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TMI Blog1977 (5) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... tions have been made regarding the non-application of the provisions of the Partnership Act to the cases arising under the Income-tax Act to which we do not subscribe. Thus, in our view, Dharam Pal Sat Dev's case [1974] 97 ITR 302 (Punj) needs reconsideration. The matter is of considerable importance. A number of Division Bench decisions and some decisions of the Supreme Court have to be considered and, there-fore, it would be advisable that this reference is heard by a larger Bench, at least of five judges. The assessment year in question is 1968-69. The original constitution of the assessee-firm was under a deed of partnership executed on May 16, 1964, and is as follows : "1. Shri Nand Lal 7/40 2. Shri Sohan Lal 7/40 3. Shri Har Dyal 7/40 4. Shri Harbans Lal 7/40 5. Shri Ram Lal 5/40 6. Shri Mukand Lal 7/40 On 20th October, 1967, one of the partners, namely, Shri Mukand Lal, died. After his death a new partnership deed was executed on 26th October, 1967, and Shri Rajinder Kumar, his minor son, was admitted to the benefits of the partnership. The assessee filed two returns, one for the period from April 13, 1967, to October 20, 1967, and the other for the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section or an explanation section has to be strictly construed and the meaning as defined or as explained will hold good for purposes of the Act in which the explanation occurs. The assessee may or may not be right in claiming that in civil law it should be deemed that a partnership is dissolved on the death of the partner. Whatever be the position in other laws (laws other than Income-tax Act), the explanation given in the Income-tax Act must be adopted as authoritative, mandatory and final, so far as the application of the Income-tax Act is concerned. We, therefore, have no hesitation in coming to the conclusion that the assessee must fail and it must be held that there was a change in the constitution of the firm within the meaning of section 187(2) referred to above. Even in spite of the very persuasive arguments of the learned counsel for the assessee, he failed to dislodge us from our view expressed above, and, therefore, we hold that in the instant case, the Income-tax Officer was right in making a single assessment because of section 187(2) of the Income-tax Act. The assessee fails on this issue." The assessee then moved the Tribunal under section 256(1) of the Act f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-clauses. 25. (1) Where any business, profession or vocation 176. (1) Notwithstanding anything to which sub-section (3) is not applicable, is contained in section 4, where any discontinued in any year, an assessment may assessment year, the income of the be made in that year on the basis of the income, income of the period from the expiry profits or gains of the period between the end of of the previous year for that the previous year and the date of such assessment year up to the date of discontinuance in addition to the assessment, if such discontinuance may, at the any, made on the basis of the income, profits or discretion of the Income-tax Officer, gains of the previous year......... be charged to tax in that assessment year........... (4) Where the person who was (6) The tax chargeable under this at the commencement of the Indian Income-tax section shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. constituted at the time of making the assessment. (2) Where a person carrying on any business, (2) For the purposes of this section profession or vocation has been succeeded in there is a change in the constitution such capacity by another person, of the firm-- such person and such other person shall, suject to the provisions of (a) if one or more of the partners sub-section (4) of section 25, each be assessed cease to be partners or one or more in respect of his actual share, if any, of the new partners are admitted, in such income, profits and gains of the previous year : circumstances that one or more of persons who were partners of the firm before the change continue as partner or partners after the change ; or Provided that, when the person succeeded (b) where all the partners continue in the business, profession or vocation cannot with a change in their respective be found, the assessment of the profits of the shares or in the shares of some of year in which the succession took place up to them. the date of succession, and for the year preceding 188. Where a firm carrying on a that year shall be made on the person succeeding bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intly and severally liable for the amount of tax, penalty or other sum payable, and all the provisions of this Act, so far as may be, shall apply to any such assessment or imposition of penalty or other sum. (4) Where such discontinuance or dissolution takes place after any proceedings in respect of an assessment year have commenced, the proceeding may be continued against the persons referred to in sub-section (3) from the stage at which the proceeding stood at the time of such discontinuance continuance or dissolution and all the provisions of this Act shall, so far as may be, apply accordingly. (5) Nothing in this section shall affect the provisions of sub-section (6) of section 159. 