Law: Income Tax Act, 1922

Section: 26A

Section 184 of the Income-tax Act, 1961 [Corresponding to section 26A of the Indian Income-tax Act, 1922] - Firm - Position prior to 1-4-193 Registered of - Assessment year 1947-48 - Assessee-firm's application for renewal of registration under section 26A was rejected by ITO on ground that one of its partners did not sign application personally - Whether statutory provisions did not permit any agent signing said application on behalf of a partners and if partnership was to get advantage of section 26-A,it was incumbent on all partners to sign personally - Held, yes - Whether, therefore, renewal of registration was rightly refused to assessee-firm - Held, yes FACTS The assessee, a partnership firm consisting of five partners and carrying on business in turmeric, was registered under section 26A of the 1922 Act, for the assessment year 1946-47. The firm applied for renewal of registration. However, the application was signed only by four of the five partners personally, while it was signed by another partner, holding a general power of attorney from the fifth partner. Thus, this application was not signed, by all the partners personally. For this reason the ITO refused to renew the registration. Both the AAC as well as the Tribunal dismissed the assessee's appeal. On reference : HELD Sub-section (2) of section 26A and the relevant rule are expressed in mandatory words. The application must be signed by the partners themselves if the request for registration is to be complied with. The partnership, in order to bring itself within the terms of that section, must satisfy the requirements of that section and the Rules made thereunder. Statutory provisions do not permit any agents signing on behalf of the partners. If a partnership is to get the advantage of section 26A, it is incumbent on all the partners to sign personally. There is no provision of law which casts an obligation on the ITO to return the application for compliance with the requirement of section 26. In the absence of a proper application it is open to the department to reject the application. It is not imperative to reject the application. It is not imperative that the ITO should return the…

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