Law:

Section:

Section 189, read with sections 148 and 282 of the Income-tax Act, 1961 (Corresponding to section 44, read with sections 34 and 63 of Indian Income-tax Act, 1922) read with Order 30, Rule 3 of the Civil Procedure Code, 1908 - Firm - Assessment after dissolution - Assessment year 1952-53 - Whether even after discontinuance of business of firm either by dissolution or otherwise, firm can be treated as continuing so far as assessment of its pre-dissolution income is concerned and assessment or re-assessment of such a firm after dissolution under section 44 of 1922 Act could be made in same manner under Chapter IV as if it had not discontinued its business - Held, yes - Whether additional service on partners individually is a further requirement under rule 3 of Order 30 of Code of Civil Procedure, necessary to be complied with in case of dissolved firm, if in a suit brought in name of such a firm plaintiff wants a decree not only against firm but also against partners personally - Held, yes - Pursuant to notices under section 34(1)(a) of 1922 Act and later under section 34(1)(b), ITO made an order of re-assessment by making additions - AAC upheld ITO's order-Tribunal held that re-assessment on dissolved firm, whose business was discontinued, without notices having been served on each of individual partners, was invalid, and re-assessment made was void - Whether, in case of a continuing and existing firm, service of notice on a partner of firm is sufficient and, therefore, service of notice issued in name of assessee-firm and served on one of its partners was valid and proper and assessment made in pursuance thereof was legal and valid - Held, yes FACTS For the assessment year 1952-53, the ITO after issue of the statutory notices under section 34(1)(a) and later under section 34(1)(b) to the assessee-firm, and having served the same on one of its partners, made an order of re-assessment by making addition to its total income assessed earlier. On appeal, the AAC confirmed the re-assessment. On second appeal, the Tribunal held that the re-assessment on the dissolved firm, whose business was discontinued, without notices having been served on each of the individual…

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