ANDHRA PRADESH HIGH COURT

                                               Choudry Brothers

                                                         Vs

                                        Commissioner of Income Tax

                                               (P.A.Choudary, J.)

                                                   17.01.1984

                                                 JUDGEMENT

P.A.Choudary, J.

( 1. ) THE following three questions are referred by the Income-tax Appellate Tribunal for
obtaining the opinion of this court : "(1) Whether, on the facts and in the circumstances of the
case, the assessment in the status of association of persons is valid ? (2) Whether, on the facts and
in the circumstances of the case, the Tribunal can direct the assessee to file Form No. 11 and
comply with conditions under section 184 and directing the Income-tax Officer to pass orders
thereon ? (3) Whether, on the facts and in the circumstances of the case, the assessee is entitled to
benefits of registration ?"

( 2. ) IN order to be able to answer these questions, a few facts as they appear from the statement
of case are stated. The assessee is a partnership firm constituted under a deed of partnership dated
5/07/1962, consisting of four partners of which Sushilchand Choudary was a minor represented
by his mother. For the assessment year 1966-67, the assessee filed an application for registration
of the firm before the Income-tax Officer. But the Income-tax Officer rejected the application and
refused to register the firm under the Income-tax Act on the ground that the partnership deed
dated 5/07/1962, was an invalid instrument. Under section 30 of the Partnership Act, a minor can
only be admitted to the benefits of a partnership and cannot be made a partner. The partnership
deed on the basis of which registration was sought had one minor by name Sushilchand
Choudary as a full partner. The Income-tax Officer, therefore, sought to make an assessment as
association of persons. The assessee carried the matter in appeal before the Appellate Assistant
Commissioner who confirmed the order of the Income-tax Officer. The assessee made a further
appeal to the Income-tax Appellate Tribunal.

( 3. ) BEFORE the Income-tax Appellate Tribunal, it was urged that the above mentioned
Sushilchand Choudary had on attaining majority elected to continue as a partner and had
intimated that fact to the Registrar of Firms on 25/03/1964, and that for the assessment year
1966-67, the assessee had filed on that basis an application in Form No.12 for continuation of
registration. However, the Income-tax Officer refused to register the firm in view of his order for
the earlier year. The Tribunal considered the question whether in the matter of continuation of
registration, a fresh partnership deed is necessary after Sushilchand Choudary attained majority.
The Tribunal held that since Sushilchand Choudary became major and had elected to continue to
be a partner of the firm constituted by the partnership deed dated 5/07/1962, the partnership was
perfectly valid. The Tribunal held that the said Sushilchand Choudary signed the application in
Form No. 11 for the assessment year 1965-66 and also Form No. 12 for 1966-67 clearly
undertaking that he agreed to be a partner of the firm. The Tribunal opined that this conduct of
the said Sushilchand Choudary cured the invalidity attached to the partnership deed.
Accordingly, the Tribunal concluded that the invalidity hitherto attached to the partnership deed
was removed and that the assessee was entitled to registration under section 184 of the Income-
tax Act. Accordingly, the Tribunal directed the assessee to file an application in Form No. 11
complying with the conditions under section 184 of the Income-tax Act and also directed the
Income-tax Officer to pass orders thereon. ;