1982 (3) TMI 94 - AT - Income Tax

Summary

Issues:
1. Delay in filing appeals.
2. Cancellation of registration of a partnership firm due to the inclusion of minors as partners.
3. Interpretation of the term "person" under the Companies Act, 1956.

Analysis:
1. The appeals were filed with a delay of 13 and 25 days, respectively. The delay was attributed to postal reasons, and it was deemed reasonable, leading to its condonation.

2. The registration of a partnership firm was canceled by the Income Tax Officer (ITO) as it consisted of more than 20 partners, including minors. The cancellation was upheld by the CIT (Appeals)-II, Kanpur, based on the Companies Act, 1956. However, the CIT (Appeals) allowed an opportunity for amending the partnership deed regarding the lack of guardians' signatures for minors, following a CBDT circular.

3. The assessee contended that minors admitted to the benefits of partnership should not be counted as partners under the Companies Act, 1956 and the Partnership Act, 1932. Legal references were made to support this argument, emphasizing that minors cannot be full-fledged partners. The Tribunal agreed with this view, stating that minors should not be included in determining the 20-person limit under the Companies Act, 1956. The Tribunal also highlighted the distinction in defining "person" under different acts and upheld the CIT (Appeals) decision to allow amending the partnership deed.

4. The Tribunal referred to relevant legal provisions and precedents to support its decision. It emphasized that a minor cannot be considered a partner in a firm under the Partnership Act, 1932, and the context of defining "person" varies across acts. The Tribunal concluded that the ITO's decision to cancel the firm's registration was not justified, and the matter was remanded for amending the partnership deed as per the law.

5. Consequently, the appeals filed by the assessee were allowed based on the Tribunal's observations, highlighting the need for amending the partnership deed to include guardians' signatures for minors, in line with the CIT (Appeals) decision.

This detailed analysis of the judgment provides insights into the legal reasoning and interpretation of relevant laws and precedents in resolving the issues raised in the case.