ARUNA AND COMPANY Vs. FIRST INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner is a partnership firm. For the assessment years 1983-84 to 1985-86, it had been granted registration. Subsequently, the Assessing Officer wrote a letter to the petitioner on April 4, 1988 stating that one Muthuswamy who is a partner of a firm is acting in a dual capacity, one as an individual and the other as a representative of the Hindu Undivided family which he represents. Inasmuch as partnership is a contract, there cannot be a contract with himself and therefore, the principle of consensus ad idem is affected and he was of the opinion that no genuine firm came into existence and proposed to cancel the registration from the assessment year 1983-84 onwards. Aggrieved by this action of the Assessing Officer, the petitioner has filed this petition.

(2.) THE central Board of Direct Taxes, while considering the question whether the matter decided by the Bombay High Court in CIT v. Raghavji Anandji and Co. [1975] 100 ITR 246 in an identical situation should be taken up in appeal to the Supreme Court of not, stated as follows :