MANOHARLAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question referred by the Income-tax Appellate Tribunal for our opinion is :

(2.) THE assessee was a partner in the firm Messrs. Raghunandan Prasad Manohar Lal, which was assessed for the assessment year 1945-46 as an unregistered firm. THE income of the firm was assessed at Rs. 47,755 and the tax determined on this income was Rs. 15,588- 8-0. THE amount of tax so determined was recovered from the three partners, one of whom was the assessee. THE assessee had one- third share in the profits of the partnership firm. In the appeal before the Income-tax Appellate Tribunal, the assessee did not dispute that the firm, Messrs. Raghunandan Prasad Manohar Lal, being an unregistered firm, was a separate assessable entity and that its income was properly assessed and taxed in its hands. THE contention raised before the Tribunal was that, though the firm was separate assessable entity, it was not a juristic person and that, in fact, the imposition of income-tax was on the income of each partner and the partners were the persons from whom the tax was realised, so that, in their individual assessments, the partners where entitled to claim refund in case it was found that, on taking into account their shares in the income of the partnership firm, the tax payable on that part of the income was less than the tax actually assessed and charged in the proceedings for assessment of the firm itself. It was on this contention that the Tribunal framed the question mentioned above and referred it for opinion to this court.

(3.) WE may, in this connection, mentioned a decision of the Madras High Court in Commissioner of Income-tax v. Arunachalam Chettiar which however, can be of no assistance in the present case because, at the time when that case was decided, the law was quite different from the law as if now stands. The definition of the word assessee has been altered, sub-section (5) has been added to section 23 and there have been amendments in sections 29 and 48 of the Income-tax Act. Section 48, which came up for interpretation in that case, as it stood at that time was markedly different from section 48 as it now stands and the decision in that case, in view of the change of the language, is clearly inapplicable in the present case. It is, therefore, not necessary for us to discuss that the case in any detail. The principles, which govern the present case, have already been explained by us above and, on these principles, the question referred to us has to be answered in the negative and we answer it accordingly. The assessee shall pay the costs of the opposite party which we fix at Rs. 200 representing fee of learned counsel for the Department.