Expired partnership deed cannot support firm registration where business continues under a new implied arrangement.

A firm cannot obtain registration on the basis of a partnership deed that had already expired before the application was filed. Where a partnership is for a fixed term and the business continues afterwards, the continuation rests on a new implied or verbal arrangement, not on the expired instrument. Terms of the earlier deed may apply only to the extent they fit the new arrangement, but the original deed is no longer operative. Registration being confined to a firm constituted under a subsisting instrument of partnership, the expired deed could not support registration, and the refusal was upheld.

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Issues: Whether the assessees were entitled to registration as a firm when the written partnership deed had expired before the application for registration was made, and the business was thereafter continued only under an implied or verbal arrangement.

Analysis: A partnership constituted for a fixed term comes to an end on the expiry of that term, and if the business continues thereafter, the relationship rests upon a new implied agreement and not upon the expired deed. Terms of the old deed may be treated as continuing only insofar as they are applicable to the new arrangement, but the original instrument itself is no longer operative. Since registration under the Act and the Rules is confined to a firm constituted under an operative instrument of partnership, the expired deed could not support registration. The assessment year did not alter that position, because the relevant enquiry was whether there was a subsisting document at the date of application.

Conclusion: The assessees were not entitled to registration, and the refusal by the Commissioner was upheld.

Final Conclusion: The reference was answered against the assessees, confirming that registration cannot be granted on the basis of an expired partnership deed when the continuing business is carried on under a new implied arrangement.

Ratio Decidendi: A firm can be registered only if, at the time of application, it is constituted under a subsisting instrument of partnership; once the deed expires and the business continues under an implied agreement, the expired deed cannot serve as the basis for registration.

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