JUDGMENT B.P. Jeevan Reddy, C.J.
1. The only question raised in this petition is whether the appellate authority had the power to direct the Income-tax Officer to make two assessments, one for the period January 1, 1977 to October 25, 1977, and the other for the period October 26, 1977 to December 31, 1977. The assessee was a partnership firm comprising two partners. One of them, Bidhi Chand Gupta, died on October 25, 1977. Evidently, there was no provision in the deed of partnership that, even after the death of one partner, the partnership will continue with his heirs. A fresh partnership was entered into with surviving partners. In those circumstances, the assessee submitted that two assessments must be made with respect to the said two periods. The Income-tax Officer, however, did not agree and made one assessment for the entire calendar year (previous year). Against the said order, the assessee filed an appeal which was allowed and the Income-tax Officer was directed to make two separate assessments for the two periods. The assessee carried the matter to the Income-tax Appellate Tribunal contending that the appellate authority had no jurisdiction to direct a fresh assessment to be made, inasmuch as an assessment on that date was barred by Section 153(1). The Tribunal did not agree, whereupon the present reference was obtained under Section 256(1). The question referred is :
"Whether, on the facts and in the circumstances of the case and in view of the time limit prescribed under Section 153(1) of the Income-tax Act, 1961, for completing the assessments, the Appellate Tribunal was justified in law in upholding the order of the Commissioner of Income-tax (Appeals) directing the Income-tax Officer to make two separate assessments for the periods January 1, 1977, to October 25, 1977, and October 26, 1977, to December 31, 1977 ?"
2. Learned counsel for the assessee fairly brought to our notice Subsection (3) of Section 153 which clearly provides for such a situation. Subsection (3) reads as follows ;
"(3) The provisions of Sub-sections (1) and (2) shall not apply to the following classes of assessments, reassessments and recomputations which may, subject to the provisions of Sub-section (2A), be completed at anytime -
(i) where a fresh assessment is made under Section 146 ;
(ii) where the assessments, reassessments or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under Sections 250, 254, 262, 263 or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act;
(iii) where, in the case of a firm, an assessment is made on a partner of the firm in consequence of an assessment made on the firm under Section 147".
3. It is evident from a reading of Sub-section (3) that the limitation prescribed in Sub-section (1) does not apply where an assessment is made in consequence of or to give effect to any finding or direction contained in an appellate order. It cannot, therefore, be said that the appellate authority had no power to give the direction it did.
4. The reference is, accordingly, answered in the affirmative, in favour of the Revenue and against the assessee. No costs.