1982 (9) TMI 33

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....y 15, 1969, the firm was granted the benefit of continuance of registration. Subsequently, the ITO found that a change had taken place in the constitution of the firm inasmuch as Kumari Geeta became major on January 7, 1969. He was, therefore, of the opinion that continuance of registration, which had been allowed to the firm, was erroneous. He issued a notice under s. 186(1) of the I.T. Act and, after hearing the assessee and obtaining the previous approval of the IAC, cancelled the registration. The assessee appealed to the AAC, who, relying on the decision of this court in Ram Narain Laxman Prasad v. ITO [1972] 84 ITR 233 (All), upheld the order of the ITO. On appeal by the assessee, the Appellate Tribunal took the view that the only gro....

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....done, continuance of registration of the firm was erroneous. There being no genuine firm in existence, an action under s. 186(1) was competent. We find no merit in the contention. The assertion that on a minor attaining majority change takes place in the constitution of the firm and the firm must apply for fresh registration under s. 184(8) of the Act, is based on the view taken in Ganesh Lal Laxmi Narain v. CIT [1968] 68 ITR 696 (All) and Ram Narain Laxman Prasad's case [1972] 84 ITR 233 (All). These decisions have been overruled by a Full Bench of this court in Badri Narain Kashi Prasad v. Addl. CIT [1978] 115 ITR 858. It would, therefore, not be correct to say that as a consequence of a minor attaining majority change in the constitution....

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....he income-tax department was based on any such fact it might have been possible to hold that the firm was not genuine. The mere fact that the instrument of partnership may not have been in existence during the relevant accounting period could be no ground for holding that the firm was not genuine. It is a different matter that initially a mistake might have been made by the income-tax department for granting registration as no instrument of partnership was in, existence during the relevant accounting year but the mistake, if any, could not be corrected by cancellation of the registration under rule 6B for the very simple reason that the only ground upon which the registration can be cancelled is the non-existence of a genuine firm." The ....