Law: Income Tax Act, 1922

Section: 26A

Income-tax Act (XI or 1922)----S. 26-A-Firm, registration of-Reconstitution of firm-Firm constituted on 26-3-1949 and granted registration from year to year--Partners of existing firm on 31-12-1968 admitting more partners in firm with effect from 1-1-1969-No new partnership, held, came into being but a reconstitution of old firm took place and such firm not hit by S. 26-A (5)-Reconstituted firm was qualified for renewal of registration in circumstances. Commissioner of Income-tax, Rawalpindi v. Ahmed Shafi 1980 P T D 331; 1980 P T D 343; 1980 P T D 415 and P L D 1961 Kar. 90. JUDGMENT Z. C. VALIANT, J. -The applicant has filed the above application, and the following two questions have been referred for our opinion: - "(i) Whether there was any evidence with the Tribunal to hold that the firm constituted vide instrument of partnership dated 26-3-1949 had ceased to exist on 31-12-1968 and was not the same firm that continued carrying on business after the change in constitution on 1-I-1969? (ii) Whether the applicant 'firm was entitled to registration under section 26-A of the Income-tax Act, 1922?" The learned Advocate for the applicant submitted, that these very questions have been decided by two reported cases namely Commissioner of Income-tax, Rawalpindi v. Ahmad Shafi 1980 P T D 331, 1980 P T D 343 and 1980 P T D 415 as well as indirectly in the decision reported in P L D 1961 Kar. 90. The facts out of which the above reference arises are as follows: - "That Messrs Shakoor Ali Muhammad and Sons, was originally a part­nership firm consisting of two partners. The articles of partnership were embodied in a written instrument dated 26-8-1949. The names of the partners and the profit sharing ratio are set out hereinbelow: - (i) Mr. Shakoor, s/o Ali Muhammad ... 50 per amt. (ii) Mr. Ismail s/o Shakoor... 50 per cent. The firm was registered under section 59 of the Partnership Act with the Registrar of Firms, Hyderabad on 24-10-1963. (2) That on 1-1-1969, there was a change in the constitution of the firm, which was evidenced by an instrument of partnership executed on 16-6-1969. The preamble of the instrument of partnership is reproduced hereunder: - "Whereas the…

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