Partnership registration requires an operative instrument during the relevant accounting year; a later deed cannot validate earlier tax registration.

Section 26A required a firm to be constituted under an instrument of partnership specifying the partners' shares, and the instrument had to be in force during the relevant accounting year. A partnership first formed orally could still qualify if later reduced to writing, but only where the written deed existed during that year and governed the profits of that period. A deed executed after the accounting year did not satisfy the statutory scheme for registration for an earlier assessment year. On that basis, the firm was held not entitled to registration for the years in question, and refusal of registration was upheld.

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Issues: Whether a firm can be registered under section 26A of the Indian Income-tax Act, 1922 when it was first brought into existence by oral agreement and the instrument of partnership was executed later, and whether the instrument must be operative during the relevant accounting year.

Analysis: Section 26A, read with the relevant rules, requires that the firm be constituted under an instrument of partnership specifying the partners' shares, that the application be properly made for the relevant assessment year, and that the partnership terms governing the previous year be embodied in a document operative during that accounting year. The expression "constituted under" is not confined to firms created only by the instrument; it can also include a partnership initially formed orally but subsequently reduced to writing, provided the written instrument was in existence during the accounting year and governed the relevant profits. A deed executed after the accounting year does not satisfy the statutory scheme for registration for an earlier assessment year.

Conclusion: The firms were not entitled to registration for the assessment years in question because the instruments of partnership were not operative during the relevant accounting years. The refusal of registration was upheld, and the appeals failed.

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