KISAN GHAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE two applications under Section 256(2) of the Income-tax Act, 1961, are filed by the assessee, regarding the assessment year 1981-82 and assessment year 1982-83, respectively. The assessee wants this court to direct the Income-tax Appellate Tribunal to state the following questions :

(2.) THE assessee is a partnership firm. It carried on business up to March 31, 1980, with four partners. On March 31, 1980, the partnership was dissolved. Two of the partners constituted a new partnership with effect from May 15, 1980. A deed of partnership was executed on the same day. THE new firm, with which we are concerned herein, opened its accounts on May 15, 1980, and closed them on June 30, 1981, after a period of 131/2 months. THE firm did not file any return for the assessment year 1981-82 nor an application for registration. It filed a return and an application for registration for the assessment year 1982-83. THE Income-tax Officer took the view that the firm ought to have filed a return for the assessment year 1981-82 and since it was not filed, he issued a notice under Section 148. In response, the assessee filed a return showing nil income. Its case was that it commenced business on May 15, 1980, and closed it on June 30, 1981, in respect of which a return was filed for the assessment year 1982-83 and, therefore, there was no necessity to file a return for the assessment year 1981-82. THE Income-tax Officer did not agree. He held that there was no dissolution of the firm on March 31, 1980, but it was merely a reconstitution. He was of the opinion that the assessee was bound to file a return for the assessment year 1981-82 disclosing its income for the period May 15, 1980, to March 31, 1981. He, accordingly, calculated the income and made the assessment. On appeal, the Appellate Assistant Commissioner agreed with the assessee that there was a dissolution of the firm on March 31, 1980, and that the firm which came into existence on May 15, 1980, was a new firm. He held that the assessee had the right to choose its own "previous year" and, accordingly, allowed the appeal. THE Revenue questioned the correctness of the appellate order before the Tribunal. THE Tribunal confirmed the finding that there was a dissolution on March 31, 1980, but it held against the assessee on the other question. Relying upon the language of Section 3, the Tribunal held that the assessee could not choose to have a previous year of 131/2 months. It held that the assessee was bound to file a return for the assessment year 1981-82 disclosing the income for the period May 15, 1980, to March 31, 1981, and that the next previous year would commence on April 1, 1981 and end on March 31, 1982, which would fall within the assessment year 1982-83. THE Tribunal directed that the income for the said years may be recalculated on that basis. It is then that the assessee applied for referring the above questions which the Tribunal declined. Hence, this application.

(3.) IT is argued by learned counsel for the applicant that the questions raised by him are questions of law. We are not sure. Even if they are questions of law, they are not such as to deserve a direction for reference under Section 256(2).