Chinnappa Reddy, J.
1. The ITO, by his order dated February 18, 1961, granted registration to the assessee-firm consisting of four partners. Subsequent to the grant of registration the ITO discovered that one of them, though a minor on the date of registration of the instrument of partnership, was treated as a full-fledged partner. He, therefore, thought that the partnership was not valid and issued notice to the assessee to show cause why the registration should not be cancelled under Rule 6B of the Indian I.T. Rules, 1922. After the assessee showed cause, the ITO cancelled the registration and his order was confirmed by the AAC. The Income-tax Appellate Tribunal held that Rule 6B did not apply since it was confined in its application only to firms which were not genuine, that is to say, firms which did not exist in fact. The Tribunal, therefore, allowed the appeal of the assessee. At the instance of the Commissioner of Income-tax the question whether the ITO was right in cancelling the registration has been referred to us. Rule 6B is as follows :
'6B. In the event of the Income-tax Officer being satisfied that the certificate granted under Rule 4, or under Rule 6A, has been obtained without there being a genuine firm in existence, he may cancel the certificate so granted.'
2. It is clear that under Rule 6B, the ITO was empowered to cancel the certificate of registration only if he was satisfied that the firm was not a genuine firm in existence. The learned counsel for the. Department submitted that a firm which included a full-fledged minor partner was not a firm in the eye of law and, therefore, action could be taken under Rule 6B. We are not prepared to agree with the submission of the learned counsel. The use of the expression 'genuine' puts the matter beyond doubt. We are of opinion that Rule 6B applies only to firms which do not exist in fact as distinguished from the firms which may exist in fact but may be considered as non-existent in law. We are supported in our view by the decision of Obul Reddi and Venkateswara Rao JJ. in R.C. No. 83 of 1968.
3. The questions referred to us are therefore answered in favour of the assessee.