1982 (10) TMI 7

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....nt order dated August 8, 1977, granting Continuation of registration for the A.Y. 1977-78 was not erroneous or prejudicial to the interest of the Revenue attracting the provisions of section 263 of the Act ?" The material facts giving rise to this reference, as set out in the statement of the case, briefly are as follows: The assessee is a partnership firm. By a deed of partnership dated 2nd January, 1972, the assessee-firm was constituted consisting of five partners and two minors, Shri Purandas and Shri Premchand, who were admitted to the benefits of the partnership. The assessee-firm was granted registration under s. 185 of the Act for the first time in the assessment year 1973-74. Continuation of registration was allowed up to the....

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....an appeal before the Tribunal. The Tribunal, relying upon a circular of the Board, held that where a genuine firm had come into existence, registration should not be denied, simply because the minor, who was admitted to the benefits of the partnership, had become a full-fledged partner on attaining majority. In this view of the matter, the Tribunal set aside the order passed by the Commissioner and restored that passed by the ITO. Hence, at the instance of the Department, the Tribunal has referred the aforesaid question of law to this court for its opinion. Sub-section (7) of s. 184 of the Act provides for continuation of registration for subsequent years. That provision reads as under: "184. (7) Where registration is granted to any f....

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....dmitted to the benefits of partnership would become a major. A Division Bench of this court in such a situation has held as follows in Durgaprasad Rajaram Adatiya v. CIT [1982] 134 ITR 601 at p. 608 : "The mode in which the losses were to be distributed after each minor became a major is thus neither foreseen by the instrument of partnership nor can it be ascertained by applying s. 30(7)(b) or s. 13(b) of the Partnership Act. In such a situation, it is clear that when each minor became major there was a change in the shares as evidenced by the instrument of partnership within the meaning of the first proviso to s. 184(7). The facts of the instant case are similar to the facts of I.T.R. No. 637 of 1972, which was one of the references dec....