Failure to file partnership deed change instrument with tax return not fatal; genuineness verification upheld.

The court held that the failure to file the certified copy of the instrument of change in the partnership deed along with the return was not fatal. It emphasized that the purpose of filing the changes in the partnership deed is to verify the genuineness of the partnership and the proper distribution of remuneration. The court concluded that the non-filing of the instrument of change in the partnership deed along with the return, but submitting it during assessment, does not disqualify the assessee from claiming deductions under the Income Tax Act.

---

---

Issues involved:
1. Interpretation of Section 185 of the Income Tax Act regarding the filing of the instrument of change in the partnership deed along with the return.
2. Validity of the deduction claimed by the assessee for remuneration paid to partners without filing the certified copy of the partnership deed along with the return.

Detailed Analysis:
1. The primary issue in this case revolves around the interpretation of Section 185 of the Income Tax Act concerning the obligation to file the instrument of change in the partnership deed along with the return. The Revenue challenged a judgment that held the omission to file the certified copy of the instrument of change in the partnership deed along with the return as non-fatal. The assessing officer initially held that the failure to submit the certified copy of the deed along with the return was a violation of Section 184(4) of the Act. However, the CIT(Appeals) reversed this decision, stating that the omission should not be considered fatal.

2. The second issue pertains to the validity of the deduction claimed by the assessee for remuneration paid to partners without filing the certified copy of the partnership deed along with the return. The Income Tax Appellate Tribunal upheld the deletion of the disallowance amount on the grounds that the filing of the instrument of change in the partnership deed along with the return is procedural in nature. The Tribunal emphasized that the purpose of filing the copy of the changes in the partnership deed before the assessing officer is to ascertain the genuineness of the partnership and the proper distribution of remuneration.

3. The judgment extensively discusses precedents and legal interpretations regarding the filing requirements under the Income Tax Act. It cites cases from the Kerala High Court, Delhi High Court, and Gujarat High Court to support the view that non-filing of the partnership deed along with the return is an irregularity and a curable defect. The court emphasizes that the purpose of the filing requirement is to enable the assessing officer to verify the authenticity of the partnership and the distribution of remuneration, rather than rendering the return invalid.

4. The court also addresses the argument that the omission to file the instrument of change in the partnership deed along with the return precludes the assessee from claiming any deduction under Section 185. However, the court rejects this argument, stating that the provisions of the Act must be read in conjunction with each other. It highlights that the assessing officer's refusal to treat the return as defective deprived the assessee of the opportunity to cure the alleged defect, indicating that the provisions are not intended to be mandatory in nature.

5. Ultimately, the court upholds the decision of the CIT(A) to delete the disallowance made by the assessing officer, concluding that the non-filing of the instrument of change in the partnership deed along with the return, but filing it during the assessment proceedings, does not disentitle the assessee from claiming the remuneration paid to partners in accordance with the provisions of the partnership deed and the Income Tax Act.

---