A division bench of the Calcutta High Court in Madu Ghosh v. CIT (Admn) held that a partner of a Firm can claim the amount already granted to the said Firm after its reconstitution.
The sole grievance of the petitioner, a partner of the assessee-Firm was that the IT authorities refused to pay the amount of refund ordered to them by stating that the said Firm has dissolved and the petitioner cannot receive the entirety of the amount directed to be refunded.
Before the High Court, the petitioner submitted that the partnership has since been dissolved and the he is the sole proprietor of the firm after its dissolution. The petitioner has, therefore, taken over the entire assets and liabilities of the erstwhile partnership firm. It was also submitted that the outgoing partner had given a written statement that he has no objection to the Income Tax Authorities paying the amount of refund to the petitioner.
Allowing the plea of the petitioner, Justice Debangsu Basak noted that “the partnership underwent a re-constitution, in the sense, that it stood dissolve with the petitioner taking over the entire assets and liabilities of such partnership. Therefore, the petitioner becomes entitled to receive the entirety of the refund in terms of the order passed by the authorities in respect of the partnership firm as an assessee.”
Accordingly, the bench directed the IT department to pay the amount of refund to the petitioners within four weeks.
Read the full text of the Judgment below.
