Law:

Section:

section 184(7) of the Income-tax Act, 1961 - Firm - Registration - Continuation of - According to terms of partnership deed in case of death of any partner, assessee-firm was not to be dissolved but his successors or representatives were to be admitted in his place - One of partners died on 2-10-1974 - Assessee claimed status as registered firm for assessment year 1975-76 for which accounting period ended on 13-11-1974 - Tribunal held that assessee was entitled to status of registered firm and continuation of its registration only up to date of death of partner - Whether Tribunal was justified - Held, yes Facts The assessee claimed status as a registered firm in its return filed for the assessment year 1975-76 for which the accounting period ended on 13-11-1974. One of the partners of the firm died on 2-10-1974. According to the terms of the partnership deed in case of death of any partner, the firm was not to be dissolved but the successors or representatives of the deceased partner were to be admitted in the firm. The ITO treated the assessee as an unregistered firm for the entire period. On appeal, the AAC reversed the ITO's order and held that the assessee-firm was entitled to the status of a registered firm for the entire accounting year, i.e., even for the period subsequent to the death of the partner. The Tribunal, however, modified the AAC's order and held that the assessee was entitled to the status of a registered firm and consequently continuation of its registration, only up to the date of death of the partner. On reference : Held There was no flaw in the Tribunal's conclusion that the assessee-firm was entitled to continuation of registration up to the date of the partner's death. Consequently, the Tribunal was justified in its conclusions. B.K. Rawat for the Applicant. B.L. Nema for the Respondent. JUDGMENT Verma, CJ. - This is a reference under section 256(1) of the Income-tax Act, 1961 ('the Act), at the instance of the revenue to answer the following question of law, vis.: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in directing the ITO to allow continuation of registration till the date…

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