Law:

Section:

Section 187, read with section 185 of the Income-tax Act, 1961 - Firm - Change in constitution of - Assessment year 1976-77 - Assessee-firm consisted of four partners, out of which two partners retired on 2-3-1975 - On 3-3-1975 two minors were admitted to benefits of partnership - On 26-4-1975, one of existing partners committed suicide - Assessee filed separate returns for period upto 2-3-1975 and for period 3-3-1975 to 25-4-1975 and also filed declaration in Form No. 12 - Whether in view of stipulation in partnership that firm should not stand dissolved on death of any of partners but should be continued with legal representatives of deceased partner, and as on 3-3-1975 firm on reconstitution consisted of existing two partners, it was a case falling under section 187, and thus, only one assessment was to be made - Held, yes - Whether since in Form No. 12 assessee had clearly stated that there had been no change in partners or profit-sharing ratio during period 1-5-1974 to 2-3-1975, assessee-firm was entitled to renewal of registration upto 2-3-1975 - Held, yes FACTS The assessee-firm consisted of four partners, out of which two partners, retired on 2-3-1975 and with effect from 3-3-1975, two minors, were admitted to the benefits of partnership. However, on 26-4-1975, one of the existing partners, D committed suicide. The assessee closed its accounts for the year 1-5-1974 to 25-4-1975. It furnished two returns of total income, i.e., one for the year 1-5-1974 to 2-3-1975, and the other relating to the period 3-3-1975 to 25-4-1975, and claimed that it was a case of succession and, therefore, in view of the provisions of section 188, two assessments should be made. Up to the assessment year 1975-76, the firm had been granted renewal of the registration. For the assessment year 1976-77, the assessee had filed an application in Form No. 11A, seeking registration. It filed declaration in Form No. 12 to the effect that there had been no changes in the partners or in the profit sharing ratio during the period 1-5-1974 to 2-3-1975. The ITO was of the opinion that it was a case of change in the constitution of the firm in terms of section 187, and, therefore, only one…

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