C. A. Abraham, Uppoottil, Kottayam v. The Income-Tax Officer, Kottayam And Another

2 S.C.R. SUPREME COURT REPORTS C. A. ABRAHAM, UPPOOTTIL, KOTTAYAM THE INCOME-TAX OFFICER, KOTTAYAM AND ANOTHER (J. L. KAPUR, M. HIDAYATULLAH a.nd J. c. SHAH, JJ.) Income-tax-Suppression of income of partnership firm-Penalty, if can be imposed after dissolution of partnership-Income-tax Act, r9zz (II of r9zz), ss. z8(r)(c). 44. The appellant who was carrying on business in food grains in partnership with another person submitted the returns of the income of the firm for the accounting years even after his part· ner's death. It was found that certain income of the firm was concealed and the Income-tax Officer not only assessed the firm to tax for the suppressed income but also imposed penalties for concealing the said income. Appeals to the higher income tax authorities failed and the appellant then applied to the High Court for a writ of certiorari quashing the orders of assessment and imposition of penalty on the ground inter alia that the firm was dissolved by his partner's death and no penalty could be imposed after dissolution of the firm, The High Court ·rejected the petition. On appeal with the certificate of the High Court, Held, that by virtue of s. 44 and other provisions of the Income Tax Act a partner of a dissolved partnership firm may not only be made liable to assessment for income tax for the accounting years but despite dissolution of the firm he may be made liable to pay penalty for concealing the income of the firm under s. 28(1)(c) of the Act. The analpgy of dissolution of a Hindu Joint Family does not apply to dissolution of a part-nership. Mareddi Krishna Reddy v. ln~ome-tax Officer, Tenali, [1957] 31 I.T.R. 678, approved. •I • ' . • · Commissioner of Income-tax v. Ra_yalaseema Oil Mills, [1959] 37 I.T.R. 208 and S. v. Veerappan Chettiar v. Commissioner of Income-tax, Madras, [1957] 32 I.T.R. 4II, disapproved. MahankaU Subbarao v. Commissioner of Income-tax, [1957] 31 I.T.R. 867, distinguished. · , The Legislature intended that the provisions of Ch. IV of the Act shall apply to a firm even after discontinuance of its business. In interpreting a fiscal statute the Court cannot pro-ceed. to make good deficiencies if there be any. In case of doubt it should be interpreted in favour of the tax payer. The expression "assessment" has different connotations and has been use.d in its widest connot~tion in Ch. IV and s. 44 of November 119. 766 SUPREME COURT REPORTS [1961] the Act. · It is not restricted only to computation of tax but in-cludes imposition of penalty on tax payers found in the process x960 C. A. Ab•aham, of assessment guilty of concealing income. Commissioner of Income-tax, Bombay Presidency and Aden v. Khemchand Ramdas, [1938] 6 I.T.R. 414, referred to. Uppoollil, Kollayam T v. The Income-tax Act provided a complete machinery for O'ffih• Income-lax obtaining relief against improper orders passed by the Income-"" Kollayam tax Authorities and the appellant could not be permitted to .s. Anolh., abandon that machinery, and invoke the jurisdiction of the High Court under Art. 226 of the Constitution against the orders of the taxing authorities. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 517 of 1958. Appeal from the judgment and order dated Octo- ber 31, 1957, of the Kera.la. High Court in 0. P. No. 215 of 1957. G. B. Pai and Sardar Bahadur, for the appellant. Hardyal Hardy and D. Gupta, for the respondents. 1960. November 29. The Judgment of the Court was delivered by SHAH, J.-C. A. Abraham hereinafter referred to as SAah J. x960