Change in firm constitution requires an effective alteration during the accounting year; continuance of registration was upheld.

The minor partner attained majority during the accounting year, but the fresh partnership deed was executed only after year-end. Until the close of that year, the statutory period for the former minor to exercise the option had not expired, so no change in the constitution of the firm had taken effect during the relevant accounting year. Continuance of registration was therefore available to the assessee-firm.

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Issues: Whether there was a change in the constitution of the assessee-firm during the relevant accounting year so as to deny continuance of registration.

Analysis: The minor partner attained majority during the accounting year, but the fresh partnership deed was executed only on the next day after the year-end. Until the close of the accounting year, the statutory period for the former minor to exercise the option had not expired, and no change in the constitution of the firm had taken effect for that year.

Conclusion: There was no change in the constitution of the firm during the relevant accounting year, and the assessee was entitled to continuance of registration.

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