Sinha, J. - (1.) The facts In this case are shortly as follows : The petitioner, Manindra Lal Goswami, carried on a business in co-partnership with one B. R. Das Gupta and one P. C. Mukherji under the name and style of 'Dyes and Chemical Agency', at No. 12, Dalhousie Square, Calcutta. The partnership commenced from 1-4-1940 and was discontinued as & from 31-3-1944. On or about 25-11-1944 notice was issued under Section 34, Indian Income-tax Act. So far as the petitioner is concerned, it was issued in this form: "Notice under Section 34 of the Indian Income-tax Act, 1922 (XI of 1922) No. III(1)/1946 income-tax Office Date 25-11-44 To M. L. Goswami, Esqr., Partner of M/S. Dyes & Chemical Agency C/o Bengal Engineering Co., Ltd., 12, Dalhousie Square, Calcutta. Whereas in consequence of definite information which has come into my possession, I have discovered that your income assessable to income-tax for the year ending 31st of March 1944 (a) escaped assessment: I therefore propose to assess the said (a), escaped assessment: I hereby require you to deliver to me not later than 5-1-45 : Or within thirtyone days of the receipt of this notice a return in the attached form of your total income and total world income assessable for the said year ending 31st of March 1944."
(2.) It will be observed that the notice was not on the firm but on an individual partner calling for a return of his income, that is to say, his total world income, which would include not only his income from the firm but from other sources as well. I am informed that a similar notice was issued to the partner B. R. Das Gupta. The notice was received by the petitioner on 30-11-1944. It appears that he received the notice but did nothing about it. On the other hand, Sri Das Gupta filed a return. At the hearing before the Income-tax Officer, which took place on 12-12-1947 Daa Gupta appeared and the firm was assessed for the year 1943-44. A copy of the assessment order dated 12-12-1947 is annexed to the petition and is marked 'A'. In the assessment order, the name of the assessee is stated to be "Dyes & Chemical Agency: represented by Mr. B. R. Das Gupta". The status was URP which means 'unregistered firm', It is further stated in the said order that the firm was R and OR which means 'resident and ordinarily resident'. The assessment was stated to have been under Section 23(3) read with Section 34. It appears from the assessment order itself that the return showed a net loss of Rs. 1,889/-, but this was not accepted by the Income-tax Department which assessed the firm upon a total income of Rs. 45,101/-. It was directed that demand notice and challan was to be issued on the unregistered firm. It is stated in the petition that notice of dissolution of the firm was served on the then income-tax Officer, District III(1) Calcutta in or about 14-1-1947. In the affidavit in opposition, reference has been made to the record, but there is no express denial. As the firm defaulted in making payment, the Income-tax Officer on 30-3-1949 sent to the Collector of 24 Parganas a certificate under Section 46(2), Indian Income-tax Act for recovery from the firm of arrears amounting to Rs. 13,264/1. On 31-3-1949 the Certificate Officer signed and filed certificate No. 1537 IT of 1948-49 under the Public Demands Recovery Act against the firm. Thereafter the Certificate Officer issued notice on the firm under Section 7, Public Demands Recovery Act. This notice was returned un served with tile report that the firm the certificate debtor was not traceable. On 28-12-1950 the Certificate Officer reported the fact to the Income-tax Officer and requested him to furnish the correct address and present whereabouts of the certificate debtor, together with a list of his assets. On 13-2-1952 the Income-tax Officer stated that the firm was not traceable and he was therefore issuing notice to the partners for payment of the taxes, failing which, he would issue certificate under Section 46(2) on the partners, and requested the Certificate Officer to keep the case pending. Subsequently, having the Income-tax authorities thought that the firm not being registered under Section 26A, Indian Income-tax Act, the partners of the firm were liable for the dues of the firm and no separate demand notice was required to be served on the partners. Thereafter the Certificate Officer added the names of the three partners in the certificate under Section 4, Public Demands Recovery Act, and notices under Section 7 of the said Act were served on the partners. The petitioner and P. C. Mukherji, another partner, filed objections before the Certificate Officer which, were rejected on 30-11-1953. Thereupon appeals were preferred before Mr. K. C. Basak, Commissioner, Presidency Division. Three points were taken before the Commissioner. The first point was that the partners were not served with any demand notice. Secondly, it was urged that the Income-tax Officer had issued a certificate under S. 46(2), Indian income-tax Act against the firm and not its partners and consequently the Certificate Officer could not proceed against a partner under the Public. Demands Recovery Act. Thirdly, St was urged that the firm having been discontinued the partners would have to be separately assessed because the liability was of a discontinued firm, and under Section 44, Indian Income-tax Act, proceedings could be taken against the partners jointly or severally by assessing them as such. This rule was issued on 25-8-1954 upon the respondents to show cause why an order in the nature of a Writ of Certiorari should not be issued and why ia Writ in the nature of Mandamus should not be made directing the respondents to refrain from taking any further steps in connection with the said certificate proceedings commenced upon the requisition of respondent 1 in the petition mentioned, .and why such further or other order or orders should not be made as to the Court might seem fit and proper. Although the rule does not specifically say what the Writ of Certiorari was meant to do, it is clear from the petition that it is for quashing the assessment order and the issue of a certificate under Section 46(2), Income-tax Act. While the Rule was pending, the appeal has been heard and allowed. The learned Commissioner has held that no notice under Section 25(2), Indian Income-tax Act having been served of the discontinuance of the firm, Section 44, Indian Income-tax Act was not applicable. He proceeded upon the footing that the assessee was an unregistered firm. He held that the certificate having been issued against the unregistered firm by the Income-tax Officer under Section 46(2), Indian Income-tax Act, it was not open to the Certificate Officer to add the names of the partners and/or to execute the certificate against the partners. The appeals were accordingly allowed and the recovery proceedings under the Public Demands Recovery Act were set aside. I am informed that an appeal against this order has been preferred by the Income-tax authorities.
(3.) The first point that arises in this application is as to the exact scope thereof. So far as the certificate proceedings are concerned, the petitioner has already got relief by the order of the learned Commissioner and it is not necessary at this stage to intervene. Mr. Roy however argues that his attack in this application is also upon the assessment order itself, as well as the order made by the Income-tax Officer under Section 46(2), Income-tax Act, which is left outstanding and which, in the opinion of the Income-tax authorities, is executable against a partner. It will be observed, however, that the certificate under Section 46(2) is also against the unregistered firm and not against the partners as such. The real complaint is that the assessment order has been made against an unregistered firm and it is quite obvious that the Income-tax authorities consider this as entitling them to proceed individually against the partners without any assessment of the partners themselves. Of course, it is not obligatory upon the Income-tax Department to proceed under the Public Demands Recovery Act, and they may proceed in other ways. Mr. Meyer on behalf of the Income-tax authorities very fairly submitted that he was not going to take & technical stand but wished to have a decision on the point as to whether such an assessment could be made and having been made, whether it could be realised from the partners. I will therefore proceed to consider this point.;