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Section 245: Set off of refunds against tax remaining payable: Where under any of the provisions of this Act, a refund is found to be due to any person, the Assessing Officer, Deputy Commissioner (Appeals), Commissioner (Appeals) or Chief Commissioner or Commissioner, as the case may be, may, in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against the sum, if any, remaining payable under this Act by the person to whom the refund is due, after giving an intimation in writing to such person of the action proposed to be taken under this section.” 20. From a reading of the above Section, it is crystal clear that the Assessing Officer, Deputy Commissioner (Appeals), Commissioner (Appeals) or Chief Commissioner or Commissioner, as the case may be, may, in lieu of payment of the refund, set-off the amount to be refunded or any part of that amount, against the sum, if any, remaining payable under the Act by the person to whom the refund is due, after giving an intimation in writing to such person of the action proposed to be taken under that Section. (emphasis supplied).On a perusal of the entire material documents including the impugned order, it is clearly evident that there is no intimation in writing to the petitioner-assessee before making such an adjustment of refund. No doubt, the respondent is empowered to make the adjustment of refund, but the same can be done only in the manner as contemplated under the provisions of the Act. It is conspicuous from the records that there is no intimation in writing to the petitioner before making such adjustment of refund. As the respondent has not followed the procedures prescribed under the provisions of the Act while adjusting the refund amount with the outstanding amount, the impugned order is vitiated in law and is liable to be set aside. For the foregoing reaasonings, the impugned order is set aside. The Writ Petition is allowed and the matter is remanded back to the respondent for compliance of Section 245 of the Act, and thereafter, the respondent is at liberty to adjust the refund amount payable to the petitioner with the amount payable for the respective assessment year, in accordance with law. Such an exercise shall be completed by the respondent within a period of four weeks from the date of receipt of a copy of this order. No costs. The Miscellaneous Petition is closed. Reported in/ published in http://judis.nic.in/judis_chennai/filename=41825

IN THE HIGH COURT OF JUDICATURE AT MADRAS     DATED: 30.4.2013   CORAM:   THE HONOURABLE MR.JUSTICE V.DHANAPALAN   W.P.No.8571 of 2013 & M.P.No.1 of 2013           M/s.Cognizant Technology Solutions India P. Ltd., 6th Floor, New No.165/Old No.110, Menon Eternity Building, St.Mary’s Road, Chennai-600 018 represented by its Director .. … Continue reading

