DULAT J. - A partnership firm consisting of L. Kheta Mal and his five sons - Kishore Chand, Ramji Das, Dayal Chand, Roshan Lal and Balbir Chand - was constituted in the year 1929. Later, in March 1947, one of the sons, Balbir Chand, was made to retire from the partnership and his share was allotted as follows :
(1) To his three minor sons, Mohinder Pal, Harish Chander and Ramesh Chander, by his deceased first wife : 1/10th.
(2) To his second wife, Smt. Kaushalia Devi : 1/20th.
(3) To his minor son, Surrendar Kumar, by Smt. Kaushalia Devi : 1/20th.
The instrument of partnership was signed by their uncle, Kishore Chand, on behalf of Mohinder Pal, Harish Chander and Romesh Chander, and by Smt. Kaushalia Devi on behalf of her son Surrendar Kumar. It was mentioned in the deed that the minors had been admitted to the benefits of the partnership.
In October, 1947, the father, Kheta Mal, died and thereupon another instrument of partnership was executed on the 3rd December, 1947, the shares of the minors being mentioned as :
L. Kishore Chand son of L. Kheta Mal :
L. Ramji Dass son of L. Kheta Mal :
L. Dayal Chand son of L. Kheta Mal :
L. Roshan Lal son of L. Kheta Mal :
Mohinder Pal, Harish Chander and Romesh Chander, minor sons of L. Balbir Chand, through Kishore Chand, their uncle :
Surrendar Kumar son of L. Balbir Chand, through Smt. Kaushalia Devi, his mother :
Smt. Kaushalia Devi wife of L. Balbir Chand :
The Income-tax Officer allowed registration of the firm under this deed of partnership for the year 1948-49, and it was renewed for the years 1949-50 and 1950-51. Renewal was also allowed by the Income-tax officer for the next year 1951-52. This matter, however, came to the notice of the Income-tax Commissioner and he, acting under section 33B of the Income-tax Act, set aside the order of the Income-tax Officer granting renewal for the year 1951-52, holding that the shares of all the partners were not specified inasmuch as the shares of Mohinder Pal, Harish Chander and Romesh Chander were not separately mentioned, although their total share in the partnership was specified as 1/10th, and further that in the renewal application, apart from the partnership deed, the share of Shrimati Kaushalia Devi and the shares of Balbir Chands sons were shown together as 1/5th and not separately specified. Against the learned Commissioners order, an appeal was taken to the Income-tax Appellate Tribunal, and that Tribunal found that the reasons mentioned by the Commissioner of Income-tax for refusing renewal of registration were untenable. The Tribunal held that in the context of the relevant facts, there could be no doubt that when the partnership deed stated that Mohinder Pal, Harish Chander and Romesh Chander held 1/10th share in the partnership, it meant that these three minors held that 1/10th share in equal shares. The Tribunal concluded, therefore, that it was not right to say that the shares of these three minors were not specified. On the second matter the Tribunal held that the small defect in the application for renewal, that the shares of the minors and Kaushalia Devi were lumped together and shown as 1/5th of the total partnership, was immaterial because the deed of partnership, which accompanied the application, left no doubt about the exact shares of the partners. The Tribunal was, therefore, of the view that the renewal application was properly allowed by the Income-tax Officer and ought not to have been refused by the Commissioner of Income-tax. The Tribunal allowed the appeal and restored the order of the Income-tax Officer. The Commissioner of Income-tax then applied to the Tribunal to refer two questions of law to this court, and the Tribunal, although feeling that the questions were essentially of fact, agreed to refer the following two questions for decision by this court :
'(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the three minor sons of Balbir Chand, viz., Mohinder Pal, Harish Chander and Romesh Chander, were to share their collective 1/10th share equally ?
(2) Whether, on the facts and in the circumstances of the case, the assessees application for renewal of registration merited rejection on the ground that the shares of Kaushalia Devi and the four minor sons of Balbir Chand were cumulatively shown there as 1/5th.'
The answer to the first question must turn on the consideration of the deed of partnership and there can, in my opinion, be no doubt that if that deed is properly read, the meaning is perfectly clear that the 1/10th share falling to Mohinder Pal, Harish Chander and Romesh Chander is to be divided equally amount them, or, in other words, that they are to share equally in the benefits of the partnership to the extent of 1/10th share. I say this because no other meaning to this particular recital in the deed of partnership seems reasonable, and I find that anyone reading the deed as a whole can be left in no doubt about this matter. The Commissioner of Income-tax appears to have been influenced by the circumstances that it was not mentioned in so many words that these three minors were to share equally in the 1/10th share allotted to them, but that is of no consequence, for the context is eloquent in that connection, and the Income-tax Appellate Tribunal was, in my opinion, justified in holding that Mohinder Pal, Harish Chander and Romesh Chander were to share their collective 1/10th share equally.
Mr. Sikri referred to some decided cases in this connection, but those cases deal with entirely different sets of facts very unlike the present. Thus in Jabalpur Ice ., and (2) The Nerbudda Ice Factory holding equal shares. It was found that the Nerbudda Ice Factory belonged to two partners, Purshottam Lal Sood and Bhoora Ram, and it was held therefore that the partnership sought to be registered had three partners, namely, Bharat Ice and Aerated Waters, Ltd., Purshottam Lal Sood and Bhoora Ram, and registration was refused because the individual shares of Purshottam Lal Sood and Bhoora Ram were not defined and also the application for registration was not signed by Bhoora Ram. Similarly, in Kannappa Naicker & Co. v. Commissioner of Income-tax a partnership consisted of certain individuals and another firm, but the shares of the partners of that other firm were never specified. Mr. Sikri also referred to a decision of the Supreme Court, Steel Brothers & Co. Ltd. v. Commissioner of Income-tax but there again the question was entirely different, for, while a partnership was sought to be registered on the ground that it consisted of two partners, it was found as a fact that there were three partners and, of course, the share of the third partner was never specified in the deed or in the application for registration. The present case is totally different and what we have to look for here is not any rule of law governing such a matter but the proper meaning to attach to certain words used in a particular context in a deed of partnership. As I have said, the context leaves no doubt about the meaning, and once the meaning is clear no legal problem remains. I am satisfied that the Appellate Tribunal rightly considered the deed of partnership as meaning that Mohinder Pal, Harish Chander and Romesh Chander were to take the 1/10th share in equal shares. The answer to the first question posed by the Appellate Tribunal must, therefore, be in the affirmative.
The second question rests on a mere technically, for, if it is, as I have found it, that the deed of partnership did specify the individual shares of the partners, then the mere circumstance, that in the application for renewal the shares of the minors and Kaushalia Devi were lumped together, should not result in the rejection of that application. As the Appellate Tribunal had pointed out, the deed of partnership was attached with the application for renewal, so that the facts themselves could be in no doubt. It is significant that identical application for renewal had on two previous occasions been granted by the Income-tax Officer, and the small omission in the renewal application was never noticed. The Appellate Tribunal was in the circumstances, entitled to hold that the Commissioner of Income-tax was not justified in refusing renewal of registration on account of an error of this kind. I share the view of the Appellate Tribunal and am wholly unable to agree that as a matter of law renewal of registration merited rejection on the ground mentioned by the Commissioner of Income-tax. The answer to the second question posed by the Appellate Tribunal must, therefore, be in the negative.
With these answers I would return the reference. Costs of the reference are to be paid by the Commissioner of Income-tax which are assessed at Rs. 100.
G. D. KHOSLA C.J. - I agree.
Reference answered accordingly.