Law:

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Section 188 of the Income-tax Act, 1961 - Firm - Succession of one firm by another - One of partners of assessee-firm died - Tribunal held that after date of death of partner, there was a succession of one firm by another under section 188 and, that two separate assessments should be framed on basis of two returns of income filed by assessee - Whether since it was now agreed before High Court that instant case was a case of succession of one firm by another firm and not a case of reconstitution, order of Tribunal was justified - Held, yes Section 185 of the Income-tax Act, 1961 - Firm - Position prior to 1-4-1993 - Whether in view of finding stated under heading 'Firm - Succession of, one firm by another', since application for registration was filed within time, assessee firm was entitled to be treated as registered firm till date of succession - Held, yes FACTS The Tribunal held that after the death of one of the partners of the assessee-firm on 4-9-1973, there was a succession of one firm by another firm under section 188. The Tribunal further held that two separate assessments should be framed on the basis of the two returns of income filed by the assessee. The Tribunal also held that the firm was entitled to be treated as registered firm till the date of succession. On application under section 256(2) : HELD It was now agreed before the High Court that it was a case of succession of one firm by another firm with effect from date of succession, within meaning of section 188 and that it was not a case of reconstitution of firm within meaning of section 187. Therefore, the Tribunal was justified in holding that it was a case of succession of one firm by another and that the two separate assessments should be framed. Since it was found that an application for registration was filed within time, the Tribunal was justified in holding that the firm was entitled to be treated as a registered firm till the date of succession. Note : The decision is in favour of the assessee. JUDGMENT The following four questions were referred to this court in pursuance of a direction of this court under section 256(2): "(1)Whether, on the facts and in the circumstances of the case,…

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