Holding

Under the Income Tax Act, 1961 the Assessing Officer has no option to choose between taxing an Association of Persons or its members; tax must be levied on the "right person" only.

Summary

The respondents, Atchaiah and Kondal Reddy, bought land that was later acquired by the government and received compensation, part of which was treated as capital gain and taxed individually in assessment years 1965-66 and 1968-69. In 1972 the Income Tax Officer (ITO) issued a notice under s.148 alleging unassessed income for AY 1964-65 and proposed to tax the same income as belonging to an Association of Persons (AOP) formed by the two owners, despite having already taxed them individually. The Andhra Pradesh High Court held that the ITO had an option to tax either the AOP or its members and therefore barred the assessment on the AOP. The Supreme Court reversed, holding that under the Income Tax Act, 1961 there is no such option; the tax must be levied on the "right person" only, and the ITO cannot tax the AOP after taxing the members individually. Consequently, the High Court judgment was set aside.

Issues considered

Whether the Income Tax Act, 1961 confers on the Assessing Officer a discretion to tax income either in the hands of an Association of Persons or its members individually.
Whether an assessment already made on the individual members precludes a subsequent assessment on the Association of Persons for the same income.

Legislation cited

Income Tax Act, 1961s. 148, s. 155(2), s. 183, s. 2(31), s. 4(1)
Land Acquisition Act

Subjects

Income TaxAssociation of PersonsRight Person DoctrineSection 4(1) Income Tax ActSection 148 noticeCapital GainsLand Acquisition CompensationAssessment YearTax discretion

Judgment

INCOME TAX OFFICER A
v.
CH. ATCHAIAH

DECEMBER 11, 1995

[B.P. JEEVAN REDDY AND B.N. KIRPAL, JJ.] B

Income Tax Act, 1961-Section 4(1)-Levy of income tax on total in-
come of every person-Charge of income t~ncome Tax Officer must tax
right person and right person alone-No option availabl-Tax has to be levied
on that person, whether an individual, HUF, Company, Finn, Association of C
( persons/BOP etc.-D1fference between 1922 Act and 1961 Act.

The respondent and another person K purchased certain land under
a sale deed dated 20.10.1962 for a consideration of Rs. 7.5.000. Eve~ prior
to the execution of the sale deed, the lands had been notified for acquisition
under the Land Acquisition Act. The compensation amount was received D
by the respondent aud K in equal shares. Ou reference, the compensation
as enhanced was also shared between the respondent and K in equal
proportion.

In the assessment proceedings relating to Assessment year 1965-66,
E
the Income Tax Officer include a sum of Rs. 35,397, au amount determined
after deducting the amount contributed by the respondent towards the
purchase of the lauds, treating it as the capital gain, in the income of the
respondent. Again in the assessment relating to Assessment Year 1968-69,
the enhanced compensation falling to the share of respondent was brought
to tax as capital gain. The assessee K was also taxed in the same manner F
for both these assessment years.

In February 1972 the ITO issued a notice to both the respondent and
K u/s 148 of the Income Tax Act stating that he had reason to believe that
income chargeable to tax for the Assessment Year 1964-65 had escaped G
assessment. He called upon them lo file a return. The respondent and K
filed a 'Nil' return. The ITO proposed ·to tax them as an Association of
persons and bring the entire profit made by them as capital gain in the
hands of such Association of Persons. The respondent and K challenged
the notice by filing a writ petition alleging that the ITO having assessed
the share of each of them in their respective individual hands, had no H
543
544 SUPREME COURT REPORTS (1995] SUPP. 6 S.C.R.

A jurisdiction to assess the same income as the income of and in the hands
of the Association of Persons as having exercised the discretion vested in
him to assess them individually with respect to their shares, it was not
open to him to assess them as an Association of Persons with respect to
the very same income. The High Court allowing the petition held that the
B ITO has an option to" assess either the Association of persons as a unit or
the members there of individually and having exercised the option to
assess the members of the Association of Persons individuals, he cannot
seek to tax the Association of Persons with respect to the very same income.

