D.N.Sinha, J. - (1.) The facts in this case are shortly as follows: In the year 1947, the partnership firm of Balmukund Radheshyam came into existence. The petitioner, Shivram poddar was a partner of the said firm. It appears from the returns filed by the Firm for the years 1949-50 and 1950-51, that the principal place of business of the firm was at No. 138, Cross Street, Calcutta, with branches at Ratlam, Indore and 357, Kalbadevi Road, Bombay. The1 firm carried on business as commission agent in cotton, sale and purchase of cotton and cotton piece goods, and speculation in cotton and silver. It is said that the firm was dissolved in February 1950. and that the notice of dissolution of the firm was duly given to the Income Tax Officer, Special Survey Circle III, Calcutta, by March, 1953. This however, is denied by the respondents. On August 20, 1952 a return was filed in respect of the income of the firm before the Income Tax Officer, Special Survey Circle III, Calcutta in respect of the assessment years 1949-50. An order of assessment was made on 28-10-1952. It is said that the income-tax assessed was duly paid. This firm had an income-tax file in the office of the Income Tax Officer, Special Survey Circle III, Calcutta and another file in the office of the Second Income Tax Officer, Bom-bay, in which however, no return was filed and no assessment was made. By an order dated 3-8-1955, the Central Board of Revenue, in exercise of powers under Sub-section (7A) of Section 5 of the Indian Income Tax Act, 1922 (hereinafter referred to as the 'Act') transferred the pending income-tax case in respect of the Bombay and Calcutta files to the file of the Income Tax Officer (Central) Circle II, Calcutta. By a letter dated 13-10-1955, the Income Tax Officer (Central) Circle II, Calcutta upon the ex-partners of the said firm to produce books of the firm for the year 2004-05, and particularly all the documents relating to the speculation in cotton and silver. On 22-10-1955 the said Income Tax Officer issued a notice under Section 34 of the said Act on the petitioner. A copy of the said notice is annexed Herewith and marked with the letter 'E'. It was addressed to 'Shri Shivram Poddar (Partner), for and 0n behalf of M/s. Balmukund Radheshyam 138, Cross Street, Calcutta'. In that notice it was stated that the said Income Tax Officer had reason to believe that his income assessable to income-tax for the year ending 31-3-1950, had been under-assessed and that he proposed to re-assess the income. Ths petitioner was called upon to file his return. Thereafter, there was correspondence between the peti-tioner and/or his authorised representative and the Income Tax Officer and several notices were issued. It is unnecessary to go into details. On 14-12-1955 the petitioner made an application to this Court under Article 226 of the Constitution, and a rule was issued on 16-12-1955 calling upon the respondents in that application to show cause why appropriate writs should not be issued commanding the said respondents to forebear to give effect to the said notices and for other orders. A copy of this rule is annexed to the petition and marked with the letter 'O'. By an order made by me dated 23-1-1957 this rule was made absolute and the respondents in the said application were prohibited and restrained tram taking any further steps upon the said notice with liberty, however, to proceed against the partners of the said dissolved firm and/or their legal representatives or in any manner in accordance with law. A copy of the rule-absolute is annexed to the petition and marked with the letter 'P'. The respondents thereupon preferred an appeal, which appeal was dismissed with costs on 26-5-1950. In deciding the said application, I followed my own decision in Manindra Lal Goswami v. Income Tax Officer, wherein I had held that under the circumstances prevailing in the case, there could not be any assessment or re-assessment of a dissolved firm as such. This decision of mine has been upheld by the Appeal Court in R.N. Bose v. Manindra Lal Goswami. I shall refer to this decision in greater detail presently. On March 28, 1958 the said Income Tax Officer who is the respondent No. 1 in this case issued another notice under Section 34 read with Section 22(2) of the said Act. A copy of this notice is annexed to the petition and marked with the letter 'Q'. This notice is addressed to 'Shri Shivram Poddar, partner of the firm of M/s. Balmukund Radheshyam at the time of its dissolution C/O M/s. Anandram Gajadhar, 33 Netaji Subhas Road," Calcutta." The relevant part of this notice runs as follows: "Whereas I have reason to believe that M/s Balmukund Radheshyam (name of the firm) was dissolved on or about 24-2-1950 : And whereas the income of the said firm assessable to income-tax for the assessment year 1949-58 has been under-assessed; And whereas I propose to reassess the said income; And whereas under Section 44 of the Indian Income Tax Act, 1922, you the said Shivram Poddar , and Ramnarain Ojha (deceased) 33. Netaji Subhas Road, Calcutta, who were partners of the said firm of M/s. Balmukund Radheshyam at the time of its dissolution, are jointly and severally liable to assessment in respect of the income, profits and gains of the said firm before its dissolution and for the amount of tax payable thereon; Now therefore under Section 34 read with Section 22(2) of the said Act, I require you, the said Shivram Poddar to deliver to me within 35 days of the receipt of this notice a return in the attached form, of the total income and the total world income of the said firm assessable for the year ending 31s6 March, 1950 ......"
(2.) I have set out the notice in some detail because, the petitioner in this application challenges this notice. In August, 1958 the petitioner protested against the validity of the notice and proceedings and thereafter made an application to this Court and this rule was issued on 18-9-1958 calling upon the respondent No. 1 to show cause why he should not be directed to forebear from giving effect to the said notice and why the said notice and the proceedings should not be quashed by appropriate writs.
(3.) Before I proceed to deal with the point that has been raised in this application. I might state here that the whole case depends on the interpretation of Section 44 of the said Act. This section has now been amended. For the sake of convenience I set out the original section and the amendment: "Original Section 44. Where any business, profession of vocation carried on by a firm or an association of persons has been discontinued or where an association of persons is dissolved, every person who was at the time of such discontinuance or dissolution a partner of such firm or a member of such association shall, in respect of the income, profits and gains of the firm or the association be jointly and severally liable to assessment under Chapter IV and for the amount of tax payable and all the provisions of Chapter IV shall so far as may apply to any such assessment.";