189. (1) Where any business or profession carried on by a firm has been discontinued or where a firm is dissolved, the Income-tax Officer shall make an assessment of the total income of the firm as if no such discontinuance or dissolution had taken place, and all the provisions of this Act, including the provisions relating to the levy of a penalty or any other sum chargeable under any provision of this Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is not covered by the provisions of the Income-tax Act. Though a particular firm, in view of the provisions of section 42(c) of the Indian Partnership Act, may stand dissolved, but if we come to the conclusion that such a case is covered by the provisions of section 187 of the Act, the assessee cannot get the benefit of the said dissolution of the firm for the purposes of the Income-tax Act. "We are, however, unable to agree with this line of approach. In the first place, there is no provision in the Income-tax Act as to what happens to a firm whose partner dies. Necessarily, therefore, reference has to be made to the Partnership Act. In this connection we would like to refer to the decision of the Supreme Court in Dulichand Laxminarayan v. Commissioner of Income-tax [1956] 29 ITR 535, 539 540, 541, 542 (SC). Das C.J., who spoke for the court, observed : Section 26A of the Act quoted above postulates the existence of a firm, for otherwise no question of its registration can possibly arise. The Act, however, does not indicate what a firm signifies or how it is to be constituted. Indeed section 2(6B) of the Act, clearly provides, inter alia, that 'firm' and 'Partnership' have t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he application of that definition to the word 'persons' occurring in section 4. Is there, however, anything repugnant in the subject of partnership law, which will exclude application of that definition to section 4 ? As pointed out in Lindley on Partnership., 11th edition, at page 153, merchants and lawyers have different notions respecting the nature of a firm. Commercial men and accountants are apt to look upon a firm in the light in which lawyers look upon a corporation, i.e., as a body distinct from the members composing it. In other words, merchants are used to regard a firm, for purposes of business, as having a separate and independent existence apart from its partners. In some systems of law this separate personality of a firm apart from its members has received full and formal recognition, as, for instance, in Scotland. That is, however, not the English common law conception of a firm. English lawyers do not recognise a firm as an entity distinct from the members composing it. Our partnership law is based on English law and we have also adopted the notions of English lawyers as regards a partnership firm. Some of the mercantile usages relating to a firm have, however, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitute the firm. In other words, a firm name is merely an expression, only a compendious mode of designating the persons who have agreed to carry on business in partnership. According to the principles of English jurisprudence, which we have adopted, for the purposes of determining legal rights 'there is no such thing as a firm known to the law' as was said by James L.J., in Ex parte Corbett : In re shand [1880] 14 Ch D 122, 126 (CA). In these circumstances to import the definition of the word 'person' occurring in section 3(42) of the General Clauses Act, 1897, into section 4 of the Indian Partnership Act will, according to lawyers, English or Indian, be totally repugnant to the subject of partnership law as they know and understand it to be. It is in this view of the matter that it has been consistently held in this country that a firm as such is not entitled to enter into partnership with another firm or individuals. It is not necessary to refer in detail to those decisions many of which will be found cited in Jabalpur Ice Manufacturing Association v. Commissioner of Income-tax [1955] 27 ITR 88 (Nag) to which a reference has already been made. We need only refer to the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (2) of section 187 of the Act and it has been rightly held by the authorities below that this constituted a change in the constitution of the firm." These observations, in our opinion, do not lay down the correct proposition of law, keeping in view the scheme of the Income-tax Act. Sections 187 to 189 are in Chapter XVI headed : "Special provisions applicable to firm." Part A of this Chapter deals with assessment of firms, Part B with its registration and Part C deals with changes in constitution, succession and dissolution. This part thus deals with the situations, namely, change, succession and dissolution of a firm; change in constitution of a firm implies that the firm which the Income-tax Act treats as a taxable entity has not ceased to exist and only one or more of its partners have ceased to be its partners or some new partners have been added to it. Succession implies that the business of the firm has passed over to another firm, and the case is not one of change in the constitution of the firm, implying thereby that by mere change in the constitution of the firm a case of succession does not arise. Succession would mean passing over the business of the firm from o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, in its relation to assessment of the income of a firm. A firm whether registered or unregistered is recognised under the Act as a unit of assessment (sections 3 and 2(2)) and its income is computed under clauses (3) and (4) of section 23 as the income of any other unit. Section 25(1) relates to assessment in the case of a discontinued business --whether the business is carried on by a firm or by any other person ... Then there is the special provision relating to assessment when at the time of making an assessment it is found that a change has occurred in the constitution of a firm, or a firm