This appeal had been filed against the judgment of the High Court
C allowing the writ petition and issuing a writ of prohibition restraining the
appellant from taking any action pursuant to the notice.

The appellant urged that the High Court was in error in holding that
under the 1961 Act, like the 1922 Act option is available to the Income Tax
Officer to tax either Association of Persons or its members individually.
D The right person has to be taxed and merely because a wrong person is
taxed, it does not operate as a bar to taxing the right person and if in law
the income bad to be taxed in the hands of Association of Persons, it had
to be taxed as such and the mere fact that the said income was taxed in
the hands of individual members of Association of Persons does not bar
E the Income Tax Officer from taking the Association of Persons.

The appellant-assessee contended that there was no difference be-
tween the position obtaining under the 1922 Act and the present Act.

Allowing the appeal, this Court
F
HELD : Under the Income tax Act, 1961, the Income Tax Officer bas
no option like the one he had under the 1922 Act. He can, and be must,
tax the right person and the right person alone. By "right person', it means
the person who is liable to be taxed, according to law, with respect to a
particular income. The expression "wrong person" is used as the opposite
G of the expression "right person". Merely because a wrong person is taxed
with respect to a particular income, the Assessing Officer is not precluded
from taxing the right person with respect to that income. This is so
irrespective of the fact which course is more beneficial to the Revenue. The
language of the relevant provisions of the present Act is quite clear and
H unambiguous. Section 183 shows that where the Parliament intended to
INCOMETAXOFFICER v.ATCHAIAH 545

provide an option, it provided so expressly. Where a person is taxed A
wrongfully, he is no doubt entitled to be relieved of it in accordance with
law but that is a different matter altogether. The person lawfully liable to
be taxed can claim no immunity because the Assessing Officer (Income
Tax Officer) has taxed the said income in the hands of another person
contrary to law. [549-E-H)
B·
Section 3 of the 1992 Act provided that in respect of the total income
of a firm or an Association of Persons, the income tax shall be charged
either on the firm or the Association of Persons or on the partners of the
firm or on the member of the Association of Persons individually. It is
evident that this option was to be exercised by him keeping in view of the C
interest of Revenue. Whichever course was more advantageous to revenue,
he was entitled to follow it. In such a situation, it was generally held that
once the Income Tax Officer opted for one course, the other course was
barred to him. But no such option is provided to him under the present Act.
Section 4 says that income tax shall be charged on the total income "of every
person" and the expression "person" is defined in clause (31) of Section 2. D
The definition merely says that. the expression "person" includes inter alia a
firm and an Association of Persons or a body of individuals whether incor-
porated or not. There are no words in the present Act which empower the
Income Tax Officer or give him an option to tax either the Association of
Persons or its members individually or for that matter to tax the firm or E
its partners individually. It is the income of the Association of Persons in
law, Association of Persons alone .has to be taxed; the members of the
Association of Persons cannot be taxed individually in respect of the income
of the Association of Persons. Consideration of the interest of Revenue has
no place in this scheme. When Section 4(1) of the present Act speaks oflevy
of Income tax on the total income of every person, it necessarily means the F
person who is liable to pay income tax in respect of that total income
according to law. The tax has to be levied on that person, whether an
individual, Hindu Undivided Family, Firm, Company, Association of Per-
sons/BOP, a local authority or an artificial juridical persons.
[551-D-H, 552-A) G
Mahendra Kumar Agrawal/a v. Income Tax Officer, (1976) 103 I.T.R.
688, Rodamal Lalchand v. Commissioner of Income Tax, (1977) 109 I.T.R.
7, Choudry Brothers v. Commissioner of Income Tax, (1986) 158 I.T.R. 224
and Punjab Cloth Stores v. Commissioner of Income Tax, (1980) 121 I.T.R.
604, affirmed. H
546 SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R.

