Y. NARAYANA CHETTY & ANOTHER vs THE INCOME-TAX OFFICER, NELLORE AND OTHERS

The Supreme Court held that Rule 6B of the Income-tax Rules is not inconsistent with Section 23(4) of the Indian Income-tax Act, 1922, and is valid. The Court clarified that Rule 6B pertains to the cancellation of registration for non-genuine firms, while Section 23(4) addresses cancellation due to non-compliance by genuine firms. The Court upheld the validity of notices served under Section 34 of the Act on the firms, stating that the firms themselves are the assessees, making the notices served on a partner valid and proper. The writ petitions challenging the orders were dismissed.