TMI Blog1973 (2) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... onsequently, an application dated September 2, 1959, for registration of the said firm under section 26A of the Indian Income-tax Act, 1922, was filed on September 30, 1959, before the Income-tax Officer, A-Ward, Ludhiana, copy of which is annexure " C " with the statement of the case. Shri Rabinder Kumar, a partner of the firm, had left India for the United States of America for prosecuting his studies on January 29, 1958. The Income-tax Officer entertained doubts as to whether Shri Rabinder Kumar has signed the deed personally in the presence of the witnesses as mentioned in the concluding paragraph of the said deed. Similarly, the Income-tax Officer also doubted the signature of Shri Rabinder Kumar on the application for registration under section 26A of the Act. The Income-tax Officer held an enquiry into this aspect of the matter as, according to the assessee, the partnership deed as well as the registration form were signed by Shri Rabinder Kumar personally. The Income-tax Officer after having held an elaborate enquiry into the matter, concluded that the deed of partnership was not genuine as Shri Rabinder Kumar had not personally put his signature on the said deed and also o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cond contention, regarding filing of the application for registration at a later stage, which contained the genuine signatures of all partners, the Appellate Assistant Commissioner held that such a question did not arise when in his opinion the partnership itself was not genuine. Therefore, there was no question of the Income-tax Officer getting the application for registration rectified. The order of the Appellate Assistant Commissioner is annexure " I " with the statement of the case. The assessee filed second appeal before the Income-tax Appellate Tribunal which appeal was dismissed by the Tribunal after coming to the conclusion that the signatures of Shri Rabinder Kumar on the partnership deed as well as on the application for registration were not genuine and, therefore, the firm was not entitled to registration. The Tribunal came to the conclusion that, if the signature of one of the partners is forged, there can be no question of the document being regarded as an instrument and the document is void and no genuine partnership can come into existence under any such document. The ultimate findings recorded by the Tribunal are in the following terms: "For all the reasons app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 persons (not being minors) who were partners in the firm immediately before dissolution and by the legal representative of any such partner who is deceased, and shall, for any year of assessment up to and including the assessment for the year ending on the 31st day of March, 1953, be made before the 28th February, 1953, and for any year of assessment subsequent thereto, be made-........ 3. The application referred to in rule 2 shall be made in the form annexed to this rule and shall be accompanied by the original instrument of partnership under which the firm is constituted, together with a copy thereof ; provided that if the Income-tax Officer is satisfied that for some sufficient reason the original instrument cannot conveniently be produced, he may accept a copy of it certified in writing by all the partners (not being minors) or where the application is made a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw it is not necessary that the partnership deed should be signed by all the partners. It is contended that there can be in existence a genuine partnership under a partnership deed, even though a partnership deed is not signed by all the members if the non-signed members have otherwise consented to the partnership as constituted under the partnership deed. It is, therefore, contended that without there being any finding that the firm was not genuine, as constituted under the deed of partnership, the registration could not be refused. On the other hand, it is contended by the learned counsel for the revenue that since the partnership deed itself was incomplete, in the sense that it was not signed by Shri Rabinder Kumar and his signatures were forged, therefore, there could not be in existence any genuine firm which was entitled to be registered. It is further contended by the learned counsel for the revenue that even if this point be held in favour of the assessee even then the question referred should be answered in favour of the revenue on the ground that the application for registration was not signed by Shri Rabinder Kumar and that being the requirement of rule 4 of the Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er an instrument of partnership specifying the individual shares of the partners, and the precise enquiry which the Income-tax Officer has to make under rule 4 is that there is or was a firm in existence constituted as shown in the instrument of partnership. It is not the requirement of the above referred to provisions that the firm should come into existence under the instrument of partnership, but on the other hand, the enquiry to be made is whether a firm is or was in existence as is shown in the instrument of partnership. It is no more in dispute that if there is a genuine firm in existence even under an oral partnership and the instrument of partnership is reduced into writing subsequently, but during the same assessment year, even then the firm is entitled to registration. In this connection reference may be made to the Supreme Court decisions in R. C. Mitter and Sons v. Commissioner of Income-tax and N. T. Patel and Co. v. Commissioner of Income-tax. Thus it would be seen that if there does exist a firm in the relevant assessment year and the said firm is in existence as depicted in the written instrument of partnership and the shares of each of the partners are specified, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of them, if it had been assented to by the others who had not signed it and they had joined in putting it forward along with other partners for registration, it would be admissible for registration under the Indian Income-tax Act, 1922. Thus, from what has been stated above, it would be seen that under the provisions of the Income-tax Act there can be a partnership which may be in existence in accordance with the instrument of partnership with some of the partners having assented to the partnership but not having signed the said partnership deed itself. It is from this view-point that an enquiry has to be made in order to find out whether a firm is entitled to registration or not, keeping in view the above referred to provisions of the Income-tax Act and the Rules made thereunder. But, in the present case, according to the Income-tax Tribunal, if the signatures of one of the partners are forged, there could be no question of the document being recorded as an instrument of partnership and the document is void and no partnership can come into existence. The learned counsel for the revenue could not cite any authority or advance any argument for the proposition that if the partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions. It is settled that the rule providing that the application should be signed by each and every partner personally is mandatory and the non-compliance of the said rules would entitle the Income-tax Officer to reject the application. In this connection reference may appropriately be made to Pratapmal Luxmichand v. Commissioner of Income-tax, Steel Brothers and Co. Ltd. v. Commissioner of Income-tax , Rao Bahadur Ravulu Subba Rao v. Commissioner of Income-tax and Koduri Sambasivadu Sons v. Commissioner of Income-tax. Therefore, if it is held that this aspect of the case does arise out of the order of the Income-tax Appellate Tribunal, the question referred to this court has to be answered in favour of the revenue on this ground alone. In Commissioner of Income-tax v. Scindia Steam Navigation Co. Ltd. their Lordships of the Supreme Court held that it is only a question that has been raised or decided by the Tribunal that could be held to arise out of its order and a question when (sic) arose before the Tribunal and dealt with by it is clearly one arising out of its order. Similarly, a question of law if it arose before the Tribunal, but the Tribunal failed to deal with i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y on the ground that the partnership deed was not genuine. Therefore, this finding alone was to be challenged by the assessee. It was for the revenue to have raised this question before the Tribunal, as is being raised now, that the Income-tax Officer could not entertain a rectified application for registration which admittedly was signed by Shri Rabinder Kumar. It may be mentioned at this stage that a subsequent application was made by the partners of the firm signed by them all before the Income-tax Officer which is annexure " G " with the statement of the case and is dated March 12, 1965. If the matter would have been raised by the revenue before the Income-tax Appellate Tribunal, the Tribunal was bound to go into the question whether the defect in the signatures of Rabinder Kumar could be rectified as was offered by Shri Rabinder Kumar who came from U.S.A. to appear before the Income-tax Officer for this purpose or whether the subsequent application, which was admittedly signed by all the partners was good in fact and in law and registration could be granted on that basis. It was for the Income-tax Tribunal to have gone into this question of fact whether the second application ..... X X X X Extracts X X X X X X X X Extracts X X X X
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