has been newly constituted: section 26(1). The date on which the change has occurred is immaterial: it may be in the year of account, in the year of assessment or even after the close of the year of assessment. The Income-tax Officer has under section 26(1) to assess the firm as constituted at the time of making the assessment, but the income, profits and gains of the previous year have, for the purpose of inclusion in the total income of the partners, to be apportioned between the partners who were entitled to receive the same. Sub-section (2) of section 26 relates to ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uccession to the business. Cases of reconstitution of the firm or succession to the business of the firm are covered by section 26(1) and (2)." In Hoshiarpur Electric Supply Co. v. Commissioner of Income-tax [1971] 79 ITR 164 (Punj), the question was totally different, and the provision with which we are concerned never fell for consideration. The question was whether there was a transfer of business, and it was held that there was no transfer of business. The decision in R. B. Jessa Ram Fateh Chand v. Commissioner of Income-tax [1971] 81 ITR 409 (All), in our opinion, does not lay down the law correctly. Of course, this decision does support the view that the learned judges took in Dharam Pal Sat Dev's case [1974] 97 ITR 302 (Punj). We are, therefore, of the view that the decision in Dharam Pal Sat Dev's case [1974] 97 ITR 302 (Punj) does not lay down the correct law and needs reconsideration, and that is why we have recommended that this is a matter which should be decided rather authoritatively. We, therefore, direct that the papers of this case be laid before the learned Chief justice for constituting a Bench, at least of five judges. We further direct that this matter be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect from October 21, 1967, vide partnership deed dated October 26, 1967. These contentions were repelled by the learned Tribunal and at the instance of the assessee-firm it has referred the following question of law to this court for its opinion: "Whether, on the facts and in the circumstances of the case, one assessment for both the periods was justified in view of the provisions of section 187(2) of the Income-tax Act, 1961?" The reference came up before Mahajan J. (as the learned Chief justice then was) and Pattar J. Before the Bench it was contended on behalf of the revenue that the matter was concluded against the assessee-firm by a Division Bench judgment of this court in Dharam Pal Sat Dev v. Commissioner of Income-tax [1974] 97 ITR 302 (Punj). The Bench noticed that the view taken by the Bombay High Court in Bhausa Ganusa Pawar and Co. v. Commissioner of Income-tax [1966] 62 ITR 75 (Bom) was not brought to the notice of the Division Bench which decided Dharam Pal Sat Dev's case [1974] 97 ITR 302 (Punj) and observed that in the latter case certain assumptions had been made regarding the non-application of the provisions of the Indian Partnership Act to the cases arising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm to be carried on or for the partners to carry it on in partnership. This provision makes it clear that in any of the aforementioned contingencies, the firm shall stand compulsorily dissolved. Section 42 provides that a firm may stand dissolved on the happening of certain contingencies and reads: "(a) if constituted for a fixed term, by the expiry of that term; (b) if constituted to carry out one or more adventures or undertakings, by the completion thereof ; (c) by the death of a partner ; and (d) by the adjudication of a partner as an insolvent. "Section 44 of this Act lays down that at the suit of a partner, the court may dissolve a firm on any of the grounds mentioned therein. A perusal of the aforementioned provisions shows that a partnership has not been invested with the status of a person under this Act and indeed it was so held by the Supreme Court in Dulichand Laxminarayan v. Commissioner of Income-tax [1956] 29 ITR 535, 541. Speaking for the court, S. R. Das C. J. observed as under: "It is clear from the foregoing discussion that the law, English as well as Indian, has, for some specific purposes, some of which are referred to above, relaxed its rigid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he business of a firm, every person who was, at the time of its discontinuance, a partner, is liable, in respect of the income, profits and gains of the firm, to be assessed jointly and severally; (2) each partner is liable to pay the amount of tax payable by the firm; and (3) that the provisions of Chapter IV, so far as may be, apply to such assessment." In other words, this special provision made in the Income-tax Act which ran contrary to the Indian Partnership Act was held to govern the field. The court observed: "In effect, the legislature has enacted by section 44 that the assessment proceedings may be commenced and continued against a firm of which business is discontinued as if discontinuance has not taken place. It is enacted manifestly with a view to ensure continuity in the application of the machinery provided for assessment and imposition of tax liability notwithstanding discontinuance of the business of firms. By a fiction, the firm is deemed to continue after discontinuance for the purpose of assessment under Chapter IV." Similarly, in Commissioner of Income-tax v. S. V. Angidi Chettiar [1962] 44 ITR 739 (SC), it was held that if a registered firm is expos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... special provision was made in a taxing statute in derogation of the provisions of the Indian Partnership Act, the effect was given