( 1 ) THE assessee, Mannilal Sagarmal, during the course of the assessment for the year 1943-44, made an application for registration of the firm under Section 26-A of the Indian Income Tax act. The Income Tax Officer issued a notice under Section 22 (4) Of the Act requiring the assessee to produce certain accounts and documents on the date fixed. The accounts and documents were not produced and on the facts before him, the Income Tax Officer held that they had been deliberately suppressed. Thereupon, the Income Tax Officer held that the notice had not been complied with and the assessee was liable to assessment under Section 23 (4) of the act. Consequently, he refused registration and rejected the application under Section 26-A of the act. The assessee appealed against this order but the Appellate Assistant Commissioner of Income tax dismissed the appeal holding that no application had been made under Section 27 of the Act to the Income Tax Officer for cancellation of the Assessment and, therefore, would be presumed that the assessee had no reasonable cause for non-compliance with the notice under Section 22 (4) of the Indian Income Tax Act, The assessee went up in appeal before the Income Tax appellate Tribunal. This appeal was also dismissed on the view that, though the assessment had been made under Section 23 (4) of the Act, no application under Section 27 had been made to the income Tax Officer for cancellation of the assessment, presumably, because the assessee had realised that he had no reasonable cause for not complying with the notice under Section 22 (4) of the Act. The Tribunal further proceeded to hold that under Section 23 (4) the Income Tax Officer had power to refuse to register a firm and they did not see any reason to interfere with the discretion of the Income Tax Officer in this respect after taking into consideration "all the facts of this case. In these circumstances, the assessee moved the Tribunal under Section 66 (1) of the Indian income Tax Act and the Tribunal has referred the following two questions for our opinion:

"q. 1. Whether, in the circumstances of the case as stated above, the Tribunal could in law refuse to interfere with the discretion of the Income-tax Officer exercised in refusing to register the firm under Section 26-A of the Income-tax Act? q. 2. Whether, in the circumstances of the case as stated above, the refusal of registration under section 26-A, I. T. Act was legally permissible "

( 2 ) THE facts, disclosed by the statement of the case mentioned above, show that both the Income tax Appellate Tribunal and the Appellate Assistant Commissioner of Income Tax, in deciding the appeal of the assessee against the refusal of the Income Tax Officer to register the firm, relied mainly on the circumstance that the assesses had no application under Section 27 of the indian Income Tax Act for cancellation of the assessment. In proceeding in this manner, they failed to notice the distinction that the income Tax Act provides for between an appeal against a best judgment assessment made under Section 23 (4) end an appeal against refusal to register under Section 23 (4 ). In the case of a best judgment assessment under Section 23 (4), provision has been made under section 27 for an application for cancellation of the assessment on certain grounds including the ground that the assessee had been prevented by sufficient cause from making the return required by Section 22, or from complying with the requirements of a notice issued under Section 22 (4)of the Act. An order rejecting such an application is separately appealable and, consequently, it has been held that if an assessee does not take such objections by an application under Section 27 as are open to him under that provision of law, he cannot challenge the assessment itself on the same grounds when he files an appeal against the quantum of assessment made under Section 23 (4 ). On the other hand there is no provision in the Act