Two-partner firm dissolution on retirement justified fresh registration filing and supported entitlement to registration.

A firm with only two partners is stated to dissolve automatically on the retirement of one partner, so the assessee-firm ceased to exist and a new firm came into existence for the relevant year. On that basis, filing Form No. 11 was treated as the proper course, rather than Form No. 11A for a mere change in constitution. The form was filed within time, and the genuineness of the firm was not in dispute, supporting entitlement to registration for the relevant assessment year.

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Issues: Whether, on the retirement of one of the two partners of a registered firm, the firm stood automatically dissolved so that the assessee was entitled to claim registration in Form No. 11 for the relevant assessment year.

Analysis: A firm consisting of only two partners is automatically dissolved on the retirement of one partner. On that footing, the assessee-firm ceased to exist and a new firm came into existence for the relevant accounting year. The filing of Form No. 11 was therefore held to be the proper course, and the authorities were not justified in treating the case as a mere change in constitution requiring Form No. 11A. The form was filed within time and the genuineness of the firm was not disputed.

Conclusion: The assessee was entitled to registration for the relevant assessment year.

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