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Issues:
Validity of registration under section 185 of the Income-tax Act based on the professional qualifications of partners in a firm. Analysis: The appeal was filed against the order rejecting registration under section 185 of the Income-tax Act, 1961, due to the partners' lack of professional qualifications. The firm, constituted by a partnership deed, included a daughter as a partner, leading to the rejection by the Income Tax Officer (ITO) on the basis that both partners were not professionally qualified. The Appellate Assistant Commissioner (AAC) upheld the decision, citing the daughter's lack of qualification under section 288. The appellant contended that professional qualifications were not necessary for all partners as per the Partnership Act, 1932, unless required by specific Professional Acts governing certain professions. The firm, engaged in income-tax practice, did not fall under such regulations, making the partnership valid under the law. The contention was supported by the Appellate Tribunal, emphasizing that the definition of 'business' under the Partnership Act includes professions, validating the partnership deed. The Tribunal ruled in favor of the appellant, vacating the previous orders and granting registration under section 185 to the firm. This case highlights the interpretation of partnership laws concerning professional qualifications and the definition of business under the Income-tax Act and the Partnership Act. The decision clarifies that the necessity of professional qualifications for partners in a firm may vary based on the nature of the business or profession conducted. The judgment emphasizes that the validity of a partnership should be assessed in accordance with the relevant statutes and the activities carried out by the firm. In this instance, the firm engaged in income-tax practice, which was considered a professional activity falling under the definition of business, validating the partnership despite one partner's lack of professional qualifications.
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