TMI Blog1966 (12) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... kash, a minor, was also admitted to the benefits of the partnership, and it was agreed between Tirkha Ram and Nandlal that after giving 10% of the benefits to the minor, Om Prakash, they would divide the remaining profits in certain proportions and that, should losses occur in the business of the partnership, the minor shall not be responsible for the same. The firm had applied for registration under the Income-tax Act for the first time during the assessment year 1950-51 and had obtained renewal thereof for the succeeding years 1950-51 to 1955-56. The relevant assessment year for the purpose of the present reference is 1956-57, the corresponding accounting year being April 2, 1955, to April 17, 1956. It is admitted that the minor, Om Prakash, attained majority on the 5th September, 1955. An application for renewal of the registration with respect to this partnership for the year 1956-57 was made on the 15th June, 1956. This application was signed by the two partners, Tirkha Ram and Nandlal, only and although Om Prakash had become a major on the 5th September, 1955, it did not bear his signatures. The Income-tax Officer refused registration for the year in question on the ground th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistration of firms.--(1) Application may be made to the Income-tax Officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purposes of this Act and of any other enactment for the time being in force relating to income-tax or super-tax. (2) The application shall be made by such person or persons, and at such times and shall contain such particulars and shall be in such form, and be verified in such manner, as may be prescribed ; and it shall be dealt with by the Income-tax Officer in such manner as may be prescribed. " Rule 2 of the Rules, in so far as it is material for our purpose, reads as under : " Any firm constituted under an instrument of partnership specifying the individual shares of the partners may, under the provisions of section 26A of the Indian Income-tax Act, 1922 (hereinafter in these rules referred to as the Act), register with the Income-tax Officer, the particulars contained in the said instrument on application made in this behalf. Such application shall be signed by all the partners (not being minors) personally, or in the case of a dissolved firm by all p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that an application for registration shall be signed by all the partners, not being minors, personally. Further, the requirements of an application for renewal of registration under rule 6 are precisely the same. The important words in these rules are (1) " all the partners " and (2) " personally. " That being so we cannot but hold that an application for registration to be competent must be signed by all the partners of the firm and not by only a majority or some of them and, further, it must be signed by each of the partners himself and not through the instrumentality of any agent of his in spite of the fact that he may have been expressly authorised to do so. There have been a number of decisions of the other High Courts and even of the Supreme Court for the view that the partners must sign the application for registration personally, i.e., by themselves and that this requirement of the rule is mandatory. In Koduri Sambasivadu Sons v. Commissioner of Income-tax it was, held that an application for registration of a firm under section 26A of the Income-tax Act, 1922, must be signed by all the partners themselves and that the statutory provisions did not permit any agent signi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mself, such a requirement would not be complied with by an agent signing on his behalf. Again, the same principle seems to us to be deducible from the decision of their Lordships in Pratapmal Luxmichand v. Commissioner of income-tax. In this case a partnership consisted of 7 members and the application for registration was signed by as many as 6 of them, the 7th being unable to sign as he was a security prisoner under the Defence of India Rules at that time. The Special Income-tax Officer, Nagpur, rejected the application both on the ground that the partnership deed itself had not been signed by all the partners mentioned in the body and, further, there was no signature of, one of the partners on the application. On appeal, the Appellate Assistant Commissioner set aside the order of the Income-tax Officer, and ordered that he do register the firm after obtaining the signatures of the 7th partner both on the application for registration and the deed of the partnership. On a further appeal, the Tribunal set aside the order of the Appellate Assistant Commissioner, and held that the Income-tax Officer was justified in refusing to register the firm as the application for registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of them personally is an essential requirement for the validity of such an application having regard to the language of the rules as they stood at the relevant time, and they could not have been dispensed with by the income-tax authorities on a priori considerations. Applying this rule to the present case the position boils down to this. The application for renewal for the relevant assessment year 1956-57 came to be made on the 15th June, 1956. Before that time the minor, Om Prakash, had become major on the 15th September, 1955. He did not opt to come out of the partnership on becoming major, and, therefore, must be treated as having become a full-fledged partner of the firm in question. That being so, having regard to the requirements of rules 2 and 6 read with section 26A of the Act, as we have discussed above, it was imperative that the application for renewal of registration must have been signed not only by the other two partners, but also by Om Prakash. That was admittedly not done and, consequently, the conclusion seems to us to be irresistible that the Income-tax Officer and the Appellate Tribunal were perfectly justified in refusing to renew the registration for the yea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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