R.N. Misra, J.
1. On an application of the assessee made under Section 256(1) of the Income-tax Act of 1961 (hereinafter referred to as 'the Act') the Income-tax Appellate Tribunal, Cuttack Bench, has stated this case and referred the following question for the opinion of the court:
' Whether or not, under the facts and circumstances of the case, the continuation of registration for a part of the relevant previous year 1969, viz., till August 31, 1968, for the assessment year 1969-70, was maintainable in terms of 'the provisions of Section 187(1) of the Income-tax Act, 1961?'
2. Assessee is a firm and the relevant assessment year is 1969-70 corresponding to the previous year ending October 31, 1968 Assessee filed its return for the year together with a declaration under Section 184(7) of the Act. Daring the previous year one of the partners, Radhashyam Khandelwal, had passed away on August 31, 1968. The Income-tax Officer found that the assessee had not closed the books of account on that day nor was there any reconstitution of the firm. It was also found that there was no application in Form No. 11A or in Form No. 11 and one single return of income had been filed covering the entire previous year. Registration of the firm was refused and assessment was made in the status of unregistered firm.
3. In appeal, the Appellate Assistant Commissioner found that the firm had originally consisted of four partners, namely, Radhashyam, Jawaharlal, Nirmal Kumar and Syam Sundar, the first two having thirty per cent. interest each and the other two with twenty per cent. interest for each. The said firm had been granted registration for the assessment year 1966-67. Radhasyam died on August 31, 1968. His widow had signed the application in Form No. 12 on behalf of her husband. The firm continued as such by admitting the minor son of Radhashyam to the benefits of the partnership. A formal partnership deed was drawn up on October 26, 1968, making provision for the admission of the minor son of Radhashyam. The Appellate Assistant Commissioner further found that the original partnership deed dated October 27, 1962, remained effective till August 31, 1968. He, therefore, directed that the assessment year in question should, be divided into two parts--one from the commencement of the year up to August 31, 1968, and the other from September 1, 1968, up to October 31, 1968. For the first part of the period registration should have been allowed to the firm and for the second portion assessment should have been completed in the status of unregistered firm. Accordingly, he required the Income-tax Officer to give effect to his direction.
4. The revenue appealed claiming that, as a single return had been filedfor the entire accounting year, it was not open to make two separateassessments for portions of the period covered by the return. Reliance wasplaced on the provision of Section 184(7) of the Act and the decision of theAndhra Pradesh High Court in the case of Commissioner of Income-tax v.Sri Rama Talkies : 87ITR615(AP) . Assessee contended that asingle return was filed, but two accounts were prepared for the periodsending August 31, 1968, and October 31, 1968. It was claimed that distribution of profit among the original partners and the reconstituted partnership had also been made. The Tribunal, however, relied upon the decisionof the Andhra Pradqsh High Court and came to hold that the AppellateAssistant Commissioner was not justified in upholding the claim of registration up to August 31, 1968, and, therefore, reversed his decision andrestored that of the Income-tax Officer.
5. The Income-tax Officer found in this case that the assessee had not closed his books on August 31, 1968, when Radhashyam died and no reconstitution was made during the previous year and there was no application either in Form No. 11 or Form No. 11A. One single return had been filed for the entire previous year. On the assessee's own showing, therefore, the period was not open to bifurcation, that is, one up to August 31, 1968, and the other from September 1, 1968, up to the end of the year. Before the Appellate Assistant Commissioner it was contended by the assessee that the accounts were closed for the period ending October 31, 1968. The profit falling to the share of the deceased Radhashyam, up to August 31, 1968, was credited to his account on pro rata basis and, thereafter, the profit was credited to the account of his minor son, Satyanarayan. Since no fresh deed of partnership was drawn up admitting the minor to the benefits of the partnership, no application was made in Form No. 11A but the application was made in Form No. 12 claiming the benefit of registration up to the period August 31, 1968, when the firm continued as such with all the existing partners. The Appellate Assistant Commissioner observed :
' The contention of the appellant appears to have much force. Since the firm constituted under an instrument of partnership dated October 27, 1962, continued as such till August 31, 1968 and fresh instrument of partnership was drawn up on 22nd October, 1968, the Income-tax Officer was not justified in refusing to grant renewal of registration of the firm for the period ending August 31, 1968, after which the firm should have been treated as unregistered from September 1, 1968, to October 31, 1968. Accordingly, the Income-tax Officer is directed to consider the application for renewal of registration in Form No, 12 filed on September 16, 1969, and to pass separate order and determine the status accordingly. '
6. The appeal before the Tribunal was disposed of by a single member. He held :
' In my view the decision of the Andhra Pradesh High Court squarelyfits in with the facts of the present case. It is an admitted fact that onereturn of income was filed for the whole of the previous year relevant to theassessment year and only two different profit and loss accounts were filed.With regard to the submission that as a result of the death of one of thepartners another firm bloomed up, there is no substance in view of the factthat the same business hereinbefore carried on by a body of individualscompendiously referred to as partners was carried on despite the death ofone of the partners in the same name and style with the minor admitted tothe benefits of the partnership and with varied share ratio. The assessee-counsel's further submission that the treatment accorded to the status,namely, ' registered firm ' as well as 'unregistered firm ', is clearly indicativeof the existence of two different assessees, is also not correct. In myopinion, the Appellate Assistant Commissioner was unjustified to direct theIncome-tax Officer to grant continuation of the partnership for the periodup to August 31, 1968......'
