- (1.) THE Income-tax Appellate Tribunal, Amritsar, has referred the following question of law for the opinion of this court under Section256 (1) of the I. T. Act, 1961 (hereinafter to be referred to as " the Act ") : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in granting registration to the assessee for the assessment year 1967-68 ? "
(2.) BRIEFLY, the relevant facts giving rise to this reference are : Mothoo Ram and Harnam Dass were partners of the firm known as M/s. Mothooram Prem Chand. Its head office was at Phagwara and branches at Quraya and Banga. It was granted registration up to the assessment year 1966-67. Harnam Dass retired from the partnership on May 31, 1966, and died on June 9, 1966. Thereafter, a new partnership came into existence with effect from June 1, 1966, under a partnership deed dated June 29, 1966. In the new partnership there were four partners, namely, Mothoo Ram, Prem Chand, son of Mothoo Ram, Ramesh Kumar and Naresh Kumar, sons of Prem Chand, who had equal share in profits and losses. It continued to carry on the same business in the name and style of M/s. Mothooram Prem Chand (hereinafter to be referred to as " the assessee-firm " ).
(3.) ON March 27, 1967, the assessee-firm filed an application in Form No. 11a for registration for the assessment year 1967-68, relevant to the accounting period from April 1, 1966, to March 31, 1967. The ITO impounded the books of the assessee-firm for the period ending March 31, 1967, on August 28, 1969. The books had not been closed. The assessee, it is stated, made a number of applications to the ITO for returning the books and the inspection of records in order to enable it to file the return of the income. Ultimately, the assessee-firm filed the return of its income on August 26, 1971, after inspecting the record. It declared its income as Rs. 27,580. It, along with the return, filed statements of trading and profit and loss account prepared on estimated basis, and a statement showing the division of profits amongst the partners.;