COMMISSIONER OF INCOME TAX Vs. CHITTERMAL PURUSHOTTAM DASS

JUDGEMENT

(1.) AT the instance of the Revenue, the Tribunal has referred the following question relating to asst. yr. 1975-76 for the opinion of this Court:

(2.) THE facts as found by the Tribunal are that one of the partners of the assessee firm, namely, Smt. Illachi Devi died on 8th Sept., 1974, and thereafter the remaining partners, namely, Shri Krishna Gopal and Shri Ram Gopal continued to carry on the partnership business. The assessee- firm, therefore, filed two returns one for the period from 1st April, 1974 to 8th Sept., 1974, and the other for the period from 11th Sept., 1974 to 31st March, 1975. The contention of the assessee was that the firm stood dissolved on the death of one of the partners. The ITO, however, took the view that there was merely a change in the constitution within the meaning of S. 187 and that the case of the assessee did not fall under S. 188 of the IT Act, 1961 (briefly, the Act). On appeal, the AAC accepted the contention of the assessee and accordingly directed the ITO to make two separate assessments for the two broken periods. On further appeal, the Tribunal upheld the order of the AAC.

(3.) WE have carefully gone through the assessment order and the orders passed by the appellate authorities. Neither the assessing authority nor the appellate authorities mentioned anywhere whether there was a contract to the contrary in the partnership deed whereunder Smt. Illachi Devi (deceased) was one of the partners. The legal position is that if there was a contract to the contrary in the said partnership deed, then the partnership shall survive even upon the death of one of the partners, otherwise not. It has, therefore, to be found out whether there was a contract to the contrary in the partnership deed. In the absence of such finding, it is difficult to give a categorical opinion whether the partnership survived upon the death of Smt. Illachi Devi, one of the partners. Stating the legal position as aforesaid and without recording a clear finding on the aforementioned question, we remit the matter back to the Tribunal, who may record a clear finding on the question whether there was a contract to the contrary within the meaning of S. 42 of the Partnership Act in the original partnership deed. If the Tribunal comes to the conclusion that the original partnership deed mentioned a contract to the contrary, then the partnership will survive even upon the death of one of the partners and in that situation a single assessment shall be made on the assessee- firm. If the Tribunal comes to the conclusion that there was no contract to the contrary in the original partnership deed, then the partnership would stand dissolved upon the death of Smt. Illachi Devi (one of the partners) and in that case, two separate assessments shall be made for the two broken periods. The reference is decided accordingly.