Law:

Section:

Section 189 of the Income-tax Act, 1961 [Corresponding to section 44 of the Indian Income-tax Act, 1922] - Firm - Assessment after dissolution - Assessment years 1953-54 and 1954-55 - Whether assessment made on a firm after its dissolution without issuing separate notices to all partners of defunct firm is bad in law - Held, no FACTS For the assessment years 1953-54 and 1954-55, notices under section 22(2) were issued to the assessee-firm on 16-7-1953, and 10-6-1954, respectively and were served on 25-7-1953 and 17-7-1954, on one of the partners. The return of income dated 8-4-1956, was filed on 9-4-1956, and was signed by a partner, N in respect of the assessment year 1953-54. No return of income was filed for the assessment year 1954-55, and the assessment was ultimately made under section 23(4) on 19-7-1958. For the assessment year 1953-54, an application for registration under section 26A signed by three partners was filed on 26-2-1953, but no application was filed for year 1954-55. For the assessment year 1953-54, notices under sections 22(3) and 23(3) were issued to the address of assessee but were not complied with and the assessment was completed on 27-3-1958, in the name of assessee under section 23(4). Aggrieved, the assessee filed appeals before the AAC, challenging the validity of the assessments on the ground that they were made against a firm after its dissolution and as such were illegal. The AAC allowed the appeal holding that no assessments could be made on a dissolved firm. On revenue's appeal, the Tribunal held that an assessment could be made even on a dissolved firm provided notice was served on a partner thereof. On reference : HELD The Supreme Court in C.A. Abraham v. CIT [1961] 41 ITR 425 , 430 [1961] 2 SCR 765 held that the assessment proceedings may be commenced and continued against a firm of which business is discontinued as if discontinuance has not taken place. In view of the said decision, it was to be held that the assessments made in the instant case were valid in law. Note : The case was decided against the assessee. CASES REFERRED TO C.A. Abraham v. CIT [1961] 41 ITR 425 (SC), Chandu Lal Ghanshyam Dass v. CIT (Income-tax…

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