MAQBOOL HUSSAIN STONE SLAB SUPPLY COMPANY v. INCOME TAX OFFICER
[Citation -1985-LL-0104]

Citation 1985-LL-0104
Appellant Name MAQBOOL HUSSAIN STONE SLAB SUPPLY COMPANY
Respondent Name INCOME TAX OFFICER
Court ITAT
Relevant Act Income-tax
Date of Order 04/01/1985
Assessment Year 1978-79
Judgment View Judgment
Keyword Tags renewal of registration • retrospective amendment • unregistered firm • form no. 12
Bot Summary: The Tribunal did not accept the above contention in view of he decision of the Full Bench of the Hon ble Madhya Pradesh High Court in Girdhari Lal Nanne Lal vs. CIT 38 CTR 258: 147 ITR 529 and observed that on the death of a partner, there was only a change in the constitution of the firm governed by s. 187 of the IT Act and not a succession as envisaged under s. 188 of the IT Act. In the present miscellaneous application, the assessee submitted that in view of the amendment of s. 187 of the IT Act retrospectively w.e.f. 1st April, 1975 by the Taxation Laws Act, 1984, a mistake has become apparent in the order of the Tribunal which calls for rectification under s. 254 of the Act. The Taxation Laws Act, 1984 w. e. f. 1st April, 1975 has added the following proviso to s. 187 fo the IT Act which reads as under: Provided that nothing contained in cl. After hearing the learned representative of the parties, we are of the opinion that in view of the retrospective amendment of s. 187 of the IT Act w.e.f. 1st April, 1975, wherein it has been laid down that the provisions of cl. As a result of the fiction created by s. 33 of the Taxation Laws Act, 1984 w.e.f. 1st April, 1975, the error in the order of the Tribunal became apparent and such error calls for rectification under s. 254 of he IT Act. In the above decision, their Lordships have clearly held that in view of the retrospective amendment of certain provisions of the Act, an error in the assessment made before the enactment of the amending Act would become apparently erroneous and would be open to rectification under the relevant provision of the Act. Respectfully following the ratio of the above decision and considering sidering the facts of the case, we are of the opinion that in view of the retrospection amendment of s. 187 the firm stood dissolved on the death of its partner, on 9th April, 1977 and two separate assessments should be made in this case i.e., one for the period 1st Sept., 1976 till 9th April, 1977 and the second assessment for the period 10th April, 1977 till 31st Aug., 1977.


P. L. KANOJIA, A. M. : This is miscellaneous application under s. 254 (2) of IT Act filed by assessee seeking to rectify mistake said to be apparent in order of Tribunal dt. 23rd Aug., 1984 in ITA No. 218/Ind/83 relating to asst. yr. 1978- 79. assessee is registered firm. It was earlier constituted with 5 partners out of whom one of partners. Smt. Fatima Begum expired on 9th April, 1971. remaining 4 partners continued business till close of accounting period. No application for registration in Form No. 11 or 11A was filed for period from 10th April, 1977 to 31st Aug., 1977 and it was claimed that only oral agreement was in existence during this period. ITO, in absence of fresh partnership deed and application in From No. 11 or 11A, treated firm as unregistered. This action of ITO was also upheld in appeal. assessee filed second appeal and before Tribunal it was submitted that since application for renewal of registration in Form No. 12 had been filed in time, registration should have been granted to assessee at least upto 9th April, 1977. Tribunal did not accept above contention in view of he decision of Full Bench of Hon ble Madhya Pradesh High Court in Girdhari Lal Nanne Lal vs. CIT (1984) 38 CTR (MP) 258 (FB): (1984) 147 ITR 529 (MP) and observed that on death of partner, there was only change in constitution of firm governed by s. 187 (2) of IT Act and not succession as envisaged under s. 188 of IT Act. Tribunal further observed that in view of decision of Hon ble Madhya Pradesh High Court in Ganesh Dal Mills vs. CIT (1982) 136 ITR 762 (MP) registration cannot be granted for part of year. Accordingly, Tribunal also upheld decision of authorities below in refusing to grant registration to assessee firm in absence of fresh partnership deed and fresh application in Form No. 11-A in respect of period after death of Smt. Fatima Begum, partner. In present miscellaneous application, assessee submitted that in view of amendment of s. 187 of IT Act retrospectively w.e.f. 1st April, 1975 by Taxation Laws (Amendment) Act, 1984, mistake has become apparent in order of Tribunal which calls for rectification under s. 254 (2) of Act. In this connection, it would be pertinent to reproduce submissions of assessee made in paras 4 to 7 of its application: "4. Thus it would be seen that findings of all Revenues authorities were based on provisions of s. 187 (2) of IT Act and Hon ble Tribunal also further took into account decision