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of <h1>Partner's Death Dissolves Firm - No Agreement Found</h1> The Tribunal held that the death of a partner resulted in the dissolution of the firm unless there was an agreement among the surviving partners to the ... - Issues:1. Dissolution of old firm and constitution of a new firm.2. Eligibility for registration of the firm.Analysis:Issue 1: Dissolution of old firm and constitution of a new firmThe case involved two returns of income filed for different periods under the name of the same firm, claiming a dissolution of the old firm and the constitution of a new one due to the death of a partner. The Income Tax Officer (ITO) rejected the claim, stating it was a mere change in the firm's constitution. The Appellate Assistant Commissioner (AAC) accepted the assessee's claim, ruling that the firm was indeed dissolved, and a new one was constituted. The Department appealed, arguing there was no evidence of dissolution and that the firm continued uninterrupted. The Tribunal held that the death of a partner resulted in the dissolution of the firm unless there was an agreement to the contrary among the surviving partners. As no such agreement was proven, the firm was deemed dissolved, and two separate assessments were ordered based on the returns filed.Issue 2: Eligibility for registration of the firmRegarding the registration of the firm, the ITO denied registration due to a delay in filing the application. The assessee contended that the delay should have been condoned, as the firm's genuineness was not in doubt. The AAC agreed with the assessee, directing the ITO to allow an opportunity to rectify the application. The Department argued that the delay was not condonable, and the provisions of section 185(2) did not apply. The Tribunal held that the delay in filing the application was not a defect that could be rectified under section 185(2). The Tribunal decided to leave the matter of registration open for the ITO to decide on merits during the assessment process, contrary to the AAC's direction. Ultimately, one appeal was dismissed, and another was partly allowed based on these findings.
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