Registration under the Income-tax Act: admit minor to benefits but partnership valid among adult signatories, registration allowed.

Whether instruments created a registrable partnership under the Income-tax Act is resolved by treating the family arrangement of 7 August 1942 as co-ownership with temporary management, not a partnership; the partnership deed of 21 August 1942 is effective to create a partnership among the adult signatories while admitting the minor to the benefits of the partnership; instruments executed after the 1946 registration application (including the 1948 deed) are immaterial to that application. Operative effect: the assessee's registration claim under the Act should be allowed based on the 21 August 1942 deed as construed.

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Issues: Whether, on the facts and in the circumstances of the case, the assessee is entitled to claim registration as a firm under Section 26A of the Income-tax Act on the basis of the partnership deed dated 21st August, 1942, and/or the deed of family arrangement dated 7th August, 1942, and/or the deed dated 24th March, 1948.

Analysis: The question referring assessment-related provisions was not pursued and only the question about registration under Section 26A arising from the partnership instruments is considered. The family arrangement of 7th August, 1942, contemplates co-ownership and appointment of a manager for a limited period and provides for a later division of assets; it does not, on its terms, create a partnership. The partnership deed of 21st August, 1942, purported to make all family members partners, but one signatory, Dhanraj, was a minor at the time. A minor cannot bind himself by contract, yet the document can still be construed so that the minor is admitted to the benefits of the partnership while the adult parties form a valid partnership among themselves. Subsequent instruments executed after the registration application (including the deed dated 24th March, 1948) could not be considered for deciding the registration application made in 1946.

Conclusion: The partnership deed dated 21st August, 1942, constitutes a valid partnership among the adult signatories with the minor admitted to the benefits of the partnership; accordingly, registration under Section 26A of the Income-tax Act should have been granted. The assessee's claim to registration is allowed.

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