( 1 ) THIS is a reference made under section 256 (1) of the Income-tax Act by the Income-tax Appellate Tribunal, vide its reference order dated 15/06/1987, passed in R. A. No. 162/hyd of 1986. This reference was made on the request of the Revenue. The question referred is as under :"whether, on the facts and in the circumstances of the case and in law, the Appellate Tribunal was correct in holding that the assessee firm was entitled to registration ?"

( 2 ) THE undisputed facts are that the assessee, Oriental T. Maritimes, Visakhapatnam, filed an application under section 185 (1) (b) of the Income-tax Act for registration. The assessee-firm is constituted by five adult partners and three miners. Of the three miners, two were clearly admitted only to the benefits of the partnership. In respect of another minor by name Padmapriya, the deed made no distinction between her and other adult partners and as per the partnership deed she had an interest of 20 per cent. in the profit and loss of the firm. In view of this fact, the Income-tax Officer refused the registration of the firm by holding that the partnership deed was not valid and consequently registration would not be granted. He further opined that such a minor could have been admitted only to the benefits of the partnership and she could not be made a full-fledged partner responsible for the loss of the firm also. In an appeal preferred by the assessee, the Appellate Assistant Commissioner agreed with the Income-tax Officer. On a further appeal preferred by the assessee to the Income-tax Appellate Tribunal, the Income-tax Appellate Tribunal allowed the appeal, vide its judgment and order dated 17/01/1986, on its file I. T. A. No. 707/hyd of 1983. It is in those circumstances the Revenue sought six questions to be referred to this court, but the Income-tax Appellate Tribunal referred only the question as extracted above.

( 3 ) THE Income-tax Appellate Tribunal held that though the minor partner has not exercised her option as required under section 30 (5) of the Partnership Act, within six months of her attaining majority, by giving a public notice, yet from Form No. 11, it is clear that she has already signed that form like a fullfledged partner, as expressing her desire to be considered as partner. It further held that the Partnership Act no doubt gives a minor six months time but such a minor need not wait for six months to exercise his or her option and he or she can do so the very next day after attaining majority. In this view of the matter, the Tribunal held that Padmapriya signing the application for registration after attaining majority is a positive act showing that she has exercised her option to continue as a fullfledged partner. Since the profit accrued only on the last day of the accounting year, i. e. , 30/06/1979, and on that day Padmapriya was a major and as such there is no question of a minor being saddled with a possible loss which may accrue to the firm. On these reasons, the Tribunal allowed the appeal. In our view, the Tribunal has misdirected itself in coming to the said conclusion. It has not considered the import of sections 184 and 185 of the Income-tax Act.

( 4 ) THE matter in question relates to the assessment year 1980-81. During the relevant assessment year, the relevant provisions under sections 184 and 185 of the Income-tax Act read as under :"184. Application for registration.- (1) An application for registration of a firm for the purposes of this Act may be made to the Assessing Officer on behalf of any firm, if - (i) the partnership is evidenced by an instrument; and (ii) the individual shares of the partners are specified in that instrument. (2) Such application may, subject to the provisions of this section, be made either during the existence of the firm or after its dissolution. (3) The application shall be made to the Assessing Officer having jurisdiction to assess the firm, and shall be signed - (a) by all the partn