COMMISSIONER OF INCOME TAX Vs. SWAMY AND PATHY

JUDGEMENT

(1.) THE question under section 256(1) of the Income-tax Act, 1961, read thus :

(2.) THE question assumes that no option was exercised by the assessee in changing its previous year after the reconstitution of the firm, though the assertion of the Revenue before us has been that, while filing the returns, the assessee has, by necessary implication, changed the previous year.

(3.) THE Tribunal held that, in spite of section 187, technically, there were two firms here, one, till April 15, 1980, and thereafter, there constituted firm, under the provisions of the Partnership Act. THE legal fiction created by section 187(2) ought to be restricted for the purpose of the said section only and cannot be extended to treat (sic), that throughout the same assessee existed, for all purposes under the Act; therefore, the Income-tax Officer could not have assessed the income of the entire period of 17 months under single assessment. THE Tribunal observed :