V.S. Desai, J.
1. In the assessment of the assessee for the assessment years 1953-54 and 1954-55, the assessee applied to the income-tax authorities for registration of the partnership firm consisting of himself and one Namdeo. The instrument of partnership on the basis of which registration was asked, was dated the 19th July, 1953, which was beyond the accounting period for the assessment year 1953-54, but within the accounting period for the assessment year 1954-55. the Income-tax Officer refused registration because he was not satisfied that the firm was a genuine firm. The Appellate Assistant Commissioner in the appeal filed by the assessee took the same view and dismissed the appeal. The Tribunal was of the opinion that there was no material on the basis of which the genuineness of the firm could be questioned and the assessee firm, therefore, was a genuine firm. The Tribunal, therefore, allowed the appeals filed by the assessee and directed that the assessee firm may be registered for both the assessment years. The department made an application to the Tribunal under section 66(1) of the Indian Income-tax Act and on that application the following question of law has been raised by the Tribunal and referred to us in respect of the registration allowed for the assessment year 1953-54 :
'Whether, on the facts and in the circumstances of the case, the appellant firm is entitled to registration under section 26A of the Income-tax Act ?'
2. Now, in view of the recent Supreme Court decision in R.C. Mitter & Sons v. Commissioner of Income-tax : D.C. Auddy & Brother v. Commissioner of Income-tax, it is necessary that the instrument of partnership on the basis of which registration is claimed under section 26A should be in existence in the accounting year in respect of which the assessment is being made. In the present case, the accounting year for the first assessment year viz., the assessment year 1953-54, extended from 31st October, 1951, to 18th October, 1952. The instrument of partnership is, as we have stated earlier, dated the 19th of July, 1953. It was, therefore, not in existence in the accounting year corresponding to the assessment year 1953-54 and, in view of the Supreme Court decision, registration could not be allowed of the firm for the assessment year 1953-54.
3. In our opinion, therefore, the answer the question referred to us will have to be that the appellant firm was not entitled to registration under section 26A of the Income-tax Act for the assessment year 1953-54.
4. Mr. Dwarkadas, learned counsel appearing for the assessee, has urged before us that the question referred to us by the Tribunal did not arise out of its order because the contention that registration could not be allowed as the allowed as the instrument of partnership was beyond the accounting year was not raised by the department before the Tribunal nor was it the basis of the decision of the income-tax authorities. The only ground on which the income-tax authorities had rejected the application for registration was that the firm was not genuine and the Tribunal had granted registration because it had held that the firm was a genuine one. Before the Tribunal, Mr. Dwarkadas says, the department was in the position of a respondent and it was not, therefore, permissible for the respondent to urge a contention before the Tribunal, but it was also not capable of being raised by the department. Mr. Dwarkadas, therefore, argues that the question referred to us by the Tribunal not being one arising out of its order is not required to be answered by us. In our opinion, the argument advanced by Mr. Dwarkadas is not tenable. The contention, which the department has sought to raise, arose on the facts and the material which were before the income-tax authorities in the proceedings before them. A question of law, which arises on the facts and material on the record, even if not considered by the income-tax authorities or by the Tribunal, is a question which arises out of the order of the Tribunal (see in his connection Commissioner of Income-tax v. Scindia Steam Navigation Co. Ltd.) The circumstance, therefore, that the question was not raised before the Tribunal or was not dealt with by the Tribunal, will not avail the assessee to urge that the question does not arise out of the order of the Tribunal. Moreover, on the agreed statement of facts, which we have before us, it cannot be said that the point was not urged before the Tribunal. The Tribunal has observed :
'The record shows that this question was considered by the income-tax authorities as also by the Tribunal. As there was a direct authority of the Bomaby High Court in favour of the assessee it was not argued by the parties and was lost sight of when dictating the order.'
5. We cannot, therefore, agree with the contention of Mr. Dwarkadas that the question referred to us by the Tribunal does not arise out of its order.
6. The further submission of Mr. Dwarkadas that the department, which was the respondent before the Tribunal, could not have urged that contention before the Tribunal and the Tribunal had no jurisdiction to consider it, is also not tenable. In the first place, the statement of the Tribunal to which we have already made a reference shows that the contention was taken even before the income-tax authorities. It was not, therefore, a new contention, which the department as the respondent was raising before the Tribunal. Moreover, a respondent is not confided merely to the ground on which the lower authority has decided in its favour in supporting the decision of the lower authority. The respondent is entitled to urge any other grounds which may be available to him in support of the decision of the lower authority, which is in its favour. If a ground, which is purely one of law and arises on the facts, which are either admitted or proved on the record, the respondent is not precluded from urging it in support of the decision of the lower court, which is in his favour merely because the said decision is based not on that ground but on some other ground.
7. Mr. Dwarkadas has then urged that registration should not be refused to the assessee firm on the mere technical ground that the instrument of partnership produced by it along with its application for registration was one that was executed beyond the accounting period when here was a genuine partnership firm and when further an instrument of partnership executed before the end of the accounting period was also in existence but unfortunately was not annexed to the application for registration of the firm of the assessee.
8. It is not doubt true that the firm of the assessee has been held to be a genuine partnership firm and the refusal to grant registration to a genuine partnership firm on the mere technical objection that the instrument of partnership was executed beyond the accounting period may appear to be somewhat unfair or unjust. The department itself appears to be aware of the hardship involved since we find from the observations of Hidayatullah J. in the supreme Court decision R.C. Mitter & Sons v. Commissioner of Income-tax, D.C. Auddy & Brothers v. Commissioner of Income-tax that the Board of Revenue has issued instructions that all firms should be registered whether the documents under which they were constituted existed in the accounting year or not provided the Income-tax Officer was satisfied about the genuineness of the firm. We have however to decide the question which already stated we must answer it by saying that the assessee firm was not entitled to obtain registration for the assessment year 1953-54. That the assessee firm was not entitled as of right to obtain registration under section 26A would, however, not disentitle the income-tax been issued by the Board of Revenue as we find from the observations of Hidayatullah J. referred to above. In view of the finding of the Tribunal that there is no material on the basis of which the genuineness not find it difficult to obtain or suspected, the assessee, we hope may not find it difficult to obtained registration for the assessment year 1953-54. The assessee will pay the costs of the department.
9. Reference answered accordingly.