M.R. Sharma, J.
1. The firm known as Messrs. Jupiter Foundry and Machines (Knives), Amritsar (hereinafter referred to as 'the assessee'), was constituted under a partnership deed dated September 29, 1964, with four partners, namely, Shri Surinder Singh, Shri Joginder Singh, Shri Gurbachan Singh and Shri Manmohan Singh. On December 27, 1966, Shri Surinder Singh retired and the firm was dissolved. The dissolution deed dated December 28, 1966, shows that the accounts were settled and the remaining partners took over the business including the assets and liabilities of the partnership firm. In other words, they continued to carry on the same business in the same name and style under a new partnership deed of the same date.
2. On September 30, 1967, the assessee-firm as constituted on December 28, 1966, filed a consolidated return showing the income for two periods, that is, from April 1, 1966, to December 27, 1966, and from December 28, 1966, to March 31, 1967. The assessee also filed a declaration in Form No. 12 for continuance of the registration under Section 184(7) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), for the assessment year 1967-68, relevant to the accounting period ending on March 31, 1967. The declaration form was signed by all the three partners and the same was accompanied by a note as follows :
'Although with the change in the constitution, an application for registration has been filed, yet out of abundant precaution, declaration in Form No. 12 is also filed.'
3. The Income-tax Officer found that the assessee-firm had not filed an application for registration before the expiry of the relevant accounting period ending on March 31, 1967. Much later, that is, on December 1, 1970, the assessee filed an application for registration in Form No. 11 along with the partnership deed dated December 28, 1966, with a forwarding letter in which it was contended that since there was no change in the constitution of the firm up to the date of the retirement of Shri Surinder Singh on December 27, 1966, the declaration in Form No. 12 for continuation of registration was filed along with the return of income for the period from April 1, 1966, to December 27, 1966, and that the application in Form No. 11 for the registration of the firm could not be filed before March 31, 1967, due to the confusion and misunderstanding created by the prolonged illness and death of its income-tax adviser, Shri A. C. Kher.
4. In the course of assessment proceedings before the Income-tax Officer, the assessee submitted as follows:
(1) That since the original firm with four partners had been dissolved on December 28, 1966, it was a case of succession and not of change in the constitution of the firm and so two assessments under Section 188 of the Act instead of one assessment under Section 187 of the Act should be framed.
(2) That, in any case, renewal of registration should be granted to the firm for the period commencing from April 1, 1966, and ending on December 27, 1966, under Section 184(7) of the Act.
(3) That there was sufficient cause for condonation of delay in filing the application for registration and registration should be granted to the assessee-firm for the period commencing from December 28, 1966, and ending on March 31, 1967.
(4) That since the assessment of one of the partners, namely, Shri Man-mohan Singh, had already been completed, the registration could not be refused in view of the decision rendered by their Lordships of the Supreme Court reported as Commissioner of Income-tax v. Murlidhar Jhawar and Puma Ginning and Pressing Factory : 60ITR95(SC) .
5. The Income-tax Officer rejected all the four contentions raised on behalf of the assessee. He held that since the case of the assessee was covered under Section 187 of the Act, Section 188 did not apply and only one assessment need be framed. He also held that since there was only a change in the constitution of the firm, renewal of registration could not be granted under Section 184(7) of the Act, for the period from April 1, 1966, to December 27, 1966, and since the assessee had not filed an application in Form No. 11 for the registration of the firm before the expiry of the relevant accounting period, the assessee was not entitled to registration. Last of all, he held that there was no reasonable cause for the condonation of delay of three years in filing the application for registration. As a result of these findings, a single assessment was framed against the firm.
