RAMSAHAI NATHULAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE applicant-assessee had earlier filed Miscellaneous Civil Case No. 92 of 1985 in this court under Section 256(2) of the Income-tax Act, 1961. In that case, this court passed the order on September 4, 1987 (see [1988] 171 ITR 371), directing the Tribunal to state the case and refer the indicated questions of law for opinion of this court. In compliance with this order, the Tribunal stated the case and referred the undernoted two questions of law for our opinion (at page 373) ;

(2.) BRIEFLY stated, the facts of the case are that the applicant-assessee is a firm and the assessment year in question is 1977-78 for which the accounting year ended on Diwali, 1976. This firm consisted of three partners, namely, Shri Ramsahai, Shri Nathulal and Shri Vimalchand. The firm was dissolved on August 14, 1976, and the assets and liabilities of this firm were taken over by one of the partners, Shri Ramsahai. The assessee filed two separate returns, one for the period up to August 14, 1976, in the status of a registered firm, and the other from August 15, 1976, till Diwali end in the status of an unregistered firm. On October 24, 1976, a partnership deed was executed by Shri Ramsahai, Shri Nathulal, Shri Vimalchand, Shri Prayagdatt and Smt. Dhapubai. In that deed, it was mentioned that the firm shall be deemed to have come into existence from August 15, 1976. The assessee filed an application for continuation of its registration for the period up to August 14, 1976. The Income-tax Officer held that there was a change in the constitution of the firm and, therefore, the assessee should have applied for fresh registration in Form No. 11-A. The Income-tax Officer, therefore, rejected the application and made a single assessment for the aforesaid two periods treating the assessee as an unregistered firm. On appeal, the Appellate Assistant Commissioner confirmed the order of the Income-tax Officer. On further appeal, the Tribunal also took the same view and held that the assessee was rightly assessed as an unregistered firm for the whole period. The appeal was accordingly dismissed. The orders passed by the Income-tax Officer, the Appellate Assistant Commissioner and the Tribunal are marked as annexures "A", "B" and "C", respectively. Copies of the dissolution deed and partnership deed were placed on record as annexures "D" and "E", respectively. The Tribunal did not refer the question as a result of which the assessee filed Miscellaneous Civil Case No. 92 of 1985. The direction was made by this court. This is how the Tribunal referred the aforesaid two questions.

(3.) ON agreement by both the sides, we reshape and reformulate ques tion No. 1 as under ;