JUDGMENT BOSE, C.J. 1. THIS is an appeal against an order of Sinha J. dt. the 27th April, 1959, dismissing a writ application for quashing a notice issued under s. 34 of the Indian IT Act. 2. A firm of the name of Balmukund Radheshyam carried on business as commission agents in cotton, sale and purchase of cotton and cotton piece goods and speculation in cotton and silver at Ratlam and Indore, since 22nd Dec., 1947, until it was dissolved on the 24th Feb., 1950. On 20th Aug., 1952, one of the ex-partners of the said firm filed a return of the income of the said firm before the ITO, Special Survey Circle III, Calcutta, showing a sum of Rs. 18,737-5-9 as net profits for the accounting period of the firm's first year of business, that is for the asst. yr. 1949-50. An order of the assessment was made on the 28th Oct., 1952, and the sum assessed to income-tax was duly paid. It is alleged that sometime in March, 1953, the notice of dissolution of the said firm was duly given to the ITO, Special Survey Circle III, Calcutta, though this fact is denied on behalf of the IT Department. By an order dt. the 3rd Aug., 1955, the Central Board of Revenue, in exercise of its powers under sub-s. (7A) of s. 5 of the Indian IT Act, transferred the income-tax cases of the said firm pending in the office of the Second ITO, Bombay to the ITO, Central Circle II, Calcutta. By a letter dt. the 29th Sept., 1955, the then ITO, Central Circle II, Calcutta, informed the said firm at 357, Kalbadevi Road, Bombay, that the case of the said firm has been assigned by the Central Board of Revenue to him. By a letter dt. the 13th Oct., 1955, the ITO, Central Circle II, Calcutta, called upon the ex-partners of the said firm to produce the books of the firm for the year 2004-05 and particularly all documents of speculation in cotton and silver on 10th Nov., 1955. On 22nd Oct., 1955, the said ITO issued a notice a notice under s. 34 addressed to Shivram Poddar (partner) for and on behalf of M/s Balmukund Radheshyam, 138, Cross Street, Calcutta. On 22nd Oct., 1955, the said ITO issued a notice a notice under s. 34 addressed to Shivram Poddar (partner) for and on behalf of M/s Balmukund Radheshyam, 138, Cross Street, Calcutta. In this notice it was, inter alia, stated as follows : I have reason to believe that your income assessable to income- tax for the year ending 31st March, 1950, has been under- assessed. I, therefore, propose to re-assess the said income that has been under-assessed. I should request you to deliver to me within 35 days of the receipt of this notice, a return in the attached form of your total income and total world income assessable for the said year ending 31st March, 1950. This notice is being issued after obtaining the necessary satisfaction of the CIT, Central, Calcutta (Sd.) A. BAKSI, ITO, Central Circle II, Calcutta. 3. THEREAFTER, certain correspondence followed. An objection to the jurisdiction of the ITO was taken with regard to the proceedings proposed to be taken under s. 34 of the Indian IT Act. But as no heed was paid to it, an application was moved before this Court on or about 14th Dec., 1955, under Art. 226 of the Constitution of India and this Court was pleased to issue a rule nisi on 16th Dec., 1955. This rule was subsequently made absolute by Sinha J. by an order dt. the 3rd Jan., 1957. An appeal was preferred against the order of Sinha J. dt. the 3rd Jan., 1957, but the same was dismissed. In the meantime, on 28th March, 1958, the ITO issued another notice under s. 34 r/w s. 22(2) of the Act to the petitioner-appellant " as partner of the firm of M/s Balmukund Radheshyam at the time of its dissolution". The relevant portion of the notice may be set out hereunder : "To Shri Shivram Poddar, Partner of the firm of M/s Balmukund Radheshyam at the time of its dissolution, C/o M/s Anandram Gajadhar, 33, Netaji Subhas Road, Calcutta. Whereas I have reason to believe that M/s Balmukund Radheshyam (name of the firm) was dissolved on or about 24th Feb., 1950 ; And whereas the income of the said firm assessable to income-tax for the asst. yr. Whereas I have reason to believe that M/s Balmukund Radheshyam (name of the firm) was dissolved on or about 24th Feb., 1950 ; And whereas the income of the said firm assessable to income-tax for the asst. yr. 1949-50 has been under-assessed ; And whereas I propose to re-assess the said income ; And whereas under s. 44 of the Indian IT Act, 1922, you the said Shivram Poddar and Ramnarain Ojha (decd.), 33, Netaji Subhas Road, Calcutta, who were partners of the said firm of M/s Balmukund Radheshyam at the time of its dissolution, are jointly and severally liable to assessment in respect of the income, profits and gains of the said firm before its dissolution and for the amount of tax payable thereon ; Now therefore under s. 34 r/w s. 22(2) of the said Act, I require you the said Shivram Poddar to deliver to me within 35 days of the receipt of this notice a return in the attached form, of the total income and the total world income of the said firm assessable for the year ending 31st March, 1950. This notice is issued after the CIT (Central), Calcutta, is satisfied that this is a fit case for the issue of this notice. ITO (Central) Circle II, Calcutta." 