1991 PLP 142 (PTD)

GOKAL CHAND MITAL, J.--Gobind Ram Vishan Dass, the assessee, was a partnership firm and was granted registration for the year prior to the assessment year 1977-78, the accounting year being from Dussehra to Dussehra. For the assessment year 1977-78, the accounting year was October 9, 1975, to October 6, 1976. On June 24, 1976, Vasdev, one partner retired. Two separate returns were filed, one from October 9, 1975, to June 24, 1976, and the second from June 25, 1976, to October 6, 1976. The assessee filed an application in Form No.12 for continuation of registration from October 9, 1975, to June 24, 1976. The assessee's case before the Income-tax Officer and the Appellate Assistant Commissioner was that on the retirement of Vasdev, there was a dissolution of the partnership and during the accounting year there were two firms and thus two returns were filed. The stand of the assessee was also that for the period October 9, 1975, to June 24, 1976, registration could be continued. The Income-tax Officer and the Appellate Assistant Commissioner rejected both the contentions and made one assessment for the entire period on the firm as an unregistered firm. On the assessee's further appeal, the Tribunal followed Addl. CIT v. Abdul Kareem & Co. (1979) 117 ITR 233, a decision of the Madras High Court, and held that a separate assessment up to June 24, 1976, could be framed and registration could be continued up to that date. On these facts, the following question has been referred to this Court for opinion: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in directing the Income-tax Officer to allow continuation of registration to the assessee-firm up to the period from October 9, 1975, to June 24, 1976?" After hearing learned counsel for the parties and on consideration of the judgment cited, we are of the view that on the basis of the decision of the Supreme Couri in Wazid Ali Abid Ali v. CIT (1988) 169 ITR 761, the referred question has to be answered in favour of the assessee. that is, in the affirmative. The Madhya Pradesh High Court in Nawab and Bros. v. CIT (1980) 124 ITR 307, had opined that for part of the year, no registration could be granted and a Full Bench of our High Court in Nandlal Sohanlal v. CIT (1977) 110 ITR 170,, held that even if there is a change in the constitution of the firm, only one assessment is to be framed. On the contrary, in Abdul Kareem's case (1979) 117 ITR 233, the Madras High Court took the view that registration could be granted for a partial period. Similar view was taken by a Division Bench of the Allahabad High Court in CIT v. Shiv Shanker Lal Ram Nath (1977) 106 ITR 342, but that was dissented from by a Full Bench of our Court in Nandlal Sohanlal's case CIT (1977) 110 TTR

170. In Vishwanath Seth v. CTT (1984) 146 ITR 249, a Full Bench of the Allahabad High Court overruled the view taken in Shiv Shanker Lal Ram Nath's case (1977) 106 ITR 342 (All). The Delhi High Court in CIT v. Sant Lal Arvind Kumar (1982) 136 ITR 379, took the view that separate assessments had to be framed. The Supreme Court in Wazid Ali Abid Ali's case (1988) 169 ITR 761 approved the Delhi High Court decision in Sant Lal Arvind Kumar's case (1982) 136 ITR 379 and disapproved the view taken in Vishwanath Seth's case 1984 146 ITR 249 All) FB. Therefore, the net result is that separate assessments can be framed and registration for part of the period till the date of change in the constitution of the firm can be renewed in Form No.

12. Similar view was taken by a Division Bench of this Court in CIT v. Chandigarh Bottling Co. (1986) 160 ITR 780, to which I was a party. For the reasons recorded above, the referred question is answered in favour of the assessee, in the affirmative, i.e., that the Tribunal was right in law in directing the Income-tax Officer to allow continuation of registration to the assessee-firm from October 9. 1975, to June 24, 1976. No costs. Z.S./804/T?????????????????????????????????????????????????????????????????????????????????????????? Order accordingly.