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CIVIL APPELLATE JURISDICTION: Civil Appeals nos. 317 to 320 of 1957.

Appeal from the judgment and order dated March 5, 1954, of the Madras High Court, in Writ Petitions Nos. 613 and 629 of 1952 and 201 and 202 of 1953.

A. V. Viswanatha Sastri and B. K. B. Naidu, for the appellants.

A. N. Kripal, R. H. Dhebar and D. Gupta, for respondent No. 1.

1958. October 15. The Judgment of the Court was delivered by GAJENDRAGADKAR, J.-These four appeals arise from four petitions filed against the Income-tax Officer-, Nellore Circle, Nellore, respondent 1, in respect of the proceedings taken by him against three firms under s. 34 of the Indian Income-tax Act (hereinafter called the Act). The firm M/s. Bellapu Audeyya and Chilla Pitchayya was formed on April 20, 1936, and it was dissolved on March 31, 1948. It consisted of two partners, Chilla Pitchayya and Bellapu Audeyya. Chilla Pitchayya had started another firm in the name and style of G. Pitchayya & Co. with another partner R. Subba Rao. This firm was formed on July 30, 1941, and it was dissolved on March 31, 1949. Bellapu Audeyya and. Chilla Pitchayya had also formed another firm along with five other partners which carried on its business in the name and style of Prabbat Textiles. This firm was formed on December 1, 1941, and it "-as dissolved by a decree of the civil court Passed oil December 22, 1949, the dissolution having taken effect from January 1, 1949. All the three firms were carrying on business in yarn and cloth and all of them were registered under s. 26A of the Act. It appears that for the purpose of assessing the income of these firms for the years 1943-44 and 1944-45, respondent 1 was satisfied on making enquiries that each of the three firms was a separate entity and so separate assessment orders were passed in respect of the income of each one of them for the said two years. Subsequently on August 14, 1951, respondent I issued notice against the firm of Prabliat Textiles under s.34 of the Act. In the proceedings thus commenced, respondent I hold that the firm of Prabhat Textiles was a fictitious tirm and that the real partners ",ere C. Pitchayya and B. Audeyya. As a result of this finding, respondent I cancelled the registration of the said firm under r. 6B of the Income-tax Rules and passed fresh orders of assessment against the said firm on the basis that it was an unregistered firm for the assessment years 1943-44 and 1944-45 on August 14, 1952, and February 25, 1953, respectively. Similar action was taken by respondent I in respect of the two other firms on the same dates.