TaxTMI 
TaxTMI 
1960 (12) TMI 2
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....If the answer to question No. 1 is in the affirmative, whether the fact that on January 1, 1946, there was no firm in existence would be fatal to the application for registration of the firm under section 26A of the Indian Income-tax Act or whether the firm could be registered with effect from March 26, 1946, if it is held that the firm was genuine ? " Prior to January 1, 1945, there was a firm called Dwarkadas Khetan & Co. On that date, the firm ceased to exist, because the other partners had previously withdrawn, and it came to be the sole proprietary concern of Dwarkadas Khetan. On February 12, 1946, Dwarkadas Khetan obtained the selling agency of Seksaria Cotton Mills Ltd. On March 27, 1946, he entered into a partnership with three ot....
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....oduced before the Registrar of Firms showing the names of the four partners. The Registrar of Firms granted a registration certificate, and in the certificate Kantilal Kasherdeo was shown as a full partner and not as one entitled merely to the benefits of the partnership. Banks were also informed about the four partners, and it does not appear that to them intimation was sent that one of the named partners was a minor. Though the partnership came into existence on March 27, 1946, the firm was stated to have started retrospectively from January 1, 1946. It may be pointed out that the firm has the calendar year as its account year, and the matter before us refers to the account year, 1946 corresponding to the assessment year, 1947-48. For p....
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.... for the decision of the High Court. The High Court differed from the Tribunal, and answered both the questions in favour of the assessee. In so far as the second question is concerned, the matter is now settled by the decision of this court in R. C. Mitter & Sons v. Commissioner of Income-tax. But, in our opinion, the decision of the High Court on the first question was not correct, and the correct answer does not leave the second question open at all. There is a distinct cleavage of opinion among the High Courts on this point. The Bombay, Madras and Patna High Courts have held that where a minor is admitted as a full partner by adult partners, the document can be registered after interpreting it to mean that the minor has been admitted ....
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.... be read as giving to the minor the rights laid down by the Partnership Act. They also observed that too rigid a construction need not be put upon the deed, and referred to Lindley on Partnership, 11th edition, page 87, and Khorasany v. Acha. The other cases which we need not examine are Vincent v. Commissioner of Income-tax, and Sahai Brothers v. Commissioner of Income-tax. On the other hand, there is a decision of the Calcutta High Court reported in Hoosen Kasam Dada v. Commissioner of, Income-tax, in which Costello and Panckridge, JJ., have held that under section 26A of the Income-tax Act and the Rules, the Income-tax Officer is only empowered to register a partnership which is specified in the instrument of partnership and of which r....
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....finition does is to apply to a minor admitted to the benefits of partnership all the provisions of the Income-tax Act applicable to partners. The definition cannot be read to mean that in every case where a minor has, contrary to law, been admitted as a full partner, the deed is to be regarded as valid, because, under the law, a minor can be admitted to the benefits of partnership. The rules which have been framed under section 26A quite clearly show that a minor who is admitted to the benefits of partnership need not sign the application for registration. The law requires all partners to sign the application, and if the definition were to be carried to the extreme, even a minor who is admitted to the benefits of partnership would be compet....