JOHN M L Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THESE three petitions under Article 226 are being disposed of by a common judgment.

(2.) WRIT petition No. 523 of 1975 is by M.L. John and I.E. John. The two petitioners question the validity of the various reassessment orders under the Indian I.T. Act, 1922, and the Excess Profits Tax Act, for the assessment years 1942-43 to 1947-48, as also that of the reassessment orders under the I.T. Act for the assessment years 1948-49 to 1956-57, made in the case of the unregistered firms known as John Mills and Co. and John and Co. They pray that notices of attachment of movable and immovable properties for a realisation of the tax assessed under the impugned assessment orders be quashed and the respondents be restrained from taking any step to recover the said demands amounting to Rs. 26,72,662-66 from the petitioners.

(3.) MAJOR A.U. John, one of the partners of John Mills Co. died on May 8, 1943, and, thereafter, M.L. John and I.E. John filed suit No. 28/1943 in the Civil Courts at Agra, claiming a decree for the dissolution of the firm and for accounting. A preliminary decree was passed in February, 1944, but the proceedings in preparation for final decree are still pending. Thereafter, according to the petitioners, R.E. John ran the mills till May 23, 1946, in the name and style of John Mills Company (1943) as his proprietory concern. The case of the respondent, on the other hand, is that as per the returns filed by Sri M.L. John, it was run by the remaining partners of the firm John Mills and Company i.e., R.E. John, M.L. John and I.E. John in the name of John Mills Company (1943). John Mills and Co. and the business income thereof was assessed as such. At this stage R.E. John sold his proprietary interest in three mills to his two brothers M.L. John, I.E. John and Mrs. Marzano, who had already become the owner of G.A. John's share in the mill properties and, thereafter, the mills were run by M.L. John, I.E. John and Mrs. Doris Marzano in the name of the firm M/s. John. and Co. In the month of July, 1946, the executors of the estate of A.U. John, sold the interest that A.U. John had in the mills to Hira Lal Patni (father of petitioner, N.K. Patni, in Writ Petition No. 962 of 1975) and Munni Lal Mehra (petitioner in Writ Petition No. 790 of 1975). Likewise Edven John sold his interest in the mill properties to one Sri Gambhirmal Pandey. On April 11, 1949, the new owners of the mills formed a partnership by the name of John Jain Mehra and Company. On April 18, 1949, one Sri Loon Karan Sethiya filed suit No. 76/49 against John Jain Mehra and Company and John Mills and Company for the recovery of certain loans advanced to M/s. John and Company. In that suit, the Civil Court at Agra, vide its order dated May 21, 1949, appointed Sarvasri P.S. Mathur and M.B. Tawakley, advocates, as joint receivers.