KATHLEEN PRIO SALDHANHA Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE assessees were the erstwhile partners of a partnership firm called "Silver Cloud Coffee Estate". THE assessment year involved in these cases is 1982-83. THE assessees are the applicants herein. THE partnership firm, Silver Cloud Coffee Estate, was dissolved on August 28, 1981. Before the dissolution, the firm was filing its returns. After the dissolution, the erstwhile partners of the firm obtained their share from the firm in accordance with their profit-sharing ratio. THEreafter, they opted to compound tax under section 65 of the Tamil Nadu Agricultural Income-tax Act, 1955 (hereinafter referred to as "the Act"), for their holdings held by them in the middle of the accounting year. THE Agricultural Income-tax Officer, Gudalur, permitted the partners of the firm for composition of tax under section 65 of the Act for the assessment year 1982-83. However, by exercising the suo motu power under section 34 of the Act, the Commissioner after hearing the assessees came to the conclusion that inasmuch as the assessees filed their individual returns, the Agricultural Income-tax Officer was not correct in permitting the assessees to compound tax. Accordingly, he set aside the permission given by the Agricultural Income-tax Officer and directed the Agricultural Income-tax Officer to assess the assessees individually on the basis of the returns filed by them. It is against that order, these applications are preferred by the assessees.

(2.) LEARNED counsel appearing for the assessees submitted that the Commissioner without assigning any reason exercising his suo motu power directed the Income-tax Officer to withdraw the permission given to the assessees to compound tax. It was submitted that it is always open to the assessees herein to ask for compounding the tax under section 65 of the Act. However, the learned Additional Government Pleaded (Taxes) while supporting the order passed by the Commissioner contended that inasmuch as the assessees filed their individual returns, the Commissioner was correct in directing the Agricultural Income-tax Officer to assess the assessees on the basis of their returns.