LexINCOME-TAX OFFICER, AGRA versus RADHA KRISHAN
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.A B c u F G H INCOME-TAX OFFICER, AGRA v. RADHA KRISHAN April 27, 1967 [J. C. SHAH AND V. RAMASWAMI, JJ.] Indian Income-tax Act, 1922, s. 23(5) (a), 26A and 44-Registered firm-Partners taxed individually on •their shares--One partner defaulting in pay111ent of tax on his share-Tax so due 1vhether can he recovered from other partners. The respondent was one of the partners in a partnership firm regis- tered under s. 26A of the Indian Ineome-tax Act, 1922. The Jncome- tax Officer in making assessments for the assessment years 1944-45, 1945-46. and 1946-47 and 1947-48 determined the shares of each of the partners and taxed them accordin~ to the provisions of s. 25 (3) (o) of the Indian Income-tax Act .. 1922. One of the partners defaulted in the payment of tax and tl1e Income-tax Officer sought to recover the unpaid tax attri~ butable to tile share of the defaulting partner in the firm from the res- pondent. The respondent's petitioo under Art. 226 challenging the :..tten1pteJ rccuvt:r• 1 was allowed by the single Judge whose order was confirmed by the Division Bench. The Revenue by special came to this Court. It was urged on behalf of the Revenue that even though bys. 23(5)(a) the total income of each membe-r of a registered firm is taxed it is the firm which is assessed to tax so that the tax attributable to the share of one partner can be recovered from another, the responsibility of all being joint an<l several. Reliance was also placed on s. 44 of the Act. HELD : (i) Undoubtedly contractual obligations of a firm are en- forceable jointly and severally against the partners. But the liability to pay income-tax is statutory; it does not arise out of any contract, and its incidence must b~ determined by the statute. If the statute which imposes the liability has not made it enforceable jointly. and severally against the partners, no such implication can arise merely because contractual liabilities of a firm may be jointly and severally imposed again5t the partners. [825E-F] . (ii) There is nothing in s. 44 of the Act which suppo1"ts the conten- \IOJ:! \hat for payment of tax assessed against a partner of a registered firm ~n~1v1dually under •. 2~(5)(a) of the Act, another partner becomes liable 1omtly and severally with the first partner to pay tax. [825C] The entire scheme of taxing the income of a registered firm in the hands of the individual partner is inconsistent with any assumption that for payment of tax ?ssessed against a partner, other partners are liable. The t?x asses~ed. a~a1nst a partner of a registered firm is assessed on his total. inco~-e 1nclus1~e of the share in the firn1's income and the rate applicable IS determmed hy the quantum of the total income of the part.1cr. !8250-E] Co1nn1issioner o_f .I11co111e-1ax, 1Yfadras v. S. V. Angidi Chettlar, 44 T.T.R. 739, Co1nnuss1011er of lnco111e~tax, Bo111hay v. A1nri1/al Bhogi/a/ & Comp~ny, 34 I.T.R. 130 and Shivram Poddar v. Income-tax Of!icer Cen- tral Circle II, Calcutta, SI I.T.R. 823, distinguished. ' CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1413 of 1966. 822 SUPREME COURT REPORTS [1967] 3 S.C.R· Appeal by special leave from the judgment and order dated A July 31, 1963, of the Allahabad High Court in Special Appeal No. 205 of 1963. B. Sen, S. K. Aiyar and R. N. Sachthey, for the appellant. A. K. Sen, J. P. Goyal and G. C. Sharma, for the respondent. The Judgment of the Court was delivered by Shah, J. A business of manufacture and sale of tents was commenced in 1940 in the name and style of Messrs J awahar Tent Factory, Agra, in partnership. There were four partners in the firm-Jawahar Lal, Shiam Lal, Radha Raman and Radha Krishan. J awahar Lal represented his Hindu undivided family and his share in the profit & loss was -/8/- (eight annas) in a rupee. The share of other partners was -/2/~ (two annas eight pies) each. The firm was registered under s. 26A of the Indian Income-tax Act, .1922, and tax was assessed on th.e income of the firm in accordance with s. 23 ( 5 )(a) of the Act. The partner- ship was, according to the Income-tax Officer, dissolved on Octo- ber 23, 1946. This appeal relates to the· tax liability of J awahar Lal in res- pect of the income from the firm for the assessment years 1944-45, 1945-46, 1946-47 and 1947-48. The tax attributable to the share of Jawahar Lal, which it is claimed could not be recovered from him, is sought to be recovere
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