A Commissioner of Income Tax v. Blue Mountain Engineering Cetpora-
tion, (1978) 112 I.T.R. 839; Commissio11er of I11come Tax v. Pure Nichitour
Colliery Company, (1975) 101 I.T.R. 79 and Commissioner of Income Tax v.
B.R. Constntctions, 202 I.T.R. 222, overruled,

Raman/a/ Madan/al v. Commissioner of Income Tax, (1979) 116 I.T.R.
B 657 distinguished.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2513 of
1977.

From the Judgment and Order dated 25.4.75 of the Andhra pradesh
C High Court in W.P. No. 5856 of 1972.

Dr. V. Gauri Shankar, S.N. Terdol and S. Rajappa for the Appellant.

A. Panduranga Rao, Rakesh K. Sharma and K.R. Chowdhary for the
Respondent.
D
The Judgment of the Court was delivered by

B.P. JEEVAN REDDY, J. This Appeal is directed against the judg-
ment of the Andhra Pradesh High Court allowing the writ petition filed
E by the respondent and issuing a writ of prohibition restraining the appellant
(respondent in the writ petition) from taking any action pursuant to the
notice dated March 17, 1972 issued under Section 148 of the Income Tax
Act, 1961 (1961 Act).

The respondent in this appeal, Sri Atchaiah, and another person, Sri
F Kondal Reddy, purchased an extent of 454.11 acres in a village in Medak
District in Andhra Pradesh from Sri lkramuddin and Smt. Azizunnisa
Begum under a sale deed dated October 20, 1962 for a consideration of
Rupees seventy five thousand. Even prior to the execution of the sale deed,
the said lands had been notified for acquisition under the Land Acquisition
Act. The respondent and Kondal Reddy appeared before the Land Ac-
G quisition Officer claiming compensation. By award dated February 4, 1964,
the Land Acquisition Officer determined the compensation at Rs.
1,38,794.12 annas which amount was received by the respondent and Kon-
dal Reddy on December 4, 1964, in equal shares. At their instance, a
reference was made under Section 18 of the Land Acquisition Act. The
H learned District Judge enhanced the compensation by Rs. 3,95,026.00
INCOME TAX OFFICER v. ATCHAIAH [B.P. JEEVAN REDDY, J.] 547

(according to the appellant, the figure is Rs. 4, 17,477). The enhanced A
compensation was also shared between the respondent and Kondal Reddy
in equal proportion.

In the assessment proceedings relating to Assessment year 1965- 66,
the Income Tax Officer included a sum of Rs. 35,397, treating it as the
capital gain, in the income of the respondent. (This figure was arrived at
B
after deducting the amount contributed by the respondent towards the
purchase of the said lands.) Again, in the assessment relating to Assess-
ment Year 1968-69, the enhanced compensation falling to the share of
respondent was brought to tax as capital gain. Sri Kondal Reddy was also
taxed in the same manner for both the said assessment years. c
On February 18, 1972 the Income Tax Officer issued a notice to both
the respondent and Kondal Reddy under Section 148 of the Income Tax
Act stating that he has reason to believe that income chargeable to tax for
the Assessment year 1964-65 has escaped assessment. He called upon them D
to file a return. On April 3, 1972, the respondent and Kondal Reddy filed
a "Nil" return. On August 3, 1972, the Income Tax Officer gave a notice to
both of them stating that in the return filed by them they have not
mentioned the status in which the return was fded. The Income Tax Officer
proposed to tax them as an Association of Persons and bring the entire
profit made by them as capital gain in the hand< of such Association of E
Persons. The respondent and Kondal Reddy raised certain objections to
the proposed assessment but finding that the Income Tax Officer was
inclined to proceed with the assessment, they approached the Andhra
Pradesh High Court by way of a writ petitiou questioning the aforesaid
notice dated February 19, 1972. p.

