9911796707
TMI Blog1991 (5) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... to this court under section 256(1) of the Income-tax Act, 1961, for short "the Act". "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the lower authorities were wrong in cancelling the registration of the assessee-firm under section 186 of the Income-tax Act, 1961 ?" Briefly stated, the facts are as follows : Three persons formed a partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch runs as follows : "(1) If, where a firm has been registered, or its registration has effect under sub-section (7) of section 184 for an assessment year, the Income-tax Officer is of opinion that there was during the previous year no genuine firm in existence as registered, he may, after giving the firm reasonable opportunity of being heard (and with the previous approval of the Assistant Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onary (5th Edition),- the term "genuine" means that it is not false, forged, fictitious, simulated, spurious or counterfeit. We are, therefore, of the opinion that the expression "no genuine firm in existence as registered" in section 186 of the Act means that a firm registered under section 184 of the Act is actually not in existence, non est or a fictitious one. Therefore, for the purpose of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s), was signed only by three partners and that the partnership is bad in law inasmuch as the artificial juridical person cannot be made liable to share the loss of the firm. In this connection, learned counsel has placed reliance in Dulichand Laxminarayan v. CIT [1956] 29 ITR 535 (SC). In Dulichand Laxminarayan [1956] 29 ITR 535 (SC) the question that arose for consideration before the apex cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter and came to a clear finding that there was a genuine firm in existence during the previous year relevant to the assessment year under appeal and this finding cannot be faulted. For the reasons stated above, we answer the question in the affirmative and in favour of the assessee. In other words, we hold that the Tribunal was justified in holding that the lower authorities were wrong in canc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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