THE COMMISSIONER OF INCOME TAX, RAWALPINDI vs MESSRS ZAMINDARA
This petition for special leave to appeal arises from an order of the High Court of West Pakistan, Lahore, which dismissed the petitioner's application under subsection (2) of section 66 of the Income-tax Act seeking a direction to the Income-tax Appellate Tribunal to refer a question of law. The core legal question was whether the Tribunal was justified in allowing registration to the respondent firm for the assessment year 1964-65 under section 26-A of the Income-tax Act on the basis of a partnership deed dated 1st March 1963. The Supreme Court held that the question of whether a partnership existed prior to the execution of the deed was purely a question of fact determined by the Tribunal upon consideration of relevant circumstances, and no question of law arose for examination by the High Court. The petition was accordingly dismissed, affirming the view that factual determinations by the Tribunal regarding partnership creation do not warrant interference.
- Whether the question of the existence of a partnership prior to the execution of a partnership deed constitutes a question of fact or a question of law?
- Is an Income-tax Appellate Tribunal's finding regarding the creation of a partnership open to reference under section 66(2) of the Income-tax Act when based on factual circumstances?
- Whether a firm is entitled to registration under section 26-A of the Income-tax Act on the basis of a partnership deed executed on 1st March 1963 for the assessment year 1964-65?
- Subsection (2) of Section 66, Income-tax Act
- Section 26-A, Income-tax Act
1. SAJJAD AHMAD, J.-This petition for special leave to appeal arises out of an application made by the petitioner to the High Court of West Pakistan, Lahore, under subsection (2) of section 66 of the Income-tax Act for issuance of a direction to the Income-tax Appellate Tribunal for reference of the following question to the High Court:- "Whether on the facts and circumstances of the case, the income-tax Appellate Tribunal was justified in allowing registration to the firm for assessment year 1964-65 on the basis of partnership deed dated 1-3-1963."
2. The Income-tax Appellate Tribunal had held on a further appeal, in concurrence with the order of the Appellate Assistant Commissioner that the assesses respondent-firm was entitled to the grant of registration under section 26-A of the Income-tax Act for the charge year 1964-65 relevant to the previous year commencing on the 1st January 1963, and ending on the 31st December 1963, thus upsetting the order of the Assistant Income-tax Officer dated the 19th of November 1966, whereby he had refused the claim of the firm for registration on the ground that the partnership relied upon had not been created by the deed which was executed on the 1st of March 1963, as that deed was a mere aide memories of a pre-existing partnership.
3. A Division Bench of the High Court has dismissed the petitioner's application on the ground that the question whether the partnership existed before 1st of March 1963, that is, prior to the date of the execution of the partnership deed, was a question of fact and has been decided by the Income-tax Appellate Tribunal on a consideration of all the relevant circumstances in favour of the respondent firm. The view of the Tribunal that the partnership was created by the deed itself and the firm was, therefore, entitled to registration under section 26-A of the Income-tax Act for the charge year in question, there being no pre-existing partnership as a matter of fact, did not present any legal question to be brought in the High Court for examination and decision under subsection (2) of section 66 of the Income-tax Act.
4. We feel that the matter was rightly decided in the High Court and does not call for our interference.
5. The petition is dismissed.
Cited by 1 case
- Mst. KHATIJA BAI vs THE COMMISSIONER OF INCOME TAX (KARACHI 1978 PLD Karachi 395