1. By this reference under Section 256(1) of the Income-tax Act, 1961, hereinafter called 'the Act', the Income-tax Appellate Tribunal has referred the following question to this court:
'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in sustaining the refusal of registration to the assessee-firm for the assessment year 1961-62, on the ground that no genuine firm came into existence under the deed dated February 23, 1959 ?'
2. The facts and circumstances revealed in the statement of the case may now be set out: The assessment year in question is 1961-62 for which the corresponding accounting year is 1367 B. S. An application under Section 26A of the old Income-tax Act, for registration of the assessee-firm as constituted under an instrument of partnership dated 23rd February, 1959, was made in respect of the assessment year 1961-62. It appears that, due to certain defects in the aforesaid deed, the firm's previous applications for registration in the earlier years ,had been rejected. This, according to the assessee, led to the execution of a deed of rectification on March 4, 1962. In both the deeds the partnership is stated to have commenced with effect from 1st of Baishakh 1365 B. S. The Income-tax Officer rejected the present application by his order dated March 28, 1963. The order was affirmed on appeal by the Appellate Assistant Commissioner by his order dated December 21, 1963. On further appeal by the assessee to the Tribunal, the application met with the same fate and the order of the Appellate Assistant Commissioner was sustained. The facts that were relied on by the assessee before the Tribunal were that Nishikanta Sen, who was an employee of Ganesh Das Sree Ram Das of Fenchuganj in the district of Sylhet, started a retail grocery shop at Karimganj with his eldest son, Madhusudan, in 1342, B. S. Nishikanta's second son, Jadunath, joined the business in 1938, while his third and fourth sons, Bidhu Bhusan and Benoy Bhusan, joined the business in 1943 and 1950, respectively. It was further claimed that the four sons developed the business and in 1950, they decided to start a branch in Calcutta and the Karimganj shop was turned into a wholesale business. It was further stated that from the year 1957, the Calcutta branch was managed by Jadunath and Benoy Bhusan while the business at Karimganj was looked after by Madhusudan and Bidhu Bhusan, the father, Nishikanta, who was 73 years of age being too old to look alter the business. On February 23, 1959, a deed of partnership was executed by and between Nishikanta and his four sons which recited, inter alia, that the parties intended to be partners in the business of M/s. Nishikanta Madhusudan Sen, so long belonging to and carried on by the partners as coparceners of the Hindu undivided family of which the first partner was the karta, and which had by a memorandum of partition dated February 23, 1959, been taken out of the Hindu undivided family and divided among the partners in equal shares, by division of book balances in the books of accounts of the business. Clause 5 of the said deed provided that the capital of the partnership would be Rs. 1,20,000 which belonged to the partners equally, being made up of the assets previously held by the partners as coparceners of the Hindu undivided family, of which the first partner was the karta. The deed is marked as annexure 'C'.
3. Applications for registration of the firm for the assessment year 1959-60 and 1960-61 were rejected on the ground that the firm was not genuine as Nishikanta was governed by the Dayabhaga school of Hindu law and there could not be a coparcenary consisting of himself and his sons. It was also found that the assets of the business were not divided and the partners' accounts were not credited with any capital as at 1st of Baisakh 1365 B. S., as claimed in the partnership deed. In consequence of such refusal of registration, a fresh deed was executed on March 4, 1962, between Nishikanta Sen and his four sons wherein, after reciting the circumstances in which the business was started by Nishikanta Sen who was helped in the business by his four sons and also reciting that in the deed of partnership dated February 23, 1959, the partners were described as coparceners of a Hindu undivided family, it was stated that whereas the partners considered it necessary to execute another deed of partnership to clarify the position without affecting the terms and conditions embodied in the deed of partnership dated February 23, 1959, this partnership deed was being executed. This deed is marked as annexure 'D'.
4. The deed was described as a deed of partnership. Clause 5 of the deed provided that the capital of the partnerhip would be Rs. 1,56,895.60 which belonged to the partners equally. The above are the facts and circumstances which appear from the statement of the case.
