Registered professional firm status depends on professional income, not every partner's qualifications, for concessional tax treatment.

A partnership firm may qualify for the concessional rate applicable to registered professional firms where at least 51% of its total income is derived from a profession carried on by it. The decisive factor is the source and character of the income, not whether every partner holds professional qualifications. Professional activity carried on on behalf of the firm can be attributed to the firm itself under partnership principles. Authorities requiring dependence on the personal qualifications of the practitioners were distinguished because they rested on different statutory wording. On that basis, the firm was entitled to assessment at the lower rate reserved for registered professional firms.

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Issues: Whether the assessee-partnership firm was entitled to be treated as a registered professional firm for the purpose of the lower rate of tax applicable where the firm's total income includes income derived from a profession carried on by it.

Analysis: The governing provision required only that not less than 51 per cent of the firm's total income should be income derived from a profession carried on by it. The decisive consideration was the nature of the activity from which the income was earned, not whether every partner possessed professional qualifications. The partnership law concept that business may be carried on by all or any one acting for all supported the view that professional activity carried on on behalf of the firm could be attributed to the firm itself. The authorities relied upon by the revenue were distinguished because they turned on materially different statutory language requiring dependence on the personal qualifications of the persons carrying on the profession.

Conclusion: The assessee-firm was entitled to be assessed at the rates applicable to registered professional firms, and the revenue's appeal failed.

Ratio Decidendi: For the purpose of the concessional rate provision, a partnership firm carries on a profession if the income is derived from professional activity conducted on behalf of the firm, and it is not necessary that all partners be professionally qualified.

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