4. ON the 17th April, 1958, the appellant addressed a letter to the ITO challenging, inter alia, the jurisdiction of the ITO and the validity of the said notice issued under s. 34 and also asking for certain particulars specified therein. By a letter dt. the 23rd July, 1958, the ITO insisted on compliance with the notice issued under s. 34 and called upon the appellant to file a return by 7th Aug., 1958. By a letter dt. the 6th Aug., 1958, the petitioner again protested against the validity of the notice and proceedings and thereafter moved this Court under Art. 226 of the Constitution and a rule nisi was issued on the 18th Sept., 1958. This rule came up for hearing before Sinha J. and was discharged by a judgment and order dt. the 27th April, 1959. It is against this order that the present appeal has been preferred. This rule came up for hearing before Sinha J. and was discharged by a judgment and order dt. the 27th April, 1959. It is against this order that the present appeal has been preferred. The sole question which arises for determination in this appeal is whether under s. 44 of the Indian IT Act, as it stood before it was amended by the Finance Act (XI Of 1958), a partner of a dissolved firm could be assessed to income-tax and made liable for payment of such tax. It will be convenient at this stage to set out s. 44 as it existed prior to the amendment of 1958 and after it. 5. ORIGINAL s. 44 "Where any business, profession or vocation carried on by a firm or association of persons had been discontinued, or where an AOPs is dissolved, every person who was at the time of such discontinuance or dissolution a partner of such firm or a member of such association shall, in respect of the income, profits and gains of the firm or association, be jointly and severally liable the assessment under Chapter IV and for the amount of tax payable and all the provisions of Chapter IV shall, so far as may be, apply to any such assessment." 6. THE new s. 44 which was introduced w.e.f. 28th April, 1958, is as follows : New s. 44 "Liability in case of firm or association discontinued or dissolved.--Where any business, profession or vocation carried on by a firm or other AOPs had been discontinued or where a firm or other AOPs is dissolved, the ITO shall make an assessment of the total income of the firm or other AOPs as such as if no such discontinuance or dissolution had taken place...... (3) Every person who was at time of such discontinuance or dissolution a partner of the firm or a member of the association, as the case may be, shall be jointly and severally liable for the amount of tax or penalty payable, and all the provisions of Chapter IV, so far as may be, shall apply to any such assessment or imposition of penalty." The most glaring difference between the two sections is the absence of the word "firm" in the first part of the old s. 44 after the words "discontinued or where' and the introduction of the word "firm" into the section by the amending Act of 1958 and so the argument of the learned counsel for the appellant is that a dissolved firm or a partner of a dissolved firm was not in any case intended to be covered by the original s. 44. 7. NOW it is well known that to constitute a partnership the parties must have agreed to carry on business and to share profits in some way in common. This is the concept underlying the definition of partnership as given in s. 4 of the Indian Partnership Act, 1932. Sec. 4 reads as follows : "Partnership' is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Persons who have entered into partnership with one another are called individually 'partners' and collectively 'a firm', and the name under which their business is carried on is called the ' firm name'." 8. SO three elements are necessary to establish a partnership : (1) There must be an agreement entered into between all the parties. (2) The agreement must be to share the profits of a business. (3) The business must be carried on by all or any of them acting for all. The modes in which the dissolution of a partnership firm takes place are dealt with in Chapter VI of the Partnership Act. Secs. 39 to 55 deal with the subject of dissolution, of its incidents and the rights and liabilities arising upon dissolution. It is clear from a perusal of the various sections of the Act that a dissolution does not necessarily follow because the partnership has ceased to do business. Secs. 39 to 55 deal with the subject of dissolution, of its incidents and the rights and liabilities arising upon dissolution. It is clear from a perusal of the various sections of the Act that a dissolution does not necessarily follow because the