COMMISSIONER OF INCOME TAX Vs. KANDATH MOTORS

JUDGEMENT

(1.) The Income Tax Appellate Tribunal, Cochin Bench, has sent up the following question of law under S.256(1) of the Income Tax Act, 1961, for our opinion, namely

(2.) The assessment year with which we are concerned is 1972-73, and the previous year in relation to the same is the year commencing from 1st July 1970 and ending with 30th June 1971. The assessee firm originally consisted of six partners, namely: (1) K.K. Sudevan (2) K.S. Krishnadas (3) K.A. Jayapalan (4) K.S. Haridas (5) K.A. Mohandas and (6) K.A. Haridas. The partnership was constituted by a deed dated 13th September 1966 and was granted registration for purposes of Income Tax. Clause.13 of the deed provided that the death or retirement of any of the partners would not operate to dissolve the firm, but that the firm may be continued by the surviving or remaining partners on such terms and conditions as may be agreed upon in writing between the partners. On 9th February 1970 Sudeven, No. 1 among the partners, died. By his registered Will dated 28th January 1970 he bequeathed all his properties to his three adult sons, namely: K.S. Krishnadas (No. 2 of the partners), K.S. Haridas (No. 4 of the partners) and K.S. Bhagavandas (who was not one of the partners under the deed of 1966). On 20th February 1970 a further deed of partnership was executed. The executants are (1) K.S. Krishnadas (No. 2 in the original deed and an heir under the Will of Sudevan) (2) K.A. Jayapalan (No. 3 in the original deed), (3) K.S. Haridas (No. 4 in the original deed and an heir under the Will of Sudevan), (4) K.A. Mohandas (No. 5 in the original deed), (5) K.A. Haridas (No. 6 in the original deed),

(3.) We may refer to the provisions of S.184, 185, 186 of the Income Tax Act, 1961. Under S.184, an application for registration has to be made on behalf of the firm if two conditions are satisfied, namely: (1) that the partnership is evidenced by an instrument and (2) that the individual shares of the partners are specified in that instrument. Under S.185, the Income Tax Officer is to enquire into the genuineness of the firm and its constitution. If satisfied that there was during the previous year, in existence, a genuine firm with the constitution specified in the instrument of partnership, he shall grant registration to the firm; and refuse the same if he was not so satisfied. S.186 authorises cancellation of registration if the officer is of opinion that during the previous year there was no genuine firm in existence as registered. R.22 of the Rules framed under the Income Tax Act provides for application for registration of firms and the particulars to be contained therein. We need not refer in detail to the content of the Rule.