Operative partnership deed required for registration under section 26A; later deed cannot validate prior-year registration.

Registration under section 26A required an operative instrument of partnership that created the firm and specified the partners' shares for the relevant accounting year. A deed executed only after the close of the previous year, even if it recorded an earlier oral arrangement, could not satisfy that requirement because the instrument had to exist and govern profit-sharing at or before the start of the accounting period. The statutory scheme, rules, and application form were read consistently to that effect. On that construction, the firm was not entitled to registration for the year in question.

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Issues: Whether a firm alleged to have been formed by oral agreement during the accounting year could be registered for that year under section 26A when the instrument of partnership was executed only after the close of the previous year.

Analysis: The statutory language required a firm constituted under an instrument of partnership specifying the individual shares of the partners. The expression "instrument of partnership" was held to denote a deed which itself creates the partnership and governs the sharing of profits during the relevant accounting period, not a later document merely recording an earlier oral arrangement. The scheme of the section, the prescribed rules, and the application form were read together to show that the instrument must be operative at or before the commencement of the accounting year. A later deed could not validate registration for a prior period when no partnership deed then existed. The reference to the shares being shown in the instrument and the power to deal with registered firms under the Act did not alter that construction.

Conclusion: The question was answered in the negative. The assessee was not entitled to registration under section 26A for the assessment year in question on the basis of an instrument executed after the relevant previous year.

Ratio Decidendi: Registration under section 26A requires an operative instrument of partnership that creates the firm and governs the distribution of profits for the relevant accounting year; a later deed merely recording an antecedent oral partnership does not suffice for that year.

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