Per Shri George Cheriyan, Accountant Member - This appeal is by the revenue. The appeal relates to the assessment year 1980-81. This accounting year was from 1-4-1979 to 31-3-1980 and the assessee was a firm. In the accounting period under consideration, the partners were Ramachandra Rao, Karuna Sagar and Prakash Rayudu. After the finalisation of accounts on 31-3-1980, Prakash Rayudu retired and the firm with two partners, i.e., Ramachandra Rao and Karuna Sagar, continued. It is not in dispute that there was only a change in constitution when Prakash Rayudu went out. It is also not in dispute, as a matter of fact that the revenue has expressly contended in its grounds of appeal and that the change in constitution took place only after the accounting year.

2. Along with the return of income for the assessment year 1980-81, a declaration was filed in Form No. 12 on 25-7-1980. This declaration was signed only by partners Ramachandra Rao and Karuna Sagar or, in other words. Prakash Rayudu was not a signatory. It is not in dispute again that the declaration as filed was in time. On 29-7-1980, Prakash Rayudu wrote a letter to the ITO which read as under:

"I was a partner in the firm M