JUDGMENT Untwalia, C. J. This is a reference by the Income Tax Appellate Tribunal, Patna, Bench under section 256(1) of the Income Tax Act, 1961, (hereinafter called the 1961 Act). In the Statement of the case mention of section 66(1) of the old Act seems to be a mistake as the assessment year in question is 1962-63 governed by the 1961 Act. Sheo Prasad Pandey, Kesho Prasad Pandey, and Kamla Prasad Pandey are three brothers. They alongwith one Shrimati Phuleshwari Devi, who is said to be their mother, constituted a partnership by the Partnership deed dated 31.5.1956, the partnership commenced from 1.6.1956. All the four partners had equal shares. The partnership deed was registered on 8.6.1956 in the Registration Office, and it was registered with the Income Tax Officer for income tax purpose for the first time on 11.3.1958 in relation to the assessment year 1957-58. For every successive years the partnership was registered till the assessment year 1961-62. For the assessment year 1962-63, under confusion which was common, the assessee filed an application for renewal of registration in Form No. I.T.A. This was an application for renewal of registration under the Income Tax Act, 1922 (hereinafter referred to as the 1922 Act). This application was filed on 16.4.1962. Eventually, the assessee filed an application in the correct form on 17.12.1962 which was described as Form No.12 under the rules which came into force after coming into force of the 1961 Act. This was a declaration under section 184 (7) of that Act. The Income Tax Officer, accepted the declaration and completed the assessment on 15.3.1963. In his order he recorded that the partners had filed a declaration under section 184 (7) on 18.12.1962, and since there was no change in the constitution of the firm, registration of the firm was granted for the assessment year 1962-63. Allocation of the profits assessed was made accordingly equally among the four partners. 2. Later on the Departmental authorities noticed that the partnership dated 31.5.1956 was for a fixed term of five years. It, therefore, expired on 31.5.1961. In course of the enquiry in a letter dated 23.3.1964, the assessee had explained that there was a fresh deed executed on 23.5.1961 and it was claimed that it had the effect of continuing the old partnership. A copy of this deed was furnished to the Income Tax Officer on 27.4.1964. 3. It, therefore, expired on 31.5.1961. In course of the enquiry in a letter dated 23.3.1964, the assessee had explained that there was a fresh deed executed on 23.5.1961 and it was claimed that it had the effect of continuing the old partnership. A copy of this deed was furnished to the Income Tax Officer on 27.4.1964. 3. The Commissioner of Income Tax, in exercise of his power under section 263 (1) of the 1961 Act interfered with the order of the Income Tax Officer allowing registration of the firm and held that the assessee was not entitled to renewal of registration because a new partnership deed had come into effect. He was of the opinion that the assessee ought to have applied for a fresh registration of the new firm and not merely for its renewal. 4. The assessee went up in appeal before the Tribunal. The Tribunal dismissed the appeal and maintained the cancellation of the registration done by the Commissioner. The Tribunal also did not accept the contention of the assessee that by the new deed the old partnership had been continued. In their opinion, there was a considerable change in the terms of the two partnerships and, therefore, the Tribunal thought that the Commissioner was justified in annulling the registration. 5. On the facts aforesaid the Tribunal was referred for determination of this court the following question of law: "1. Whether the instrument of partnership dated 23.5.1961 brings into existence a new partnership". 2. Whether the registration was correctly annulled in the circumstances of the case". 6. I think, the two questions of law in this case can be consolidated in one and reframed as hereunder: Whether on the facts and in the circumstances of this case the assessment for the assessment year 1962-63 after granting registration to the assessee firm was wrong in law, as held by the Commissioner and the Tribunal"? 7. The Commissioner or the Tribunal has nowhere found that there was any change in the personnel of the partnership. The very four partners who had constituted it in the beginning were also the partners under the new deed, which I shall discuss hereinafter in this judgment. Nor has it been found that there was any change in the shares of the partners, the shares remained equal as before. The very four partners who had constituted it in the beginning were also the partners under the new deed, which I shall discuss hereinafter in this judgment. Nor has it been found that there was any change in the shares of the partners, the shares remained equal as before. The Tribunal has compared the relevant terms of the two partnership deeds and come to the conclusion that there are changes in the terms, and, therefore the new deed must be construed as a fresh deed of partnership. 8. The Commissioner of Income Tax had referred to a case, National Motor Company V. Commissioner of Income Tax1 for the proposition that if under an instrument of partnership it has been constituted for a fixed term, then on the expiry of that term registration of the firm could not be allowed. The argument advanced before the Commissioner with reference to section 17(b) of the partnership created by the deed dated 23.5.1961 was a new one and hence, registration could not be allowed on the basis of a declaration filed by the assessee in accordance with section 184 (7) of the 1961 Act. I shall presently show that both the Commissioner and the Tribunal have committed errors of law and have mis-directed themselves in that they have not applied the correct principle of law which was applicable to the facts of the case. 9. Application for the renewal of registration of a firm was provided in section 26 A of the 1922 Act. The application for the renewal had to be made in the form prescribed in rule 6. In paragraph 2 of that application it had to be stated; "The instrument of partnership/certified copy of instrument of partnership was registered by the Income Tax Officer for......in the State of..... on