GOVINDASWAMY T Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS petitioner, who is a partner of a firm called "Unni & Co.", prays for the issue of an appropriate writ to wash the proceedings initiated by the second respondent, the Deputy commissioner, Bangalore District, to recover from the petitioner income-tax due by the said firm on the strength of a certificate under Section 46(2) of the Indian Income-tax Act issued by the first respondent, the Income-tax Officer. Special Survey Circle, Bangalore.

(2.) FOR the assessment year 1953-54 the said firm was assessed as an unregistered firm under an order of assessment dated March 15, 1954, made by the first respondent officer. A sum of Rs. 70,206-10-0 was determined as the income-tax payable by the firm, a notice of demand under section 29 of the Act was also served on the firm. Deducting a small sum said to have been paid by one of the partners, a balance of Rs. 67,923-1-3 remained unpaid. The first respondent thereupon issued to the second respondent a certificate under section 46(2) of the Act specifying the amount of arrears due from the assessee firm, sometime later if stated that the first respondent gave certain details as to the constitution of the firm to the second respondent. But no separate notice of demand was issued to the petitioner, nor was he named in the certificate as the assessee from whom areas were due. The second respondent proceeded to attach and sell properties belonging to the petitioner was liable to pay 1/4 of Rs. 67,923-1-3.

(3.) IT will be convenient first to decide what exactly is the legal effect of the letter mentioned above. In the said letter it is clearly stated "the firm has not done many business for the assessment year under review (1955-56) and the firm is not also having any idea of carrying on the business any further and that the same is not also having any idea of carrying on the business any further and that the same is going to be dissolved shortly ". IT is clear, therefore, that it was not a mere suspension of business. The firm had no idea of continuing the business at all. In fact it was contemplating dissolution. There is no suggestion that the business is going to be taken over by some other person or firm. IT was not, therefore, a case of succession to the business of the firm either. The conclusion is inevitable that the situation was one of total cessation or stoppage of business. IT would, therefore, be discontinuance within the meaning of section 44.