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Renewal of registration under section 26A of the Indian Income-tax Act, 1922 for a partnership firm with changes in partners and constitution. Analysis: The judgment by the High Court of Allahabad dealt with a reference under section 66(1) of the Income-tax Act concerning the renewal of registration for a partnership firm. The firm, constituted in 1942 with four partners, faced a challenge when one of the partners, Girdharilal, passed away in 1954. Despite Girdharilal's death, the firm applied for renewal of registration for the assessment year 1957-58, with his son, Hari Shanker, representing his share. The Income-tax Officer, Appellate Assistant Commissioner, and Income-tax Appellate Tribunal all concluded that the firm was not entitled to renewal due to the change in partners and constitution. The primary issue revolved around whether the original deed of partnership from 1942 was sufficient for the renewal of registration under section 26A of the Act. The court analyzed the requirements under section 26A, emphasizing the need for an instrument of partnership specifying partners' shares and compliance with the prescribed form. The absence of the original partnership deed and the change in the firm's constitution were key arguments raised against the renewal. The court referred to precedents such as Makerwal Colliery and Girdharilal Seetaram and Bros. to assess the impact of partner's death on firm dissolution and continuation. It was highlighted that while the partnership deed may prevent automatic dissolution upon a partner's death, the constitution of the firm could change if the deceased partner's heir joins or declines to join the partnership. Further, the court examined the Indian Income-tax Rules, particularly Rule 6 governing applications for renewal of registration. The prescribed form required certification that the constitution of the firm remained unaltered since the original registration. In this case, with Girdharilal's death and Hari Shanker stepping in, the constitution of the firm had indeed changed, rendering the renewal application defective. Ultimately, the court upheld the decision to refuse renewal of registration, citing the material defect in the application due to the change in partners and failure to meet the certification requirements. The judgment favored the Income-tax department, holding the assessee liable for costs.
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