5. The Tribunal held that it was obvious from the comparison of the two Clauses providing for the capital of the partnership that it was not a mere deed of rectification. It noticed that the capital of the partnership was declared in the earlier deed to be Rs. 1,20,000 belonging equally to the partners while in the latter the same was declared to be Rs. 1,56,895.60, which sum could be the capital of the business only on March 4, 1962, when the second deed was executed. The Tribunal has also taken note of the fact, which is admitted by both sides, that registration had been granted to the assessee for the assessment year 1962-63 on the basis of the new deed, annexure 'D'. The Tribunal did not accept the contention of the assessee that the description in the earlier deed of the business as belonging to the coparcenary of the father and the four sons was due to a mistake of law on the part of the partners, and that since Nishikanta, a Dayabhaga father, was the absolute owner of the business, he should take his sons as partners without any contribution of capital by them. It was, therefore, contended unsuccessfully by the assessee before the Tribunal that what was described by him as mere mis-description should not be fatal to the application for registration.
6. The Tribunal rejected the application mainly on two grounds, the first being the fact that there could not have been a genuine partnership as recited in the partnership deed of 1959, in view of the status of Nishi-kanta who is governed by the Dayabhaga school of Hindu law; incidentally it refused to accept the plea of mistake of law in reciting the deed and that the second deed was not at all a deed of rectification. Secondly, the Tribunal held that the partnership deed of 1959 was not acted upon. Under this head it took note of the fact that the capital Rs. 1,20,000 mentioned in the earlier deed was. not apportioned to the capital accounts of the several partners either during the accounting year 1364 B.S. or even during 1365 B.S. It was only after the closing of the accounting year 1365 B.S. (ending on April 13, 1960), that the capital of Rs. 1,56,895 was apportioned between the partners and entries made some time in 1961. The Tribunal, therefore, refused to act on the terms of the deed of 1959 in the absence of any other satisfactory materials to show that there was a genuine partnership created under those terms.
7. In a reference under the Income-tax Act, the court is required to consider only the question which has been referred to it. It is not permissible to introduce other questions of law which have not been referred to this court in its advisory jurisdiction. The court is therefore required to concentrate on the sole question referred and to come to a conclusion whether the refusal of registration to the assessee on the ground of non-existence of a genuine firm under annexure 'C' is well founded or not.
8. Mr. P. Choudhury, the learned counsel for the assessee, submits that no seriousness should be attached to the mis-description noticed in the recitals regarding the fact of the partnership being created out of a coparcenary business. According to him, the word 'coparcenary' in this context may not be taken as a term of art as understood in the Hindu law and for this mis-description alone the application, otherwise in form and in accordance with the prescribed rules, should not have been rejected. In this connection, the learned counsel refers to a decision of the Allahabad High Court in Kanodia brothers v. Commissioner of Income-tax,  22 I.T.R. 311 (All.). He submits on the authority of this decision that mere addition of a partner which fact is held to be fictitious could not authorise refusal of registration of a firm under the Income-tax Act. The facts of this case were entirely different. There the assessee was already a registered firm, and, subsequently, a fresh partnership deed was executed under which the partners continued to be the same with the same shares, but it was stated that another person had been added as a working partner in a business which until that date was a branch of the assessee. The assessee applied for renewal of registration which was refused by the Income-tax Officer on the ground that the recital in the deed that the new partner had been added as a working partner was fictitious and that the branch continued to be the business of the assessee. It is in this context that their Lordships of the Allahabad High Court held that, so far as the proceeding for registration of the assessee-firm was concerned, the question whether the business continued to be a branch of the assessee or not could not be taken into consideration and the mere fact that a wrong allegation was made in the new partnership deed could not justify a refusal to renew the registration. It is enough to state that the facts of the present case are not on all fours with those noticed in the Allahabad case.
9. The next case cited by Mr. Choudhury is Suwalal Chhogalal v. Commissioner of Income-tax, A.I.R. 1949 Nag. 249. This case also will not come to the aid of the learned counsel, as will be clear from the observation which is quoted below :
'Where there is a registered deed of partnership which embodies the essential ingredients of partnership and further credible documentary evidence is available in the shape of the account books of the partnership regularly maintained which prove that profits were actually shared by the partners in certain proportions in accordance With the terms of the deed of partnership, the existence of the partnership does not remain merely a question of discharge of burden of proof but is a fact with strong positive evidence on its side and not a tittle of evidence against it-. Mere omission to open a separate capital account is not a ground for finding that the partnership is not a genuine firm.'
