- (1.) The Petitioner and four other persons of the names of K.C. Chatterjee, G.D. Chatterjee, P.C. Biswas and S.K. Bose were partners of a firm known as "Messrs. Popular Transport Service", The Petitioner had 1/30th share in the partnership business. The partnership was engaged in transportation business. On or about July 21, 1952, the partners of the Petitioner sold their shares in the business of the partnership to certain outsiders for a consideration of Rs. 1,45,000. The Petitioner also sold his 1 /30th share in the business of the partnership to the same outsiders on the same date. The Petitioner, however, says that he did not actually retire from the partnership until October 30, 1952. The outside purchasers, it is said by the Petitioner, discontinued the transportation business on or about November 11, 1963 and the firm stood dissolved thereafter.
(2.) After the discontinuance of the firm, the Respondent No. 4, Income-tax Officer, assessed the discontinued partnership to income-tax for the assessment year 1946-47, under Section 23(4) read with Section 34(1)(a) of the Income-tax Act, 1922, on an income of Rs. 1,43,300 and determined the tax payable by it at Rs. 86,533-2-0. Also for the assessment year 1951-52, the dissolved partnership was assessed income-tax under Section 23(4) of the Income-tax Act, 1922, on an income of Rs. 48,000 and the tax payable was determined at Rs. 19,735-12-0. Notices of demand under Section 29 of the Income-tax Act, 1922, in respect of both the sums assessed, were issued in the name of the partnership, which stood discontinued and dissolved at the material time and were served upon the firm by affixation (vide para. 12 of the affidavit-in-opposition by the Respondent No. 6).
(3.) For non-payment of the tax assessed, the Income-tax Officer took steps under Section 46(2) of the Income-tax Act, 1922 and forwarded two certificates, dated March 25, 1957, to the Collector, 24-Parganas, for recovery of the two demands. A Certificate Officer, thereafter, started two recovery proceedings against the dissolved firm under the provisions of the Public Demands Recovery Act. About two years after the institution of the recovery proceedings, on November 11, 1957, the Respondent No. 5, Income-tax Officer, who had in the meantime come to be in charge of the assessment of the firm, intimated to the Certificate Officer, the names of the quondam partners of the dissolved firm including that of the Petitioner, with a request to the Certificate Officer for recovery of the certificate debts from the said named persons. Thereupon, the Respondent Certificate Officer amended the certificate by insertion of the names of the said partners and on July 5, 1960, sent two notices, under Section 7 of the Public Demands Recovery Act, calling upon the Petitioner to show cause why he should not pay the two certificate debts.;