Commissioner of Income Tax vs New Bharat Trading Co.

In this reference u/s 256(1) of the Income Tax Act. 1961, the following question of law has been referred for our opinion:- Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law to hold that the Assessee was entitled to registration under the provisions of the Income Tax Act, 1961?

We find from a perusal of the order passed by the Tribunal that Arun Kumar had joined the partnership firm of the Assessee as Karta of the HUF. The Tribunal found that in fact Arun Kumar was not married and, therefore, could not represent the HUF, which was not in existence. But, on an examination of the partnership deed, it found that the partnership deed itself is not invalidated and that Arun Kumar could be a member of the firm in his individual capacity. On this basis, the Tribunal directed the Assessing Officer to grant registration of the firm.

We do not find any error in view taken by the Tribunal in this regard particularly since the partnership deed was not invalidated.

Under the circumstances, the question is answered in the affirmative, in favour of the Assessee and against the Revenue. The reference is disposed of accordingly.