TMI Blog1968 (9) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgment of the Allahabad High Court, dated April 28, 1964, in Special Appeal No. 627 of 1961 by which the Division Bench dismissed the appellant's appeal and confirmed the order of the single judge dismissing the appellant's writ petition No. 194 of 1959. The appellant alleged that he was a partner of a firm named Regal Dehydrating Company, Meerut, in Which he held 12/53 share. It was stated that on January 15, 1945, the appellant sold away his share in the partnership to one Ram Chander, son of Nathmal Das. The partnership firm was assessed to income-tax for the assessment year 1945-46, by the Income-tax Officer, C-Ward, Meerut, by the assessment order dated December 9, 1952, on a total income of Rs. 64,622. The case of the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter in appeal under the Letters Patent but the appeal was dismissed by the Division Bench on April 28, 1964. The Division Bench proceeded on the assumption that the appellant did transfer his interest in the partnership firm in favour of Ram Chander, though the respondents dispute the genuineness of the alleged transfer. The Division Bench held that even if the appellant had transferred his interest in the partnership firm there was no change in the constitution of the firm and the transferee got only the rights in the profits in lieu of the transferring partner who did not cease to be a partner. During the hearing of the present appeal, Mr. Karkhanis, appearing on behalf of the appellant, mentioned at the outset that he will not p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayable under this Act, and includes every person in respect of whom any proceeding under this Act has been taken for the assessment of income or of the loss sustained by him or of the amount of refund due to him. " Section 29 of the Act states : " When any tax, penalty or interest is due in consequence of any order passed under or in pursuance of this Act, the Income-tax Officer shall serve upon the assessee or other person liable to pay such tax, penalty or interest a notice of demand in the prescribed form specifying the sum so payable. " Section 46 of the Act reads as follows : " 46. (1) When an assessee is in default in making a payment of income-tax, the Income-tax Officer may in his discretion direct that, in addition to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to pay ", in section 29 should be construed as " other person liable to pay under the Income-tax Act " and the liability cannot therefore be construed with reference to the Partnership Act or any other statute. In the Income-tax Act itself the liability is imposed on other persons to pay the tax apart from the assessee by several sections. For example " the other person apart from the assessee " in the language of section 29 of the Act would include : (1) a member of a divided family being liable for the assessment of the joint Hindu family (section 25A), (2) a firm being liable for the partners' tax [second proviso to section 26(1)], (3) the executor, administrator, or other legal representative being liable in respect of the tax paya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under section 25 of the Partnership Act the partners are liable jointly and severally for satisfying all liabilities of the partnership firm and the appellant would have been liable for the income-tax dues of the partnership if proper proceedings, for instance a suit, had been brought in a civil court against him by the income-tax authorities, The point taken by Mr. Karkhanis is that it was not open to the Collector in a proceeding under section 46(2) of the Act to recover from the appellant the income-tax dues from the partnership. We are unable to accede to this argument. The proviso to section 46(2) of the Act states that the Collector shall, without prejudice to any other powers in that behalf " for the purpose of recovering the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand of income-tax against the appellant who admits that he was a partner of the unregistered firm for the relevant accounting year. In the return filed by the unregistered firm on January 19, 1945, at page 33 of the paper book also the appellant is shown as one of the partners. It is manifest that the provisions of Order XXI, rule 50(2), apply to the present case mutatis mutandis and since the appellant does not dispute that he was a partner of the unregistered firm for the relevant accounting year, the Collector could lawfully proceed to execute the certificate under section 46(2) of the Act against the appellant and recover the income-tax arrears from him. It follows, therefore, that the proceedings taken for recovery of the tax by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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