TMI Blog1964 (1) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. As. Ps. 1. Butto Kristo Roy 0 2 8 2. Suniti Bala Devi 0 1 4 3. D.N. Chandra and others 0 4 0 4. Purnendu Narayan and others 0 1 0 5. Krishna Prasad Chatterjee and others 0 3 0 6. Kunj Behari Chandra 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess was acquired by purchase by Bijali Kanti Roy. The result was that in the year 1952 the Kirkend Coal Company was owned by two partners having equal shares, namely, Baidyanath Roy having 8 annas share and Bijali Kanti Roy having the other 8 annas share. Therefore, at the time of the levy of penalty, that is, on the 30th July, 1954, the firm was constituted of two partners, namely, Baidyanath Roy and Bijali Kanti Roy, who had 8 annas share each. The Appellate Tribunal, however, rejected the argument of the assessee that the penalty could not be levied because of the dissolution of the old partnership firm. Under section 66(1) of the Income-tax Act the Appellate Tribunal has submitted the following question of law for the determination o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 42(c) of the Partnership Act; and (2) that with effect from the 28th April, 1952, the business was carried on by a partnership constituted of Baidyanath Roy and Bijali Kanti Roy under the instrument dated the 27th August, 1952. The Income-tax Appellate Tribunal has also found that the terms of the partnership which carried on the business during the calendar year 1947 were as set out in the partnership deed dated the 17th October, 1949. Section 44 of the Indian Income-tax Act at the material time stood as follows: Where any business...carried on by a firm...has been discontinued...every person who was at the time of such discontinuance...a partner of such firm...shall, in respect of the income, profits and gains of the firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (8) and (9) is incurred, by virtue of section 44, that penalty or penal interest may also be imposed, notwithstanding the discontinuance of the business. In view of the principle laid down by the Supreme Court it is manifest in the present case that the penalty could be legally imposed upon the partnership constituted for the assessment year 1948-49. This legal position was not disputed by learned counsel appearing on behalf of the assessee. It was, however, contended on its behalf that the penalty could not be legally imposed upon the partnership firm as it was constituted at the time of the levy of the penalty, namely, on the 30th July, 1954. On this date the partnership business was carried on by a new partnership constituted of Baidyana ..... X X X X Extracts X X X X X X X X Extracts X X X X
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