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 1958-59 - Whether registration under section 26A of 1922 Act is registration of "instrument of partnership" specifying individual shares of partners, which has to be registered for purpose of Act - Held, yes - Assessee-firm was constituted by a partnership deed dated 18-4-1957 and dissolved on retirement of one of partner on 30-9-1957 and new partnership deed was executed on 31-1-1958 - ITO refused to allow registration to assessee-firm but Tribunal held that there should be really a registration for 8 months, from 1-2-1957 to 30-9-1957, in respect of instrument of partnership dated 18-4-1957, and that there was no dissolution but only a change in constitution of firm - Whether it is, not possible to break periods of accounting and to allow piece-meal registration of instrument of partnership under section 26A of 1922 Act as registration under section 26A of 1922 Act is an annual registration - Held, yes - Whether, therefore, Tribunal was wrong in permitting registration under section 26A of 1922 Act to assessee with reference to portion of accounting year commencing from 1-2-1957, and ending on 30-9-1957 - Held, yes FACTS The assessee-firm was constituted under a partnership deed dated 18-4-1957, and applied for registration under section 26A. One of the partners retired from the partnership from 30-9-1957 by a deed dated 31-1-1958. The ITO held that the deed dated 31-1-1958, recorded merely the dissolution of the firm of four partners with effect from 30-9-1957, but did not bring into existence any new partnership. The ITO, therefore, refused to allow registration to the assessee-firm. However, on appeal the AAC allowed the registration. On appeal by the revenue the Tribunal held that registration under section 26A should be granted to the assessee with reference the portion of the relevant accounting year commencing from the 1-2-1957, and ending on the 30-9-1957. On reference : HELD The registration under section 26A is registration of the "instrument of partnership". It is that instrument of…

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