Decided on March 01,1982



V.P. Elhence, Judicial Member - (1.) THESE two appeals arise out of the consolidated order dated 31-1-1981 of the Commissioner (Appeals) II, Kanpur, for the assessment-years 1966-67 and 1967-68.
(2.) Both these appeals were filed after a delay of 13 days and 25 days, respectively. It was pointed out by Shri A.C. Sinha, the learned counsel for the assessee, that the impugned orders were served on the assessee on 13-2-1981 and that the appeals were despatched by registered post on 7-4-1981 but were received in the office of the Tribunal only on 27-4-1981 and that, therefore, the delays being postal, were entitled to be condoned. The delays being for reasonable period, are condoned. The assessee-firm was constituted vide partnership deed dated 12-10-1965 with 17 major partners and 4 minors were admitted to the benefits of partnership. The registration was originally granted to the assessee on 27-3-1971. However, it was cancelled by the ITO under Section 186(1) of the Income-tax Act, 1961 ("the Act"), on the ground that the firm was constituted of more than 20 persons in contravention of Section 11(2) of the Companies Act, 1956. The ITO also noticed that the deed of partnership was not signed by the guardians of the minors. Therefore, after relying upon the decision of the Allahabad High Court in Addl. CIT v. Uttam Kumar Promod Kumar [1974] 97 ITR 730, he cancelled the registration.
(3.) THE assessee, being aggrieved, came up in appeal before the Commissioner (Appeals). THE learned Commissioner (Appeals) took the view that the word "person" includes a minor under the Income-tax Act as well as under the Partnership Act, 1932, though it is not defined under the Companies Act, 1956. He was also influenced by the fact that the definition of "partner" under Section 2(23) of the Act includes a minor admitted to the benefits of partnership. He, therefore, upheld the order of the ITO. Thus, he held that the partnership in this case was of 21 persons and was, therefore, violative of the provisions of Section 11(2) of the Companies Act, and, therefore, the cancellation of the registration under Section 186(1) was justified. However, he did not accept the other ground on which cancellation of registration had been sustained by the ITO, namely, the want of signatures of the guardians of the minors on the deed of partnership. In this connection he placed reliance on the CBDT's Circular No. 210/13/74-IT(A-II) [Instruction No. 938], dated 19-3-1976. On the basis of the said circular, he took the view that an opportunity may be given to the assessee to amend the partnership deed but the registration need not be refused on this ground.;

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