Registering the disputed firm
Querist :
Anonymous
(Querist) 13 November 2011
This query is : Resolved
hi all,
3 partners are doing a business for a decade and then there is a dispute among the partners and there is litigation case filed by 2 partners on 1 partner.
The litigation is withdrawn after an year stating that the firm is unregistered u/s 59 of the partnership act 1932
Immediately after such withdrawal the other 2 partners registere the firm by misrepresnting the registrar of firms and by forging the signature of the third partner.
The registrar is unaware of any suit and in good faith registeres the firm.
On a later date the third partner approaches the registrar stating that his signature is forged and that the Registrar of Firms has been misrepresented to gain registration.
The question is:
Can the registrar of firms in inspector general rank cancel the registration of the firm after enquiry of the department being misrepresented. If anyone could specify the partnership act under which the cancellation can be done.
Devajyoti Barman
(Expert) 13 November 2011
Yes he can certainly have the power. Moreover he can send the complaint to the police for causing necessary investigation as well.
ajay sethi
(Expert) 13 November 2011
the other partners are guilty of forgery .
why dont you file police complaint against your partners if they have forged your signature?
a forged document cannot be acted upon. the registration of firm is invalid
the registering authority can cancel registartion
ajay sethi
(Expert) 13 November 2011
Paul Mathew And Co. vs Commissioner Of Income-Tax And ... on 5 November, 2004
Equivalent citations: (2005) 196 CTR Ker 504, 2005 274 ITR 220 Ker
Author: C R Nair
Bench: C R Nair
JUDGMENT
C.N. Ramachandran Nair, J.
1. The petitioner is challenging exhibit P8 revisional order of the Commissioner of Income-tax issued under Section 264 of the Income-tax Act, 1961 (hereinafter called "the Act"), confirming the cancellation of registration of the firm by the Assessing Officer under Section 186(1) of the Income-tax Act. The partnership was constituted vide deed dated March 28,1971, and application for registration filed in Form No. 11A for the assessment year 1971-72 was allowed. Registration was also renewed for the subsequent assessment years 1972-73 to 1976-77. However, the Assessing Officer thereafter noticed that the partnership deed produced by the petitioner on which registration was granted was signed only by one partner, for himself and for other partners who are his sons by forging their signatures. It was also noticed that one of the partners was a minor who did not even attain the age of majority during the assessment year 1971-72. Cancellation of registration under section 186(1) was challenged in successive appeals and the Tribunal confirmed the orders. Thereafter the petitioner took up the matter in reference to this court and this court vide judgment in I. T. R. Nos. 464 to 470 of 1982 dated July 25,1991 (Paul Mathews and Co. v. CJT [1992] 195 ITR 716) declined to answer the questions referred, but remanded the matter to the Assessing Officer with an observation that the petitioner should have been given an opportunity to cure the defects in the application submitted for registration in terms of Section 185(2) of the Income-tax Act. Pursuant to the judgment the petitioner executed a fresh partnership deed dated December 3, 1993, and filed it along with Form No. 11A for the assessment year 1971-72 and Form No. 12 was filed for the subsequent years, i.e., 1972-73 to 1976-77. Thereafter the officer again declined registration under Section 185(l)(b) of the Act for the year 1971-72 on the ground that there was no genuine firm in existence entitled for registration under the Act. Since registration was declined for the year 1971-72, renewal of registration was declined for the subsequent years 1972-73 to 1976-77. The orders so issued, namely, exhibits P2 to P7 were the subject-matter of revision before the Commissioner of Income-tax who vide exhibit P8 rejected the revision petitions. It is against exhibit P8 order the petitioner has filed this writ petition.
