SUNIL KUMAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this writ petition, the petitioner has challenged the validity of the notice (annex. A) issued under s. 226(3) of the I.T. Act, 1961 (hereinafter referred to as 'the Act'), addressed to respondent No. 3 firm, directing that any amount due and payable by that firm to the petitioner should be paid to the ITO in satisfaction of the alleged tax liability of the petitioner. The validity of the notice was taken up in revision before the Commissioner and the said revision had been dismissed on March 27, 1978, vide annex. E to the petition.

(2.) THE main contention of the petitioner is that he is not under any liability to pay the income -tax dues as claimed by the Department and as such the recovery proceedings are bad. To understand his grievance, it will be necessary to refer to certain facts which are not in dispute.

(3.) THE I.T. authorities, while assessing the income of the two firms, viz., respondents Nos. 4 and 5, came to the conclusion that respondent No. 4 was actually a benamidar for the other firm, respondent No. 5 and therefore, the incomes of these two firms were clubbed together and treated as the income of the firm, respondent No. 5. At the same time, protective assessments were made against the benamidar firm, viz., respondent No. 4. The contention of the petitioner is that the assessments of respondent No. 5 (so as to include the income of respondent No . 4 firm) has become final and that, therefore, the protective assessments that were made against respondent No. 4 have ceased to be valid and enforceable. The petitioner, therefore, contends that his admission to the benefits of the partnership which was a benamidar of respondent No. 5 firm has no relevancy inasmuch as that firm itself was not really a firm but was a benamidar of respondent No. 4 firm. In addition, he has alleged that on April 21, 1977, he has given a notice under s. 30(5) of the partnership Act, 1932, electing not to become a partner in the firm. That sub -section says that a notice is required to be given within six months of his attaining majority or six months from his obtaining knowledge that he was so admitted to the benefits of the partnership. There is some controversy as to whether the notice has been given in good time. However, that is not much relevant.