Back
1961 Supreme(AP) 196
Andhra Pradesh High Court
Judges : JAGMOHAN REDDY, P.CHANDRA REDDY
Koduri Sambasivadu - Appellant
Versus
Commissioner of Income Tax - Respondent
Decided On : 11-14-61
An application for renewal of registration under section 26-A of the Indian Income-tax Act, 1922, must be signed by all the partners personally.
Headnote:
INCOME TAX - REGISTRATION OF FIRM - APPLICATION FOR RENEWAL - SIGNED BY ALL PARTNERS PERSONALLY - RULE 2 OF THE INDIAN INCOME-TAX RULES, 1922 - INTERPRETATION - REFUSAL TO REGISTER - JUSTIFIED.
Fact of the Case:
The assessee, a firm consisting of five partners, applied for renewal of registration under section 26-A of the Indian Income-tax Act, 1922. The application was signed by four partners personally and one partner by his attorney. The Income-tax Officer refused to renew the registration on the ground that the application was not signed by all the partners personally.
Finding of the Court:
The Court held that the application for renewal of registration under section 26-A of the Indian Income-tax Act, 1922, must be signed by all the partners personally. The Court further held that the Income-tax Officer was not obligated to return the application to the assessee to rectify the defect and that the Appellate Assistant Commissioner was not required to accept the application made by the assessee under rule 2(c) of the Indian Income-tax Rules, 1922.
Issues: Whether the refusal to register the firm under section 26-A of the Indian Income-tax Act, 1922, was justified.
Ratio Decidendi: The Court held that the application for renewal of registration under section 26-A of the Indian Income-tax Act, 1922, must be signed by all the partners personally. The Court further held that the Income-tax Officer was not obligated to return the application to the assessee to rectify the defect and that the Appellate Assistant Commissioner was not required to accept the application made by the assessee under rule 2(c) of the Indian Income-tax Rules, 1922.
Final Decision: The Court answered the question referred to it in the affirmative, i.e., against the assessee.
( 1 ). THE question to be answered by us in this reference is : " whether on the facts and in the circumstances of the case, the refusal to register the firm under section 26-A of the Indian Income-tax Act, 1922, was justified ?". The assessee is a firm consisting of five partners constituted under the instrument of partnership, dated 9th November, 1946, carrying on business in turmeric. It was registered under section 26-A of the Indian Income-tax Act for the assessment year 1946-47 for which the account year was the financial year ended 31st march, 1947. The firm applied for renewal of registration. However, the application was signed only by four of the partners personally. The fifth partner, venkatasubba rao, did not sign this application but it was signed by another partner, ramalingam, who held a general power of attorney from him. Thus, this application was not signed by all the partners personally. For this reason, the proper income-tax Officer refused to renew the registration. The appeal by the assessee to the Appellate Assistant Commissioner proved unsuccessful and the same fate awaited the further appeal to the Income-tax appellate Tribunal.
( 2 ) ON the request of the assessee, the Tribunal referred the abovementioned question for the opinion of this Court under section 66 (1) of the Income-tax Act. The first point to be considered by us is whether on an application of the present kind the firm could be registered under section 26-A. That section recites : " (i) 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 incometax 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. " it is manifest that sub-section (2) contemplates rules being made prescribing the manner in which the application should be signed. Accordingly, in exercise of the powers conferred by section 59 of the Indian Income-tax Act, the Board of revenue framed rules among which is rule (2 ). " Any firm constituted under an instrument of partnership specifying the individual shares of the partners may, under the provision of section 26-A of the Indian Income-tax Act, 1922 (hereinafter in these rules referred to as the Act) register with the Income-tax Officer, the particulars contained in the said instrument on application made in this behalf. Such application shall be signed by all the partners (not being minors) personally and shall be made (e) before or after the dissolution of the firm in respect of the assessment or assessments to be made on its income upto the date of dissolution : provided that where an application is made under clause (e) after dissolution of the firm, it shall be signed by all persons (not being minors) who were partners in the firm immediately before dissolution and by the legal representative of any such person who is deceased. " it is seen that sub-section (2) of section 26-A and the relevant rule are expressed in mandatory words. The application must be signed by the partners themselves if the request for registration is to be complied with. The partnership, in order to bring itself within the terms of that section, must satisfy the requirements of that section and the rules made thereunder. It is beyond doubt that the statutory provisions do not permit any agents signing on behalf of the partners. If a partnership is to get the advantage of section 26-A, it is incumbent on all the partners to sign personally.
( 3 ) THIS position is well established by the authoritative pronouncement of the supreme Court in Rao Bahadur Ravulu Subb
