N SUBBA RAO Vs. INCOME TAX OFFICER THIRD

JUDGEMENT

(1.) THE assessee petitioner has prayed in this petition for issue of a writ of prohibition or a direction in the nature of a write of prohibition, prohibiting the respondent (the Third Income-Tax Officer, City Circle II, Bangalore) from continuing with the collection proceedings under section 46 of the Indian Income-tax Act, to be referred to hereinafter as the Act, in the firm's case (of which he was the quondam partner) for the assessment year 1953-54 in pursuance of the notice of demand dated December 10, 1958, issued by the respondent to him. He has also sought a writ of certiorari or a direction in the nature of a writ of certiorari, quashing the collection proceedings before the respondent initiated under section 46 of the Act in the firm's case for the assessment year 1953-54. THEn, there is the omnibus prayer asking the court to issue such other writ or writs or orders or directions as the circumstances of the case may necessitate.

(2.) BEFORE considering the points urged by Sri K. Srinivasan, the learned counsel for the petitioner, it is necessary to set out the relevant facts. The petitioner was a partner of a firm known as "Unni & Co". For the assessment year 1953-54 that firm was assessed to an income-tax of Rs. 70,206-10-0. The order of assessment is dated March 15, 1954. The firm appears to have discontinued its business very soon after the assessment order in question was made. Thereafter, the income-tax officer issued a certificate under section 46(2) of the Act and requested the Deputy Commissioner to initiate proceedings to realise the tax due from the partners of the firm. When the Deputy Commissioner was about to move in the matter, one of the partners of the firm, namely, T. Govindaswamy, came up to this court by means of an application under article 226 of the Constitution seeking to restrain the Deputy Commissioner from collecting the arrears of tax due. In that petition (T. Govindaswamy v. Income-tax Officer, Special Survey Circle, Bangalore), this court held that proceedings for the recovery of tax could be initiated under section 46(2) only against an assessee in default. It further held that although by virtue of section 44 the petitioner therein was liable to pay the tax assessed on the firm before its discontinuance, as no notice of demand under section 29 was served on him, he could not be said to have failed to pay the amount demanded in the notice and, therefore, was not an assessee in default. Hence there was no jurisdiction to initiate recovery proceedings against him under section 46. In the course of the judgment in that case, Narayana Pai J., who delivered the judgment of the court, observed :

(3.) WE do not think that there is any force in any of the contentions advanced by Sri K. Srinivasan. The petitioner is asked to pay up the arrears of tax due not because there is any order of assessment against him as such. His liability to pay the arrears of tax arises as a consequence of section 44 of the Act, which says :