MAHADEO GANGAPRASAD Vs. INCOME TAX OFFICER SECOND

JUDGEMENT

(1.) THE petitioner, Messrs. Mahadeo Gangaprasad, is a partnership firm carrying on business in Bombay. By this petition under article 226 of the constitution of India, the petitioner seeks to get quashed the notices of demand of date 28th November, 1962, and the proceedings taken against the petitioner in pursuance thereof. The petitioner also seeks for an order against the Income -tax Officer, respondent hereto, prohibiting him or his successor in office from taking any steps or proceedings, in enforcement, furtherance, implementation or in pursuance of the said notices of demand. We are here concerned with assessment years 1956 -57 to 1960 -61. At all material times in the said assessment years one Bajranglal Birla was its partner, though there had been some changes during these years in respect of its partners and in respect of the shares of the partners. It is not necessary for the purpose of this case to go into any further detail.

(2.) THE firm, at all material times, was a registered firm. In respect of these assessment years, assessments of the firm had been made for ascertaining the income of the firm and thereafter the respective shares of the partners in the profits of the firm had also been transferred to the individual assessments of the partners and have been taxed in their hands. Bajranglal's share of profits in the firm also had been taxed in all these assessment years in his hands. On 28 the November, 1962, the Second Income -tax Officer A -IV Ward, issued five notices in respect of the aforesaid assessment years claiming n an aggregate a sum of Rs. 2,09,788.43 paise, being the amount of tax recoverable from Bajranglal, one of the partners of the petitioner -firm in the relevant assessment years. It had been stated in the notices that the demand notices were issued under section 156 of the Income -tax Act, 1961 (43 of 1961), hereinafter referred to as the Act. Along with these notices the Income -tax Officer sent covering letter of the same date, the material part thereof reads :

(3.) THE arguments advanced before us by the learned counsel for parties principally turn round the provisions of section 156 and section 187 of the Act and, therefore, in order to appreciate the arguments, it is necessary at this stage to read the material portion of the provisions thereof : section 187 occurs in Chapter XVI of the Act, which relates to the special provisions applicable to firms. Section 182 relates to the assessment of registered firms. Section 183 relates to the assessment of unregistered firms and sections 184 to 186 relate to the registration, and cancellation of registration of firm. Sub -section (1) of section 187 provides : 'Whether at the time of making an assessment under section 143 or section 144 it is found that a change has occurred in the constitution of a firm, the assessment shall be made on the firm as constituted at the time of making the assessment : Provided that -