- (1.) These appeals, by certificate granted under Section 261 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") , have been filed by the assessee against the judgment of the Madras High court dated 2/11/1981. By the said judgment the High court has answered the following question referred to it by the Income Tax Appellate tribunal (hereinafter referred to as "the tribunal") against the assessee and in favour of the Revenue: "Whether on the facts and circumstances of the case the revision of assessment under Section 263 by the Commissioner for withdrawing the development rebate granted for Assessment Years 1962-63, 1963-64, 1967-68 and 1968-69 is proper and justified. "
(2.) The assessee was a partnership firm having been constituted on 1/9/19600. It was running a steel rolling mill. Initially, there were four partners, namely, M/s S. L. Nahata, M. S. Bedi, Biharilal and M. K. Raheja, in the assessee firm. Two of the partners, Biharilal and M. K. Raheja, subsequently retired from the partnership and the partnership was reconstituted with the remaining two partners continuing the same business. On 3/3/1968, Shri M. S. Bedi, one of the two partners died. Since only one surviving partner was left the partnership stood dissolved. On 4/3/1968 a new partnership was constituted comprising Shri S. L. Nahata and the legal heirs of Shri M. S. Bedi to carry on the business undertaking previously carried on by the partnership firm of which Shri M. S. Bedi was a partner.
(3.) In these appeals we are concerned with the partnership firm as it existed prior to its dissolution on 3/3/1968. The assessee firm had obtained the benefit of development rebate under Section 33 (1) (a) of the Act during the assessment years in question. Since the partnership stood dissolved on 3/3/1968, before the expiry of the period of 8 years, the Commissioner of Income Tax, in exercise of the powers conferred on him under Section 263 of the Act withdrew the development rebate that had been granted to the assessee for the said assessment years. Feeling aggrieved by the said order of the Commissioner, the assessee filed an appeal before the tribunal which was decided against the assessee. At the instance of the assessee the tribunal referred the question abovementioned for the opinion of the High court.;