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of <h1>Court upholds Tribunal decision annulling assessments, prevents double taxation, awards costs to assessee.</h1> The court affirmed the legality of the Tribunal's decision annulling assessments of an unregistered firm for certain years after partners had already been ... Firm Assessment, Registered Firm, Unregistered Firm Issues Involved:1. Legality of the Tribunal's order annulling the assessment of an unregistered firm after some partners were already assessed.2. Applicability of the Supreme Court's decision in light of amendments to the Income-tax Act, 1922, and the Income-tax Act, 1961.Summary:Issue 1: Legality of the Tribunal's OrderThe Tribunal annulled the assessments of the unregistered firm for the assessment years 1964-65, 1965-66, and 1966-67, following the Supreme Court's decision in Commissioner of Income-tax v. Murlidhar Jhawar and Purna Ginning and Pressing Factory and the Allahabad High Court's decisions. The Tribunal held that it was not legal to assess an unregistered firm after some of its partners had already been assessed to tax on their share of income from the firm. The partners' assessments were completed on December 31, 1965, while the firm's assessments were made in February 1967. The Tribunal rejected the revenue's contention that the law had changed due to amendments in the statute.Issue 2: Applicability of Supreme Court's Decision Post-AmendmentThe court examined whether the Supreme Court's decision still held good after the amendments to the 1922 Act in 1956 and the 1961 Act. The court noted that before the 1956 amendment, the Income-tax Officer had the option to tax either the unregistered firm or the partners individually. The 1956 amendment introduced a form of double taxation for registered firms and allowed the Income-tax Officer to choose the more advantageous method for unregistered firms. The court found that the 1961 Act retained this option, and the Income-tax Officer could not tax both the firm and the partners. The court concluded that the Supreme Court's decision remained applicable, and once the option to tax the partners was exercised, the Income-tax Officer could not tax the firm itself.Conclusion:The court answered the common question of law in the affirmative, holding that the Tribunal's order annulling the assessments was legal, valid, and proper. The assessee was awarded costs, with a consolidated hearing fee of Rs. 150.
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