COMMISSIONER OF INCOME TAX Vs. BOMBAY AJMEER STORES

JUDGEMENT

(1.) THE question that has-been referred in this reference under Section 256(1) of the Income-tax Act, 1961, is as follows :

(2.) THE assessee-firm consisted of four partners. Though the partnership deed was executed on January 3, 1962, it commenced its business actually on December 14, 1961. By an application dated March 12, 1963, the assessee applied to the Income-tax Officer for registration of the firm under Section 185. Though the Income-tax Officer refused registration on various grounds, the only ground that survived before the Appellate Tribunal was that the original partnership deed was tampered with by the substitution of one page which provided for the closing of the accounts of the firm on March 31, 1963. THE Income-tax Officer and the Appellate Assistant Commissioner held that, since one of the sheets of the partnership deed had been substituted and 'as there was no evidence to show as to when that was actually substituted, it was not entitled for registration. THE Tribunal held that the substitution by itself will not disentitle the assessee for registration. THE Tribunal, on a consideration of the evidence before it, came to the conclusion that the partners even as per the original understanding had their accounts closed only on March 31, 1963, and that the accounts of the firm produced before it did not disclose any sign of tampering of the accounts showing that the accounts were actually closed for the first time on any date prior to March 31, 1963. THE application was filed on March 12, 1963. Since it is not stated that the application was not accompanied by the original instrument and a copy thereof as required by Section 184(5), we presume that the original instrument and a copy thereof was produced along with the application on March 12, 1963. If that were so, even on March 12, 1963, the substituted page was in the partnership deed. As pointed out by the Tribunal, there is no evidence to show that the accounts of the partnership were closed on any date prior to March 31, 1963. THE result is that the substituted page also had come into existence during the period of the accounting year. On these findings, the Tribunal was right in holding that the rejection of the application for registration cannot be sustained.