( 1. ) IN this reference under Section 66 (1) of the Indian Income-tax Act, 1922, the Income-tax Appellate Tribunal, at the instance of the petitioner, namely, the Commissioner of Income-tax, has referred the following question for our opinion :

" Whether, on the facts and in the circumstances of the case, the assessee-firm constituted by the instrument of partnership, dated September 20, 1952, was entitled to the grant of registration for the assessment year 1960-61, under Section 26a of the Indian Income-tax Act, 1922, when one of its two businesses, namely, liquor business, was carried on by it on the basis of licence issued by the Government in the name of one of its partners, Umashanker ? "

( 2. ) THE present reference arises on the following facts: The question relates to the assessment year 1960-61. The respondent-firm consisted of two partners, namely, Sheonarayan and Umashanker. Previous to that, Harnarayan was a partner of the firm along with Umashanker, but, after the death of Harnarayan, Sheonarayan, and Umashanker formed a partnership by a deed dated September 20, 1952, for carrying on business in medicines and liquor. The liquor business was carried on by the partnership firm on the basis of a licence granted by the Government in the name of Umashanker. The respondent-firm, therefore, applied for registration for the purposes of the Indian Income-tax Act, 1922, and an application was made to the Income-tax Officer for registration under Section 26a of that Act within the prescribed time. The respondent-firm stated that it had duly intimated to the Collector that the liquor business in respect of which licence had been issued in the name of Umashanker, who was one of the partners, would be carried on by the partnership firm. The Income-tax Officer refused registration to the respondent-firm on the ground that the assessee could not prove that it had intimated to the Collector the fact that the liquor business would be carried on by the firm. The Income-tax Officer was further of the opinion that the contract of partnership in respect of the liquor business was void as being opposed to public policy. For that proposition, the Income-tax Officer relied on the following decisions : Commissioner of Income-tax v. Krishna Reddy, [1962] 46 ITR 784 (AP), Commissioner of Income-tax v. Union Tobacco Co. , [1961] 41 ITR 115 (Ker), Commissioner of Income-tax v. Benarsi Das and Co. , [1962] 44 ITR 835 (Punj) and D. Mohideen Sahib and Co. v. Commissioner of Income-tax, [1950] 18 ITR 200 (Mad ). The Income-tax Officer, therefore, refused registration of the respondent-firm.

( 3. ) THE respondent-firm preferred an appeal before the Appellate Assistant Commissioner of Income-tax who, relying on a decision of this court, namely, Dayabhai and Co. v. Commissioner of Income-tax, [1966] 59 ITR 364 (MP) allowed the appeal. The learned Appellate Assistant Commissioner expressed the view that merely because the licence stood in the name of one partner, the carrying on of the transport business by the firm of Dayabhai and Co. was not illegal as observed by the High Court, and, therefore, the partnership could carry on the said business, although the licence or permit might be in the name of one partner only. Therefore, following the view of this court in Dayabhai and Co. v. Commissioner of Income-tax, the Appellate Assistant Commissioner allowed the assessees appeal and granted it registration.

( 4. ) THE Income-tax Officer preferred an appeal before the Income-tax Appellate Tribunal which was dismissed and the order of the Appellate Assistant Commissioner was confirmed. Therefore, the Commissioner of Income-tax, feeling aggrieved by the view expressed by the Income-tax Appellate Tribunal, successfully requested the Tribunal to refer the question for our opinion.

( 5. ) AS regards the letter written by the respondent-firm to the Collector, a copy of the same is to be found at page 14 of the paper-book, the same being marked annexure "