COMMISSIONER OF INCOME TAX, WEST BENGAL Vs. NCMANDAL

JUDGEMENT

(1.) The Commissioner of Income-tax has caused the Income-tax Appellate Tribunal to refer the following question to this Court for its opinion :- Whether in the facts and circumstances of the case Mr. N. C. Mandal was entitled to relief under Section 25(3) in respect of his share of income from the firm of N. C. Mandal ; Co., Solicitors, for the period March 1, 1943, to March 15, 1944.

(2.) The facts are admitted and are as follows : Mr. N. C. Mandal who was a senior attorney of this Court had been carrying on his business or profession as an attorney. In 1925 he entered into partnership with another solicitor, Mr. K. L. Mandal, and both carried on business as attorneys of this Court under the name and style of N. C. Mandal and Co. On March 1, 1944, two new partners were taken in and the shares were redistributed. Formerly, Mr. N. C. Mandal had 12 annas share. That share was continued. Mr. K. L. Mandal had 4 annas share. That share was reduced to 2 annas. The two new partners were given one annas each. On March 16, 1944, Mr, N. C. Mandal retired from his profession. He notified the Incorporated Law Societu of his retirement, and gave notice of discontinuance of profession to the revenue authorities.

(3.) The Income-tax authorities contend that he is not entitled to relief under Section 25(3) of the Income-tax Act, the relevant portion of that section is as follows :- Where any business, profession or vocation on which tax was at any time charged under the provisions of the Indian Income-tax Act, 1918, is discontinued, then unless there has been a succession by virtue of which the provisions of sub-section (4) have been rendered applicable, no tax shall be payable in respect of the income. Profits and gains of the period between the end of the previous year and the date of such discontinuance....