This is appeal by assessee against order of Commissioner under section 263 of Income-tax Act, 1961 ('the Act'). 2. assessee is partner ship firm. For previous year ended 30-6- 1980 relevant to assessment year 1981-82 assessee was granted registration under Act by ITO in his order dated 22-6-1983 under section 185 of Act. Commissioner exercising power vested in hi under section 263(1) scrutinized records of assessee and found that partnership was governed by instrument in writing drawn on 3-8-1979, with nine partners. He issued show-cause notice dated 21-1-1985, in which he was of opinion that partner No. 9, Shri R. Thanikachalam, was minor and that he was represented by his father Shri Dhanasekharan and that as per clause 7 of deed of partnership, profit or loss shall be enjoyed or borne by partners, which included minor Shri Thanikachalam, in equal shares. He also observed that as per return filed by assessee, share of loss has been allocated to Shri Thanikachalam along with others which was not permissible under Indian Partnership Act, 1932. it was further made out by Commissioner that though income computed by ITO in his assessment order dated 22-6-1983 was nil, still granting of registration is not proper as minor was liable to share loss of firm and, therefore, he proposed to cancel registration accorded by ITO as being erroneous and prejudicial to interest of revenue and invited objections of assessee. 3. assessee in its reply dated 28-1-1985 submitted that Commissioner had not understood deed in tear proper perspective and informed Commissioner that Shri Thanikachalam (partner No. 9) is father of Shri Dhanasekharan who is minor. Shri Thankikchalam as major is partner in firm. assessee finally stated that 'having erroneously understood that Shri Thanikachalam is minor, present show-cause notice seems to have been given to us' and requested Commissioner not to proceed under section 263 , in facts and circumstances of case. Commissioner did not issue and fresh notice to assessee but proceeded on footing that Dhanasekharan, minor, was admitted as full-fledged partner and rejected contentions of assessee at time of hearing and finally cancelled registration of firm. He also canceled assessment order passed by ITO under section 143(3) of Act with direction toured same determining correct status of assessee. 4. Before us, Shri M. J. Swamy, learned counsel for assessee, vehemently contended that Commissioner was basking under misunderstanding of provisions of partnership deed. He was under impression that ninth partner, viz., Shri Thanikachalam is minor and he was made liable for losses of firm. That is what he had made out in notice cited supra. When assessee pointed out error in Commissioner's reading of document, he ought to have issued fresh notice if he had wanted to continue proceedings under section 263. This he did not do but sought to justify his action by stating that minor Dhanasekharan was made full-fledged partner. Thus, Commissioner was shifting ground of attack which he wa not entitled to do. He further submitted that order of ITO granting registration and assessment order flowing from it did not suffer from any error prejudicial to revenue as loss admitted by assessee was convertd into nil income by ITO against which no appeal was filed. In order to invoke provisions of section 263 , it is for Commissioner to establish that order of ITO suffered from error as result of which revenue has suffered. Both these conditions, viz., error and prejudice, must co- exist. This Commissioner has not established and, therefore, his order is fit to be vacated. 5. On merits, Shri Swamy submitted that it was Shri Thanikachalam who was partner and Shri Thanikachalam is major. Maybe, he represented his minor son Dhanasekharan. But, that would not make Dhanasekharan partner of there firm. In fact, in all years, assessment of share income form this firm is made in hands of Shri Thanikachalam Himself. In law there is nothing wrong for father and guardian to enter into partnership representing his minor son. Qua partnership, it is only Thanikachalam who is partner and none else. He also explained circumstances under which corrections happened to be made in partnership deed. Originally, it was contemplated to admit Shri Dhanasekharan minor and in fact deed was drafted with that in view. other partners objected to minor being made partner and in view. other partners objected to minor being made partner and wanted Shri Thanikachalam to be partner and, therefore, corrections were carried out in instrument of partnership itself. One of conditions to become partner is to enlist 200 members to chat fund. He referred to materials collected by department long after passing of order under section 263 , which are placed before Tribunal on behalf of department, and submitted that it is true that in hand bills that were printed