TMI Blog1979 (12) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ptee (hereinafter referred to as respondent No. 5) was constituted. Radhakishanji, Ramakant and Banwarilal were the partners of this firm. In 1959, another firm by name M/s. Ramkrishna Ramnath Sons, Kamptee (hereinafter referred to as respondent No. 4) was constituted. The wives of each of the partners of respondent No. 5 firm were the partners of this respondent No. 4 firm. The names of these wives are Smt. Krishnabai, Smt. Sudha Devi and Smt. Usha Devi. The petitioner who is the son of Banwarilal and Usha Devi was admitted to the benefits of the partnership of respondent No. 4 firm. In 1970, one more partnership came into existence, viz., M/s. Shri Jagadamba Trading Corporation (hereinafter referred to as respondent No. 3). S. P. Baid and M. S. Baid were the two partners of respondent No. 3 firm. Two minors including the petitioner were admitted to the benefits of this partnership. It may be noted that the petitioner was born on August II. 1958, and that till 1976, he was a minor. The I.T. authorities, while assessing the income of the two firms, viz., respondents Nos. 4 and 5, came to the conclusion that respondent No. 4 was actually a benamidar for the other firm, respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of such protective assessment. The third contention is that the assessments against respondent No. 4 (even if they are assumed to be genuine or correct assessments), were assessments on the unregistered firm and that tax cannot be recovered from the partners. The petitioner has also alleged that the recovery proceedings were bad as no tax recovery certificate was issued under s. 222 of the Act. However, at the time of arguments, this contention was not pressed when Mr. Deshpande for the Department, made a statement that the tax recovery certificates have been issued against respondent No. 4 firm. Respondents Nos. 1 and 2 (viz., the Commissioner and the ITO) have opposed the petition by filing their return. In para. 6, it was admitted that the petitioner was not the partner of respondent No. 5. In para. 7, it is admitted that the I.T. Department held respondent No. 4 as benamidar of respondent No. 5 firm and that the protective assessments were made against respondent No. 4. The respondents also admitted that no proceedings were pending in respect of the registration of respondent No. 4 and that no proceedings were pending with regard to holding the said firm to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady been the subject matter of a regular assessment in the case of the fifth respondent firm, M/s. Ramkrishna Ramnath, which according to the Department was the real firm of which the fourth respondent firm was merely a benamidar. The petitioner has also pointed out that the assessments against respondent No. 5 have already been finalised and no proceedings challenging the said assessment are pending at any stage." This averment is also not specifically denied. In view of this position, it will be very difficult for the respondents to contend that the assessment proceedings against respondent No. 5 are not finalised or that the income of respondent No. 4 has not been included in the assessment of respondent No. 5 on the basis that the said respondent No. 4 is a benamidar for respondent No 5. It is true that the I.T. Act has not made any specific provision about the protective assessments or precautionary assessments. But this aspect has been considered by the Supreme Court in the case of Lalji Haridas v. ITO [1961] 43 ITR 387. In that case, the two brothers, Lalji and Chhotalal, had submitted the return of their respective incomes. The Department felt that the income, shown t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment of the said income on both A and B. The very purpose of such an enquiry would be to assess the income of B separately or to include it in the income of A. But if the proceeding is held only against A, it may still be possible that after necessary enquiry the concerned authority may come to a conclusion that the income of B should not be clubbed with the income of A and by the time this finding is given, the limitation for making the assessment against B would already be over. In such a contingency the income shown to have been earned by B will go untaxed. To avoid such a contingency a protective assessment is to be made even against, B. But the recovery on the basis of such protective assessment would depend upon the ultimate decision as to whether the income shown to have been earned by B belonged to A. If the finding is in the affirmative, the protective assessment will cease to be operative as the income covered by that assessment would be included in the income of A. It was contended on behalf of the respondents that the fact that only protective assessments were issued against respondent No. 4, would not come in the way of the Department to make a recovery of the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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