Partnership registration continues after a partner's death for the pre-death period where the firm's constitution remains governed by contract.

A partnership firm's registration under the Income-tax Act can continue for the period before a partner's death during the accounting year, because valid registration for an assessment year remains effective unless there is a relevant change in the firm's constitution or partner shares. The effect of section 187(2) is that death of a partner does not, by itself, invalidate registration for the pre-death period, and dissolution is not automatic where the partnership contract provides otherwise. On that basis, registration was permitted up to the date of death and the reference was answered in favour of the assessee.

---

---

Issues: Whether, on the death of a partner during the accounting year, the registration granted to a partnership firm under the Income-tax Act, 1961 could continue up to the date of death for that part of the year.

Analysis: The reference arose under section 256(1) of the Income-tax Act, 1961 and turned on the effect of section 187(2) where there is a change in the constitution of a firm. The controlling principle applied was that registration of a firm, once validly granted for an assessment year, continues unless there is a relevant change in the constitution or shares of the partners. The Court accepted that death of a partner does not by itself invalidate the firm's registration for the period prior to death, and that dissolution does not necessarily take place on death where there is a contract to the contrary.

Conclusion: Registration could be granted for part of the accounting year up to the date of death of the partner, and the question was answered in the affirmative in favour of the assessee and against the Revenue.

---