TMI Blog1963 (3) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... . This partnership functioned between January 20, 1950, and June 27, 1952. One of the partners, Subburam, retired from the firm and a fresh partnership was constituted between the other three partners which subsisted between June 28, 1952, and July 28, 1953. Then another partner, Raghavacharya, went out of the partnership and the two remaining partners, the petitioner and one D.L. Narayanan, carried on the business between July 29, 1953, and November 12, 1954. In respect of the assessment years 1953-54, 1954-55 and 1955-56, applications were made on behalf of the firm under section 26A of the Income-tax Act for registration. These applications were signed by the partners of whom the petitioner was one. Registration was granted for all the years. The firm was assessed as a registered firm and the particulars of assessment are as detailed below: Assessment year Account year Date of assessment order Total income determined Rs. 1953-54 27-6-1952 30-3-1957 1,54,184 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1953-54 3-3-1953 26-1-1955; loss under profession Share of loss from registered firm registered firm 5,723 9,216 profit Declared 1,499 quot;N.A. quot; Total loss ... 14,939 1954-55 21-3-1954 29-1-1955: profession loss 2,570 nil 1955-56 31-3-1955 31-12-1956: profession income 1,008 2,508 The petitioner admitted that he was a partner of Vinodha Pictures for purposes of assessment relating to the accounting year 1952-53 or the assessment year 1953-54. He disclosed in his return his share income from the firm as a loss of ₹ 9,216 for the assessment year 1953-54. The petitioner disclosed in his return that he was a partner of Vinodha Pictures and requested the Income-tax Officer to include his share income from the firm after the determination of his share of profit or loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmination of the appeal proceedings arising out of the assessment of the firm necessitated a fresh order under section 35 in regard to the petitioner's assessment. On March 23, 1960, the Income-tax Officer computed the petitioner's share income as per the firm's assessment at ₹ 1,33,393, and, after absorbing the carried forward loss of ₹ 25,170 for the assessment year 1954-55, computed the total income at ₹ 1,10,723. By reason of this rectification order the tax liability on the petitioner was reduced from ₹ 77,838.07 to ₹ 49,965.08. It is this order of rectification which is now called in question before us. Mr. K. Srinivasan, learned counsel for the petitioner, contends that the Income-tax Officer had no jurisdiction to pass any order of rectification under section 35 of the Act. This submission is obviously untenable in view of section 35(5) which reads as follows: Where in respect of any completed assessment of a partner in a firm it is found on the assessment or reassessment of the firm or on any reduction or enhancement made in the income of the firm under section 31, section 33, section 33A, section 33B, section 66 or section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made, having the effect of enhancing an assessment or reducing a refund unless the Commissioner, the Appellate Assistant Commissioner or the Income-tax Officer, as the case may be, has given notice to the assessee of his intention so to do and has allowed him a reasonable opportunity of being heard;....... It is implicit from this proviso that an order for rectification can be passed behind the back of the assessee if that would not, in any way, cause prejudice to him either by way of enhancement of assessment or by way of reduction of the refund due. In other words, where a rectification order secures a benefit or advantage to the assessee he cannot complain of that order by reason only of the fact that there was no notice to him of the initiation of the proceedings. Nor can it be said that the failure to issue notice in such a case, where a benefit is conferred on the assessee, would amount to violation of the principles of natural justice. In our opinion, this contention of the learned counsel for the assessee, viz., that the proceedings are bad because of want of notice, is also devoid of sub- stance. Mr. Srinivasan, however, contends that factually there has been no r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of this case there has been no enhancement of assessment or reduction of refund amount so far as the petitioner was concerned. The petitioner contends that he was never a partner of Vinodha Pictures, and that, therefore, there can be no question of including his alleged share income as a partner of that firm. Obviously this contention is wholly untenable. The assessment of the firm has proceeded on the footing that the petitioner was a partner of that firm. Indeed, the petitioner himself cannot repudiate that fact, he having subscribed his signature to the application for registration under section 26A of the Act. It is too late in the day for the petitioner to contend that he was never a partner or that he should be deemed never to have been a partner as a result of the release deed executed by him. The assessment on the firm has become complete and final, and, if the petitioner was aggrieved because of the fact that he was deemed to be a partner of that firm, his remedy was to have filed an appeal against the order of assessment on the firm. This again he failed to do. It is true that the partnership has now been dissolved, but, that would not avail the petitioner in avoidi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
