Law: Income Tax Act, 1922

Section: 26,66

Law: Income Tax Rules, 1922

Section: 5,7

Income-tax Act (XI of 1922)---S. 66 read with S. 26-A and Income-tax Rules, 1922, rr. 5 & 7- Application for registration of firm rejected by Income-tax Officer on ground that four partners had not subscribed to it-Nothing on record to show that any opportunity to show cause was asked for by 6v assessee at any stage-Tribunal upholding findings of authorities below---Held, only a question of fact and no question of law was involved in case--Reference refused. Rivoli Theatres, Karachi v. Commissioner of Income-tax (1975) 31 Taxation 55 (S C) distinguished. ORDER ---SHAFI-UR-REHMAN, J.---The petitioner applied on 6th January 1973, under section 26-A of the Income-tax Act for registration as a firm. The Assistant Income-tax Officer by his order dated 3rd January, 1974 rejected the application. The grounds given were that four of the partners were out of the country on the date when the deed was shown to have been executed in Pakistan. They were found to be residing in Qatar State. It was claimed that the documents had been sent abroad for their signatures. The officer found that there was no material at all to sustain that claim and additionally the partnership deed had no folds to indicate that it had been placed in a cover despatched and again received from abroad. The officer held "sit was not possible for the partners within the country and the partners out of the country to sign the documents on the same date, i.e. 10th August 1972, nor there is any mention ire the partnership deed regarding the fact that some of the partners were out of country and had to sign separately". On these factual findings he held tract the partnership was not genuine and proceeded to assess as association of persons. Before the Appellate Tribunal the claim made was that there was already a registered partnership doing the business and what was sought to be done by the new partnership was only a change in the proportion of the profit of the each partner. The petitioner, therefore, as constituted earlier continued and registration could not be refused on the ground that the partners had not subscribed or were not present in the country. Additionally it was urged that sufficient…

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