The main legal point established in the judgment is that the term 'status' used in Sec.246(c) for the purpose of appeal includes all categories of firms, registered or unregistered, and an appeal against the determination of the continuation of the status of a registered firm is maintainable.

1. The short question falling for consideration in these references is whether the question of status--registered or unregistered firm--can be considered by the Appellate Assistant Commissioner while hearing an appeal against the quantum of assessment ?

2. These references under Sec.256(1) of the Income-tax Act relate to the assessment years 1972-73 and 1973-74. The question referred for our opinion is as follows :

"Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the Appellate Assistant Commissioner was competent to entertain the appeal against the Income-tax Officers order refusing continuation of registration under Sec.184(7) of the Income-tax Act, 1961, relating to the assessment years 1972-73 and 1973-74, and accordingly taking the status of an assessee as unregistered firm ?"

3. The substance of the matter agitated in this question had fallen for consideration before two Division Benches of this court. The first one was in Madhur Jalpan V/s. CIT [1983] 143 ITR 351 (Pat) and the other was in CIT V/s. Manuram Babulal [1986] 158 ITR 5 (Pat). The question referred for the opinion of this court in the case of Madhur Jalpan [1983] 143 ITR 351 was whether, on the facts and circumstances of the case, the right of appeal under Sec.246(c) against the status taken in the assessment order would include the status taken as unregistered firm. In the case of Manuram Babulal [1986] 158 ITR 5 (Pat), the question referred to us was whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that an appeal is maintainable before the Appellate Assistant Commissioner against the order of the Income-tax Officer under Sec.184(7) of the Income-tax Act, 1961 ?" It is not disputed by counsel for the parties that the content of the question falling for our consideration before us is the same as in Madhur Jalpan [1983] 143 ITR 351 (Pat) and in CIT V/s. Manuram Babulal [1986] 158 ITR 5 (Pat).

4. In the case of Madhur Jalpan [1983] 143 ITR 351 (Pat), to which S. K. Jha J., my learned brother, was a party, held that where a composite order was passed, rejecting the status of the assessee as a registered firm as well as passing an assessment order assessing it as an unregistered firm, the assessee would be at liberty to agitate both the grounds in the appeal, the right to which had been conferred upon it under Sec.246(c). In the case of CIT V/s. Manuram Babulal [1986] 158 ITR 5 (Pat), it was held that there could be no escape from a construction of all the relevant provisions, that the term "status" used in Sec.246(c) for the purpose of appeal, will include not only the illustrative example given by way of explanation to that section but shall also govern with effect from April 1, 1971, all categories of firms, registered or unregistered. It was also held that an appeal against the determination whether the continuation of the status of a registered firm is to be continued or not would be certainly maintainable. The question referred to us, therefore, is governed by the decisions of the two Division Benches of this court. It must, therefore, be answered accordingly.

5. For the reasons stated above, we are of the view that the Tribunal was correct in holding that the Appellate Assistant Commissioner was competent to entertain the appeal against the Income-tax Officers order refusing continuation of registration under Sec.184(7) of the Income-tax Act, 1961, relating to the two assessment years. The question referred to us, therefore, is answered in the affirmative, in favour of the assessee and against the Revenue. The references are thus answered accordingly with costs. Hearing fee Rs. 250 (Rupees two hundred and fifty) payable by the Revenue to the assessee.

6. Let a copy of this judgment be transmitted to the Income-tax Appellate Tribunal in terms of Sec.260 of the Income-tax Act, 1961.