7. Learned standing counsel relied upon the Andnra Pradesh decision while Mr. Pasayat for the assessee placed reliance on two decisions, one of the Gujarat High Court and the other of the Allahabad High Court to which we shall presently advert.
8. The facts of the Andhra Pradesh case, Commissioner of Income-tax v. Sri Rama Talkies : 87ITR615(AP) , are these: The assessee was a registered firm consisting of three partners. The partnership was for a period of 20 years and in the event of death of any partner, the partnership was not to dissolve and it was to continue with the heirs of the deceased partner taking his place. The registration of the firm was continued from year to year. One of the partners died on 15th October, 1963, and for the assessment year 1964-65 (accounting period being 9th October, 1962, to 11th November, 1963) the assessee-firm applied for continuation of registration under Section 184(7) in Form No. 12. The Income-tax Officer refused registration on the ground that the application was not in proper form and that a fresh application for registration should have been filed instead of an application for continuation of registration. The court held that where a firm ceases to exist or is succeeded by a different firm during the course of the previous year, it may be permissible to grant registration for the assessment year in relation to the part of the previous year during which it existed. But where the assessee claims to be the same firm throughout the previous year and submits a single return as if there was only one assessee during the whole of the previous year, registration only can be granted for the whole of the previous year and not for a part of that year. A firm is constituted by its partners and, even if in accordance with the terms of the deed of partnership, a partner is replaced by another, without the firm being dissolved, there is a change in the constitution of the firm for the purpose of Section 184(7) of the Act. The conclusion of the Andhra Pradesh High Court squarely supports the stand of the revenue.
9. In the Gujarat decision cited by Mr. Pasayat for the assessee (Addl. Commissioner of Income-tax v. Harjivandas Hathibai : 108ITR517(Guj) ) the facts are as follows:
The assessee was a partnership firm consisting of four partners, each having one-fourth share. One of the partners died on May 25, 1967, and, thereafter, a new partnership was entered into between the three surviving partners arid the widow of the deceased and a new deed was executed on June 15, 1967. The new partnership was brought into existence from May 26, 1967, under which deed, the widow of the deceased was given 10 per cent. share and the other three had thirty per cent. each. For the assessment year 1968-69, the assessee's contention was that two separate assessments should be made on the firm because on the death of one of the partners, the firm automatically dissolved, since in the deed of the previous partnership there was no provision that on the death of one of the parties, the firm was to continue. It was pointed out that the profits were divided on time basis between the two firms. The Income-tax Officer, however, was of the view that there was a mere change in the constitution of the firm and so the provisions of Section 187 of the Act were attracted and the income of the two periods should be clubbed together.
10. The facts in the Gujarat case are very different from the facts before us. A new firm was reconstituted in that case during the year and the assessee from the very beginning claimed that the two periods have to be treated as different from one another and two assessments must be completed. The ratio indicated in the Gujarat case, therefore, does not throw any light for solution of the problem before us.
11. In the aforesaid Gujarat case, a Full Bench decision of the Allahabad High Court in Dahi Laxmi Dal Factory v. Income-tax Officer  103 ITR 51 was referred to. The facts show that there was a partnership constituted under a deed dated June 21, 1966, with two partners and three minors had been admitted to the benefits of the firm. On the death of one of the partners, the business was taken over by another firm constituted under a deed dated June 28, 1969, consisting of the son of the deceased partner and the other remaining partner as well as three minors admitted to the benefits of the partnership firm. In 1970-71, the petitioner's claim was that on the death of the partner, the old firm stood dissolved on June 21, 1969, and on the following day, the new firm took over the business and, therefore, two assessments should be made, one in respect of the old firm and the other for the new firm for the respective periods for which they were in existence relating to the previous year. The court came to hold that when, of the two partners, one died, the remaining partner could not constitute a firm all by himself and the firm automatically came to an end. The agreement between the partners that on the death of one of them, his legal heir would be taken as a partner does not make the legal heir automatically partner, because he was not bound by the contract to which he was not a party. Section 187 applies only where a firm is re-constituted in accordance with Sections 31 and 32 of the Indian Partnership Act. Where a firm is dissolved either by agreement or by operation of law and another firm rakes over the business, the case would be governed by Section 188 of the Act.
12. The facts of the Allahabad case are so different that the assessee in the present case cannot receive any support from it.
13. It has already been found in this case that the assessee filed one returnfor both the periods which would go to show that there was no claim formaking two separate assessments. The single return for the entire year onthe other hand is indicative of the fact that the business continued till theend of the year in the same manner as up to August 31, 1968, when one of the partners died. In that view of the matter, the assessee's claim to be treated as a registered firm up to August 31, 1968, has no force and the Tribunal, in our conclusion, has come to the correct finding.
14. We would answer the question referred to us in the negative, namely :
On the facts and in the circumstances of the case, the continuation of registration for a part of the relevant previous year was not maintainable. We make no order as to costs.
N.K. Das, J.
15. I agree.