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TMI Blog1987 (7) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee), (b) the assessee was granted registration/continuation thereof from year to year, (c) during the relevant previous year, on Chaitra Sud 8, Shri Shantilal Chunilal expired and the remaining partners carried on business of the partnership, (d) for the year under consideration, on 29-7-1978, the assessee filed two returns; one for the period from Kartak Sud 1 to Chaitra Sud 8 declaring a total income of Rs. 23,110 and the other for the period Chaitra Sud 9 to Aso Vad Amas declaring a total income of Rs. 4,920. The assessee had also filed Form No. 12 for continuation of registration on 20-4-78, (e) on 14-12-1978, the ITO passed a separate order under section 143(1) of Act for the first period on the total income of Rs. 23,100. He howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year 1978-79 is therefore erroneous in so far as it is prejudicial to the interests of revenue. I, therefore, intend to make an order under section 263 of the Income-tax Act, 1961 proposing to set aside the orders of the Income-tax Officer and directing him to re-do the assessments in accordance with law." 4. On the date of hearing fixed by the CIT, no body appeared on behalf of the assessee. As the proceedings were getting time-barred on 4-12-1980, the CIT passed order under section 263 of the Act, exparte. The relevant portion of which reads as under :- "As already stated in the first para of this order, the change in the constitution of the firm occurred on account of the death of the partner. The change so occurred is one as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his order under section 23 dt. 4-12-80 has set aside the assessment order finalised on 14-12-1978 and directed to make fresh assessment by combining the income of the above two periods. Notice u/s. 143(2) was therefore issued in response to which Shri S. H. Patel, ITP attended. The total income for both the periods is determined as under : Rs. (i) Income for the first period 23,100 ------ (ii) Income for the second period 4,920 ------ Total Income 28,020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. CIT v. Harjivandas Hathibhai 108 ITR 517 Section 187 has been amended with retrospective effect from 1-4-1975 by TLA Act, 1984 by adding a proviso to sub-sec. (2) to the effect that the provisions of cl. (a) of the sub-section will not apply to a case where the firm is dissolved on the death of any of the partners. Hence two separate assessments as per returns filed and was done by the ITO by his A. O. dt. 14-12-1978 may be made and inclusion of income of Rs. 4,920 may be deleted and the status of the RF may be assigned. 3. In view of the fact that the partnership deed did not provide for continuation of partnership on death of partner, the profits of period before the death should be taxed in the hands of predecessor firm wherea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the death of the partner in the hands of the predecessor firm. 3. Appeal is allowed." 8. Against the aforesaid orders of the AAC, the revenue has come up in appeal before the Tribunal with the following common grounds :- "1. The learned AAC has erred in law and on the facts of the case in directing that the profits of period before the death of partner Shri Shantilal Chunilal should be taxed in the hands of the predecessor firm whereas the profits of the next period should be taxed in the hands of the successor firm. 2. On the facts and in the circumstances of case, the learned AAC ought to have upheld the order of the Income-tax Officer making a single assessment for both the periods in the status of URF. 3. It is, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. In this way, he supported the order of the AAC in the quantum proceedings. The learned representative for the department in his reply submitted that since the order of the CIT made u/s. 263 of the Act has to be read as a whole and since in his order, the CIT has clearly indicated that there should be one assessment for the two periods involved, the assessee ought to have preferred an appeal against the said order of the CIT before the Tribunal. 10. We have carefully considered the rival submissions of the parties and we find considerable force in the submissions made on behalf of the revenue. It is pertinent to note that in his order made u/s. 263 of the Act, the CIT has clearly indicated that there should have been one assessment for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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