SANDERSONS AND MORGANS Vs. INCOME TAX OFFICER, "A" WARD, DISTRICT III(1), CALCUTTA, AND OTHERS.

JUDGEMENT

(1.) THIS appeal arises out of a judgment and order passed by Mr. Justice Sabyasachi Mukharji on the 23rd of December, 1971 [Sandersons and Morgans v/s. : [1973]87ITR270(Cal) ] in an application under article 226 of the Constitution of India. By the said judgment and order the writ petition was dismissed and the rule discharged.

(2.) ON the retirement or death of a partner the amount at credit of such account on the thirty -first day of December preceding the date of his retirement or death (if he retires or dies on or before the thirtieth day of June in any year) or on the thirty -first day of December of the year of his retirement or death (if he retires or dies after the thirtieth day of June in any year) shall be taken into account as hereinafter provided in ascertaining the value of his interest in the firm.

(3.) THE firm was duly registered under the provisions of Sec. 184 of the Income Tax Act, 1961 (hereinafter referred to as the said Act) so far as the accounting year 1961 is concerned on the basis of the said partnership agreement in writing. By virtue of the provisions of Sec. 184(7) of the said Act, this registration continued for 1962, and the firm was assessed in respect of this year also accordingly. In the year 1963, one of the partners, namely, Mr. Heramba Nath Bhattacharjee, died on the 7th day of December, 1963. In respect of the accounting year 1963, during the assessment proceedings, on behalf of the petitioner -firm it was contended that in view of the provisions of Sec. 184(7) of the said Act this firm was entitled to be assessed as a registered firm within the meaning of the said Act. This contention was rejected by the Income Tax Officer on the ground that by the death of Sri Bhattacharjee on the 7th December, 1963, there has been a change in the constitution of the firm and accordingly the registration could not be continued in respect of this year in view of the proviso to Sec. 184(7) of the said Act. Accordingly, the assessment in respect of the said year was made on the basis that the firm was not a registered firm within the meaning of the said Act.