Law: Income Tax Act, 1922

Section: 26,26A(5)

[Income Tax Act, 1922 (XI of 1922)].........Section 26A (5)-Firm- Re constitution Renewal of registration-Firm originally constituted on 5-6-1966 and registered with the Registrar of Firms On retirement of one of the partners the remaining partners introduced three others into partnership by a deed executed on 1-4-1969-Partnership business continued with the same name, style and capital-Whether intention was to reconstitute the firm and not to create a new firm Held yes- Reconstituted firm registered as such by Registrar of firm-Requirements of sub-section (5) of Section 26 A, whether satisfied-Held yes-Whether Income Tax Officer empowered to determine the legality of the proceedings before the Registrar of Firms-Held no-Reconstituted firm whether entitled to renewal of registration-Held yes. B. Income Tax Act, 1922 (XI of 1922)-Section 66-Reference to High Court-Question arising out of Tribunals order-Firm- Reconstitution-Tribunals finding that (i) the firm constituted on 1-4-1969 seeking registration was a reconstituted firm and not a new firm and (ii) the Registrar of Firms having been notified of the reconstitution of firm and having acknowledged it, the requirements of sub-section (5) of Section 26A were satisfied-Finding based on material before Tribunal and factors which could lead to such conclusion-Whether findings of fact-Held yes-Question framed, whether arise out of Tribunals order-Held no- Even otherwise, whether a case of reconstitution of firms and not of a new firm- Held yes. The learned counsel for the petitioner has taken us through the Partnership Act with a view to indicate that it was partnership at Will, that the partners specifically talked of dissolution of partnership and induction of three new partners and the allocation of the shares inter se All this, according to the learned counsel, implied a dissolution of the earlier firm, its effacement and the birth of an entirely new firm which todate remained unregistered, In spite of the partnership being at will in spite of one of the partners Walking out of the partnership anti in spite of induction of new sharers and alteration of the share it cannot be said that in every case a new…

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