Law:

Section:

Section 185 of the Income-tax Act, 1961 [Corresponding to section 26A of the Indian Income-tax Act, 1922], read with section 4 of the Indian Partnership Act, 1932 - Firm - Position prior to 1-4-1993 - Assessment year 1949-50 - Whether a firm is not person within meaning of section 4 of 1932 Act and, as such, is not entitled to enter into partnership with another firm or Hindu undivided family or individual - Held, yes - Whether, therefore, assessee firm consisting of three firms, a Hindu undivided family and an individual was not entitled to registration under section 26A of 1922 Act - Held, yes FACTS The assessee, an unregistered firm, filed an application under section 26A of the 1922 Act for its registration. The assessee consisted of three firms, one Hindu undivided family and one individual. The ITO held that a firm or Hindu undivided family could not as such enter into a partnership with other firms or individuals and, therefore, assessee could not be registered as a firm under section 26A of the 1922 Act. On appeal, the AAC held that when a firm entered into a partnership with another firm the result in law was that all the partners of each of the smaller firm became partners of the bigger firm and, therefore, there was no legal flaw in the constitution of the bigger firm. He, however, took the view that, as the application for registration had not also been signed personally by all the partners of those three smaller firms as required by section 26A of the 1922 Act and rule 2 of the Rules framed under section 59 of the 1922 Act, there was no valid application for registration and consequently the firm could not be registered. On further appeal, the Tribunal held that a valid partnership had been brought into existence. It reversed the decision of the AAC on the ground that as all the five executants of the deed had signed the application for registration, the requirements of law had been satisfied and accordingly, directed registration of the firm. On reference, the High Court held that assessee was not entitled to registration under section 26A of the 1922 Act. On appeal to the Supreme Court : HELD The general concept of partnership is that a firm is…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492