SHYAM SUNDER DHOOT Vs. WEALTH TAX OFFICER

JUDGEMENT

(1.) THIS writ petition has been filed for quashing the notice dated March 28, 1981 (annexure '11') issued under Section 17(1) of the Wealth-tax Act, 1957, in respect of the assessment year 1972-73, for restraining the non-petitioner from taking further proceedings in pursuance thereof and for holding that the non-petitioner has no jurisdiction to proceed against the petitioner in pursuance of the impugned notice. The facts of the case may be summarised thus.

(2.) THE petitioner along with his mother, Smt. Rukma Bai, constituted a partnership firm, Messrs. Gulab Das [agannath, in terms of the partnership deed dated November 14, 1966. It was duly registered under the Indian Partnership Act, 1932. THE Income-tax Officer granted registration to the said firm under Section 185 of the Income-tax Act thereinafter referred to as "the Act"). THE firm was regularly registered as a registered firm till the year 1977-78. THE partners of the firm, Messrs. Gulab Das Jagannath, i.e., Shyam Sunder Dhoot (the petitioner) and Smt. Rukma Bai, separately filed returns regularly under the Wealth-tax Act, 1957, including their share in the assets of the said firm. THE Wealth-tax Officer accepted the returns and passed assessment orders accordingly till the year 1977-78. THE Income-tax Officer initiated proceedings under Section 186 of the Act for cancellation of the registration granted to the said firm, Messrs. Gulab Das Jagannath, for the assessment years 1972-73 to 1977-78 and cancelled the registration holding that the petitioner's mother, Smt. Rukma Bai, was merely a benamidar of the petitioner, that the amount invested by her in the said firm did not belong to her and that she did not enter into partnership with her son. He also directed that the entire income of the firm was to be assessed in the hands of the petitioner. THEreafter, the impugned notice was issued.

(3.) IT is thus the admitted case of the non petitioner that the basis of the impugned notice, annexure-11, is the order cancelling the registration of the firm, Messrs. Gulab Das Jagannath, that it has been set aside in appeal and that the appellate order has been confirmed by this court by its judgment dated May 22, 1984, reported in CIT v. Gulab Das [1986] 159 ITR 24. Thus, the foundation for the impugned notice no more exists. As such, the notice, annexure-11, has to be quashed.