Double assessment of firm profits barred after partners were taxed first; unregistered firm assessment held invalid.

Once the Revenue has assessed partners on their share of the firm's profits, it cannot again assess the same firm as an unregistered firm on the same income. The text states that the partners were assessed first, and the Tribunal treated that prior assessment as barring a second assessment at firm level. It also accepted departmental circulars as binding and followed authorities applying the same principle under the Income-tax Act, 1961. On that basis, assessment of the firm as an unregistered firm was held invalid and unsustainable.

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Issues: Whether the firm could be assessed as an unregistered firm after its partners had already been assessed on their respective share income from the same firm.

Analysis: The partners were found to have been assessed on their share income before the assessment of the firm. The governing principle accepted by the Court was that once the Revenue has chosen to assess the partners on the firm's profits, it is precluded from assessing the firm again in the status of an unregistered firm. The Court also treated the departmental circulars as binding and followed the line of authorities holding that the Supreme Court's earlier ruling applied equally under the Income-tax Act, 1961.

Conclusion: The assessment of the firm as an unregistered firm was invalid and could not be sustained.

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