DHARAM PAL Vs. INCOME-TAX OFFICER

JUDGEMENT

(1.) TWO Writ Petitions Nos. 6792 of 1976 (Dharam Pal v. ITO) and No. 6793 of 1976 (Vidya Parkash v. ITO) have been filed by two partners of M/s. Nagesh Hosiery Mills, Ludhiana, which is a firm duly registered having two partners, namely, Dharam Pal and Vidya Parkash, petitioners, under Articles 226 and 227 of the Constitution of India, for quashing the notice, annex. P-3, dated February 10, 1976, for assessment of the income for the assessment year 1970-71, on the ground that it had escaped assessment, and also annex. P-4, the draft assessment order.

(2.) THE case set up by both the petitioners is identical and shall be decided by one judgment. The facts of this case are that the firm, M/s. Nagesh Hosiery Mills, was started in the year 1951. Dharam Pal and Vidya Parkash, partners, were being assessed as representatives of their HUFs in their individual names. Up to the assessment year 1966-67, there was no dispute about the assessment. On March 31, 1967, Dharam Pal, petitioner, made a partial partition amongst the members of his family with respect to the investment of the HUF headed by him in the firm of M/s. Nagesh Hosiery Mills and his share of income from each investment was also partitioned with the other petitioners in Civil Writ Petition No. 6792 of 1976 with the overriding share of Dharam Pal from the said concern of M/s. Nagesh Hosiery Mills. Similarly, Vidya Parkash, on March 31, 1967, made a partial partition with the members of his family constituting all the petitioners in Civil Writ Petition No. 6793 of 1976 on the same terms and conditions as in the case of Dharam Pal. The partition deed has been annexed as annex. P-1 in both these petitions.

(3.) THE petitioners in both these cases filed returns for the assessment year 1968-69 in their individual names for their respective shares from the said firm of M/s. Nagesh Hosiery Mills. In CWP No. 6792 of 1976, the share of each petitioner came to 1/6th of one-half share, which was of Dharam Pal in the firm. In CWP No. 6793 of 1976, the petitioners filed returns to the extent of 1/5th share each, of the one-half share of Vidya Parkash, who was a partner having half share in M/s. Nagesh Hosiery Mills. After due enquiries, the then ITO made six assessments in the case of the petitioners in CWP No. 6792 of 1976. Similar returns were submitted by the petitioners in CWP No. 6793 of 1976 and five assessments in this case were made. The assessed taxes were paid by them and the same process continued till the assessment year 1973-74. It is the case of the petitioners that nothing was concealed from the said ITO making those assessments and the facts were truly disclosed.