Judgment

HEGDE, J: In these appeals by certificate the question that falls for decision is whether on the facts and in the circumstances of the case registration under Section 26-A of the Indian Income Tax Act, 1922 (to be hereinafter referred to as the Act) was rightly refused to the appellant firm on the ground that the partnership in question violated the provisions of Section 4 of the Indian Companies Act, 1913.

2. The authorities under the Act as well as the High Court of Allahabad have answered that question in the affirmative. The assessee challenges that conclusion.

3. The above appeals relate to different assessment year of the same assessee, the relevant assessment years being 1952-53, 1953-54 and 1954-55. In all these years the Income Tax Officer had refused to register the appellant firm under Section 26A.

4. All the partnership deeds are, we are told, similar in terms. We have before us the deed executed on July 7, 1950. It shows that firm consists of 18 partners. Ex facie that deed does not show that any of the partners had joined the deed as representatives of their Hindu Undivided Families. From the tenor of the document, they appear to be partners in their own right. The Income Tax Officer, the Appellate Assistant Commissioner and the Tribunal have come to the conclusion that some of them had joined the partnership as Kartas of their respective Hindu Undivided Families. All the authorities under the Act as well as the High Court have opined that the partnership in question is not lawful in view of Section 4 (2) of the Indian Companies Act, 1913. The material portion of that provision reads:

"4. (1) ......

(2) No company, association or partnership consisting of more than twenty persons shall be formed for the purpose of carrying on any other business that has for its object the acquisition of gain by the company, association or partnership or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of an Act of Parliament of the United Kingdom or some other Indian Law or Royal Charter or Letters Patent.

(3) This section shall not apply to a joint family carrying on joint family trade or business and where two or more such joint families form a partnership, in computing the number of persons for the purpose of this section, minor members of such families shall be excluded.

(4) Every member of a company, association or partnership carrying on business in contravention of this section shall be personally liable for all liabilities incurred in such business.

(5) ..............."

5. The Income Tax Officer, the Appellate Assistant Commissioner as well as the Tribunal were of the opinion that some partners of the assessee firm having entered into the partnership as representatives of their respective Hindu Undivided Families, the adult members of those families should be taken into consideration for determining whether or not the total number of partners exceeded twenty. On that basis they have arrived at the conclusion that the firm has more than twenty partners and the same having not been registered as a company under the Companies Act, nor having formed in pursuance of an Act of Parliament of the United Kingdom or some other Indian Law or Royal Charter or Letters Patent, it must be held to be an unlawful partnership. When the question formulated earlier was referred to the High Court under section 66 (1) of the Act, it was heard by Jagdish Sahai and Beg, JJ. Jagdish Sahai J. was of the opinion that the partnership in question was not lawful. Beg, J. differed from him and answered the question in favour of the assessee. In view of this difference of opinion, the matter was referred to Takru, J. He agreed with Jagdish Sahai, J. By a majority the question referred to the High Court was answered in favour of the Revenue. Hence these appeals

6. Mr. Chagla appearing on behalf of the assessee urged that no Hindu joint family as such can join a partnership and it is now well