Income-tax clearance for partnership property transfers must cover each partner whose interest is conveyed, not just the firm.

For registration of a transfer of partnership property, section 230A required an income-tax clearance certificate in respect of the person whose right, title or interest was being transferred. Although a registered firm is treated as a person for income-tax assessment, partnership property is in law owned jointly by the partners, so the clearance condition had to be satisfied with reference to each partner whose interest was conveyed. Where one partner had tax arrears, insistence on clearance before registration was justified, and a certificate issued only in the firm's name was insufficient.

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Issues: Whether, for registration of a transfer of partnership property under section 230A, the income-tax clearance certificate had to be furnished in respect of each partner of the firm and not merely in the name of the firm, even though the firm itself had no tax arrears.

Analysis: Section 230A required a clearance certificate in respect of the person whose right, title or interest in the property was being transferred before registration could proceed. A registered partnership firm is a "person" for assessment purposes under section 2(31), but in general law the firm has no separate persona or corporate existence, and property standing in the name of the firm is in law owned by all the partners jointly. Since the conveyance of partnership property required execution by the partners whose interests were being transferred, the clearance requirement had to be satisfied in relation to those partners. The existence of arrears in the hands of one partner justified insistence on clearance before registration.

Conclusion: The certificate had to be furnished in respect of each partner whose interest was conveyed, and the refusal to grant a certificate only in the name of the firm was upheld, against the assessee.

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