The main legal point established in the judgment is that the partnership agreements were not illegal or forbidden by law, and the performance of the partnership contract was not impossible except by disobedience to the law.

1. This reference under section 66 (1) of the Indian Income Tax Act, 1922, concerns assessments made for the years 1956-57, 1957-58, 1958-59 and 1959-60. The assessee was described in the orders of assessment as an unregistered firm composed of a certain Raja Venkatarama Chetty, and his son, Govindarajulu.

2. It is undisputed that a certain Thiruvengadam Chetty was the grantee of mining lease under the provisions of the Mines and Minerals (Regulation and Development) Act, 1948, and the Mineral Concession Rules, 1949. There was an assignment of this lease by Thiruvengadam Chetty formed a partnership along with six others on November 1, 1954, for carrying by Thiruvengadam Chetty of the identical mining lease on February 11, 1955, once again to Venkatarama Chetty. On July 1, 1955, Venkatarama Chetty formed a second partnership, the partners being himself and his son, Govindarajulu.

3. There were applications for registration under section 26A of the Indian Income Tax Act, 1922, in respect of each of the four periods with which we are concerned in this reference. Those applications were refused by the Income Tax Officer, and the appeals preferred by the assessee to the Appellate Assistant Commissioner and the Income Tax Appellate Tribunal were dismissed. The refusal of the applications was founded on the view that the partnership on behalf of which applications were sought were not genuine, in the sense that the assignments of the mining lease by Thiruvengadam Chetty to Venkatarama Chetty once in the year 1954, and again in the year 1955, were not valid assignments, since the previous sanction of the State Government was not obtained in regard thereto under rule 37 of the Mineral Concession Rules. This, in our opinion, is how we should understand what was said, although the Income Tax Appellate Tribunal in some part of its order made a casual reference to the fact that there was a power of attorney executed by Thiruvengadam Chetty in favour of Venkatarama Chetty after the assignment on October 31, 1954, and observed in that context that the execution of the power of attorney militated against the assignment.

4. In regard to the application for registration, for one part of the assessment year in 1956-57, the view taken by the Income Tax Officer was that the application was made beyond the time prescribed for that purpose.

5. The four question which we are called upon to decide read :

"(i) Weather it was open in law to the Tribunal to reject the application for registration (or renewal of it) of the partnership deed dated November 1, 1954, on the ground that the application field for obtaining registration of the same was belated when neither the Appellate Assistant Commissioner nor the Income Tax Officer had rejected the application for registration (or renewal of it) on the ground of the belatedness of the said application ?

(ii) Whether a partnership formed for working mines on the assignment on permission of a person, who held a valid lease from the State government, is hit as being prohibited by the Mines and Minerals (Regulation and Development) Act, 1948, and the Rules made thereunder ?

(iii) And even if there is there no prohibition, is a partnership of the type mentioned entitled to registration ?

(iv) Even if the assignment mentioned in question No. 2 is held to be void for lack of sanction of the State Government, can the partnership, which are in the nature of collateral agreements, be held to be illegal or forbidden by law ?"

6. The first question relates to a period of only three month forming part of the assessment year 1956-57. The application for registration was sought by the firm of which Venkatarama Chetty, the assignee from Thiruvengadam Chetty, and six others were partners under the instrument of partnership executed on November 1, 1954. The Income Tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal alluded to the fact that the application, which concerned the period of three m