MAHESH PRASAD KEDAR NATH Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner is a partnership firm. It applied for and obtained registration under Section 184 of the Income-tax Act for the year 1970-71. This registration was continued year after year till 1975-76. In that year, however, the registration was cancelled on the ground that there is no genuine partnership in existence within the meaning of Section 185(1)(a). THE main grounds upon which the registration was cancelled are the following :

(2.) ACCORDING to the deed of partnership, there are three partners and a minor is admitted to the benefits of partnership. Though the share of each of the partners is specified and it is stated that the minor shall not be liable for any losses, the deed allocates the loss only among the three major partners leaving a balance of 10% unprovided for. In other words, the deed does not make it clear as to what will happen to 10% of losses in case the firm incurred losses.

(3.) IN our opinion, it is a fit ease where the court should interfere even at this stage.