NARASINGMAL PREMCHAND Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the Income Tax Act, 1961. At the instance of the Assessee, the Income Tax Tribunal has referred the following question for the opinion of the Court:

(2.) A firm, in order to entitle itself to registration under Section 26A of the Income Tax Act, 1922, was to satisfy the following requirements:

(3.) Mr. Mohanty appearing for the Assessees contended that even if there was no partnership in existence on 12 -11 -1958, it cannot be denied that by the time the application for registration under Section 26A was made, the new firm had come into existence. It was further submitted by him that at any time during the year the instrument of partnership could be drawn up, and on the basis of such an instrument registration could be granted in case a genuine firm bad come into existence from the beginning of the year as alleged. It is difficult to accept this contention in view of the fact that the Assessees bad come up with the positive case that the firm case to be reconstituted in terms of the new instrument with effect from 12 -11 -1958. In the face of such a positive assertion, it becomes difficult to accept Mr. Mohanty's submission that if the firm had not been there from 12 -11 -1958, it had at least been in existence by the time the application of registration under Section 26A was made.