Commissioner of Income Tax vs Ramdayal Ramcharan Purohit

N.D. Ojha, C.J.—The Income Tax Appellate Tribunal has referred the following question of law u/s 256(1) of the Income Tax Act, 1961, to this court for its opinion :

" Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in upholding the decision of the Appellate Assistant Commissioner of Income Tax directing the Income Tax Officer to allow continuation of registration for the first period ended on October 28, 1976?"

The facts in brief necessary to answer the aforesaid question are that a few persons carried on business as partners in the name and style of M/s. Ramdayal Ramcharan Purohit, Chhatarpur. During the accounting period, Ramdayal, one of the partners, expired on October 28, 1976. The partnership was, however, continued even though the partners did not execute the partnership deed till the close of the accounting year. A question arose as to whether registration of the firm was permissible in the aforesaid circumstances. The Appellate Assistant Commissioner held that the assessee was entitled to the benefit of registration till October 28, 1976, namely, the date when Shri Ramdayal expired. On this basis, he directed the Income Tax Officer to allow registration for the period if the application made in this behalf in Form No. 12 was found to be in order. The appeal preferred by the Department against the order of the Appellate Assistant Commissioner was dismissed by the Tribunal. However, the aforesaid question has been referred to this court for its opinion at the instance of the Department.

Having heard learned counsel for the parties, we are of the opinion that the answer to the aforesaid question is concluded against the Department by a recent decision of the Supreme Court in Wazid Ali Abid Ali Vs. Commissioner of Income Tax, Lucknow, and our answer, therefore, is in the affirmative, in favour of the assessee and against the Department. There shall, however, be no order as to costs.