G.R. Jagadisan, J.
1. The following questions have been referred by Income-tax Appellate Tribunal under Section 66 of the Indian Income-tax Act:
Whether, on the materials on record, there was no division of the joint family assets including the business in Malaya and Burma as and from 15th September, 1950, or at least from 13th December, 1950 as claimed by the assessee and
Whether, on the facts and circumstances of the case, the Appellate Tribunal was justified in its conclusion that the assessee firm is not entitled to registration under Section 26-A of the Act for the period from 14th April, 1951 to 15th November, 1951
2. The facts are as follows : A Hindu undivided family of Nagarathars having the Vilasam 'A.K.A. CT. V.' consisted originally of the father, Chidambaram Chettiar, and his four sons, Alagappa, Meenakshisundaram, Venkatachalam and Annamalai. The kartha, Chidambaram Chettiar, died on 21st July, 1950. Thereafter, the family consisted of the four brothers. Annamalai the last brother was a minor. In the course of the assessment proceedings under the Indian Income-tax Act for the period 1951-52, the family claimed that it had been divided with effect from 15th September, 1950, and applied for an order under Section 25-A. That section provides that a Hindu family which had been assessed as an undivided family may claim, at the time of making an assessment, that a partition had taken place amongst the members of such family, and call upon the Income-tax Officer to record an order to the effect that the family property had been partitioned among the members. If the Income-tax Officer is satisfied, on such enquiry as he may make, that there has been, in fact, a partition, he should record an order to that effect. For the purposes of this section, it is not sufficient that the joint family has merely become extinct. The section can only be invoked, where there has been an actual partition by metes and bounds, or, in other words, a physical division and not a division in status. In the instant case, the family claimed that there was an actual division of the family on 15th September, 1950. It must be mentioned that the family was carrying on money-lending businesses in four places in Burma, and at Kuala Lumpur in Malaya. It was claimed by the family that, by appropriate entries in the books of account of the former money-lending firm, the capital had been distributed between the sharers. A partnership deed dated 9th November, 1950, and a partition yadast (agreement) dated 13th December, 1950, were also relied upon. Under this latter document, the Indian immovable properties were said to have been divided.
3. On an examination of the evidence produced before him, the Income-tax Officer refused to admit the claim of partition for the assessment year 1951-52. He was of the opinion that the idea of partition could not have been in the minds of the members of the family till the end of the accounting year. He also referred to the fact that the stamp papers, in which the partnership deed and the partition yadast were engrossed, were in the names of strangers. The stamp papers pertaining to the partnership deed were purchased in the name of one A.K. Abdulla Rowther of Karaikudi on 13th May, 1950. The document was, however, unregistered. The partition yadast bore stamp papers purchased in the name of one Alagappa of Kottaiyur and one Ramaswamy Iyer on 7th November, 1950. Having regard to these suspicious features and the rather unsatisfactory evidence placed before the Officer, he reached the conclusion that the claim under Section 25-A of the Act was not well founded. An application which had been preferred before the Officer under Section 26-A of the Act on behalf of the firm for registration of the alleged partnership between the brothers also stood rejected.
4. The assessee appealed to the Appellate Assistant Commissioner and claimed that at least the partial partition of the Burma and Malayan business should be recognised. The Appellate Authority found that the Burma business was not partitioned on 15th September, 1950, but only much later, that the alleged partnership deed was an antedated document, as there was no proof that the assessee had the stamp papers on 9th November, 1950, that the partition yadast looked fresh and that it was a spurious document. On these reasons, the Appellate Assistant Commissioner dismissed the appeals both regarding the question of division under Section 25-A and registration under Section 26-A of the Act.
5. Appeals were preferred to the Tribunals by the assessee. The claim for partial partition was restricted only to the Malayan business. The Tribunal dismissed these appeals. An application under Section 66(1) of the Act for referring a question of law filed before the Tribunal also failed. Then there was an application to this Court under Section 66(2) and that application was also rejected, and this Court observed:
On the findings recorded by the Tribunal which were themselves based on what the assessee himself conceded before the Appellate Assistant Commissioner at one stage and on the concession on a different point about Burma made before the Tribunal, no question of law arises.
6. The result, therefore, was that in respect of the assessment year 1951-52, the assessee failed all along the line.
7. The assessee made renewed efforts, in respect of the assessment year 1952-53. The claim for partition and the claim for registration were reiterated. Again, reliance was placed on the old documents, which stood condemned in the proceedings in respect of the year 1951-52. This time, the Income-tax Officer accepted the partition from 16th November, 1951, because, there was, in addition, a registered deed of partition between the parties dated 16th November, 1951. The profits from 14th April, 1951, the beginning of the previous year, upto 15th November, 1951 were accordingly passed on the assessee family, and for the later period on the firm as claimed, in respect of which he granted registration from 16th November, 1951. The assessee appealed to the Assistant Commissioner against the refusal of the claim for partition and the refusal of registration for the period 14th April, 1951 to 15th November, 1951. The Appellate Assistant Commissioner examined one Alagu and one Karuppan Chettiar, attestors to the partition agreement. Ultimately, the appeals stood dismissed. The matter went up further by way of appeals before the Tribunal. The Tribunal dismissed the appeals for the same reasons as were given for the year 1951-52 and held that for the period 14th April, 1951 to 15th November, 1951, the family was a joint family and that the family income was correctly assessed upon the members as a Hindu undivided family. Considering the two documents, the partnership deed and the partition yadast, the Tribunal observed as follows:
This deed (partnership deed), however, has been written on old stamp papers, originally purchased by strangers. There is no contemporaneous evidence in support of its execution. The four brothers entered into another agreement among themselves on 18th December, 1950 on two stamp papers of twelve annas each bought at different times and on different dates. The genuineness of this deed also has not been established.
