Partnership registration under tax law requires an operative deed during the accounting period; a later deed cannot act retrospectively.

Registration under section 26A was available only where the firm was constituted by an instrument of partnership operative during the relevant accounting period and governing the division of profits for that year. A deed executed only after the close of the accounting year could not operate retrospectively to alter tax liabilities already attached to income earned in that period. On that basis, a firm formed by oral agreement was not entitled to registration for the assessment year 1949-50 because the written partnership instrument came into existence too late.

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Issues: Whether a firm formed by an oral agreement could be registered under section 26A for the assessment year 1949-50 when the written instrument of partnership was executed only after the close of the relevant accounting period.

Analysis: Registration under section 26A was held to be available only to a firm constituted under an instrument of partnership operative during the accounting period for which the income was to be assessed. The statutory rules and forms, read with sections 26 and 28 of the Income-tax Act, showed that the deed to be registered must govern the distribution of profits for the relevant previous year and not be a later document brought into existence after the period had ended. A deed executed after the close of the accounting year could not operate retrospectively so as to alter tax liabilities already attached to income earned in that year.

Conclusion: The firm was not entitled to registration under section 26A for the assessment year 1949-50.

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