MOHANLAL Vs. SHYAMLAL

JUDGEMENT

(1.) This is a reference under Section 66 (2) of the Indian Income-tax Act, 1922, and was made at the instance of Messrs. Mohan Lal Shyam Lal of Benaras. The assessment year is 1938-39. It has been conceded in the course of argument that the Income-tax Act of 1922 before the amendment by the Act of 1939 will govern the present reference.

(2.) There was a man by the name of Lala Shyam Lal whose fathers name was Mohan Lal. Shyam Lal had two wives. One was Mst. Muni and from this union there were two sons, Kanhiaya Lal and Kishen Das. The second wife was Mst. Shyam Kumari and from this union there were two sons, Basant Lal and Gobind Prasad. His business, consisted of Benares cloth, gold and silver thread and money-lending. The assessee Messrs. Mohan Lal and Shyam Lal were always assessed as an "association of individuals". An attempt was made in the year 1934-35 for the assessment being made as an unregistered firm, but the application was withdrawn and in that assessment year also Messrs. Mohan Lal and Sayam Lal were assessed as an "association of individuals".

(3.) During the assessment year 1938-39 some time about September 1938 an application was made by Baij Nath Das on behalf of Messrs. Mohan Lal Shyam Lal under Section 26-A of the Act for registration for purpose of the Act. Section 26-A runs as follows : "Application may be made to the Income-tax Officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purpose of this Act and any other enactment for the time being in force relating to income-tax or super-tax". The pre-requisites of a successful application under Section 26-A are the existence of a firm and an instrument of partnership. The firm further must have been constituted under an instrument of partnership.