prior to execution of partnership deed, Shri Dhansehkaran, miner son of Shri Thanikachalam, was described as partner, But, that was before execution o f partnership deed and was in keeping with idea of making Shri Dhanasekharan partner. Upon objections from other partners, idea was given up and Shri Thanikachalam entered partnership representing his son. Shri Swamy submitted that distribution of hand bills that were published before execution of partnership deed could have been avoided, but such descriptions in hand bills would not make Shri Dhanasekharan partner vis- a-vis assessee. These hand bills were lying in stock and they were utilized and partners now realised that they were 'penny wise and point foolish. He pleaded that it should not be taken as evidence against genuineness of partnership that came into existence subsequently between Shri Thanikachalam, major, and others. Similarly, old draft deeds which were meant for circulation among partners prior to coming into existence of firm showed Shri Dhanasekharan as partner and copies of these old drafts might have been given to banker in advertently by clerical staff, but that would not make Shri Dhanasekharan, minor, full-fledged partner. It is Shri Thanikachalam who had signed partnership deed though representing minor and partnership deed was registered under Indian Partnership Act wherein Shri Thanikchalam had subscribed his signature as Shri Thanikachalam and it was this partnership deed that was before ITO at time of granting of registration and in Form No. 11 also it is Shri Thanikachalam who had signed as Thanikachalam though in remarks column it was indicated that he is father of minor. As all these facts will prove that there was genuine partnership among adult partners, but Commissioner misconstrued partnership deed and also did not appreciated in proper respective weight of evidence in favour of assessee. He had not established that there was any error resulting in prejudice to revenue. Therefore, he submitted that order of Commissioner as regards registration of firm and assessment should be canceled. 6. Shri N. Santhanam, learned departmental representative submitted t h t even though notice issued to assessee under section 263 inadvertently described Shri Thanikachalam as minor partner, assessee had participated in proceedings before Commissioner and, therefore, plea that notice was defective is not available to assessee now. Commissioner found that minor had been admitted as full-fledged partner liable to share of profits and losses and such admission was against provisions of section 39 of Indian Partnership Act. hand bills circulated among public contained name of Shri Dhanasekharan as partner and Shri Dhanasekharan being minor, and yet made liable to share losses, were submitted to bankers consigned Shri Dhanasekharan's name as partner. In face of such adverse evidence, it does not lie in mouth of assessee to take plea that it was Shri Thanikachalam who was partner and not Shri Dhanasekharan. Even though there was no taxable income for firm in relevant assessment year, if registration is granted to firm, continuation of registration will have to be granted in future when firm might be earning large incomes. Therefore, prejudice envisaged in section 263 is not prejudice confined to year of assessment alone, but can also be one taking in repercussions that might follow in subsequent years in terms of loss of revenue. mere registration of firm under Indian Partnership Act would not automatically lead to registration under Income-tax Act - Ladhu Ram Taparia v. CIT [1962] 44 ITR 521 (SC). For reasons stated in order of Commissioner and in light of material gathered subsequently, Shri Santhanam pleaded that action of Commissioner should be sustained. 7. We have heard rival submissions and perused records. partnership firm came into existence by instrument in writing dated 3-8-1979. T h e partnership is for fixed period till 31-3-1986. There are nine partners. There is not controversy that partners 1 to 8 are adults. controversy revives round only ninth partner. original deed of partnership, photostat copy of which was furnished before us, would appear to have contained 'Shri Dhanasekharan, son of Shri Thanikachalam, aged 15 years, resident of Vizianagaram, hereinafter called ninth partner represented but father and natural gardenia. Thanikachalam'. In its place, typed correction have been carried out whereby 'Shri Thanikachalam, resident of Vizianagaram, hereinafter called ninth partner representing as father and natural guardian Dhanasekharan, minor aged 15 years' is described as partner. It is department's connotation that it is Dhanasekharan, minor, who is partner. alternative contention is that guardian cannot become partner on behalf of his minor son and thereby make latter liable to losses in partnership. 