9911796707
TMI Blog1991 (9) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year 1979-80. The assessee-firm comprised of twelve partners with the constitution as specified in the partnership deed dated 29-6-1971. The firm was following Samvat year as its previous year and the previous year for the year under appeal ended with the Diwali of 1978 (12-1-1977 to 31-10-1978). This previous year was relevant to the assessment year 1979-80. One of the partners, viz. Shri Haridas Ratansey Lalji died on 8-7-1978. Clauses 7 and 8 of the partnership deed dated 29-6-1971 provide as follows : " 7. The death or retirement of any partner shall not dissolve the partnership between the surviving partners who shall continue to carry on business in the same name. But the account of a deceased partner shall be made up as Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 184(7) at the time of passing the assessment order under section 143(3). During the course, of the assessment proceedings for the next assessment year this fact came to the knowledge of the Income-tax Officer that there had been a change in the constitution of the assessee-firm during the assessment year 1979-80 on account of the death of one of the partners and the Income-tax Officer found that the claim for renewal of the registration for that year on the part of the assessee-firm was not proper. Thereupon, after giving the assessee an opportunity of being heard in this regard, the Income-tax Officer cancelled the registration already to the assessee for the assessment year under consideration, i.e., assessment year 1979-80. 5. During t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abad High Court decision in the case of Badri Narain Kashi Prasadv.Addl. CIT [1978] 115 ITR 858 (All.)(FB) ; and (iii) Supreme Court decision in the case of Wazid Ali Abid Ali v. CIT [1988] 169 ITR 761. 7. We have considered the facts and circumstances of the case and given our careful thought to all its aspects and find that this appeal by the assessee can succeed, but only partly. For the proper appreciation of the issues involved in the matter, it will be convenient to reproduce sections 184(7), 185(1) and 186(1) of the Income-tax Act, 1961, which read as under : " 184(7) : Where registration in granted or is deemed to have been granted to any firm for any assessment year, it shall have, effect from every subsequent assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d length and held that that decision rendered in the context of the Indian Income-tax Act, 1922, did not offer any material help to the assessee. We have gone through the relevant part of the impugned order and see no reason to differ with the learned first appellate authority on this aspect of the matter. As regards the other two decisions, a study thereof would reveal that they speak against the assessee rather than support it. The best decision on the point under issue in the present case is found in the pronouncement of the Supreme Court in Wazid Ali Abid Ali's case. That decision of the Supreme Court and the decision of the Allhabad High Court in Badri Narain Kashi Prasad's case endorse the legal position to the effect that normally de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 and pleaded with us to accept his contention that the firm even after the death of one of its partners did not cease to be a genuine firm during the year under appear and, therefore, the registration of such firm could not have validly been cancelled under section 186(1) of the Act. We have given our careful thought to this argument of the learned counsel for the assessee, but find ourselves in agreement with him only partially and not wholly. The word " genuineness " occurring in sub-section (1) of section 185 is connected both with the word " firm " and the words " its constitution ". That provision of section 185 further goes to lay down that what is meant by the constitution of the firm is such constitution as specified in the insrume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We were told that one signature purported to be by Shantikumar Haridas in his own right as partner and the other in his capacity as the legal heir of the deceased partner, Haridas. This manner of making application cannot be held to be acceptable under law. Moreover, the declaration (ii) reproduced above was far from being true inasmuch as on the death of Haridas there had been a change in the constitution of the firm between the period from the last day of the immediately preceding year and the last day of the year relevant to the assessment year under appeal. Thus the assessee could not have been allowed continuance of registration of the firm for the period from the death of the partner, Haridas. But, insofar as the period prior thereto ..... X X X X Extracts X X X X X X X X Extracts X X X X
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