Commissioner of Income Tax vs Law Times Press

B.P. Jeevan Reddy, C.J.—No one appears for the respondent-assessee. Heard counsel for the Revenue.

The following question is referred u/s 256(1) of the Income Tax Act, 1961 :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that two assessments should have been made by the Income Tax Officer one for the period April 1, 1972, to October 6, 1972, i.e., before the change in the constitution of the firm, and another for the period October 7, 1972, to March 31, 1973, i.e., the period after the change in the constitution of the firm ?"

The assessee is a partnership firm. The assessment year concerned is 1973-74. At the inception of the relevant previous year, the firm comprised seven partners. On October 6, 1972, one of the partners retired. The remaining partners executed a new partnership deed on October 12, 1972, with effect from October 7, 1972. In the above circumstances, the question arose as to whether it is a case of reconstitution calling for one assessment for the entire year or a case of succession calling for two separate assessments. The Tribunal held in favour of the assessee following the decision of this court in Commissioner of Income Tax Vs. Shiv Shanker Lal Ram Nath, . The said decision was overruled in Vishwanath Seth Vs. Commissioner of Income Tax, . Having regard to the said Full Bench decision and in view of the provisions of Section 187(2) of the Act, we must answer the question referred to us in the negative, i.e., in favour of the Revenue and against the assessee. No costs.