Law: Income Tax Act, 1922

Section: 26,26A

Indian Income-tax Act, 1922(XI of 1922) -Section 26A-Partnership-Registration - Whether deed should necessarily specify the actual shares in losses in fraction -Held no -Actual share deducible from terms of the deed --Deed providing for sharing of profits and losses in the ratios as .specified -Minor admitted to the benefits of partnership -Minors share in losses not specified in the Deed - Whether shares should necessarily be specified in terms of 100 paisa or 16 annas as a unit -Held no-Refusal of registration, whether justified on these accounts -Held no -Non-mentioning of share particulars in column 6 of the application filed under section 26A of ills Act- Whether curable and not a material defect -Held yes. A firm had been reconstituted after inducting some more partners, out Of whom, one was a minor, having 7 Paise share out of total 100 paise and admitted only to the benefits of the partnership, One of terms of the partnership deed was that all the profits and losses will be divided in the ratios as stated in the deed. For the assessment year 1959-60, the assessee filed application for registration under section 26A of the Indian Income fax Act, 1922. No order was passed thereon and the firm was assessed as an unregistered firm. Subsequently on an application filed by the assessee under section 27, the Income Tax Officer reopened the assessment, granted registration and reassessed the assessee as a registered firm. On appeal, the Appellant Assistant Commissioner set aside the order and remanded the case to the Income Tax Officer. On remand, the Income fax Officer refused to grant registration under section 26A of the Act and the Appellate Assistant Commissioner, on appeal, affirmed the same. On further appeal, the Tribunal held that, as the minor was only admitted to the benefits of partnership, the registration cannot be refused on that ground, The plea of the revenue, urged for the first time before the Tribunal, that the registration was refused as the shares of the partners in the profits were not specified in column 6 of the application filed under section 26A of the Act was also rejected by the Tribunal, on the ground that it was not put to the…

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