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TMI Blog1982 (3) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... that, therefore, the delay being postal, were entitled to be condoned. The delays being for reasonable cause are condoned. 3. The assessee firm was constituted vide partnership deed dt. 12th Oct., 1965 with 17 major partners and 4 minor were admitted to the benefits of partnership. The registration was originally granted to the assessee on 27th March, 1971. However, it was cancelled by the ITO under s. 186(1) of the Act on the ground that the firm was constituted of more than 20 persons in contravention of s.11(2) of the Companies Act, 1956. The ITO also noticed that the deed of partnership was not signed by the guardians of the minors. Therefore, after relying upon the decision of the Hon'ble High Court in Addl. CIT vs. Uttam Kumar Pram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the numbers of partners for purposes of s. 11(2) of the companies Act, 1956. He also submitted that the minors could also not be included in the total number of partners constituting a firm under the provisions of the Partnership Act, 1932. In this connection he placed reliance on the definition of 'partner' under the IT Act, 1961 as well as under the Partnership Act, 1932. He pointed out that the firm had been duly registered with the Registrar of Firms, UP, in terms of s. 58 of the Partnership Act, 1932. He referred to the decision of the Supreme Court in CIT vs. Dwarkadas Khaitan Co. (1961) 41 ITR 528 (SC) for the proposition that in view of s.30 of the partnership Act, 1932, a minor cannot become a partner though with the consen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be questioned and that the ITO should be directed to give an opportunity to the assessee to amend the partnership deed in that regard. In this connection he placed reliance on the decision of the Hon'ble Allahabad High Court in the case of Uttam Kumar Pramodkumar. 6. We have considered the rival submissions. The copy of the partnership deed has not been place before us. In the case of Uttamkumar Pramodkumar the minors had not signed the partnership nor had anybody acted on their behalf. It was also found that the minors were given the right of participation in the business of the partnership like the major partners, and the minors were made liable for losses of the partnership. The court also found that the terms of the partnership de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the CIT (Appeals) was quite justified in taking this view. 7. So far as the other point is concerned, s. 11(2) and (3) of the Companies Act, 1956 are in the following terms: "(2) No Company, association or partnership consisting of more than 20 persons shall be formed for the purpose of carrying on any other business that has for its object the acquisition of gain by the company, association or partnership, or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of some other Indian Laws. (3) The section shall not apply to a joint family as such carrying on a business; and where a business is carried on by two or more joint families, in computing the number of persons f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tively "a firm", and the name in which the business is carried on is called the "firm name". Further s.30 of this Act provides that a person who is a minor according to the law to which he is subject, may not be a partner in a firm but with the consent of all the partners for the time being, he may be admitted to the benefits of partnership. Since partnership is, therefore, the result of an agreement, a minor cannot be a partner nor can he be included in the number of persons who are said to constitute a partnership. This is also clear from s. 11 of the Contract Act, 1872 in terms of which a minor is not competent to contract. The same position has been recognised in s.30 of the Partnership Act, 1932 referred to above. The context in which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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