Firm registration renewal required prior division of profits before application under the statutory scheme.

Renewal of firm registration under section 26A of the Indian Income-tax Act, 1922 required the applicant to certify, in the prescribed form, that the previous year's profits or losses had been or would be divided or credited among the partners as scheduled. Reading section 26A with rules 2, 3 and 6, the Court held that actual division or credit of the previous year's profits before the renewal application was a mandatory statutory condition. The requirement was not optional, and hardship could not displace the plain language of the statutory scheme.

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Issues: Whether, on an application for renewal of registration of a firm under section 26A of the Indian Income-tax Act, 1922, the assessee must have divided or credited the profits of the previous year before making the application.

Analysis: Section 26A, read with rules 2, 3 and 6 and the prescribed forms, requires an applicant seeking renewal to certify that the profits or losses of the previous year were or would be divided or credited as shown in the schedule. The prescribed renewal form specifically contemplates apportionment of the income, profits or gains of the previous year between the partners entitled to share therein. The language of the provision and the rules leaves no room for treating this requirement as optional, and considerations of hardship cannot override the plain terms of the statutory scheme.

Conclusion: The requirement is mandatory, and the assessee was bound to divide the previous year's profits before seeking renewal of registration.

Ratio Decidendi: Where renewal of firm registration under section 26A is governed by rules and prescribed forms requiring certification of prior division of profits, actual division or credit of the previous year's profits before application is a mandatory statutory condition.

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