HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Agarwal and Co. v. Commissioner of Income-tax, U.P.
Civil Appeals Nos. 2200, 2200A and 2200B of 1968
[1971] 1 SCR 237 ·
Indian Income-tax Act, 1922: sections 2(9) and 26A · Indian Partnership Act, 1932: section 4 · Companies Act, 1913: section 4(3)
Sources & disclosures includedDownload original judgment / order
3-judge bench; unanimous judgment delivered by K. S. Hegde, J. · J. C. Shah, J. · K. S. Hegde, J. · A. N. Grover, J.
Assessment years: 1952-53, 1953-54 and connected year
01 · Facts of the case
An 18-partner firm sought section 26A registration. Tax authorities counted adult members of HUFs represented by some partners, concluded the number exceeded 20 and treated the unregistered association as unlawful (SCR pp.237-241; PDF pp.1-5).
Source: Primary judgment: facts
02 · Discussion by the Hon’ble Court
An HUF is not itself a contractual partner; a coparcener or karta joins individually even if accountable to the family. For registration the officer examines conformity, genuineness and legal existence, not beneficial arrangements behind the deed (SCR pp.241-247; PDF pp.5-11).
Source: Primary judgment: discussion
03 · Judicial decision
The Court allowed the appeals, answered for the assessee and awarded costs in the Supreme Court and High Court (SCR p.247; PDF p.11).
Source: Primary judgment: decision
04 · Outcome / in whose favour
In favour of the assessee-firm: the partnership was validly formed and had to be registered (SCR pp.245-247; PDF pp.9-11).
Source: Primary judgment: outcome
05 · AKHB REVIEW POINT
AKHB analysis: distinguish legal partners named in the deed from persons with beneficial interests behind them. Registration can test genuineness and legal validity, but not rewrite genuine partner identities solely from internal HUF arrangements (based on SCR pp.244-247; PDF pp.8-11).
Source: Primary judgment: review point
Source & verification
Download original judgment / order · Open cited source rendition
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Statutory scope
The decision applies repealed firm-registration and Companies Act provisions; current entity, partnership and registration law was not checked.
Later treatment
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