Joint and several tax liability cannot extend to a partner's separate assessment after firm dissolution.

Under the Income-tax Act, 1922, a registered firm is not assessed as a unit; each partner is assessed individually on his share of the firm's income and other income. Section 44, which imposes joint and several liability on persons concerned with a discontinued or dissolved firm or association, does not extend to recovery of tax assessed separately against one partner from another partner. Statutory liability to pay income tax arises only from the Act itself and cannot be enlarged by analogy with partnership law. The recovery notice against the appellant for the other partners' arrears was therefore without jurisdiction and was quashed.

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Issues: Whether, after dissolution of a registered firm, one partner could be proceeded against under section 45 of the Income-tax Act, 1922 for recovery of tax arrears due from other ex-partners on the basis of joint and several liability under section 44.

Analysis: Under the scheme of the Income-tax Act, 1922, a registered firm is not taxed as a unit; instead, each partner is assessed individually on his share of the firm's income along with his other income. Section 44 applies to a discontinued firm or dissolved association and makes the persons concerned jointly and severally liable for assessment and for tax payable in respect of the income of the firm or association. That provision does not extend to making one partner liable for tax assessed individually against another partner under section 23(5). The statutory liability to pay income tax depends on the Act itself and cannot be enlarged by analogy with partnership law.

Conclusion: The notice issued to the appellant for recovery of the other partners' tax arrears was without jurisdiction and liable to be quashed; the appeal succeeded in favour of the assessee.

Ratio Decidendi: Where the statute provides for individual assessment of partners in a registered firm, the joint and several liability clause applicable to dissolved firms cannot be invoked to recover one partner's tax from another partner unless the Act expressly so provides.

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