R.R. Rastogi, J. - (1.) THIS is a reference under Section 256(1) of the I.T. Act, 1961 (hereinafter " the Act "). The brief facts are these, M/s. Omega Sports and Radio Works, Gorakhpure, hereafter " the assessee ", was a registered firm of three partners. On August 19, 1968, two of the partners retired and with effect from the following date, i.e., August 20, 1968, the surviving partner and one another formed the partnership. For the assessment year 1969, the previous year ended on March 31, 1969, the assessee filed two returns and in respect of the first period claimed renewal of the registration and for the latter period a fresh registration. The ITO being of the opinion that there was a change in the constitution of the firm with effect from August 20, 1968, made one assessment for the entire year in the status of a registered firm. The income of the two periods aforesaid was allocated amongst the partners of the firm as existing during the two periods respectively and allowed renewal of registration under Section 184(7) for the first period and for the second period allowed fresh registration under Section 185(1)(a) of the Act.
(2.) NO appeal was filed against that order. Subsequently, the assessee made an application under Section 154 of the Act, requiring the ITO to pass separate assessment orders for the two periods aforesaid. It was contended that a mistake apparent on the face of the record had occurred, inasmuch as only one assessment had been framed for the entire period and, hence, rectification was sought. The ITO did not accept that contention and rejected the application, vide his order dated May 11, 1973. On appeal, the AAC took a contrary view and directed the ITO to frame separate assessments for the aforesaid two periods. The department then took up the matter in appeal before the I.T. Appellate Tribunal. The revenue conceded before the Appellate Tribunal that in view of the Full Bench decision of this court in Dahi Laxmi Dal Factory v. ITO [1976] 103 ITR 517, which is binding in the State of Uttar Pradesh, it may not be possible to argue that one assessment for the entire period was legally justified in the case. It was, however, contended that in view of the fact that the question is highly debatable in nature and the Punjab and Haryana High Court has taken a different view on this matter, recourse to Section 154 of the Act could not be taken. This contention has found favour with the Appellate Tribunal and it has taken the view that even though, because of the fact that the decisions of this court are binding in Uttar Pradesh, it was not possible to hold that an order passed by an authority in the State of U.P. contrary to the ratio of the decision of the Allahabad High Court suffers from a glaring or obvious mistake of law. Since this question was highly contentious, recourse to Section154 of the Act was not justifiable.
(3.) NOW, at the instance of the assessee, the Appellate Tribunal has referred the following question of law to this court. " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the provisions of Section 154 were not applicable in this case ? " We have already narrated the facts of the case above and it would be seen that in view of the decisions of this court in Dahi Laxmi Dal Factory [1976] 103 ITR 517 [FB], CIT v. Kunj Behari Shyam Lal [1977] 109 ITR 154 [FB], the controversy stands concluded that in the event of a change taking place in the constitution of a firm during the course of a year, separate assessments should be framed for the two periods. That being so, in the case of the assessee for the two periods aforesaid separate assessments should have been made. The question, which, however, falls for consideration is as to whether there was a mistake apparent on the record which could be rectified under Section 154 of the Act ?;