Joint and several liability allows penal Chapter IV provisions to apply to discontinued-firm assessments, permitting penalty recovery from former partners.

Section 44 renders erstwhile partners jointly and severally liable for the income, profits and gains of a discontinued firm and expressly applies Chapter IV provisions to such assessments; accordingly, section 28's penal provisions for concealment and assessment defaults may be invoked in assessments made under section 44, permitting imposition and recovery of penalties from former partners. The analysis states that statutory joint-and-several liability under section 44 allows penal enforcement without an absolute mens rea prerequisite where the statute imposes liability by its terms, supporting revenue authority to levy and recover penalties from erstwhile partners.

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Issues: Whether, under section 44 of the Income-tax Act, an Income-tax Officer has jurisdiction to impose a penalty under section 28 and to recover the share of such penalty from erstwhile partners of a firm which has been discontinued or dissolved.

Analysis: Section 44 makes every person who was a partner at the time of discontinuance jointly and severally liable in respect of the income, profits and gains of the firm and provides that all the provisions of Chapter IV shall, so far as may be, apply to any such assessment. Section 28 is a Chapter IV provision penalising concealment of income and defaults in the assessment process. The wording of section 44, unlike section 25A(2), incorporates the applicability of Chapter IV provisions to assessments of discontinued firms, permitting the application of section 28 to such assessments to the extent appropriate. The requirement of mens rea is not an absolute prerequisite where the statute imposes liability by its terms; section 44's joint and several assessment framework allows penal provisions of Chapter IV to operate against erstwhile partners for defaults relating to the firm's assessment.

Conclusion: Section 28 applies to assessments made under section 44 and the Income-tax Officer has jurisdiction to impose and recover the penalty from the erstwhile partners; decision is in favour of the revenue.

Ratio Decidendi: Where a statute expressly makes Chapter IV assessments applicable to discontinued firms, the penal provisions within Chapter IV, including section 28, may be applied to erstwhile partners by virtue of the joint and several liability created by section 44.

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