KALVA SURYANARAYANA Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) This appeal is brought, by special leave from the judgment of the High Court of Andhra Pradesh dated December 21, 1964 in Writ Petition No. 1294 of 1961.

(2.) The appellant had entered into a partnership with three others named D. Sayappa, Siddappa and M. Verraiah to out a "Gulmoha" contract for the year 1949-50. The firm was known as Messrs Kalva Suryanarayana. After completion of the contract the partnership came to an end. For the assessment year 1951-52, the partners of the dissolved firm made an application for registration of the partnership to the respondent who granted the registration on February 28, 1953, and on that basis proceeded to assess the total income of the partnership which he determined at Rs. 1,64,546/- (O.S.), and the total income was apportioned among the four partners in proportion of their respective shares. Subsequently, the Commissioner of Income Tax in exercise of his revisional power under Section 33B of the Income Tax Act passed an order on February 26, 1955 holding that the partnership had suppressed income to the extent of Rs, 1,72,149 (I.C.) by inflating the expenses under railway height and by not accounting for the sale of old gunnies. The Commissioner of Income Tax accordingly directed that the assessment already made should be enhanced by a sum of Rs. 1,72,149. In pursuance of this order the respondent revised the assessment on March 11, 1955 and determined the total income of the partnership at Rs. 3,13,189/- (I.G.) and apportioned it among the several partners in proportion to their shares and demand notices were issued accordingly against individual partners of the dissolved firm. It appears that the appellant and D. Sayappa paid their shares of the tax but M. Veeraiah and H. Siddappa failed to pay their shares which were Rs. 10,654,62 and Rs.5,640.62 respectively. After about six years the respondent issued a notice to the appellant under Section 45 of the Income Tax Act, 1922, hereinafter called the 'Act calling upon him to pay up the arrears on the footing that under the provisions of Section 44 of the Act there was joint and several liability of each and every partner of the dissolved firm in respect of the arrears of tax. The appellant thereafter moved the High Court for grant of a writ to quash the notice. The writ petition was dismissed by the High Court by its Judgment dated December 21,1964.

(3.) The provisions of Section 23 (5) and Section 44 of the Act as they stood at the material time are reproduced below: