Appeal No 408 of 1957
Appeal by Special Leave from the Judgment and Order dated the 28th September 1955 of the former Bombay High Court in Income tax Reference No 5 of 1955
Sanat P Mehta section N Andley J B Dadachanji Rameshwar Nath and P L Vohra for the appellant
A N Kripal R H Dhebar and D Gupta for the respondent
October 18
The Judgment of the Court was delivered by SHAH J
To the appellant who was a non resident for the purposes of the Indian Income Tax Act 1922 had accrued in the assessment years 1943 44 194445 1946 47 and 1947 48 certain dividend income within the taxable territory of British India but the appellant did not submit returns of his income for those assessment years
In exercise of his powers under section 34 of the Indian Income Tax Act 1922 the Income Tax Officer Bombay City served upon the appellant notices under section 34 read with s 222 of the Act for assessment of tax in respect of those years
The notice for the year 1943 44 was served on the appellant on March 27 1952 for the year 1944 45 on February 16 1953 for the year 1946 47 on April 4 1951 and for the year 1947 48 on April 2 1952
The Income Tax Officer completed the assessments in respect of the years 1943 44 1944 45 and 1947 48 on May 6 1953 and for the year 1946 47 on March 19 1952
The orders of assessment were confirmed by the Appellate Assistant Commissioner and by the Income Tax Appellate Tribunal
At the instance of 37 the appellant the Income Tax Appellate Tribunal drew up a statement of the case under section 661 of the Income Tax Act and submitted to the High Court of Judicature at Bombay the following two questions I
Whether the notices issued under section 222 of the Act read with section 34 of the Act for the assessment years 1943 44 1944 45 1946 47 and 1947 48 were served after the period of limitation prescribed by section 34 of the Act 2 If the answer to Question No 1 is in the affirmative whether the assessments for the years in question were invalid in law The High Court answered the first question in the negative and observed that on that answer the second question  did not arise 
With special leave under article 136 of the Constitution this appeal is preferred by the appellant against the order of the High Court
The only question which falls to be determined in this appeal is whether the proceedings for assessment were commenced within the period of limitation prescribed for serving notice of assessment under section 341a of the Act
At the material time by section 34 1a the Income Tax Officer was invested with power amongst others to serve at any time within eight years from the end of any year of assessment notice of assessment if he had reason to believe that income profits or gains had escaped assessment by reason of omission or failure on the part of the assessee to make a return of his income under section 22 for that year or to disclose fully and truly all material facts necessary for his assessment of that year
In those cases where the Income Tax Officer had in consequence of information in his possession reason to believe that income profits or gains had escaped assessment even though there was no omission or failure as mentioned in el
a he could under cl
b within four years from the end of the year of assessment serve a notice of assessment
Admittedly the notices issued by the Income Tax Officer for the years in question were issued within eight years from the end of the years of assessment and if el
1a of section 34 applied the assessment was not barred by the law of limitation
38 But the appellant contended that the notices for assessment were even though he had not made a return of his income for the years in question governed not by cl
1a of section 34 but by cl
1b of section 34
He contended that being a resident outside the taxable territory in the years of  assessment a general notice under section 221 did not give rise to a liability to submit a return and his inaction did not amount to omission or failure to submit a return inviting the applicability of section 341a
He submitted that omission or failure to make a return can only arise qua a non resident if no return is filed after service of an individual notice under section 222
In other words the plea is that a notice under section 221 imposes an obligation upon persons resident within the taxable territory and not upon non residents and support for this argument is sought to be obtained from section 1 sub section
2 which extended the Income Tax Act at the material time to British India
The expression  every person whose total income during the previous year exceeded the maximum amount which is not chargeable to income tax  in section 221 includes all persons who are liable to pay tax and there is nothing in the section or in its context which exempts non residents from liability to submit a return pursuant to a notice thereunder
The fact that a non resident assessee may not come to know of the general notice issued under section 221 is not a ground for not giving effect to the plain words used in the section
In terms the clause read with r 18 requires every person who has taxable income to submit his return and if he fails to do so under section 34 of the Act the Income Tax Officer may commence proceedings for assessment within the period prescribed by cl
1a
Section 341b applies only to those cases where there is no omission or failure to make a return of the income or to make a full and true disclosure of facts material to the assessment
To the appellant though non resident income bad admittedly accrued in the taxable territory and that income exceeded the maximum amount not chargeable to income tax
 The appellant not having submitted a return in pursuance of the notice issued under section 221 the Income Tax 39 Officer was competent under section 341a to issue notice at any time within eight years of the end of the year of assessment for assessing him to tax
Once a notice is given by publication in the press and in the prescribed manner under section 221 every person whose Th
income exceeds the maximum amount exempt from tax is obliged to submit a return and if he does not do so it will be deemed that there was omission on his part to a make a return within the meaning of section 341a
