BANERJEE, J.

1. THIS reference, under s. 66(1) of the Indian IT Act, 1922, has been made in circumstances hereinafter related.

2. THE assessment years, which are involved in this reference, are 1959- 60 and 1960-61, corresponding to accounting years ended on December 31, 1958, and December 31, 1959.

In or about August, 1949, one Baidyanath Gorai commenced business as an electrical contractor, under the trade name of M/s Electro House. Up to the asst. yr. 1958-59, he was assessed as the sole proprietor of the business. On January 2, 1958, a deed purporting to convert the said business into a partnership came into existence between Baidyanath Gorai, his mother-in- law, Srimati Gouribala Dasi, and his son-in-law, Nemaichand Saha. According to the deed, the three partners were given the following shares in the partnership :

3. THE ITO accorded registration to the firm, under section 26A, for the successive two assessment years under appeal. THE CIT of Income-tax, West Bengal, Calcutta, however, found on examination of the records that the orders of the ITO granting registration to the firm for the asst. yr. 1959-60 and the renewal of registration for the asst. yr. 1960-61 were