The Commissioner of Income-tax cannot indirectly set aside an order of the Appellate Assistant Commissioner by cancelling the registration of a firm under Section 33B of the Indian Income-tax Act, 1922.

Das, J.

1. This case has come to me on a difference of opinion between my learned brethren Ramaswami, J. and Misra, J., with regard to one of the questions of law submitted to the High Court for opinion. The question on which there has been a difference of opinion between my learned brethren is:

"Whether in the facts and the circumstances of the case the orders passed by the Commissioner of Income-tax cancelling the orders of the Income-tax Officer granting registration of the firm and directing the Income-tax Officer to determine the tax payable by the firm on the basis that no registration had been granted to the firm, were valid in law".

Ramaswami, J. is of the opinion that this question should be answered in favour of the Department and against the assessee; Misra, J. is of the opinion that the question should be answered in favour of the assessee and against the Department. Three other questions were also submitted for the opinion of the High Court. With regard to the answers to those three questions my learned brethren agreed. I have, therefore, to record my opinion on the only question with regard to which my learned brethren differed. I propose now to do so in the following paragraphs.

2. A few facts must be stated first. In this case the assessment years are 1947-48, 1948-49 and 1949-50; the corresponding accounting periods were the calendar years 1946, 1947 and 1948. Two ladies, Srimati Durgabati and Srimati Narmadabala Gupta, were carrying on a coal mining business as co-owners till the assessment years 1942-43. The ladies were assessed to income-tax as "association of persons"

On 21-4-1843, the two ladies entered into a partnership for carrying on the coal mining business and in para (o) of the partnership deed it was said that "the partnership will not dissolve by the death of any of the partners and that on the death of a partner her sons and grandsons would automatically become partners and that the partnership would be deemed to be continuing and would continue". Srimati Durgabati died on 27-5-1943, leaving a will by which she bequeathed her half share in the partnership business to her two minor sons, Dina Nath Agarwala and Basudeo Prasad Agarwala, in equal shares. For the assessment year 1944-45 an application was made under Sec.26A, Income-tax Act for registration of the firm. The application was made "on behalf of Srimati Narmadabala Gupta having 8 annas share, Dina Nath Agarwala having 4 annas share and Basudeo Prasad Agarwala having 4 annas share. The application for registration was based on the partnership deed of 21-4-1943. The Income-tax Officer granted registration of the firm.

For the assessment year 1945-45 the same persons applied for registration, but this time the application was rejected by the Income-tax Officer on the ground that the shares of the minor sons of Srimati Durgabati Devi were not stated in the deed of partnership. An appeal was then preferred to the Appellate Assistant Commissioner, and the latter allowed the appeal and directed that the partnership firm should be registered. For the assessment year 1946-47 the Income-tax Officer renewed the registration of the firm under Sec.26A, Income-tax Act.

For the assessment years in question the Income-tax Officer again renewed the registration of the firm and on that basis made an assessment of the income of the partnership firm under Sec.23(5) of the Act. For two of the assessment years, 1947-48 and 1948-49, the order of the Income-tax Officer was dated 24-9-1949, and the relevant portion of the Order of the Income-tax Officer was in these terms: "Application for renewal of registration under Sec.26A filed. This being in order, registration is renewed. Assessed as above on a total income of Rs. 62,537/- under Sec.23(3) and 23(5)(a), Income-tax Act. The income is shared by the partners as under: (Then the income-tax Officer mentioned the share of each of the partners)."

For the assessment year 1949-50 the order was passed on 21-1