8. Before we proceed to examine issue, it has to be seen whether order of ITO was erroneous and prejudicial to revenue without which Commissioner cannot invoke his jurisdiction under section 263(1). It is not enough that order suffers form error but it must be shown that order is prejudicial to revenue. These two factors, viz., error and prejudice, must exist simultaneously. If one or other of factors is absent, Commissioner cannot exercise suo motu power of revision. We are supported in this proposition by Karnataka High Court decision in V. G. Krishanamurthy v. CIT [1985] 152 ITR 683. If loss of revenue arises out of erroneous order of ITO, certainly Commissioner has jurisdiction to invoke provisions of section 263. In this case, Shri Swamy contends that assessing authority had determined income at nil even though assessee had returned loss at Rs. 36,834.93 assessee had not gone on appeal against assessment. When income is nil, there could be no prejudice to revenue even if order is erroneous. Shri Santhanam contends that prejudice is not confined to one particular year and as result of erroneous order prejudice might be caused in subsequent years. 9. Though prejudice to intests of revenue may either be immediate one or in future, it has not been shown how interests of revenue have suffered in year of assessment when income was determined at nil. To decide whether there is justification for apprehension that prejudice might be caused in further years, one has to go into merits of that prejudice might be caused in further years, one has to go into merits of case, to which we shall revert later. Even if it is assumed, without admitting in facts and circumstances of this case, that prejudice might be caused in future department is not without remedy: In case of CIT v. Voleti Veerabhadra R o [1972] 84 ITR 764, it was laid down by their Lordships of Andhra Pradesh High Court that where original registration has been granted under section 185(1) or certificate of continuation of registration under sub-section (7) of section 184 , read with sub-section (4) of section 185 of Act is granted for subsequent years of assessment, ITO may cancel same if, in his opinion, in previous year, no genuine firm was in existence. Allahabad High Court in Badri Narain Kashi Prasad v. Addl. CIT [1981] 128 ITR 663 (head- notes at p. 664), held that Commissioner acting under section 263(1) is competent to cancel continuation of registration for subsequent year if in that year it is proved that continuation of registration was wrongly granted. 10. In our view, on facts and in circumstances of case, no prejudice is caused either in year of assessment or might be caused in future as would be seen in later part of our discussions. Therefore, order of Commissioner is liable to be set aside. 11. Section 263 is in two parts. first part is confined to assumption of jurisdiction by Commissioner and that is ex parte. No notice or opportunity need by given by Commissioner to assessee before former's arriving at decision that reverse to that section is necessary in circumstances of case. second part concerns with actually revising and varying ITO's order. Before that, requirement of natural justice comes in and notice has to be served on assessee giving him opportunity to meet charge. Now we are concerned with first part of section 263 in which Commissioner forms belief ex parte form notice issued to assessee, it is abundantly clear that Commissioner was under impression that Shri Thanikachalam is minor partner. This assumption or belief is not warranted in terms of partnership deed and other records before him. This assumption is erroneous assumption and Commissioner misdirected himself as to facts even though none of records before him suggested that Shri Thanikchalam was minor. Therefore, assumption of jurisdiction itself, though should be done ex parte, is undoubtedly based on misunderstanding of facts in this case. However, when Commissioner realised that Shri Thanikachalam is not minor, he sought to shift his ground by reaching conclusion that Shri Dhanasekharan, minor, had been admitted as full-fledged partner. When assumption of jurisdiction itself is upon mis construction of facts, in our opinion, Commissioner is precluded from proceeding further and that too by shifting grounds. In this view of matter also, order of Commissioner is liable to be set aside. 