JUDGMENT
1. This is a reference under section 256(1) of the Income-tax Act, 1961, wherein the following questions have been referred for our opinion :
"1. Whether, on the facts and in the circumstances, the Income-tax Appellate Tribunal was justified in weight to the supplementary deed dated February 1, 1977 ?
2. Whether the Income-tax Appellate Tribunal was justified in treating the application for registration in Form No. 11 as contemporaneous evidence ?"
None appears on behalf of the assessee. Heard Shri Dhananjay Awasthi, learned standing counsel for the Revenue. In R. C. Mitter and Sons v. CIT and D.C. Auddy and Bros. v. CIT [1959] 36 ITR 194, the apex court has held that if the assessee-firm came into existence on April 1, 1948, under an oral agreement, and an intimation was given to the bank on April 15, 1949, as there was no evidence of creation of partnership firm in the previous year, the assessee was not eligible for registration for the assessment year 1949-50.
Thus it was held that unless the partnership firm had carried on business in accordance with terms of an instrument of partnership which was operative during the accounting year, it cannot claim the benefit of registration as it could not be registered in respect of the following assessment year.
In the instant case the Commissioner of Income-tax has set aside the order of registration dated September 2, 1977, for the assessment year 1976-77 on the ground that there was no evidence as to when the firm came into existence prior to the assessment year 1975-76. More so the return filed on behalf of the firm stood superseded by the return filed by Sri J.P. Bhatia in individual capacity.
In view of the above, we answer both the questions in the negative, i.e., in favour of the Revenue and against the assessee.