RAY, C.J. - This arises out of a case stated by the Income-tax Appellate Tribunal, Madras Bench, under Section 66(1) of the Income-tax Act. The simple facts are that the assessee firm had been registered as a partnership firm for years preceding the assessment year in question. Under the law, every partnership firm is required to renew its registration for every year of assessment. In the present case, the application for registration, or to speak more properly, for renewals of registration, was filed on June 30, 1944. One of the partners (Reghunath) died on February 27, 1944, according to the terms of the partnership agreement (7th para.) it was agreed between the founders of the firm that the partnership business would not stand dissolved but shall continue to be carried on by the surviving partners with survivors or heirs or executors or administrator of the deceased partner as the case may be. The application for renewals of registration was signed by Kishorilal, son of Raghunath. It is neither stated nor urged by the Department that it had any other survivors or heirs or executors or administrator who can represent his estate. The Income-tax Officer was probably under the impression that in such a contingency some alterations by way of showing that the deceased partners heirs or successors had been taken in as partners should have been made in the partnership deed or a new partnership deed should have been substituted for it. The original deed, without any alteration, had been produced, and the Income-tax Officer being of opinion that the renewal of registration has to be granted by an endorsement on the partnership deed had refused the renewal on the ground that the relevant deed was not produced. As to the application, he found two defects, namely, that Raghunaths death was not stated in the body and that the partners, as named in the deed before him, did not all personally sign.
The order of the Income-tax Officer was confirmed by the Appellate Income-tax authority as well as by the Appellate Income-tax Tribunal. The latter being moved under Section 66(1) agreed to state a case as above and referred to us the question formulated as 'whether under the facts and circumstances of the case the application for renewals of registration was defective and liable to be rejected.'
This question must be answered in the negative. The relevant rule bearing upon the subject is Rule 6, as amended, of the Income-tax Rulers, 1922. The rule reads :-
'Any firm to whom a certificate of registration has been granted under Rule 4 may apply to the Income-tax Officer to have the certificate of registration renewed for a subsequent year. Such application shall be signed personally by all the partners (not being minors) of the firm, or where the application is made after dissolution of the firm, by all persons (not being minors) _ who were partners in the firm immediately before dissolution and by the legal representative of any such person who is deceased, and accompanied by a certificate in the forms set out below.'
The form, which is also printed in Sampath Iyengars Indian Income-tax Act, 3rd Edn., App. VII, Page LXXI, contains a note which is identical as the relevant portion of the Rule 6. The Note : 'This application must be signed personally by all the partners (not being minors) in the firm or if made after dissolution of the firm, by all persons (not being minors) who were partners in the firm immediately before dissolution and by the legal representative of any such person who is deceased.'
In this view of the matter, it is clear that there was no defect in the application as Kishorilal had signed as legal representative of the deceased Raghunath. In view of the stipulation contained in para. 7 of the original partnership deed, no alteration in the deed or no fresh deed was needed in order to constitute a partnership between the surviving partners and the heirs or successors of the deceased partner. Of course, non-mention of the death of Raghunath and the fact that his successor, by virtue of the agreement, became a partner automatically and that he accepted the position by signing the application for renewal in order to make it more appropriate and in order should have been avoided. By we cannot conclude that such trivial deficiencies would vitiate the application.
The learned standing counsel contends that the words 'and by the legal representative of any such person who is deceased' in the rule should govern the latter of the alternative cases contemplated in the rule, namely, that which governs the form of the application in case of dissolved firm. Grammatically he is not correct. Secondly, there cans be no sense in such a distinction that this enabling provision should apply to the case of a dissolved firm and not to a firm not dissolved. It may be that ordinarily on the death of any of the partners, the firm gets dissolved automatically but it does not so dissolve where the deceased partners heir automatically, by virtue of the terms of the deed, becomes a partner without any fresh agreement. There can be therefore, no reason why he should not sign in the place of the deceased partner whose status devolves upon him.
In consideration of what I have said above, I would answer the question in the negative holding that in the facts and circumstances of the case, the application for renewal of the registration was not defective and should not have been rejected.
The application is allowed with costs. Hearing fee is assessed at Rs. 100.
NARASIMHAM, J. - I agree with my Lord the Chief Justice.
Reference answered in the negative.