R.K.Gulati, J. - (1.) Under Section 256(1) of the Income-tax Act, 1961 (for short "the Act"), the Income-tax Appellate Tribunal has referred the following question of law for the opinion of this court : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in upholding the order of the Commissioner of Income-tax (Appeals) directing the Income-tax Officer to frame two separate assessments for the periods April 1, 1977, to October 10, 1977 and October 12, 1977, to March 31, 1978?"
(2.) The assessee is a firm. The dispute relates to the assessment year 1978-79 with the relevant previous year ending on March 31, 1978. At the inception of the previous year to the assessment year in question, the firm consisted of two partners, viz., Ram Bilas and Prem Kumar. In the midst of the relevant previous year, i.e., October 9, 1977, one out of the two partners died. Three days thereafter, on October 12, 1977, the lone surviving partner joined hands with one Sushil Kumar. A fresh deed of partnership was drawn up to carry on the business of the firm under the same name and style under which the erstwhile firm had carried on its business. Two returns of income, one each in respect of the two broken periods, were filed. The Income-tax Officer, however, framed a single assessment for the entire relevant previous year and clubbed the income of the two broken periods and assessed the tax liability accordingly. He rejected the plea that two separate assessments were required to be made in respect of the two returns.
(3.) On appeal, the Commissioner of Income-tax (Appeals) directed that there ought to have been two assessments. The second appeal filed at the instance of the Revenue was dismissed by the Income-tax Appellate Tribunal. The Revenue having felt aggrieved, got the question of law, set out earlier, referred for the opinion of this court.;