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TMI Blog1952 (8) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... as a unit, which application was admitted before the Tribunal to have been signed by Ghanshyam Das only, was a proper and valid application within the meaning of Rule 2 of the Income Tax Act on the basis of which registration could be allowed for purposes of Income Tax Act. The facts, as gathered from the statement of the case and from the appellate order of the Tribunal, are that there was a joint Hindu family comprising the descendants of one Jetha Ram which was carrying on business and was assessed to Income Tax as a Hindu undivided family. There was a partition in the family and after the partition, a deed of partnership was executed in March, 1945. In the deed of partnership it was mentioned that Ghanshyam Das Sunder Lal constituting a Hindu undivided family were joining this partnership through L. Ghanshyam Das and L. Sunder Lal, both being sons of L. Bilas Rai. The share of the joint family represented by Ghanshyam Das Sunder Lal was 3 1/5 annas while the shares of the other four partners, Ram Kumar, Babu Lal, Ram Niwas and Govind Prasad, were also 3 1/5 annas each. In the assessment year 1944-45 an application for registration was made under Section 26A of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated by Mr. Pathak. As the mistake was made by him by inadvertence by reason of the original application being not available as it was in the Income Tax Officer at Gonda, we do not think the Tribunal should have refused to make the correction. In any case the application being a part of the statement of the case, we cannot ignore the fact that it bears six signatures and there are six executants to the document. Coming to the next point whether a Hindu undivided family as such could be a partner learned counsel has urged that, whatever might have been the view of this Court prior to the year 1948, the decision of their Lordships of the Judicial Committee in Lachman Das v. Commissioner of Income Tax, Punjab, makes it now clear that the view should be reconsidered. Reliance is also placed on a judgment of the Bombay High Court in Udhavji Anandji v. Bapudas Ramdas. In Lachhman Dass case the point for decision was whether a valid partnership could be entered into by a member of a Hindu undivided family with the karta as representing that family. Their Lordships of the Judicial Committee relied on the fact that a member of a join t Hindu family is competent to enter into a contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now well-recognised that the karta or the adult members of a joint Hindu family may enter into a partnership with a stranger and, where it is a trading family, represent the joint Hindu family. In Lachhman Dass case their Lordships did not consider the question whether a Hindu undivided family as such, which is a fleeting and changeable body, could enter into a partnership under the Partnership Act. Their Lordships pointed out that the partnership is in its nature a contractual relationship and only such of its members as in fact enter into contractual relationships with the stranger become partners. The fact that it is the karta who becomes the partner and not every member of the joint Hindu family or the joint Hindu family as such is supported by the decision of the Madras High Court in Sokkanadha Vannimundar v. Sokkanadha Vannimundar where the manager of a joint Hindu family had entered into a partnership with a stranger and the partnership was entered into by the manager not for his personal benefit but on behalf of the family, and it was held that the death of the manager dissolved the partnership. The learned Judges observed :- It is scarcely necessary to say that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saved by certain acknowledgments. If the learned Chief Justice had accepted the view now pressed for by Mr. Pathak that the partnership was not with the plaintiffs father but with the joint family as such, then the partnership was not with the plaintiffs father but with the joint family as such, then the partnership would not have stood dissolved on the death of the plaintiffs father and no question of limitation would have arisen. The observations relied on were with respect to the point whether it is only the personal property of the manager or the entire joint family property of the manager or the entire joint family property that was liable for the debts of the partnership which had been entered into on behalf of the joint family and we respectfully agree with the view expressed by the learned Chief Justice that if a manager has had the right under the Hindu law to enter into the partnership the entire joint family property may be made liable for the debts of the partnership. The next point for consideration is whether a Hindu undivided family as such is a legal entity distinct and separate from that of the members who constitute it. It may be that a member of a Hindu undivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, therefore, be a partner only in a loose sense. The persons entering into the contract of partnership alone are partners, and through them the joint Hindu family may be entitled to the benefits and the joint family property may be liable for the losses of the partnership. The result, therefore, is that in our view it is the karta of a joint Hindu family who becomes the partner and if he has acted within his rights as karta and has joined the partnership not in his individual capacity but as representing the joint family, then he may bind other coparceners who would be entitled to get the benefits of the partnership and whose share in the joint family property would be liable for the debts of the partnership. But the other members of the joint family cannot, each of them, claim in his individual right that he has becomes a partner in the partnership and is entitled to exercise the rights of a partner. He becomes a sort of sub-partner and can only act through the karta who has jointed the partnership on his behalf. If the contention of the learned counsel for the assessee is accepted then, on the karta becoming a partner on behalf of joint Hindu family, every member of the joint ..... X X X X Extracts X X X X X X X X Extracts X X X X
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