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TMI Blog1987 (7) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... the period Chaitra Sud 9 to Aso Vad Amas declaring a total income of Rs. 4,920. The assessee had also filed Form No. 12 for continuation of registration on 20-4-78, (e) on 14-12-1978, the ITO passed a separate order under section 143(1) of Act for the first period on the total income of Rs. 23,100. He however ignored the return filed for the second period. On the same date i.e. 14-12-1978, the ITO passed a separate order under section 184(7) of the Act, granting continuation of registration to the assessee. 3. Thereafter, the CIT initiated proceedings under section 263 of the Act and issued a show cause notice dtd. 27-11-80 on the assessee, the relevant portion of which reads as under :- "On examining the records of the income-tax proceedings in the case of the firm for the assessment year 1978-79, it is seen that the Income-tax Officer has made two separate assessments for the two periods; one assessment up to the date of death of a partner viz. Shri Shantilal Chunilal i.e. up to the period from Kartak Sud 1 to Chaitra Sud 8 of S. Y. 2033 and the other assessment for remaining period of S. Y. 2033. The Income-tax Officer passed the above two assessment orders for two separate pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 110 for the first period i.e., from Kartak Sud 1 to Chaitra Sud 8 of S. Y. 2033 (up to the date of the death of the partner Shri Shantilal Chunilal). (ii) Another one on 29-7-78 declaring income of Rs. 4,920 declaring income from Chaitra Sud 9 to Aso Vad Amas. Only one assessment for the first period was finalised under section 143(1) on 14-12-1978 whereas return of income for the remaining period was ignored. The CIT, Guj-IV, Ahmedabad vide his order under section 23 dt. 4-12-80 has set aside the assessment order finalised on 14-12-1978 and directed to make fresh assessment by combining the income of the above two periods. Notice u/s. 143(2) was therefore issued in response to which Shri S. H. Patel, ITP attended. The total income for both the periods is determined as under : Rs. (i) Income for the first period &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r passed u/s. 184(7) of the Act. In the quantum matter, the AAC directed the ITO to frame two separate assessments for the two periods involved in the following manner :- "The ITO has passed one order dt. 30-3-83 taking income of Rs. 23,100 + Rs. 4,920 = Rs. 28,020 and assigned the status of URF. The ITO is not correct in passing one order and it is not in accordance with the law. Provisions of section 187(2) are not applicable. The partnership deed does not contain any provisions that death of partner could not dissolve partnership. Hence on the death of Shantilal the firm stood dissolved and the business continued after his death amounts to succession. In such events two separate assessments are to be made - CIT v. Sant Lal Arvind Kumar 136 ITR 379 CIT v. Raghumal Ashok Kumar 149 ITR 466 CIT v. Hind Agencies 148 ITR 94 Addl. CIT v. Harjivandas Hathibhai 108 ITR 517 Section 187 has been amended with retrospecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred in law and on the facts of the case in directing that the profits of period before the death of partner Shri Shantilal Chunilal should be taxed in the hands of the predecessor firm whereas the profits of the next period should be taxed in the hands of the successor firm. 2. On the facts and in the circumstances of case, the learned AAC ought to have upheld the order of the Income-tax Officer making a single assessment for both the periods in the status of URF. 3. It is, therefore, prayed the order of the learned AAC may be set aside and that of the Income-tax Officer may be restored to the above extent." 9. The learned representative for the revenue strongly urged that since the assessee had not preferred appeal against the order of the CIT passed u/s. 263 of the Act, the AAC was not justified in directing the ITO to frame two separate assessments for the two periods involved. He, therefore, urged that the order of the AAC in the quantum proceedings should be set aside. The learned counsel for the assessee, on the other hand, submitted that since an appeal is provided against the order of the ITO giving effect to the order of the CIT the fact that the assessee had not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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