Jagannatha Shetty, J.—The question referred under s. 256(2) of the I.T. Act, 1961 (the "Act"), runs as follows :

"Whether, on the facts and in the circumstances of the case, the assesses-firm was not entitled to continuance of registration under the Income Tax Act, 1961 ?"

2. The assessee is a partnership firm. The firm was established by an indenture dated June 21, 1971. S. N. Gundu Rao and S. C. Madhukar were partners and also parties to the deed. Besides, Master Santosh Kadam (minor)has been admitted to the benefits of partnership. The relevant portions of the deed of partnership are set out below for immediate reference :

"Whereas the parties have agreed to admit Master Santosh Kadam to the benefits of partnership on the same terms and conditions hereinafter mentioned and described.

Clause-8 :

'The net profits and losses of the firm for any year shall be divided among partners as follows :

Sri S. N. Gundu Rao 20%

Sri S. C. Madhukar 40%

Master Santosh Kadam 40%

Clause-13 :

'The minor member admitted to the benefits of the partnership shall have no rights over the goodwill of the firm'."

3. For the assess