1966 (12) TMI 3 - HC - Income Tax

Whether the Tribunal was right in law in upholding the ITO s order and refusing to renew registration for the assessment year 1956-57 on the ground that O s signature to the application was a mandatory requirement, as he had attained majority - Held, yes

Issues Involved:
1. Whether the Tribunal was right in upholding the Income-tax Officer's order and refusing to renew registration for the assessment year 1956-57 on the ground that Om Prakash's signature to the application was a mandatory requirement, as he had attained majority?

Issue-wise Detailed Analysis:

1. Facts Leading to the Reference:
The assessee is a firm consisting of two partners, Tirkha Ram and Nandlal, with Om Prakash, a minor, admitted to the benefits of the partnership by a partnership deed dated January 20, 1951. The firm had applied for and obtained registration under the Income-tax Act for the assessment year 1950-51 and subsequent renewals until 1955-56. For the assessment year 1956-57, Om Prakash had attained majority on September 5, 1955. The renewal application made on June 15, 1956, was signed only by Tirkha Ram and Nandlal, not by Om Prakash.

2. Income-tax Officer's Decision:
The Income-tax Officer refused the registration for the year 1956-57 on the ground that Om Prakash, having attained majority and not opting out of the firm, must be treated as a full-fledged partner. Thus, the application for renewal required his signature as mandated by section 26A of the Act read with rule 6.

3. Appellate Assistant Commissioner's View:
The Appellate Assistant Commissioner, while agreeing that the application should have been signed by all partners, suggested that the defect might be curable. However, he dismissed the appeal on the ground that Om Prakash was not a genuine partner, as the firm's accounts for 1957-58 did not show any division of profits or losses including Om Prakash.

4. Tribunal's Decision:
The Tribunal dismissed the appeal, holding that the absence of Om Prakash's signature was a fatal defect under section 26A, read with rule 2, thus justifying the refusal of registration.

5. Legal Provisions and Interpretation:
Section 26A of the Indian Income-tax Act, 1922, and rules 2 and 6 of the relevant rules mandate that applications for registration and renewal must be signed by all partners personally. The language of these provisions is clear and unambiguous, requiring compliance for the validity of such applications.

6. Judicial Precedents:
Several judicial precedents support the mandatory nature of these requirements:
- In *Koduri Sambasivadu & Sons v. Commissioner of Income-tax*, it was held that the application must be signed by all partners personally, and an agent's signature is invalid.
- *Greenfields v. Commissioner of Income-tax* reaffirmed that personal signatures of all partners are mandatory.
- The Supreme Court in *Rao Bahadur Ravulu Subba Rao v. Commissioner of Income-tax* and *Pratapmal Luxmichand v. Commissioner of Income-tax* emphasized strict compliance with the statutory requirements for registration.
- In *Steel Brothers and Co. Ltd. v. Commissioner of Income-tax*, the Supreme Court reiterated that the application must be signed by all partners to be valid.

7. Conclusion:
Given the legal framework and judicial precedents, the requirement for all partners to sign the application personally is mandatory. Om Prakash, having become a full-fledged partner upon attaining majority, was required to sign the renewal application. The failure to do so rendered the application invalid. Consequently, the Tribunal and the Income-tax Officer were justified in refusing the renewal of registration for the assessment year 1956-57.

Judgment:
The court answered the question in the affirmative, upholding the Tribunal's decision. No order as to costs was made.

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