The main contention urged by the respondent was that the Income
Tax Officer having assessed the share of each of them in their respective
individual hands, has no jurisdiction to assess the same income as the
income of and in the hands of the Association of Persons aforesaid. Having G
exercised the discretion vested in him to assess them individually with
respect to their shares, it was contended, it was not open to him to assess
them as an Association of Persons with respect to the very same income.
Certain other contentions were also raised with respect to the validity of
the impugned notice with which objections, however, we are not con-
cerned herein. The High Court accepted the respondent's contention. It H
548 SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R.
..
A rejected the contention urged by the learned standing counsel for the
Revenue that the decisions relied upon by the respondent-writ petitioner
were all rendered with reference to the provisions in the Indian Income
Tax Act, 1922 (1922 Act) and that the principle of the said decisions cannot
be extended to the case arising under the 1961 Act. The High Court found
that the position under the present Act is no different from the position
B under the 1922 Act notwithstanding the difference in the language
employed in the relevant provisions of the 1961 Act. The High court
opined that even under the present Act, the Income Tax Officer has an
option to assess either the Association of Persons as a unit or the members
thereof individually and that having exercised the option to assess the
C members of the Association of Persons as individuals, he cannot seek to
tax the Association of Persons with respect to the very same income. The
High Court also rejected an alternative contention put forward by the
Revenue, viz., inasmuch as the previous assessments in individual capacity
were made for the Assessment Year 1965-66 and because the impugned
D notice is for the Assessment year 1964-65, the Income Tax Officer is not
precluded from taxing the income in the hands of the Association of
Persons. This argument was rejected by the High Court holding "in our
view, there is a fallacy in this argument. When making an assessment the
Income Tax Officer exercised his option and chose to assess the individual,
but he did so for the year 1965-66 as the amount was received by the
E assessee on December 4, 1964. The question is not for what particular year
the assessment was made, but whether the Income Tax Officer exercised
his option in levying the tax on the Income in the hands of individual or in
the hands of the association."

F In this appeal, Dr. Gauri Shankar, learned counsel for the Revenue,
urged that the High Court was clearly in error in holding that under the
present Act, the Income Tax Officer has an option to tax either Association
of Persons or its members individually. Learned counsel submitted that
while such an option was available to the Income Tax Officer under the
1922 Act, no such option is available under the present Act. According to
G the present Act, the learned counsel says, the right person has to be taxed
and merely because a wrong person is taxed, it does not operate as a bar
to taxing the right person. In other words, his contention is that if in law
the income in question had to be taxed in the hands of Association of
Persons, it had to be taxed as such and the mere fact that the said income
H was taxed in the hands of individual members of Association of Persons

•
INCOME TAX OFFICER v. ATCHAIAH (B.P.JEEVAN REDDY, J.] 549

does not bar the Income Tax Office from taxing the Association of Persons. A
Sri A. Panduranga Rao, learned counsel for the appellant-assessee, con-
tended, on the other hand, that there is no difference between ·the position
obtaining under the 1922 Act and the present Act and that, therefore, the
decisions rendered under the 1922 Act hold good equally under the present B
enactment. The learned counsel supported the reasoning and conclusion
of the High Court. Learned counsel also brought to our notice that though
the Andhra Pradesh High Court had taken a different view in a subsequent
decision in Choudry Brothers v. Commissioner of Income Tax, [1986] 158 C
I.T.R. 224, the said view has since been overruled by the Full bench of that
Court in Commissioner of Income Tax v. B.R. Constructions, 202 l.T.R. 22.
The Full Bench , it is stated, has affirmed the correctness of the decision
under appeal (which is reported in 1161.T.R. 675. The learned counsel has D
also filed written arguments, which we have perused.

