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Issues:
1. Registration of a firm under section 27 of the Kerala Agricultural Income-tax Act, 1950. 2. Competency of Deputy Commissioner to exercise suo motu powers of revision regarding registration of a firm. Analysis: The judgment delivered by the High Court of Kerala involved two references by the Deputy Commissioner of Agricultural Income-tax and Sales Tax regarding the registration of a firm for the assessment years 1968-69 and 1969-70. The questions of law referred for determination were whether the firm was entitled to registration under section 27 of the Kerala Agricultural Income-tax Act, 1950, and whether the Deputy Commissioner had the authority to set aside the finding of the officer regarding the satisfaction of the requirements of section 27 by the applicant. The firm had applied for registration under section 27 of the Act, which required an application on behalf of a firm constituted under a partnership instrument specifying the individual shares of the partners. The registration was allowed by the Agricultural Income-tax Officer, but the Deputy Commissioner, utilizing his suo motu powers of revision under section 34 of the Act, disallowed the registration based on grounds related to the keeping of accounts by the firm and the distribution of profits among the partners not aligning with the partnership deed. Regarding the first ground, the court found it untenable to impose the requirement of keeping accounts by the firm for registration, as neither the section nor the rules mandated such a condition. Judicial precedents were cited to support this position. As for the second ground, the Deputy Commissioner's objection to the distribution of profits not matching the partnership deed was also dismissed. The court analyzed the provisions of the Act, rules, and the partnership deed to conclude that the application for registration did not need to specify the profit-sharing ratio as per the partnership deed, and the rejection on this basis was unjustified. Moreover, even if the profit-sharing ratio had to align with the partnership deed, the deed itself did not explicitly state the ratio but referred to an arithmetical calculation based on initial contributions. Therefore, the rejection of the application on this ground was deemed incorrect. Ultimately, the court ruled in favor of the assessee on the first question regarding registration entitlement and in favor of the department on the Deputy Commissioner's competency to exercise revision powers. No costs were awarded, and the judgment would be communicated to the Deputy Commissioner as per legal requirements.
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