Minor as full partner defeats firm registration where the deed makes the minor liable for losses.

A minor cannot be made a full partner under section 30 of the Indian Partnership Act, and may only be admitted to the benefits of partnership with the consent of the adult partners. Where a registration or renewal application describes a minor as entitled to profits and liable for losses, the firm is inconsistent with that statutory scheme and cannot qualify for registration under section 26A of the Indian Income-tax Act, 1922. The authorities must assess the partnership as presented in the application, and cannot disregard the loss-sharing reference. On that basis, renewal of registration was rightly refused.

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Issues: Whether renewal of registration of the firm could be refused where a minor was shown as a full-fledged partner sharing losses, and whether such a partnership was valid for registration purposes.

Analysis: Under section 30 of the Indian Partnership Act, a minor cannot become a partner, though the minor may be admitted only to the benefits of partnership with the consent of the adult partners. A document or application which treats the minor as a partner liable for losses goes beyond that legal limit and cannot support registration under section 26A of the Indian Income-tax Act, 1922. The application for renewal in this case described the minor as entitled to profits and liable for losses, which made the firm inconsistent with the statutory scheme. The attempt to ignore the reference to loss was rejected because the authorities must act on the partnership as presented in the application.

Conclusion: Renewal of registration was rightly refused, and the answer to the reference was against the assessee.

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