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Application under Sec. 66(3) of the Indian Income Tax Act to require Commissioner to state the case of the assessee for decision on questions of law arising from the partnership deed and registration refusal. Analysis: The case involved an application under Sec. 66(3) of the Indian Income Tax Act, seeking to compel the Commissioner of Income Tax to present the case of the assessee, "Firm Haji Ghulam Rasul, Khuda Bakhsh," to the Court for the resolution of legal questions. The firm initially comprised two partners, Haji Ghulam Rasul and Haji Khuda Bakhsh, with specific share percentages. However, a partnership deed executed later added three sons of Haji Ghulam Rasul as partners, reducing Haji Ghulam Rasul's share. The Income Tax Officer rejected the registration application, deeming the partnership deed as bogus, and assessed the firm as originally constituted. The Assistant Commissioner upheld this decision, leading to the application under Sec. 66(3). The primary contention raised was that once an instrument of partnership specifying individual shares was submitted, the Income Tax authorities had no discretion to refuse registration. However, the Court disagreed, emphasizing that the partnership instrument must be genuine. Citing precedents, the Court highlighted that authorities could reject registration if the partnership was not authentic, as seen in cases involving attempts to evade taxes through sham partnerships. The burden of proof rested on the applicant to establish the existence of a genuine partnership, with evidence required to substantiate the claim. In this case, the Court found discrepancies in the timeline of partnership establishment, profit division, and lack of capital contributions by the alleged partners. The sons of Haji Ghulam Rasul were deemed as mere assistants rather than genuine partners, based on their financial dependence on the father and absence of separate capital or property. These circumstances led to the conclusion that the firm essentially consisted of Haji Ghulam Rasul and Haji Khuda Bakhsh only, warranting dismissal of the application. The judgment highlighted the importance of substantial evidence in determining the authenticity of partnerships to prevent tax evasion. The Court dismissed the application, with each party bearing their own costs. Both judges concurred with the decision, underscoring the lack of a legal question in the case due to the factual findings regarding the partnership's authenticity. The judgment reinforced the principle that income tax authorities could scrutinize partnership documents and circumstances to discern genuine partnerships and prevent misuse of tax regulations.
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