THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA REFERRED CASE No.275 of 1996 07.12.2011 Between: Commissioner of Income-tax, Guntur … Petitioner AND M/s.K.C. Rangaiah & Co., Nellore … Respondent THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA REFERRED CASE No.275 of 1996 ORDER: (Per Hon’ble Sri Justice V.V.S.Rao) In this Referred Case the following two questions have been referred for the opinion of this Court by the Income Tax Appellate Tribunal, Bench-A, under Section 256(1) of the Income Tax Act, 1961 (the Act). 1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is correct in law in holding that the assessee ﬁrm in existence was a genuine ﬁrm entitled to registration under Section 185(1)(a) of the Act? 2. Whether the order of re-assessment passed in consequence of the order passed by the C.I.T. under Section 263 of the Act is sustainable in law? The following brief fact of the matter would place the controversy in perspective. The respondent (assessee) was granted registration of the ﬁrm on 29.8.1989 based on the partnership deed dated 17.12.1979. Proceedings under Section 132 of the Act were conducted. During the said search, the oﬃcials recorded statements of three partners, namely, Smt.Chandaluru Dhanalakshmamma, Smt.Appala Suryakantamma and Sri Padarti Chenchaiah who denied the existence of any partnership. Therefore the Commissioner of Income Tax (CIT) initiated revisional jurisdiction under Section 263 of the Act. After issuing notice dated 23.6.1983, and examining the record, the CIT came to the conclusion that the ﬁrm is not genuine. Accordingly by order dated 12.8.1983 he set aside the assessment order under Section 143(3) of the Act for the assessment year 1980-81. The registration was also cancelled. Being aggrieved, the assessee ﬁled appeal before the Income Tax Appellate Tribunal. By an order dated 31.10.1985 the same was allowed and the order of the CIT under Section 263 of the Act was cancelled by the Tribunal. At the instance of the Revenue, the case being R.C.No.206 of 1991 was referred to this Court. In pursuance of the order of the CIT dated 12.8.1983, the Income Tax Oﬃcer passed order under Section 185(1)(b) of the Act on 09.2.1984 holding that the assessee is not a genuine ﬁrm and is not in existence and accordingly refused to grant registration for the assessment year 1980-81. This was again assailed before the Additional Appellate Commissioner who allowed the appeal and remanded the matter to the Income Tax Officer. Aggrieved thereby the Revenue carried the matter by way of further appeal and the Tribunal conﬁrmed the order of the Appellate Commissioner. At the instance of the Revenue the questions quoted herein above are referred for opinion of the High Court. Though notice is served none appears for the assessee and they are set ex parte. During the course of the submission the Junior Standing Counsel for Income Tax brought to our notice the order passed by this Court in R.C. No.206 of 1991 which is a reference arising out of the order of the CIT dated 12.8.1983. In the said Referred Case reported as CIT v K.C.Rangaiah and Co[1] the ﬁrst question referred to this Court was as follows. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is correct in law in canceling the order passed by the Commissioner of Income-tax under Section 263 of the Income-tax Act, 1961? This Court answered the said question in the negative in favour of the Revenue and against the asessee. As the CIT in the order dated 12.8.1983 cancelled the registration of the ﬁrm of the assessee, this reference is also to be answered in accordance with the decision in K.C.Rangaiah and Co. Accordingly the question No.1 is answered in the negative in favour of the Revenue and against the assessee and question No.2 is answered in the affirmative in favour of assessee. The Referred Case shall stand disposed of accordingly. _______________ (V.V.S.RAO, J) ____________________ (B.N.RAO NALLA, J) December 07, 2011. YS [1] (1998) 230 IT R 385 (AP)