9911796707
TMI Blog1980 (12) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... requisite deed of partnership was executed during the accounting year in question. Application in form No. 11A and form No. 12 both dt. 1st April, 1974 were filed by the assessee along with the return of income on 18th Jan., 1975. The ITO, however, pointed out that on the death of the partner and the induction of his wife, there was a change in the constitution of the firm while there was no written agreement and, therefore, there was no genuine firm in existence during the accounting year. The ITO was, therefore, of the opinion that the benefit of registration could not be given to the assessee-firm. There was an alternate contention that the benefit may be allowed atleast upto the date of the death of Shri S. Abdul Sattar i.e. upto 30th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion put forward by the Deptl. Representative. 4. On a closer scrutiny of the matter, we find that the Bangalore Bench decision was based on a recent decision of the Madras High Court in Addl. CIT vs. Abdul Karim Co. 1978 CTR (Mad) 150: (1979) 117 ITR 233 (Mad) wherein exactly similar question was before their Lordships. In that case, a partner had executed a release deed on 4th March, 1963 in favour of another partner. However, the two other partners executed a fresh partnership deed only on 1st Jan., 1964. The Tribunal had held that registration could not be granted for the entire period ending 31st March, 1963 on the basis of the deed executed on 1st Jan., 1964. It had, however, confirmed the order of the AAC, allowing registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement in law and it was not possible to bifurcate the two periods. Now, this decision has no bearing on the facts of the present case. Here, there was a perfectly valid agreement of partnership to start with. It was only because of the death of Shri S. Abdul Sattar that the firm stood dissolved. So that upto that date, there was absolutely nothing to stand in the way of the assessee's claim for registration. Under sub-s. (7) of s. 184 of the IT Act, where registration is granted to a firm for any assessment year, it shall have the effect for every subsequent year. This is only subject to two conditions i.e., firstly there is no change in the constitution of the firm or change in the share of profits or loss of the partners as evidenced by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partner in the new firm, but, according to the partnership that had been executed in this case, there was no provision for continuation of the firm on the death of any partner and, therefore, in effect, the firm stood automatically dissolved. According to sub-s. 2 of s. 187, it is only for the purpose of this section that if one or more of the old partners are there, that it amounts to only a change in the constitution and there may be an assessment on the firm found to exist at the time of making an assessment. This, however, would not change the substantive law of partnership and this specific meaning assigned to the term 'change in the constitution' cannot govern the remaining provisions of the law, relating to registration. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
