COMMISSIONER OF INCOME TAX Vs. KOLHE M P

JUDGEMENT

(1.) IN the assessment of the assessee for the asst. yrs. 1953 -54 and 1954 -55, the assessee applied to the IT authorities for registration of the partnership firm consisting of himself and one Namdeo. The instrument of partnership, on the basis of which registration was asked, was dt. the 19th July, 1953, which was beyond the accounting period for the asst. year 1953 -54, but within the accounting period for the subsequent asst. year 1954 -55. The ITO refused registration because he was not satisfied that the firm was a genuine firm. The AAC in the appeal filed by the assessee took the same view and dismissed the appeal. The Tribunal was of the opinion that there was no material on the basis of which the genuineness of the firm could be questioned and the assessee firm, therefore, was a genuine firm. The Tribunal, therefore, allowed the appeals filed by the assessee and directed that the assessee firm may be registered for both the assessment years. The Department made an application to the Tribunal under S. 66(1) of the Indian IT Act and on that application the following question of law has been raised by the Tribunal and referred to us in respect of the registration allowed for the asst. year 1953 -54 :

(2.) NOW , in view of the recent Supreme Court decision in R.C. Mitter and Sons vs. CIT : D.C. Auddy & Brother vs. CIT (1959) 36 ITR 194 : (1959) Suppl. 2 SCR 641, it is necessary that the instrument of partnership on the basis of which registration is claimed under S. 26A should be in existence in the accounting year in respect of which the assessment is being made. In the present case, the accounting year for the first assessment year viz., the asst. year 1953 -54, extended from 31st Oct., 1951, to 18th Oct., 1952. The instrument of partnership is, as we have stated earlier, dt. the 19th July, 1953. It was, therefore, not in existence in the accounting year corresponding to the asst. yr. 1953 -54 and, in view of the Supreme Court decision, registration could not be allowed of the firm for the asst. year 1953 -54. In our opinion, therefore, the answer the question referred to us will have to be that the appellant firm was not entitled to registration under S. 26A of the IT Act for the asst. year 1953 -54.

(3.) THE further submission of Mr. Dwarkadas that the Department, which was the respondent before the Tribunal, could not have urged that contention before the Tribunal and the Tribunal had no jurisdiction to consider it, is also not tenable. In the first place, the statement of the Tribunal to which we have already made a reference shows that the contention was taken even before the IT authorities. It was not, therefore, a new contention, which the Department as the respondent was raising before the Tribunal. Moreover, a respondent is not confided merely to the ground on which the lower authority has decided in its favour in supporting the decision of the lower authority. The respondent is entitled to urge any other grounds which may be available to him in support of the decision of the lower authority, which is in its favour. If a ground, which is purely one of law and arises on the facts, which are either admitted or proved on the record, the respondent is not precluded from urging it in support of the decision of the lower Court, which is in his favour merely because the said decision is based not on that ground but on some other ground.