Law:

Section:

Section 185 of the Income-tax Act, 1961 [Corresponding to section 26A of the Indian Income-tax Act, 1922] - Firm - Position prior to 1-4-1993 - Assessment year 1955-56 - At time when 'M' was minor, a deed of partnership was executed on 25-7-1953, between And 'M' purporting to constitute assessee firm - 'M' attained majority on 23-10-1953. - On 10-1-1955, an application was made by 'C' and 'M' for having firm registered under section 26A of 1922 Act, and for purpose of registration reliance was placed upon deed of partnership as instrument under which firm was constituted - Whether since on date when partnership deed was executed 'M' was minor, no firm came into existence under said deed - Held, yes - Whether since no instrument of partnership was executed after 'M' obtained majority, firm during relevant period could not be said to be constituted under instrument of partnership - Held, yes - Whether, therefore, said firm was not entitled to registration under section 26A of 1922 Act - Held, yes FACTS There were two brothers 'C' and 'M'. At a time when 'M' was a minor, a deed of partnership was executed on 25-7-1953, between 'C' and 'M' purporting to constitute the assessee firm. 'M' attained the majority on 23-10-1953. On 10-1-1955, an application was made by 'C' and 'M' for having the firm registered under section 26A of the 1922 Act, and for the purpose of registration reliance was placed upon the deed of partnership as the instrument under which the firm was constituted. The ITO refused to register the firm. The matter was carried before the AAC and thereafter before the Tribunal. The Tribunal by its order dated 21-6-1960, dismissed the appeal of the assessee. On reference: HELD It is obvious that in order to be entitled to claim registration, the firm must be constituted under an instrument of partnership. It was difficult to see how the firm in the instant case could be said to be constituted under an instrument of partnership. At the date when the deed of partnership was executed, 'M' was a minor and no firm, therefore, came into existence under the deed of partnership. The firm came into existence after 'M' attained majority as a result of an oral…

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