Rajagopalan, J.- The question referred under section 66(1) of Act XI of 1922. for the decision of this Court was: “Whether, on the facts and in the circumstances of the case, the assessee firm was bound to send to the Income-tax Officer an estimate of the tax payable by it before the 15th March, 1947 and pay the tax as required by section 18-A(3) of the Indian Income-tax Act, 1922.” Though the question as framed does not really bring out the real point in issue, a mere enumeration of the dates and events that preceded the imposition of the penalty on the assessee should suffice to answer the question, even as it has been framed, in the negative and in favour of the assessee. A partnership was formed on 28th December, 1945, evidenced by an agreement in writing, and business was commenced on 24th January, 1946. The partners adopted the Samvat year as the year of accounting, and the accounts were closed on 24th October, 1946. The partnership deed itself was drawn on 2nd June, 1947, and the firm lodged its return of assessment on 14th July, 1947, along with an application for the registration of the firm. The registration was ordered on 15th November, 1947, on which date the assessment was also completed on the footing that it was a registered firm. At the same time, the Income-tax Officer issued a notice to the assessee firm calling upon it to show cause why penalty should not be imposed for contravening the provisions of sub-section 3 of section 18-A of the Act. Eventually, a fine of Rs.2,500 was imposed. An appeal to the Assistant Commissioner of Income-tax and a further appeal to the Appellate Tribunal failed, and thereupon, the Tribunal referred this question under section 66(1) of the Act. Under section 18-A, sub-clause (3), the due date on which the estimate had to be furnished was the 15th of March, and, in this case, it was the 15th of March, 1947. On that date, the partnership was as yet unregistered. The application for registration was made on 14th July, 1947, and it must be remembered the partnership deed itself was drawn on 2nd June, 1947, though the agreement to enter into partnership had been already drawn up on 28th December, 1945. On that date, the partnership was as yet unregistered. The application for registration was made on 14th July, 1947, and it must be remembered the partnership deed itself was drawn on 2nd June, 1947, though the agreement to enter into partnership had been already drawn up on 28th December, 1945. Under section 23 (5) the registered partnership, as such is not liable to pay, except in the two contingencies specified in the two provisos; it is the partners of the registered firm that are liable to pay the income-tax, though, for the purpose of assessing the income-tax payable by the individual partners, the firm is the unit. The assessee as such, whether by the term “assessee” we mean the registered firm or “the in-dividual partners of the registered firm”, was not really in existence on 15th March, 1947. It was not the liability of the registered firm or of the individual partners thereof to furnish the estimate required by sub-section (3) of section 18-A. No doubt, the unregistered firm was in existence on 15th March, 1947. It closed its accounts’ on 24th October, 1946, for the assessment year 1947-48, and but for registration the unregistered firm would have been the assessee in the sense the assessee liable to pay the income-tax due. But, when eventually the assessment was completed, it was not the unregistered firm as such that was liable to pay. It was the individual members of the registered partnership that were liable to pay, and were really the assessees as defined by sub-section 2 of the Act. Section 28(1)(a), which is the penal clause to be construed to justify the imposition of the penalty, has to be construed strictly as a penal clause. The assessee whether the registered firm or the individual members thereof really came to shoulder the liability to pay the assessed income-tax only on the date of the registration; and, on 15th March, 1947, that liability could not have been enforced. If the unregistered firm was under a liability to disclose its income and provide for payment of the income-tax in advance on 15th March, 1947, it was not the unregistered firm that was eventually assessed. If the unregistered firm was under a liability to disclose its income and provide for payment of the income-tax in advance on 15th March, 1947, it was not the unregistered firm that was eventually assessed. So, there was no possibility, in any event, of enforcing the liability for failure to comply with sub-clause 3 of section 18-A, as far as the registered firm, and at any rate, as far as the individual members thereof were concerned. Therefore, there was no question of any default of either the registered firm or of the individual partners thereof. Therefore, there was no question of there being any liability to pay any penalty. The question is answered in the negative and in favour of the assessee. Since the assessee has succeeded, the Income-tax Department will pay the costs of the assessee. Rs.250. K.C. ----- Reference answered in favour of the assessee.