NAIMUDDIN, J.-By this reference under section 66 (1) of the Income-tax Act, 1922 (here in after called the Act), the Commissioner of Income-tax, Karachi (West), the applicant has referred the following question for our answer "Whether on the facts and in the circumstances of the case the Income---tax Appellate Tribunal was justified in directing the Income-tax Officer to allow renewal of registration under section 26-A of the Income-tax Act, particularly when the assessee failed to produce the original deed of partnership before the Income-tax Officer and the appellate autho--rities in support of his claim for renewal of registration of the firm ?"
2. The facts giving rise to this question may first be briefly stated. These are : Respondent Messrs Khodromal Mohrromal, Grain, Cloth and Kiriana Merchant, Qadirpur Ghotki, District Sukkur on 3rd September, 1963 filed an application dated 2nd September, 1963 under section 26-A of the Act. The Income-tax Officer rejected the application on the ground that the original partnership deed was neither filed alongwith the application nor was produced at the time of assessm ent, when required.
3. The cage of the respondent before the Income-tax Officer was that the original partnership deed was filed alongwith the application by their Advocate which claim was not accepted by him on the ground that only a copy was filed and there was interpolation in the peon-book.
3-A, Aggrieved by this order the respondent filed an appeal with the Appellate Assistant Commissioner of Income-tax, 'D' Range, Karachi, who allowed the same by the order dated 3-5- 1969, and directed the registration of the firm. The reasons which Inter alia weighed with the learned Appellate Assistant Commissioner were that the Income-tax Officer bad not doubted the genuineness of the firm as he had not only assigned in the assessment order the status as unregistered firm but allocated and distributed the income determined amongst sighs partners in their profit showing proportion as per partnership deed. He alto accepted the evidence of entry in the books of account showing that a Its. 20 stamp paper was purchased. The learned Appellate Assistant Commissioner further observed that if the respondent's Advocate had filed or not filed the original deed or if it had been misplaced later on it should not result in hardship or penalty for the respondent. In support of the observations he relied on the following observations of the Income-tax Appellate Tribunal "------------.The Departmental Representative, however contends, in the first instance, that the evidence of an application having been trade had been created in collusion with clerk concerned.
This suggestion, however, remains unsubstantiated. It is not permissible to presume framed or unfair play in the absence of any tangible evidence . . . . . .--- (I. T. A. No, 536 of 1936-57 dated 31-12-1950/Assessment year 1949-50 and (I. T. A. No. 537 of 1956-57 dated 31.2-1956)/Assessm ent year 1950-51."
He also relied on the following observation of the Tribunal in the case of Assessee v. Department ((1960) 2 Taxation 28): "If the records are not available and if there are sure indications that the assessee did file the applications for registration in due time, he cannot be allowed to suffer on account of the non- appearance of the records.
4. After discussing the various cases and reproducing the entry with regard to receipt of the application which reads as "3-9-63 Application for registration under section 26-A received" observed as follows :- "It is thus clear that the appellant should not be penalised for non-- availability of the original partnership deed (that is stamped) as all the circumstances for this purpose go in his favour and the Income-tax Rules in this respect also permit copy of the deed signed by all partners being filed where the original for some reasons or the other cannot be traced out or is not available."
He also relied on rule 4 of the Income-tax Rules which reads as follows "The application referred to in Rule 3 shall be made and verified in the form annexed to this Rule and shall be accompanied by the original instrument of partnership by which the firm is constituted together with a copy thereof.
Provided that where the Income-tax Officer is satisfied that for some sufficient reason the original instrument cannot be conveniently produced, he may accept a copy thereof certified in writing by all the partners (not being minors) of the firm, or, where the application is made after the dissolution of the firm, by all persons (not being minors) who were partners in the firm immediately before its dissolu--petition and by the legal representative of any such person, who is deceased, to be a correct copy ; and in such a case the application shall also be accompanied by a duplicate copy;".
And came to the conclusion "The Tribunal has repeatedly observed that in matters of registration requirements are not to be rigid or technical and this is the policy of the Department itself also. And the appellant belongs to moffusil area. The arguments and logic of the Income-tax Officer clearly appear to be incoherent and rambling and inconsistent. Considering all the extenuating facts and circumstances and arguments and giving cumulative effect to the case it is clear that there was no justification for the Income-tax Officer to have refused registration to the appellant firm, it should be allowed now."
