1984 (11) TMI 83 - AT - Income Tax

Summary

Issues:
- Appeal against continuation of registration under section 184(7) of the Income-tax Act, 1961 for the assessment year 1980-81.

Analysis:
The appeal was filed by the revenue against the order of the AAC directing the ITO to grant continuation of registration under section 184(7) to the assessee-firm for the assessment year 1980-81. The ITO had initially denied the continuation of registration based on the fact that one of the minors admitted to the benefits of the partnership attained majority during the accounting year. The ITO relied on a Supreme Court decision stating that the firm should not be granted registration if the sharing ratio of partners in loss was unknown from the partnership deed. The AAC, however, allowed the appeal of the assessee by relying on a decision of the Allahabad High Court and distinguishing the case cited by the ITO. The revenue challenged the AAC's decision, arguing that the ITO was justified in assessing the firm as unregistered. The Tribunal analyzed the facts and legal provisions, noting that the minor partner who attained majority did not opt to continue as a partner within the prescribed period of six months. The Tribunal held that since the minor failed to exercise the option within the specified time, the firm should be treated as a registered firm for the relevant period. The Tribunal agreed with the AAC's reasoning and the decision of the Allahabad High Court, ultimately confirming the order directing the ITO to grant continuation of registration to the assessee-firm.

In conclusion, the Tribunal dismissed the appeal, upholding the AAC's decision to grant continuation of registration under section 184(7) to the assessee-firm for the assessment year 1980-81.