Law:

Section:

Section 155 of the Income-tax Act, 1961 - Rectification of mistakes - Other amendments - Whether where original assessments in case of firm and partners are completed, in case of reassessment of a firm Assessing Officer can only take recourse to section 155 to modify assessments of partners by taking revised share income, and cannot take recourse to section 148 - Held, yes FACTS The respondent-assessee was a partner in a firm. The original assessments of the firm as well as of the partners had been completed. As a result of search conducted under section 132 in connection with the firm, its partners, etc., the firm filed a revised return. The assessment of the firm was completed on an enhanced income as declared in the revised return. Since the partners had not furnished the revised returns, after the revised return in the case of firm, the Assessing Officer initiated the reassessment proceedings under section 147/148. The assessee furnished return in response to notice under section 148 under protest. The assessment was completed under section 143(3) by which the Assessing Officer, in addition to revising the assessee's share in the firm, made certain other additions. On appeal, the order of the Assessing Officer was confirmed. On second appeal, the Tribunal set aside the order of the Commissioner (Appeals) and quashed the reassessment accepting the assessee's submission that since original assessment had been completed his share in the firm should have been revised by invoking the provisions of section 155(1) and not 147. On appeal under section 260A : HELD As per section 155(1), in case of reassessment of a firm, the Assessing Officer has not only to determine the assessable income of the firm but has also to amend the assessment orders of the partners accordingly. Hence, in the instant case, the Assessing Officer could only take recourse to section 155 to modify the assessment of the assessee-firm and he could not take recourse to section 148. The Tribunal had also held that the revenue could revise the shares of the assessee in the firm by invoking the provisions of section 155(1), if the law so permitted. [Para 7] There was no illegality in the order of…

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