CHAPTER XVI — SPECIAL PROVISIONS APPLICABLE TO FIRMS
CHAPTER XVI — SPECIAL PROVISIONS APPLICABLE TO FIRMS
Section 182 — Assessment of registered firms (Omitted)
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Omitted by the Finance Act, 1992, w.e.f. 1 April 1993. Spent for assessment year 1992-93 and earlier (now read with section 189A).
Finance Act, 2026: No change. The provision stands omitted; the Finance Act, 2026 makes no amendment to Chapter XVI.
Successor (ITA 2025): No corresponding charging provision — the registered/unregistered-firm distinction was not carried into the new scheme.
A. SECTION COMMENTARY
1. What the section did
Section 182 was the operative charging-and-machinery provision of the old scheme of firm taxation. Under that scheme a firm was either a "registered firm" or an "unregistered firm". Where a firm was registered (originally under section 26A of the 1922 Act and later under sections 184 to 186 of the 1961 Act as they then stood), section 182 directed that the firm's income-tax be computed, the share of each partner in the firm's total income be included in his individual assessment, and tax be charged on the partners on their shares. The registered firm itself paid a comparatively small charge; the real incidence fell on the partners. This was the deliberate policy of the old regime — to tax the profits substantially in the partners' hands.
2. Why it was omitted
The Finance Act, 1992 recast the entire taxation of firms with effect from assessment year 1993-94. The registered/unregistered dichotomy was abolished; the firm became a single, separate taxable entity charged at a flat rate, the partner's share of firm profits was made exempt in the partner's hands (section 10(2A)), and deductions for interest, salary and remuneration paid to partners were brought under section 40(b). Sections 182, 183 and 186 — the load-bearing provisions of the old scheme — were therefore omitted. Section 184 was simultaneously re-enacted in its present, much shorter form, and section 185 was recast.
3. Why it still matters
Section 182 is not dead letter for historical purposes. Section 189A preserves the old Chapter — including section 182 as it stood — for the assessment year commencing on 1 April 1992 and any earlier year. Appeals, rectifications, reassessments and recovery proceedings relating to those years continue to be governed by the old law, and the large body of pre-1993 jurisprudence on registered firms remains good law for those years. The commentary below is confined to that limited, historical operation.
B. STATUTORY POSITION (verbatim text)
The Act now carries only the omission notice for this section:
182. [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
Editorial note: The section as it stood before omission has not been reproduced; only the omission marker appears in the current Act. The pre-omission text continues to govern assessment year 1992-93 and earlier by force of section 189A.
C. AUTHORITIES
Section 182 is omitted; there is no current jurisprudence on it. The authorities below are noted only for the historical operation of the old registered-firm scheme that survives, for past years, under section 189A. They are flagged as old-regime decisions.
These decisions explain the working of the old scheme that section 182 implemented and that section 189A keeps alive for pre-1993 years.
CIT v. A. Abdul Rahim & Co. — illustrating the registered-firm scheme (historical)
Context: Under the old scheme the benefit of registration carried real tax consequences (lower charge on the firm, taxation of shares in partners' hands). Registration was therefore keenly contested. The decisions collected under sections 183 and 184 below explain the conditions and consequences; they apply, for the limited purpose of section 189A, to the registered-firm machinery of section 182.
Status / candour: Section 182 itself has generated no post-omission litigation. For pre-1993 years the governing principles are those developed under section 26A of the 1922 Act and sections 184-186 of the 1961 Act as they then stood — see R.C. Mitter & Sons, K.D. Kamath & Co. and Mandyala Govindu & Co. discussed under section 184.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the Income-tax Act, 1961 (local Act print, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; no statutory word has been altered. The new scheme of firm taxation (firm as a separate taxable entity, abolition of registration) operates from assessment year 1993-94; sections 182, 183 and 186 stand omitted by the Finance Act, 1992, w.e.f. 1-4-1993. The Finance Act, 2026 makes no amendment to any section of Chapter XVI. Citations are stated as reported; orders of the Tribunal and High Courts are flagged as such. Where a section has not been judicially construed on its own terms, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.
