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TMI Blog1960 (8) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... ed all the prayers asked for by the plaintiff. So this appeal was preferred by the plaintiff. The appeal was resisted by respondents Nos. 3 and 4, who also contested the suit in the trial court. Some broad facts of the case are admitted. They may be set out below : There was an unregistered firm bearing the name and style of Satya Narayan Khan Kali Charan Sadhukhan Bepin Behary Tat , which carried on business in various kinds of oil, in premises No. 49, Strand Road, Calcutta. The partnership firm was dissolved in Baishak 1354 B.S., corresponding to sometime in April, 1947. After the dissolution of the firm the Income Tax Officer made an assessment on the firm for the Income Tax year 1946-47 under section 23(4) of the Indian Income Tax Act. This assessment was completed, on 28th February, 1951, and a sum of ₹ 31,000 was assessed as being payable by the firm. A demand notice to that effect was issued on the firm on 21st March, 1957 (vide demand notice, exhibit B-1 ). The amount stated in the demand notice was not paid up by the firm or by its partners. Thereafter the Income Tax Officer passed an order on 28th March, 1952, directing that the amount should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1952, in connection with the assessment case which runs as follows : On inquiry it is learnt that Satya Narayan Khan, one of the partners, succeeded to the business of the firm when the firm was discontinued early in 1354 B.S. The partner, Satya Narayan Khan, who was summoned under section 37, himself admitted as such before me. Since the partners are jointly and severally liable for the tax of the firm the amount may be recovered from this partner under section 26(2) treating him as successor to the firm. Hence, a certificate may be issued in the name of the firm, Satya Narayan Khan others, represented by partner, Satya Narayan Khan, successor to the firm. The order shows that the Income Tax Officer treated the appellant, Satya Narayan Khan, as a successor to the firm after having made some inquiry and also on the basis of some admission made by Satya Narayan himself. We do not know that information was obtained by the Income Tax officer on the strength of any enquiry. The so-called admission of Satya Narayan is contained in a letter filed by him before the Income Tax Officer on the same date, namely, 28th March, 1952. The relevant portion of the letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er passed by the Income Tax Officer the onus lay upon the appellant to show that there was a complete cessation of the old business and the new business of the appellant had no connection with or relation to the old business. This fact could have been proved by the appellant by production of his account papers. The account papers have not been produced. In these circumstances an adverse inference should be made against the appellant. After considering all these facts and circumstances we are of opinion that the finding of the court below that the appellant had succeeded to the old business of the unregistered firm is a correct finding. In the above connection Dr. Gupta submitted that even if it be held that the appellant had succeeded to the old business, no Income Tax can be recovered from him for the period during which the firm had carried on business without making any assessment upon the appellant himself as a successor to the old business. Reliance was placed by Dr. Gupta upon section 26(2) of the Income Tax Act. That sub-section, together with the proviso, runs in the following terms : Where a person carrying on any business, profession or vocation has been s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red from him without fresh assessment is not sound and it must be negatived. The foregoing finding that Satya Narayan was a successor to the unregistered firm and that the tax levied on the firm is realisable from Satya Narayan by the operation of the second part of the proviso to sub-section (2) of section 26 of the Income Tax Act is sufficient for the purpose of the disposal of this appeal. Mr. Meyer, however, contended on behalf of the contesting respondents that the tax in question is recoverable from the appellant not only by the operation of section 26(2) of the Income Tax Act but also by virtue of section 44 of that Act. That section runs in the following terms : Where any business, profession or vocation carried on by a firm or 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 association, be jointly and severally liable to assessment under Chapter IV and for the amount of tax payable and all the provisions of Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the amount of arrears due from an assessee, and the Collector, on receipt of such certificate, shall proceed to recover from such assessee the amount specified therein as if it were an arrear of land revenue : Provided that without prejudice to any other powers of the Collector in this behalf, he shall for the purpose of recovering the said amount have the powers which under the Code of Civil Procedure, 1908 (V of 1908), a civil court has for the purpose of the recovery of an amount due under a decree. The proviso is important for our purpose. It lays down that for the purpose of recovering an unpaid Income Tax, the Collector shall have the powers which under the Code of Civil Procedure a civil court has for the purpose of recovering an amount due under a decree. Now under clause (b), sub-rule (1) of rule 50 of Order XXI of the Code of Civil Procedure execution may be granted by a court against any person who has been a partner of a firm where a decree has been passed against that firm. In the present case the certificate may be regarded as a decree against the unregistered firm. So the Collector has got the power to realise the decretal amount from a person wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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