8. It is, therefore, quite clear that neither the Department nor the Tribunal was-inclined to place any reliance upon the documents produced by the assessee, except the registered document of the date 16th November, 1951. The question whether a document is genuine or is an ante-dated document brought into existence with the help of old stamp papers is purely one of fact, and this Court cannot embark upon a fresh investigation of the facts in a proceeding under Section 66 of the Act.
9. Alagappa Chettiar has himself given a sworn statement before the Officer. A reading of that statement shows that he was unable to explain who that Abdulla Rowther, in whose name the stamp papers were purchased, was, and was also unable to say categorically that these disputed documents were really brought about on their respective dates. This is what he states:
The deed was written on four stamp papers purchased by A. K. Abdulla Rowther on 13th May, 1950. These were not purchased by me. They were purchased by my father as I intended dividing from him then...The entries in Kualalampur books could not be made according to the partnership deed as Kosa was pending. Kosa was taken only in Kara, Masi and the capital and surplus capital in that business was divided only from Nandana, Chitrai.
10. Mr. K. Srinivasan, learned Counsel for the assessee, pointed out that ultimately even the Income-tax Officer has granted registration for a portion of the accounting period, only on the basis of the disputed partnership deed. Even if an ante-dated document is created on particular date giving an earlier date, as if it had been executed on that date, and, though it may not have validity from the date which appears ex facie, it might be open to the Department, taking into account the fact of its physical existence, to give effect to it from the point of time, when it must have been executed. Surely, the Income-tax Officer did not mean to say that the document was valid and operative as and from 9th November, 1950. If that were the position, the assessee would have succeeded even for the previous assessment year 1951-52. In all the circumstances of the case, we are not holding that the finding of the Tribunal is unsupported by the evidence or the probabilities of the case, so as to-warrant the questions being answered in favour of the assessee.
11. We have said enough in support of the findings of the Department and the Tribunal, and that would be sufficient to dispose of this Reference application. But we wish to point out one circumstance namely, that the partnership deed dated 9th November, 1950 was between the four brothers, one of whom was a minor represented by his mother and guardian, Umayal Achi. It is now settled law that the guardian of a minor cannot involve the minor in a partnership. The law, however, permits a minor being admitted to the benefits of the partnership. Per se, the document is invalid and illegal. The refusal to register the firm under Section 26-A can be justified on this ground alone. This Court took the view in Jakka Devayya v. Commissioner of Income-tax : 22ITR264(Mad) and Vincent and Ors. v. Commissioner of Income-tax : 22ITR285(Mad) that a deed of partnership making a minor a full partner like the other adult co-partners should be construed liberally and interpreted as if the minor partner was admitted only to the benefits of the partnership. The Bombay High Court in Dwarakadas Khetan & Co. v. Commissioner of Income-tax : 29ITR903(Bom) accepted this view as correct and the Patna High Court in Sahai Bros. v. Commissioner of Income-tax : 33ITR40(Patna) was also in accord with that view. The Bombay Case, Dwarakadas Khetan & Co. v. Commissioner of Income-tax : 29ITR903(Bom) went up on appeal to the Supreme Court. The Supreme Court reversed the decision of the Bombay High Court in Commissioner of Income-tax v. Dwarkadas Khetan & Co. : 41ITR528(SC) . The Supreme Court referred to the distinct cleavage of judicial opinion among the High Courts, on the question whether a document of partnership which makes a minor a full partner can be so construed as to give effect to it on the footing that the minor, despite the language of the instrument, had been admitted only to the benefits of the partnership. It must be pointed out that the Calcutta, Allahabad and the Punjab High Courts had taken a view different from that taken by the High Courts at Madras, Bombay and Patha. The Supreme Court held that a partnership deed, in which a minor was admitted as a full partner, was not valid and could not be registered under Section 26-A of the Income-tax Act.
12. In the present case, the document of partnership dated 9th November, 1950, makes it quite clear that the minor, Annamalai, who was represented by his mother and guardian, Umayal Achi, was made a partner along with his adult brothers, and was not merely admitted to the benefits of the partnership. Clause 8 of the document reads:
The net profit or loss of the business shall be apportioned amongst the partners in proportion Ho the capital contributed by each of the partners every year or at convenient intervals as may be agreed to by the partners.
Clause 10 is as follows:
Each of the partners shall be just and faithful to the other in all transactions relating to the partnership.
The document offends Section 30 of the Indian Partnership Act, which clearly lays down that a minor cannot become a partner, though with the consent of the adult partners, he may be admitted to the benefits of the partnership. In our opinion, the Department ought not to have granted registration of the firm for any period of the accounting year, on the basis of this document.
13. In the result, the questions are answered against the assessee, who. will pay the costs of the Department. Counsel's fee Rs. 250.