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Jurisdiction of Income-tax Officer to impose penalty on partners of a dissolved firm and collect the same from any one of them. Analysis: The case involved an appeal against a judgment where the appellant, a partner of a dissolved firm, contested the Income-tax Officer's jurisdiction to impose a penalty on partners of a dissolved firm and collect it from any one of them. The main contention was based on Section 44 of the Income-tax Act, which governs the situation of a discontinued firm or dissolved association. The section makes every person who was a partner at the time of discontinuance or dissolution jointly and severally liable for assessment and tax payment. However, the appellant argued that the section does not provide for levying and collecting penalties from partners of a dissolved firm. The appellant relied on a judgment of the Patna High Court regarding a different section of the Act, which held that there was a gap in the provisions for imposing penalties on disrupted entities. The argument was that since Section 44 did not explicitly mention penalties, the Income-tax Officer lacked jurisdiction to impose penalties on partners of a dissolved firm. The appellant contended that penalties could only be imposed on individuals with mens rea, and the Act did not provide a mechanism for penalizing and collecting penalties from former partners of a dissolved firm. The High Court analyzed the provisions of Section 44 and compared them with a different section of the Act related to Hindu undivided families. The Court noted that while the Act did not explicitly mention penalties in Section 44, the provision stating "all the provisions of Chapter IV shall, so far as may be, apply to any such assessment" allowed for the application of penalty provisions like Section 28. The Court held that Section 28, which imposes penalties for defaults related to assessment, could be applied to assessments under Section 44, thereby giving the Income-tax Officer jurisdiction to collect penalties from former partners of a dissolved firm. In conclusion, the High Court dismissed the appeal, affirming that the Income-tax Officer had jurisdiction to proceed against partners of a dissolved firm for collecting penalties imposed on the firm. The Court held that Section 28 could be applied to assessments under Section 44, allowing for the imposition and collection of penalties from former partners.
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