Partnership registration under income tax law depends on genuineness and the deed, not unsupported objections about profit allocation.

Registration of a firm under the Income-tax Act, 1961 depends on a valid partnership instrument, a proper application, and a firm that is genuine and constituted as stated in the deed. A refusal cannot rest merely on the Revenue's assertion that profits were not distributed in accordance with the registration form unless there is material showing that the partners were bound to share that income and that the declaration was false. The Tribunal distinguished the Supreme Court ruling cited by the Revenue because it arose under the 1922 Act and involved renewal of registration on an admitted incorrect certificate. On the facts noted, there was no basis to treat the firm as nongenuine, and registration was granted.

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Issues: Whether the assessee-firm was entitled to registration under sections 184 and 185 of the Income-tax Act, 1961 despite the Revenue's objection that the profits were not distributed in accordance with the partnership deed and that the firm was not genuine.

Analysis: Registration under the 1961 Act depends on a valid application, an instrument of partnership, and a genuine firm constituted as specified in the deed. The dispute here did not concern validity of constitution, but only whether profits said to belong to a trust had not been shared in the manner shown in the registration form. The earlier Supreme Court decision relied upon by the Revenue was distinguished because it arose under the 1922 Act, concerned renewal of registration, and turned on an admitted wrong certificate about undisclosed profits. On the facts before the Tribunal, there was no admission that the trust income represented divisible profits of the firm, no material showing that the partners had agreed to share such income, and no basis to treat the firm as nongenuine. The order under section 185 was treated as distinct from the assessment under section 143(3).

Conclusion: The assessee-firm was held entitled to registration, and the refusal of registration was set aside.

Ratio Decidendi: For registration under the Income-tax Act, 1961, the decisive question is whether the firm is validly constituted and genuine; a refusal cannot rest merely on an allegation that certain income was assessed in another entity's hands unless there is material showing that the firm's partners were bound to share that income and the registration certificate was false.

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