KALVA SURYANARAYAL'LA versus INCOME-TAX OFFICER, A-3, WARD, HYDERABAD

Citation: [1969] 1 S.C.R. 840 · Decided: 23-08-1968 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed
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Judgment (excerpt)

• 
KALVA SURYANARAYAL'lA 
V. 
INCOME-TAX OFFICER, A-3, WARD, HYDERABAD 
August 23, 1968 
A 
[J. C. SHAH, V. RAMASWAMI AND A. N. GROVER, JJ.J 
B 
Income-tax Act (11 of 1922), ss. 23(5) and 44--Firm registered-
Dissolved-Liability of une partner to pay arrears of ta:c. 
The appellant was a partner in a firm which carried on business in 
1949-50 and was then dissolved. 
For lhe assessment year 1951-52 the 
1irn1 was a~sed as a registered firm and its income was apportioned 
between the partners and taxed in their hands. 
Subsequently the Com-
c 
mco;sioner of J ncome-tax acting under s 33B of the Indian Income-tax Act, 
1922 directe<l that the a=ssment of the firm be enhanced. The lncome-
tax Officer after ma.king the enhancement as directed made consequential 
changes in the assessments of the partners. 
1·wo of the panncrs, other 
than the appellant did not pay the additional tax and the Income-tax 
omcer issued a notice to the appellant to pay the tax payable by them 
on tho footing that under the provisions of s. 44 of the Income-tax Acr, 
1922 there w~1s joint and several liability of each and every partner of 
D 
the dis.solv1...-d firm in respect of the arrears of tax. 
The appellant ti.led 
a writ petition in the High Court to qu.ish the notice but it was dismissed. 
In appeal, thi-. Court. 
HELD : ·1 here is nothing in s. 44 of the Act which supports the 
contention that for payment of lax asseso;;ed against a partner df regis-
tered partnership under s. 23(5) (a) another parlncr 
becomes 
liable 
jointly n.nd severally with the first partner to pay tax. 
"rhc dis.c;olurion 
E 
of the firm n1akes no difference to the application of this principle. [843 
C-D) 
It should he noticed that the tax assessed against a partner of a regi5-
tercd partnership is asst.-sscd on his total income inclusive of the. share in 
thi..: income of lhc partnership and the rate applicable is dctern1ined hv the 
quantum of the total income of the partner. 
Section 44 on the coritrary 
contemplates cases of joint and several a"ic;cs..~mcnt of income of the blllliii-
F 
ne5.s of a partnership which is discontinued. 
When such assessment is 
n1ade, each n1cmber of the partnership n1av be liahlc to pay joiruly and 
severally tax payable hv the partnership. 
But when under the scheme of 
the Act tax is a<tsessed individually againsr each partner, and no tax is 
made payable hy the partnership, the principle of joint and several liabi~ 
lity under s. 44 cannot he invoked. 
Although under the Partnership 
Law the contr~tctual obligations of a partnership arc enforceable jointly 
and severally agains: the partners . .the liability to pay income-tax is ~tatu-
G 
tory. and docs not arise out of any contract and it'i incidence will be 
determined by the provision~ of the statute. 
If the statute which imposai; 
liabiJity has not made it enforceable jointly and severally again.'it the part-
ners. no such in1plication can he drawn mercly because the contractual 
Jiahilitics of a partnership mav be jointly and severally enforoed agaimt 
the partners. [843 H-844 CJ 
Income Tax Officer. Agra v. Radha Krislian, 66 l.T.R. 590. followed. 
ff 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 998 ~f 
1966. 
A 
B 
c 
D 
E 
F 
- G 
H 
. K, SURYANARAYANA v. I.T.O, (Ramaswami, I.) 
SH 
Appeal by special leave from the judgment and order dated 
December 21 1964 of the Andhra Pradesh High Court in Writ 
Petition No. l294 of 1961. 
· 
P. Ram Reddy and R. Thiagarajan, for the appellant. 
C. K. Daphtary, 
Attorney-General, 
T. A. Ramachandran, 
R. N. Sachthey and B. D. Sharma, for the respondent. 
The Judgment of the Court was delivered by 
Ramaswami, J. This appeal is brought, by special leave, from 
the judgment of the High Court of Andhra Pradesh dated Decem-
ber 21, 1964 in Writ Petition No. 1294 of 1961. 
The appellant had entered into a partnership with three other; 
named D. Sayappa, H. Siddappa and M. Veeraiah to can:y out a 
"Gulmoha" contract for the year 1949-50. The firm was known 
as Messrs. Kalva Suryanarayana. 
After comp)etion of the ::on-
tract the partnership came to an end. 
For the assessment year 
1951-52, the partners of the dissolved firm made an application 
for registration of the partnership to the respondent who granted 
the registration on February 28, 1953, and on that basis pro-
ceeded to assess the total income of the partnership which he 
determined as Rs. 1,64,546/- (O.S.), and the total income was 
apportioned among the four partner
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