Law:

Section:

Section 187(2), read with first proviso to section 184(7), of the Income-tax Act, 1961-Firm-Change in constitution of-Minor admitted to benefits of partnership became full-fledged partner on attaining majority-On minor's becoming full-fledged partner, there was no change in number of partners or in their profit-sharing ratio, except that minor agreed to share losses in the same proportion as his share in profits-Whether there was a change in constitution of firm or shares of partners within the meaning of first proviso to section 184(7)-Held, on facts, no-whether assessee entitled to continuation of registration-Held, on facts, yes Facts The assessee-firm constituted under a deed of partnership dated 30-10-1963, consisted of six major partners and one V was admitted to the benefits of the partnership. The proportion in which the major partners and V were to share the profits was specified in the deed. V, being a minor, had no share in the losses of the firm. The assessee-firm was granted registration under section 185(1)(a) up to the assessment year 1966-67. However, on 28-8-1966, V attained majority and opted to become a full-fledged partner. Consequently, a fresh deed of partnership was executed on that day confirming the original deed. In the fresh deed, neither V's share in the profit nor that of any other partner was changed, but V agreed to share the loss in the same proportion as his share in the profit. For the assessment year 1967-68. The assessee-firm did not seek a fresh registration by making an application in Form No. 11 A, but applied for continuation of registration by making a declaration in Form No. 12. However, during the assessment proceedings, the assessee made an application in Form No. 11A on 14-3-1969 for a registration of the firm on the basis of the fresh deed of partnership. The ITO, however, refused registration and assessed the firm as an unregistered firm. He was of the view that the partnership deed dated 28-8-1966 brought about a change in the constitution of the firm and, hence, the application in Form No. 11A should have been filed in time and since this was not done, the assessee was not entitled to the registration. On appeal,…

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