Law: Income Tax Act, 1922

Section: 44,34

Income-tax Act (XI of 1922)----S. 44 (before amendment of 1958)--Partnership-Dissolution-Assessment after dissolution--­Permissibility. After a partnership was dissolved the Income-tax Officer issued a notice of re-assessment under section 34 of the Income-tax Act addressed to "S, partner of the firm B. R. at the time of its dissolution . . . ." S presented an application to the High Court challenging the validity of the notice on the ground that no assessment could be made on a dissolved firm under section 44 (before amendment in 1958) : Field, that even before its amendment in 1958 it was possible under section 44 of the Income-tax Act, 1922 to proceed against the partners of a partnership which had been dissolved and had com­pletely stopped doing business and the notice issued under section 34 was legal. R. N. Bose v. Manindra Lal Goswami (1958) 33 I T R 435 explained. R. N. Bose v. Manindra Lal Goswami (1958) 33 I T R 435 ; Commissioner of Income-tax v. P. E. Polson (1945) 13 I T R 384 and Manindra Lal Goswami v. Income-tax Officer (1956) 30 I T R 550 ref. JUDGMENT The facts in this case are shortly as follows : In the year 1947, the partnership firm of Balmukund Radheshyam came into existence. The petitioner, Shivram Poddar, was a partner of the said firm. It appears from the returns filed by the firm for the years 1949-50 and 1950-51, that the principal place of business of the firm was at No. 138, Cross Street, Calcutta, with branches at Ratlam, Indore and 357 Kalbadevi Road, Bombay. The firm carried on business as commission agent to cotton, sale and pur­chase of cotton and cotton piece goods, and speculation in cotton and silver. It is said that the firm was dissolved in February 1950, and that the notice of dissolution of the firm was duly given to the Income-tax Officer, Special Survey Circle III, Calcutta, by March 1953. This, however, is denied by the respondents. On August 20, 1952, a return was filed in respect of the income of the firm before the Income-tax Officer, Special Survey Circle III, Calcutta, in respect of the assessment year 1949-50. An order of assessment was made on October 28, 1952. It is said that the income-tax assessed was duly…

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