1977 (2) TMI 65 - AT - Income Tax

Summary

Issues:
1. Refusal of registration under s. 185 of the Income Tax Act.
2. Validity of partnership between an individual and a Trust.
3. Delay in filing the application for registration.

Analysis:
1. The appeal was against the dismissal of the registration under s. 185 of the Income Tax Act. The Income-tax Officer rejected the registration due to a three-month delay in filing the application and the perceived nature of the partnership as a means to share profits without conducting business. The Appellate Assistant Commissioner found the delay unjustified and concluded that the partnership did not come into existence until November 1971, based on the sequence of events leading to the partnership deed.

2. The Appellate Assistant Commissioner examined the validity of a partnership between an individual and a Trust. The Departmental Representative argued against such a partnership, stating that a Trust cannot enter into a partnership and that the partnership could not have existed from January 1971. The Appellate Tribunal agreed with the finding that the partnership did not exist from January 1971 and that the delay in registration was not justified.

3. The delay in filing the registration application was a crucial issue. The Appellate Assistant Commissioner found the explanation for the delay unsatisfactory, as the partnership deed was executed on the last date for filing the application, indicating that there was no valid reason for the delay. The Tribunal agreed that the delay was not due to a reasonable cause, as the application could have been filed along with the partnership deed. Therefore, the registration of the firm was rightly refused for the assessment year 1972-73.

In conclusion, the appeal was dismissed, upholding the decision to refuse registration based on the delay in filing the application and the questionable nature of the partnership's existence.