12. We have already held that for proper appreciation of fact whether prejudice would be caused in future also, discussion of merits of case is called for. learned Commissioner is of view that corrections carried out in original deed of partnership were not specifically attested by partners and witnessed by witness and, therefore, unattested correction in deed cause doubt as regards what other eight partners agreed to. However, firm had filed its application under section 58 of Indian Partnership Act for registration of firm on 30-3-1981 under rule 5 in Form in file of Registrar of Firms and according to it, against serial No. 9 Shri Thanikachalam is described as partner having joined partnership on 3-8- 1979. True copy of same is in assessee's paper book at page 11. In addition, we notice that assessee-firm had furnished to Income-tax Department Form No. 11 under rule 22(2) and rule 22(4) (i) of Income-tax Rules, 1962 as early as 25-12-1979 to which all partners from 1 to 9 have subscribed their signatures. At serial No. 9, Shri Thanikachalam as Thanikachalam has signed. In Schedule thereto, against serial No. 9, name of partner is given as Shri R. Thanikachalam though in remarks column then is description to effect: 'father and natural gardenia of minor Shri Dhanasekharan'. Form No. 11 was also accompanied by original deed of partnership with correction referred to by Commissioner, carried out against serial No. 9 Form No. 11 and deed of partnership are found in departmental paper book at pages 8 to 15 and originals of same are in custody of d apartment from 25-12-1979 onwards. 13. It may not be out of place to mention here that department had obtained sworn statements from partners after passing of order under obtained sworn statements from partners after passing of order under section 263 by Commissioner and has filed one such statement, that of Shri R. K. Ramachandran, managing partner of assess-firm. ITO had shown h m two partnership deeds-one given to Indian Bank, Vizianagaram, and another given to Corporation Bank, Vizianagaram (page 37 to 39 of departmental paper book). following question put to Shri Ramachandran by ITO and answers given by him are relevant: "Question 7: In first partnership deed dated 3-8-1979 filed before Indian Bank, Vizianagaram by you, which I have just now shown to you, fourth partner is shown as: 'T. Dhanasekharan, son of R. Thanikachalam, aged 15 years, resident of Vizianagaram, hereinafter called fourth partner represented by father and natural gardenia, Thanikachalam'. In second partnership deed, dated 3-8-1979, filed by you before Corporation Bank, T. Dhanasekharan was made as ninth partner as shown below: '9. T. Dhanasekharan, son of R. Thanikachalam, aged 15 years, resident of Vizianagaram, hereinafter called ninth partner represented by father and natural guardian Thanikachalam.' Which is correct? Answer: Both above partnership deeds are correct, except change in serial numbers of partners. Question 10: Your firm has published pamphlet under Saving - cum- Benefit Scheme wherein following persons are shown as partners in Shri Mahalaxmi Finance Corporation, which I am showing to you: (1) Akasapu Surya Rao son of Appalaraju, Vizianagaram. (2) Akasapu Suryaprakasa Rao, Vizianagaram. (3) Yekula Paidilingam, Vizianagaram. (4) Smt. V. Jagadamba, wife of Chandrasekhararao, Vizianagaram. (5) T. Dhanasekharan, care of R. Thanikachalam, Vizianagaram. (6) Kapuganti Prakash, Vizianagaram. (7) Y. Sangayya, Vizianagaram. (8) R. K. Ramachandran, Vizianagaram. (9) Smt. Jayashree Bhag, wife of Bhag Mirpuri, Vizianagaram. Is it correct? Answer: Yes, it is correct, as per pamphlet." From above questions and answers, it is evident that Shri Ramachandran was shown two partnership deeds other than one that was presented to income-tax authorities along with Form No. 11 in which Shri Thanikachalam is described as partner with of course corrections carried out in original deed of partnership. last-mentioned partnership deed was never put to Shri Ramachandran and there was not even question put by department to concerned person as to how and why different document describing Shri Thanikachalam as partner came to be presented to ITO. Therefore, nothing turns out of this sworn statement in favour of department. 14. Shri Swamy, assessee's counsel, filed sworn statements obtained b y department from other partners. Here also, partnership deeds furnished to Indian Bank and Corporation Bank, Vizianagaram, where theme on which questions were framed. In addition, following questions and answers are found in statement of Shri Akasapu Surya Rao (pages 16 and 17 of paper book): "Question: Do you agree that all nine partners described in copy of partnership deed dated 3-8-1979 filed before Corporation Bank, Vizianagaram, to open fixed deposit account in 1982 are partners in firm of Shri Mahalaxmi Finance Corporation, Vizianagaram? Answer: Shri Dhanasekharan described as ninth partner is not partner in Mahalaxmi Finance Corporation, Vizianagaram. Question: I show you partnership deed dated 3-8-1979 filed before Income-tax Department. There is another copy of partnership deed with same date filed before Indian Bank to open current account and also copy of partnership deed with above date filed before Corporation Bank, Vizianagaram to open fixed deposit account. In all partnership deeds at clause 12 it is mentioned as under: '.... If any particular job is assigned to any one of partners excluding minor ....' It indicates that minor is admitted in business as per all above partnership deeds. Do you agree? Answer: There are no minors admitted in business. Question: As per pamphlet, there are nine partners printed underneath. Are they correct partners? Answer: Out of nine partners printed in pamphlet, persons in item Nos. 5 and 6, viz., T. Dhanasekharan and K. Prakash are not partners. Question: You say that Shri T. Dhanasekharan and K. Prakash are not partners. Who are partners came in their place? Answer: Shri P. V. Subramaniam and R. Thanikachalam came in place of T. Dhanasekharan and K. Prakash." 