: Sabyasachi Mukharji, J. - In this reference u/s 256(1) of the IT Act, 1961, following question has been referred to this court :
'Whether, on the facts and in the circumstances of the case, Appellate Tribunal was correct in holding that the assessee firm was entitled to registration u/s 185 of the It Act, 1961 for the asst. yr. 1965-66 ?'
2. This reference relates to the asst. yr. 1965-66 of which the relevant previous year is from 16-11-1963 to 2-11-1964 (Dewali Sambat Year 2021). The assessee firm was formed in 1962 and was evidence by a partnership deed executed on 29-10-1962. Under the said deed, there were seven partners partnership. On 15-11-1963, that is, on the last day of the prior accounting year, one partner, L. N. Todi, retired and one minor named Vinod Kumar Todi, son of Radha Krishna Todi, was admitted to the benefits of partnership. On the change of the constitution, a fresh partnership deed was executed on 16-11-1963. The assessee firm claimed fresh registration and filed an application on 20-2-1964 in Form No. 11 accompanied by the original partnership deed. The ITO refused to grant registration of the assessee firm following his previous order.
3. There was an appeal therefrom to the AAC who held that there was no justification for refusing the registration. There was a further appeal to the Tribunal. The Tribunal has noticed that revenue has not been able to bring on record any material to prove that the three partners, Sri Kailash Prasad Todi, Sri Hari Prasad Todi and Sri Rajendra Kumar Todi were benamidars of the old partners of the assessee firm. The Tribunal also agreed with the AAC that on a reading of cl. 6 of the Partnership Deed dt. 16-11-1963 which was operative during the relevant accounting year and it was not necessary that the three partners should introduce capital immediately and that the quantum of capital to be introduced, not being mentioned in the Partnership Deed, had to be decided by mutual consent. In the premises, the Tribunal upheld the order of the AAC and the Tribunal was of the view that the assessee firm was entitled to registration. On these facts, the aforesaid question has been referred to this court.
4. In view of the facts and circumstances of the case and in view of the finding of the Tribunal, the question must be answered in the affirmative and in favour of the assessee.
5. In the facts and circumstances of the case, the parties will pay and bear their own costs.
Suhas Chandra Sen, J. - I agree.