the.....of......19…. .and we hereby certify that the constitution of the firm and the individual shares of the partners as specified in the instrument of partnership/certified copy of the instrument of partnership so registered on. ...remain unaltered." It will thus be noticed that in order to get renewal of registration the partners of the assessee firm had to state that the constitution of the firm as also the individual shares of the partners were the same as specified in the instrument of the partnership already registered. ...remain unaltered." It will thus be noticed that in order to get renewal of registration the partners of the assessee firm had to state that the constitution of the firm as also the individual shares of the partners were the same as specified in the instrument of the partnership already registered. In other words, renewal could be claimed on the basis of a new deed, whatever its effect may be. It may, however, be pointed out here that there was a provision in the 1922 Act contained in section 26 (1) that "where, at the time of making an assessment under section 23 it is found that a change has occurred in the constitution of a firm or that a firm has been newly constituted, the assessment shall be made on the firm as constituted at the time of making the assessment." Since the expression used in section 26 (1) was "change in the constitution of a firm", it was held by the Full Bench of the Calcutta High Court in Moolji Sicka2 that change in the shares of the partners, the partners remaining the same, was not a change in the constitution of the firm. Change in the constitution of the firm would mean a change in its partners. Section 38 and 63 (1) of the Partnership Act were pressed into service in support of this view, and it was held that change in the constitution of a firm means change in the personnel of the firm, that is to say, a change in the persons who were partners in the firm. The same view was taken by the Mysore High Court in C. Srinivasa Rao and Brothers V. Commissioner of Income Tax, Mysore3 and it was said at page 105 : "The words constitution of a firm, have according to their plain meaning reference to the composition or the structure of the firm. Generally speaking the composition of a firm is determined by the partners who constitute it and its constitution would get altered when there is an inclusion of new partner or an old partner ceases to be one". 10. The scheme of registration or its renewal had undergone a change under the 1961 Act and the forms in force after coming into force of that Act are different. 10. The scheme of registration or its renewal had undergone a change under the 1961 Act and the forms in force after coming into force of that Act are different. Under section 184 (1), an application for registration of a firm has to be made to the Income Tax Officer on behalf of the firm if the partnership evidenced by an instrument and the individual share are specified in that instrument. There is a separate form given for making such an application. Sub-section (7) of section 184 provides :– "Where registration is granted to any firm for any assessment year, it shall have effect for every subsequent assessment year; (i) there is no change in the constitution of the firm, or the shares of the partners as evidenced by the instrument of partnership on the basis of which the registration was granted and (ii) the firm furnishes, alongwith its return of income for the assessment year concerned, a declaration to that effect in the prescribed form and verified in the prescribed manner”. The scheme under the 1961 Act, therefore, is that once registration is granted to any firm for any assessment year under the 1961 Act, the registration shall have effect for every subsequent assessment year on compliance with the requirement of the proviso to subsection (7). The Income Tax Officer is merely required to record the fact of the continuance of the registration every year in the instrument of partnership in accordance with sub section (4) of section 185. The declaration to be given in accordance with sub-section (7) of section 184 is to be in form No. 12 prescribed under rule 24. In this form, after stating that the firm has granted registration for the earlier year, the only declaration which has to be made that "there has been no change in the constitution of the firm or the shares of the partners since the last day of the previous year relevant to the assessment year 19....19.....up to the last date of the previous year relevant to the assessment year 19......19....or to the date (....19...) of dissolution of the firm". There is some observation in the order of the Commissioner as also of the Tribunal since a new partnership deed had been executed, the assessee firm ought to have applied for registration under section 184 (1) of the 1961 Act. There is some observation in the order of the Commissioner as also of the Tribunal since a new partnership deed had been executed, the assessee firm ought to have applied for registration under section 184 (1) of the 1961 Act. But all seem to be agreed that if it was not constitution of a new firm or a new partnership, then the registration granted for the year 1961-62 could be taken to the registration granted for the purpose of section 184 (7). In this case, therefore, the only question which falls for consideration is whether the requirement of sub-section (7) of section 184 of 1961 Act was fulfilled by the assessee. 