partnership has ceased to do business. But there can be no question that if a partnership is dissolved it cannot enter into any fresh transaction unless it is otherwise agreed or provided for. A dissolved firm has normally to discontinue its business once for all. So dissolution ordinarily involved the idea of permanent discontinuance of the business. Now it is admitted in several paragraphs of the petition under Arts. 226 that the firm of Balmukund Radheshyam had been dissolved in February, 1950. The effect therefore is that the business of the firm has been discontinued. That being the position the present case falls within the first part of the old s. 44, namely, " where any business.... carried on by a firm... has been discontinued". But as against this, the argument of the learned counsel for the appellant has been that if a case of a dissolved firm was intended to be covered by the word "discontinuance" resulting from dissolution, there could be no point in the legislature providing specifically by way of amendment in 1958 for the case of a dissolved firm in addition to the case of a dissolved AOPs as it was there in the original section. But it is not altogether improbable that, one of the reasons for the amendment made in 1958 was to clarify the position and to fee rid of the effect of the judicial decisions which held that a case of a dissolved firm was altogether outside the ambit of s. 44 of the Act. It may be pointed out that in the case of Manindra Lal Goswami vs. ITO (1956) 30 ITR 550 , Sinha J. had held that under the circumstances prevailing in that case there could not be any assessment or re- assessment of a dissolved firm as such. This decision of Sinha J. had been upheld by the appeal Court in the case of R.N. Bose vs. Manindra Lal Goswami (1958) 33 ITR 435 . This decision of Sinha J. had been upheld by the appeal Court in the case of R.N. Bose vs. Manindra Lal Goswami (1958) 33 ITR 435 . Chakravartti C. J., who delivered the judgment of the Court of appeal, made, inter alia, the following observations : "The question, as presented to us, turns on the true construction of s. 44 of the Indian IT Act. That section speaks of a case where any business, profession or vocation carried on by a firm or AOPs has been discontinued and a case where an AOPs is dissolved. It does not speak of a case, at least expressly, where a firm has been dissolved. It will be noticed that when speaking of the discontinuance of a business, profession or vocation, the section speaks of both a firm and an AOPs, but when speaking of dissolution, it drops the 'firm'. It is, therefore, arguable that the dissolution of a firm is not within the contemplation of s. 44 at all and, therefore, the Department cannot invoke its aid for the purpose of assessing the income of a dissolved firm. Mr. Meyer agreed that if the Department could not rely on s. 44, there was no other section in the Act which would authorities it to assess the income of a dissolved firm, but he contended that discontinuance included dissolution. I am unable to accept that contention because although the dissolution of a firm must involve discontinuance of its business, the converse need not necessarily be true and a firm may conceivably continue to exist after deciding to discontinue its business as firms very often do for various purposes, such as collecting their debts. Why the section should have dropped the firm when speaking of dissolution it is difficult to understand, but I need not pause to speculate about the reasons. The parties have throughout proceeded on the footing that s. 44 applied to the case of a dissolved firm and, for the purpose of this case, I shall proceed on the assumption that s. 44 applies." 9. The parties have throughout proceeded on the footing that s. 44 applied to the case of a dissolved firm and, for the purpose of this case, I shall proceed on the assumption that s. 44 applies." 9. THESE observations made it clear that a doubt was cast by the learned Chief justice on the point whether a case of dissolution of a firm was at all within the ambit of the original s. 44 as it stood before the amendment and so the legislature intervened by way of amendment in 1958 in order to clarify the position and place the matter beyond the pale of any doubt. 10. BOTH Sinha J. and Chakravartti C.J. construed s. 44, as it stood prior to its amendment, to mean that a firm could no longer be assessed as a firm after its dissolution for its pre- dissolution income and that the assessment could only be made on the partners jointly and severally. At page 447 the learned Chief Justice recorded the following conclusion : "The conclusions for which I have endeavoured to give my reasons at some length are : (1) that, on the notice under s. 34 as issued on the respondent in the present case and issued also on another partner, there could not possibly be an assessment of the firm or of the firm's income ; and (2) that hence, after the dissolution of a firm, an assessment to income-tax of its predissolution income can only be made, assuming s. 44 applies, on the persons who were partners of the firm at the time of the dissolution jointly and severally and it cannot be made on the firm, as a firm, and this whether the firm was a registered or an unregistered one." The decision of Sinha J. was given on the 19th Dec., 1955, and the decision of the Court of appeal was given on 6th March, 1957. The amendment was, as I have indicated already, made in 1958, w.e.f. 28th April, 1958. 