TMI Blog1982 (3) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-1981 but were received in the office of the Tribunal only on 27-4-1981 and that, therefore, the delays being postal, were entitled to be condoned. The delays being for reasonable period, are condoned. 3. The assessee-firm was constituted vide partnership deed dated 12-10-1965 with 17 major partners and 4 minors were admitted to the benefits of partnership. The registration was originally granted to the assessee on 27-3-1971. However, it was cancelled by the ITO under section 186(1) of the Income-tax Act, 1961 ("the Act"), on the ground that the firm was constituted of more than 20 persons in contravention of section 11(2) of the Companies Act, 1956. The ITO also noticed that the deed of partnership was not signed by the guardians of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sinha, the learned counsel for the assessee, submitted that 4 minors admitted to the benefits of partnership could not be included in the total number of partners for the purposes of section 11(2) of the Companies Act. He also submitted that the minors could also not be included in the total number of partners constituting a firm under the provisions of the Indian Partnership Act, 1932. In this connection he placed reliance on the definition of "partner" under the Income-tax Act, as well as under the Partnership Act, 1932. He pointed out that the firm had been duly registered with the Registrar of Firms, UP, in terms of section 58 of the Partnership Act. He referred to the decision of the Supreme Court in CIT v. Dwarka Das Khetan Co. [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that for want of signature of the guardians of the minors on the partnership deed, the genuineness of the partnership could not be questioned and that the ITO should be directed to give an opportunity to the assessee to amend the partnership deed in that regard. In this connection he placed reliance on the decision of the Allahabad High Court in the case of Uttam Kumar Promod Kumar. 6. We have considered the rival submissions. The copy of the partnership deed has not been placed before us. In the case of Uttam Kumar Promod Kumar, the minors had not signed the partnership deed, nor had anybody acted on their behalf. It was also found that the minors were given the right of participation in the business of the partnership like the major ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amend the partnership deed and that registration need not be refused on this ground. In view of the above, we are of the view that the Commissioner (Appeals) was quite justified in taking this view. 7. So far as the other point is concerned, sections 11(2) and (3) of the Companies Act are in the following terms : "(2) No company, association or partnership consisting of more than 20 persons shall be formed for the purpose of carrying on any other business that has for its object the acquisition of gain by the company, association or partnership, or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of some other Indian law. (3) This section shall not apply to a joint fami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for all. Persons who have entered into partnership with one and another are individuals called "partners" and collectively "a firm" and the name in which the business is carried on is called the "firm name". Further section 30 of this Act provides that a person who is a "minor according to the law to which he is subject, may not be a partner in a firm but with the consent of all the partners for the time being, he may be admitted to the benefits of partnership". Since partnership is the result of an agreement, a minor cannot be a partner nor can he be included in the number of persons who are said to constitute a partnership. This is also clear from section 11 of the Contract Act, 1872, in terms of which a minor is not competent to contr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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