KURUMBER BETTA ESTATE Vs. INCOME TAX OFFICER FOURTH

JUDGEMENT

(1.) THE petitioner is a partnership-firm represented by its managing agent. Exhibit P-1 is the deed of partnership. THEre were four partners. Plantation is the main business. Clause 12 of exhibit P-l provided that, if a partner dies, the partnership shall accept his legal representative as a partner in his place ; but if the legal representative is unwilling to join, he or she shall be entitled to the same reliefs as a partner willing to retire. Till such intimation, the other partners shall have full right of deciding all questions connected with the working of the partnership. Channiah, one of the four partners, died in 1971. His legal representative, Pramila Krishna, readily joined as a partner. In 1973, another partner, Bharathi Udayabhanu retired by mutual agreement and the other partners continued. Another partner, Devaki Amma, then died and her legal representative, Sarada Vijayan, was admitted as a partner. At present, the three partners are Pramila Krishna, Sarada Vijayan and Pavizham Madhavan Nair, among whom the last mentioned alone is an original partner.

(2.) THOUGH the firm as such did not have any income-tax liability, Channaiah was indebted to the Income-tax Department for arrears due in respect of a certificate dated June 12, 1968, forwarded by the Income-tax Officer, Central Circle-I, Bangalore, and the interest payable under Section 220(2). One-third share of Channaiah in the partnership assets was kept under attachment by exhibit P-2 order dated December 28, 1968, issued under Rule 32 of the Second Schedule to the Income-tax Act, 1961, before the death of Channaiah. Exhibit P-2 was not pursued further. On January 5, 1978, long after the death of Channaiah, the Income-tax Officer, Mysore, issued exhibit P-7 notice to the firm under Section 226(3) demanding the tax due from Channaiah. The firm was informed that on failure it will be treated as a defaulter. That was followed by long correspondence, but nothing took place.

(3.) THE main objection is that this court is not having jurisdiction to entertain the original petition. Other contentions are : (1) Attachment evidenced by exhibit P-2 was not challenged and hence original petition will not lie for that reason also, (2) the petitioner is estopped from claiming back any amount as the clearance certificate was obtained and deposit made on agreed basis, and (3) the claim of the Department has preference over all liabilities.