6. On appeal, the Appellate Assistant Commissioner upheld the order of the Income-tax Officer and the second appeal filed by the assessee was also dismissed. However, at the instance of the assessee, the Income-tax Appellate Tribunal, Amritsar, framed the following four questions of law for our opinion under Section 256(1) of the Act:
'(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that this was a case of 'change in the constitution' of the firm within the meaning of Section 187(2) and not of 'succession' of one firm by another firm under Section 188 of the Income-tax Act, 1961?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that renewal of registration could not be granted under law for a part of the accounting period, i.e., for the period from April 1, 1966, to December 27, 1966 ?
(3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was not prevented by any sufficient cause from filing the application for registration before March 31, 1967 ?
(4) Whether, on the facts and in the circumstances of the case, the assessee-firm was entitled to registration under the Income-tax Act, 1961, because one of its partners, Shri Man Mohan Singh, had already been assessed in respect of his share income from the said firm ?'
7. Regarding question No. 1, it may be observed that Section 187(2) of the Act clearly lays down that if one or more of the partners of a firm cease to be its partners or one or more new partners are admitted, in such circumstances that one or more of the persons who were partners of the firm before the change continue as its partner or partners after the change, or where all the partners continue with a change in their respective shares or in the shares of some of them, the firm would be deemed to be reconstituted. In view of this clear position of law, it must be held that it was not a case of 'succession' of the firm as envisaged by Section 188 of the Act and the firm had only been reconstituted and continued in its original name and style.
8. Furthermore, in Dharam Pal Sat Dev v. Commissioner of Income-tax a Division Bench of this court held that the provisions of the Indian Partnership Act can be referred to only if it is found that a particular situation is not covered by the provisions of the Income-tax Act. If two of the partners of a newly constituted firm remain the same after the departure of one of its old partners, the case answers the description of Section 187(2) of the Act which entitles the Income-tax Officer to frame only one assessment. We are bound to follow this view with respect. The same view was taken in Dahi Laxmi Dal Factory v. Income-tax Officer : 103ITR517(All) , Commissioner of Income-tax v. T. Veeraraghavulu Chetty and Sons Co. : 100ITR723(AP) and Kaithari Lungi Stores v. Commissioner of Income-tax : 104ITR160(Mad) . We, accordingly, answer the first question in favour of the revenue and against the assessee.
9. Questions Nos. 2 and 3 can be conveniently dealt with together. It was found as a matter of fact by the Income-tax Officer that no application for registration had been filed by the newly constituted firm before the end of the previous year corresponding to assessment year 1967-68 as required by law, and an application in Form No. i 1 was filed on December 1, 1970, with a prayer that the delay in filing the application should be condoned. The reason advanced for the condonation of the delay was that the income-tax adviser of the firm, Shri A. C. Kher, had died after a prolonged illness and due to some misunderstanding and confusion resulting from his death the application for registration in Form No. 11 could not be presented earlier. The Tribunal has found as a matter of fact that Shri Kher had died in the year 1965. Obviously, therefore, the death of the income-tax adviser of the firm could not have caused any confusion or misunderstanding. Where the Tribunal, which is the final court of fact, on good grounds, comes to a conclusion that no cause is made out for condoning the delay in making an application for registration, no question of law arises for the determination of the High Court. Once it is held that the assessee was not prevented by sufficient cause from making the application before the end of the previous year, it has also to be held in the eyes of law that there was no proper application before the Income-tax Officer for the registration of the firm. In that situation, the question of registration of the firm does not arise at all. However, a reference to Section 184(4) and Section 185(1) of the Act shows that registration can be sought for the whole assessment year and not for a part of the year. We, accordingly, answer questions Nos. 2 and 3 in favour of the revenue and against the assessee.
10. The point raised in question No. 4 is also concluded against the assessee by a Division Bench judgment of this court in Rodamal Lal Chand v. Commissioner of Income-tax [ITR No. 8 of 1974, decided on November 3, 1976) ]. In that case, it was held that even if the assessment of a partner of the firm had been finalised for a particular year, it was still open to the Income-tax Officer to assess a partnership firm as a unit for that year. We, accordingly, answer this question also in favour of the revenue and against the assessee.