Firm not a separate partner for tax registration; individual shares and personal signatures must be strictly specified.

For registration under section 26A of the Indian Income-tax Act, 1922, a firm is not treated as a separate legal person capable of entering into a partnership as such with another firm, a Hindu undivided family business, or an individual; the partnership must be between persons, and the firm remains only a compendious name for its partners. The article also states that registration requires strict compliance with the prescribed form: the deed must specify the individual shares of all partners, and the application must bear the personal signatures of all partners, not merely an authorised signature by one partner. On that reasoning, the claim to registration failed.

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Issues: (i) whether a firm, as such, can enter into a partnership with another firm, a Hindu undivided family business, or an individual for the purposes of registration under section 26A of the Indian Income-tax Act, 1922; (ii) whether the application for registration satisfied the statutory requirements as to specification of individual shares and personal signatures of all partners.

Issue (i): whether a firm, as such, can enter into a partnership with another firm, a Hindu undivided family business, or an individual for the purposes of registration under section 26A of the Indian Income-tax Act, 1922.

Analysis: Section 26A contemplates a firm constituted under an instrument of partnership, and the concept of firm and partnership is borrowed from the Indian Partnership Act, 1932. A partnership under section 4 of that Act is the relation between persons who agree to share the profits of a business carried on by all or any of them acting for all. In the law as applied in India, a firm is not a separate legal person but only a compendious name for the partners composing it. The definition of "person" in the General Clauses Act, 1897 could not be imported where it would be repugnant to partnership law. A firm therefore cannot, as such, be treated as a partner in another firm.

Conclusion: The answer is against the assessee. A firm, as such, cannot enter into a valid partnership with another firm, a Hindu undivided family business, or an individual for registration under section 26A.

Issue (ii): whether the application for registration satisfied the statutory requirements as to specification of individual shares and personal signatures of all partners.

Analysis: Even on the footing that a valid partnership could have been formed by the individual members, the deed did not specify the individual shares of all partners of the constituent firms. Further, the application for registration was not signed personally by all the partners of those firms, which was required by section 26A read with the prescribed rule. Authority given to one partner by co-partners could not satisfy the requirement of personal signatures.

Conclusion: The answer is against the assessee. The application was not in the prescribed form and the statutory conditions for registration were not met.

Final Conclusion: The refusal of registration was upheld and the assessee's claim to registration failed on both the constitution of the firm and the form of the application.

Ratio Decidendi: For purposes of registration under section 26A of the Indian Income-tax Act, 1922, a firm is not a legal person capable of entering into partnership as such, and the statutory conditions of specified individual shares and personal signatures must be strictly satisfied.

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