R.R.RASTOGI, J. - (1.) THE IT Tribunal Delhi Bench "B" New Delhi has referred the following questions for the opinion of this Court : "1. Whether on the facts and in the circumstances of the case, were the AAC and the Tribunal legally correct in admitting the amendment deed dt. 19th Aug., 1969? 2. Whether on the facts and in the circumstances of the case, the provisions of rr. 22(2), 22(3) and 24 of the IT Rules, 1962 wee not complied with by the assessee and was the assessee entitled to the benefit of registration under S. 185 of the IT Act, 1961? 3. Whether on the facts and in the circumstances of the case, the assessee's failure to divide the profits in the profit sharing ratio specified in the partnership deed dt. 19th Aug., 1969 is fatal to the assessee's claim of benefit of registration as per its application in Form 11A filed on 30th March, 1970?"
(2.) THE facts briefly stated are that the respondent Lalta Pd. Bishambhar Saran, Kashipur, a partnership firm was originally constituted under a deed of partnership dt. 1st April, 1959. It comprised of four partners. Viz., Bishambhar Saran, Ved Prakash, Dharam Prakash and Om Prakash. This firm was granted registration and the benefit of continuance of registration till the asst. yr. 1969-70. On 18th July, 1969 Bishambhar Saran died and S/s Om Prakash and Dharam Prakash left the firm. The firm was then reconstituted and a deed of partnership was executed on 19th Aug., 1969. It comprised of the surviving partner, Ved Prakash and Smt. Chameli Devi, widow of Bishambhar Saran. The minor son of Bishambhar Saran, Vishnu Prakash, was admitted to the benefits of the partnership. The shares of the partners in the profit and loss were as under : Name of the Partner Profit Loss 1. Ved Prakash 35 per cent 50 per cent 2. For the asst. yr. 1970-71 with which we are concerned in this reference application for registration in Form No. 11 duly signed by Ved Prakash and Smt Chameli Devi was given on 31st March, 1970. The original partnership deed was attached with the application. The ITO on a scrutiny of the accounts found that the profit had been divided for the period from 18th July 1969 to 31st March, 1970 in the ratio of 33.33 per cent each which was not is accordance with the shares specified in he partnership deed. He also found that for the fist period i.e. 1st April, 1969 to 18th July, 1969 no declaration in Form No. 12 had been given. Accordingly, he refused to grant registration to the assessee firm for this assessment year. Aggrieved the assessee filed and appeal before the AAC and produced before him an amended deed of partnership which had been executed on 19th Aug., 1969. According to this deed the shares of the two partners and the minor in the profits were 33,33 per cent each and in the losses the shares of the two adult partners were 50 per cent each and in the losses the shares of the two adult partners were 50 per cent each and that of the minor nil. The AAC admitted that document and help that the profits had been divided quite correctly in accordance with the shares specified in the amended deed and the assessee was entitled to registration. He also found that the ITO had not doubted the genuineness of the firm. The assessment had also not been made under S. 144 of the Act and if at all, there was only an irregularity in the matter of filing of the application for registration and for that reason registration could not be refused.
(3.) THE revenue took up the matter in appeal before the Tribunal. The Tribunal agreeing with the AAC, held that it was merely due to a mistake that the assessee could not file a copy of the aforesaid deed before the ITO. The genuineness of the firm had not been doubted. It was evidenced by an instrument of partnership and the profits had been divided in accordance with the shares specified in the deed as amended subsequently and the assessee was, thus, clearly entitled to registration. In the result, the appeal was dismissed.;