P.P.S. JANARTHANA RAJA, J.

1. The Revenue is on appeal as against the order of the Income Tax Appellate Tribunal, Madras 'A' Bench dated 25.08.2006 in ITA.No.2602/Mds/2004 and dated 31.08.2006 in ITA.No.3246/Mds/04. raising the following questions of law:-

"1. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the assessee's status cannot be changed from Association of persons to firm under Section 143(1) when in fact the assessee had filed its return inducating its status as Firm in Form 3CD?

2. Whether in the facts and circumstances of the case, the Tribunal was right in going into the question of the assessee's status, when the assessee had not filed an appeal raising that dispute before the Tribunal?"

2. The brief facts arising out of the case are as under:-

The issue involved in both the tax case appeals are one and the same and hence, they are taken up together and disposed of by a common judgment. The relevant assessments years under consideration are 2002-03 and 2003-04. The assessee is a partnership firm and had four partners upto 31.01.2001 and was assessed as a firm up to assessment year 2001-02. For the assessment year