Law: Income Tax Act, 1961

Section: 184,185,187,188,184(7),184(8),185(4)

(a) Income-tax----Firm---Registration---Continuation of registration---Change in constitution of firm---Difference between dissolution of a firm-and a change in its constitution--Application in Form NO. 11 -A has to be filed' in case of change in constitution of firm---Registration cannot be continued for a part of previous year up to the date of death of partner on a declaration in Form No. 12---Indian Income Tax Act, 1961, Ss. 184, 185, 187 & 188. (b) Income-tax--- ----Firm---Change in constitution of firm---Dissolution of firm or change in its constitution- --Partnership deed providing that death of a partner would not result in dissolution of firm---Death of a partner during accounting year relevant to assessment year 1978-79---Firm continuing to maintain one account and filing a single return---Death of partner resulted in a change in the constitution of the firm---Indian Income Tax Act, 1961, Ss. 187 & 188. A firm for the purpose of the Income-tax Act, is an assessable entity independent from its partners. For the purposes of computation of taxable income and other purposes a firm is dealt with differently depending on whether the firm is registered or deemed to be registered under the Income Tax Act or is an unregistered firm. Among registered firms there is a distinction in treatment for the purposes of income-tax between (i) a firm which is not dissolved but reconstituted; (ii) a firm which is dissolved, and (iii) a firm where there is change resulting in succession by any other firm. Once a firm is registered, the registration enures for succeeding years without any requirement of fresh registration but subject to declaration required to be submitted in the prescribed Form No.12 that no change has occurred in the constitution of the firm or no change in the shares of the partners had taken place from the last date of the preceding previous year to the last day of the previous year relevant to the assessment year and also to the date of making of the application. Thus, the declaration is required to be made for continued existence of the firm for the whole of the previous year in question. The certificate that is required to be entered under…

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