AGARWAL AND CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-taxAppellate Tribunal, Delhi Bench, (hereinafter referred to as " the Tribunal") has submitted a statement of the case and referred the following question of law at the instance of the assessee, Messrs. Agarwal and Co. (hereinafter referred to as " the assessee ") under Section 66(1) of the Income-tax Act, 1922 (hereinafter referred to as the "Act") :

(2.) THE assessment years in question are 1952-53, 1953-54 and 1954-55.

(3.) ACCORDING to this document, there were in all 18 partners. The assessee firm applied for registration under Section 26A in all the three years. The Income-tax Officer refused registration every time on the finding that the partnership consisted of more than 20 persons which was violative of Section 4 of the Indian Companies Act and for that reason could not be registered as a partnership. The orders passed in each year were affirmed on the assessee's appeals by the Appellate Assistant Commissioner and the Tribunal. It is clear from the statement of the case that some of the partners of the assessee-firm had joined it only in their representative capacity being kartas of their respective Hindu undivided families. The appellate order of the Tribunal has been made a part of the statement of the case and has been marked as annexure "E" in the referring order. In paragraph 4 of the appellate order the Tribunal has clearly stated that :