COMMISSIONER OF INCOME TAX Vs. SAGAR TALKIES

JUDGEMENT

(1.) The following question is referred to us for our opinion under section 256(1) of the Income-tax Act, at the instance of the Revenue :

(2.) The assessee claiming to be a firm of seven partners constituted under a partnership deed dated 11/05/1966, applied for registration to the Income-tax Officer. The Income-tax Officer refused to recognise the existence of the firm. He observed that the partnership deed was not signed by one of the alleged partners, Sri I. A. Patel, and the application for registration was also not signed by all the partners. He further found that there were disputes among the partners, that Sri I. A. Patel had filed a suit against the other partners for settlement of accounts, that he was not accepted as a partner by others and that, therefore, there was no (genuine) partnership in the eye of law. He accordingly took the status of the assessee as association of persons and made the assessment.

(3.) In appeal, the Appellate Assistant Commissioner observed that for the preceding year the status of the assessee has been held to be that of an unregistered firm by the Appellate Assistant Commissioner which was confirmed in appeal by the Tribunal in its order dated 31/10/1974. He, however, held that the assessee was not entitled to registration since the partnership deed was not signed by Sri I. A. Patel as also the application for registration. He, therefore, directed the Income-tax Officer to take the status of the assessee as unregistered firm The assessee took up the matter in appeal before the Tribunal and contended that the assessee firm is evidenced by an instrument of partnership as required under section 184(1) of the Income-tax Act and it was not necessary that it should be signed by all the partners for the purpose of getting registration under section 185 of the Act. Reliance was placed on a decision of the Punjab and Haryana High Court in Jagan Nath Pyare Lal v. CIT [1973] 92 ITR 207.