14.1 No questions were put to Shri Akasapu Suryaprakasa Rao as regards partnership deed filed before income-tax authorities (sworn statement at pages 19 to 24 of paper book). 14.2 In sworn statement of Shri Yekula Paidilingam, another partner (pages 25 to 28 of paper book), apart from usual questions that were put to other partners, there are specific questions as follows: "Question: Are there any minors admitted in firm of Shri Mahalaxmi Finance Corporation, Vizianagaram? Answer: No. There are no minors admitted in above firm. Question: In balance sheets filed before ITO for assessment years 1982-83, 1983-84 and 1984-85 you have shown capitals of Rs. 4,662.04 for assessment year 1982-83 at L. F. No. 17, Rs. 15,787.88 for assessment y e r 1983-84 and Rs. 24,218.90 at L. F. No. 11 in name of Shri T. Dhanasekharan. As per this, I conclude that Dhanasekharan is partner in Shri Mahalaxmi Finance Corporation, Vizianagaram. What is your reply? Answer: Shri Dhanasekharan is not partner in firm of Shri Mahalaxmi Finance Corporation, Vizianagaram. Thanikachalam is partner. I think it is Accountant's mistake. Question: .... You have already stated that there are no minors in business. Then where is need to mention at clause 12 of partnership deed that 3-8-1979 filed before ITO 'any one of partners excluding minors'? Where is need to mention minors in partnership deed when you say that there are no minors in partnership? Answer: There is no need to mention in above partnership deed 'any one of partners excluding minors.' I do not know how it occurred. In reply to another question answer is: Shri Dhanasekharan is not partner. His father Thanikachalam is partner. Question: Finally I conclude that you have filed one copy of partnership deed exhibiting Shri Dhanasekharan as fourth partner before Indian Bank, one copy of partnership deed filed before corporation bank to open fixed deposit amount in 1982 exhibiting Shri Dhanasekharan as ninth partner aged 15 years and you have filed another partnership deed before Income-tax Department. Hence, I conclude that you have not filed correct partnership deeds before banks and ITO. I conclude that your firm is not genuine one. What is your reply? Answer: Our firm is genuine one. partnership deed filed before ITO on 4-2-1980 is correct one. 14.3 In sworn statement of Smt. Jayshree Bhag Mirpuri (pages 39 and 40 of paper book), reference was made to partnership deed filed with Indian bank, Vizianagaram, and following questions and answers are noticed: "Question: In above partnership deed Shri Dhanasekharan, son of Thanikachalam made as fourth partner. Is it correct? Answer: It is rough partnership deed in which Dhanasekharan is made as fourth partner, but fair partnership deed was written later wherein his father Thanikachalam is admitted as partner. Question: For assessment years 1982-83, 1983-84 and 1984-85 you h v e distributed profits of firm to Shri Dhanasekharan, son of Thanikachalam. But you say Thanikachalam is partner. Then where is need to distribute profits to Dhanasekharan instead of Thanikachalam? Answer: I do not know how profits were allocated to Dhanasekharan when real partner is Thanikachalam. To last question, answer is: My knowledge goes that Thanikachalam is partner in Sri Mahalaxmi Finance Corporation, Vizianagaram." 14.4 In sworn statement of Smt. Vusirikala Jagadamba (pages 41 to 43 of paper book) following questions and answers are worth noting: "Question: firm has filed original partnership deed dated 3-8-1979 before ITO, Vizianagaram along with Form No. 11. Do you know contents of this deed? Answer: Yes. I know contents of this partnership deed. Question: Are there any minors admitted in partnership firm Sri Mahalaxmi Finance Corporation, Vizianagaram, as per partnership deed dated 3-8-1979? Answer: There are no minous admittedin partnership firm as per partnership deed dated 3-8-1979." 14.5 In sworn statement of Shri Yelchuri Sangayya (pages 47 to 49 of paper book), following question and answer are noticed among others: "Question: Your firm, i.e., Sri Mahalaxmi Finance Corporation, Vizianagaram, filed original partnership deed dated 3-8-1979 before ITO, Vizianagaram, on 4-2-1980. There are some corrections on 1st page of partnership deed at ninth partner. Do you know anything about it? Answer: No. I do not remember." 