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Issues:
1. Whether there should have been two separate assessments for the two periods as claimed by the assessee or one consolidated assessment as framed by the Income-tax Officer? Analysis: The judgment pertains to a reference under section 256(1) of the Income-tax Act, 1961, regarding the assessment year 1980-81. The assessee, a registered firm, underwent a change in partnership during the relevant previous year. The firm filed two returns of income for different periods and requested two separate assessments. The Income-tax Officer, citing section 187 of the Act, opted for a consolidated assessment. The Appellate Assistant Commissioner allowed separate assessments based on a Full Bench decision. The Income-tax Appellate Tribunal upheld the separate assessment view but noted conflicting decisions from other High Courts. The court examined the definition of "change in the constitution of the firm" under section 187 and highlighted a subsequent amendment to the section. The amendment, introduced retrospectively, impacted the dissolution of a firm on the death of a partner. Due to the amendment and lack of clarity on the dissolution issue, the court remanded the case to the Tribunal for rehearing, following precedents of the Supreme Court in similar situations. The court refrained from answering the reference question and directed the Tribunal to decide the appeal afresh, potentially requiring further evidence. This judgment underscores the application of section 187 of the Income-tax Act in cases of partnership changes and the significance of subsequent amendments impacting such scenarios. The court's decision to remand the case for rehearing by the Tribunal reflects the need for a comprehensive examination of the partnership deed, relevant laws, and partners' conduct to determine the firm's dissolution status post the partner's death. The court's approach aligns with established legal principles and precedents, emphasizing the importance of thorough analysis and adherence to legal provisions in resolving taxation disputes.
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