NARASINGHMAL PREMCHAND Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under S. 256(1) of the IT Act, 1961. At the instance of the assessee, the Tribunal has referred the following question for the opinion of the Court :

(2.) THE facts appearing in the statement drawn up by the Tribunal, so far as relevant for decision of the point, are as hereunder. Narasinghmal, Premchand and Pokhraj constituted a partnership in the name and style of "Narasinghmal Premchand" under a partnership deed dated January 25, 1948. In the said firm, Narasinghmal, Premchand and Pokhraj had 6 annas 3 pies, 5 annas 3 pies and 4 annas 6 pies shares, respectively, and the said firm had been granted registration under S. 26A of the IT Act, 1922, for the assessment years upto 1959 60 inclusive.

(3.) THE ITO refused to grant registration to the firm mainly on three grounds : (a) the alleged reconstituted firm was exploiting the licence granted by the excise authorities to the old firm of 3 partners without obtaining either a fresh licence or getting the old licence suitably amended and, therefore, the partnership was illegal; (b) the change in the constitution of the firm was not notified to the sales tax authorities contemporaneously, and on March 2, 1959, one of the partners of the old firm made an application for renewal of the certificate of registration and gave a declaration duly verified wherein it was indicated that the partnership was constituted by 4 persons, Narasinghmal, Premchand and Pokhraj, which clearly showed that the alleged firm on the basis of the document dated November 12, 1958, had not come into existence; and (c) the application for registration was belated, having been filed more than 6 months after the constitution of the firm.