Law: Income Tax Act, 1922

Section: 25,25A,66

[Income Tax Act, 1922 (XI of 1922)].............Sections 25A, 66-firm-Geniuneness- Registration Question of law arising out of Tribunals order-Firm shown to have been constituted by the Partnership Deed not found genuine on facts Refusal to grant registration based on findings of facts-weather gives rise to question of law- Held no-Opportunity of hearing-Neither any opportunity of hearing asked for at any stage nor any material was indicated which could be determinative of question involved Question of opportunity of hearing, whether arose-Held no-Income Tax Rules, rr. 5,7. Case distinguished: Rivoli Theatres, Karachi v. Commissioner of Income Tax (1975) 31 Taxation 55(S.C.). ORDER The petitioner applied on 6 January, 1973 under Section 26-A of the Income Tax Act for registration as a firm. The Assistant Income Tax Officer, by his order dated 3 January, 1974 rejected the application. The grounds given were that four of the partners were out of the countr5 on the date when the deed was shown to have been executed in Pakistan. They were found to be residing in Qatar State. It was claimed that the documents had been sent abroad for their signatures. The officer found that there was no material at all to sustain that claim and additionally the partnership deed had no folds to indicate that it had been placed in a cover despatched and again received from abroad. The officer held "it was not possible for the partners within the country and the partners out of the country to sign the documents on the same date i.e. 10 August 1972, nor there is any mention in the partnership deed regarding the fact that some of the partners were out of country and had to sign separately". On these factual findings he held that the partnership was not genuine and proceeded to assess as association of persons. Before the Appellate Tribunal the claim made was that there was already a registered partnership doing the business and what was sought to be done by the new partnership was only a change in the proportion of the profit of the each partner. The petitioner, therefore, as constituted earlier continued and registration could not be refused on the ground that the partners had not…

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