Judgment

SHAH, J. : These are three appeals with certificates of fitness granted by the High Court of Madras against orders passed in Petitions for the issue of writs of certiorari setting aside orders imposing penalty upon the firm of Messrs. S. V. Veerappan Chetiar & Co. passed by the Income-tax Officer under S. 28(1) (c) of the Indian Income-tax Act.

2. Four persons carried on business in cloth at Virudhunagar, in the name and style of S. V. Veerappan Chettiar & Co. -hereinafter called the firm. The firm was registered under section 26A of the Income-tax Act, 1922 for the assessment years 1947-48, 1949-50 and 1950-51. The firm concealed particulars of its income in submitting its returns, and the Income-tax Officer, Virudhunagar, in the course of assessment proceedings directed, by order dated May 20, 1954, payment of penalty of Rs. 20,000/- for the year 1947-48., Rs. 10,000/- for the year 1949-50 and 5,000/- for the year 1950-51. Against the orders imposing penalty, one of the partners of the firm moved the Commissioner of Income-tax, Madras in revision but without success. Thereafter, petitions under Art. 226 of the Constitution for issue of writs of certiorari or other appropriate writs calling for records relating to the orders dated May 20, 1954 passed by the Income-tax Officer Virudhunagar in respect of the three assessment orders and the record relating to the order of the Commissioner and for quashing the penalty orders were fried by two partners of the firm in the High Court at Madras. It was submitted by the petitioners that by agreement between the partners the firm stood dissolved on April 13, 1951 and intimation in that behalf was given to the Income-tax Officer and that in any event the firm stood dissolved on May 5,1953 when one of the partners died and the Income-tax Officer could not, in exercise of the power under S. 28 (1) make an order imposing penalty after dissolution of the firm. The High Court accepted the plea of the petitioners and directed that the orders of the Income-tax Officer dated May 20, 1954 and the further action of the Commissioner thereon declining to revise the order of the Income-tax Officer in each of the petitions be set aside. Against the orders passed by the High Court the Commissioner appeals to this Court.

3. This Court in a recent Judgment -C. A. Abraham v. Income-tax Officer, Kottayam (1961) 41 ITR 425 held that the Income-tax Officer had power under S. 28 of the Income-tax Act to impose penalty in the course of assessment of a firm even if the firm stood at type date of the order dissolved by the death of one of its partners. In so holding this Court observed that S. 44 of the Income-tax Act sets up machinery for assessing tax liability of a firm which has discontinued its business and that the expression "assessment" in the different sections of Chapter IV of the Income-tax Act was not used merely in the sense of computation of income, and when S. 44 declared that the partners or members of the firm shall be jointly and severally liable to assessment, it referred to the liability to computation of income under S. 23 as well as the application of the procedure for declaration and imposition of tax liability and the machinery for enforcement, thereof.

4. counsel for the respondents, however, contended that C. A. Abraham s case 1961-41 ITR 425 was one of as unregistered firm and the principle of that case has no application where the firm is a registered firm. But S. 44 makes the provisions of chapter IV, so far as may be, applicable to assessment when any business, profession or vocation carried on by a firm has been discontinued: the section declares liability of all discontinued firms and not merely of unregistered firms. There is nothing in S. 44 or the context in which it occurs to indicate that it does not apply to registered firms. This Court in C. A. Abraham s case, 1961-41 ITR 425 approved the decision of the Andhra Pradesh High Court in Krishna Reddy v. Income-tax Office