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[2007] 292 ITR 561 (CAL.) HIGH COURT OF CALCUTTA G.S. Atwal & Co. (ASANSOL) v. Income-tax Officer ASHIM KUMAR BANERJEE AND TAPAS KUMAR GIRI, JJ. A.P.O. NO. 367 OF 2003 IN W.P. NO. 979 OF 1990 JULY 4, 2007 Section 184 of the Income-tax Act, 1961 - Firm - Assessed as such â–  One 'S' was a partner of firm 'CS.' 'S' retired from the partnership while others continued with some new partners. 'S' later made an application for disclosure of income before the income-tax authority and offered to pay tax on the said amount. It was disclosed in the said petition that the said income was for the assessment years 1958-59 to 1961-62 i.e. the period when 'S' was a partner. The income-tax authority allowed the application by accepting such undisclosed income of Rs. 46.15 lakhs and assessed tax accordingly. The income-tax authority imposed the assessed tax accordingly on the partners including 'S'. When the order was served on 'S', 'S' informed the revenue that he did not get any benefit of the said sum of Rs. 46.15 lakhs and that since he had retired from the partnership long ago such assessment of tax upon him was illegal. He, however, contended that since he was saddled with the liability he should be given appropriate opportunity to pay the said sum by instalment. He also indicated in the said letter that his monthly income was Rs. 4,000 per month and as such it was not possible for him to meet such tax liability of the partnership firm. The income-tax authority thereafter asked the existing partners and the firm to discharge such liability. The firm, along with its existing partners, refused to pay the tax liability imposed upon 'S'. A series of correspondence took place. Reminders were given from time to time. Even then the firm did not discharge such tax liability. Hence, the authority was compelled to attach the outstanding dues of the firm from the garnishee under section 182(4). Held that, admittedly, the undisclosed income was offered for tax by existing partners at a time when 'S' admittedly retired from the partnership. Under the deed of retirement the entire liability was taken over by the existing partner and 'S' was indemnified accordingly. The landed…

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