11. But before I do so, I may refer to the change brought about in section 187 of the 1961 Act which no longer permits the acceptance of the principle laid down by the Calcutta and the Mysore High Courts with reference to section 26 (1) of the 1922 Act. In sub-section (2) of section 187 it has been provided now that for the purpose of this section, there will be deemed to be a change in the constitution of the firm if one or more of the partners cease to be partners or one or more new partners are admitted, or where all the partners continue with a change in their respective shares or in the shares of some of them, in other words, for the application of the provision contained in section 187 (i) of the 1961 Act, which corresponds to section 26 (1) of the 1922 Act, it would be deemed that there is a change in the constitution of the firm not only when there is a change in the personnel but also when there is a change in the shares of the parties. I have referred to this aspect of the matter to indicate as to what is meant by the expression "Change in constitution of the firm" occurring in sub section (7) of section 184 of the 1961 Act. 12. I have referred to this aspect of the matter to indicate as to what is meant by the expression "Change in constitution of the firm" occurring in sub section (7) of section 184 of the 1961 Act. 12. The only requirement of the declaration given under the said provision of law is that there is no change in the constitution of the firm or that the shares of the partners as evidenced by the instrument of partnership on the basis of which registration was granted had remained unchanged on the facts of this particular case, registration was granted and renewed under the 1922 Act on the basis of the instrument of partnership dated 31.5.1956. Even on execution of the partnership deed dated 23.5.1961 there was no change either in the personnel of the partners or in their shares. That being so, the requirement of proviso (i) was fulfilled. Undoubtedly, the declaration was required by proviso (ii) of sub-section (7) of the section 184 had been filed. Even, according to the new Form No. 12, the statement in paragraph (ii) was not consistent with the true state of affairs of the assessee's firm. 13. It seems, as I have said above, that neither the Commissioner nor the Tribunal has approached this case from the right angle and applied the correct law. I now proceed to refer to the reasonings given by the Tribunal with reference to the two deeds of partnership which are annexures C and D to the statement of the case. Annexure D clearly indicates that there was a necessity for execution of this deed because in the original deed the term of partnership had been fixed for five years. The partners wanted to continue the partnership further. Merely extending the duration of the partnership by the deed (Annexure D) will not make it a fresh partnership. Annexure D was executed before the expiry of the period. It had, therefore, the effect of supplementing the earlier partnership deed and continuing the period beyond five years. It is expressly mentioned in clause 2 of Annexure D that the partnership shall be deemed to have commenced on 1.6.1956, was continuing and would continue as partnership at will. Annexure D was executed before the expiry of the period. It had, therefore, the effect of supplementing the earlier partnership deed and continuing the period beyond five years. It is expressly mentioned in clause 2 of Annexure D that the partnership shall be deemed to have commenced on 1.6.1956, was continuing and would continue as partnership at will. The Tribunal is wrong in arriving at a different conclusion on the basis of the third and the fourth paragraphs of the preamble of the deed (Annexure D) that it was not a continuance of the old partnership without a fresh partnership deed, the old partnership could not be continued for the purposes of the Income Tax Act although under section 17(b) of the Partnership Act it could be continued even without a fresh deed. The purpose of executing a fresh deed was to give a new life of extension to the old deed. The Tribunal has also compared some of the terms of the two deeds to arrive at the conclusion that there was some change in the terms. Firstly it is to be pointed out that there is no substantial changing of the terms of carrying on the partnership business and it has not the effect of bringing into existence a new partnership, or changing the constitution or changing the shares of the partners. In the original deed it was stated that the office of the partnership would be carried on "at Japla and at such other place or places", but in the new deed it is mentioned only "Japla". If no necessity was felt for opening the office at any other place, the place for running the office was fixed at Japla only. It was not a substantial change of the term at all. There was no substantial change in regard to the payment of interest on the capital or investment of the partners. A sum of Rs. 4000/- was invested, free of interest and any party investing more than his share will be entitled to interest at 61/2 per cent, per annum on that amount. In regard to the carrying on of the business also by other firms, there was merely a change in the phraseology, but no other substantial change. A sum of Rs. 4000/- was invested, free of interest and any party investing more than his share will be entitled to interest at 61/2 per cent, per annum on that amount. In regard to the carrying on of the business also by other firms, there was merely a change in the phraseology, but no other substantial change. I have, therefore, no difficulty in holding that it was not a new partnership which was created by the new deed; rather, the old one has been continuing. Therefore, an application under section 184(1) of 1961 Act, for the registration of the firm was not necessary. Nor the ratio decidendi of the case of National Motor Company1 was applicable. It is doubtful whether the view expressed by the Bombay High Court in that case will hold good under the provisions of the 1961 Act. Section 17 (d) of the partnership Act makes the continuance of the partnership constituted for a fixed term as a partnership at will without any fresh deed. But for the purposes of the renewal of registration is could not be so, as held by the Bombay High Court, because the instrument of partnership under which the firm was constituted ceased to be operative. Under the new law and the form in force after coming into force of the 1961 Act, it is doubtful whether section 17(b) of the Partnership Act cannot be pressed into service for continuing the registration under section 184 (7) and Form No. 12 14. For the reasons stated above, I answer the reframed question in the negative, in favour of the assessee and against the Department. I hold that on the facts and in the circumstances of the case, the assessment was correctly made by the Income Tax Officer or grant of registration to the assessee firm in accordance with section 184(7) of the 1961 Act. The assessee must have the cost of this reference. Hearing fee is assessed at Rs. 100/- only. Reference answered in favour of the assessee.