COMMISSIONER OF INCOME TAX ANDHRA PRADESH HYDERABAD Vs. JAYALAKSHMI RICE AND OIL MILLS CON TRACTOR CO

JUDGEMENT

(1.) This is an appeal from a judgment of the Andhra Pradesh High Court arising out of a reference made under Section 66 (1) of the Income Tax Act, 1922, hereinafter called the 'Act' of the question whether on the facts and in the circumstances of the case the application under Section 26-A of the Act was filed out of time.

(2.) The facts are not in dispute. The assessee firm was constituted under a creed of partnership dated October 6, 1955. It was to come into existence with effect from November 5, 1954. The assessee filed an application under Section 26-A of the Act for registration of the firm for the assessment year 1956-57. The 'previous year' of the firm was shown as the year ending October 26, l955. This application was received by the Income-tax Officer on October 14, 1955. On October 20, 1955 the assessee filed before the Registrar of Firms a statement under Section 58 of the Indian Partnership Act, 1932. On November 2, 1955 the Registrar of Firms filed the statement of the assessee and made entries in the register of firms. On March 23, 1961 the income tax Officer passed an order refusing to register the firm under Section 26-4 inter alia for the reason that the application had not been made in time. The appeal taken to Appellate Assistant Commissioner by the assessee failed. The Income tax Appellate Tribunal also upheld the order of the Income-tax Officer and the Appellate Assistant Commissioner. On that a reference was sought and the High Court answered the question referred in favour of the assessee on the ground that the application had been filed in time.

(3.) Section 26-A of the Act provides that an application may be made to the Income tax Officer on behalf of any firm constituted under an instrument of partnership specifying the individual shares of the partners for registration for the purposes of the Act. The application has to be made by such person or persons and at such time and has to contain such particulars etc., as may be prescribed. Rules 2 to 6 (b) of the Rules made under Section 59 of the Act deal with registration of firms. We are concerned with the following material portion of Rule 2