In our opinion, the contention urged by Dr. Gauri Shanker merits
acceptance. We are of the opinion that under the present Act, the Income E
Tax Officer has no option like the one he had under the 1922 Act. He can,
and he must, tax the right person and the right person alone. By "right
person", we mean the person who is liable to be taxed, according to law,
with respect to a particular income. The expression "wrong person" is F
obviously used as the opposite of the expression "right person". Mer_!y
because a wrong person is taxed with respect to a particular income, the
Assessing Officer is not precluded from taxing the right person with respect
to that income. This is so irrespective of the fact which course is more G
beneficial to the revenue. In our opinion, the language of the relevant
provisions of the present Act is quite clear and unambiguous. Section 183
shows that where the Parliament intended to provide an option, it provided
so expressly. Where a person is taxed wrongfully, he is no doubt entitled
to be relieved of it in accordance \vith law* but that is a different matter H
altogether. The person lawfully liable to be taxed can claim no immunity
because the Assessing Officer (Income Tax Officer) has taxed the said
income in the hands of another person contrary to law. We may proceed
to elaborate.

Section 3 of-~ Indian Income Tax Act, 1922, as amended by the
Apart from questioni.rlg the levy by way of appeal, revision and reference, it is
suggested, the assessee Can also resort to Section 155(2). We, however, express no
opinion on the applicability of Section 155(2) since it does not directly arise in this case.
550 SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R.

A Indian Income Tax (Amendment) Act, 1939, read as follows :

"3. Charge of Income-tax. - Where any Central Act enacts that
income tax shall be charged for any year at any rate or rates tax
at that rate or those rates shall be charged for that year in
accordance with, and subject to the provisions of, this Act in
B respect of the total income of the previous year of every individual,
Hindu undivided family, company and local authority, and of every
firm and other association of persons or the partners of the fem or
the members of the association individually."

c (Emphasis added)

The expression "person" was defined in clause (9) of Section 2 in the
following words: "9. 'Person' includes a Hindu undivided family and a local
authority".

D As against the above provisions, Section 4 of the Present Act (before
it was amended by the Direct Tax Laws {Amendment) Act, 1987, with
effect from April 1, 1989) read thus :

"4(1). Where any Central Act enacts that income tax shall be
charged for any assessment year at any rate or rates, income tax
E at that rate or those rates shall be charged for that year in
accordance with and subject to the provisions of this Act in respect
of the total income of the previous year or previous years, as the
case may be, of every person :

F Provided that where by virtue of any provision of this Act income-
tax is to be charged in respect of the income of a period other
than the previous year, income-tax shall be charged accordingly.

(2) In respect of income chargeable under sub-section (1), income-
tax shall be deducted at the source or paid in advance, where it is
G so deductible or payable under any provision of this Act."

(The amendments made by the aforesaid Amendment Act of 1987
do not make any difference so far as the present controversy is concerned.)
The expression "person" is defined in clause (31) of Section 2 in the
H following words :
INCOME TAX OFFICER v. ATCHAIAH [B.P. JEEVAN REDDY, J.] 551

"'Person' includes - A
(i) an individual,

(ii) a Hindu undivided family,

(iii) a company, B
(iv) a firm,

(v) an association of persons or a body of individuals, whether
incorporated or not,

(vi) a local authority, and
c
(vii) every artificialjuridical person, not falling within any of the
preceding sub-clauses."

A comparison of the provisions of both enactments immediately D
being out the difference between them. Section 3 of the 1922 Act provided
that in respect of total income of a firm or an Association of Persons, the
income tax shall be charged either on the firm or the Association of
persons or on the partners of the firm or on the members of the Association
of Persons individually. It is evident that this opinion was to be exercised
by him keeping in view of the interest of Revenue. Whichever course was E
more advantageous to Revenue, he was entitled to follow it. In such a
situation, it was generally held that once the Income Tax Officer opted for
one course, the other course was barred to him. But no such option is
provided to him under the present Act. Section 4 extracted hereinabove
says that income tax shall be charged on the total income "of every person" F
and the expression "person" is defined in clause (31) of Section 2. The
definition merely says that expression "person" includes inter alia a firm and
an Association of Persons or a body of individuals whether incorporated
or not. There are no words in the present Act which empower the Income
Tax Officer or give him an option to tax either the Association of Persons G
or its members individually or for that matter to tax the firm or its partners
individually. If it is the income of the association of Persons in law,
Association of Persons alone has to be taxed; the members of the Associa-
tion of Persons cannot be taxed indhidually in respect of the income of the
A'5ociation of Persons. Consideration of the interest of Revenue has no
place in this scheme. When Section 4(1) of the present act speaks of levy H
552 SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R.

