Law:

Section:

Section 256, read with section 3, of the Income-tax Act, 1961 - Reference - Question of fact - Assessment years 1981-82 and 1982-83 - Assessee-firm consisting of four partners closed down its business on 31-3-1980 - Two of partners constituted a new partnership with effect from 15-5-1980 and new firm opened its accounts on 15-5-1980 and closed them on 30-6-1981 - Assessee-firm did not file return for assessment year 1981-82 and filed a return in assessment year 1982-83 for a period from 15-5-1980 to 30-6-1981 claiming that assessee-firm was dissolved on 31-3-1980 and firm which came into existence on 15-5-1980 was a new firm and as it commenced business on 15-5-1980 and closed it on 30-6-1981, there was no necessity to file a return for assessment year 1981-82 - Tribunal agreed with assessee that there was dissolution of firm on 31-3-1980, but relying upon language of section 3 held that assessee could not choose to have previous year of 13½ months and assessee was bound to file a return for assessment year 1981-82 disclosing income for the period 15-5-1980 to 31-3-1981 and that next previous year would commence on 1-4-1981 and end on 31-3-1982, which would fall within assessment year 1982-83 - Whether any question of law arose from order of Tribunal - Held, no FACTS The assessee-firm consisting of four partners closed down its business on 31-3-1980. Two of the partners constituted a new partnership with effect from 15-5-1980 and the new firm opened its accounts on 15-5-1980 and closed them on 30-6-1981, after a period of 13-1/2 months. The assessee did not file any return for the assessment year 1981-82 and filed a return for the assessment year 1982-83 for a period from 15-5-1980 to 30-6-1981 claiming that the assessee-firm was dissolved on 31-3-1980 and the firm which came into existence on 15-5-1980 was a new firm and as it commenced business on 15-5-1980 and closed it on 31-6-1981, there was no necessity to file a return for the assessment year 1981-82. The ITO did not agree with the assessee and held that there was no dissolution of the firm on 31-3-1980 but it was merely a reconstitution and, therefore, the assessee was bound to file a return for the…

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