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Jurisdictional challenge regarding the assessment of a new partnership firm following the dissolution of an old partnership firm. Detailed Analysis: The judgment pertains to three appeals by the assessee against the order of the CIT (Appeals)-II, Bombay, concerning the assessment years 1977-78, 1978-79, and 1979-80, consolidated and disposed of together. The assessee, a partnership firm with two partners, had an earlier partnership with a deceased partner, leading to the formation of a new firm. The issue revolves around the jurisdictional dispute arising from the dissolution of the old firm and the creation of the new firm. The Tribunal had previously directed separate assessments for the old and new firms due to the dissolution of the former by operation of law upon the demise of a partner. The core contention in the appeals is the jurisdictional challenge raised by the assessee regarding the treatment of the new firm as a "reconstituted firm" by the department. The department argued that the new firm should be considered part of the old firm's assessment jurisdiction. In contrast, the assessee asserted that the new firm was a distinct entity following the dissolution of the old firm, supported by the Tribunal's direction for separate assessments. The jurisdictional dispute hinged on whether the new firm should be assessed under the old firm's jurisdiction or treated as a separate entity. The legal analysis delves into the concept of partnership firms as distinct entities under the Income-tax Act, emphasizing that a firm is treated separately from its partners for taxation purposes. The judgment interprets the provisions of the Indian Partnership Act, 1932, and the Income-tax Act to establish the new firm's distinct identity from the old firm. It highlights the significance of a firm's dissolution and succession by a new firm, clarifying that such cases fall under section 188 rather than section 187, especially in instances of dissolution due to a partner's death. The judgment scrutinizes the jurisdictional aspects, citing the fundamental principle that an order passed without jurisdiction is null and void. It underscores that the defect of jurisdiction cannot be rectified, even with the parties' consent. The conclusion asserts that the Assessing Officer lacked jurisdiction over the new firm, emphasizing the legal distinction between the old and new entities. Ultimately, the appeals of the assessee are allowed based on the finding of jurisdictional deficiency in the assessment proceedings, declaring the entire process as legally invalid. In summary, the judgment addresses the jurisdictional dispute arising from the dissolution of an old partnership firm and the subsequent assessment of a new partnership entity. It clarifies the legal principles governing partnership firms' distinct identity for taxation purposes and emphasizes the criticality of jurisdiction in assessment proceedings. The decision upholds the assessee's challenge to the jurisdictional validity of the assessment, ultimately leading to the allowance of the appeals.
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