COMMISSIONER OF INCOME TAX Vs. KIRIT WOOD WORKS

JUDGEMENT

(1.) At the instance of revenue, the Income Tax Appellate Tribunal, Bench 'B', has referred the following question of law arising out of its order dated 15.3.1983 in Income Tax Application No. 2486/Ahd/89 relating to A.Y. 1978-79.

(2.) The facts and circumstances of the case, as narrated by the tribunal, may be briefly noticed. The assessee is a registered firm up to the previous year relevant to A.Y. 1977-78. The relevant accounting period for the A.Y. in question 1978-79 was from 24.10.76 to 11.11.1977. Before the end of the previous year one of its partners died on 16.9.77. An application was filed on 29.6.78, that is to say after the end of the previous year, under Form No. 12 that the firm continued to be registered for the first part of the previous year from Kartik Sud 1 to Bhadarwa sub. 3, that is to say, from 24.10.76 to 16.9.77 disclosing that Manilal Lalji Mistry has died on 16.9.77. The partnership deed of the firm provided that the firm shall not be dissolved on the death of one of the partners. The assessing officer pointed out that as it is not a case of dissolution of the firm, the declaration furnished by the firm in pursuance of sub-sec. (7) of sec. 184 is not in order. According to assessing officer, it was a case where there has been a change in the constitution of the firm resulting on account of death of the partner coupled with provision in the partnership deed. In order to avail the benefit of continued registration for the previous year in question, the assessee must have filed an application in Forms No. 11 and 11A for registration afresh in terms of sec. 184(8) and as the assessee has not done so, he made order that the registration granted to the firm shall not have the effect for the relevant assessment year. This order of the assessing officer was affirmed by the Appellate Assistant Commissioner of Income Tax vide his order dated 19.9.1981. On further appeal, the tribunal, relying on its earlier decision in I.T.A. No. 360/Hyd/69-70 dt. 19.8.71 and a decision of Madras High Court in Addl. C.I.T. v. Abdul Kareem & Co., (1979) 117 ITR 233 set aside the order of the lower authorities. It held,

(3.) Relying on the decision of the Madras High Court in Abdul Kareem & Co. (supra), it further held that the ratio of the case therefore is that the firm is entitled to registration for a part of the accounting period ending on a certain date on the basis of application in Form No. 12 if upto that date the partnership continues as it was from the beginning of the accounting period.