Partnership registration cancellation under Section 186(1) fails absent a finding that the firm was not genuine.

Section 186(1) cancellation of a partnership firm's registration was considered in the context of two persons described as minors in the deed having already attained majority on the deed date. The appellate reasoning, following Andhra Pradesh High Court authority, was that Section 186(1) is not attracted unless there is a finding that the firm is not genuine. The misdescription of the two partners, by itself, did not establish non-genuineness or justify cancellation of registration, so the cancellation orders were set aside.

---

---

Issues: Whether the order cancelling registration of the partnership firm under Section 186(1) of the Income-tax Act, 1961 was justified where two persons shown as minors in the partnership deed had, in fact, attained majority before the deed date, and whether the firm could be treated as non-genuine on that basis.

Analysis: The appellate authority found no factual finding that the firm was not genuine. It relied on binding Andhra Pradesh High Court decisions holding that Section 186(1) was not attracted in the absence of a finding of non-genuineness of the firm. The alleged defect in describing two partners as minors did not, by itself, establish such infirmity as would justify cancellation of registration.

Conclusion: The cancellation orders under Section 186(1) were rightly set aside, and the departmental appeals failed.

---