2. I have heard Sri P. Balakrishnan, counsel for the petitioner, and Sri P. K. R. Menon, senior standing counsel, for the Income-tax Department. Counsel for the petitioner heavily relied on the judgment of this court in I. T. R. cases (see [1992] 195 ITR 716) above referred to wherein this court after declining to answer the questions referred to it remanded the cases back to the Assessing Officer. According to counsel for the petitioner, this court has considered all the issues in detail and the remand was for the purpose of considering registration for 1971-72 and renewal of registration for later years based on new application for registration in Form No. 11A and Form No. 12 declarations to be filed along with new partnership deed properly executed with the signature of all the partners. According to him, registration should have been granted based on fresh deed and forms filed in terms of the observations and findings in the above referred judgment of the Division Bench of this court (see [1992] 195 ITR 716). He has further pointed out that the new partnership deed and forms furnished subsequent to the judgment are free from defects and the Assessing Officer and the Commissioner have no case to the contrary. According to him, reliance on the earlier partnership deed, i.e., the defective deed and demand of registration by the respondents is contrary to the findings of this court in the judgment in the reference cases. Standing counsel for the Department, on the other hand, submitted that all that this court directed was to give an opportunity to the petitioner to cure the defect in terms of Section 185(2) of the Act. According to him, opportunity to cure the defects does not give right to the petitioner to substitute the entire documents and claim benefit based on the fresh documents. He has also submitted that the defects referred to in Section 185(2) are defects in the application for registration and not defects pertaining to partnership deed as such. Alternately he contended that even if the petitioner is entitled to cure the defect in the partnership deed, the same does not entitle the petitioner to furnish an entirely new deed executed on December 3, 1993, in the place of the earlier deed produced. I have gone through the judgment of this court in I. T. R. case (see [1992] 195 ITR 716) produced by the petitioner based on which the impugned proceedings are issued. The contention of counsel for the petitioner is that this court has considered the defects pointed out in the document and when this court remanded the case to the authorities giving opportunity to the petitioner to cure the defects, it is to be assumed that the defects referred to therein are capable of being cured. Standing counsel, on the other hand, submitted that the defects in the original deed were grave and incapable of being cured. In the first place the original partnership deed on which registration was sought was signed by a partner who was a minor and for no period relevant to the assessment year 1971-72 the said partner was a major. A partnership deed executed with a minor as a partner is an invalid agreement and such firm cannot be called a genuine firm entitled to registration. Therefore, cancellation of registration wrongly granted originally for the assessment year 1971-72 has to be sustained and I find nothing wrong with the impugned orders in this regard. Since the firm is not entitled to registration for 1971-72 on this ground alone, there is no need to go into the allegations of forgery or signatures of other partners by one partner. However, this aspect is relevant for considering registration for the subsequent years, i.e., 1972-73 to 1976-77, when the minor had become a major. The partnership deed in respect of which registration was sought was signed by one person by forging the signature of all other partners who are his sons. In the first place a forged document cannot be said to be a genuine document. Secondly, the Commissioner of Income-tax rightly pointed out that the partnership deed should be the result of consensus among the partners and unless it is signed by all the partners, it is no partnership at all. Therefore, the defect of the original document, i.e., partnership deed, containing forged signatures of all the partners except one, is not a defect that could be cured. This court only gave an opportunity to cure the defects which does not entitle the petitioner to execute a fresh partnership deed to consider registration based on it. Counsel for the petitioner has raised a contention that on account of the indifferent grant of registration to the firm for the assessment year 1971-72 the petitioner was disabled from executing proper deed or making application for registration along with fresh partnership deed for subsequent years. In the normal course this court in exercise of jurisdiction under Article 226 of the Constitution of India would have tried to help the petitioner, but I am afraid the petitioner is not entitled to the same because the original partnership deed produced contained only forged signatures of all the partners except that of one person. I do not think a firm whose main partner forged the signatures of all. other partners, though such partners are his sons, is entitled to any relief from this court. Therefore, the firm as constituted vide partnership deed dated December 3, 1993, is not entitled for registration for the assessment year 1972-73 and renewal for later years.
3. In the circumstances, O. P. is devoid of any merit and is dismissed.
Shonee Kapoor
(Expert) 13 November 2011
Nothing more to add.
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
Raj Kumar Makkad
(Expert) 13 November 2011
I agree with shonee a.bout the contribution of sethi.
prabhakar singh
(Expert) 14 November 2011
You make me learn many more things than simply to answer Mr. Makkad.
prabhakar singh
(Expert) 14 November 2011
Like you i too agree with Mr.Shonee.
prabhakar singh
(Expert) 14 November 2011
Oh! I meant about contribution of Mr. Sethi.
