LexSRI RAMAMOHAN MOTOR SERVICE versus COMMISSIONER OF INCOME-TAX, HYDERABAD
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SRI RAMAMOHAN MOTOR SERVICE
v.
COMMISSIONER OF INCOME-TAX, HYDERABAD
April 11, 1973
[K. S. JIEGDE AND H. R. KHANNA, JJ.]
Income-tax Act 1922, s. 26A-Registration of firm-Minor sholWl ps
partner in pcirtnership deed-Not shown as having been admitted only to
bene{itl of
partnership-Applications for
registration and ronewal of
regi&tmtion ·~f firm not mentionjng letter 'P' in colrunn
6--Partnership
is void under s, 30 of Partners/tip Act 1932-Application under S. 26A
not complying Income-tax Rules-Registration rightly re/used.
The appellant firm according to j!s partnership deed was constituted
of fh"e partners one of whom was a minor represented by his father. One
of the terms in the partnership deed was that the profit and loss of the busi-
ness would be divided and bor:ne between the partners in equal shares.
The appellant firm made an application under s.26A of the Income-tax Act
1922 for the registration of the firm for the year 1956-57 on 30..6-1955.
the last day for making the application. Along with the application as
required by the rules, a copy of the partnership deed was submitted. On
October 8, 1955 an application was made to the Registrar of firms for
registration of the firm under the Partnership Act. The Registrar raised
an objection to the effect that the partnership was invalid uncler ~.30 of
the Partnership Act as one of the partners was a minor.
On December
18, 1955 the four adult partners informed the Registrar by letter that the
minor was admitted to the tteJ>Cfils of the partnership and was not liable
to share losses.
The Registrar thereafter registered the firm.
The Income-
tax Officer registered the firm for the assessment
year
195 6-57
and
renewed its registration for subsequent years up to 1961-62. But the
Commissioner of Income-tax i;n exercise of his power under S. 33B of
the act set aside the orders made by the Incme-tax Officer. The Tribunal
and the High Court decided in favour of the Revenue.
In appeal to this
Court by special leave.
HELD : (i) . The assessee firm was not registered under the Indian
Partnership Act before the application uncler s.26A of the Act was made,
nor was the partnership deed registered under the Indian Registration Ac1.
The partnership deed submitted along with the application for registration
disclosed that the partnership constituted under that deed was void in view
of s. 30 of the Partnership Act as o,ne of the five partnership was a minor.
Hence the application made for registration was an invalid-application. The
subsequent alteration of one of the terms of the partition deed, even if
validily made, could not validate the application made because the alteration
in q_ues~on was Il!ade long after the ti':"e prescribed for making the
appllcation had exp1re<l and there was nothmg to show that the Income-tax
Officer had condoned the delay in exercise of his power under the proviso
to Rule 2. If the original order of registration was unauthorised, the sub-
sequent renewals of the registration must also be held to be unauthorised.
[963 FJ
(ii) It was found by the Tribunal that both in the application made
for registration of the firm as well as in the applications made for renewal
of registration ln column 6 of the formletter 'P' was not mentioned. On the
other hand the 111inor's share was shown as I/5th which means his share
both in the profits as well as in the loss. The record did not show whether
959
.
960
SUPREME COURT REPORTS
[1973] 3 S.C,R.
tho Income-tax Officer was informed 9f the letter written to the Registrar
of Firms on 18-12-1955 and if so on what date he was informed about it.
From the above facts it was clear that the applications made by the part-
ners of the firm did not comply with the requi_rements of the rules. H<ll!Ce
those applications
muld not be considered as valid applications. [9()4 Fl
(iil) Since the applications for registration
and renewal/ didl not
conform to the requirements of the Jaw the! registration and the renewals
could not have been aranted.
(iv) Seclion 185(2) of the 1961 Act is not retrospective in opeation
oor were the requirements of that section complied with, The plea that
substantial compliance with the rules is sufficient stands negatived by the
decisions of this Court,
[9650]
Rao Baliad11r Ray11/11 S11bba Rao and Ors, v. Commlssiontr of Income-
rax, Madras, 30 J.T.R. 163 at 172, N. T. Patel & Co. v. Commisslontr of
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