Continuity of association personality binds former members jointly and severally to tax assessed after dissolution under assessment procedures.

Section 44 preserves the legal personality of a dissolved association for purposes of assessment, permitting Chapter IV assessment proceedings to be validly commenced and continued against the association after dissolution; accordingly an assessment under section 23(4) made after dissolution is not invalid for that reason. Notices addressed to the appropriate person for associations suffice to invoke the assessment machinery, and all persons who were members at the time of dissolution are jointly and severally liable for the tax determined by such an assessment; thus the assessment and member liability stand.

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Issues: (i) Whether the assessment made by the Income-tax Officer under section 23(4) after dissolution of the association (the Group) on September 30, 1953 was bad in law; (ii) If not, whether the applicant (a member not personally served with notice) was liable for the tax payable as determined by that order of assessment by reason of section 44 of the Income-tax Act.

Issue (i): Whether the order of assessment under section 23(4) dated September 30, 1953, made after dissolution of the association, was bad in law.

Analysis: The Court examined section 44 which continues the personality of a discontinued or dissolved association for the purposes of assessment under Chapter IV, thereby preserving continuity of assessment machinery. The Act contemplates assessment of the association as a unit or of individual members as separate units; it does not envisage assessing only an aliquot share of the association's income limited to members actually served. Where section 44 applies, the association's personality is continued so that assessment proceedings may be validly commenced and continued against the association notwithstanding dissolution. The procedural question whether notice was improperly served on the wrong principal officer was not raised before the Tribunal and therefore was not open for decision; the case proceeds on the footing that notice was properly served on the appropriate person.

Conclusion: The order of assessment under section 23(4) dated September 30, 1953 is not bad in law.

Issue (ii): Whether the applicant, not personally served with the notice of assessment, was nevertheless liable for the tax determined by the assessment under section 44.

Analysis: Section 44 makes every person who was a member at the time of dissolution jointly and severally liable for the income and tax of the association; by continuing the association's personality for assessment purposes, Chapter IV procedures applicable to the association apply. A notice to the appropriate person under the relevant provision for serving associations is sufficient to enable assessment of the association and to bind its members jointly and severally for the tax payable that would have been assessed but for dissolution. The contention that only members personally served with notice can be bound is inconsistent with the purpose and language of section 44.

Conclusion: The applicant was liable for the amount of tax payable under the order of assessment.

Final Conclusion: The assessment made under section 23(4) is valid despite dissolution of the association and the members of the dissolved association who were members at the time of dissolution are jointly and severally liable for the tax determined by that assessment; accordingly the appeal by the Revenue is allowed.

Ratio Decidendi: Section 44 of the Income-tax Act continues the personality of a dissolved or discontinued association for assessment under Chapter IV, permitting valid assessment of the association and rendering all members at the time of dissolution jointly and severally liable for the tax so assessed.

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