TMI Blog1970 (4) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... atiala Versus Ambala Flour Mills. Ambala Flour Mills Versus Commissioner of Income-Tax, Patiala . Judge(s) : A. N. GROVER., K. S. HEGDE. and J. C. SHAH. JUDGMENT The judgment of the court was delivered by SHAH J.- Balkishan Dass, Debi Prasad and Jai Ram Dass were partners in a trading venture conducted in the name of the Ambala Flour Mills, Ambala. On April 29, 1948, Jai Ram Das commenced an action for dissolution and for accounts of the partnership. The trial court decreed the suit. In appeal to the District Court, the decree was reversed. On appeal under the Letters Patent from the judgment of a single judge, the High Court of Punjab by order dated September 26, 1951, restored the decree of the trial court and de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ociation of persons and directed that the case be remanded to the Income-tax Officer to assess the income as "the income of the family of Debi Parshad". In appeals by Debi Parshad the Income-tax Appellate Tribunal confirmed the orders of the Appellate Assistant Commissioner annulling the assessment made by the Income-tax Officer and directed that the direction for assessing the income in the hands of Debi Parshad be deleted. The Tribunal referred the following three questions at the instance of the Commissioner of Income-tax: " 1. Whether L. Debi Parshad was a stranger in respect of the income-tax proceedings against Ambala Flour Mills? 2. Whether the Appellate Assistant Commissioner could give a direction in the case of Ambala Flo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer to make a fresh assessment after making such further inquiry as the Income-tax Officer thinks fit or the Appellate Assistant Commissioner may direct, and the Income-tax Officer shall thereupon proceed to make such fresh assessment..... (4) Where as the result of an appeal, any change is made in the assessment of a firm or association of persons or a new assessment of a firm or association of persons is ordered to be made, the Appellate Assistant Commissioner may authorise the Income-tax Officer to amend accordingly any assessment made on any partner of the firm or any member of the association." All the returns have been filed by Debi Parshad but in different capacities. The Income-tax Officer was of the view that the business was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assessment or reassessment made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 31, section 33, section 33A, section 33B, section 66 or section 66A. " The assessment of tax had according to the law at the relevant time in force, ordinarily, to be completed by the Income-tax Officer within four years from the last date of the year of assessment in which the income was first assessable. But to this rule there were several exceptions. If the assessment had to be made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order of the Appellate Assistant Commissioner or of the Appellate Tribunal or of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on must be one who would be liable to be assessed for the whole or a part of the income that went into the assessment of the year under appeal or revision. If so construed, we must turn to section 31 to ascertain who is that person other than the appealing assessee who can be liable to be assessed for the income of the said assessment year. A combined reading of section 30(1) and section 31(3) of the Act indicates the cases where persons other than the appealing assessees might be affected by orders passed by the Appellate Assistant Commissioner. Modification or setting aside of assessment made on a firm, joint Hindu family, association of persons, for a particular year may affect the assessment for the said year on a partner or partners of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the Income-tax Officer, Debi Parshad was a member. In making a direction against Debi Parshad the Tribunal did not exercise his powers qua a stranger to the assessment proceeding. Civil Appeals Nos. 1280-1282 of 1966 must therefore fail. The Appellate Assistant Commissioner had directed that the income in the three assessment years be assessed in the hands of the family of Debi Parshad, apparently on the view that Debi Parshad represented the Hindu undivided family of which he was a member. The Tribunal set aside the direction to assess the income of the Ambala Flour Mills in the hands of Debi Parshad personally, for in their view Debi Parshad was a stranger to the proceeding for assessment. The High Court held that the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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