Law:

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Section 182, read with section 67 of the Income-tax Act, 1961 - Firm - Position prior to 1-4-1993 - Whether provisions mentioned in sections 182 and 67 providing for assessment of registered firm and also its partners did not violate articles 14,19(1)(f) and 19(1)(g) of Constitution of India, and were valid - Held, yes FACTS The petitioner legal practitioner constituted a partnership firm, with another advocate to carry on legal profession. The firm was registered under the Act and continued till 31-3-1978. For the assessment years 1974-75 to 1978-79 the ITO assessed the firm and the share of the partners in the firm was separately assessed to tax. The petitioner filed applications before the ITO under section 154 for rectification of the assessments. It was pleaded that excess tax had been recovered from the petitioner in as much as tax had been recovered from the registered firm as well as from him individually on the same income. The ITO rejected the said application. The petitioner filed revisions under section 264. The Commissioner, however, dismissed the revisions on the ground that the matter did not fall within the ambit of section 264 since it challenged the constitutional validity of a statute. On writ, it was asserted that double assessment on the firm and partners was not possible. The provisions of section 67 and 182 warranting assessment of partners' share income in the firm were void being violative of article 14, 19(1)(f) and 19(1)(g) of the Constitution. It was stressed that section 67 and 182 created obvious discrimination between members of registered partnership firms and members of HUF, partners of unregistered firms and associations of persons. It was unjust, unreasonable and against the fundamental concept of justice and fair play. HELD The charge of tax under section 4, is on every "person", which, under section 2(31), includes, (i) an individual, (ii) a HUF, (iii) a company, (iv ) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person not falling within any of the preceding clauses. Each of these assessable entities is a distinct…

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