TMI Blog1976 (9) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... e fifteen partners, fourteen partners are also not in arrears but one of the partners in the firm is in arrears to the wealth-tax authorities. The Income-tax Officer refused to grant the certificate on the ground that the arrears of this particular partner have to be paid in full or satisfactory provision has to be made for payment of existing liabilities before the clearance certificate could be granted. Hence, this writ petition. The contention of Mr. Eswara Prasad is that when the firm is not due any tax to the authorities and only a partner is due wealth-tax to the authorities in his individual capacity, the Income-tax Officer is incorrect in refusing to grant a certificate to the firm for the sale of the property belonging to the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he authorities or any creditor could proceed against the entire assets of the firm when the assets of the defaulting partner have been fixed according to the partnership deed. Having regard to the respective contentions advanced by the learned advocates, I am of the opinion that this is a matter of importance and ought to be decided by a Bench. The office is directed to place the papers before my Lord the Chief Justice for the formation of a Bench. JUDGMENT The judgment of the Division Bench was delivered by B. J. DIVAN C.J.--The petitioner herein prays for a writ, direction or order directing the respondent herein to issue the income-tax clearance certificate under rule 44A of the Income-tax Rules and forward the income-tax cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade satisfactory provision for payment of all existing liabilities under the Income-tax Act and allied Central fiscal enactments. On May 16, 1973, the petitioner-firm applied in the prescribed form for a certificate under sub-section (1) of section 230A to the respondent. It is the petitioner's case that there was no existing liability against the petitioner-firm on the date of the application under any one of the aforesaid Acts and it was so stated in column 6 of the application. By his letter dated May 18, 1973, the respondent asked the petitioner to produce the tax clearance certificate in respect of all the partners of the firm and it is the petitioner's contention that the tax clearance certificate that has to be furnished is only in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the firm who jointly own the partnership property that has to be furnished. Since the property jointly belongs to the partners, each individual partner must have a clearance certificate in his favour before the partnership property can be registered. Under these circumstances, the decision of the respondent herein that the income-tax clearance certificate must be furnished in respect of each of the partners and not merely in respect of the firm as a whole was correct. This writ petition, therefore, fails and is dismissed. The rule is discharged. We may, however, observe that, in spite of our decision as above, it will be open to the petitioner-firm to deposit or otherwise satisfy the demand of the income-tax department as regards ..... X X X X Extracts X X X X X X X X Extracts X X X X
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