Report No. 12
193. Cancellation of Registration.-
(1) If, where a firm has been registered, or its registration has effect under section 191(7) [newly added sub-section in section re: application for registration, to the effect that registration has effect for subsequent year], for any assessment year, the Income-tax Officer is of opinion that there was during the previous year no genuine firm in existence as registered and that the registration was obtained or continued by misrepresentation, he may, with the previous sanction of the Inspecting Assistant Commissioner and after giving the firm a reasonable opportunity of being heard, cancel the registration of the firm for that assessment year.
[New] [See Rule 6B]
(2) If, where a firm has been registered or its registration has effect under section 191(7) [newly added sub-section in section re: application for registration, providing that registration once granted has effect for future years], for any assessment year, there is, on the part of the firm, any such failure in respect of the assessment year as is mentioned in section 148 [section 23(4), main para., earlier half, i.e., section for best judgment assessment], the Income-tax Officer may cancel the registration of the firm for the assessment year, after giving the firm not less than fourteen days notice intimating his intention to cancel its registration and after giving it a reasonable opportunity of being heard.
[Section 23(4), main para., latter half, part] [Section 23(4), proviso]
(3) Where the registration of a firm is cancelled for any assessment year, the Income-tax Officer shall amend the assessments of the firm and its partners for that assessment year on the footing that the firm is an unregistered firm.
(4) The provisions of section 161 [35 (1) to (4)] shall, mutatis mutandis, apply to the amendments of the assessments of the firm and its partners under sub-section (3) the period of four years specified in section 161 (7) [section 35 (1)] being reckoned from the date of the order cancelling the registration.
(5) No order cancelling the registration of a firm for any assessment year shall be made after the expiry of eight years from the end of that assessment year.
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