CHAPTER XVI — SPECIAL PROVISIONS APPLICABLE TO FIRMS
Section 182 — Assessment of registered firms (Omitted)
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Omitted by the Finance Act, 1992, w.e.f. 1 April 1993. Spent for assessment year 1992-93 and earlier (now read with section 189A).
Finance Act, 2026: No change. The provision stands omitted; the Finance Act, 2026 makes no amendment to Chapter XVI.
Successor (ITA 2025): No corresponding charging provision — the registered/unregistered-firm distinction was not carried into the new scheme.
A. SECTION COMMENTARY
1. What the section did
Section 182 was the operative charging-and-machinery provision of the old scheme of firm taxation. Under that scheme a firm was either a "registered firm" or an "unregistered firm". Where a firm was registered (originally under section 26A of the 1922 Act and later under sections 184 to 186 of the 1961 Act as they then stood), section 182 directed that the firm's income-tax be computed, the share of each partner in the firm's total income be included in his individual assessment, and tax be charged on the partners on their shares. The registered firm itself paid a comparatively small charge; the real incidence fell on the partners. This was the deliberate policy of the old regime — to tax the profits substantially in the partners' hands.
2. Why it was omitted
The Finance Act, 1992 recast the entire taxation of firms with effect from assessment year 1993-94. The registered/unregistered dichotomy was abolished; the firm became a single, separate taxable entity charged at a flat rate, the partner's share of firm profits was made exempt in the partner's hands (section 10(2A)), and deductions for interest, salary and remuneration paid to partners were brought under section 40(b). Sections 182, 183 and 186 — the load-bearing provisions of the old scheme — were therefore omitted. Section 184 was simultaneously re-enacted in its present, much shorter form, and section 185 was recast.
3. Why it still matters
Section 182 is not dead letter for historical purposes. Section 189A preserves the old Chapter — including section 182 as it stood — for the assessment year commencing on 1 April 1992 and any earlier year. Appeals, rectifications, reassessments and recovery proceedings relating to those years continue to be governed by the old law, and the large body of pre-1993 jurisprudence on registered firms remains good law for those years. The commentary below is confined to that limited, historical operation.
B. STATUTORY POSITION (verbatim text)
The Act now carries only the omission notice for this section:
182. [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
Editorial note: The section as it stood before omission has not been reproduced; only the omission marker appears in the current Act. The pre-omission text continues to govern assessment year 1992-93 and earlier by force of section 189A.
C. AUTHORITIES
Section 182 is omitted; there is no current jurisprudence on it. The authorities below are noted only for the historical operation of the old registered-firm scheme that survives, for past years, under section 189A. They are flagged as old-regime decisions.
Cluster 1 — Old-regime registered-firm scheme (historical)
These decisions explain the working of the old scheme that section 182 implemented and that section 189A keeps alive for pre-1993 years.
CIT v. A. Abdul Rahim & Co. — illustrating the registered-firm scheme (historical)
Context: Under the old scheme the benefit of registration carried real tax consequences (lower charge on the firm, taxation of shares in partners' hands). Registration was therefore keenly contested. The decisions collected under sections 183 and 184 below explain the conditions and consequences; they apply, for the limited purpose of section 189A, to the registered-firm machinery of section 182.
Status / candour: Section 182 itself has generated no post-omission litigation. For pre-1993 years the governing principles are those developed under section 26A of the 1922 Act and sections 184-186 of the 1961 Act as they then stood — see R.C. Mitter & Sons, K.D. Kamath & Co. and Mandyala Govindu & Co. discussed under section 184.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the Income-tax Act, 1961 (local Act print, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; no statutory word has been altered. The new scheme of firm taxation (firm as a separate taxable entity, abolition of registration) operates from assessment year 1993-94; sections 182, 183 and 186 stand omitted by the Finance Act, 1992, w.e.f. 1-4-1993. The Finance Act, 2026 makes no amendment to any section of Chapter XVI. Citations are stated as reported; orders of the Tribunal and High Courts are flagged as such. Where a section has not been judicially construed on its own terms, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.