Strict compliance for firm registration requires specified partner shares and a deed effective during the relevant accounting year.

Registration of a firm under Section 26A required strict compliance with the statutory scheme: the partnership instrument and the registration application had to specify each partner's individual share with precision, because the scheme depended on assessment of partners on their respective shares and on statutory safeguards against profit distribution. Omission to state the shares was a mandatory defect, not a mere procedural irregularity. A partnership deed executed after the close of the relevant accounting year could not support registration for that year, as the deed had to govern the accounting period in question. The firm was therefore not entitled to registration for the assessment years concerned.

---

---

Issues: Whether a firm seeking registration under Section 26A of the Indian Income-tax Act was required to have an instrument of partnership specifying the individual shares of the partners and, for the relevant assessment year, a partnership deed in existence during the accounting year.

Analysis: Registration under Section 26A was held to be governed by the statutory scheme of the Act and the rules framed under Section 59. The instrument of partnership and the application for registration were required to disclose the individual shares of the partners with precision, because the registered-firm scheme depended upon assessing each partner on his share of the firm's income and also upon enforcing the statutory safeguards against improper distribution of profits. The omission to specify the individual shares was therefore not a mere procedural defect but a failure to satisfy a mandatory condition. As to the later deed executed on 1 April 1947, it took effect only from that date and not during the accounting year that had already ended on 31 March 1947. A partnership deed executed after the close of the accounting period could not support registration for that year, since the deed to be registered had to govern the relevant accounting period.

Conclusion: The firm was not entitled to registration under Section 26A for the assessment years 1945-46, 1946-47 and 1947-48, and the answer to the referred question was in favour of the Revenue.

Ratio Decidendi: Registration of a firm under Section 26A is available only when the partnership instrument, and the corresponding application, strictly specify the individual shares of the partners and the deed relates to a firm in existence during the relevant accounting year.

---