11. IN the case of C.A. Abraham vs. ITO, Kottayam (1961) 41 ITR 42; (1961) 2 SCR 765 ; AIR 1961 SC 609 , certain observations were made in relation to the provision embodied in s. 44 which throw some light on the question before us. IN that case Abraham and Thomas were partners of the firm of M.P. Thomas and Co. IN that case Abraham and Thomas were partners of the firm of M.P. Thomas and Co. carrying on business in foodgrains at Kottayam. Thomas died on 11th Oct., 1949. Abraham, as partner of the said firm, had submitted returns in the years August, 1947, July, 1948, August, 1948, July, 1949 and August, 1949, July, 1950, as returns of the income of the unregistered firm. It was discovered that the firm had not disclosed other incomes earned in fictitious names and so on 29th Nov., 1954, the ITO assessed the suppressed income and after issuing notice for imposition of penalty under s. 28 of the IT Act imposed penalty of the total sum of Rs. 29,000 in respect of the three years. After the appeal to the AAC was dismissed, Abraham applied for a writ under Art. 226 for quashing the orders of assessment and the orders of imposition of penalty. It was contended on behalf of Abraham that after dissolution of the firm by the death of Thomas in October, 1949, no order of imposition of penalty could be passed against the firm. The High Court rejected the application and thereupon an appeal was preferred to the Supreme Court. The Supreme Court, after quoting the old s. 44, observed as follows : "That the business of the firm was discontinued, because of the dissolution of the partnership is not disputed. It is urged, however, that a proceeding for imposition of penalty and a proceeding for assessment of income-tax are matters distinct, and s. 44 may be re-sorted to for assessing tax due and payable by a firm business whereof has been discontinued, but an order imposing penalty under s. 28 of the Act cannot by virtue of s. 44 be passed. Sec. 44 sets up machinery for assessing the tax liability of firms which have discontinued their business and provides for three consequences, (1) that on the discontinuance of the business of a firm, every person who was at the time of its discontinuance a partner is liable in respect of income, profits and gains of the firm to be assessed jointly and severally, (2) each partner is liable to pay the amount of tax payable by the firm, and (3) that the provisions of Chapter IV, so far as may be, apply to such assessment." 12. TOWARDS the end of paragraph 5 of the report the following material observations were made : "In effect, the legislature has enacted by s. 44 that the assessment proceedings may be commenced and continued against a firm of which business is discontinued as if discontinuance has not taken place. It is enacted manifestly with a view to ensure continuity in the application of the machinery provided for assessment and imposition of tax liability notwithstanding discontinuance of the business of firms." By a fiction, the firm is deemed to continue after discontinuance for the purpose of assessment under Chapter IV. So this case is an authority for the proposition that discontinuance of the business of a partnership firm, as a result of dissolution of the firm, attracted the provisions of s. 44 of the IT Act. 13. OUR attention has also been drawn by the learned counsel for the respondent to a decision of the Bombay High Court in Ramniwas Hanumanbux Somani vs. Venkataraman, ITO, Bombay (1961) 43 ITR 152. In this case the appellant, Somani, was one of the four partners of a firm of the name of Motilal Somani and Co., which was formed in the year 1940. One of the partners of that firm died in 1946 and the new partnership was formed in 1947 in the same name by taking a new fourth partner. This second partnership was dissolved in 1948 and another partnership was formed in the same name with the appellant and another person as partners. This third partnership was finally dissolved in 1955. In spite of these changes in the constitution of the firm the same business was carried on all throughout and it was taken over by the appellant as a proprietary concern and carried on in the same name and at the same place. On the 15th Dec., 1955, the appellant informed the ITO that the firm was dissolved on 14th Nov., 1955, and that the business had become his proprietary concern. On 25th March, 1958, the ITO issued a notice under s. 34(1) in