15. From perusal of answer elicited from partners in sworn statements, one fact stands out very clear, viz., that Shri Thanikachalam was admitted as partner and before addition, number of draft or 'rough' partnership deeds are in circulation. first draft in which Shri Dhanasekharan was shown as partner No. 4 was not acted upon. second draft in which Shri Dhanasekharan was shown as ninth partner was typed on stamp paper and on second thoughts corrections would appear to have been carried out in stamp paper itself and it was this partnership deed with said corrections that was acted upon, and it was on basis of this partnership deed registration was sought from income-tax authorities and losses were distributed in previous year. There is force in plea of Shri Swamy that for opening of accounts, those rough deeds or drafts deeds that were not on stamp paper, might have been given to bankers inadvertently by staff. Similarly, distribution of profits to minor in subsequent years may be viewed as act of inadvertence or clerical error, but such distribution will not make Shri Dhanasekharan partner. plea of assessee is that in later years, due to clerical inadvertence or mistake profits came to be credited to account of Dhanasekharan in books of firm, but such mistake was rectified subsequently. That it is clerical mistake in later years is proved by fact that in first year of assessment, it is Thanikachalam's account in books of firm which was dealt with but not Dhanasekharan's. Even though clerical mistake was committed in books of firm in later years, which was subsequently rectified, it is pertinent to point out that Thanikachalam had offered these incomes in his assessment in T-1722/NRD I (I) (pages 63 to 67 of assessee's paper book). In our view, clerical errors cannot affect genuineness of firm as has been held in Addl. CIT v. Mardan Khan Rafiq Ahmad Khan [1978] 115 ITR 559 (All.) and other cases in CIT v. Hari Ram Khanna [1979] 116 ITR 886 (All.), CIT v. K. Venkateswara [1982] 134 ITR 328 (AP) and Tax Case Nos. 11 and 12 of 1979 dated 6-3-1980 arising out of Income-tax Appeal Nos. 1971 and 1972 (Hyd.) of 1975-76. 16. department has brought on record certain hand bills (page 25 of its paper book). These hand bills were issued in connection with Saving-cum- Benefit Scheme organized by assessee. There are nine partners mentioned therein. Against serial No. 5, Shri Dhanasekharan's name is found, and against serial No. 6, name of Kapuganti Prakash is mentioned as partners. According to partnership deeds that were presented to Indian bank, Dhanasekharan's name appears as partner against serial No. 4, and according to partnership deed filed with Corporation bank, Shri Dhanasekharan's name appears against serial No. 9. name of Kapuganti Prakash does not appear in either of these deeds. In deed filed before income-tax authorities, it is Thanikachalam's name representing Dhanasekharan that appears against serial No. 9 and name of Kapuganti Prakash is not found therein. These circumstances would reinforce plea of Shri Swamy that initial drafts presented to bankers and hand bills were all drafted long before emergence of final deed of partnership on basis of which registration was granted. 17. Now, we turn to partnership deed on basis of which register w s initially granted which was subsequently canceled by Commissioner under section 263. In preamble, partner No. 9 is described as follows: "R. Thanikachalam, resident of Vizianagaram, hereinafter called ninth partner representing as father and natural guardian Dhanasekharan, minor, aged 15 years." Clause 12 of partnership deed is as follows: "During course of existence of partnership, partners shall convene monthly meeting of partners where all issues relevant to partnership can be discussed and such discussions shall be reduced to writing. In such meeting, if any particular job is assigned to any one of partners excluding minor, such job or work so entrusted to such partners shall be attended to by such partner with honesty and due diligence." Reading these two clauses together, Commissioner reached conclusion that Shri Dhanasekharan, minor, became partner either on his own or through his father and natural guardian Shri Thanikachalam and he was given share in loss. Reference to minor would appear to have been made in this clause because in recital it is stated that Shri Thanikachalam represented minor and, therefore, partners wanted to emphasize minor's exclusion and to look to Thanikachalam alone for all intents and purposes. This is one view. Another view is also possible, viz., in rough deeds, as Shri Dhanasekharan was mentioned as partner with this clause No. 12 intact, when final deed was approved with Shri