Law: Income Tax Act, 1922

Section: 26A,26,23,22(2),25(1)

Law: Income Tax Rules, 1922

Section: 2(2)(b)

Income-tax Act, 1922 -Sections 22(2), 26(1), 26A -- Income-tax Rules -Rule 2(2)(b) -- Change in the constitution of firm -Change taking place prior to issuance of notice under Sec. 22(2) -Provisions of Sec. 26(1), whether applicable -Held no -"At the time of making assessment", meaning of - Firm Registration - Application for registration -Addition of new partners in a firm -Whether results in creation of a new firm -Held yes -Application for registration -Whether should be made within six months of the constitution of the firm or by the end of the year, whichever is earlier -Held yes - Expression "at the time of making the assessment" -Interpretation -Section 26(1) applicable only if change in constitution of firm has taken place "at the time of making assessment under Section 23" -Change in constitution firm taking place much earlier than issuance of notice under Section 22(2) -Provisions of Section 26(1) not applicable - Registration of firm -Addition of new partners in a firm -Results in creation of a new firm -Application for registration of such new firm not made within six months of its constitution or by the end of previous year -Income-tax Officer, held, would be justified in law in rejecting application - JUDGMENT {The judgment of the court was delivered by MUSHTAQ HUSSAIN J.}.-A partnership deed was drawn up to which seven persons namely Mohammad Afzal, Muhammad Irshad, Mst. Ghulam Fatima, Mst. Sardar Begum, Qazi Altaf Hussain, Qazi Akbar Hussain and Maulana Saif-ud-din were partners. On the strength of this partnership deed an application was made for registration of the firm Messrs. Fayyaz Brothers, Lahore on the 2nd of March, 1959. Before the application for registration was made the partnership was not duly registered with the registrar of Firms. 2. The application was filed on the 24th of March, 1960 and was rejected by the order of Mr. Hafeez Ullah, Income-tax Officer, G(1) Ward, Lahore on the ground that it had not been made within six months of the constitution of the firm or by the end of the previous year whichever be earlier. It may be mentioned at the stage that three out of these seven persons had been previously carrying on business…

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