Income Tax Act, 1961-Effect of death of one of the partners of a registered firm during the assessment year on the continued benefit of registration under section 184(7) thereof-Whether a fresh application for registration with partnership deed embodying change in constitution of firm, required. % Two appeals were filed before this Court one (Civil Appeal No. 1792 (NT) of 1974) by the assessee from the Allahabad High Court, and the second (Civil Appeal No. 609 (NT) of 1975) by certificate, at the instance of the revenue, from the Gujarat High Court. Both the appeals dealt with a common situation, namely, the position of the registered firm during the assessment year if one of the Partners died or retired. In the assessee’s case above-mentioned, the assessee was a partnership firm styled as Messrs. Wazid Ali Abid Ali, constituted under a deed of partnership, which, inter alia provided “that where the deed is silent, it shall be governed by the Indian Partnership Act save and except that on the death or demise of any partner the firm shall not be dissolved but shall be carried on with the remaining partners and that heir and representative of the deceased partner who resides in India on such terms and conditions to which they mutually agree. ” On June 4, 1964, one of the partners, Qamaruddin, died and his son, Fariduddin, joined the firm as a partner. New deed of partnership evidencing the change in the constitution of the firm was not executed (before November 4, 1964). The assessee filed a declaration in Form No. XII for the relevant assessment year 1965-66 under section 184(7) of the Act, signed by all the partners and Fariduddin taken in as a partner in place of his father, Qamaruddin. The Income Tax officer held that the admission of a new partner in place of the deceased partners amounted to a change in the constitution of the firm and as the firm had failed to file a fresh application for registration, the assessee was not entitled to the continued benefit of registration under section 184(7) of the Act. An appeal filed by the assessee before the Appellate Assistant Commissioner was dismissed. The assessee preferred an appeal to the Income 918 Tax Appellate Tribunal. The Tribunal held that the death of Qamaruddin and the inclusion of Fariduddin involved a change in the constitution of the firm and a fresh deed of partnership should have been executed and a fresh application for registration, filed. The Tribunal, however, also held that the conditions laid down in sub-section (7) of section 184 of the Act had been satisfied and the assessee would be entitled to the benefit of registration upto June 4, 1964; that is, a part of the previous year, and that the Income Tax officer should have made a single assessment only on the assessee and apportioned the total income between the partners who were entitled to receive’ the profits accordingly as they were entitled to share the profits, the firm being assessed as a registered firm in respect of the profits for the remaining part of the previous year. And the question “whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that for the period covered by the old constitution the income was assessable in the hands of the assessee as a registered firm?” was referred to the High Court, which answered the question in favour of the revenue and in the negative. The assessee appealed to this court for relief, as aforementioned. In the second appeal afore-mentioned at the instance of the revenue, the assessee, a registered firm, consisted of five partners, out of whom, one partner, Sarabhai Chimanlal died on March 9, 1963. The assessee firm filed two returns for the assessment year in question-one for the period ending on March 9, 1963 and the other, for the rest of the accounting period. A declaration under section 184(2) of the Act was enclosed along with the return for the first period. The two returns were filed on the basis that according to the assessee there was a dissolution of the firm on the death of the partner Sarabhai Chimanlal, and, therefore, the subsequent continuance of business was only for the purpose of winding up the firm. The Income Tax officer held that there was a change in the constitution of the firm within the meaning of section 187(2), and the assessee should have applied for registration and should not have remained content with the filing of the declaration under section 187(2) of the Act. The assessee filed an appeal before the Appellate Assistant Commissioner, who dismissed the same. The assessee then appealed to the Income Tax Appellate Tribunal, which came to the conclusion that there was a dissolution of the partnership on March 9, 1963, and at the instance of the revenue the Tribunal referred to the High Court, two questions “(1) Whether, in the facts and circumstances of the case, there was any dissolution of the partnership on the date of death of Shri Sarabhai Chimanlal and that, therefore, there should be separate assessment till the date of his death? and (2) 919 Whether in the facts and circumstances of the case, provisions of section 187(2) apply to the facts of the case? The High Court answered the first question in both parts in the affirmative and in favour of the assessee, and the second question, in the negative and in favour of the assessee, and granted certificate to the revenue to appeal to this court as aforementioned. Allowing the assessee’s appeal (the Allahabad case) and dismissing the appeal by the revenue (the Gujarat case), the Court, ^ HELD: The real question in both these appeals is when there is a death of a partner within a previous year in the case of a registered firm, what happens. [930B-C] In the context of the relevant statutory provisions of the Income Tax Act, 1961, the question arises whether on the death of the partners in the situations of the two appeals, the firm was dissolved or whether two assessments should be made. [932H; 933A] It is well to reiterate that in all cases, dissolution does not take place by death if there is a contract to the contrary. If that is so, then, in such a situation, the next question is whether there was any contract to the contrary in the situations of the two cases. [933A-Bl There was a contract to the contrary in the Allahabad case, where the deed of partnership provided, inter alia that where the deed is silent, it shall be governed by the Indian Partnership Act save and except that on the death or demise of any partner, the firm shall not be dissolved but shall be carried on with the remaining partners and that heir and representative of the deceased partner who resides in India on such terms and conditions as they mutually agree to. Therefore on the death of the partner, there is no dissolution by the expressed terms of the contract between the parties but the partnership is deemed to be carried on with the remaining partners and that heir and representative of the deceased partner, who was in India. The terms and conditions of the partnership, however, had to be mutually agreed upon. In this (Allahabad) case, Qamaruddin, one of the partners, died on June 4, 1964. Within the relevant time, his son, Fariduddin joined the firm as a partner. Before the expiry of November 4, 1964, that is, the assessment year which expired on November 4, 1964, the assessee had filed a declaration in Form XII for the relevant assessment year 1965-66 under section 184(7) of the Act. [933B-E] 920 In this case, on the death of Qamaruddin and the inclusion of A Fariduddin, there was a change in the constitution of the firm, but the firm was not dissolved. Fresh deed had to be executed under sub-section (7) of section 187. The application was not filed for the whole of the assessment year; so, for a part of the assessment year, the firm was registered and for the rest, the firm was not registered. The Tribunal held that (1) the assessee would be entitled to the benefit of registration upto June 4, 1964, that is, a part of the previous year and (2) the total income would be apportioned between the partners who were entitled to receive the profits accordingly as they were entitled to share the profits, the firm being assessed as a registered firm in respect of the profits ending on June 4, 1964, and as an unregistered firm in respect of the profits for the remaining part of the previous year. This conclusion of the Tribunal is correct. An analysis of the different sections of the Act lead to that conclusion and there is no contrary provision in the Act. Such a conclusion is logical and equitable and would do justice to both, the revenue and the assessee. In the circumstances of the case, the course open was to seek registration to execute a new deed of partner-ship and apply for the registration of that deed, as rightly held by the High Court, but failure to do so, does not make the registration upto the date of the death of the partner Qamaruddin invalid, and in the absence of any express prohibition indicating the same, the firm was entitled to the benefit of such registration. [933E-H; 934A- E] In the Allahabad case, the Tribunal took the correct view and the High Court was in error in the view it took. Judgment and order of the High Court set aside. The view of the Tribunal upheld. [934G] In the second appeal (Gujarat case), the question is whether in the facts and circumstances of the case, there was any dissolution of the partnership on the date of the death of Shri Sarabhai Chimanlal and whether there should be two separate assessments till the death or whether in the facts and circumstances of the case, provisions of section 187(2) of the Act apply to the facts of this case. The High Court found that the assessee’s contention was right that the firm, as found by the Tribunal, was dissolved and the transactions were carried on with the remaining parties in the course of the winding up and for the realisation of its dues. The High Court, accordingly, answered rightly in the affirmative and in favour of the assessee. There was in fact a dissolution, as found by the Tribunal, and in the facts and circumstances of the case, after the dissolution, the firm ceased to exist and there should be two separate assessments. The High Court was right in answering the question as it did. The High Court was also right in answering the 921 question in view of the fact that there was a death and as such dissolution of the firm by the manner in which the parties acted, there was no question of the same firm being continued and the provisions of section 187(2) could not be said to apply in the light of the facts. [939E-H] In re. Hakerwal Colliery, [1942] 10 ITR 422, Girdharilal Seetaram & Bros. v. C.I.T, [1949] 17 I.T.R. 282; Pannalal Babulal v. C.I.T., [1969] 73 I.T.R. 503; Rex v. General Commissioners for the City of London, 24 Reports of Tax Cases 221; Commissioner of Income-Tax v. Shiv Shankar Lal Ram Nath, 106 I.T.R. 342; Vishwanath Seth v. Commissioner of Income Tax, U. P., 146 I.T.R. 249; Badri Narain Kashi Prasad v. Additional Commissioner of Income Tax, 115 I.T.R. 858; Sandersons Morgans v. Income Tax `A’ ward, District III (I), Calcutta, and others, 87 I.T.R. 270; Joshi & Co. v. Commissioner of Income-Tax, 162 I.T.R. 268; Girdharilal Nannelal v. Commissioner of Income-Tax, 147 I.T.R. 529; Commissioner of Income-Tax, Delhi-IV v. Sant Lal Arvind Kumar, 136 I.T.R. 379; Dungarsidas Kaluram v. Additional Commissioner of Income-tax, M.P., 132 I.T.R. 526; Ganesh Dal Mills v. Commissioner of Income-Tax, 136 I.T.R. 762; Dahi Laxmi Lal Factory v. Income-Tax Officer, Sitapur, and another, 13 I.T.R. 517; Additional Commissioner of Income-tax, Gujarat v. Harjivandas Hathibhai, 108 I.T.R. 517; I. Ramakrishnaiah & Sons. v. Commissioner of Income-tax Orissa, 111 I.T.R. 296; Tyresoles (India), Calcutta v. Commissioner of Income-tax, Coimbatore, 49 I.T.R. 515 and Mayukkaria (N) Estate Tea Factory v. Additional Commissioner of Income-tax, Madras II, 112 I.T.R. 715, referred to. 1988 AIR 757, 1988( 1 )SCR 917, 1988Suppl.SCC 193, 1987( 2 )SCALE1078, 1987( 4 )JT 349

