1968 (1) TMI 14

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....etitioner eventually succeeded on a reference to this court under section 66(2). Pursuant to the opinion expressed by this court in the reference, the Tribunal, by its order dated October 19, 1961, directed the Income-tax Officer to grant registration to the firm under section 26A for the year 1951-52. The Income-tax Officer carried out the direction by an order of his dated February 2, 1962. Thereafter, the same officer worked out the tax effect on the individual assessment of each of the partners and a sum of Rs. 51,137.03 was adjusted by him against the tax due from them. As a result of the disposal by the Tribunal of the firm's appeal, a refund of Rs. 27,739.39 had been made earlier on July 16, 1960. After deducting these two amounts fr....

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.... interest on the sum of Rs. 11,298.27 would be irregular. But, in our opinion, the liability to pay interest under the proviso extended to the entire sum of Rs. 62,435.30. Section 66(7) had been enacted in aid of collection of tax. Pendency of a reference to the High Court would not be an excuse and would not also act as a stay of collection of tax. But this provision directs that notwithstanding a pending reference income-tax shall be payable in accordance with the assessment made in the case. That indicates that the subject-matter of the reference should involve and be related to a liability to pay in accordance with the assessment. The expression "assessment "in section 66(7) has been used in the sense of liability to pay tax which of....

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.... for the procedure in respect of assessment of a firm. As the law stood prior to the Finance Act, 1956, in the case of a registered firm, the sum payable by the firm itself should not be determined but the total income of each partner of the firm, including therein his share of its income, profits and gains of the previous year, shall be assessed and the sum payable by him on the basis of such assessment shall be determined. In passing, we may mention that by section 14 of the Finance Act, the aforesaid position was changed. In the case of a registered firm, the sum payable by the firm should be determined. When this court in the reference expressed the view that registration should have been granted and it was carried out by the Income-tax....