to it and where no such provision had been made, decision regarding liability for payment of tax was made while taking into consideration the general provisions of the Indian Partnership Act. It is, therefore, obvious that where the provisions of the Indian Income-tax Act are clear, resort cannot be had to the provisions of another statute like the Indian Partnership Act. This view taken by the Division Bench of this court in Dharam Pat Sat Dev's case [1974] 97 ITR 302 (Punj), even though based on a concession, represents the correct statement of law on the subject. It is now to be seen whether the provisions contained in the Act have covered the situation in hand or not. For that purpose some of the provisions of the Act have to be examined. Section 2(31) of the Act defines a "person" to include--(i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person not falling within any o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 170." The purport of section 187(1) is that assessment on the firm which undergoes change in its constitution has to be made as it stands reconstituted at the time of the making of assessment, provided of course one of its old partners continues to be its member at the time of framing the assessment. In a way it gives a special definition of the expression "reconstituted firm". It implies that if the same business continues and at least one of the old partners continues as a partner, the change in the remaining personnel of the firm, whether one or more partners cease to remain partners or some new ones are added, the firm continues to have a legal entity as a unit of assessment. It has already been noticed that if one of the partners dies or an additional partner is introduced in a partnership, a new partnership comes into existence if the case is viewed strictly in accordance with the provisions of the Indian Partnership Act, but the Act makes a thorough departure from these concepts and expressly provides that such changes would ensure continuity of the firm as a unit of assessment. The matter is not res integra and as shall be seen hereinafter is covered by the binding pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of section 26, the Income-tax Officer will, in imposing the penalty, proceed against the firm. If there is discontinuance of the business, penalty will be imposed against the partners of the firm. " If the legislature has succeeded in introducing a fiction by which a dissolved firm is deemed to continue, there appears to be no reason to whittle down the effect of wide and all embracing phraseology employed in section 187 of the Act which allows an assessment to be framed against a reconstituted firm. This section makes no distinction between a going concern which is reconstituted or a firm which is dissolved and then reconstituted. In principle there is no difference between a person who ceased to be the partner of a firm on his being dropped as a partner or on his being declared insolvent. Nor does it make any difference if a person ceases to be a partner because of his death. All that the section requires is that if the same business is continued by a reconstituted firm of which at least one of the old partners continues to be a partner of the new firm, the firm will be treated as a continuing entity in the eyes of law. It is no doubt true that the term "dissolution of a fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there was equally no necessity for bringing on the statute book section 187 of the Act. It is settled law that a legislature is not deemed to waste its words or to say anything in vain much less to bring on the statute book an entire section if its purpose can be served otherwise. Every part of a statute has to be given its full meaning and effect and no clause of it has ordinarily to be rejected as superfluous. If the interpretation advanced on behalf of the assessee is accepted, it will have to be held that sections 187 and 188 are superfluous. I cannot comprehend such a course without entertaining serious apprehensions in my mind. In my considered view, neither on principle nor on a proper construction of the statutory provisions, the view-point canvassed on behalf of the assessee can be considered as correct. The aforementioned considerations apart, a similar matter came up for consideration before a Full Bench of the Andhra Pradesh High Court in Additional Commissioner of Income-tax v. Visakha Flour Mills [1977] 108 ITR 466 (AP) [FB]. After an exhaustive consideration of the entire case law on the subject including Dharam Pal Sat Dev's case [1974] 97 ITR 302, (Punj), the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontract of partnership so provides. But where a firm is dissolved either by agreement of the partners or by operation of law and another firm takes over the business that will be a case of succession governed by section 188 of the Act even though some of the partners of the two firms are common. In the instant case, since the erstwhile firm stood dissolved on the death of one of the partners, the petitioner-firm which took over the same business could be assessed only in accordance with section 188 and a single assessment for the whole year was not valid. " It is significant to mention that the court relied upon the following passage appearing in Ram Narain Laxman Prasad v. Income-tax Officer [1972] 84 ITR 233, 235 (All): There is a change in the constitution of the firm. when there is a change in the number and identity of the partners. Generally, such a change takes place when a person is introduced as a partner into an already existing firm or a partner retires or is expelled or ceases to be a partner on his becoming insolvent