JUDGMENT
Jagannath Shetty, J.
1. The following questions have been referred under section 256(1) of the Income-tax Act, 1961 (“the Act”) :
“(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that on the death of Gunapal, one of the partners, on January 4, 1972, there was only a change in the constitution of the firm and not a dissolution of the partnership ?
(ii) Whether, on the facts and in the circumstances of the case, a single assessment for the full year, viz., July 1, 1971, to June 30, 1972, was justified ?”
(iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee-firm was not entitled to registration for the period July 1, 1971, to January 4, 1972 ?”
2. The assessee is a firm. It was originally constituted by a deed of partnership, dated December 18, 1968, according to which there were 19 partner including one Gunapal Clause (16) of the deed provided as follows :
“If during the continuance of the firm any of the partners shall die or become insolvent or be incapacitated to become a partner, the surviving partners may take the legal heir or heirs of the deceased partner in his place and continue the business. In the event the legal heir or heirs do not wish to join the firm, such deceased partner’s share shall be paid to the legal heir or heirs as may be fixed by the arbitrator appointed by them mutually in instalments together with interest at 9% per annum till the date of full settlement. The first of such instalment shall be paid within a period of 6 months from the date of death of such partner.”
3. Gunapal, died on January 4, 1972. On this death, the accounts were not closed but were continued as if there was a continuation of the firm, the profits up to date of Gunapal were not ascertained and distributed among the partners.
4. The books were continued as if the same firm continued. On Gunapal’s death, his minor son, Randhir, was admitted to the benefits of partnership. A new partnership deed was executed on July 11, 1972. In the preamble of the new deed, it was stated as under :
“Whereas due to death of B. Gunapal, one of the partners, the other partners mutually agreed to admit his minor son, B. Randhir, agreed about 17 years, for the benefits of partnership and to continue the said business and whereas all the above partners have expressed their desire to reduce the terms and conditions of the partnership in writing.”
5. The previous year of the firm for the assessment year 1973-74 was the year ending June 30, 1972. For this year, no application for registration was filed either in Form No. 11 or in Form No. 11A which the firm was required to file, if the old firm had been dissolved and a new firm had come into existence. Only a declaration in Form No. 12 was filed standing that there was no change in the constitution of the firm.
6. Although no application for registration as such was filed, it was claimed before the Income-tax Officer that registration has to be granted at least for the first part of the period, i.e., till the death of Gunapal, viz., for the period from July 1, 1971, to January 4, 1972. But that claim was rejected by the Income-tax Officer by observing that there was only a change in the constitution of the firm. Accordingly, he made a single assessment for the entire previous year relevant to the assessment year 1973-74.
7. He has also refused to grant registration to the firm for the assessment year 1973-74.
8. The assessee appealed to the Appellate Assistant Commissioner of Income-tax, Bangalore, both against the regular assessment as well as against the order under section 185(1)(b). In the appeal against the regular assessment, it was claimed that the Income-tax Officer was not justified in making a single assessment for the entire period. In the appeal against the order under section 185(1)(b), it was contended that at least registration ought to have been granted for the broken period up to the date of death of Gunapal. The Appellate Assistant Commissioner held that in view of clause (16) of the partnership deed, there was no dissolution of the firm. On the question of registration, the Appellate Assistant Commissioner held that it cannot be said that the assessee had complied with the provisions of section as applicable in cases of change in constitution and the annual registration under the Act. So stating, he dismissed both the appeals.
9. The assessee’s further appeals preferred before the Tribunal were also dismissed. The Tribunal held that the original partnership did not stand dissolved on the death of Gunapal. Factually also the Tribunal found that no such dissolution took place as on the death of Gunapal, since, even the accounts were not closed on his death and his minor son was admitted to the benefits of the partnership in his place. Accordingly, the Tribunal held that it was a mere change in the constitution of the firm and a single assessment was rightly made by the Income-tax Officer. On the question of registration also, the Tribunal concurred with the view taken by the lower authorities in refusing to grant registration, even for part of the year up to the death of the partners.
10. The question referred should not detain us any longer, since, the matter has been completely covered by the decisions of this court in CIT v. Shambulal Nathalal [1984] 145 ITR 329 and in CIT v. Sree Durga Enterprises [1984] 145 ITR 351. This court has consistently followed that in a case like this, there could not be a single assessment for the whole year.
11. So far as question No. 3, relating to registration for the period July 1, 1971, to January 4, 1972, is concerned, it is needless to state that if there could be a single assessment for the whole year, there cannot be registration for a broken period. The Tribunal also found factually that there was no dissolution and only a change in the constitution of the same firm. In that view also, there could not have been registration for the broken period.
12. In the result, we answer all the questions in the affirmative and against the assessee.