A of income tax on the total income of every person, it necessary means the
person who is liable to pay income tax in respect of that total income
according to law. The tax has to be levied on that person, whether an
individual, Hindu Undivided Family, Company, Firm, Association of Per-
sons/BOP, a local authority or an artificial juridical person. From this, it
B follows that if income of A is taxed in the hands of B, may be legitimately
aggrieved but that does not mean that B is exonerated of his liability on
that account. B cannot say, when he is sought to be taxed in respect of the
total income which is lawfully taxable in his hands, that since the Income
Tax Officer has taxed very same income in the hands of A, he himself
cannot be taxed with respect to the said total income. This is not only
C logical but is consistent with the provisions of the Act. In this connection,
it may be pointed out that where the parliament wanted to provide an
option, a discretion, to the Income Tax Officer, it has provided so express-
ly. Section 183 (which has since been omitted with effect from April 1, 1993
by the Finance Act, 1992) provided that in the case of an unregistered firm,
D it is open to the Income Tax Officer to treat it, and made an assessment
on it, as if it were registered firm, if such a course was more beneficial to
Revenue - in the sense that such a course would fetch more tax to the
public exchequer. Section 183 read as follows :

"183. Assessment of unregistered fimis. - In the case of an un-
E registered firm, the Assessing Officer -

(a) may determine the tax payable by the firm itself on the
basis of the total income of the firm, or

F (b) if, in his opinion, the aggregate amount of the tax payable
by the firm if it were assessed as a registered firm and the
tax payable by the partners individually if the firm were so
assessed would be greater than the aggregate amount of the
tax payable by the lirm under clause (a) and the tax which
would be payable by the partners individually, may proceed
G to make the assessment under sub-section (1) of section 182
as if the firm were a registered firm; and, where the proce-
dure specified in this clause is applied to any unregistered
firm, the provisions of sub-section (2), (3) and (4) of section
182 shall apply thereto as they apply in relation to a
H registered firm."
INCOME TAX OFFICER v. ATCHAIAH (B.P. JEEVAN REDDY, J.] 553

It may be mentioned that Section 183 corresponded to Section A
23(5)(b) of the 1922 Act. The 1922 Act not only provided an option to the
Income Tax Officer in this matter of firm and Association of Persons under
Section 3 but also expressly enabled him to assess an unregistered firm as
a registered firm (Section 23(5)(b), if by doing so, more tax accrued to the
State. The 1961 Act has omitted the first option, while retaining the second.
B
In this connection, it would be relevant to notice the relevant
provisions of the draft Bill proposed by the Law Commission in its Xllth
Report, which constitutes the basis for the 1961 Act. Clause (27) of Section
2 of the draft (definition of "person") did expressly provide an option
similar to the one contained in Section 3 of the 1922 Act. Clause 27 read C
thus:.

"(27) 'Person' includes -

(i) an individual,
D
(ii) a Hindu undivided family,

(iii) a company,

(iv) a firm or other association of persons, whether incor-
porated or not, or the partners of the fim1 or the members E
of the association individually.

(v) a body of individuals, whether incorporated or not,

(vi) a local authority, and
F
(vii) every artificial juridical person, not falling within sub-
clauses (i) to (vi)"

(Emphasis added)

In the "Notes on Clauses" appended to the draft, the Commission G
stated :

''27. Person. The definition of 'person' in existing section 2(9) has
been amplified.

The existing definition includes (a) Hindu undivided family H
554 SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R.

