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TMI Blog1974 (10) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... e years were made on the assessee-firm in the status of unregistered firm on the 31st March, 1965, and 31st March, 1966, respectively. The assessee's applications under s. 26A of the Indian I.T. Act, 1922, were rejected by separate orders. A number of grounds had been taken by the assessee in appeal against this assessment before the AAC. At the time of hearing of the appeal, however, an additional ground was taken contesting the validity of the assessments on the ground that since the ITO had chosen to assess the partners separately on their respective share income as was evident from the assessments made on the partner, H. B. Amin, the assessments made on the assessee-firm in the status of an unregistered firm were not valid in law. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the aforesaid decision of the Tribunal which is the subject-matter of challenge in the question referred to us. Section 3 of the Indian I.T. Act, 1922, which corresponds to s. 4(1) of the I.T. Act, 1961, provides that where any Central Act enacts that income-tax should be charged for any assessment year at any rate or rates income-tax at that rate or those rates shall be charged for that assessment year in accordance with and subject to all the provisions of the relevant Act in respect of the total income of the previous year of every individual, Hindu undivided family, company and local authority and other firm or other association of persons or the partners of the firm or the members of the association individually. Therefore, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unregistered firm. The Supreme Court observed at page 97 of the report that in the case of ITO v. Bachu Lal Kapoor [1966] 60 ITR 74 (SC), in dealing with the claim made by the ITO to assess the income in the hands of an HUF after assessing the income in the hands of the members on the footing that the family had severed, the exercise of the option to do one or the other of the two alternatives open to an officer assumed knowledge on his part of the existence of the two alternatives. The Supreme Court, however, in the instant case of CIT v. Murlidhar Jhawar and Purna Ginning and Pressing Factory [1966] 60 ITR 95 observed that it was not possible to accept the plea that the ITO was not in possession of information relying on which it could b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent had not taken place. With this knowledge the revenue chose to assess other partners. Now it appears that in the case of the subsequent year two of the partners were assessed by the same officer having jurisdiction over the firm. On behalf of the revenue counsel contended that, as the officer who had assessed the partner in question was not the officer who had jurisdiction to assess the firm, he was not called upon to exercise the option as such. It was, therefore, suggested that the assessment order was valid on the firm. The liability to be taxed in certain contingency depends upon the substantive provisions of the I.T. Act, in this case under s. 3 of the 1922 Act and s. 4(1) of the 1961 Act. That liability, in our opinion, cannot be m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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