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TMI Blog1951 (1) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... n 1939 was applicable ? The Appellate Tribunal had held that the section was applicable disagreeing with the view of the Income-tax Officer and the Appellate Assistant Commissioner. The assessee was a firm, P.M. Bagchi Co., which had been in existence for some time though its constitution had changed. In the year 1937 a receiver was in possession of the partnership assets on behalf of the then partners. On 16th December, 1937, the receiver sold the right, title and interest of these three partners in the business and the present assessees purchased. The year of assessment is the year 1938-39 the accounting year being 1937-38. There was difficulty in the assessment as the tax authorities claimed that certain income had escaped asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax separately. What was assessed was the total income of each partner including his share of the profits of the partnership. Before this amendment the income of the partnership firm was separately assessed and tax was paid at the rate applicable to that income. After the amendment the tax payable on the profits of a partnership is paid at the rate appropriate to the total income of each individual partner. For example, before the 1939 Act the profits of a firm which shall we say amounted to ₹ 3,00,000 would be assessed at the rate applicable to ₹ 3,00,000 whereas after the amendment no assessment would be made on the sum of ₹ 3,00,000 but the assessment would be made on the income of each partner which would include hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Court's in this country that a statute will not affect rights which had accrued before a statute came into force unless there are express words in the statute affecting such rights or where a retrospective effect to the statute is inevitable by necessary intendment or implication. On the other hand Dr. Radhabinod Pal has contended that this new sub-section 23(5) introduced by the 1939 Amending Act was nothing more than a procedural section and did not affect at all the Government's right to revenue. Retrospective effect is given to statutes affecting only procedural matters and if this amendment was purely procedural then retrospective effect could be given to it and it could be made to apply to an assessment year before 1st Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose profits or gains calculated at the difference between those rates or at the rate at which income-tax has been levied as the case may be . From this sub-section it is clear that where a partner was liable to pay income-tax at the rate of X annas in the rupee on his total income but the profits of the partnership had been assessed and made liable to tax at the rate of Y annas in the rupee the partner was entitled to a refund of Y-X, in case the rate of Y was greater than the rate of X. In other words the amount of tax which the Government obtained before 1st April, 1939, was not the tax levied at the maximum rate on the total partnership income but rather the amount of tax payable upon each partner's share of the partnership profit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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