Partnership registration requires actual operation under the operative deed; a later cancellation cannot retrospectively revive an earlier deed.

Registration under the Income-tax Act depends on the firm having actually existed and carried on business during the accounting year in accordance with the operative partnership deed. Here, a later deed admitted two additional partners, their capital was introduced, and the firm functioned as a six-partner concern for the relevant period. The later attempt to cancel that deed and revive an earlier partnership could not retrospectively erase the legal effect of a deed that had already been acted upon. As the profits were not shown to have been allocated in accordance with the operative deed and the cancellation could not operate backward, the firm's genuineness and eligibility for registration were not established.

---

---

Issues: Whether the assessee-firm was entitled to registration under the Income-tax Act, 1961, when a later partnership deed admitting additional partners had been acted upon for the relevant period and a subsequent deed purported to cancel it and revive the earlier deed.

Analysis: Registration depends on the firm being constituted and actually carried on in accordance with the instrument of partnership during the accounting year, with the profit or loss credited or divided as required by that instrument. Here, the later deed dated 1 April 1979 brought in two additional partners, their capital was introduced, accounts were maintained on that basis, and the partnership functioned as a six-partner firm for the relevant period. The later attempt to cancel that deed by a subsequent document and to revive the earlier deed could not undo the legal effect of a partnership that had already come into existence and operated during the year. Since the profits were not allocated in accordance with the later deed and the subsequent cancellation could not operate retrospectively, the genuineness and eligibility of the firm for registration were not established.

Conclusion: The assessee was not entitled to registration, and the refusal of registration was .

Ratio Decidendi: A firm is entitled to registration only if it actually existed and functioned during the accounting year in conformity with the operative partnership instrument; a subsequent deed cannot retrospectively cancel an already acted-upon partnership and revive an earlier deed for registration purposes.

---