Law:

Section:

Section 185 of the Income-tax Act, 1961 [Corresponding to section 26A of the Indian Income-tax Act, 1922], read with rules 2 to 6 of the Indian Income-tax Rules, 1922 - Firm - Position prior to 1-4-1993 - Assessment years 1945-46 to 1947-48 - Whether provisions as to specification of share of each partner in partnership deed enacted under section 26A of 1922 Act and in application form prescribed under rule 3, are mandatory in nature and unless these provisions are strictly complied with, a partnership firm is not entitled to get itself registered under section 26A of 1922 Act - Held, yes - Whether it is necessary for purpose of registration under section 26A of 1922 Act that partnership should be constituted by instrument of partnership and that such partnership as is constituted under instrument of partnership should have been in existence during accounting year - Held, yes FACTS By a document of partnership dated 7-12-1916 there was a partnership firm started. There were two partners, 'K' with 10 annas share and 'R' with 6 annas share. After 'K' died, his three sons acquired the 10 annas share of the partnership. Similarly on the death of 'R', his son and grandson acquired his 6 annas interest in the partnership. On the 1-5-1931, all these five members of the families of 'K' and 'R' entered into a new partnership. Two partners were minors and the deed of partnership was executed on their behalf by their guardian. In this deed of partnership the three sons of 'K' were collectively shown as having 10 annas share and the heirs of 'R' were also shown collectively for 6 annas share. After the two minor sons attained majority, applications were made to the income-tax authorities for the registration of the firm. For the assessment years 1945-46 and 1946-47 two separate applications were made on 1-4-1947, a second deed of partnership was executed between these five persons which affirmed the first deed of partnership and in addition specified the individual share of the five persons. For the assessment year 1947-48 an application for registration of the firm was made. The Income-tax Officer rejected all the three applications. As regards the first two applications…

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