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Refusal to register assessee-firm for assessment year 1961-62. Analysis: The case involved a reference under section 66(1) of the Indian Income-tax Act, 1922, regarding the refusal to register the assessee-firm for the assessment year 1961-62. The firm, "M/s. Gandhi Fakirchand Chenabhai," operated with five partners, one of whom died during the relevant accounting period. The surviving partners continued the business with altered profit-sharing ratios, effective from the date of the partner's death. The Income-tax Officer rejected the firm's registration application, citing improper division of profits for the accounting period. The Appellate Assistant Commissioner upheld the decision but directed the allocation of profits based on time periods. The Tribunal disagreed with the direction and restored the Income-tax Officer's decision. The main contention was whether the refusal to renew the firm's registration was lawful. The partnership deed did not specify the continuation of the firm after a partner's death. The court noted that without such a clause, the partnership was deemed dissolved upon the partner's demise. The renewal application was found to be flawed as it was not signed by the deceased partner's legal representatives and covered the entire accounting period, not just the period until the partner's death. The court rejected the argument that the remaining partners signed as heirs, emphasizing the lack of proper representation. Regarding the application for fresh registration, it was acknowledged as time-barred and rightfully rejected. Consequently, the court affirmed that the refusal to register the assessee-firm for the assessment year 1961-62 was legally justified. The question posed in the reference was answered in the affirmative against the assessee-firm, with costs awarded to the firm. The judgment highlighted the importance of compliance with partnership laws and proper documentation in registration applications to avoid legal challenges.
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