Law: Income Tax Act, 1961

Section: 2(23),256(1),256(2)

Section 2(23) of the Income-tax Act, 1961 - Firm - Definition of - In assessee-firm wife of one P represented her HUF as manager and hence registration was refused on ground that she could not represent HUF when her husband was alive - Tribunal allowed registration to assessee-firm holding that she should not be treated as benamidar within ambit of section 185 and that it was not necessary that such representative should only be karta of HUF - High Court rejected revenue's application for reference under section 256(2) - Whether issues involved were questions of law -Held, no Section 256 of the Income-tax Act, 1961 - Reference to High Court - General - Whether when framing of questions is in such a manner that they do not set out facts clearly, such questions could be referred by Tribunal to High Court - Held, no FACTS The assessee-firm filed an application for registration along with the original partnership deed and copy thereof which showed three partners including wife of one 'P' representing HUF as its manager, each partner having one-third share. The Assessing Officer refused registration holding that the wife could not represent HUF as she could not claim to be the manager of the HUF when her husband was alive. He also opined that there could not be a smaller HUF within the larger HUF when there was no partition as such. On second appeal, the Tribunal expressed the view that in the case of a member of HUF representing it, it is not necessary that such member should be a karta and that member should not be treated as benamidar within the ambit of section 185. Hence, the Tribunal held that the registration could be granted, and further refused to make reference under section 256(1). The High Court also rejected the revenue's application under section 256(2). On appeal: HELD The questions raised by the revenue as to whether the Tribunal was legally correct in allowing registration to the firm when Mrs. 'P' was alleged to have joined the firm as partner in the capacity of manager of a HUF which had not been recognised under section 171 and when she was benamidar of bigger HUF, were not questions of law. Even the framing of the questions was in such a manner…

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