1. A partnership firm called, A. N. Rangappa and Sons, consisting of five partner constituted a partnership firm under a deed of partnership dated November 20, 1975, for carrying on the business set out in that deed. The firm has been registered with the Restorer of Firms under the Indian Partnership Act, 1932 (Central Act 9 of 1932). On March 20, 1976, the firm filed an application under s. 184 of the I.T. Act, 1961 (Central Act 43 of 1961) (hereinafter referred to as 'the Act'), before respondent No. 2 for registration of the firm for the assessment year 1976-77. On March 27, 1979, respondent No. 2 rejected the said application (annex. E), the correctness of which was challenged by the firm before respondent No. 1 in a revision under s. 264 of the Act. On November 19, 1979, respondent No. 1 has rejected the said revision petition and has affirmed the order of respondent No. 2. In this petition under area. 226 of the Constitution, the firm has challenged the aforesaid orders.
2. As before, the petitioner has asserted that it was entitled for registration under s. 185 of the Act and the benefits flowing therefrom and the same has been refused on totally irrelevant grounds.
3. Sri K. B. Basavarajan, learned counsel for the petitioner contends that the reasons on which the authorities have refuse registration are totally irrelevant to s. 185 of the Act and the authorities should be compelled to examine and dispose of the application on relevant consider actions only.
4. Sri K. Srinivasan, learned senior standing counsel, sought to supper the impugned orders.
5. Clause 3 of the partnership deed date November 20, 1975, sets out the nature of business to be carried on by the firm. That clause, that is material for the case, reads thus :
'The business of the partnership shall consist of catering and providing facilities for indoor and outdoor games to be participated by the members of Merchants Social Club, Hospital Road, Bangalore-53, for the time being. The partners are at liberty to undertaken any other business as they determine from time to time.'
6. Before the authorities, as also before this court, the petitioner has asserted that it has carried on the business set out in clause 3 of the deed of partnership. But in rejecting the application made by the petitioner, respondent No. 2 states that the business of catering and providing facilities for indoor and outdoor games is not a business as decided by several courts. Sri Srinivasan has not been able to place before us any ruling of the Supreme Court or this court or any other High Court which has held that the nature of the business carried on by the petitioner is note a business. In rejecting the application made by the petitioner, respondent No. 2 has not addressed himself to the factor that should be considered as per s. 185 of the Act. Unfortunately, respondent No. 2, without addressing himself to the factors enumerated in s. 185 of the Act, has rejected the application on vague and irrelevant considerations. Even respondent No. 1 has not cortically examined the case of the petitioner and the factors that should be taken into consideration before granting or refusing an application under s. 185 of the Act. The order or respondent No. 1, though somewhat elaborate, suffers from the same infirmity as was committed by respondent No. 2.
7. As both the authorities have failed to examine the application made by the petitioner with due regard to the factor enumerated in s. 185 of the Act, there is no other alternative for this court, except to quash the impugned orders and direct the original authority to re-examine the application made by the petitioner and dispose of the same in accordance with law.
8. In the light of my above discussion, I quash the impugned order and issue a writ in the nature of mandamus to respondent No. 2 to restore the application made by the petitioner to its original file and dispose of the same in accordance with law and in the light of the observations made in this order.
9. Rule issued is made absolute. But, in the circumstances of the case, I direct the parties to bear their own costs.