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TMI Blog1991 (12) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... s M.K. Mody earlier constituted a partnership with Mrs. Ellen K.K. Mody (hereinafter this is to be referred as "old firm"). Mrs. Ellen died on 12-1-1974. The duration of the partnership was "at will". On the demise of Mrs. Ellen K.K. Mody, the firm was said to have been dissolved. The fresh deed of partnership was executed on 18-1-1974. It was mentioned in the said deed that the earlier firm was dissolved on 12-1-1974. 4. The business of the old firm was exhibition of cinema pictures at Bombay and Calcutta. The firm was owning theatre at Bombay by the name 'New Empire' and in Calcutta, one by the name 'Elite' and another by the name 'Minerva'. The new firm continued the same business. 5. Consequent upon the demise of Mrs. Ellen K. Mody, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CBDT's order covers the case of new firm also, as new firm cannot be construed to be a distinct entity. 9. The assessee challenged the jurisdiction on the ground that the old firm was dissolved and new firm was a "distinct entity". The case of the new firm is not covered by the order of the CBDT. 10. Shri Mathur, ld. counsel for the assessee, contended that since the order of assessment was passed without jurisdiction, the same should be treated as void ab initio. According to ld. counsel, CBDT issued orders in relation to the old firm. New firm is different from the old firm. It is assessed under a different G.I.R. No. The fact that Income-tax Officer reopened the assessments under section 146 indicates that department treated it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a "person" includes a firm also. It follows that under the Income-tax Act, a firm is treated as a distinct and separate entity, different from the partners constituting it. 13. Where a firm is dissolved either by operation of law or by act of parties and is succeeded by another firm which has, as its partners, one or more partners of the former firm, the question arises whether in such a case there is change in the constitution of the firm as defined in section 187(2) or it is a case of succession covered by section 188? 14. On this question, we are of the opinion, that where the firm is dissolved either by operation of law or by act of parties and thereafter a new firm is formed or old firm is reconstituted so as to include one o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the making of the return. " We find that in the instant case assessee (new firm) has duly filed its return of income. The assessments were completed under section 144. Subsequently these were re-opened under section 146. In view of this fact, in our opinion, the case of assessee does not come within the ken of section 124(5)(b). 18. Under the law, it is a fundamental principle that an order passed without jurisdiction is a nullity. A defect of jurisdiction, cannot be cured even by the consent of the parties. The assessee pointed out that defect of jurisdiction at the embryonic stage. But department proceeded on the basis that the new firm is the continuation of the old firm. Legally this is not correct. New firm is distinct from th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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