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TMI Blog1992 (9) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... rship firm consisted of six partners and they remained so till August 7, 1987. Thereafter, on account of some dispute among the partners, the partnership was dissolved. It was reconstituted with effect from August 7, 1987, with four partners. This reconstituted firm further changed its constitution on November 15, 1989, when one of the partners retired from the same leaving behind three partners. None of the petitioners was a managing partner of the firm during the accounting year relevant to the assessment year 1988-89 nor had any knowledge regarding the affairs and responsibilities of the reconstituted firm. Even prior to the reconstitution of the firm, none of the petitioners acted as a managing partner or acquainted himself/herself with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the summons has been challenged, inter alia, on the grounds that once a firm is reconstituted, the assessment has to be made only on the firm as reconstituted at the time of making the assessment. Furthermore, the petitioners ceased to be partners of the firm after its reconstitution and when the return was to be filed for the accounting year ending December 31, 1987, the petitioners were no more partners of the firm. Therefore, they could not be held responsible for the same. Moreover, under section 140 of the Income-tax Act, it is the managing partner of the firm who has to sign and verify the return. Consequently, none of the petitioners-accused had any legal obligation in the matter of furnishing the return. Therefore, the complain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k note of the fact that, in the complaint, it was specifically mentioned that Shri Murari Lal had filed the return and he was responsible. Therefore, relying on the allegation in the complaint, the court came to the conclusion that the complaint could survive only against Murari Lal and not against the other partners. Therefore, relying on this judgment, counsel contended that, in this case also, in the complaint and in particular in paragraph 2, it had been specifically mentioned that accused No. 8 was associated with the firm since March, 1989. Accused No. 8, i.e., Shri V. P. Punj, was actively participating in the functioning of the firm since March, 1988. It was accused No. 8, Shri V. P. Punj, who had signed the relevant papers on behal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioners were not partners at the relevant time or were not responsible. He further contended that, in view of the latest pronouncement of the Supreme Court in the case of M. R. Pratap v. V. M. Muthukrishnan, ITO [1992] 196 ITR 1 holding that (at page 7) : " by the introduction of section 278B by the Taxation Laws (Amendment) Act of 1975, with effect from October 1, 1975, it is enacted that, where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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