JEEWANRAM GANGARAM Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference, under s. 66(1) of the Indian IT Act, 1922 (hereinafter referred to as the Act), was made in the circumstances hereinafter stated in brief. Under an instrument of partnership, dt. 15th March, 1938, the firm of M/s Jewanram Gangaram was constituted of seven partners, viz.,

(2.) THIS firm was granted registration, under s. 26A of the Act. One of the partners, named Lachmandas Mimani died on February 24, 1947, leaving him surviving two minor sons, named Gokuldas Mimani and Jamnadas Mimani, and his widow, named Smt. Ram Piyari Devi. Partner Chandratan Mimani used to represent his HUF in the partnership of Jewanram Gangaram. There was a partition in this family and Chandratan and his brother, Chhoganlal, separated. Consequent upon the death of Lachmandas Mimani and the separation between Chandratan and Chhoganlal, it became necessary to reconstitute the firm. So as to bring some of the legal representatives of Lachmandas and also Chandratan and Chhoganlal in their separated status, into the firm, a new partnership deed was executed on 25th March, 1947. The parties to this deed were :

(3.) AGAINST the decision by the CIT, the assessee appealed before the Tribunal. Four contentions were raised before the Tribunal. The first contention was that s. 297 of the IT Act, 1961, repealed the Indian IT Act, 1922, as from the 1st April, 1962, and the CIT was not justified in taking action under s. 338 of the repealed Act in August, 1962. The second contention was that the order under s. 33B was passed in violation of the principles of natural justice because one of the grounds on which the CIT cancelled the registration, namely, that the application for renewal of registration did not fulfil the technical requirements of the Act, had not been communicated to the assessee in the notice given under s. 33B and the assessee was not given sufficient opportunity of showing cause against the same. The third contention was that the minors had not been taken as full partners under the partnership deed but merely admitted to the benefits of partnership any finding contrary thereto was wrong both in fact and in law. The last contention was that inasmuch as the Commissioner came to the conclusion that the firm had not been lawfully constituted, with the minors as full partners, he should not have directed the assessment of the firm as an unregistered firm after the cancellation of the registration of the firm.