Alfred Henry Lionel Leach, C.J.
1. The assessees constitute a firm trading in timber under the style of N. V. Mammaly and Sons. Before the year 1939-40 the firm had been registered under Section 26-A of the Income-tax Act, and on the 10th October, 1939 an application for a renewal of the registration was made. Three weeks later N. V. Abdulla Sahib, the senior partner, died and his death resulted in the reconstitution of the firm. His widow was taken in as a partner and his three sons and three daughters, all of whom are minors, were admitted to the benefits of the partnership. In the application for the registration of the new firm under Section 26-A the shares of the partners were stated to be N. V. Ummarkutty, six annas; N. V. Kayumma, two annas; N. V. Mariyumma, two annas; and K. Bibi (the widow of N. V. Abdulla Sahib) six annas. K. Bibi had not in fact a six annas share in the partnership. Her share was two annas, the remaining four annas being intended for the benefit of the minors, who were admitted to the benefits of the partnership as a body and not as individuals.
2. Clause 5 of the partnership deed states:
That the said six minor children, viz., three sons and three daughters of the said late N.V. Abdulla are hereby agreed and declared to be admitted to the benefits of the said partnership. They shall as a body be jointly entitled to 2|8 share of the net profits of the business, if any, and the said body shall for the purposes of the partnership be regarded as a unit or a single individual so that the benefits of the partnership hereinbefore agreed and declared shall enure and accrue to them and the survivors of them at the time when the accounts of the partnership are taken from time to time.
3. Clause 16 of the deed reads as follows:
That in the event of any of the children of said late N.V. Abdulla attaining the age of majority, as and when each child of his should attain such majority, he or she shall be called upon by the firm or its managing partner to elect to become a partner in the business or not to do so, and if he or she should elect to become a partner, then his or her share of profits shall be as may be agreed to between the parties hereto and him or her as the case may be. But if he or she should elect not to become a partner then he or she shall be entitled, in the manner hereinafter provided, to the payment of what may stand to his or her credit in the separate account and also to his or her proper share in the share of profits standing on such date to the credit of the body of minor children of the said late N.V. 'Abdulla. The total amount of profits standing at any time to the credit of the minor children of said late N.V. Abdulla as a body as hereinbefore provided shall at the time of division or whenever required be divisible equally among all the children alive at the time without reference to the Sex of the children or shares under Mohammadan law. And it is also hereby expressly declared and provided that if at any time the amount due to any of the children of late N.V. Abdulla under his or her separate account, or as his or her proper share in the profit account, the same shall be payable by the firm only on the expiry of one year from the date of demand or intimation.
This clause is reproduced from the statement of the case, but it would appear that the words 'be demanded' or similar words have been omitted after the words 'in the profit account'. Throughout, the drafting of this clause is faulty, but reading the deed as a whole it is clear that the intention is that the minors are not to take a vested share in the fund, but that their rights shall be governed by the law of survivorship when the fund is distributed. Mr. Sesha Aiyangar on behalf of the Commissioner of Income-tax has, however, expressed the opinion that a duly constituted guardian of a minor would at any time be entitled to withdraw his ward's share.
4. Section 26-A of the Income-tax Act reads as follows:
(1) Application may be made to the 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 income-tax or super-tax.
(2) The application shall be made by such person or persons and at such times and shall contain such particulars and shall be in such form, and be verified in such manner, as may be prescribed; and it shall be dealt with by the Income-tax Officer in such manner as may be prescribed.
Section 2 (6-B) states that the expression 'partners' includes any person who being a minor has been admitted to the benefits of partnership. The application which was made for the registration of the new partnership clearly did not comply with the requirements of Section 26-A. The individual shares of the partners were not correctly specified. The widow was credited with a six annas share, whereas she was only entitled to a two annas share and nothing was said about the admission of the minors to the benefits of the partnership. The Income-tax Officer rejected the application on these grounds and there can be no doubt that in doing so he was acting in accordance with the law. The Appellate Assistant Commissioner of Coimbatore having upheld the Income-tax Officer's refusal to register the firm the assessees applied to the Commissioner of Income-tax to state a case to this Court and in accordance with their request the Commissioner, acting under Section 66 (2) has referred the following question:
Whether the individual shares of the minors who were admitted to the benefits of partnership can be said to have been specified in the deed presented for registration under Section 26-A of the Act.
It will be observed that in framing the question in this way the Commissioner raises the wider issue whether the deed itself, not the application, specifies the individual shares of the minors in the benefits of the partnership.
5. We have no hesitation in answering the question in the negative. No doubt the deed contemplates the admission of the minors to the benefits of the partnership, but it does not specify with certainty what their shares are to be. As the deed stands, should one of the minors die before the fund is distributed, his or her estate will not participate in the fund. The dead minor's share will go to the survivors. The Act requires the tax in a particular year to be levied on the income of the previous year. Now, supposing a minor died in the year of assessment he or she would have no right whatever in the profits made during the year of account, and unless the partnership deed specifically indicates what each partner shall receive out of the profits in the year of account it is not possible for the firm to comply with the requirements of Section 26-A. The section only contemplates the registration of a firm which is constituted under an instrument of partnership which with clearness states what the individual shares of the partners are to be, and that is certainly not the case here. The minors as a body cannot be regarded as a taxable unit.
6. As the question referred is answered in the negative, the Commissioner of Income-tax is entitled to his costs, which we fix at Rs. 250.