Law: Income Tax Act, 1922

Section: 26,66

(a) Income-tax Act (XI of 1922)----S. 66 read with S. 26-A-Reference to High Court-Finding of fact-Fact that one of partners was allowed to retire and remaining partners undertook to continue partnership with same name, style and capital with certain other partners showing intention of partners to reconstitute and continue partnership-Such finding of fact recorded by Tribunal on basis of material before it-Held, cannot be said to be erroneous in law-No question of law arises from such order of Tribunal. (b) Income-tax Act (XI of 1922)- S. 66-Reference to High Court-Findings of fact-Held, cannot be agitated before High Court under S. 66. JUDGMENT SHAFI-UR-REHMAN, J. -The Commissioner of Income-tax has raised the questions of law under section 66 of the Income-tax Act for adjudication by this Court: (1) Whether the firm constituted by the partnership deed dated 1-4-69 is not a new entity? (2) If the answer to question No, 1 is in the affirmative, then whether on the facts and in the circumstances of the case the Tribunal was justified in granting renewal of registration. 2. The background leading to this reference is that a partnership registered in the name and style of Haji Mukhtar and Company came into existence by a partnership deed dated 5-6-1966 and was got registered with the Registrar of Firms. One of the partners retired and three others were introduced to the partnership by a deed executed, on 1-4-1969. The firm's capital and the name remained the same. The firm applied to the Registrar for giving effect to the alteration and reconstitution of the firm which face was registered. Thereafter the partnership moved the Income-tax Officer on 30-3-1970 for renewal of registration of the firm under section 26-A of the Income-tax Act for the assessment year 1970-71. The Income-tax Officer by his order dated 28-4-71 refused registration on the ground that firm created by the deed dated 1-4-1969 was a new entity which was not registered with the Registrar of Firms as required by subsection (5) of section 26-A of the Income-tax Act. An appeal was filed by the respondent with Income­tax Appellate Tribunal which was accepted, The Tribunal held that there was only a…

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