revenue has come up in appeal for assessment year 1982-83. On behalf of revenue, Shri Ruhela, learned departmental representative, submitted that firm had large outstanding tax arrears. Certain properties of firm were attached for collection of tax and were sold by public auction. assessee's immovable property, where its office and factory were located, were disposed of partly for Rs. 5,72,000 on 5-3-1982 by public auction. On behalf of assessee, it was contended even before ITO that firm was dissolved long time back and there could be no assessments on firm. ITO, however, mentions that provisions of section 189 of Income-tax Act, 1961 ('the Act') are very clear and, therefore, passes order on assessee- firm. 2. Shri Ruhela, submitted before Commissioner (Appeals), that assessments of firm were done up to 1957-58 only. There was no material o n record to show that any business was carried on thereafter. No assessments were done thereafter, as factory was closed all time. It was also submitted that soon-after discontinuance of business, firm also stood dissolved. It was also submitted that after dissolution of firm, property of firm should belong to partner as co-owner and capital gain, if any, arising therefrom on property, should be treated as gain in hands of individual partners and not on firm. It was also submitted that section 189 has been misapplied and that it is only for purposes of keeping firm alive for recovery of taxes that were due earlier to dissolution. various points raised by assessee were given to ITO for his comments and in respect of certain paragraphs, ITO had submitted that- (1) property was auctioned on 8-3-1982, and, therefore, this has to be treated as sold in assessment year 1982-83; (2) section 189 has been correctly applied to facts of case; and (3) authorised representative has argued without any legal sanctity. It was also submitted by assessee that there were four partners originally in firm, two of whom died subsequently after they had retired from firm. There were only two partners from 11-2-1953. remaining two partners also died about 5-10 years from date of auction. It could, therefore, be construed that only firm had discontinued its business, but that partnership stood dissolved on death of partners. Commissioner (Appeals) on these facts came to conclusion that provisions of section 189 were not applicable and that since no partner existed on date of auction, they having died much before assessment of firm was held to be invalid. 3. Before us, Shri Ruhela submitted copy of IAC's report dated 29-9- 1983 wherein he had categorically stated that there was no dissolution of firm. According to this report, only business seems to have been discontinued. Shri Ruhela relied on provisions of section 47 of Indian Partnership Act, 1932 as also ratio of judgment in Laxminarayan Sawalram v. Dwarkaprasad Rudmal AIR 1964 MP 55 that till firm is fully dissolved and assets are settled, firm shall be deemed to be in existence. 4. On behalf of assessee, Shri Choudhary, learned representative for assessee, submitted that partnership was at will and partners died. This fact has not been disputed. There were only four partners, two of whom retired and there were only two partners remaining from 1957, who also died in 1970's. Shri Choudhary raised question: Can there be any existence of partner when partners, who comprised firm, do not exist? He relied on Addl. Tahsildar v. Gendalal [1968] 21 STC 263 (SC). He again submitted that provisions of section 189 are for limited purposes of recovery of taxes. Recovery of tax is one matter and assessing income of certain assets as belonging to firm after partners having died is another matter. words contain in section 189, sub-sections (3), (4) and (5) were important according to Shri Choudhary. Shri Choudhary also submitted that provisions of section 176(3A) of Act were introduced for taxing income of professional, who ceased to be professional in year of receipt. In instant case, property belonging to firm was sold but partners comprising of firm died about 10 years back. Under these circumstances, he was of view that assessment made on firm is totally invalid. 5. We have heard parties. undisputed fact in instant case is that remaining two partners, who comprised firm from 1953 also died about 5-10 years back. dissolution of firm, which firm has been constituted by partners as at will, is provided for in section 43 of Indian Partnership Act. According to this section, partnership at will can be dissolved by notice served by partner or another partner. In instant case, partner, who can serve such notice died in sequence (sic). Thus, there is no partner remaining, who could issue or dead partner cannot issue any notice. In such situation, section 42 of Indian Partnership Act, clause (c) would come into play, which provides for dissolution of firm by death of partner. Since partners have died, natural corollary is that firm stood dissolved from date of death of partners. Therefore, as on March 1982, when property of firm was sold for recovery of taxes, there was no firm in existence by name of United Trading Co. provisions of section 189 are for purpose of treatment under Act up to date of dissolution. Till date of dissolution, partners of firm shall be deemed to be in existence and assessments could be made on them though such assessments are passed subsequent to dissolution of firm. Similarly, if there is any recovery to be made in respect of taxes, then section provides that liability of partners jointly or severally and also provides attachment of properties of firm. All these provisions are limited to and in relation to various proceedings on firm made for various transactions up to date of dissolution of firm. order passed by ITO would have been valid had property been sold during lifetime of partners and recoveries effected thereon. As far as recovery of taxes from out of rights by means of provisions of section 189, but as far as assets that are concerned in respect of capital gains on sale of property, assessment is bad in law and could not have been effected at all on firm as there was no firm in existence on date of sale of property. order passed by Commissioner (Appeals) is, therefore, upheld. 6. departmental appeal is thereby dismissed. *** INCOME TAX OFFICER v. UNITED TRADING COMPANY