| Case ID |
00c5e69c-460e-462a-9513-520b6c9e25a4 |
| Body |
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| Case Number |
IT REFERENCE No. 228 OF 1975 |
| Decision Date |
Jan 20, 1978 |
| Hearing Date |
|
| Decision |
The Calcutta High Court ruled that the assessee-firm was not entitled to the continuation of registration for the assessment years 1968-69 and 1969-70. The court held that the death of a partner, presumed due to drowning, constituted a change in the firm's constitution, thereby disqualifying the firm from maintaining its registration. The application for registration was also deemed defective under the Income-tax Rules, reinforcing the Tribunal's decision against the firm. The case underscores the importance of strict compliance with legal requirements when applying for firm registration and the implications of partner changes on such status. |
| Summary |
In the case of Bengal Decorators v. Commissioner of Income tax, the Calcutta High Court addressed the issue of firm registration under the Income-tax Act, 1961, particularly focusing on the implications of a partner's presumed death. The case arose when one partner, Shyamdhan Sett, was drowned and subsequently presumed dead. The Income-tax Officer denied the firm's registration for the assessment years 1967-68, 1968-69, and 1969-70, arguing that a genuine firm could not exist under these circumstances. However, the Appellate Assistant Commissioner initially granted registration. The Tribunal later overturned this decision, stating that the firm’s constitution had changed due to the partner's death, thus rendering it ineligible for continued registration. The High Court upheld the Tribunal's ruling, emphasizing that the partnership deed's stipulation against dissolution upon a partner's death did not negate the change in constitution, as the partner was no longer alive. The ruling highlights the critical nature of adhering to procedural requirements in tax law and the significant impact of partner status on firm legality. |
| Court |
Calcutta High Court
|
| Entities Involved |
Commissioner of Income tax,
Bengal Decorators
|
| Judges |
Sabyasachi Mukharji,
Sudhindra Mohan Guha
|
| Lawyers |
Debi De,
M. De,
A. Sengupta,
P.K. Majumdar
|
| Petitioners |
Bengal Decorators
|
| Respondents |
Commissioner of Income tax
|
| Citations |
1978 SLD 599,
(1978) 113 ITR 805
|
| Other Citations |
Addl. CIT v. Vinayaka Cinema [1977] 110 ITR 468 (AP) (FB),
Sri Ramamohan Motor Service v. CIT [1973] 89 ITR 274 (SC),
Sandersons & Margans v. ITO [1973] 87 ITR 270 (Cal.)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
184,
187
|