Post-dissolution tax liability: former partners remain jointly liable when assessment is made after a firm's dissolution.

Section 44 of the Income-tax Act, 1922 fastens joint and several liability on former partners where a firm has discontinued business or been dissolved, and it operates as a machinery provision to continue assessment notwithstanding dissolution. Because the assessment and revised assessment were made after the firm had ceased to exist, the tax liability and arrears were recoverable from the petitioner as a former partner. Section 23(5) did not displace this effect, since it did not override section 44 in a post-dissolution assessment context. The challenge to the notice therefore failed.

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Issues: Whether the petitioner, as a former partner of a dissolved firm, was jointly and severally liable under section 44 for arrears of tax arising from an assessment and revised assessment made after dissolution.

Analysis: Section 44 of the Income-tax Act, 1922 applies where a firm has discontinued business or been dissolved, and it fastens joint and several liability upon every person who was a partner at the time of discontinuance or dissolution in respect of the income, profits and gains of the firm and the tax payable thereon. The provision operates as a machinery section intended to continue the assessment process notwithstanding dissolution. Since both the assessment and the imposition of tax liability in the present case were made after the firm had ceased to exist, the liability fell squarely within section 44. The contention based on section 23(5) could not prevail because that provision did not displace the effect of section 44 where the assessment itself was made after dissolution.

Conclusion: The petitioner was liable for the arrears of tax as a former partner of the dissolved firm, and the challenge to the notice failed.

Ratio Decidendi: Where the assessment of a dissolved firm is made after discontinuance, section 44 makes the former partners jointly and severally liable for the tax payable by the firm, including arrears recoverable after dissolution.

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