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TMI Blog1970 (5) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt was delivered by R. S. PATHAK J.-The Income-tax Appellate Tribunal has referred the following questions : " 1. Whether the appeals filed by Kishorilal Khemka before the Appellate Assistant Commissioner from the assessment orders made in the case of the Bharat firm, which had become the subject-matter of appeals by another partner, Joti Bhushan Gupta, and whose appeals were earlier disposed of by the Appellate Assistant Commissioner, were competent ? 2. Whether Kishorilal Khemka has been rightly held to be a partner of the Bharat firm ? " On December 1, 1942, a partnership firm was constituted consisting of Raja Jwala Prasad and Jyoti Bhushan Gupta for undertaking engineering and construction works under the name and style " Bha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the original firm. The Income-tax Officer assessed the firm for the assessment years 1944-45, 1945-46 and 1946-47 in the status of an unregistered firm and showed Kishorilal Khemka as one of the partners. The assessments were challenged in appeal by Jyoti Bhushan Gupta in the name of the firm before the Appellate Assistant Commissioner and thereafter he filed second appeals before the Income-tax Appellate Tribunal. About the time when Jyoti Bhushan Gupta filed the appeals before the Appellate Assistant Commissioner, Kishorilal Khemka also filed appeals against the assessments. These appeals remained pending and were disposed of some time after the appeals filed by Jyoti Bhushan Gupta were decided. The Appellate Assistant Commissioner di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier appeals by the firm filed by Jyoti Bhushan Gupta against the same assessment orders had already been disposed of, we would hold that such a question does not arise out of the appellate order of the Tribunal. Before the Tribunal it was pointed out that the firm had discontinued its business and, therefore, by virtue of section 44 of the Indian Income-tax Act, 1922, Kishorilal Khemka, along with the other partners, was jointly and severally liable to assessment and thus he was entitled to be considered as an assessee with a right of appeal against the assessments made on the defunct firm. The Tribunal rejected the contention on the ground that the conditions of the second proviso to section 30(1) were not satisfied inasmuch as Kishorilal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f such assessment was determined. The other case was where the firm was treated as an unregistered firm but under section 23(5)(b), the Income-tax Officer, finding it to be to the benefit of the revenue, proceeded in the manner laid down in section 23(5)(a) as applicable to a registered firm. In either case, the partners of the firm would be individually assessed on their shares in the total income of the firm, and the case would then fall within the scope of the second proviso to section 30(1). The proviso does not apply where the firm has been treated as an unregistered firm and the Income-tax Officer determines the sum payable by the firm itself. The Tribunal has found that neither section 23(5)(a) nor section 23(5)(b) has been applied t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular circumstances. In either case the denial is a denial of liability to be assessed under the provisions of the Act. " It was open to the assessee, we think, to appeal against the assessment orders on the ground that he was not a partner of the firm and those appeals were competent under the substantive provisions of section 30(1). That he has such a right of appeal was pointed out by the Bombay High Court as long ago as Gokuldas v. Kikabhai Abdulali. Tendolkar J., speaking for the court, observed : " . . . . . and where after notice to all the alleged partners the Income-tax Officer proceeds to determine who the partners are and what their shares, obviously an appeal against this part of his order shall lie under section 30 at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tner of the Bharat Engineering Construction Co. There was ample material before the Tribunal on the basis of which it could come to the finding that Kishorilal Khemka was a partner of the firm. There was, first, the circumstance that the original partnership deed of February 6, 1943, contemplated that Kishorilal Khemka could be taken in as a partner. Reference has been made to a supplementary deed dated February 15, 1943, which gave effect to that provision. It is true that the supplementary deed was never filed before the income-tax authorities, but there are other circumstances which point heavily to the conclusion that he was inducted as a partner into the firm. The several applications made under section 26A for the assessment years u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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