Law: Income Tax Act, 1922

Section: 3

Income-tax----Firm---Partner---Assessment---Unregistered firm---Option under Act of 1922 to assess partners of firm---Assessment of one of partners provisionally with specific statement that it would be rectified later---Subsequent assessment of firm by different ITO ---No option exercised to assess partners---Assessment of, firm was valid---Indian Income-tax Act, 1922, S.3. Under the Indian Income-tax Act, 1922, the Income Tax Officer had an option either to tax the partners of a firm or the firm with respect to the income of the firm but once he exercised his option one way, he could not obviously bring the same amount to tax in the hands of the other. Under the Income Tax Act, 1961, however, no such option is available to him. Held, accordingly, on the facts, that for, the Assessment year 1961-62, the assessment on one of the partners of the assessee firm was completed earlier i.e. on January 31, 1966. That was done by the Income Tax Officer, "A" Ward, while the assessment on the firm was made by the Income-tax Officer "C" Ward, on March 23, 1966. The order of assessment dated January 31, 1966, supecifically stated that the return was accepted for the time being and that it would be rectified when the report from the Income Tax Officer concerned was received. The order of assessment on the firm did not indicate that the assessing Officer was aware that the partners of the firm had been already assessed with respect to their share income from the firm. The Tribunal had said that it had no information whether or when any other partner was assessed. In the light of the above circumstances, the tribunal was justified in concluding that the option contemplated by section 3 of the 1922 Act was not exercised by the Income Tax Officer in this case and hence the assessment made on the firm was valid. ITO v. Ch. Atchaiah (1996) 218 ITR 239 (SC) and Hindusthan Mill Stores Supply Co v. CIT (1979) 116 ITR.681 (Cal.) ref. JUDGMENT B.P. JEEVAN REDDY, J.---The Calcutta High Court has answered the following question, referred at the instance of the assessee, in the negative i.e. in favour of the assessee and against the Revenue: "Whether, on the facts and in the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492