Legal Case Summary

Case Details
Case ID 201a251e-d1cc-46a9-ad58-746a1f4c2af4
Body View case body.
Case Number CIVIL APPEAL No. 111 OF 1956
Decision Date Apr 07, 1959
Hearing Date
Decision The Supreme Court upheld the decision of the Income-tax authorities, stating that the application for registration of the firm under section 26A of the Income Tax Act was not valid. The Court emphasized that the application was not signed by each of the partners of the constituent firms and did not specify the individual shares of these partners. This failure to meet the mandatory requirements of the law justified the rejection of the registration application. The Court concluded that the appellant firm, represented by two partnership firms and seven individuals, did not fulfill the necessary legal criteria for registration, thus confirming the lower court's decisions in favor of the revenue.
Summary In the landmark case of Textile Supply Co. v. Commissioner of Income Tax, the Supreme Court of India addressed critical issues surrounding the registration of partnership firms under the Income Tax Act, 1922. The case revolved around the application for registration submitted by a firm consisting of nine partners, two of whom were representing their respective partnership firms. The Supreme Court ruled that the application was not valid due to failures in compliance with the statutory requirements of section 26A of the Income Tax Act. Specifically, the application was not signed by all individual partners and did not delineate their respective shares in the profits of the firm. This case underscores the importance of adhering to legal formalities in partnership agreements and registration processes, providing a clear precedent for future cases involving partnership registrations and income tax law. Keywords such as 'Income Tax Act', 'partnership registration', 'Supreme Court India', and 'legal requirements for firms' are essential for understanding the implications of this ruling. The decision highlighted the necessity for clarity and compliance in legal documentation, serving as a guiding principle for tax law and partnership agreements in India.
Court Supreme Court of India
Entities Involved Not available
Judges S.R. DAS, N.H. BHAGWATI, M. HIDAYATULLAH
Lawyers A.V. Viswanatha Sastri, K.R. Chaudhury, M C. Setalvad, Ganapathy Iyer, D. Gupta
Petitioners Textile Supply Co.
Respondents Commissioner of Income tax
Citations 1959 SLD 272, (1959) 36 ITR 242, (1959) 1 TAX 20
Other Citations Dulichand Laxminarayan v. CIT [1956] 29 ITR 535, Ravulu Subba Rao v. CIT [1956] 30 ITR 163
Laws Involved Income Tax Act, 1922, Income-tax Act, 1961
Sections 26A, 184