K. Bhaskaran, C.J.
1. Annexure ' A ' is the copy of the deed of partnership executed on October 8, 1959, which constituted the firm. Clause 5 of the deed (annexure ' A ') provided that the partnership was to continue in the first instance for a period of five years from the date of the deed. Annexure ' B ' is the fresh deed of partnership executed on December 22, 1965. The undisputed fact is that the assessee, M/s. Brahmagiri ' B ' Estate, was recognised to be a registered firm during the assessment year prior to 1965-66. The firm sought renewal of registration under Section 27 of the Kerala Agricultural Income-tax Act, 1950 (the ' Act '), for the assessment years 1965-66 and 1966-67 by an application dated June 11, 1965. Annexure ' B ' provided, inter alia :
'The deed of partnership expired by efflux of time on October 8, 1964. We, in spite of efflux of time, have been carrying on the business under the same terms and conditions as set out in the deed of partnership referred to above.
We have not been able to sign a fresh deed of partnership in view of the fact that the second of us had been away in the U. K. for the last two years and has not been in a position to come back to India.
We hereby declare that under the deed of partnership which expired on October 8, 1964, by efflux of time, the partnership has been continued as a partnership under the same terms and conditions as set out in the above deed of partnership and that the said partnership shall continue for a further period of five years from this day under the same terms and conditions. '
2. The Inspecting Assistant Commissioner declined to grant the registration on the plea that there was no instrument of partnership for the whole of the year inasmuch as annexure ' B ' was dated December 22, 1965, whereas the life of annexure ' A ' partnership deed expired on Octobers, 1964. The Appellate Tribunal, in reversal of the decision of the Inspecting Assistant Commissioner, ordered grant of registration as prayed for.
3. The question is whether the assessee-firm is entitled to registration for the assessment years 1965-66 and 1966-67. Section 27 provides :
' 27. Procedurein registration of firms.--(1) Application may be made to the Agricultural Income-tax Officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purposes of this Act and of any other enactment for the time being in force relating to agricultural income-tax or super-tax.'
4. The submission made by the counsel for the Revenue is that unless the instrument of partnership came into existence from the very beginning of the relevant accounting year, which, in other words, was in existence for the whole of the accounting year, the assessee was not entitled to have the registration in spite of the fact that the partnership might have existed as stated in annexure ' B ' (the fresh deed of partnership). Reliance was place on the decision of a Division Bench of this court in CIT v. Joseph & George : 77ITR292(Ker) , in which Raghavan J., as he then was, who spoke for the Bench, stated as follows (at pp. 296 and 297):
' From the language of Section 184(4) and Section 184(5), we are of opinion that the document need not be operative during the whole year. Sub-section (4) enacts that the application shall be made before the end of the previous year; therefore, if the application is made even on the last day of the accounting year, the firm must be registered for the next assessment year. For registering the firm, Sub-section (5) says, the application for registration shall be accompanied by the document of partnership : this means that the document should be in force on the day on which the application is made : it need not be in force on any previous day: of course, the partnership should have been in existence for the whole of the accounting year... '
5. In our view, the essence of the requirements are found in these words.
6. The only point of doubt raised by the Government pleader appearing for the Revenue is that in view of the fact that the instrument of partnership was dated December 22, 1965, whereas the application for renewal of registration was much earlier, on June 11, 1965, and the benefit was to enure for the whole year (the accounting year commencing with effect from April 1, 1965, and ending with March 31, 1966) whether the assessee was entitled to claim the benefit of registration for the purpose of agricultural income-tax for the years 1965-66 and 1966-67. As far as the first of the two years is concerned, in view of the fact that the partnership deed existed in 1965-66, there could be no doubt that the assessee was entitled to the benefit of registration. As far as the second of the two years, viz., 1966-67, is concerned, the contention has to be examined with reference to the instrument which came into existence during the course of the year, provided the business had been carried on throughout the year. In this case, annexure B fresh deed of partnership recites that the partnership was carried on throughout and the deed relates to that period as well as for a further period of five years. The requirement, in the words of Raghavan J., that the document should be in force on the day the application was made remains satisfied if the deed recited the existence of the partnership from the beginning of the year and stated that the deed related to the partnership business. The argument of the Government pleader appearing for the Revenue that because a five-year period is stated in annexure B, that has to be reckoned from December 22, 1965, and when it is done, the previous year has to be excluded from the time the deed was in force cannot hold good from the very recital of the document. The decision of the Madras High Court, relied on by the Tribunal, in M.R. Raju Chettiar v. CIT : 48ITR737(Mad) states (at p. 743) :
' If this arrangement was in existence at the commencement of the relevant account year, the subsequent execution of an instrument during the course of the accounting year gives the firm the character of a firm constituted under a deed of partnership throughout the accounting year. '
7. For the foregoing reasons, we answer the question referred to this court in the affirmative, that is, in favour of the assessee and against the Revenue.
8. A copy of this judgment under the signature of the Registrar and the seal of this court would be sent to the Kerala Agricultural Income-tax and Sales Tax Appellate Tribunal, Ernakulam.