Section 187(1) — the law in short
What the courts have decided on section 187(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Statutory position — sections 187, 188, 188A and 189: one assessment on the firm or two
CBDT Circulars & InstructionsCuts both ways
Partners left and joined during the year, and one of them died. Will the department make one assessment on the firm for the whole year or two separate assessments?
One assessment if it is a change in constitution under section 187, two if it is a succession under section 188. Section 187 applies where partners cease or are admitted but at least one pre-change partner continues, or where all the partners continue with a change in their shares; the assessment is then made on the firm as constituted at the time of making the assessment. The dividing line is the proviso to section 187(2): where the firm is dissolved on the death of a partner, clause (a) does not apply, so the case falls to section 188 and separate assessments are made on the predecessor and successor firms in accordance with section 170.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.