Appeal No 1690 of 1969
Appeal by special leave from the judgment and order dated July 15 1968 of the Delhi High Court at New Delhi in Incometax Reference No 44 of 1964
GC Sharma R Chawla section R Gupta R P Soni and K B Rohtagi for the appellant
F section Nariman Addl
Solicitor General of India A N Kirpal section P Nayar and RN Sachthey for the respondent
The Judgment of the Court was delivered by HEGDE J
This is an appeal by special leave
The appellant is the assesssee
In this case we are concerned with his assessment for the assessment year 1958 59
The relevant previous year ended on March 31 1958
The assesses firm applied for renewal of its registration under section 26A of the Indian Income Tax Act 1922 in short the Act  before the Income Tax Officer on May 26 1958
In that application he mentioned that the previous years  income had been divided among the partners
The Income Tax Officer rejected that application
He did not believe the version of the assessee that the previous years  income 77 had been divided
In appeal the Appellate Assistant Commissioner agreed with the conclusion reached by the Income tax Officer
On a further appeal being taken to the Income tax Appellate Tribunal the Tribunal agreed with the conclusions reached by the lower authorities
Before the Tribunal yet another contention appears to have been taken
That contention was that at any rate the partners having divided the income of the previous year as evidenced by the balance sheet before the assessment Was made the assessee firm was entitled for its registration under section 26A
The Tribunal did not go into that question
The High Court agreed with the view taken by the Tribunal
The only question that arises for decision in this case is whether it was incumbent on the part of the assessee to have divided the profits of the previous year before it made its application for renewal of the registration certificate
For deciding this question it is necessary to refer to the relevant provisions of the Act as well as the Rules
Section 26 A of the Act reads
thus 26A Procedure in registration of firms 1 Application may be made to the Income tax Officer on behalf of any firm constituted under an instrument of partnership specifying the individual shares of the partners for registration for the purposes of this Act and of any other enactment for the time being in force relating to income tax or super tax
2 The application shall be made by such person or persons and at such times and small contain such particulars and shall be in such form and be verified in such manner as may be prescribed and it shall be dealt with by the income tax Officer in such manner as may be prescribed
 Turning to the relevant Rules they are found in Rules 2 3 and 6
These Rules read thus Rule 2 Any firm constituted under an Instrument of Partnership specifying the individual shares of the partners may under the provisions of section 26A of the Indian Income tax Act 1922 hereinafter in these rules referred to as the Act register with the Incometax Officer the particulars contained in the said Instrument on application made in this behalf
Such application shall be signed by all the partners not being minors personally or in the case of a dis 78 solved firm by all persons not being minors who were partners in the firm immediately before dissolution and by the legal representative of any such partner who is deceased and shall for any year of assessment UP to and including the assessment for the year ending on the 31st day of March 1953 be made before the 28th February 1953 and for any year of assessment subsequent thereto be made
aWhere the firm is not registered under the TX of 1932 or where the deed of partnership is not registered under the Indian XVI of 1908 and the application for registration is being made for the first time under the Act
i within a period of six months of the constitution of the firm or before the end of the previous year of the firm whichever is earlier if the firm was constituted in that previous year iibefore the end of the previous year in any other case
b where the firm is registered under the TX of 1932 or where the deed of partnership is registered under the Indian XVI of 1908 before the end of the previous year of the firm and cwhere the application is for renewal of registration under Rule 6 for any year before the 30th day of June of that year  Provided that the Income tax Officer may entertain an application made after the expiry of the time limit specified in this rule if he is satisfied that the firm was prevented by sufficient cause from making the application within the specified time 
Rule 3 The application referred to in Rule 2 shall be made in the form annexed to this rule and shall be accompanied by the original Instrument of Partnership under which the firm is constituted together with a copy thereof  provided that if the Income tax Officer is satisfied that for some sufficient reason the original Instrument cannot conveniently be produced be may accept a copy of it certified in writing by all the partners not being minors or where the application is made after dissolution of the firm by all the persons 79 referred to in the said Rule to be correct copy and in such a case the application shall be accompanied by a duplicate copy
FORM I FORM OF APPLICATION FOR REGISTRATION OF A FIRM UNDER SECTION 26A OF THE INDIAN INCOME TAX ACT 1922