Thanikachalam as partner representing minor, this particular provision excluding minor came to be mentioned innocuously. But, extreme view that mention of exclusion of minor in clause 12 by itself would make minor partner does not appeal to us. In this view of matter, we are also supported by clause 19 of partnership deed wherein 'the provisions of Indian Partnership Act insofar as they are not contained herein' have been adopted. In spite of specific provision in clause 19 incorporating provisions of Indian Partnership Act, conclusion that section 30 of said Act is violated does not appear to be valid. In Manvi Bros. v. CIT [1960] 39 ITR 173 (Bom.) (as per headnote) father and two sons who originally formed joint Hindu family, entered into partnership on 1-4-1945, when family was disrupted. elder of two sons died on 18-3-1947, but partnership was continued, his widow representing interest of three minor sons stepping into shoes of her deceased husband. partnership deed was executed on 8-4- 1948, parties to it being father, second son and third being described as 'the names of three minor sons by their guardian mother'. Clause 5 of partnership deed provided that shares of parties both in profits and losses were equal and clause 8 provided that relation of parties shall be governed by said Act. partnership deed was signed by father and son and by mother on behalf of her minor sons. It was held on facts that it was widow who became partner representing her minor sons and deed of partnership was in conformity with section 26(a) of Indian partnership Act and did not suffer from any defect which would entail non-registration of partnership. It was further held that in law it is quite possible for guardian to become partner and to be liable for profits and losses although question as to how far his wards are bound by any losses incurred by guardian may be entirely different question. assessee's facts are on ker footing since Shri Thanikachalam had signed partnership deed and other documents as partner and never as guardian or representative of his minor son. In CIT v. Kedarmall Keshardeo [1969] 73 ITR 150 (Assam & Nagaland), facts of case are that on death of partner, his widow was described as representing herself and her minor son and she also signed deed accordingly. deed did not provide for individual shares of widow and minor son and they were made liable for losses also. On question whether on construction of deed minor was taken in as full-fledged partner and partnership was, therefore, invalid and, hence, firm was not entitled to registration, it was held that widow was partner only in representative capacity and not in dual capacity and minor was not made full-fledged partner, nor were widow and minor made partners jointly and hence, their individual shares were not required to be specified, nor was minor made liable for losses, and, therefore, firm was entitled to registration. In facts of assessee's case, in our view, partner is Shri Thanikachalam who is liable for losses. minor has not been made full-fledged partner. cases relied on by Commissioner are not applicable to facts of case before us. Shri Thanikachalam has not signed on behalf of his minor son but has only indicated his desire to represent him in preamble. In our view, there is force in contention that Shri Thanikachalam has signed partnership deed in question and application in Form No. 11 as partner without qualification as guardian and again given himself as partner in column No. 1 of Schedule mentioning names of partners in application form. remark in remarks column that he is guardian of Shri Dhanasekharan apparently expresses his intention to benefit minor but in all essential particulars, it is Shri Thanikachalam who is clearly shown as partner and not minor. It is significant that Shri Thanikachalam accounts for his profits and loss in his own assessment even after minor became major subsequently. Therefore, we set aside order of Commissioner. 18. We have already held that firm is genuine one and order cancelling registration must fail in terms of lack of jurisdiction and on merits. Commissioner has also canceled assessment order in last paragraph of his order. In case before us, assessee returned loss of Rs. 36,834.93 which was converted into nil income against which no appeal was instituted. quantum assessment was never before Commissioner. cancellation of assessment arises only on account of status of assessee. At nil income, no prejudice would be caused to revenue whether assessee is assessed as registered firm or unregistered firm. Besides, as we have held that correct status of assessee is that of registered firm, no prejudice would be caused in future also. consequential order of Commissioner in respect of assessment also does not survive. 19. In result, appeal is allowed. *** SRI MAHALAKSHMI FINANCE CORPN. v. INCOM-TAX OFFICER