Bombay High Court
Commissioner Of Income-Tax vs Tirupati Oil Corporation on 28 February, 2000
Equivalent citations: [2001]248ITR194(BOM)
Bench: S.H. Kapadia, A.P. Shah
JUDGMENT
1. The short point which arises for consideration in the present matter is whether the undisclosed income of a partner can be treated as undisclosed income of the firm for the purposes of Chapter XIV-B of the Income-tax Act, 1961.
2. The facts of this appeal are as follows : A search operation under Section 132 of the Act was carried out at the residences of the partner pursuant to which notice under Section 158BC of the Income-tax Act was issued to the firm on August 5, 1996, requiring the assessee-firm to furnish its return of income for the block period in question. The Assessing Officer came to the conclusion that since a partnership firm is not a legal entity the assessee-firm was liable with regard to the material detected at the residence of its partner. The Tribunal in appeal, however, rightly came to the conclusion that under the Income-tax Act, a registered firm is a taxable unit and if the Assessing Officer wanted to proceed under Chapter XIV-B of the Income-tax Act with regard to the undisclosed income of the partner for the purposes of making block assessment on the assessee-firm, then the Assessing Officer was required to invoke Section 158BD which has not been done in the present case and, therefore, the block assessment made on the firm without following the procedure under Section 158BD was bad in law. We do not find any error of law in the judgment of the Tribunal.
3. No substantial question of law, in any event, arises. Hence, the appeal is dismissed.