There is no warrant for the submission that section 221 applies to residents only and that an obligation to make a return on the part of a nonresident can only arise if a notice under sub section
2 is served
Under sub section
2 it is open to the Income Tax Officer to serve a special notice upon any person requiring him to furnish a return in the prescribed form but that provision does not derogate from the liability arising under sub section
1 to submit a return
The Income Tax Act extends by section 12 to the taxable territory and not beyond but within that territory the Income Tax Officer has power to tax income which accrues arises or is received and that is not disputed by the appellant
If power to tax be granted it is difficult to appreciate the ground on which the plea that the general provision imposing liability upon persons receiving taxable income is subject to an unexpressed limitation that it is to apply only to residents and not to non residents
The submission that a person liable to pay tax but resident outside the taxable territory must be served with a special notice under section 222 before his inaction in the matter of making a return may be deemed omission within the meaning of section 341 is without force
There is no such express provision made by the statute and none can be implied from the context
The High Court was therefore right in holding that the proceedings for assessment were properly commenced within the period of limitation prescribed by section 341a from the close of the year of assessment
The appeal fails and is dismissed with costs
Appeal dismissed


Summary:
The respondent a firm carrying on business in Singapore filed a plaint in the firm name against the appellants for the breach of contract
The plaint had been signed and verified on behalf of the firm by one D  on a power of attorney executed by one of the partners only
After about 6 years the respondents made an application for the amendment of the plaint
The amendment sought was to the effect that the name of the firm as plaintiff be struck off as it was a misdescription and in its place and stead the names of five partners of the firm should be brought on record in order to bring the controversy between the proper parties into clear relief
The amendment petition was rejected inter alia on the grounds that the original plaint was no plaint in law and it was not a case of misnomer or misdescription nor a case of a nonexistent firm or a non existent person but a legal bar as the plaint was a nullity
The proper course when there is such a mistake is not to amend disregarding the condition of 0
i r 10 of the Code of Civil Procedure but to seek the Court s permission to withdraw the suit with liberty to file a fresh suit under 0
23 r i of the Civil Procedure Code on the ground of formal defect and which should be done before limitation
In appeal the High Court came to the conclusion that the description of a plaintiff by a firm name in a case where the Code of Civil Procedure does not permit a suit to be brought in the firm name should properly be considered a case of description of the individual partners of the business and as such a misdescription which in law can be corrected and should not be considered to amount to a description of non existent person
It also rejected the contention that the power of attorney in favour of D was insufficient
983 Held that the word  firm or the firm name  in section 4 Of the Indian Partnership Act is merely a compendious description of all the partners collectively
Where a suit is filed in the name of a firm it is still a suit by all the partners of the firm unless it is proved that all the partners had not authorised the suit
The provision of 0
XXX r 1  2 of the Code of Civil Pro cedure are enabling provisions to permit several firms who are doing business as partners to sue or be sued in the name of the firm and do not prevent the partners of a firm from suing or being sued in their individual names nor do they prohibit the partners of a firm suing in India in their names individually although they may be doing business outside India since a firm is not a legal entity the privilege of suing in the name of a firm is permissible only to those persons who as partners are doing business in India
Such privilege is not extended to persons who are doing business as partners outside India
In their case they still have to sue in their individual names
If however under some misapprehension persons doing business as partners outside India do file a plaint in the name of their firm they are misdescribing themselves as the suit instituted is by them they being known collectively as a firm
A plaint filed in a court in India in the name of a firm doing business outside India is not by itself a nullity
It is a plaint by all the partners of the firm with a defective description of themselves for the purpose of the Code of Civil Procedure
A civil court could permit under provisions of section 153 of the Code an amendment of the plaint to enable a proper description of the plaintiffs to appear in it in order to assist the court in determining the real question or issue between the parties
Neither r 10i nor r 102 of Order I have any application to a case of this kind as the suit had been from its very inception a suit by the partners of the firm and no question of adding or substituting any person arises the partners collectively being described as a firm with a particular name
Held further that it is not necessary that the power of attorney should be signed by all the partners of the firm
A partner is an agent of the firm and there is no prohibition to a partner executing a power of attorney in favour of an individual authorising him to institute a suit on behalf of the firm
Vyankatesh Oil Mill Co vs Velamahomed AIR 1928 Bom
191 disapproved
Amulakchand Mewaram vs Babulal Kanalal AIR 1933 Bom
304 Sadler vs Whiteman  Mura Mohideen vs VOA Mohomed AIR 1955 Mad
294 and Kasturchand Bahiravdas vs Sagarmal Shriyam Bom
413 discussed
Hajee Sattar Hajee Peer Mohomad vs Khusiram Benarsilal ILR  referred to 984