S. 44 of the Indian Income-tax Act, 1922, applied to the case of a dissolved firm, and that the Income-tax Officer was competent to issue the notice to the appellant.

Judgment

SHAH J. : Balmukand Radheshayam-hereinafter called the firm -having its head office at Calcutta carried on business in commission agency, and cotton piece goods. The firm which consisted of four partneers-one of whom was Shivram Poddar, appellant in this appeal- was dissolved in February 1950 and it appears that thereupon its business was discontinued. For the assessment year 1949-50 one of the partners of the firm submitted a return of its income and it was assessed on October 28, 1952, in the status of an unregistered firm.

2. On March 28, 1955, the Income-tax Officer issued a notice under S. 34 read with S. 22(2) of the Indian Income-tax Act, 1922 addressed to the appellant as a partner of the firm at the time of its dissolution calling upon him to submit a return of the income of the firm for the year ending March 31, 1950. The appellant moved the High Court of Judicature at Calcutta for a writ of mandamus under Art.226 of the Constitution commanding the Income-tax Officer to forbear from giving effect to the notice. The petition was dismissed by D. N. Sinha, J., and that order was confirmed in appeal under the letters Patent by the High Court of Calcutta. This appeal is against that judgment of the High Court.

3. The question which falls to be determined in this appeal is whether the income earned by the firm in the year ending March 1950 could be assessed to tax under S. 44 of the Indian Income-tax Act after the firm was dissolved. Section 44 of the Indian Income-tax Act, 1922, before it was amended by the Income-tax (Amendment) Act, 1958, stood as follows :

"Where any business, profession or vocation carried on by a firm or association of persons has been discontinued, or where an association of persons is dissolved, every person who was at the time of such discontinuance or dissolution a partner of such firm or a member of such association shall, in respect of income, profits and gains of the firm or association, be jointly and severally liable to assessment under Chapter IV and for the amount of tax payable and all the provisions of Chapter IV shall, so far as may be, apply to any such assessment."

The object of the enactmet is clear : it is to authorise assessmet of tax on income, profits or gains earned in a business, profession or vocation carried on by a firm or association before discontinuance of the business, profession or vocation, or before dissolution of the association, and to impose joint and several liablity upon every person who was at the time of discontinuance a partner of the firm or a member of the association or at the time of dissolution a member of the association.

4. This Court in dealing with the effect of S. 44 of the Indian Income-tax Act upon the liability of partners to be assessed in rerspect of the income of a firm which had discontinued its business on account of dissolution, observed in C. A. Abraham Uppootil, Kottoyam v. The Income-tax Officer Kottayam, (1961) 2 SCR 765 at p. 770 : :

"In effect, the Legislature has enacted by S. 44 that the assessment proceedings may be commenced and continued against a firm of which business is discontinued as if discontinuance has not taken place. It is enacted manifestly with a view to ensure continuity in the application of the machinery provided for assessment and imposition of tax liablity notwithstanding discontinuance of the business of firms."

5. In Abraham s case, (1961) 2 SCR 765 discontinuance of business of the firm was the result of dissolution upon death of one of the partners. The primary question in that case was about the competnece of the Income-tax Officer to order the levy of penalty against a firm, after it had discontinued its business upon dissolution, for concealing the particulars of income or for deliberately furnishing inaccurate partculars of income in a return of the income of the firm. The validity of the order of assessment of income of the firm was not challenged in that case, though at the date of the order of assessm