Alternative assessment of partnership income bars double taxation once partner's share has been validly assessed.

Under the Income-tax Act, 1922, a firm and its partners are alternative assessable entities for the same partnership income, because the charging language is disjunctive. If the revenue has already validly assessed the partner's share income, it cannot make a second substantive assessment of the same income in the hands of the unregistered firm. Provisions relied on for correction or modification do not authorise double assessment or a fresh charge on the same income. The result is that only one assessment route may be adopted for the same partnership income, either against the firm or against the partners individually, but not both.

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Issues: Whether an unregistered firm can be assessed after the share income of its partner has already been assessed individually.

Analysis: Section 3 of the Income-tax Act, 1922 charges tax on the total income of a firm or its partners, and the use of the word "or" is disjunctive. The statutory scheme contemplates taxation of the firm or the partners as alternative assessable entities, not both in respect of the same income. Once the department has adopted one course and validly assessed the income in the hands of the partners, it cannot thereafter make a further assessment of the same income in the hands of the firm. The provisions referred to as enabling correction or modification do not confer power to impose a second substantive charge on the same income.

Conclusion: The question was answered in the negative. The firm could not be assessed again after the partner's share income had already been assessed, and the answer was in favour of the assessee.

Final Conclusion: The decision affirms that the Income-tax Act, 1922 permits only one assessment route for the same partnership income, either in the hands of the firm or in the hands of the partners individually, but not both.

Ratio Decidendi: Where the charging provision makes a firm and its partners alternative assessable entities in respect of the same income, the income cannot be taxed twice by assessing both the partners and the firm.

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