Continuation of firm registration on a partner's death upheld up to the date of death under the partnership deed.

A partnership firm's registration could continue up to the date of death of a partner where the deed provided for continuation of the firm on a partner's death. The reference under section 256(1) of the Income-tax Act concerned the period for which the assessee-firm remained entitled to registration during the accounting year. The Tribunal's limited relief was upheld on the facts, and no infirmity was found in restricting continuation only until the partner's death. The answer was therefore against the Revenue and in favour of the assessee.

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Issues: Whether the assessee-firm was entitled to continuation of registration up to the date of death of a partner during the relevant assessment year.

Analysis: The reference arose under section 256(1) of the Income-tax Act, 1961, on a question concerning the duration of registration of a firm where one partner died during the accounting period. The Tribunal had accepted the assessee's claim only up to the date of death, and the Revenue challenged that limited relief. On the facts, the partnership deed contemplated continuation of the firm on the death of a partner, and no infirmity was found in the Tribunal's view that registration could continue until the date of death.

Conclusion: The assessee was entitled to continuation of registration up to the date of death of the deceased partner, and the answer was against the Revenue and in favour of the assessee.

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