The main legal point established in the judgment is that the eligibility for registration of a partnership firm under S. 26A is determined by the firm's compliance with the specified requirements, regardless of the dissolution of a joint family or the terms of a consent decree.

CHATTERJEE, J. :- At the instance of the Commissioners of Income-tax, the question of law which has been referred to this Court for its opinion by the Tribunal is in these terms :

"Whether on the facts and in the circumstances of this case the Tribunal was right in holding that the partnership firm of Dudwala and Co. should be registered under S. 26A of the income-tax Act."

2. The facts shortly are as follows. The partners of the firm were Rai Bahadur Rameshwar Nathany, representing the Mitakshara joint family under the name and style of Baldeodas Rameswar, one Mannalal Musuddi and one Ramkumar Agarwal. Mannalal Musuddi went out of the partnership in November 1942 and a fresh deed was executed by which the two partners carried on the business of the firm, in which the share of Rameswar Nathany [representing Baldeodas Rameswar] was twelve an nag and Ramkumar Agarwala three annas. The remaining one anna share was devoted to charity. The deed was dated 10th February 1946.

3. A suit for partition was instituted by one of the members of the Hindu undivided family. That suit was instituted on the original side of this Court and was marked No. 1436 of 1943. That litigation resulted in a compromise and a consent decree was passed. The relevant clauses are set out in para. 4 of the referring order.

4. By cl. 1 of the terms of Settlement, the joint family came to an end on 21st September 1943. In cl. 3 the shares of each of the members of the family after the partition are stated. Clauses 7 and 10 are important and they are set out below.

Clause 7. "The business carried on under the names and Styles of Rai Bahadur Baldeodas Rameswar and Rameswar Nathany and Co. shall be stopped from the date hereof but this is not to affect the partner ship carried on under the name and Style of Messrs. Dudwala and Co. in which Messrs Baldeodas Rameswar are the partners and the said partnership shall be continued as provided in Cl. 10 hereof."

Clause 10. "In the firm of Dodwalla and Co. the parties hereto have twelve annas shares and it shall remain joint and the parties shall be entitled thereto according to the shares mentioned in Cl. 3 thereof."

5. An application was made in this case under S. 26A, Income-tax Act. That section is in the following terms.

(1) 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 Income-tax 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."

6. Dr. S.K. Gupta, learned counsel for the revenue authorities, drew our attention to the rules bearing on the subject under R. 2.

"Any firm constituted under an instrument of partnership specifying the individual shares of the partners may under the Provisions of S. 26A, Income-tax Act register with the Income-tax officer the particulars contained in the said Instrument on application made in this behalf."

7. Such application shall be signed by all the partners.

8. In the schedule to the form set out in R. 3 there is a note which says that the application must be signed by all the partners [not being minors] in the firm as constituted at the date on which the application is made and it must specify the names of the partner, the address, the date of admittance to partnership, interest on capital or loans, salary or commission from the firm and share in the balance of profit or loss.

9. Dr. Gupta also drew our attention to R. 4 which states that if on receipt of application referred in R. 3 the Income-tax officer to satisfied that there is a firm in existence constituted as shown in the Instrument of Partnership, and t