TMI Blog1998 (12) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... Srikantha Raja, filed his returns on November 30, 1989, for the assessment year 1989-90, admitting a total income of Rs. 33,890 and a further agricultural income of Rs. 17,234 under the head "Income from house property and other sources". The said income was processed under section 143(1)(a) of the Income-tax Act, 1961, and an assessment passed on February 5, 1989, admitting his returns. But, however, the respondent, by exercising power under section 148, read with section 147 of the Income-tax Act, 1961, issued notice dated August 20, 1991, for an alleged escaped assessment. The petitioner, after receiving the said notice, submitted his explanation and also the revised return on September 18, 1991, stating that, in view of section 182(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be stated as without jurisdiction or illegal. Mr. C.V. Rajan, learned junior standing counsel (Income-tax), further contended that, in any event, the petitioner, having filed his reply dated September 18, 1991, to the notice dated August 20, 1991, issued under section 148 of the Act, ought not to have approached this court for the above relief, and therefore, contends that it is sufficient to direct the authorities to pass appropriate orders on the reply dated September 18, 1991, submitted by the petitioner. I have given a careful consideration to the submissions of both sides. In this regard, I am obliged to refer sections 147, 148 and 182 of the Income-tax Act, 1961, which read as follows: "147. Income escaping assessment.--If t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oregoing proviso. Explanation 2.--For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely: (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (c) where an assessment has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be determined; and (ii) the share of each partner in the income of the firm shall be included in his total income and assessed to tax accordingly. (2) If such share of any partner is a loss, it shall be set off against his other income or carried forward and set off in accordance with the provisions of sections 70 to 75. (3) When any of the partners of a registered firm is a non-resident, the tax on his share in the income of the firm shall be assessed on the firm at the rate or rates which would be applicable if it were assessed on him personally, and the tax so assessed shall be paid by the firm. (4) A registered firm may retain out of the share of each partner in the income of the firm a sum not exceeding thirty per cent. there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 182(3) whether the income of the petitioner through the firms is chargeable to tax, and then, should have reason to believe that such income chargeable to tax has escaped assessment for the assessment year 1989-90. There cannot be any doubt that, as per section 182(3), the petitioner, admittedly, being a non-resident partner in the three firms referred to above, the tax on the share in the income of the firms shall be assessed only on the firm at the rate or rates, which should be applicable, if it were assessed on him personally, and the tax so assessed, shall be paid only by the firm. Consequently, the income of the petitioner, a non-resident partner through the said registered firms, cannot be said to be an income chargeabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esident, the tax on his share in the income of the firm shall be assessed on the firm at the rate or rates which would be applicable as if it were assessed on him personally, and the tax so assessed shall be paid by the firm. The crucial words occurring in sub-section (3) of section 182 are, 'if it were assessed on him personally'. The sub-section does not refer to the assessment on his total income. In the case of a non-resident partner, there are two assessments; one on the share income derived from the partnership-firm and another for his individual income from other sources, apart from the share income derived from the firm. In so far as the circular issued by the Central Board of Direct Taxes is concerned, it relates to the 1922 Act an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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