Law: Income Tax Act, 1922

Section: 46(5)

Section 226 of the Income-tax Act, 1961 [Corresponding to section 46(5) of the Indian Income-tax Act, 1922] - Collection and recovery of tax - Other modes of recovery - Deceased 'V' and 'T' were partners in a firm having equal share - On death of partners, firm was dissolved - Later on firm was found liable to pay tax dues - Notices under section 46(5) were issued - Petitioner, one of heirs of 'V', paid tax dues - However, on appeal petitioner became entitled to refund of tax paid - Whether amount was paid by petitioner, after demise of his father and, therefore, no part of refund was due to deceased and same never became part of estate of deceased and question of obtaining succession certificate, did not arise at all - Held, yes - Whether once refund became due it was to be paid to firm and after account were taken and debts of firm had been paid off, if any, money was found due to partners that amount could be appropriated by department for recovery of tax arrears - Held, yes - Whether, therefore, correct legal position was that entire amount must be paid to firm which means, to all legal representatives of two late partners of firm, and it would be after taking accounts that any amount due to late 'T' could be taken hold of by department - Held, yes - Whether in such circumstances, Central Board of Revenue was to be directed to issue directions to its subordinate officers concerned for refund of amount to firm, petitioner - Held, yes FACTS One 'L' and 'T' were the partners of the firm having equal shares. The firm was dissolved in March, 1947. 'V' died in October 1952. The firm was found liable to excess profits tax by the Excess Profits Tax Officer, respondent, for the accounting periods ending March, 1943, 1944, 1945 and 1946. Notice had been issued to the petitioner, the son of deceased 'V'. On appeal the AAC set aside the order of assessment of the excess Profits Tax Officer. This order was finally confirmed by the Tribunal on an appeal by the first respondent and as a result of these orders, according to the petitioners, they became entitled to the refund. When the actual refund was asked for by petitioner with regard to his one-half share, he was asked…

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