€0MMISSIONER OF INCOME-TAX, ANDHRA PRADESH, HYDERABAD versus JAYALAKSHMI RICE AND OIL MILLS CONTRACTOR CO.

Citation: [1971] 3 S.C.R. 365 · Decided: 15-01-1971 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed
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Judgment (excerpt)

-• 
365 
A €0MMISSIONER OF INCOME-TAX, ANDHRA PRADESH, 
HYDERABAD 
B 
c 
D 
E 
F 
G 
v . 
.JAYALAKSHMI RICE AND OIL MILLS CONTRACTOR CO. 
January 15, 1971 
[J. c. SHAH, C.J., K. s. HEGDE AND A. N. GROVER, JJ.] 
Income-tax Act, 1922, s. 26A-Income-ta!< Rules, r. 2(b)-Indian 
Partnership Act, 1932, ss. 58, 59, 69-Rule 2(b) 11taviding that in respect 
of firms registered under Partnership Act the application for registration 
of firm u/s 26A of the Income-tax Act shall be made before the end of 
the previous year-Firm can be said to be registered under Parwrship 
Act not on date of receipt of app/iCQ/ion under a. 58 but when entry is 
made in register of firms under s. 59--:-IJ such an entry is made after end 
of 'previous year' firm is not registered under the Partnership Act for the 
purpose of r. 2(b). 
Tue assessee firm was constituted under a deed of partnership dated 
October 6, 1955. It was to come into existence with effect from November 
5, 1954. Tue assessee filed an application under s. 26A of the Act for 
registratlon of the firm for the assessment year 1956-51. The previous 
year of the firm was shown as the year ending October 26, 1955. The 
application was received by the Income-tax Officer ·an October 14, 1955. 
On October 20, 1955 the assessee filed before the Regiatrar df Firms a 
statement under s. 58 of the Indian Partnership Act, 1932. On November 
2, 1955 the Registrar of Firrmr1iled the statement of ~he assessce and 
made entries in the register of firms. On March 23, 1961 the Income-tax 
Officer passed an order refusing to register the firm under s. 26A inter alia 
for the reason that the application had not been made in time. The appeal 
taken to the Appellate Assistant Commissioner failed. The Tribunal also 
upheld the order of the 
authorities below. In reference t!fe High Court 
answered the question in favour of the assessee holding that the partnership 
should be deemed to have been registered on the date when the application 
was presented and that the requirement of r. 2(b) of the Rules would 
be satisfied if it became registered under the Partnership Act even after 
the application under s. 26A was filed. In appeal by the Revenue. 
HELD : (i) The view taken by the High Court was not correct. Under 
the Partnership '•w it can be taken to have been settled by decisioRs of 
High Courts, from. a long time that the registration of firm takes place 
only when necessary entries are made in the register of firms under s. 59 
of the Partnership Act by_the Registrar. Section 58 of the Act no doubt 
employs language which, without anything more may appear to lend sup-
port to the view that the registration of a firm may be effected merely by 
sending an application which would mean that as soon as an application 
is sent and if entry is made under s. 59 pursuant to it the registration 
would be effective from the date when the application was presented. But 
;. 58(2) is not to be read in isolation and has to be considered along with 
the scheme df the other provisions of the Act viz. ss. 59 and 69. The 
latter section which deals with the effect of non-registration throws light 
on what was contemplated by the Legislature with regard to the point of 
time when the firm could be regarded as registered. [368 C-OJ 
H 
Ram Prarttd v. Kamta Prasad, A.LR. 19l5 All. 898, Danmal Par-
shotamadas v. Haburam Chhotelal. I.L.R. [1936) 58 All. 495 and Kera/a 
Road Lines Corporation v. Commissioner of Income-tax, Kera/a 51 J.T.R. 
71 1, approved. 
366 
SUPREME COURT REPORTS 
[1971 J3 S.C.R. 
(ii) The views expressed by the Special Committee appointed by the 
Government of India in respect of the Bill which came to ·be passed by 
the Central Legislative as the Partnership Act were irrelevant for the pur-
po"' of construing the provisions of the Act. [1369 Bl 
CIVIL APPELLATE JURISDICTION; 
Civil Appeal No. 545 of 
1967. 
. 
Appeal from the judgment and order dated April 15, 1966 of 
the Andhra Pradesh High Court in Case Referred No. 40 of 1963. 
S. C. Manchanda. B. D. Sharma and R. N. Sachthey, for the 
appellant. 
K. Rajendra Chaudhuri, for the respondent. 
The Judgment of the Court was delivered by 
Grover, J. 
This is an appeal from a judgment of the Andhra 
A 
B 
c 
Pradesh High Court arising out of a reference made under s. 66( 1) 
of the Income-tax Act, 1922, hereinafter called the 'Act' of the 
question whether on the facts and in the circumstances of the case 
( 
the application under s. 26A of the Act was
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