COMMISSIONER OF INCOME TAX Vs. CHHEHARTA BUTTON FACTORY

JUDGEMENT

(1.) THIS is a reference under section 66(1) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act), by the Income-tax Appellate Tribunal for decision of the following question of law :

(2.) THE brief facts of the case are that the assessee-firm, Chheharta Button Factory, is an unregistered firm. A notice under section 22(2) of the Act was issued and served on the assessee on the 28th May, 1963, in respect of the assessment year 1953-54. During the course of assessment proceedings, the assessee sent two letters dated the 27th December, 1957, and 16th January, 1958, informing the Income-tax Officer that the business of the assessee had been closed. THE Income-tax Officer, vide his order dated the 20th January, 1958, assessed the income of the firm to be Rs. 40,939. In appeal by the assessee it was contended before the Appellate Assistant Commissioner that the assessment had not been validly made as the firm had been dissolved on 30th April, 1957, long before the order of the Income-tax Officer. THE Appellate Assistant Commissioner accepted the appeal and set aside the assessment on the ground that the assessment could not be made in the name of the firm which had been dissolved on the 30th April, 1957. Against the finding of the Appellate Assistant Commissioner, the Income-tax Officer went up in appeal before the Appellate Tribunal. THE Tribunal upheld the decision of the Appellate Assistant Commissioner about the dissolution of the firm on the 30th April, 1957, and held that in view of the dissolution the assessment should be annulled. On application filed by the Commissioner of Income-tax, the Tribunal referred the question of law reproduced above to this court.

(3.) I would, accordingly, answer the question referred for decision in the affirmative. Looking to the circumstances of the case, I would leave the parties to bear their own costs of this reference.