A partnership is not a person in the eye of law and the provisions enacted by Sec. 4(1)(d) of the Bihar Mica Act cannot, therefore, apply to a partnership as such.

1. Miscellaneous Judicial Case No; 327 of 1957 : In this case it appears that one K. C. S. Reddy obtained a dealers licence under the provisions of the Bihar Mica Act in 1948. For the assessment year 1950-51 he filed a return of his income from the business in mica in the status of an individual and the assessment was completed on, that basis. Subsequently the assessee made a claim that the business had been taken over by a firm consisting of himself and four others, namely (1) Adala Ramireddy of Nellore, (2) Bettepati Sub-bareddy of Nellore, (3) Veluru Saraswathama of Indupur, Kovur Taluk, and (4) Kotamreddi Chenchamma of Bodduvaripalem, Kovur Taluk. It was alleged that there was a partnership deed dated 15-8-1950, and registration of the firm was claimed on the basis of this partnership deed under Sec.26A of the Indian Income-tax Act.

The application for registration was rejected by the Income-tax Officer and assessment was made under Sec.23(3) of the Income-tax Act on the basis that the firm was an unregistered firm. The matter, was taken up in appeal, but the Appellate Assistant Commissioner dismissed the appeal, holding that the assessee was carrying on mica dealing business without a dealers licence in the name or the partnership and so there was contravention of the provisions of the Bihar Mica Act of 1947 and the business carried on by the assessee was unlawful. The Appellate Assistant Commissioner, therefore, upheld the order of the Income-tax Officer refusing the registration under Sec.26A and also making the assessment in the status of an unregistered firm. The assessee appealed to the Income-tax Appellate Tribunal against both the orders of the Appellate Assistant Commissioner. The Tribunal allowed both the appeals, holding that the partnership was not unlawful and the application of the partnership for being registered should have been allowed under Sec.26A of the Indian Income-tax Act. The Tribunal also set aside the quantum assessment of the firm on the basis that it was an unregistered firm.

2. As required by the Income-tax Department, the Income-tax Appellate Tribunal has submitted the following question of law for the opinion of the High Court under Sec. 66(1) of the Indian Income-tax Act:

"Whether the partnership has been properly held to be valid and so entitled to registration?" On behalf of the Income-tax Department the Standing Counsel put forward the argument that the partnership firm was bound to take out a dealers licence under the provisions of Sec. 4(1) (d) of the Bihar Mica Act, if the business of the partnership was to deal in mica, and in the absence of any such licence having been granted to the partner ship it must be held; that the object of the partner ship was unlawful and registration had been, rightly refused by the Income-tax authorities. We do not accept this argument as right. Sec. 4(1) (d) of the Bihar Mica Act is to the following effect.

"4. (1) Save as provided in Sub-section (2) and Sub-section (3) of this section, no person shall: x x x x x

(b) buy mica, or have in his possession or sell mica extracted in a controlled area from a mica mine or mica dump of which he is not in possession or, mica imported into a controlled area from any place not situated in a controlled area, except under and in accordance with a dealers license;" A "dealers license" has been defined by Sec.2(e) of the Act as "a license granted under Sec. 6 authorising the person to whom it is granted to buy mica, and to have in his possession and sell mica, (i) extracted in a controlled area from a mica mine of which he is not in possession or from a mica dump; or (ii) imported into a controlled area from any place not situated in a controlled area". In our opinion, Sec. 4 (1) (d) does not require a partnership as such to take out a dealers licence before carrying on the business of dealing in mica. The reason is that a partnership is not a person in the eye of law and the provisions enacted by Sec. 4 (1) (d