Judgment:
V. V. KAMAT, J.:
The Dy. Commr. of Agrl. IT and ST, Koshikode, by the order dt. 30th June, 1989 has made a reference of the following two questions for our answer:
' 1. Whether, on facts and in the circumstances of the case, the order of the Dy. Commr., under s. 34 of the Agrl. IT Act in setting aside the assessment order made for 1972-73 holding that the order of the Agrl. ITO in granting renewal of registration of the firm M/s Valook Rubber Estate for 1972-73 is improper, irregular and illegal is wrong?
2. Whether, on facts and circumstances of the case, the proceedings of the Dy. Commr. under s. 34 of the Agrl. IT Act in the instant case is barred by limitation of time?'
The reference order is really more than elaborate when the legal position that a minor partner can never be understood as a partner, but only for the benefits of the partnerships. This situation of a minor being a person incompetent in law and could only eamitte to the benefit in the fundamental principles of law of contract is more than settled now nearly a century ago, by the decision of the privy council Mohori Bibee & Anr. vs. Dhurmodas Ghose 30 Indian Appeals 114. Even then the assessment for the year 1972-73 with regard to the partners then wasting has been allowed to be open on the ground that the assessing
authority wrongly assigned the status of a registered firm, as one of the minor partners attaining majority on 13th April, 1971, and thereby there was a change in the constitution of the firm. It is further observed in this connection that the firm was allowed refusal for registration for the asst. yr. 1972-73 on the strength of the original partnership deed without considering the fact that there was no valid instrument of partnership. A partner entitled to the benefits of the partnership is never a partner but has been understood as a person entitled to the benefit thereof. In such a situation on attainment of the majority he cannot be understood as a continuing partner. This is the legal fallacy in the entire reasoning of the reference order.
2. Be that as it may. Additionally it would be seen and it is an undisputed position that the assessment of the wasting partnership firm was completed on 31st March, 1973, and in the reference order itself it is found that the proposal to revise the order for the above reasons, under s. 34 of the Act is thought of well nigh after the expiry of 15-112 years thereafter.
3. On the first aspect of the Dy. Commr. would have to be held in error in seeing that the firm was reconstituted w.e.f. 1st April, 1972, on the ground that one of the minors admitted to the benefit of partnership had attained majority. Additionally the undisputed position is that the assessee-firm M/s. Valook Rubber Estate is dissolved w.e.f. 1st Dec., 1972. In any event the minor K.A. Moidu could not be understood as a partner but a person entitled to the benefits of the partnership. He was an independent person he attained majority thereafter because the dissolution deed makes a reference that on the date of the dissolution-1st Dec., 1972 he was of 20 years. From the order the Dy. Commr. of Agrl. IT, it is seen that the date of birth is 13th April, 1953 which would show that he attained majority on 13th April, 1971. Apart from these facts, the clear position would vitiate the reasoning of the Dy. Commr. when a minor cannot be understood as a partner in the partnership firm.
4. On the second aspect it will have to be seen again as an undisputed position that the assessment completed is sought to be reopened well-nigh after 15-1/2 years. Curiously enough a long reliance is placed on the decision of this Court T.A. George vs. Agrl. ITO 1983 KLT 1049, because this Court was considering the limits of the High Court which is self-imposed in character in exercise of powers under Art.226 of the Constitution of India. Such consideration is with reference to the well-known limitation of the exercise of powers to the effect that the High Court will not exercise jurisdiction if the petitioner is guilty of laces and delay. Even the period of 15-1/2 years did not stare in the face, because the Dy. Commr. proceeds to observe that the nature and dimension of the issue involved is to be taken into account and the issue being the assignment of correct status for the purpose of assessment of the firm being a legal issue can be reopened under the circumstances.
5. In our judgment completed assessment as far back as on 31st March, 1973 could not be justifiably reopened under the provisions of s. 34 of the Act and that too by resort to the decision of this Court relating to the exercise of extraordinary jurisdiction under Art. 226 of the Constitution of India.
6. The Dy. Commr. was exercising powers of revision under s. 34 of the Agrl. IT Act, 1950 on his own motion and it is more than settled that suo motu exercise of powers are normally to be exercised within a period of one year may be from the date of the knowledge. This does not mean that such a power may be exercised after a period of time when, even ordinary law could sit beyond limitation much earlier. Apart therefrom except that it is stated to be the legal question there is no other reason to be found in regard to this gross delay of 151/2 years. We find that our decision on both the questions get fortified by the two decisions of this Court Dy. Commr. of Agrl. IT & 5ST vs. P.S.B. Paul Pandian : [1981]128ITR809(Ker) and Ashiyana Greens vs. Commr. of Agri. It (1981) 132 ITR 497.
For the above reasons we pass the following order. Question No. 1 is answered in the affirmative-against the Revenue and in favour of the assessee, question No. 2 is also answered in the affirmative-against the Revenue and in favour of the assessee.