RAM MILLS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference by the Income-tax Appellate Tribunal, Patna Bench, under Section 256(1) of the Income-tax Act 1961. The assessee is a partnership firm consisting of five partners. They carry on business in chanti and dal milling at Patwah in the district of Patna. It filed an application under Section 26A of the Indian Income-tax Act, 1922, for registration of the firm for the assessment year 1961-62. The Income-tax Officer refused registration on the following two grounds :

(2.) A copy of the partnership deed in question is annexure " B " to the statement of the case. A copy of the order of the Income-tax Officer dated March 30, 1965, is annexure "E" to the statement of the case. The assessee went up in appeal before the Appellate Assistant Commissioner from this order. The Appellate Assistant Commissioner by his order dated January 27, 1967 (annexure " F "), allowed the appeal and upset both the findings recorded by the Income-tax Officer.

(3.) IT is, therefore, obvious that there was a contradiction between the recital of the date of execution in the deed and its actual execution. The question for consideration was whether the deed could be held to be invalid only on that account, as has been held to be so by the Tribunal. IT has missed a fundamental principle of interpretation of a document that the document has to be read as a whole, and if there is any conflict between one part of the document and the other, then effect has to be given to that part of the document which finds support from other facts and circumstances of the case. Hence, it is plain that the recital about the date of execution of the document on the 31st day of October, 1959, was incorrect. Stamps were purchased much later, and on those stamps the deed could not be executed on October 31, 1959 The actual execution of the deed came in when the partners signed the document on May 5, 1960. That being so, to all intents and purposes, the document was executed on March 18, 1960, and one could take the view that the partnership did not come into existence on October 31, 1959, on the basis of the obviously wrong recitals in the earlier portion of the deed. But, surely, it did come into existence when the document was executed on March 18, I960. The Tribunal, in the eye of law, was not right and justified in holding the deed of partnership to be invalid only because of the mistake of recital of the date of execution in it. If can hazard a surmise for the cause of this mistake, although it is not necessary to do so, it seems to me that the partners purported to execute a partnership agreement on October 31, 1959, and after the stamps were purchased, the recital, which might have been there in a plain paper, was copied out in the deed in question, without making the correction in the recitals. Be that as it may, on the plain facts of this case, it goes without saying that the deed was executed on March 18, 1960, stamps had been purchased before its actual execution, and the mere recital of the deed of partnership having been made on the 31st day of October, 1959, could not detract from its value of being a valid partnership document.