A and (b) a local authority. The General Clauses Act, defines
'person' as including a company or association or body of in-
dividuals whether incorporated or not. The charging section (sec-
tion 3) of the Income-tax Act enumerates the units for taxation as
'individual, Hindu undivided family, company, local authority, firm
and other association of persons, or the partners of a firm or the
B members of the association individually'. Section 4 of the Act refers
to a 'person.

It seems desirable to have a comprehensive definition of the
word 'person' in the Act so as to cover all entities mentioned in -
c (i) the existing definition [S.2(9) ].

(ii) the existing charging provisions (sections 3 and 4), and

(iii) the General Clauses Act.

D The definition has therefore been amplified on the above lines."

The Parliament, however, chose not to accept the suggested defini-
tion in Iota; it deleted the words indicating the option. The Committee,
which drafted the draft Bill comprised Sri P. Satyanarayana Rao, Sri G.N.
E Joshi and Sri N.A. Palkhivala, who was specifically appointed as a member
for the purpose of the revision of the Income Tax Act. (Extracts arc taken
from the Xllth Report of the Law Commission of India, published by
Government of India, Ministry of Law.)

This question has also been troubling the High Courts in the country.
F As a matter of fact, Patna and Andhra Pradesh High Courts have taken
different views. Be that as it may, we may mention that the Patna High
Court in Mahendra Kumar Agrawal/a v. Income Tax Officer, (1976) 103
I.T.R. 688, Punjab and Haryana High Court in Rodamal Lalchand v.
Commissio11er of /11come-1ax, (1977) 109 !TR 7, Andhra Pradesh High
Court in Choudry (supra) and Delhi Court in Punjab Cloth Stores v.
G Commissioner of Income Tax, (1980) 121 LT.R. 604 have taken the view
which we have taken. On the other hand, Madras High Court in Commis-
sioner of Income Tax v. Blue Mountain Engineering Corporation, (1978) 112
LT.R. 839 and Patna High Court in its earlier decision in Commis~::mer of
income Tax v. Pure NichilpllT Colliery Company, (1975) 1011.T.it. 79 have
H taken the opposite view. Andhra Pradesh High Court first expressed the
INCOME TAX OFFICER v. ATCHAIAH (B.P. JEEVAN REDDY, J.j 555

other view, then in Choudry it took the view which we have taken and then A
again in B.R. Constrnctions (F.B.), it has gone back to the other view and
reiterated the view taken in the judgment under appeal. In Raman/al
Madan/a/ v. Commissioner of Income Tax, (1979) 116 I.T.R. 657,
Sabyasachi Mukharji, J ., speaking for a Bench of the Calcutta High Court,
recognised the distinction in the language employed in Section 3 of the B
1922 Act and Section 4 of the present Act but that was a case of an
unregistered firm where the Income Tax Officer had assessed the incomes
in the hands of the partners individually. In such a situation, the learned
judge held, the Income Tax officer cannot, at the same time bring the
unregistered firm to tax in respect of the very same income. Section 183
was also referred to in that connection. C
The decision of the High Courts taking the contrary view appears to
have been influenced largely by the decisions of this Court in Commissioner
of Income Tax v. Kanpur Coal Syndicate, (1964) 53 I.T.R. 225 and Com-
missioner of Income Tax v. Mur/idhar lhawar and Puma Ginning and
Pressing Factory, (1966) 60 I.T.R. 95 which were rendered under the 1922 D
Act and have not given due weight to the marked difference in the language
of the relevant provisions in the two enactments.

For the above reasons, the appeal is allowed. The judgment of the
High Court is set aside. We must make it clear :hat we have pronounced E
only one question referred to above. We have not expressed ourselves on
any other contention urged by the assessee before the Income Tax officer
or for that matter before the High Court. It is open to the assessee to urge
these contentions before the Income Tax Officer, if he is so advised,
according to law. There shall be no order as to costs.
F
Appeal allowed.