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TMI Blog2009 (9) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was being assessed as a registered firm until the assessment year 1992-93. From April 1, 1993, onwards, major amendments were introduced in Chapter XVI of the Income-tax Act dispensing with registration of firms for the purpose of assessment under the Act. The newly substituted provisions of section 184 introduced with effect from April 1, 1993, are extracted hereinbelow for easy reference : "184. Assessment as a firm.- (1) A firm shall be assessed as a firm for the purposes of this Act, if- (i) the partnership is evidenced by an instrument ; and (ii) the individual shares of the partners are specified in that instrument. (2) A certified copy of the instrument of partnership referred to in sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction by way of any payment of interest, salary, bonus, commission or remuneration, by whatever name called, made by such firm to any partner of such firm shall be allowed in computing the income chargeable under the head `Profits and gains of business or profession' and such interest, salary, bonus, commission or remuneration shall not be chargeable to income-tax under clause (v) of section 28." 3. Admittedly, the assessee was assessed as a registered firm upto the assessment year 1992-93 and it was again assessed as a firm during the year 1995-96. However, in between for the two assessment years 1993-94 and 1994-95, the assessee was declined the status as a "firm" for the purpose of assessment for the reason that it did not attach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s fatal to the assessee's claim for assessment in the status as a "firm". The contention of counsel for the assessee is that the firm, which was assessed in that status until 1992-93, need not furnish the certified copy of the instrument of partnership, for assessment in the status as "firm" for the subsequent assessment years because there was no change in the deed of partnership. In other words, according to him, the firm once assessed in that status, is entitled to be assessed in the same status for all subsequent years by virtue of operation of section 184(3) of the Act, if there was no change in the constitution of the firm for any of those years. The standing counsel, on the other hand, contended that the assessment year 1993-94 is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any certified copy of the instrument of partnership until there is a change in the constitution of the firm. For assessment as firm after change in the constitution of the firm, sub-section (4) of section 184 requires production of revised instrument of partnership along with the return for the assessment year relevant for the previous year in which such change in the partnership took place. Sub-section (3) refers to the assessment in the status as a "firm" based on the assessment made pursuant to production of the certified copy of the instrument of partnership referred to in sub-section (2) of section 184 and not the assessment made as a registered firm for any assessment year prior to 1993-94. The consequence of non-production of the cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, in this particular case, if the findings of the Commissioner are true, then we feel, the assessee is entitled to the benefit of assessment as a "firm" because 1993-94 is the first year of assessment after the amendment came into force and sub-section (3) creates confusion as to whether the continuation of status is based on any assessment as a "firm" after and including the assessment year 1993-94 or whether it is sufficient, the assessee was granted the status as a registered firm for the assessment year prior to 1993-94. Therefore, we direct the Assessing Officer to verify the records and find out, whether the assessee has produced the certified copy of the deed of partnership when the assessment was taken up and if so, to grant st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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