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TMI Blog1977 (3) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... e four persons who were taken in as partners from 1st April, 1972 were minors and that they were admitted to the benefits of the partnership. Two applications for registration of the said firm were filed before the Income-tax Officer. One of them was signed by two partners viz., Messrs. P. Sivaramaiah and P. Sivarajaiah and the other application was signed by all the six partners including the four partners stated to be minors. The above applications were filed before the Income-tax Officer on 23rd August, 1972 while the accounting year of the firm ended on 31st March, 1973. The Income-Tax Officer observed that Messrs. P. Srinivasa Prabhu and P. Subhas Chandra Sekhar though aged 20 and 19 years respectively were shown as minors in the instrument of partnership and that further it was stated that they would not be liable for losses. He further observed that the above two partners who were majors were not made parties to the contract of partnership. He held that there was no valid contract of partnership since all the major partners did not sign the deed of partnership. He concluded the contract was ab initio void. He further observed that the application for registration signed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of the original deed of the partnership viz., 5th April, 1972. He contended that the mere fact that Messrs. P. Srinivasa Prabhu and P. Subhas Chandra Seykhar were described as minors in the deed of partnership would not render the firm invalid. He added that it is not necessary that all the partners should sign the deed of partnership and that in this case there is enough evidence to show that all the six partners constituted the firm. He drew our attention to the application made to the Registrar of Firms and the communications sent to the bank in this connection. He relied on the following rulings in support of his stand: Imperial Automobiles vs. CIT, Madras(1) Jagan Nath Pyare Lal vs. CIT Patiala(2) He also referred us to the order of the Appellate Tribunal, Hyderabad Bench `A and `B in the case of M/s. B. Pandaiah Co. vs. Income-tax Officer, A-Word, Mahaboobnagar and in the case of Income-tax Officer, B-Ward, Circle III vs. M/s. Ashok Enterprises, Secunderabad in I.T.A. No. 1252 (Hyd) 1974-75 (order dated 24th August, 1976) and in ITA No. 376 to 380 (Hyd) 1974-75 (Order dated 28th September, 1974). 4. On behalf of the revenue reliance was placed on the orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kishore were all minors. This is evident from the following preamble that appears in the said deed: "And whereas the said P. Sivaramiah and the said P. Sivarajiah have mutually agreed to admit the following minor sons of the said Pabba Shankariah all residing at Secunderabad, to the benefits of this partnership. (1) Pabha Srinivasa Prabhu aged about 20 years (2) Pabba Subhash Chandra 19 years (3) Pabba Suryaprakash 16 years (4) Pabba Nandkishore 13 years It is not disputed by the revenue that the age of the partners mentioned above are not correct. While partners Nos. 3 and 4 Pabba Suryapraksah and Pabba Nandkishore aged 16 and 13 years respectively were minors the other two Pabba Sriniasa Prabhu and Pabba Subhas Chandra Seykhar were majors. The learned counsel for the assessee Mr. M.J. Swamy contended that due to wrong advice and erroneous impression about two viz. P. Srinivasa Prabhu and P. Subhas Chandra Seykhar were also considered as minors as not having attained age of 21 years which was stated to be the age at majority. He pointed out that the document came to be executed in the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this partnership (1) Pabba Surya Prakash, aged 16 years, (2) Pabba Nandkishore, aged 13 years shall be substituted. Except for the amendment the Principal Deed shall stand good and valid for all purposes and intent and shall be deemed to be in full force and effect. IN WITNESS WHEREOF the said parties have signed this Deed on the day, month and the year first aforementioned: Witnesses Parties 1. Sb. B.N. Acharya. 1. Sb. Pabba Sivaramiah 2. Sb. V.K. Madhava Rao 2. Sb. P. Sivarajiah . 3. Sb. P. Srinivas Prabhu . 4. Sb. P. Subhas Chandra Shekhar . 5. Sb. P. Shankeriah Father and natural guardian Pabba Shankeriah. 6. Sb. P. Shankeriah A perusal of the above deed clearly indicates that from 5th April, 1972 all the six parties viz P. Sivaramiah, P. Sivarajiah, P. Srinivasa Prabhu, P. Subhash Chandra Sekhar, P. Surya Prakash and P. Nandakishore (the last two represented by their father and guardian P. Shankeriah) have entered into the contract of Partnership and that due to certain error the description of Messrs. P. Srinivasa Prabhu and P. Subhash Chandra Sekhar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made in the original deed of partnership. We are therefore of the opinion that the deed of partnership dated 5th April, 1972 stood rectified by the rectification deed ever since the commencement of partnership from 1st April, 1972. We are unable to agree with the learned Departmental Representative s submission that the deed of rectification was not in force in the relevant account year and that therefore it would not for part of the deed of partnership. As pointed out earlier the deed of rectification has not brought out any change in any part of the contract of partnership. The deed of partnership has only clarified the correct position about the description of the above two partners. The description of the above partners was wrongly mentioned as minors by a wrong advice tendered to the assessee firm. The said mistake has not altered in any manner the other clauses of the contract of partnership. We are satisfied that the mistake rectified is an obvious and glaring one because of the fact that the age of the concerned partners were set out in the deed of partnership dated 5th April, 1972 and 20 and 19 years respectively. We are, therefore, of the opinion that the deed of partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... constituted as a partnership firm. A deed of rectification dated 14th November, 1962 was entered into between M B and it was stated that the original partnership was really entered into only between M B and that the minor was never intended to be a partner and that he was shown as a partner by reason of ignorance of law. On these facts it was held that the deed of rectification was not operative at any time during the accounting period and it would not help the assessee. The facts here are entirely different as pointed out above. 8. We may add and even if for argument sake we accept the contention of the learned Departmental Representative that the deed of rectification can have no retrospective effect and that therefore the original deed of partnership dated 5th April, 1972 to which M/s. P. Srinivasa Prabhu and P. Subhas Chandra Sekhar were not parties, they having not signed the deed, yet we are unable to agree with him that the assessee is not entitled to registration. It is well settled the that mere fact that a partner has not signed the instrument the partnership would not be an invalid partnership. If there is material to show that the partner who had not signed the in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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