Commissioner of Income Tax vs Chuharmal Manghandas

G.G. Sohani, Actg. C.J.

This is an application u/s 256(2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act").

The material facts giving rise to this application, briefly, are as follows : The assessee-firm consisted of four partners. One of the partners died on June 7, 1977. The wife of the deceased partner, thereafter, joined as a partner. The assessee contended during the course of assessment for the assessment year 1978-79, that there was no change in the constitution of the firm. The Income Tax Officer, however, held that there was a change in the constitution of the firm and that the assessee ought to have applied for registration in Form No. 11 A. The Income Tax Officer, therefore, refused registration to the assessee-firm. On appeal, the Appellate Assistant Commissioner held that the assessee was entitled to registration. Aggrieved by the order passed by the Appellate Assistant Commissioner, the Revenue preferred an appeal before the Tribunal. That appeal was dismissed. Aggrieved by the order passed by the Tribunal, the Revenue sought reference, but as the application made by the Revenue in that behalf has been rejected, the Revenue has filed this application.

Having heard learned counsel for the parties, we have come to the conclusion that the following question of law does arise out of the order passed by the Tribunal :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee-firm was entitled to renewal of registration ?"

The application is, therefore, allowed. The Tribunal is directed to state the case and to refer the aforesaid question of law to this court for its opinion. In the circumstances of the case, parties shall bear their "own costs of this application.