Assessment split upheld for firm after partner's death. Referral to High Court for clarity on legal question.

The Tribunal upheld the CIT(A)'s decision to conduct three separate assessments for an assessee firm following changes in its constitution due to a partner's death. Despite a rejected reference application by the Revenue, the Tribunal decided to refer the case to the High Court based on the legal necessity, emphasizing the need for clarity on the legal question despite conflicting decisions from other High Courts. The case was remanded for further proceedings in light of the referral decision.

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Issues:
1. Whether the Tribunal was correct in upholding the CIT(A)'s decision to make three separate assessments of the assessee firm instead of one assessment for the entire accounting year.
2. Whether the reference application to the Hon'ble High Court of Gujarat is required in this case.

Analysis:
1. The case involved a firm where one partner died, leading to changes in the firm's constitution. The remaining partners admitted the deceased partner's widow and her minor son to the benefits. Subsequently, the firm dissolved, and a new firm was constituted with two surviving adult partners and the minor. The minor later became a major and elected to continue as a full-fledged partner. The Income Tax Officer (ITO) rejected the claim for three separate assessments and made only one assessment for the entire accounting period. The CIT(A) allowed the appeal, directing three separate assessments based on a decision of the Gujarat High Court. The Tribunal upheld the CIT(A)'s decision, citing the same case law. The Revenue filed a reference application to the Tribunal, which was rejected. However, a difference of opinion arose among the Tribunal members regarding whether the reference should be made to the High Court.

2. The Accountant Member rejected the reference application, considering the matter covered by the High Court decision and the undue burden on the individual assessee due to litigation. In contrast, the Judicial Member suggested making the reference due to the presence of a legal question without a Supreme Court decision. The Tribunal, following the precedent set by the Gujarat High Court, decided to refer the matter despite the differing views of the members. The Tribunal emphasized the necessity to refer the case based on the legal requirement, even if there were conflicting decisions from other High Courts. The case was sent back to the bench for further proceedings in light of the reference decision.

This detailed analysis of the judgment highlights the issues, the factual background, the legal arguments presented, and the Tribunal's decision-making process, culminating in the referral of the case to the High Court for consideration of the legal question at hand.

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