Valid execution of partnership deed and registration application required for firm registration; contracting partner cannot sign for another partner.

For registration of a firm under the Income-tax Act, the partnership deed and the registration application must be validly executed by the partners concerned. The requirement of execution by the partners is substantive, not merely formal, because the instrument creating rights and liabilities must be signed by the parties to it. Applying agency principles, a contracting partner cannot sign on behalf of another partner as that partner's agent where the signature is required from the principal himself. The explanation permitting an authorised person to sign for an absent partner did not cure the defect on these facts, so the deed and application were invalid and refusal of registration was justified.

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Issues: Whether a partnership deed and an application for registration under the Income-tax Act were valid when not signed personally by all partners and, in particular, whether a partner acting as attorney for other partners could sign on their behalf where he was himself a contracting party.

Analysis: Registration of a firm under section 184 of the Income-tax Act requires a valid instrument of partnership and a valid application in the prescribed manner. The requirement of execution by the partners was treated as substantive, and the Court relied on the principle that a legal instrument creating rights and liabilities must be executed by the parties concerned. Applying the law of agency under section 182 of the Indian Contract Act, 1872, it was held that an agent cannot execute the contract on behalf of a principal where the agent himself is a contracting party with that principal. The partner who signed for the non-resident partners had no authority to do so in the circumstances, and the statutory explanation permitting an authorised person to sign for an absent partner did not validate the application.

Conclusion: The partnership deed and the registration application were invalid for want of proper execution, and the refusal of registration was justified.

Ratio Decidendi: For registration of a firm, the partnership instrument and the application must be validly executed by the partners concerned, and a contracting partner cannot sign on behalf of another partner as his agent where the signature is required to be made by the principal himself.

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