TaxTMI 
TaxTMI 
1977 (7) TMI 16
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....tion 185 of the Income-tax Act, 1961, for the assessment years 1965-66 and 1966-67 ? " The material facts of the case may be briefly stated thus : The assessee-firm, M/s. Jain & Co., Fancy Bazar, Gauhati, was constituted on February, 1964, on which date a partnership deed (annexure C) was executed. The deed of partnership showed that the firm consisted of the following five partners : (1) Shri Ratan Kumar Bawari, (2) Shri Sukumar Chandra Jain, (3) Shri Manikchand Agarwalla, (4) Shri Jaiprakash Sharma, (5) Smt. Pushpa Devi Goyal. They all signed the deed of partnership. They had to share the profits equally, at 20 per cent. each. Shri Sukumar Chandra Jain retired from the partnership with effect from 10th June, 1964. ....
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....her found that as per clause 4 of the deed of partnership, Shri Sukumar Chand Jain was entitled to 20% of the profit and loss of the partnership business, whereas, according to the memorandum, he retired from the partnership on no loss no profit basis. He has further found that on the retirement of Sukumar Jain with effect from June 10, 1964, the partnership constituted according to the deed of partnership dated February 1, 1964, stood dissolved, and in the absence of a fresh deed of partnership, amongst the remaining four partners, the application for registration on April 9, 1965, was incompetent. On appeals, the order of the Income-tax Officer was upheld by the Appellate Assistant Commissioner of Income-tax and the Tribunal. At the insta....
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....rtners as evidenced by the instrument of partnership on the basis of which the registration was granted ; and (ii) the firm furnishes, along with its return of income for the assessment year concerned, a declaration to that effect, in the prescribed form and verified in the prescribed manner. (8) Where any such change has taken place in the previous year, the firm shall apply for fresh registration for the assessment year concerned in accordance with the provisions of this section. " The material portion of section 185 of the Act may also be quoted : " 185. Procedure on receipt of application.---On receipt of an application for the registration of a firm, the Income-tax Officer shall inquire into the genuineness of the firm and ....
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.... of profits. This is because in the case of a registered firm, the department can know the share of profit of each individual partner and levy income-tax thereon accordingly. Section 185 of the Act read with rule 22 and Forms 11 and 11A show that a partnership firm has to be registered for one assessment year ; and under section 184(7), the registration shall have effect for every subsequent year, if there has been no change in the constitution of the firm or in the shares of the partners. In the instant case the partnership deed dated February 1, 1964, constituting a firm consisted of five members with 20% share each, in the profits. Sukumar Jain retired with effect from June 10, 1964. The finding is that there was no application for....