10. There is a further observation in the same decision to the effect at page 253 :
'However, the books are not before me, and there is no other material on which I can reach a sure conclusion, but, as I say, that fact is immaterial because it is clear from the accounts and from the partnership deed exactly how much Mohanlal has to receive.'
11. Therefore, it is clear that the partnership deed and the accounts were considered by the income-tax authorities and by the High Court in deciding the questjpn of existence of a genuine firm.
12. Next case cited is a decision of the Patna High Court in Sahabuddin Mohammed Raza v. Commissioner of Income-tax,  46 I.T.R. 203 (Pat.), wherefrom the following observation is quoted before us :
'The fact that there was no separate capital account of the partners or that no share capital was contributed by some of the partners originally is not a ground for refusing registration of a firm.'
13. Their Lordships in this case have further held that there was no material before the income-tax authorities to support their conclusion that the partnership constituted under the deed of partnership dated 21st March, 1953, was not a valid partnership and on that basis it was held that there was a genuine partnership firm under the deed dated 21st March, 1953, and hence, the firm should have been granted registration under Section 26A. In this case there was nothing to show that the instrument of partnership was not acted upon by the partners. Mr. Choudhury also relied upon Haja Allauddin Maracair v. Commissioner of Income-tax,  22 I.T.R. 545 (Mad.), which is a decision from the Madras High Court. But the following observation in this decision will clearly show that this authority is of no assistance :
'The cumulative effect of all the circumstances should be considered in arriving at the conclusion whether the partnership was real or not. A perusal of the provisions of the deed did not throw any doubt on the fact that the partnership was real and it must, therefore, be registered under Section 26A.'
14. Mr. Choudhury also cited a decision of the Supreme Court in Umacharan Shaw & Bros v. Commissioner of Income-tax,  37 I.T.R. 271, 277 (S.C.). This was an appeal under Article 136 of the Constitution. The appeal was allowed by the Supreme Court as their Lordships were satisfied that there was no material on which the Income-tax Officer could come to the conclusion that the firm was not genuine. Their Lordships held :
'There are many surmises and conjectures, and the conclusion is the result of suspicion which cannot take the place of proof in these matters.'
15. This decision is, therefore, of no assistance to Mr. Choudhury. He relied on Commissioner of Income-tax v. Sivakasi Match Exporting Co.,  53 I T.R. 204;  8 S.C.R. 18 (S.C.), Kylasa Sarabhaiah v. Commissioner of Income-tax,  56 I.T.R. 219;  2 S.C.R. 310 (S.C.) and V. K. Kurien & K. P. George v. Commissioner of Income-tax,  63 I.T.R. 675 (Ker.), in order to support his submission that if legal requirements are fulfilled, registration must be granted. In Commissioner of Income-tax v. Sivakasi Match Exporting Co., their Lordships of the Supreme Court held as follows :
'That the combined effect of Section 26A and the Rules made thereunder was that the Income-tax Officer could not reject an application made by a firm if it gave the necessary particulars prescribed by the Rules, and if there was a firm in existence as shown in the instrument of partnership. A firm might be said to be not in existence if it was a bogus or not a genuine one, or if in law the constitution of the partnership was void. The jurisdiction of the Income-tax Officer was, therefore, confined to ascertaining two facts, namely, (i) whether the application for registration was in conformity with the Rules made under the Act, and (ii) whether the firm shown in the document presented for registration was a bogus one or bad no legal existence.'
16. The proposition settled in the above decision is clear enough ; its application to the facts of the case is what is of importance and it will be seen below that, bearing in mind all this, the application for registration could be said to be rightly rejected.
17. On the other hand, on behalf of the department, Mr. J. P. Bhatta-charjee has relied upon a decision of the Privy Council in Sundar Singh Majithia v. Commissioner of Income-tax,  10 I.T.R. 457, 461 (P.C.), wherein the following observation is apposite:
'When a document purporting to be an instrument of partnership is tendered under Section 26A on behalf of a firm and application is made for registration of a firm as constituted under such instrument, a question may arise whether the instrument is intended by the parties to have real effect as governing their rights and liabilities inter se in relation to the business or whether it has been executed by way of pretence in order to escape liability for tax and without intention that its provisions should in truth have effect as defining the rights of the parties as between themselves. To decide that an instrument is in this sense not genuine is to come to a finding of fact: whether there was evidence upon which it was open to the income-tax authority to come to such a decision is a question of law.'
