Law: Income Tax Act, 1961

Section: 184,30

Income-tax-----Firm---Registration---Validity of partnership---Admission to benefits of partnership--- Only a minor can be admitted to benefits of partnership--¬Major who was deaf and dumb admitted to benefits of partnership--¬Partnership not entitled to registration---Indian Income Tax Act, 1961, S.184---Indian Partnership Act, 1932. S.30. Under the provisions of section 30 of the Indian Partnership Act, 1932, a minor alone can be admitted to the benefits of partnership, with the consent of all the partners. A deaf and dumb person cannot be admitted to the benefits of the partnership under the provisions of section 30 of the Partnership Act. Admitting a major to the benefits of partnership is impliedly prohibited under that provision. A firm consisted of two partners each having a 121/2 per cent share in the profits and a 50 per cent share in the loss. G. R. and S were admitted to the benefits of the partnership with a 25 per cent share each in the profits. G was aged about 21 years. She had been treated as a minor because she was a deaf and dumb person. Since a minor alone can be admitted to the benefits of the partnership, the Income-tax Officer came to the conclusion that partnership was invalid and, accordingly, he refused to grant registration. The Tribunal held that the firm was entitled to registration. On a reference: Held, that the firm was not entitled to registration under section 184 of the Income Tax Act, 1961. CIT v. B. Pandaiak & Co. (1983.) 143 ITR 464 (AP) fol. CIT v. R.S. Shoe Factory (1963) 47 ITR 917 (All.); Manohar Das Kedar Nath v. CIT (1950) 18 ITR 914 (All.) and Rejendra Nath v. CIT (1991) 188 ITR 753 (All.) ref. JUDGMENT THANIKKACHALAM, J. ---As per the directions of this Court under section 256(2) of the Income Tax Act, 1961 (in short, "the Act"), the Tribunal referred the following two questions for the opinion of this Court: "(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the admission of one Miss A. Gita, major, to the benefits of partnership would not make the partnership as illegal or invalid and, hence, the assessees claim for registration of the firm cannot…

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