Law:

Section:

Section 184 of the Income-tax Act, 1961 - Firm - Entitlement to registration - Partnership deed of assessee-firm on basis of which registration was sought showed one minor as a full partner - Minor on becoming major elected to continue to be a partner and Form No. 12 signed by such partner was submitted - Whether original partnership deed showing a minor as full partner made partnership invalid - Held, yes - Whether subsequent act of minor electing to remain partner on becoming major and signing Form No. 12 cured such invalidity entitling firm to registration -Held, on facts, no Section 4, read with section 2(31), of the Income-tax Act, 1961 - Association of persons - Assessability of - Partnership deed, when originally executed had one minor shown as full partner - Partnership being illegal, ITO did not assess them either as registered firm or as an unregistered firm but instead sought to make assessment as AOP -Whether ITO had an option either to assess a body of persons as AOP or its individual members - Held, no - Whether ITO was justified in assessing the assessee as AOP -Held, on facts, yes Facts The assessee, a partnership firm, constituted under a deed of partnership dated 5-7-1962, consisted of four partners of which one S was a minor but he was shown as a full-fledged partner. For the assessment year 1966-67, the assessee filed an application for registration of the firm before the ITO who rejected the application and refused to register the firm on the ground that the partnership deed was an invalid instrument, as under section 30 of the Indian Partnership Act, 1932 a minor could only be admitted to the benefits of a partnership and could not be made a full partner. The ITO assessed the firm as an AOP. On appeal, the Tribunal found (i) that S became major and was elected to continue to be a partner of the firm, and (ii) that S signed Form No. 12 for 1966-67 clearly undertaking that he agreed to be a partner of the firm. The Tribunal opined that the conduct of S cured the invalidity attached to the partnership deed. Accordingly, the Tribunal concluded that the invalidity hitherto attached to the partnership deed was removed and that the assessee was…

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