SUHAS CHANDRA SEN ,J. - (1.) THE Tribunal has referred the following three questions of law to this Court under s. 256(2) of the IT Act, 1961: "1. Whether, on the facts and in the circumstances of the case and particularly in view of the fact that the assessee itself had declared its status as a firm in the return filed and also filed an application for registration, the Tribunal was justified in holding that the status of the assessee should be taken as that of an association of persons ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that rental income derived from the premises No. 29, Ganesh Chandra Avenue, Calcutta, should be assessed as income from property under s. 22 and not as income from other sources under s. 56 of the IT Act, 1961 ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the provisions of s. 26 of the IT Act, 1961, have application in the asst. yr. 1962-63 ?"
(2.) THE assessment year involved in this reference is the assessment year 1962-63. The relevant facts, as stated in the statement of case by the Tribunal, are as follows : The assessee filed its return of income in the status of a firm. Along with that return, it also submitted an application in Form No. 11 seeking registration. The ITO, by a separate order, refused to grant registration and treated the firm as an unregistered one. The AAC confirmed the order of the ITO. The assessee came on appeal to the Tribunal. It was claimed before the Tribunal that in all the earlier as well as the subsequent years the Department had accepted the position that the correct status of the assessee was of an "association of persons". With regard to the controversy raised in the first question, it cannot be doubted that the Tribunal has the jurisdiction to determine the correct status of an assessee. The Tribunal has noted the fact that the status of the assessee was being taken in all the earlier as well as in the subsequent years by the Department as an "association of persons". The Tribunal has taken a decision which has been consistently accepted by the Department. So, we fail to see how the Department can feel aggrieved by the order of the Tribunal and raise question No. 1. The decision of the Tribunal is consistent with the practice of the Department and cannot be said to be erroneous.
(3.) THE answer to question No. 2 follows logically from the answer to question No. 1. If the assessee has been assessed in the status of an "association of persons" and if such assessment is upheld, then by virtue of s.9 of the Indian IT Act, 1922, the shares of the individuals forming the association being definite and ascertainable, a member of the association has to be assessed individually. There is no reason why the rental income should not be assessed separately.;