Dissolved firm assessment must target former partners jointly, and a personal-income notice cannot sustain firm-level assessment.

A notice under section 34 addressed to an individual partner as if the escapement were his personal income could not validly support assessment of a dissolved firm, because it did not clearly notify that the firm's income was in question. For a dissolved firm, the governing rule treated section 44 as requiring assessment of the partners who were members at dissolution, jointly and severally liable for the tax, rather than assessment of the firm as a continuing entity. The text also distinguishes statutory schemes where Parliament expressly preserves assessment of the original entity. The notice therefore could not found a valid assessment of the firm or its income.

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Issues: (i) Whether a notice issued under section 34, addressed to an individual partner in terms referring to the partner's own income, could validly support an assessment of the dissolved firm or its income; (ii) Whether, after dissolution of a firm, pre-dissolution income can be assessed on the firm as such or only on the partners who were members at the time of dissolution, jointly and severally.

Issue (i): Whether a notice issued under section 34, addressed to an individual partner in terms referring to the partner's own income, could validly support an assessment of the dissolved firm or its income.

Analysis: The notice described the addressee by name, treated the escapement as the addressee's own income, and called for a return of the addressee's total income and world income. It did not clearly indicate that the escapement related to the income of the firm as a unit. Even if the notice was served on a partner in that character, its language could only convey that the partner's personal income was in question. A notice in that form could not be the foundation of a valid assessment of the firm.

Conclusion: The notice was invalid for supporting an assessment of the firm or its income.

Issue (ii): Whether, after dissolution of a firm, pre-dissolution income can be assessed on the firm as such or only on the partners who were members at the time of dissolution, jointly and severally.

Analysis: Section 44 was treated as the governing provision. Its language does not preserve assessment of the dissolved firm as a firm; instead, it makes the persons who were partners at the time of dissolution jointly and severally liable to assessment and for the tax payable. The provision is distinct from the machinery applicable to a living registered or unregistered firm, and the comparison with section 25A(2) and section 24B(2) showed that where Parliament intended assessment to proceed as if the original entity continued, it said so expressly. The court also distinguished the Excess Profits Tax Act decision relied on by the Revenue, holding that its language and machinery were materially different.

Conclusion: Pre-dissolution income of a dissolved firm can be assessed only on the partners jointly and severally, and not on the firm as such, whether registered or unregistered.

Final Conclusion: The assessment could not be sustained against the firm or enforced against the respondent on the basis of the notice issued, so the appeal failed.

Ratio Decidendi: Where section 44 governs a dissolved firm, the statutory assessment is on the partners who were partners at dissolution, jointly and severally, and a notice that does not clearly relate to the firm's income cannot validly found an assessment of the dissolved firm.

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