Law:

Section:

Section 185(2) [as it stood prior to 1-4-1971] of the Income-tax Act, 1961 - Firm - Registration - Genuineness of - Whether in case where a minor had attained majority during accounting period and had not signed partnership deed within specified period of six months of attaining majority, ITO had to give an opportunity to assessee to correct -application by putting relevant signature - Held, yes Section 184 of the Income-tax Act, 1961 - Firm - Registration - Entitlement to - During relevant accounting year, being financial year 1967-68, assessee-firm, which had come into existence by an oral agreement on 28-3-1967, executed partnership deed on 25-9-1967 - However, a minor 'P' who had attained majority on 31-5-1967 was not shown as full-fledged partner and had not signed partnership deed - Whether partnership deed dated 26-9-1967 showing 'P' as a minor admitted to benefits of partnership was not a legal deed and, hence, no legal partnership came into existence on 25-9-1967 - Held, on facts, yes Facts The assessee-firm came into existence by an oral agreement on 28-3-1967 and minor P was admitted to the benefits of the partnership by the other partners of the firm. P was born on 31-5-1949. A partnership deed was executed on 25-9-1967 and in it the date of birth of P was also mentioned. However, P had not signed the partnership deed. For the assessment year 1968-69, for which the accounting year was the financial year was 1967-68, an application for registration was filed by the assessee on 4-12-1967. The ITO held the firm to be genuine and granted registration for the assessment year 1968-69. The Commissioner cancelled the registration. The Tribunal took the view that when on 25-9-1967 the deed was executed, the minor had not become a full-fledged partner and still there was two months' time (i.e, up to 30-11-1967) in which he would have chosen to become a full-fledged partner and that the only defect was that the application for registration had not been signed by all the partners. The Tribunal held that if that defect had been noticed by the ITO, he could have called upon the assessee to rectify the mistake. And, thus, the Tribunal directed the ITO to get the…

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