R.K.Agrawal, J. - (1.) The Income-tax Appellate Tribunal, Delhi, has referred the following questions of law under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for opinion to this court :-" 1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the two firms were entirely distinct and separate entities and, therefore, on the basis of two returns filed for the periods April 1, 1978 to May 31, 1978, and June 1, 1978 to March 31, 1979 two separate assessments have to be made by the Income-tax Officer ?
(2.) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in upholding the order of the Appellate Assistant Commissioner directing the Income-tax Officer to grant registration to the assessee-firm for the assessment year 1979-80 in question ?" 2. Briefly stated, the facts giving rise to the present reference are as follows : The reference relates to the assessment year 1979-80. The respondent-assessee is a firm carrying on the business of hire-purchase of trucks. Initially the respondent firm was constituted under the partnership deed dated April 1, 1977, and had 12 partners. It was dissolved under a deed of dissolution, executed on June 1, 1978, and another partnership was constituted under a fresh deed of the same date in which six of the erstwhile partners, namely, Smt. Gurjeet Jaggi, Lt. Col. S.S. Gill, S.P.S. Gill, Smt. Rajinder Kaur and Smt. Kulwant Kaur joined the fresh partnership along with two new partners--Sardar Lakhinder Singh and Smt. Harbans Kaur. The respondent filed two returns one for the period April 1, 1978 to May 31, 1978, and the other for the period June 1, 1978 to March 31, 1979. The Income-tax Officer instead of making two assessments, had made only one assessment, treating it to be a case falling under Section 187 of the Act. He also declined the registration and assessed the respondent as an unregistered firm. The respondent, feeling aggrieved, preferred separate appeals -one against the assessment and the other against the order declining registration. The Appellate Assistant Commissioner of Income-tax allowed both the appeals and directed the Income-tax Officer to frame two separate assessments on the basis of the return filed as also to grant registration to the firm. The Revenue's appeal before the Tribunal has failed.
(3.) We have heard Sri Govind Krishna, learned counsel for the Revenue, and Shri Vikram Gulati, learned counsel appearing for the respondent.;