GIRDHARI LAL LAXMAN PRASAD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee is a partnership firm consisting of three partners, Girdhari Lal, Laxman Prasad and Ram Dulari Devi. For the assessment year 1958-59 the Income-tax Officer took separate assessment proceedings against Girdhari Lal and Ram Dulari Devi in their individual status and included therein the share of each from the profits of the assessee-firm. THE share was taken in accordance with the return filed by each partner and a remark was added that the amount would be rectified later under section 35 of the Income-tax Act, 1922, when the correct share was determined in the assessment of the assessee-firm. THE share was brought to tax in the assessment of each individual partner. Subsequently, the Income-tax Officer took assessment proceedings against the assessee-firm for the assessment year 1958-59 and made an assessment order against it treating it as an unregistered firm. Before the Appellate Assistant Commissioner the assessee-firm contended that, as the Income-tax Officer had already taxed the share income in the hands of two of the partners, it was not open to him to proceed to assess the profits again in the hands off the assessee-firm. THE contention did not find favour with the Appellate Assistant Commissioner. In second appeal, the Income-tax Appellate Tribunal took the view that the Income-tax Officer was entitled to tax the profits in the hands of the assessee-firm and thereafter grant relief to the individual partners who had paid the tax on their separate assessments. Accordingly, the Tribunal dismissed the appeal.

(2.) SRI R. L. Gulati, appearing for the revenue, has raised an objection to the general terms in which the question has been framed and has urged that the question as framed does not arise out of the appellate order of the Tribunal and this court, treating it as a question of academic importance, should return the reference unanswered. We are unable to accept the contention of the learned counsel. While it is true that the language in which the question is couched tends to the abstract, it must be remembered that the question has been framed by reference to a set of facts found by the Tribunal in appeal and now set out in the statement of the case. If, as is the case here, it is possible to relate the question to those facts and define the scope of the question by reference to them we must do so and not decline to answer the question. The objection is rejected.

(3.) THE unit of assessment in respect of the income earned by the association is either the association or each individual member in respect of his share in the income. This is so when the association is existing and after it is dissolved as well.