COMMISSIONER OF INCOME TAX Vs. GANPATJI TUNIYABHAI

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the I.T. Act, 1961, hereinafter referred to as "the Act", at the instance of the CIT, Madhya Pradesh, Nagpur and Bhandara. The question, which has been propounded by the Income-tax Appellate Tribunal for our decision, is as follows :

(2.) THE material facts giving rise to this reference briefly are as follows : THE assessee is M/s. Ganpatji Tuniyabhai of Khargone. For the assessment year 1961-62, the assessee submitted an application for renewal of registration of the firm under Section 26A of the Indian I.T. Act, 1922. THE application was rejected by the ITO on the short ground that as the guardian of certain minors, who were admitted to the benefits of partnership, had signed the deed of partnership, the minors became full-fledged partners contrary to law and the partnership was, therefore, illegal. On appeal, the AAC held, relying on CIT v. Shah Mohandas Sadhuram [1965] 57 ITR 415 (SC), that the fact that the guardian of the minors, who were admitted to the benefits of the partnership, had signed the deed of partnership on behalf of the minors was not a fatal defect and that fact, therefore, could not be a ground for rejecting the application for renewal of the registration. THE learned AAC, however, held that as the application, which was filed in June, 1961, was not signed by Rameshchandra, who had become a major in June, 1961, the order passed by the ITO refusing the renewal of registration was justified on that ground. THE assessee then preferred a second appeal before the Tribunal. THE Tribunal held that so far as the assessee was concerned the accounting year ended on 20th October, 1960, when Rameshchandra was admittedly a minor. THE Tribunal, therefore, held that as Rameshchandra was a minor during the accounting year, when the original partnership deed was in force, the application for renewal of registration for the assessment year 1961-62 was not rightly refused. THE Tribunal, therefore, held that the assessee was entitled to renewal of registration for the assessment year 1961-62.

(3.) THE form of application prescribed by the Rules and the note appended thereto make it absolutely clear that the application for renewal is required to be signed personally only by those partners who are not minors. In view of the admitted fact that Rameshchandra was a minor during the accounting year which ended on 20th October, 1960, the application for renewal of the registration for the assessment year 1961-62 was not required to be signed by Rameshchandra as he was a minor admitted to the benefits of the partnership for the accounting year ending on 20th October, 1960. THE Tribunal was, therefore, justified in holding that the assessee was entitled to the renewal of registration for the assessment year 1961-62.