of M. P. High Court reported in (1985) 147 ITR 529 (MP). However, Taxation Laws (Amendment) Act, 1984 w. e. f. 1st April, 1975 has added following proviso to s. 187 (2) fo IT Act which reads as under: "Provided that nothing contained in cl. (a) shall apply to case where firm is dissolved on death of partner." That by insertion of above proviso in s. 187 (2) of IT Act with retrospective effect i. e. from 1st April, 1975, inevitable consequence is that firm stood dissolved on 6th April, 1977 on death of Smt. Khadeza Begum and, therefore, s. 187 (2) had no application and accordingly firm became entitled to continuation of registration for period From No. 12, filed and income earned during period from 1st Sept., 1976 to 9th April, 1977 requires to be assessed in status of registered firm. It is, therefore, submitted that as result of fiction created by amending Act which made addition of provisio applicable to year under consideration, error in Hon ble Tribunal s order becomes apparent and, therefore, it has to be rectified accordingly. Resultantly it has to be held that firm dissolved on 9th April, 1977 consequent to death fo Smt. Khadeza Begum and hence provisions of s. 187 (2) are not applicable. Consequently, firm is entitled to continuation of registration till 9th April, 1977. assessments also therefore ordered to be made accordingly. assessee relies on decision of M. P. High Court in case of CWT vs. Lalchand Singhai reported in (1983) 140 ITR 314 (MP) for seeking above rectifications, Submitted." At time of hearing of this miscellaneous application, ld. counsel submitted that in partnership deed there was no clause to effect that in event of death of any of partners. firm will not dissolve and, hence, on account of death of Smt. Fatima Begum, partner, on 9th April, 1971, firm was dissolved and, hence, in view of retrospective amendment of s. 187 (2) of IT Act w. e. f. 1st April, 1975 by s. 33 of Taxation Laws (Amendment) Act, 1984, two separate assessments should have been made in this case: i. e., one for period 1st Sept., 1976 to 9th April, 1977 in status of registered firm since application for renewal of registration in Form No. 18 had been filed within time, and second assessment should be made for period 10th April, 1977 to 31st Aug., 1977 in status of unregistered firm since no application in Form No. 11 or 11A was filed in respect of this period. ld. Departmental Representative submitted that there is no mistake in order of Tribunal which calls for any rectification. After hearing learned representative of parties, we are of opinion that in view of retrospective amendment of s. 187 (2) of IT Act w.e.f. 1st April, 1975, wherein it has been laid down that provisions of cl. (a) of sub-s. (2) of s. 187 of IT Act would not apply to case where firm is dissolved on death of partner, there is apparent mistake in order of Tribunal dt. 28th March, 1984 in ITA No. 218/Ind/83 relating to asst. yr. 1978-79. As result of fiction created by s. 33 of Taxation Laws (Amendment) Act, 1984 w.e.f. 1st April, 1975, error in order of Tribunal became apparent and, therefore, such error calls for rectification under s. 254 of he IT Act. above view finds support from decision of Hon ble M. P. High Court in CWT vs. Lalchand Singhai (1983) 140 ITR 314 (MP). In above decision, their Lordships have clearly held that in view of retrospective amendment of certain provisions of Act, error in assessment made before enactment of amending Act would become apparently erroneous and would be open to rectification under relevant provision of Act. Respectfully following ratio of above decision and considering sidering facts of case, we are of opinion that in view of retrospection amendment of s. 187 (2) firm stood dissolved on death of its partner, on 9th April, 1977 and, hence, two separate assessments should be made in this case i.e., one for period 1st Sept., 1976 till 9th April, 1977 and second assessment for period 10th April, 1977 till 31st Aug., 1977. assessment for period 10th April , 1977 till 31st Aug., 1977 should be made in status of unregistered firm since, admittedly, assessee did not file any application in Forms Nos. 11 or 11A nor copy of partnership deed was filed within time. However, in respect of period 1st Sept., 1976 to 9th April, 1977, assessee has claimed that application in Form No. 12 was filed within time and, hence, for this period registration should be allowed to firm. We direct that this fact should be verified and if assessee has, in fact, filed application in Form No. 12 within time and in proper manner, registration should be allowed to assessee firm for period 1st Sept., 1976 to 9th April, 1977. miscellaneous application filed by assessee is, accordingly, allowed and order of Tribunal dt. 23rd Aug., 1984 in ITA No. 218/Ind/83 should be treated as amended, as indicated above. *** MAQBOOL HUSSAIN STONE SLAB SUPPLY COMPANY v. INCOME TAX OFFICER
Report Error