Law:

Section:

Section 177 of the Income-tax Act, 1961 [Corresponding to section 44 of the Indian Income-tax Act, 1922], read with section 10A of the Excess Profits Tax Act, 1940 - Association dissolved or business discontinued - Assessment year 1944-45 - Applicant was partner in firm which was assessed as AOP - In a suit filed by firm, it became entitled to certain amount against Government - Said decretal amount was deposited by Government in Court - ITO got attached said decretal amount towards payment of income-tax - Civil Judge directed payment of same to ITO - Thereafter said assessment was set aside under section 27 of 1922 Act - EPTO added to firm's income incomes of two other firms - Applicant filed instant writ petition and sought refund of one-fourth of his share of decretal amount after adjustment of amount due against firm and further setting off income-tax dues on his income as partner - ITO, however, refused to pay said amount on ground that he proposed to appropriate under section 44 of 1922 Act entire balance towards taxes due from other partners in respect of their assessments - Applicant filed writ petition against action of ITO - Whether remedy of applicant would be to approach Civil Judge for direction that attaching creditor, be directed to refund amount and such prayer, if made to Civil Judge, would be considered by him in accordance with law, but applicant was not entitled to any relief in writ petition - Held, yes FACTS The applicant was one of partners of a firm. The ITO assessed the firm as association of persons and demanded excess profits tax and income-tax. In a suit by firm, it became entitled to certain amount against Government. The said decretal amount was deposited by Government in the Court. The income-tax authorities got said money attached for payment of taxes and the Civil Judge directed for payment of same to ITO. On an application under section 27, the aforesaid assessment was set aside. The EPTO acting under section 10A of the 1940 Act added to the firm's income the incomes of the two other firms and made the final assessment. Thereafter, the applicant applied to the Commissioner praying that out of the sum received by the department…

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