- (1.) The Income-tax Appellate Tribunal, Delhi, has referred the following two questions of law under Section 256(1) of the Income-tax Act, 1961, hereinafter referred to as "the Act", for the opinion of this court : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that even if there was merely a change in the constitution of the firm within the meaning of Section 187(2) of the Act, the Income-tax Officer was duty bound in law to make the separate assessments in respect of the two periods and in further directing the Income-tax Officer to exclude from the assessment the income pertaining to first period ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in directing the Income-tax Officer to allow renewal of registration for the assessment year under consideration in respect of the previous year period from May 1, 1974, to March 2, 1975 ?"
(2.) Briefly stated the facts giving rise to the present reference are as follows : The respondent-assessee is a firm. The reference relates to the assessment year 1976-77, the previous year used to be from May 1 to April 30, i.e., from May 1, 1974 to April 30, 1975. The respondent-firm was constituted in terms of the deed dated May 1, 1979, consisting of four partners out of which two partners, namely, Om Prakash and Laj Kumari retired on March 2, 1975, and with effect from March 3, 1975, two minors, namely, Alok and Anupam were admitted to the benefits of partnership on March 3, 1975. However, on April 26, 1975, one of the existing partners, Laxman Dass, committed suicide. The respondent closed its accounts for the year May 1, 1974, up to April 25, 1975. It furnished two returns of total income, i.e., one for the year May 1, 1974, to March 2, 1975, and the other relating to the period March 3, 1975, to April 25, 1975, and claimed that it is a case of succession and, therefore, in view of the provisions of Section 188 of the Act two assessments should be made. It may be mentioned here that up to the assessment year 1975-76, the respondent-firm had been granted registration/renewal of the registration. For the assessment year 1976-77, the respondent had filed an application in Form No. 11A on September 29, 1976, seeking registration. It has filed declaration in Form No. 12 on June 30, 1975, to the effect that there have been no changes in the partners or in the profit sharing ratio during the period May 1, 1974, to March 2, 1975.
(3.) The Income-tax Officer was of the opinion that it is a case of change in the constitution of the firm in terms of Section 187 of the Act and, therefore, only one assessment, not two assessments should be made. He also rejected the application for grant of registration filed in Form No. 11A of the Act as he did not condone the delay. However, he did not pass any order on the application filed in Form No. 12 of the Act.;