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TMI Blog1959 (4) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... DAYATULLAH., N. H. BHAGWATI., S. R. DAS JUDGMENT The judgment of the court was delivered by BHAGWATI, J.--- This appeal with leave under section 66A of the Indian Income-tax Act (XI of 1922), hereinafter referred to as " the Act ", arises out of the refusal of the Income-tax authorities to register the appellant firm constituted under a deed of partnership dated March 6, 1946, under section 26A of the Act. A reference was made by the Income-tax Appellate Tribunal under section 66(1) of the Act referring the following question of law to the High Court of Assam : " Whether on the above facts and in the circumstances of the case the Tribunal was right in refusing the claim for registration of the assessee firm under section 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itsaria " for Ramswarup Maliram " and D. N. Himatsingka " representing Ghasiram Dwarkadas ". The original deed of partnership was enclosed along with the application. The Income-tax Officer by his order dated June 30, 1951, held that in the larger partnership of the appellant firm the partners constituting the component firms should be taken as individual partners and their shares should therefore have been specified in the deed of partnership. He also pointed out that it was not known what shares the individual partners of the component firms had in the profits of the appellant firm and as the words of section 26A did not permit of any elasticity of construction rejected the application for registration. On appeal taken to the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viz., " whether a firm is capable of entering into partnership with another firm ", and after reviewing various decisions of the High Court and of the Privy Council held that a firm as such was not capable of entering into a partnership with another firm through a partner expressly authorised in that behalf. The High Court, however, after referring to the provisions contained in section 26A of the Act which are mandatory and to the provisions contained in rule 2 of the Income-tax Rules, observed that the application for registration did not also fulfil the essential requirements of the rules ; it was neither signed by each of the partners of the constituent firms nor did it specify the individual shares of these partners either in the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ividuals, and that the shares of the partners of Messrs. Ramswarup Mahaliram and Messrs. Ghasiram Dwarkanath had not been shown individually but collectively. It was further contended that in the application for registration under section 26A of the Act, the shares of the partners of Messrs. Ramswarup Mahaliram and Messrs. Ghasiram Dwarkanath had also been collectively shown. Even if this contention which was urged on behalf of the appellant firm by its learned advocate be held not to be conclusive against it there was the further fact apparent in the record that profits of the accounting year under consideration were not credited in the books of account of the appellant firm to the two individuals, Rameshwar Lal Ajitsaria and D. N. Hima ..... X X X X Extracts X X X X X X X X Extracts X X X X
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