Law: Income Tax Act, 1922

Section: 26A,26A(1)

Income-tax Act, 1922 -- Sections 26A, 26A(1) (as amended in 1965) --- Firm -- Partnership constituted under verbal agreement on 1-1-1964 -- Instrument of partnership executed on 3-3-1964 recording terms and conditions agreed upon verbally -- Instrument of partnership, whether created a valid partnership -- Held no -- Registration of partnership -- Firm constituted by oral agreement and subsequently terms reduced to writing -- Such partnership, held, not entitled to registration -- Corresponding Sections: Income-tax Ordinance, 1979 -- Section 68(1) -- ORDER The order was passed by M. EUSUF, Judicial Member.---This appeal is directed against the order passed by the Appellate Assistant Commissioner on 4th June, 1968 in I.T.A. No. 28-C-II/1867-68 in respect of the assessment year 1965-66. 2. The grounds of appeal taken are as Under:- (1) For that both the learned I.T.O. and the learned A.A.C. have erred in law and not considered the law as amended in 1965 and hence their orders are liable to be cancelled. (2) For that in view of the amendment of Section 26A in 1965, the appellant firm be please allowed registration. (3) For that any other grounds that may, with leave, be taken up and pressed at the time of hearing of the appeal. 3. It is admitted that the partnership in question was orally constituted on the 1st of January, 1964 and that the terms and conditions of the partnership agreed upon verbally were then reduced to writing in the deed of partnership executed on the 3rd of March, 1964. When the assessee applied for registration under Section 26A of the Income-tax Act, 1922 for the assessment year 1965-66, the Income-tax Officer rejected it on the ground that as the partnership had not been brought in to existence by the deed itself, it was not entitled to get registration in view of the decision in the case of Commissioner of Income-tax, East Pakistan v. Md. Qudratullah (1966) Pakistan Tax Decision 413 = (1966) 13- TAXATION 160. The assessee then preferred an appeal before the Appellate Assistant Commissioner, who has rejected it. Hence the present appeal. 4. The learned Income-tax Practitioner appearing on behalf of the assessee-appellant has contended that…

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