Carry-forward of partnership registration under tax law fails once prior refusal of sub-partnership registration removes the Tribunal's basis.

The Tribunal's view that registration granted in an earlier year would automatically continue under section 184(7) of the Income-tax Act, 1961 was rendered unsustainable after the earlier decision declined registration to the sub-partnership firm. Once that legal foundation disappeared, the refusal to refer the question could not stand. On those facts, a question of law did arise, and the Tribunal was directed to make the reference sought by the Revenue.

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Issues: Whether, in view of the earlier decision declining registration to the sub-partnership firm, a question of law arose warranting a reference to the High Court.

Analysis: The Tribunal had proceeded on the basis that once registration had been granted for an earlier year, section 184(7) of the Income-tax Act, 1961 would carry it forward for subsequent years. That basis no longer survived after the earlier reference was decided against the assessee, and registration had been declined to the sub-partnership firm. In these circumstances, the foundation of the Tribunal's refusal to refer the question ceased to exist.

Conclusion: A question of law did arise and the Tribunal was directed to make the reference prayed for, in favour of the Revenue.

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