PETITIONER: WAJID ALI ABID ALI, ETC. Vs. RESPONDENT: COMMISSIONER OF INCOME TAX, LUCKNOW, ETC. DATE OF JUDGMENT10/11/1987 BENCH: SEN, A.P. (J) BENCH: SEN, A.P. (J) RAY, B.C. (J) CITATION: 1987 AIR 2074 1987 SCR (3)1049 1987 SCC Supl. 329 JT 1987 (3) 370 1987 SCALE (2)351 ACT: Income Tax Act, 1961-Effect of death of one … Continue reading

Rejection of plaint- Order VII Rule 11, Rule 14(1) and Rule 14(2), Form Nos. 47 and 48 in Appendix A of the Code which are statutory in nature, we hold that the learned single Judge of the High Court has correctly concluded that in the absence of any cause of action shown as against the 1st defendant, the suit cannot be proceeded either for specific performance or for the recovery of money advanced which according to the plaintiff was given to the 2nd defendant in the suit and rightly rejected the plaint as against the 1st defendant. Unfortunately, the Division bench failed to consider all those relevant aspects and erroneously reversed the decision of the learned single Judge. We are unable to agree with the reasoning of the Division Bench of the High Court. 22) In the light of the above discussion, the judgment and order dated 16.08.2011 passed by the Division Bench of the High Court in OSA No. 100 of 2006 is set aside and the order dated 25.01.2006 passed by the learned single Judge in Application No. 3560 of 2005 is restored. The civil appeal is allowed with costs.

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION 1 2 CIVIL APPEAL NO. 4841 OF 2012 3 (Arising out of SLP (C) No.30632 of 2011)   The Church of Christ Charitable Trust & Educational Charitable Society, represented by its Chairman …. Appellant (s) Versus M/s Ponniamman Educational Trust represented by its Chairperson/Managing Trustee … Continue reading

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