In the case of a registered firm the Income tax Officer has to determine the income tax payable by the firm and also to determine the total income of each partner of the firm and the sum payable by him on the basis of such assessment.
The firm then moved a petition under Art.
1 55 I.T.R. 501.
He has then to certify the determination in accordance with sub s. 6 and the apportionment thereof among the partners.
This appeal is filed by the Commissioner with certificate granted by the High Court.
Appeal from the judgment and order dated March 29, 1965 of the Allahabad High Court in S.A. No.
26,365/ .
The order of the Income tax Officer directing that the income of the partners and the shares allocated to the minors admitted to the benefit of the partnership shall be assessed in the hands of the respective Hindu Undivided Families was plainly without jurisdiction.
V. Goswami, for the respondent.
He cannot at that stage hold an inquiry whether the partners represented other persons.
193 of 1967.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The Income tax Officer must allocate the profits in accordance with the deed of partnership registered by him and to the persons admitted to the benefits thereof according to their respective shares.
Once the Income tax Officer has granted registration of the firm, be cannot proceed to inquire whether the share allocated to a partner is beneficially held by some other person or entity.
Sub sections 5 and 6 of s. 23 of the Income tax Act as they were in force in the year of assessment read as follows Notwithstanding anything companytained in the foregoing sub sections, when the assessee is a firm and the total income of the firm has been assessed under sub section 1 , sub section 3 or sub section 4 as the case may be, the income tax payable by the firm itself shall be determined the total income of each partner of the firm, including therein his share of its income, profits and gains of the previous year, shall be assessed and the sums payable by him on the basis of such assessment shall be determined. .
The order of Manchanda, J., was companyfirmed in a special appeal by the Division Bench of the High Court.
22,234/ and companyputed the income of the firm at Rs.
The partners of the firm were Smt.
The Judgment of the Court was delivered by Shah, J. M s J. P. Kanodia and Company is a firm registered under the Indian Income tax Act, 1922.
226 of the Constitution before the High Court of Allahabad.
In proceedings for assessment of tax for the assessment year 1957 58, the Income tax Officer rejected the claim of the firm to set off loss from certain speculative transactions aggregating to, Rs.
Three minors Pradeep Kumar, Anand Prakash and Rajendra Prasad were admitted to the benefits of the partnership.
jagadish Swarup, Solicitor General, G. C. Sharma and B. D. Sharma, for the appellants.
Shanti Devi and Badri Prasad.
972 of 1964.
Whenever the Income tax Officer makes a determination in accordance with the provisions of sub section 5 , he shall numberify to the firm by an order in writing the amount of the total income on which the determination has been based and the apportionment thereof between the several partners.
The Income tax Officer was of the opinion that since the capital companytributed by the partners and the minors who were admitted to the benefits of the partnership was out of the capital of the respective Hindu Undivided Families to which they belonged, the profits allocated to the partners and to the minors were liable to be assessed in the hands of the respective Hindu Undivided Families to which they belonged.
The order passed by the Income tax Officer was companyfirmed in a revision application by the Commissioner.