TO The Income tax Officer Dated 19 Income tax year 19 19 1
   2   3We do hereby certify that the profits or loss if any  of the previous year werewill be period upto the date of dissolution werewill be divided or credited as shown in section B of the Schedule and that the information given above and in the attached Schedule is correct
Signatures Address Note  This application must be signed  
SCHEDULE Name of Address Date of 1 1 2 partner admitt Interest Salaryor Share in REMARKS ance to on capital commis the bal partner or loans sion from ance of ship
if any firm profits or loss etc
1 2 3 4 5 6 7 AParticulars of the firm as constituted at the date of this application
80 B Particulars of the apportionment of the income profits or gains or loss of the business profession or vocation in the previous year between the partners who in that previous year were entitled to share in such income profits or gains or loss
Applicable where the application is made after the end of the relevant previous year
Note I If the interest salary andor commission         column with the letter R
In other cases the interest salary andor commissionmay exceed the total profits so as to leave a balance of net loss divisible in column 6
2If any partner is entitled to share in profits but is not liable to bear a similar proportion of any losses this fact should be indicated by putting against his share in column 6 the letter P
Rule 6 Any firm to whom a certificate of registration has been granted under Rule 4 may apply to the Income tax Officer to have the certificate of registration renewed for a subsequent year
Such application shall be signed personally by all the partners not being minors of the firm or where the application is made after dissolution of the firm by all persons not being minors who were partners in the firm immediately before dissolution and by the legal representative of any such person who is deceased and accompanied by a certificate in the form set out below
The application shall be made before the 30th day of June of the year for which assessment is to be made provided that the Income tax Officer may entertain an application made after the expiry of the said date if he is satisfied that the firm was prevented by sufficient cause from making the application before that date
FORM OF APPLICATION FOR THE RENEWAL OF REGISTRATION OF A FIRM LTNDER SECTION 26A OF THE INDIAN INCOME TAX ACT 1922 TO The Income tax Officer Dated 19 Assessment for the Income tax Year 19 19 1   2    81 3We do hereby further certify that the profits or loss if any of the previous year wereperiod up to the date of dissolution werewill be divided or credited as shown below Particulars of the apportionment of the income profits or gains or loss of the business profession or vocation in the previous year or the period upto the date of dissolution between the partners who were entitled to share in such income profits or gains or loss
Name of Address Date of 1 1 2 Partner admitt Interest Salary Share ance of on capital or comm in the REMARKS partner or loans ission balance ship if any from of profits firm
or loss etc
1 2 3 4 5 6 7 Note  1 If the interest salary andor  loss divisible in column 6
2 If any partner is entitled   his share in column 6 the letter P
Signatures Address Note  This application must be signed personally  of any such person who is deceased
From a reading of these provisions it is clear that in the case of an application for renewal it is incumbent on the part of the assessee to have divided the previous year s profits
This conclusion appears to be obvious from Section 26A read with Rules 2 3 6 and the forms set out earlier
The contention  of Mr Sharma the learned counsel for the assessee that if the relevant provisions are interpreted in the manner that we have done it leads to hardship to the assessee is not relevant in view of the plain language of the provisions
Our conclusion in this regard receives support from the decision of Madras High Court in Surajmall vs Commissioner of L63lSuP Cl73 82 Income tax Madras1 and that of the Allahabad High Court in Ganesh Lal Laxmi Narain vs Commissioner of Income tax UP2
In Khanjan Lal Sewak Ram vs Commissioner of Income tax UP3 this Court had ruled that para 3 of Rule 6 supra is mandatory
We see no merit in this appeal
It is dismissed with costs
VPS Appeal dismissed


Summary:
The assessee firm applied for renewal of its registration under s26A Income Tax Act 1922 in May 1958 stating that the income of the previous year which ended on March 31 1958 had been divided among the partners
The Department Tribunal and the High Court did not believe that the previous year s income had been divided and rejected the application
Dismissing the appeal to this Court HELD  From a reading of the section and rules 2 3 and 6 of the Income tax Rules and the forms prescribed it is clear that in the case of an application for renewal it is incumbent on the part of the assessee to have divided the previous year s profits before the application for renewal is made
The fact that the interpretation may cause hardship to the assessee is irrelevant when the language is plain
81 G Surajmal vs Commissioner of Income tax Madras 43 ITR 491 and Ganesh Lal Laxmi Narain vs Commissioner of Income Tax UP  approved
Khanjan Lal Sewak Ram vs Commissioner of Income tax UP  referred to