COMMISSIONER OF INCOME TAX Vs. MANICKBAG GARAGE

JUDGEMENT

(1.) THE question that arises in this case is with regard to the registration of a firm.

(2.) THE Income-tax Officer refused registration to the assessee-firm on the ground that the minors were made full-fledged partners under the partnership deed. It was found by him that the recitals in the partnership deed make it clear that the minors represented by their respective guardians actually become full-fledged partners. He has further followed the direction of the Inspecting Assistant Commissioner under section 144B of the Income-tax Act ("the Act") that the minors have been made to share the losses suffered by the firm which is prohibited under the Partnership Act and hence directing him to refuse registration. On appeal, the Commissioner (Appeals) has confirmed the order of the Income-tax Officer refusing registration.

(3.) IN order to appreciate the question involved, it is appropriate to refer to the deed of partnership made on July 2, 1979. This was done by way of reconstitution of the firm, the earlier reconstitution of the same firm having been made on January 1, 1979. The description of the partners at Serial Nos. 9 to 12 which is relevant for our purpose is as follows : <FRM>JUDGEMENT_114_ITR200_1993Html1.htm</FRM>