Genuine firm requirement controls cancellation of registration under rule 6B; mere legal invalidity does not suffice.

Rule 6B of the Indian Income-tax Rules, 1922 permits cancellation of a firm's registration only where the certificate was obtained without a genuine firm in existence. A firm may exist in fact even if its constitution is alleged to be invalid in law, and such legal invalidity does not by itself bring the case within rule 6B. The rule could not therefore be invoked merely because one partner was a minor treated as a full-fledged partner. On the facts stated, registration could not be cancelled under rule 6B, and the answer was in favour of the assessee.

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Issues: Whether registration of a firm could be cancelled under rule 6B of the Indian Income-tax Rules, 1922, on the ground that one partner was a minor treated as a full-fledged partner.

Analysis: Rule 6B empowered cancellation only where the Income-tax Officer was satisfied that the certificate of registration had been obtained without there being a genuine firm in existence. The expression used in the rule confined its operation to firms that did not exist in fact. A firm may exist in fact even if its constitution is said to be invalid in law, and such a case does not fall within the scope of rule 6B. The rule therefore could not be invoked merely because one partner was a minor or because the firm was alleged to be invalid in law.

Conclusion: Registration could not be cancelled under rule 6B on the facts stated, and the answer was in favour of the assessee.

Ratio Decidendi: Cancellation of a firm's registration under rule 6B is permissible only when there is no genuine firm in existence in fact, and not merely because the firm is alleged to be invalid in law.

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