18. Mr. Bhattacharjee relied upon this decision to show that the materials which have been noticed by the income-tax authorities in rejecting registration cannot be said to be non-existent in the eye of law and registration was, therefore, rightly refused.
19. Finally, Mr. Choudhury again drew our attention to Commissioner of Income-tax v. Sivakasi Match Exporting Co. and emphasised on the following passage in the majority judgment:
'... if the order refusing registration goes beyond the scope of the jurisdiction conferred on the Income-tax Officer under Section 26A of the Act and the Rules made thereunder or if the decision depends upon the construction of the partnership deed or if there is no evidence to sustain the finding of the Tribunal, then the High Court will have jurisdiction to entertain the reference under Section 66(2) of the Act.'
20. It is, therefore, clear that the Tribunal was justified in looking to the
terms of the partnership deed of 1959 and compare the position envisaged
therein with what was actually obtaining from the picture disclosed in the
accounts. The assessee himself produced another deed of partnership of
1962, described as a deed of rectification before the Income-tax Officer, to be
taken into account in coming to a conclusion whether there was in fact and
in reality a genuine partnership in existence as disclosed in the 1959 docu
ment. That a genuine partnership was created by the instrument of 1962
is not in dispute and the assessee has got his registration under the terms of
this deed for the relevant years. The only question is, whether on the terms
of the 1959 document and the circumstances which are relied on by the Tribunal in order to arrive at the conclusion about the genuine existence of the firm as disclosed in that instrument, it came to a wrong conclusion in law.
21. Clause 4 of the 1959 document reads as follows :
'The partnership shall be deemed to have been commenced on the 1st day of Baisakh, 1365 B.S. and shall thereafter continue for an indefinite period, until determined in the manner set forth below.'
Clause 5 :
'The capital of the partnership shall be Rs. 1,20,000 which belongs to the partners equally, having been made up of the assets previously held by the partners as coparceners of the Hindu undivided family of which the said first partner was the karta ...'
Even in the so-called deed of rectifications, Clause 4 therein shows that:
'The partnership shall be deemed to have been commenced on the 1st Baisakh of 1365 B.S. and shall thereafter continue for an indefinite period, until determined in the manner set forth below.'
Clause 5 reads:
'The capital of the partnership shall be Rs. 1,56,896.60 which belongs to the partners equally.'
22. A perusal of the above clauses in the respective documents clearly shows the conflict of the origin and nature of the partnership. Whereas the two instruments give identical date of the commencement of the partnership on 1st of Baisakh 1365 B.S., they are completely divergent in showing the capital of the partnership. The partnership having been said to commence on 1st Baisakh of 1365 B.S. could not have shown completely different capital as shown in the two instruments if they relate to the same partnership. This circumstance is a relevant circumstance in order to appreciate whether the paper transaction disclosed in the 1959 document has in truth and reality any relation to actual facts. One can understand that there might be some mis-description of the partners being described as coparceners which by itself may not have been of very serious consequence, but, in view of the origin, nature and conflict of capital disclosure of the firm, even that circumstance may have some relevance in the particular circumstances of the case. We, therefore, cannot hold that the circumstances which are relied upon by the Tribunal are absolutely extraneous to the point at issue. If there were a genuine partnership created as envisaged in the instrument of 1959 on which alone the application for registration was based, it should have been possible for the assessee to satisfy the income-tax authorities with reference to the books of accounts how the actual position is reflected there consistent with the status of the assessee as a firm. Both the parties rely on annexure 'D' as a piece of evidence and it is crystal clear that annexure 'C' read with or supplemented by annexure 'D' discloses a twin partnership and not one and the same, although the date of birth claimed is identical in each case, namely, 1st Baisakh of 1365 B.S. There is nothing wrong in law in rejecting such a precarious and imaginary partnership which has no relation whatsoever with the accounts picture of the firm and in accepting the second one as the real one, evidenced by annexure 'D' and substantiated by the books of account of the assessee.
23. We are, therefore, clearly of opinion, on the facts and circumstances of the case, that the Tribunal was justified in sustaining the refusal of registration to the assessee-firm for the assessment year 1961-62, on the ground that no genuine firm came into existence under the deed dated February 23, 1959.
24. The question is answered in the affirmative. We, however, make no order as to costs.
D.M. Sen, J.
25. I agree.