Law:

Section:

Section 186(1) of the Income-tax Act, 1961 [Corresponding to Section 26A of the Indian Income-tax Act, 1922], read with rule 6B of the Indian Income-tax Rules, 1922 - Firm - Position prior to 1-4-1993 - Assessment year 1955-56 - Whether ITO has jurisdiction to cancel registration or renewal of registration of a firm under rule 6B when he finds that very instrument of partnership on basis of which firm is constituted is invalid in law - Held, yes - Assessee-firm consisted of eight partners out of which three were minors - One of clause of partnership deed provided that each partner would have equal share in partnership business and profit and loss of partnership would be divided equally between and borne by partners - For relevant assessment year, ITO by invoking provision of section 186(1) of 1961 Act, cancelled registration of assessee granted under section 26A of 1922 Act on ground that fact of partnership deed making minor partners liable for losses was contrary to provisions of section 30 of Indian Partnership Act, 1932 - Whether since as per partnership deed minor partners were made liable for losses, it could be said that there was no genuine partnership in existence and ITO was justified in cancelling registration - Held, yes - Whether in instant case jurisdiction of ITO for cancellation of registration was referable to rule 6B of 1922 Rules, hence, even though in order of cancellation reference had been made to section 186(1) of 1961 Act, order of cancellation of registration would not be bad or vitiated because of such reference - Held, yes FACTS The assessee-firm consisted of eight partners including three minors who had entered into the partnership through their fathers. The assessee was granted registration on the basis of the partnership deed dated 1-4-1952, under section 26A of the 1922 Act. Clause 6 of the partnership deed provided that each partner would have equal share in partnership business and profit and loss of partnership would be divided equally between and borne by partners. Thereafter, the registration was renewed for the assessment year 1955-56. Thereafter, ITO by invoking the provisions of section 186(1) of 1961 Act cancelled the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492