9911796707
TMI Blog1987 (12) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... his son, namely, Chunni Lal Shukla, formed a partnership on March 23, (sic) 1959, which, purportedly, comprised six partners, viz., three sons of Laxmi Narain Shukla, his widow and two sons of Chunni Lal Shukla. Smt. Bitti Kunwar disputed the genuineness of the partnership deed of that firm and she averred that the partnership deed as well as Form No. 1 never bore her thumb impressions. It is averred that the petitioner started a separate business with his brother, Munna Lal Shukla, and mother, Smt. Bitti Kunwar, in 1961, in the name and style, Badshah Pasand Karyalaya. For such business, the petitioner filed a return for the assessment year 1963-64 in the status of a Hindu undivided family and returns for the assessment years 1964-65 and 1965-66 were filed on behalf of the firm, Badshah Pasand Karyalaya, which was constituted under the partnership deed dated October 11, 1962, by the petitioner, Munna Lal Shukla and Smt. Bitti Kunwar. In para. 6 of the petition, the averment is that Chunni Lal Shukla carried on a separate business in the same name and style in which the business was later carried on by the partnership firm constituted by the petitioner, Munna Lal Shukla and Smt. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covery proceedings against that property were null and void. The said writ petition was dismissed summarily on December 15, 1986. The petitioner then filed the instant writ petition raising the contentions that neither notices under section 143(2) of the Act, 1961, nor the assessment orders and the demand notices were served on the partners of the firm, Badshah Pasand Karyalaya, and, therefore, no recovery proceeding could be pursued against the partners and their property. It is, therefore, prayed that all the ex parte assessment orders and proclamation issued for auctioning the house be quashed and that the respondents be restrained from pursuing the recovery proceedings on the basis of the ex parte assessment orders. Counter-affidavit was filed on behalf of respondents Nos. 2 and 3 stating that the notices under section 143(2) of the Act, 1961, and the assessment orders and demand notices had been duly served on the receiver for all the assessment years 1963-64 to 1965-66. It is averred that since Smt. Bitti Kunwar was a beneficial member of the association of persons on which the assessments were made for all the three years, she was jointly and severally liable to pay the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he receiver, matched with the constitution of the firm which purports to have been constituted under the deed dated March 23, 1959. Simply because the two constitutions coincide, it cannot be said that the firm which was in existence in the subsequent assessment years 1966-67 to 1970-71 sprang up from the partnership deed dated March 23, 1959. The constitution of a firm may undergo a change at any time within an assessment year. Simply because a deed was written on March 23, 1959, showing the constitution of a firm by six partners, no sound submission could be made that the firm comprising the same partners during the assessment years 1966-67 to 1970-71 had a link or nexus with the partnership deed dated March 23, 1959. There is nothing on record to show that the partnership formed under the deed dated March 23, 1959, as stated in para 2 of the petition continued to exist year after year and continued in all the subsequent assessment years 1966-67 to 1970-71. It is not shown that the firm constituted under the deed dated March 23, 1959, filed returns year after year or submitted Form No. 12 for seeking renewal of registration year after year and that the same firm continued for all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the subsequent years at least till the assessment year 1970-71 up to which returns were filed by the receiver. Then, it was argued by Sri Upadhya that the receiver was appointed in May, 1966, and, therefore, he was not legally competent to receive the notices under section 143, assessment orders and demand notices pertaining to the earlier assessment years for and on behalf of the firm, Badshah Pasand Karyalaya. In the counter-affidavit, it is averred that the receiver was appointed to look after the total activities of the firm, Badshah Pasand Karyalaya, and that by virtue of his duties, he was well within his rights to receive assessment orders and demand notices for and on behalf of the firm. In para 19 of the counter-affidavit, the respondents do not dispute the legal proposition that the receiver had no concern with the business of the earlier years but what is stated is that ........ during the pendency of the assessment proceedings for those periods, he was justified in attending to the proceedings of assessment and receiving the notices for the period for which he was not concerned ". In the instant case, we need not enter into the legal verbiage whether or not the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he three partners having proximate relationship with each other would have acted immediately after the attachment made, vide order dated February 20, 1969, and made all possible enquiries about the proceedings leading to attachment. In para 37 of the supplementary affidavit, it is stated that ........ the petitioner and other partners since 1969 are making sincere efforts to get the copies of the assessment orders and notices of demand but the Incometax Officer, respondent No. 2, has not served the same." The veracity of this averment has to be tested. There is no averment that the receiver was in any way hostile to the petitioner and to his two other partners who constituted the firm during the assessment years 1964-65 and 1965-66. Admittedly, the receiver received the assessment orders and demand notices and on the facts of the case, it is difficult to comprehend as to why the petitioner and his two other partners failed to obtain the assessment orders and demand notices from the receiver who was appointed to look after the business of the firm, which comprised of the petitioner and his two other partners, inter alia, in the assessment year 1966-67 and onwards. For the above reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the receiver had made an application under section 146 to set aside the ex parte assessment orders. The conduct of the receiver in resorting to the proceedings for setting aside the ex parte assessment orders leads to the conclusion that he was interested in the partners of the firm, created under the deed dated October 11, 1962 and, therefore, the case that no information was passed on by the receiver to the petitioner and to his co-partners, cannot be accepted. Sri Upadhya relied on M. L. John v. ITO [1983] 139 ITR 972 (All), decided with other cases. In the said case, the question was whether receiver appointed for a successor firm could be assessed for the predecessor firm. This question was answered in the negative. This authority is misplaced inasmuch as the question of the receiver being assessed for the assessment years 1963-64 to 1965-66 is not before us. The facts of this case are almost similar if not identical to the facts of the case Sri Krishna v. CIT [1983] 142 ITR 618 (A ), wherein it was held that the conduct of the petitioner himself should be seen and if that runs counter to the averments made in the petition, then the relief prayed for would be refused. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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