the name of Motilal Somani and Co. initiating reassessment proceedings against the firm for the asst. yr. 1949-50, on the ground that certain income had escaped assessment. On 25th March, 1958, the ITO issued a notice under s. 34(1) in the name of Motilal Somani and Co. initiating reassessment proceedings against the firm for the asst. yr. 1949-50, on the ground that certain income had escaped assessment. Tambe J., who delivered the judgment of the Division Bench, after referring to some observations made in relation to s. 44 in Abraham's case (supra), proceeded to make the following observation (at page 158 of the report) : "These observations of their Lordships relate to s. 44 as it stood prior to its amendment in the year 1958, which came into effect on 1st April, 1958. Mr. Dwarkadas, who gave a reply on behalf Mr. Palkhivala in this case, tried to distinguish this decision on the ground that the observations made by their Lordships were made on a concession made by the other side. It is difficult to accept the submission. On the other hand, reading the judgement as a whole it is clear that after considering the various provisions of the Act, their Lordships recorded their conclusions as reproduced above. It appears that what was implicit in s. 44 prior to its amendment in 1958 has not been made explicit by the amendment." 14. THE learned judge of the Bombay High Court went so far as to hold in that case that a notice issued under s. 34(1) of the Act in the name of the dissolved firm in respect of its pre- dissolution income was a valid notice, both in view of the terms of the provisions of the old s. 44 and also in view of the wordings of s. 34 of the Act to the effect, "provisions of this Act shall, so far as may be, apply accordingly as if the notice was a notice issued under that sub-section". The learned judge held that these wordings in s. 34 indicate that by a fiction of law a notice issued under s. 34 is treated as if it is notice originally issued under sub-s. (2) of s. 22 of the Act. It is not necessary for us in this case to go to the length of holding that even if a notice s. 34 in this case had been issued in the name of the dissolved firm such a notice would be a valid notice. It is not necessary for us in this case to go to the length of holding that even if a notice s. 34 in this case had been issued in the name of the dissolved firm such a notice would be a valid notice. In fact a Division Bench of this Court has already held that a previous notice issued by the ITO under s. 34 of the Act in the name of the very same dissolved firm and in respect of the very same year with which we are concerned in this case was an invalid notice. The notice which is the subject-matter of the present proceeding and dt. the 28th March, 1958, is addressed to the appellant "as partner of the firm of M/s Balmukund Radheshyam at the time of its dissolution" and, having regard to the various authorities to which I have made a reference, I am inclined to hold that the notice issued is a valid notice and the order made by Sinha J. must be upheld. 15. THE learned counsel appearing for the respondent also raised the point that as the IT Act provides a complete machinery for assessment of tax and for obtaining relief in the case of an improper order passed by the IT authorities a person aggrieved cannot be permitted to abandon resort to that machinery and to invoke the jurisdiction of the High Court under article Art. 226 of the Constitution. In other words his argument is that the alternative remedy provided by the IT Act bars resort to Art. 226 of the Constitution. Reference was made by the counsel for the parties to the cases of C.A. Abraham vs. ITO, Kottayam (1961) 41 ITR 425 (1961) 2 SCR 765 ; AIR 1961 SC 609 ; Carl Still G.M. B. H. vs. State of Bihar (1961) 12 STC 449 (1962) 2 SCR 81 AIR 1961 SC 1615 and Venkateswaran vs. Ramchand Sobhraj Wadhwani (1962) 1 SCR 753 ; AIR 1961 SC 1506 , and to the cases of Calcutta Discount Co. vs. ITO, Calcutta (1961) 41 ITR 191; (1961) 2 SCR 241 , and Bidi Supply Co. vs. Union of India (1956) 29 ITR 717; (1956) SCR 267 AIR 1956 SC 479 . But I do not think it is necessary to deal with these cases at length or to express any opinion on this point. vs. ITO, Calcutta (1961) 41 ITR 191; (1961) 2 SCR 241 , and Bidi Supply Co. vs. Union of India (1956) 29 ITR 717; (1956) SCR 267 AIR 1956 SC 479 . But I do not think it is necessary to deal with these cases at length or to express any opinion on this point. Our attention was also drawn to the cases of B.M. Desai vs. Ramamurthy, ITO, Bombay (1958) 34 ITR 409; Haramohan Poddar v. Sudarson Poddar AIR 1921 Cal 538 25 CWN 847 850 and to two English cases, Attorney-General vs. Partington LR 4 HL 100, 122 and Cape Brandy Syndicate vs. IRC (1921) 1 KB 64 71. But these cases also need not be dealt with at any length. 16. IN my view this appeal must fail and it is accordingly dismissed with costs. Certified for two counsel.