Law: Income Tax Act, 1961

Section: 185

Income-tax----Firm---Registration---Minor admitted to benefits of partnership---Direction in circular of Board of Revenue that registration need not be denied for lack of signature of guardian of minor admitted to benefits of partnership unless guardian refused to sign document---Circular binding on Income-tax authorities---Tribunal ordering registration because opportunity had not been given to guardian to sign partnership deed---Order of Tribunal is valid---Indian Income-tax Act, 1961, S.185---Central Board of Direct Taxes Circular No.210/13/74/I.TA.(II), dated 19-3-1976. Certain minors were admitted to be benefits of a partnership. Application for registration was rejected on the ground that the deed of partnership was not signed by the guardian of the minors. The Tribunal allowed registration on the ground that by Circular CBDT No. 210/13/74/I.T.A.(II) dated 19-3-1976, the Central Board had issued directions that the assessee need not be denied registration for lack of signatures of the guardian unless such guardian refused to verify or sign the document if required to do so. On an application for reference under section 256(2): Held, that in the Supreme Court s K.P. Varghese v. I.T.O. (1981) 131 ITR 597 and Ellerman Lines Ltd. v. C.I.T. (1971) 82 ITR 913, it was clearly laid down that such circulars were binding on the Department and, therefore, the Circular No. 210/13/74/ITA(II), dated 19-3-1976 should have been taken notice of and opportunity should have been granted to the guardian to sign the partnership deed on behalf of the minors. Since this procedure followed, the Income-tax Officer could not refuse registration. Therefore, question of law ;rose from the Tribunal's order. Additional C.I.T. v. Uttam Kumar Pramod Kumar (1978) 115 ITR 796 (All.); C.I.T. v. Associate Industrial Distributors (1982) 138 ITR 304 (Cal.); Ellerman Lutes Ltd. v. C.I.T. (1971) 82 ITR 913 (S C); Srinivasa Stainless Steel and Moulding Works v. C.I.T. (1987) 167 ITR (A.P.) and Varghese (K.P.) v. I.T.O. (1981)131 TTR 597 (SC) ref. JUDGMENT GOKAL CHAND MITAL, J.--The Revenue desires this Court to issue mandamus for calling for a statement of the case on the following question:…

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