2004 (9) TMI 29 - HC - Income Tax

Partnership Registration - Signature vis-a-vis Thumb impression - It is not necessary that the partnership deed must bear the signature in letters and words. Thumb impression is one of the modes of signature to identify and specify as also to bind the person putting the thumb impression on a document. It is also recognised under section 3(56) of the General Clauses Act, 1897. The court also takes judicial notice of the fact that even on important documents like registration of a sale deed apart from the signature of the seller his thumb impression is also taken by the registration department to make it definite that the seller is the same person. There is no particular mode of signature prescribed under the Income-tax Act or the rules framed thereunder. Therefore putting thumb impression amounts to signing a document. Thus no adverse inference can be drawn from the fact that the two partners instead of signing the partnership deed had put their thumb impressions - Held that the assessee was entitled to the registration

Summary

Issues:
1. Interpretation of the Income-tax Act, 1961 regarding registration of partnership deed.
2. Validity of thumb impressions on partnership deed for registration.
3. Expert opinion on genuineness of thumb impressions.
4. Legal recognition of thumb impressions as a mode of signature.

Analysis:
The High Court of ALLAHABAD was tasked with determining the legality of granting registration to a firm based on a partnership deed dated December 26, 1968. The primary issue revolved around whether the lady partners' thumb impressions on the deed were sufficient for registration, as their signatures were absent. The Income-tax Officer had initially denied registration citing the lack of signatures by the lady partners. However, the Tribunal overturned this decision, emphasizing the validity of thumb impressions as a form of signature.

Upon review, the High Court noted that both the partnership deed and the registration application featured thumb impressions of the lady partners. An expert had verified the genuineness of one partner's thumb impression, but no definitive conclusion was reached regarding the other partner's impression. Despite this, the Tribunal concluded that both thumb impressions were genuine, thereby supporting the firm's registration.

The Court highlighted that while signatures are a common form of identification, thumb impressions are also legally recognized as a valid mode of signing documents under section 3(56) of the General Clauses Act, 1897. It was emphasized that there is no specific signature requirement outlined in the Income-tax Act or its regulations. The Court drew parallels with other legal practices, such as the registration of sale deeds, where thumb impressions are accepted alongside signatures to confirm identity. Thus, the Court affirmed that thumb impressions on the partnership deed were equivalent to signatures, dismissing any negative implications of their usage.

Ultimately, the High Court ruled in favor of the respondent-assessee, upholding the Tribunal's decision to grant registration to the firm based on the partnership deed with thumb impressions. The judgment clarified that the absence of signatures did not invalidate the document, as thumb impressions were legally sufficient for authentication. The decision favored the recognition of thumb impressions as a valid mode of signing documents, ensuring the firm's entitlement to registration for the specified assessment years.