TMI Blog1985 (7) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... 970. It should be noted that the assessee-firm commenced its partnership business on September, 1, 1969. The partners of tile assessee-firm filed an application for registration in Form No. 11 as required under rule 22 of the I.T. Rules, 1962, on November 3, 1969. It should be also recalled that it is common case that the deed of partnership was executed on January 8, 1970. In other words, the application for registration was not accompanied by the original or certified copy of the deed of partnership. It has been found that the assessee-firm had filed the original partnership deed along with the copy thereof after January 8, 1970, and before August, 1972, though its exact date was not known as there was no receipt-stamp on the said document. The partnership deed is found to have been drafted on two stamp papers of Rs. 50 each; one of which was purchased on September 1, 1969, and another was purchased on December 24, 1969. As stated above, the partnership deed was executed on January 8, 1970, i.e., after the application for registration was filed on November 3, 1969. The ITO had issued a show-cause notice to the assessee-firm on August 18, 1972, to show cause as to why registrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moved before him for registration as the failure on the part of the assessee to annex the instrument of partnership constituted a basic defect which rendered the assessee's claim for registration unsustainable. The ITO emphasised that on the day on which the application was made, that is, November 3, 1969, the deed of partnership was not in existence and, therefore, it could not have annexed any instrument to evidence the partnership at the date of the application as required under the rules. He, therefore, rejected the application for registration. The appeal of the assessee before the AAC as well as its further appeal before the Tribunal met with the same fate with the result that the assessee asked for a reference of the two questions as set out hereinabove which was granted by the Tribunal. What are the requisites for registration is the first question to which we must address ourselves. On a plain reading of s. 184, there are four requisites for obtaining registration of a partnership firm : 1. There should be a valid and genuine partnership in existence during the accounting year. 2. It should be " evidenced by an instrument " of partnership. 3. The instrument s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of it certified in writing by all the partners (not being minors), or, where the application is made after the dissolution of the firm, by all the persons referred to in clause (b) of sub-section (3), to be a correct copy or a certified copy of the instrument ; and in such cases the application shall be accompanied by a duplicate copy of the original instrument. (6) The application shall be made in the prescribed form and shall contain the prescribed particulars ....... The prescribed particulars which should be comprised in the application are to be found in rule 22 of the I.T. Rules, 1962. Rule 22, in so far as it is material for our purposes, provides as under : " 22. (1) An application for registration of a firm for the purposes of the Act shall be made in accordance with the provisions of sub-rules (2) to (5). (2) Where the application is made before the end of the relevant previous year- (i) and where no change in the constitution of the firm or the shares of the partners has taken place during the previous year before the date of the application- (a) the application shall be made in Form No.11 ; and (b) it shall be accompanied by the original instrument evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application for registration not being accompanied by the instrument of partnership. The second requisite as noted above for the purpose of obtaining registration is that the firm should be evidenced by an instrument of partnership. We should remind ourselves that r. 22(2)(i)(b) enjoins that an application for registration shall be in Form No. 11 and shall be accompanied by the original instrument evidencing the partnership at the date of the application. On reading this rule and the main enactment in sub-s. (5), the income-tax authorities, including the Tribunal, are of the view that the instrument of partnership must be in existence at the date of filing of the application for registration. In this connection, we should remind ourselves of the old scheme in the 1922 Act, where s. 26A which laid down the procedure for registration of the firm enjoined that an application may be made to the ITO on behalf of any firm constituted under an instrument of Partnership specifying the individual shares of the partners for the registration for the purposes of the said Act. Sub-s. (2) required that an application was to be made by such person or persons and at such times and containing such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear to us that such evidence in the nature of instrument must be in relation to partnership as it existed, if any, at the date of the application. We do not think that it is the legislative intent that unless there is an instrument of partnership in existence at the date of the application that the assessee concerned would not be entitled to registration. If that had been the legislative intention, the Legislature would have appropriately expressed itself by saying that the application for registration shall be accompanied by the original instrument in existence at the date of the application. The requirement of the original instrument is only for purposes of providing an evidence of the partnership as existing at the date of the application. It has only a limited purpose and the provision as contained in the section or the rule cannot be over-emphasised as is sought to be done by the income-tax authorities. It is no doubt true that the instrument of partnership was not annexed to the application made by the assessee for registration. Sub-section (5) of s. 184 no doubt provides that the application shall be accompanied by the original instrument evidencing the partnership.However ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the end of the previous year, if he is satisfied that the firm concerned was prevented by sufficient cause from making an application in time. Subsection (4) requires that the application is to be made before the end of the previous year for the assessment year in respect of which the registration is sought. It is an admitted position that the assessee in the present case had submitted the original instrument together with the copy before the ITO at any rate before he proceeded to decide this question of registration, though it is not clear as to whether the assessee had produced the original instrument as well as its copy before the close of the accounting year. The learned counsel for the Revenue was at great pains to impress upon us that on the date on which the application for registration was made, the instrument of partnership was not in existence and assuming that the original as well as the copy of the instrument had been produced before the close of the year, it could have been only after January 8, 1970, when the partnership deed was executed and, therefore, it could not rectify the original defect in the application, even if the court is inclined to view that defect as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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