or dies, provided that the partners are agreed to the admission of a new partner or the contract of partnership stipulates that the firm will not dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by implication did not create a fiction that the income derived by the old firm became the income of the re-constituted firm and the section only makes the new firm liable to be assessed in respect of the income derived by the old firm. It was further held that such income in the hands of the new firm was to be assessed separately and without clubbing it with the income derived by it during the relevant accounting year. With utmost respect to the learned judges who decided this case, it may be observed that the very premises, upon which they have acted, do not appear to be sound, either on principle or on authority. It has already been noticed that because of the changed definition of the word "person", a partnership firm has been invested with the status of a continuing entity and a unit of assessment. The framing of only one assessment against a person is the normal rule and two assessments can be framed against it only under exceptional circumstances recognised by the Act. If a partnership firm which falls within the definition of the word "person" claims that two assessments should be framed against it, it must show that its case falls squarely within the letter and spirit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suggested that the question aforesaid is either well covered or answered by the earlier decisions of the Supreme Court and, in particular, by Shivram Poddar v. Income-tax Officer [1964] 51 ITR 823 (SC). With respect I say that it is not so. I refrain from any attempt to dissert on these binding precedents because it appears plain to me that if their Lordships of the Supreme Court had either in terms or by necessary implication decided the issue, there could not possibly have been so much divergence of judicial opinion in the various High Courts despite those decisions which were rendered long ago. Without needless elaboration I may say that Shivram Poddar's case [1964] 51 ITR 823 (SC) abovesaid does not seriously advance the contention raised on either side and it is to be hoped that their Lordships of the Supreme Court would soon have occasion to resolve the head-on collision of precedents on this point which is inevitably noticed hereinafter. It was said at the outset that for the construction of section 187 and the two succeeding sections thereto, no reference to the relevant provisions of the Indian Partnership Act need be made and, indeed, it would be almost barred. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any patent conflict in the concepts of "firm" and "partnership" as used in sections 187, 188 and 189 of the Income-tax Act and the corresponding provisions of the Partnership Act. In the absence of such conflict, it appears to me that a reference to the Indian Partnership Act is not only desirable but absolutely necessary to correctly construe the relevant provisions. The judgments of their Lordships of the Supreme Court are legion in which while construing the provisions of the Indian Income-tax Act they have made inevitable and innumerable references to the Partnership Act wherever it becomes necessary to construe the words, "firm", "partner" and "partnership", etc., for assessment under the Income-tax Act. Having cleared the ground regarding the applicability of the partnership law for construing the relevant provisions of the Indian Income-tax Act, it is obvious that the controversy here must inevitably revolve round the language of the provisions of the Income-tax Act. The primary section which calls for interpretation is section 187, though in the context in which it has been laid, a reference to the succeeding sections 188 and 189 cannot possibly be avoided. For facility o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chnically called dissolution are entirely distinct and separate from each other. These are indeed a class apart. The distinction between the two is fundamental and has always been so construed in the law of partnership. It is unnecessary for our purposes to advert to the English law of partnership and the authoritative work of Lindley thereon to highlight the same. It would perhaps suffice to mention that the Indian Partnership Act, 1932, treats the two concepts separately and in sharply divided compartments. Chapter V thereof is headed as "Incoming and outgoing partners" and thus deals clearly with the subject of a change in the constitution of a firm whilst its identity as such remains intact. Sections 31 to 34 provide for the introduction, retirement, expulsion and insolvency of a partner which will lead to a change in the constitution of the firm. Herein, the relationship of partners inter se continues though there are changes in the personnel thereof. It is significant to note that section 32(2) in terms uses the terminology of a "reconstituted firm". On the other hand, the succeeding Chapter VI, as its very heading indicates, relates to the dissolution of a firm. Apart from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, in terms deals with the cases of dissolved firms for the purposes of assessment of income-tax. Therefore, it appears inapt to me to hold that the dissolution of a firm which is expressly provided by a separate section would nevertheless be included in section 187 which, on the face of it, deals with an altogether different subject. Such an interpretation tends to lead to a needless overlapping of the two sections. To my mind, the better view clearly is that dissolution would be governed entirely by section 189 whilst mere changes