TMI Blog1956 (6) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... he dominant partner. It was held that the other persons who claimed as partners were mere employees, and at least one of them could not be traced and might not have existed at all. The original assessment order concerned six firms, all of which were held to be benami business carried on by the firm of Ladhuram Taparia. Upon appeal, the Income-tax Appellate Tribunal, Calcutta, held that the above-mentioned four firms were all benami businesses of Ladhuram Taparia, but that the remaining two were partnership firms in which outsiders were interested. There have been further appeals from the Appellate Tribunal and the matter is now pending before the Supreme Court. Meanwhile the firm of Jagannath Hanumanbux submitted a return for the year 1945-46. As has been mentioned above, the Income-tax authorities had already held that the firm did not consist of the two alleged partners, Hanumanbux and Ganpatrai, but was a business carried on in benami by the firm of Ladhuram Taparia. The authorities were, therefore, put in a very difficult situation. If they refused to assess the firm of Jagannath Hanumanbux and if the appeal now pending before the Supreme Court is successful, in that event, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , But I say that the Certificate Officer was requested not to execute the certificate in view of the fact that the demand nevertheless was in respect of a protective assessment. The Certificate Officer did not accede to this request but cancelled the certificate against Jagannath Hanumanbux, holding that these certificates should merge with the certificates issued against Ladhuram Taparia. It is stated that the Income-tax authorities have appealed against this order. On the 12th August, 1954, and the 25th August, 1954, the Income-tax authorities have issued seven notices to various parties under section 46 (5A) of the Indian Income-tax Act. The parties to whom such notices have been given are as follows : (1) The Liquidator, Bengal Textiles Association, 22 Chittaranjan Avenue, Calcutta; (2) The Manager, United Commercial Bank Ltd., Burra Bazar Branch, 160, Cross Street, Calcutta; (3) The Manager, Bank of Jaipore Ltd., Jodhpur; (4) The Manager, Bank of Bikaneer, 8 Lyons Range, Calcutta; (5) Srimati Surabala Dassi; (6) Sitanath Pal; (7) Heranath Pal; (8) Jagannath Pal and (9) Ramnath Pal, all of No. 102, Hari Ghosh Street, Calcutta. In each case it has been stated that they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... devoted to tax avoidance may fall short of its purpose. That is a misfortune for the taxpayers who do not try to avoid their share of the burden, and it is disappointing to the Inland Revenue. But the Court will not stretch the terms of taxing Acts in order to improve on the efforts of Parliament and to stop gaps which are left open by the statutes. Tax avoidance is an evil, but it would be the beginning of much greater evils if the Courts were to overstretch the language of the statue in order to subject to taxation people of whom they disapproved. Finally, Mr. Roy argued that the matter was to be governed entirely by the Indian Income-tax Act and we should not act upon an analogy of the English Act : Bijay Singh Dudhuria v. Commissioner of Income-tax, Calcutta. The point for consideration in this case is, therefore, as to whether it is possible to have such a thing as protective assessment under the Indian Income-tax Act, and to the nature thereof. To start with, it is conceded that there is no specific provision in the Indian Income-tax Act, and that the concept has been borrowed from the law and practice as prevalent in England. The leading case on the subject is Attorn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded. Of course there are provisions in the Act which say you shall not have two assessments for the same property on the same person; if one has gone wrong, you cannot have another. If it is thought that we have assessed this business in the name of Robinson and it is really carried on by Smith, if it is Smith now and it was Smith or Robinson before, I cannot see the slightest objection to it in common sense, and I cannot see any from the point of view of the statute; so that that difficulty goes and the next thing I have to consider is who is the right person to be assessed. This is the kind of assessment which is known as protective assessment. There is no reported authority in India with regard to protective assessment but the matter came up before the court of appeal in this High Court in B. K. Bagchi and Another v. Messrs. Ladhuram Taparia. Harries, C.J., considering the same set of facts that we are considering here, stated as follows : The Income-tax authorities also made an alternative assessment, assessing each of the firms separately and this was what is referred to as a protective assessment and is permissible in order to prevent assessment being barred by limita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because according to the authorities the firm was mere benamidar of another firm, it would be entirely against the spirit and tenor of the Income-tax Act to proceed to recover the tax on the basis of the professedly wrong assessment. From this point of view, the notices given to the various parties to pay money appear to be defective. The question, therefore, is as to whether on the facts and circumstances of the case as I have stated above, the petitioner is entitled to any relief in this application. The position is that the monies in the hands of these various parties are prima facie due to Messrs. Jagannath Hanumanbux. If that firm consists of the partners Ganpatrai and Hanumanbux, then the Income-tax authorities will be entitled to receive these sums direct. But supposing that they are not the partner and that Ladhuram Taparia is the real assessee and that Jagannath Hanumanbux is the benamidar of Ladhuram Taparia, then also the monies in the hands of these parties will be payable to the Income-tax authorities, because taxes are payable Ladhuram Taparia and notices under section 46 (5A) have also been served, in respect of trades due from that firm. If that is the position, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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