Section 44 of the Income-tax Act, 1922, which provides for joint and several liability of partners of a discontinued firm for assessment and payment of tax, also attracts Section 28 of the Act, which imposes a penalty for concealment of income or improper distribution of profits.

SUBBA RAO, C.J. :- This is an appeal against the judgment of our learned brother Satyanarayana Raju, J.

2. The facts may be briefly stated. The appellant was a partner of the registered firm of Messrs. Talluri Suryanarayana and others. The firm carried on the business of milling paddy from 17th January, 1945 to 28th December, 1947, after which it discontinued the business. On 7th August, 1950, the firm filed a return disclosing an income of Rs. 2,389, for the assessment year 1947-48. That was signed by the partner Talluri Suryanarayana. During the scrutiny of the accounts, the assessee admitted that some cash credits found in the accounts represented the firms own income and the Income-tax Officer also found that for some other credit items the assessee had no explanation. The assessment was computed on a total income of Rs. 50,776. Thereafter, a notice was issued under S. 28 (1) (c) of the Indian Income-tax Act for the admitted concealment of income by the firm. On 31st August, 1953, a penalty of Rs. 9,300 was levied on the firm and the said order and the notice of demand were duly served on the partner T. Suryanarayana, who represented the firm. As the firm discontinued the business, the amount of penalty was sought to be realised proportionately from all the partners. The objections raised by some of the partners including the appellant were rejected. All the partners, except the appellant, paid their proportionate share of the penalty. The income-tax Officer is now proceeding to recover the share of the penalty from the appellant. The main contention of the learned counsel is that the Income-tax Officer had no jurisdiction to impose a penalty on the partners of a dissolved firm and to collect the same from any one of them.

3. Section 44 of the Income-tax Act governs the situation. It reads :

"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 the 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."

This section was enacted to meet the difficulty of assessing the income and for levying tax in the case of discontinuance of a firm or dissolution of an association of persons. By reason of this section, the erstwhile partners would be jointly and severally assessed and made liable for the tax. The argument is that the section only makes the partners liable jointly and severally for assessment and for the amount of tax and does not provide for levying and collecting any penalty from the said partners and therefore, there is no provision whereunder penalty can be levied on the partner of a discontinued firm. In support of this contention, reliance is placed on the judgment of a Division Bench of the Patna High Court in Commissioner of Income-tax, Bihar and Orissa v. Sanichar Sah Bhim Sah 1955-27 ITR 307 : ((S) AIR 1955 Pat 103) (A). That decision turned upon the provisions of Section 25-A (2) of the Act. Section 25-A was introduced to provide for the contingency of a division in a joint family by enacting that profits could be computed as if the said family continued to exist at the time of the assessment and by enabling the tax payable by the joint family either jointly or severally. The questions arose whether, by reason of that section, penalty could be imposed on a Hindu undivided family which had become disrupted. The relevant provision governing the case of a divided Hindu family is section 25-A (2) which reads :

"Where such an order has been passed, or where any person has succeeded to a business, profession or vocation formerly carried on by a Hindu undivided family whose join