INCOME-TAX OFFICER NELLORE Vs. M SUNDARARAMIREDDY

JUDGEMENT

(1.) This is an appeal against the order of Justice Jagmohan Reddy accepting a petition of the respondent for the issuance of a writ of Mandamus to prevent the Income-tax authorities from collecting the tax pursuant to a certificate issued under Section 46 (2) of the Income-tax Act.

(2.) The material facts which lie in a short compass are as follows: The respondent along with three others was a partner in a mining company called Lakshmi Prasad Mica Mining Co., Gudur, Nellore District. with 24/384 share. In the assessment year 1954-55, on an application by the partnership, its registration was granted by the proper Income- tax Officer. Thereafter the assessment of the firm was made. The total profits of the firm were ascertained and apportioned amongst the partners and this share of the profits was added to the other income of each of the partners and the total income brought of the tax and no tax is due from him to the department. Admittedly, the respondent paid his share of the tax and no tax is due from him to the department. Ramana Reddy, one of the partners, defaulted to pay tax within the prescribed time and so a penalty was imposed on him under Section 46 (1) of the Indian Income-tax Act. Meanwhile, the firm was dissolved. Therefore, the department sought to realise the arrears of tax including the penalty from the respondent. This was resisted by the respondent on the ground that he was not liable to fulfil the demand against one of the partners. So conceive steps were taken against the respondent by the issue of a certificate under Section 46 (2) of the Indian Income-tax Act.

(3.) At this stage, the respondent had invoked the jurisdiction of this Court under Art. 226 of the Constitution raising a plea that here was not liability on the part of one of the partners of a registered firm to pay the tax due by another partner. The department contended that consequent on the dissolution of the partnership a joint and several liability was imposed on the whilom partners and as such they were authorised to enforce the tax liability of one of the partners against the respondent.