in the constitution of the firm by section 187 and the question of succession if and when it arises being amply covered by the intervening section 188. It has to be pointedly borne in mind that the word, "dissolution", as such, or even the concept of "dissolution of a firm" is neither defined nor elaborated in the Indian Income-tax Act. If it were so then perhaps an argument could be raised that for the purposes of assessment the Indian Income-tax Act being the special statute would prevail over the Partnership Act, and, therefore, the latter must yield to the former. However, it is the admitted position that the Indian Income-tax Act does not ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach case, whether a firm stands dissolved or whether it involves a mere change in the constitution thereof. It is only when that legal question is answered that the issue arises whether sections 187, 188 and 189 would be attracted thereto for the purposes of income-tax assessment. The other suggested mode of determining this issue by attempting to apply the provisions of section 187(2) appears to me with great respect like putting the cart before the horse. Indeed, the whole of section 187 would be attracted only and come into play on the pre-condition that, in fact, only a change in the constitution of a firm has taken place. Its provisions, as they stand, are not meant to determine what may be called a jurisdictional fact, namely, whether the firm is dissolved or there is merely a change in the constitution thereof. It is only after that basic question is decided by applying the partnership law that the issue would arise whether section 187 is to be applied or the other two sections. On behalf of the revenue an attempt was made to build an argument on the basis of section 187(2) to contend that even dissolution would be within the ambit and scope of section 187 as a whole. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was pointed out that the language of clause (a) is pointedly against the background of the partnership law and ceasing to be a partner would arise from either the retirement, the expulsion or the insolvency of the partner, etc. It does not contemplate ceasing to be a partner because of death. The death of a partner in the eye of law leads to the total dissolution of the firm unless partners have expressly provided to the contrary by their agreement. That is the result of the general law and the particular provisions of section 42 of the Partnership Act. The Income-tax Act does not, either by express provision or by necessary implication, override that situation. As noticed earlier, the concept of the words "firm" and "partnership" in the Income-tax Act is the same and, indeed, identical with that under the Indian Partnership Act in view of the specific prescription of section 2(23). Therefore, it seems inapt to hold that whilst the Partnership Act categorically provides that in the absence of a contract to the contrary the firm would dissolve on the death of one of its partners, yet, under the Income-tax Act, such a death would be a mere change in the constitution of the firm. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordance with section 188 and a single assessment for the whole year was not valid." It is worth noticing that in the above-quoted case reliance was placed, by way of analogy, on the Division Bench judgment of the Bombay High Court in Bhausa Ganusa Pawar and Co. v. Commissioner of Income-tax [1966] 62 ITR 75 (Bom). A Division Bench of the Madras High Court in Kaithari Lungi Stores v. Commissioner of Income-tax [1976] 104 ITR 160 (Mad) has then approvingly followed the majority view in Dahi Laxmi Dal Factory's case [1976] 103 ITR 517, (All). Then, a Division Bench of the Gujarat High Court, after examining the matter on principle has expressly chosen to follow the Allahabad Full Bench, in Additional Commissioner of Income-tax v. Harjivandas Hathibhai [1977] 108 ITR 517 (Guj). The contrary view stands well expressed in the Full Bench judgment of the Andhra Pradesh High Court in Additional Commissioner of Income-tax v. Visakha Flour Mills [1977] 108 ITR 466 (AP) [FB]. It is evident from the above that the Allahabad, Bombay, Gujarat and Madras High Courts have succinctly taken the view that the dissolution of a partnership firm is not a matter covered by section 187 of the Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, caution is necessary in adopting the meaning ascribed to the word in other Acts. (Craies on Statute Law, seventh 1977] edition, page 164). In Macbeth v. Chislett [1910] AC 220 (HL), it was observed by the House of Lords as follows: "It would be adding a new terror in the construction of Acts of Parliament if we were required to limit a word to an unnatural sense because in some Act, which is not incorporated or referred to, such an interpretation is given to it for the purposes of that Act alone." In Adamson v. Melbourne Board of Works AIR 1929 PC 181, 183 the Privy Council said: "...... it is always unsatisfactory and generally unsafe to seek the meaning of words used in an Act of Parliament in the definition clauses of other statutes dealing with matters more or less cognate ........" In D. N. Banerji v. P. R. Mukherjee AIR 1953 S 58, 60 the Supreme Court said: "Though the definition may be more or less the same in two different statutes, still the objects to be achieved not only as set out in the preamble but also as gatherable from the antecedent history of the legislation may be widely different. The same words may mean one thing in one context and another in a d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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