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Commissioner of Income-tax Vs. Basarmal Ratan Dass - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference No. 369 of 1971
Judge
Reported in[1974]96ITR331(All)
ActsIncome Tax Act, 1961 - Sections 256(1)
AppellantCommissioner of Income-tax
RespondentBasarmal Ratan Dass
Appellant AdvocateR.R. Misra, Adv.
Respondent AdvocateP.N. Pachauri, Adv.
Excerpt:
- .....is the assessment year in dispute, there was a change in the constitution of the firm and a fresh deed of partnership was executed. the assessee applied for a fresh registration and filed along with the application for registration a copy of the partnership deed. the income-tax officer found that the deed was executed on october 25, 1965, on a stamp paper, which was purchased on november 1, 1965. in his opinion, the partnership agreement was thus void. he, therefore, refused to register the firm. on appeal, the appellate assistant commissioner of income-tax upheld the order of the income-tax officer. the assessee then appealed to the income-tax appellate tribunal where it was contended that the partnership deed was actually executed on november 1, 1965, but through a typing error, the.....
Judgment:

Gulati, J.

1. Under Section 256(1) of the Income-tax Act, 1961, the Allahabad Bench of the Income-tax Appellate Tribunal has submitted the statement of the case.

2. The assessee is a partnership firm. Up to the assessment year 1966-67, it was assessed in the status of a registered firm having 7 partners. During the previous year for the assessment year 1967-68, which is the assessment year in dispute, there was a change in the constitution of the firm and a fresh deed of partnership was executed. The assessee applied for a fresh registration and filed along with the application for registration a copy of the partnership deed. The income-tax Officer found that the deed was executed on October 25, 1965, on a stamp paper, which was purchased on November 1, 1965. In his opinion, the partnership agreement was thus void. He, therefore, refused to register the firm. On appeal, the Appellate Assistant Commissioner of Income-tax upheld the order of the Income-tax Officer. The assessee then appealed to the Income-tax Appellate Tribunal where it was contended that the partnership deed was actually executed on November 1, 1965, but through a typing error, the date of execution mentioned in the deed was October 25, 1965, on which date actually the draft of the partnership agreement was prepared. It was also stated that a deed of rectification was executed on January 23, 1968, by all the partners and was filed before the Income-tax Officer on February 12, 1968. This deed of rectification was before the Income-tax Officer when he passed the order under Section 185 of the Act refusing to grant registration. It was also submitted before the Income-tax Appellate Tribunal that the firm was a genuine one and was granted registration in the subsequent years on the basis of the same partnership deed. These submissions prevailed with the Income-tax Appellate Tribunal which held that the registration should not have been refused. The Tribunal accordingly directed the Income-tax Officer to register the firm. The Commissioner is aggrieved and at his instance the following question of law has been submitted for our opinion :

' Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the date of October 25, 1965, in the partnership deed was only a typing mistake and that a genuine firm had come into existence, which was entitled to registration under Section 185 of the Income-tax Act, 1961 '

3. To us it appears that the question as framed is not a question of law. Whether there was any typing error or whether the firm was genuine or not are questions of fact and the Tribunal's findings on these questions cannot be challenged by way of reference unless the findings are based on no material or are perverse. On the material before the Tribunal, it cannot be said that the findings are without any material nor can they be said to be perverse. The Tribunal came to the conclusion that the partnership deed was actually executed on November 1, 1965, and not on October 25, 1965, which was mentioned in the partnership deed as a result of a typing mistake. The Tribunal also took into consideration the fact that the firm, as constituted under the partnership deed in question, had been treated by the department to be a genuine firm for the subsequent assessment years and was granted registration. It is not possible to say that the Tribunal relied upon irrelevant considerations.

4. We, accordingly, answer the question in the affirmative, in favour of the assessec and against the department. The assessee is entitled to costs which we assess at Rs. 200.


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