5. The appellant as well as the respondent both filed appeal before the Income-tax Appellate Tribunal, Karachi Bench, Karachi; the appellant against the order granting the application for registration and the respondent on merits of the assessment order. The learned Tribunal has dealt with the question of registration in paragraph 10 of their order. Regarding the interpolation the Tribunal observed as follows :- "Frankly speaking we could not be sure of any interpolation, the word original for the word "Copy" in the said peon book. One may ask as to why a firm which was making a claim for registration under section 26-A in order to obtain the benefits of lower rates of tax in the assessment of the partners constituting the firm, should withhold its original deed of partnership which was a requirement of the grant of that benefit of registration. The firm is normally expected to file such a deed in compliance with the rules of registration under section 26-A of the Act."
The Tribunal further observed "Even otherwise a copy of the said deed of partnership duly signed by all the partners was duly submitted alongwith the registration application and in terms of the relevant rule 4 pertaining to the granting of registration, the Income-tax Officer might waive the requirement of the production of the original deed of partnership. Rule 4 goes as under (already quoted)."
6. After referring to the provisions of section 26-A the Tribunal observed "Under this section he should be satisfied that a genuine firm constituted as shown in the instrument or instruments was in existence in the relevant previous year. The requirement of the original instrument of partnership, therefore, is fundamentally to investigate into the question of the genuineness of a firm constituted as shown in the instrument or instruments. In other words, the firm to be registered is not only to be a genuine one but it should also be one as shown to be constituted in the instrument. This appears to account for the need to file the original deed of partnership alongwith the registra--petition application. The requirement of submitting an original deed of partnership cannot therefore, be for any other purpose than the verification of the constitution of the firm in terms of the same deed. If, therefore, the original deed cannot be conveniently produced by a firm and the Income-tax Officer, is satisfied about the sufficiency of the reason thereof, a copy of the deed certified by all the partner of the firm might well serve the purpose and fulfil the requirement of law. As said earlier, from the entries in the Income-tax record and the representative's peon book we could not be absolutely certain about the filing or otherwise of the original deed of partnership along--with the application for registration. It might or might not have been submitted. It might as well have been lost, missed or misplaced anywhere. Such a state of affairs is not quite an uncommon experience in the Income-tax Department. The fact yet remains that a copy of the deed certified by all the partners of the firm was filed and was available with the Income-tax Officer. And, again, the firm was one which was reconstituted with eight out of ten of the partners of the erstwhile firm or the death of one of the earlier partners in order to carry on the business of the old firm. The Income tax Officer could, therefore, look into the constitution of the firm from the certified copy of the instrument available with him and thereby examine its genuine--ness. It appears that he has not at all questioned the fundamental fact of the genuineness of the firm but tried merely to rely on the rather auxillary issue of the alleged non-filing of the original deed of partnership. In essence, the Income-tax Officer was depending on the technical requirement of the compliance of the rules for the purpose, and even there, one could not say with any amount of certainty as to whether the original deed accompanied the filing of the application under section 26-A. We have consistently held that an assessee would not be denied his substantive right of getting the benefit of registration under section 26-A merely on the ground of some technical error or default. If the genuineness of a firm is not in doubt and an assessee substantially complies with the requirements of law for registration, it will be an injustice to deny it the benefit of registration under section 26-A on the sole ground of the controversial position of non-- filing of the original deed of partnership."
7. Having referred to the facts and relevant observations of the Tribunal, we think the question referred to us needs slight modification and it should read as follows :- "Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in confirming the order of the Appellate Assistant Commissioner directing the Income--- tax officer to allow registration under section 26-A of the Income-tax Act, particularly when the assessee failed to produce original deed of partnership before the Income-tax Officer and the appellate authorities in support of his claim for registration of the firm" ?
8. We have heard Mr. Nasrullah Awan learned counsel for the Department. The respondents have remained absent. Since it is admitted position that a copy of the partnership deed signed by all the partners was m any case available with the Income-tax Officer and as frankly admitted by Mr. Awan, we are of the opinion that the circumstances of the case attract the provisions of rule 4 of the Income-tax Rules which we have quoted hereinabove and accordingly the Appellate Assistant Commissioner was justified in directing the registration of the firm and therefore, we would answer the slightly modified question in the affirmative. Since the respondents have remained absent, we leave the parties to bear their own costs.
I. T. R. 270/72 is between the same parties and in respect of the same subject-matter with this difference that in this case registration was refused for the subsequent assessment year 1965-66, otherwise, the order of Appellate Assistant Commissioner and the Income-tax Appellate Tribunal are the same and question referred to is also the same. The answer to the question referred to in this case may also be read as modified above and in the affirmative.