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Issues:
1. Entitlement to registration for assessment years 1960-61 and 1961-62. 2. Confirmation of the order directing assessment as an unregistered firm. Analysis: The case involved a firm seeking renewal of registration under section 26A of the Indian Income-tax Act for the assessment years 1960-61 and 1961-62. The Income-tax Officer initially granted renewal, but the Commissioner of Income-tax later canceled the registration, directing assessment as an unregistered firm. The Tribunal upheld this decision, leading to the reference to the High Court. The partnership deed of the firm, initially constituted by a partnership among a father and his five sons, raised questions about the entitlement to registration based on the share of profits and losses among the partners, including minors represented by their mother. The High Court considered precedents set by the Supreme Court in similar cases, emphasizing the distinction between cases where minors were admitted to the benefits of the partnership versus being made full partners. The court highlighted clauses in the partnership deeds that determined the sharing of profits and losses, crucial in determining the nature of partnership rights conferred upon the minors. The court referred to specific clauses in the deeds and compared them to the clauses in the Supreme Court judgments to establish the firm's entitlement to registration. In analyzing the partnership deeds and relevant legal provisions, the High Court concluded that the minors were only admitted to the benefits of the partnership without incurring personal liability for the firm's acts. The court found that the clauses in the deeds did not impose personal liability on the minors, aligning with the provisions of the Indian Partnership Act, 1932. Therefore, the refusal of registration by the authorities was deemed unjustified, and the court ruled in favor of the assessee, answering the first question in the negative. As a result of the favorable decision on the first issue, the second question regarding the confirmation of the order directing assessment as an unregistered firm did not require consideration. The High Court ordered the case accordingly, with no costs imposed on either party. The judgment was to be communicated to the Appellate Tribunal as per the requirements of the Indian Income-tax Act, 1922.
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