Tax liability survives territorial change, partner assessment can proceed without firm assessment, and status errors may be clerical.

Income arising in a period when Karachi formed part of British India remained taxable for the relevant assessment years, and the later partition did not extinguish the liability already incurred; the avoidance of double taxation agreement did not alter that result. The Revenue could assess a partner directly for his share of deposits without first assessing the firm, because assessment of the firm was not a condition precedent where the partner's undisclosed income was being taxed. A wrong description of the assessee's status in the sanction and assessment order did not invalidate the proceedings where the same assessable person was proceeded against.

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Issues: (i) Whether the assessee remained liable to assessment in the taxable territories for the relevant assessment years notwithstanding that his residence was in Karachi, which later became part of Pakistan; (ii) whether the Revenue could assess the assessee in respect of his share of the deposits without first assessing the firm in whose account the amounts stood; (iii) whether the proceedings were invalid because the Commissioner's sanction and the assessment order described the assessee in the wrong status.

Issue (i): Whether the assessee remained liable to assessment in the taxable territories for the relevant assessment years notwithstanding that his residence was in Karachi, which later became part of Pakistan.

Analysis: The relevant previous years fell within a period when Karachi was part of British India, and income arising during that period was taxable under the Indian income-tax law. Subsequent partition and the later location of Karachi in Pakistan did not extinguish the liability already incurred for those assessment years. The agreement for avoidance of double taxation did not displace that liability.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Issue (ii): Whether the Revenue could assess the assessee in respect of his share of the deposits without first assessing the firm in whose account the amounts stood.

Analysis: The law recognised an option in the Revenue to assess either the firm or the partners as individuals. Assessment of the firm was not a condition precedent to assessment of the partner where the partner's share of the undisclosed income was being brought to tax. On the assumed facts, the assessee's share could be taxed directly.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Issue (iii): Whether the proceedings were invalid because the Commissioner's sanction and the assessment order described the assessee in the wrong status.

Analysis: The sanction was obtained against the same assessee, namely the deceased's estate represented by his legal representatives, and the wrong description of status did not change the identity of the person proceeded against. A status description error does not vitiate proceedings where the assessee itself is the same and the mistake is merely clerical or descriptive. The situation was different from cases where the status describes a different assessable unit, which was not the position here.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The court upheld the reassessment on the principal substantive issues and held that the assessee remained taxable, the partner could be assessed without first assessing the firm, and the mistaken description of status did not invalidate the proceedings; only the question concerning service of notice on all legal representatives was left for further findings.

Ratio Decidendi: Liability to tax for a past assessment year is not defeated by a later territorial change, the Revenue may assess a partner without first assessing the firm, and a mistaken status description does not invalidate proceedings where the same assessable person is proceeded against.

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