Prakash Krishna, J. - (1.) The Income Tax Appellate Tribunal, Allahabad has referred the following question of law under Section 256 (1) of the Income Tax Act, 1961 (here in after referred to as the Act) for opinion to this Court: "Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that there was no asessment or re-assessment of the firm or reduction or enhancement in the income of the firm and that the provisions of Section 155(1) had no application to the instant case?"
(2.) The reference relates to the assessment year 1971-72. The assessee respondent was one of the partners in M/s. Sanjai Engineering Corporation in the assessment year 1971-72 in question. M/s. Sanjai Engineering Corporation was initially assessed for the relevant assessment year as unregistered Firm (URF). However, in appeal filed under Section 184 (7), it was held that the said firm is entitled for registration under the Income Tax Act and the order was passed accordingly. The assessment for the assessment year in question was completed on 30th October, 1976 in respect of the assessee wherein his share from the said firm was taken as "URF". There were other firms also lamely M/s. Mannu Lal Kedarnath & Sons and M/s. Mannu Lal Kedarnath and Co. These firms were unregistered firms and the shard of the assessee was taken at nil. However, in view of the subsequent order parsed under Section 184 (7) in appeal treating M/s. Sanjai Engineering Corporation as registered firm by the appellate authority, the Income Tax Officer issued notice under Sections 154 & 155 of the Act on 28.11.1981. None appeared on behalf of the assessee before the Income Tax Officer in response to the notice; and consequently the Income Tax Officer determined the share of the assessee in M/s. Sanjai Engineering Corporation, M/s. Mannu Lal Kedarnath & Co. and M/s. Mannu Lal Kedarnath & Sons. In latter two firms the determined share was taken into consideration for rate purposes. The assessment order which was made subsequently was challenged unsuccessfully by the assessee in appeal. However, before the Tribunal, in further appeal, the assessee raised a plea about the nonapplicability of Section 155 of the Act on the ground that the Section 155 had no application, since there was no assessment or reassessment of the firm, nor it is a case of any reduction or enhancement made in the income of the firm. This plea Was accepted by the Tribunal. The relevant portion is quoted below: "We have considered the rival submissions as also the decision referred to above. Section 155 had no application to the facts of the case, since there was no assessment or reassessment of the firm nor it was a case of any reduction or enhancement made in the income of the firm."
(3.) Heard Shri shambhu Chopra, the learned standing counsel for the department. None appeared on behalf pf the assessee in spite of notice, sent by the office Section 155 of the Act as it stood at the relevant time, its relevant portion is quoted below: "Section 155. Other Amendments (1) Where in respect of any completed assessment of a partner in a firm it is found (a) on the assessment or reassessment of the firm, or (b) (b) on the reduction or enhancement made in the income of the Firm under the subsequent......or .........................................., that the share of the partner in the income of the firm has not been included in the assessment of the partner or, if included, is not correct, the Assesment Officer may of amend the order of the assessment of the partner with a view to the inclusion of the share in the assessment or correction thereof...........";