Partnership registration cannot be refused solely for imperfect accounts when profit-sharing under the deed is otherwise genuine.

A genuine partnership cannot be denied registration merely because proper accounts were not maintained, where the partners in fact shared profits and losses in accordance with the deed. The Tribunal treated the delay objection as abandoned and found that the only surviving issue was the alleged defect in accounts. On the facts accepted, the firm was otherwise genuine, so absence of proper accounts by itself was not a sufficient legal basis to refuse registration under the Income-tax Act. The question was answered in favour of the assessee and against the Revenue.

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Issues: Whether the assessee-firm was entitled to registration under section 185 of the Income-tax Act, 1961, despite the Revenue's objection that proper accounts were not maintained.

Analysis: Registration had been refused on the grounds of delay, absence of proper accounts, and alleged non-genuineness of the partnership. Before the Tribunal, the limitation objection was not pursued, and the only surviving objection was the alleged failure to keep proper accounts. The Tribunal accepted that the partners were in fact dividing profits and losses in accordance with the partnership deed and held that mere absence of proper accounts was not, by itself, a legal ground to deny registration where the firm was otherwise genuine.

Conclusion: The assessee was held entitled to registration, and the question referred was answered in favour of the assessee and against the Revenue.

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