9911796707
TMI Blog1990 (8) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 1981-82, a large amount of tax was determined to be payable by the firm. A notice under section 156 of the Act was issued to the firm on December 22, 1987, calling upon it to remit a sum of Rs. 6,64,988. According to the petitioner, the firm was dissolved on January 28, 1981. Proceedings were initiated against the properties of the firm as well as of the partners of the dissolved firm for recovery of tax in arrears. Two writ petitions were filed by two partners of the firm in their individual capacity. Writ Petition No. 754 of, 1986 was filed by the petitioner herein, Padam Prakash, and Writ Petition No. 830 of 1986 was filed by another partner, Manohar Lal. These two writ petitions were heard and disposed of by a Div ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3] 139 ITR 906, a Division Bench of this court has held that "the Tax Recovery Officer has no power to recover tax from the partners by proceeding against their properties for the tax due from the firm. The said decision squarely applies here, hence unless the Tax Recovery Officer has assessed the partners of the firm in accordance with sections 182 and 183 of the Act and relevant notices had been served upon the partners, they cannot be termed as "assessees in default". Therefore, the partners' property in their individual capacities cannot be proceeded against in connection with the tax dues of the firm. Since, in this case, the defaulter is shown to be the firm, the action of the Department against the petitioners' individual properties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances that the petitioner has approached this court again and also because proceedings under section 226(3) were taken to attach certain moneys due to the petitioner. The contention of learned counsel for the petitioner is that, according to the judgment of this court dated August 25, 1987 (see [1988] 171 ITR 241 ), which operates as res judicata between the parties, tax due from the firm cannot be recovered from its partners (after dissolution) unless an assessment is made upon the partners under sections 182 and 183 of the Act. Since no assessment has been made upon the partners under sections 182 and 183 of the Act subsequent to the said judgment, the factual position is the same as was obtaining at the time of the filing of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 183, the tax due from the dissolved firm cannot be recovered from its partners. This was so held following a decision of this court in Brij Ratan Lal's case [1983] 139 ITR 906. So far as the second ground is concerned, the submission of learned standing counsel for the Revenue is that the principles of the decision in Brij Ratan Lal's case [1983] 139 ITR 906 (All) is not applicable in this case. That was a case relating to an unregistered firm, whereas the firm concerned herein is a registered firm. In the said decision, it was held that where the recovery certificate is only against an unregistered firm simpliciter without mentioning the names of the partners in the certificate, the Tax Recovery Officer has no jurisdiction to proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve to ascertain what precisely was decided therein. We have set out hereinbefore the ratio of the said decision. We have also perused the earlier Bench decision of this court in Brij Ratan Lal's case [1983] 139 ITR 906. All that was held therein was that where the firm is treated as defaulter, the Department cannot proceed against the partners. It did not hold that in no circumstances, can the partners' individual properties be proceeded against for recovering the tax arrears of a dissolved firm. Indeed, they could not have so held, since they expressly noticed the provisions of section 189(3). For proceeding against the individual properties of the partners, they said, you must first treat them as defaulters and then take further proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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