JUDGMENT

B.P. JEEVAN REDDY, J.

(1) J.- These appeals are preferred against the judgment and order of the Madhya Pradesh High court rejecting the applications filed by the assessee under Section 256(2 of the Income Tax Act, 1961. The assessee had requested the High court to direct the tribunal to state the following question of law for its opinion:

"WHETHER on the facts and in the circumstances of the case, the applicant could be refused registration under Section 185 of the Income Tax Act, 1961 on the ground that its constitution was illegal for breach of the provisions of clause VI of the General Licence Conditions made under the Excise Rules, although no action was taken by the Collector for cancellation of the licence under clause 14 of the Licence in Form CS No. 3, in spite of written intimation, dated 27/4/1967 about its constitution."

(2) THE High court rejected the applications on the ground that the question sought to be raised by the assessee was concluded against it by two decisions of that court, viz., COMMISSIONER OF INCOME TAX v. Sheonarayan Harnarayan and COMMISSIONER OF INCOME TAX v. Pagoda Hotel and Restaurant .

(3) A licence for retail sale of country spirit under supply system in Form CS No. 3 of the Madhya Pradesh Excise Rules, 1960 was obtained by Biharilal Jaiswal in respect of twenty-two out-stall shops in Tehsil Sarangarh, District Raigarh in the public auction held in January 1968. The licence was effective for the period commencing on 1/4/1968 and ending with 31/3/1969. Biharilal Jaiswal entered into a partnership with ten other persons to conduct the business under the said licence. The partnership is evidenced by the deed dated 30/8/1968. An application for grant of registration to the said firm under S. 184 and 185 of the Act was filed in Form 11. The Income Tax Officer rejected the application for registration on the ground that the partnership having been formed in violation of clause VI of the General Licence Conditions prescribed by the Madhya Pradesh Excise Rules is illegal and cannot, therefore, claim registration under the Income Tax Act. On appeal, the Appellate Assistant Commissioner directed the Income Tax Officer to grant registration as prayed for, against which order the Revenue appealed to the tribunal. The tribunal reversed the order of the Appellate Assistant Commissioner and restored the order of the Income Tax Officer. Thereupon, the assessee applied to the tribunal to refer two questions under Section 256(1 of the Act which was refused. The application to the High court under Section 256(2 to refer the aforesaid (consolidated) question was also rejected, as stated above.

(4) CLAUSE VI of the General Licence Conditions prescribed by the Excise Rules reads thus:

"VI. Transfer or Sub-Lease of Licence.- No privilege of supply or sale shall be sold, transferred or sub-leased, nor shall a holder of any such privilege enter into a partnership for the working of such privilege in any way or manner without the written permission of the Collector, which shall be endorsed on the licence. A partner, sub-lessee, transferee shall be bound by all the conditions of the licence, but the original licensee also shall continue to be responsible to the State government for the due payment of the licence fees and proper working of the shop, except that in the case of a transfer his responsibility shall cease as soon as the transfer is endorsed on the licence

(5) ANOTHER condition of licence, viz., clause (14 provided that "on breach of any of the conditions of this licence or of any of the provisions of the Madhya Pradesh Excise Act, 1915, or the Rules made thereunder, this licence may be cancelled by the Collector".

(6) A few clauses in the partnership deed may also be noticed. The preamble to the partnership deed reads:

"WHEREAS Shri Girdharilal, son of Buddhulal Jaiswal of Ambikapur, has secured the excise contract of two liquor sho