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Issues Involved:
1. Whether the Tribunal was right in holding that registration under section 26A of the Indian Income-tax Act should be granted to the assessee for the period from February 1, 1957, to September 30, 1957. 2. Interpretation of the two partnership deeds dated April 18, 1957, and January 31, 1958. 3. Whether the partnership was dissolved or merely reconstituted. 4. Applicability and interpretation of section 26A of the Indian Income-tax Act. 5. Legality of partial registration for a part of the accounting year. Detailed Analysis: 1. Whether the Tribunal was right in holding that registration under section 26A of the Indian Income-tax Act should be granted to the assessee for the period from February 1, 1957, to September 30, 1957. The Tribunal held that the assessee-firm was entitled to registration under section 26A for the period from February 1, 1957, to September 30, 1957. However, the Tribunal's decision was criticized for being self-contradictory. The Tribunal agreed with the Appellate Assistant Commissioner that the deed dated January 31, 1958, did not mean dissolution but only a continuation of the old firm. Despite this, the Tribunal proceeded to discuss the registration of the instrument of partnership dated April 18, 1957, and concluded that the registration should be granted only for the period up to September 30, 1957. 2. Interpretation of the two partnership deeds dated April 18, 1957, and January 31, 1958. The partnership deed dated April 18, 1957, constituted a firm with four partners, each having equal shares. The deed provided that the partnership would continue until determined otherwise and allowed for the retirement of partners without dissolving the firm. The deed dated January 31, 1958, recorded the retirement of one partner, Nathmull, and the continuation of the business by the remaining three partners. The controversy arose over whether this deed indicated a dissolution or merely a reconstitution of the firm. 3. Whether the partnership was dissolved or merely reconstituted. The court analyzed the clauses of both deeds. The deed dated April 18, 1957, allowed for the retirement of partners without dissolving the firm. However, the deed dated January 31, 1958, repeatedly used the terms "dissolved" and "dissolution," indicating a clear intention to dissolve the partnership constituted by the earlier deed. The court concluded that the partnership was indeed dissolved both in fact and in law, and a new partnership was formed by the remaining partners. 4. Applicability and interpretation of section 26A of the Indian Income-tax Act. Section 26A of the Income-tax Act pertains to the registration of the "instrument of partnership" for tax purposes. The registration is for the assessment of the firm for a particular period. The court emphasized that the instrument of partnership must exist for the entire accounting year for which registration is sought. The Supreme Court's decision in R. C. Mitter & Sons v. Commissioner of Income-tax was cited, which laid down that the instrument must be in existence during the relevant accounting year. 5. Legality of partial registration for a part of the accounting year. The court found that the Tribunal's decision to grant partial registration for the period from February 1, 1957, to September 30, 1957, was illegal and not permissible under the Income-tax Act. The court held that it is not possible to split the accounting year and allow piece-meal registration of the instrument of partnership. The registration under section 26A is an annual registration, and the instrument must be in existence for the whole accounting year. Conclusion: The court answered the question in the negative, holding that the Tribunal was wrong in permitting registration under section 26A of the Income-tax Act for a part of the accounting year. The court emphasized that the registration must be for the entire accounting year, and partial registration is not permissible. The judgment underscores the importance of the continuity and existence of the partnership instrument for the entire accounting year for valid registration under section 26A.
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