Law:

Section:

Section 184(7) of the Income-tax Act, 1961-Firm-Registration-Continuation of-Minor, admitted to benefits of partnership, attained majority within relevant accounting period but no fresh partnership deed executed within that period-ITO completed assessment as a registered firm but addl. Commissioner cancelled same under section 263 and directed fresh assessment as unregistered firm-Whether by cancelling assessment order, addl. Commissioner had also cancelled order of renewal of registration-Held, on facts, yes-Whether minor attaining majority amounted to change in constitution of firm-Held, no-Whether execution of fresh partnership deed necessary in instant case for continuation of registration-Held, answer dependent upon whether original deed provided for change, if any, in shares of partners on minor attaining majority, especially by redistribution of share in losses [Matter remanded to tribunal for fresh decision in that light] Facts The assessee-firm was assessed in the status of a registered firm for the assessment year 1969-70 by the ITO's order dated 21-10-1968. The Addl. Commissioner discovered that a minor admitted to the benefits of partnership in the firm had attained majority on 14-1-1968, a date within the relevant accounting period, but that no fresh deed of partnership had been executed by the partners within that period. He was of the opinion that the ITO should not have granted registration to the assessee-firm in the absence of a fresh partnership deed. Acting under section 263, he cancelled the assessment order and directed the ITO to pass fresh assessment order on the assessee in the status of URF. The Tribunal upheld the Addl. Commissioner's order. On reference, the assessee, apart from challenging the revenue's stand on the necessity of a fresh partnership deed, also questioned whether by cancelling the assessment order, the Addl. Commissioner had cancelled the order of renewal of registration as well. Held 1. The Addl. Commissioner's action not only purported to cancel the assessment order but also the order granting renewal of registration after finding that the minor had attained majority and that no fresh deed of partnership had been…

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