Law:

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Section 184 of the Income-tax Act, 1961 - Firm - Position prior to 1-4-1993 - Assessment years 1969-70 and 1970-71 - Partnership deed of assessee-firm treated minor as partner and there was no indication in deed that minor was admitted only to benefits of partnership - Whether, even though minor had been represented by guardian, yet, partnership deed could not be construed as one by which minor had been admitted only to benefits of firm - Held, yes - Whether, therefore, Tribunal was not justified in allowing registration to firm - Held, yes FACTS As per the partnership deed of the assessee-firm, four persons, had been treated as partners of the firm. One of the partners was a minor on the date of the partnership deed and he was represented by his guardian, there was no recital in any part of the deed that the minor was being admitted to the benefits of the partnership. On the other hand, the recitals indicated that he was being treated for all intents and purposes as a partner with the same rights and obligations as the other three partners. There was also no indication that the minor partner, would not be personally liable for any losses of the firm. In fact, the deed was silent about the manner in which the losses had to be borne by the partners in question. The firm applied for registration under section 184, before the Income-tax Officer for the assessment year 1969-70 and the Income-tax Officer granted registration. For the assessment year 1970-71, the firm applied for a continuance of the registration before the Income-tax Officer and it was also granted. The Commissioner acting under section 263 set aside, the orders of registration and continuance of registration holding that the partnership deed read as a whole did not mention anywhere that the minor was admitted to the benefits of partnership. However, on appeal, the Tribunal held that the guardian of minor had executed the deed on behalf of minor only for the purpose of securing benefits of partnership. Accordingly, the Tribunal allowed the assessee's appeal and restored the orders of registration. On reference: HELD On the ground that a particular argument was not considered by the Supreme Court…

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