C. A. ABRAHAM, UPPOOTTIL, KOTTAYAM versus THE INCOME-TAX OFFICER, KOTTAYAM AND ANOTHER

Citation: [1961] 2 S.C.R. 765 · Decided: 29-11-1960 · Supreme Court of India · Bench: J.L. KAPUR · Disposal: Dismissed

Cited by 6 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

2 S.C.R. SUPREME COURT REPORTS 
765 
C. A. ABRAHAM, UPPOOTTIL, KOTTAYAM 
v. 
THE INCOME-TAX OFFICER, KOTTAYAM 
AND ANOTHER 
(J. L. KAPUR, M. HIDAYATULLAH a.nd 
J. c. SHAH, JJ.) 
Income-tax-Suppression of income of partnership firm-
Penalty, if can be imposed after dissolution of partnership-Income-
tax Act, r9zz (II of r9zz), ss. z8(r)(c). 44. 
The appellant who was carrying on business in food grains 
in partnership with another person submitted the returns of the 
income of the firm for the accounting years even after his part· 
ner's death. It was found that certain income of the firm was 
concealed and the Income-tax Officer not only assessed the firm 
to tax for the suppressed income but also imposed penalties for 
concealing the said income. Appeals to the higher income tax 
authorities failed and the appellant then applied to the High 
Court for a writ of certiorari quashing the orders of assessment 
and imposition of penalty on the ground inter alia that the firm 
was dissolved by his partner's death and no penalty could be 
imposed after dissolution of the firm, 
The High Court ·rejected 
the petition. On appeal with the certificate of the High Court, 
Held, that by virtue of s. 44 and other provisions of the 
Income Tax Act a partner of a dissolved partnership firm may 
not only be made liable to assessment for income tax for the 
accounting years but despite dissolution of the firm he may be 
made liable to pay penalty for concealing the income of the 
firm under s. 28(1)(c) of the Act. The analpgy of dissolution 
of a Hindu Joint Family does not apply to dissolution of a part-
nership. 
Mareddi Krishna Reddy v. ln~ome-tax Officer, Tenali, [1957] 
31 I.T.R. 678, approved. 
•I 
• 
' 
. 
• · 
Commissioner of Income-tax v. Ra_yalaseema Oil Mills, [1959] 
37 I.T.R. 208 and S. v. Veerappan Chettiar v. Commissioner of 
Income-tax, Madras, [1957] 32 I.T.R. 4II, disapproved. 
MahankaU Subbarao v. Commissioner of Income-tax, [1957] 31 
I.T.R. 867, distinguished. 
· 
, 
The Legislature intended that the provisions of Ch. IV of 
the Act shall apply to a firm even after discontinuance of its 
business. In interpreting a fiscal statute the Court cannot pro-
ceed. to make good deficiencies if there be any. In case of doubt 
it should be interpreted in favour of the tax payer. 
The expression "assessment" has different connotations and 
has been use.d in its widest connot~tion in Ch. IV and s. 44 of 
97 
November 119. 
766 
SUPREME COURT REPORTS 
[1961] 
x960 
the Act. · It is not restricted only to computation of tax but in-
cludes imposition of penalty on tax payers found in the process 
C. A. Ab•aham, of assessment guilty of concealing income. 
Uppoollil, 
Commissioner of Income-tax, Bombay Presidency and Aden v. 
Kollayam 
Khemchand Ramdas, [1938] 6 I.T.R. 414, referred to. 
T 
v. 
The Income-tax Act provided a complete machinery for 
O'ffih• Income-lax obtaining relief against improper orders passed by the Income-
"" Kollayam tax Authorities and the appellant could not be permitted to 
.s. Anolh., 
abandon that machinery, and invoke the jurisdiction of the 
High Court under Art. 226 of the Constitution against the orders 
SAah J. 
of the taxing authorities. 
CIVIL APPELLATE JURISDICTION: 
Civil Appeal 
No. 517 of 1958. 
Appeal from the judgment and order dated Octo-
ber 31, 1957, of the Kera.la. High Court in 0. P. No. 
215 of 1957. 
G. B. Pai and Sardar Bahadur, for the appellant. 
Hardyal Hardy and D. Gupta, for the respondents. 
1960. November 29. 
The Judgment of the Court 
was delivered by 
SHAH, J.-C. A. Abraham hereinafter referred to as 
the appellant and one M. P. Thomas carried on busi-
ness in food grains in partnership in the name and 
style of M. P. Thomas & Company at Kotte.yam. 
M. P. Thomas died on October 11, 1949. For the 
account yea.rs 1123, 1124 and 1125 M.E. corresponding 
to August 1947-Jrily 1948, August 1948-July 1949 
and August 1949-July 1950, the appellant submitted as 
a partner returns of the income of the firm as an un-
registered firm. 
In the course of the assessment pro-
ceedings, it was discovered that the firm had carried 
on transactions in different commodities in fictitious 
names and had failed to disclose substantial income 
earned therein. By order dated November 29, 1954, 
the Income Tax Officer assessed the suppressed income 
of the firm in respect of the assessment year 1124 
M.E. under the Tra.va.ncore Income Tax Act and in 
respect of assessment years 1949-50 and 1950-5

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