T.V. RAJAGOPALA RAO, J.M. appeal as well as Cross Objection arise out of common order passed by CIT (A) , Calicut dt. 19th Feb., 1983 relating to asst. yr. 1979-80. appeal is preferred by assessee, whereas cross objection is preferred by Revenue. only grounds raised in appeal are (i) whether income earned by joint receivers is assessable at all for asst. yr. 1979-80. (Ii) whether proper machinery was provided in IT Act, 1961 to bring tax income earned on post dissolution period of firm , more particularly between date of dissolution and date of winding up of income earned by receivers is correctly assessed in status of and AOP. 2 . facts are few and they may be stated as under. relevant assessment year is 1979-80 for which accounting year is from 23rd May, 1978 to 31st March, 1979. assessee in this case are joint receivers appointed by Court to manage M/s United Film Exhibiters , Palghat till winding up of film was complete. 'Priya' and 'Priyadharshini' are two atres constructed as well as owned by firm M/s United Film Exhibiters which was carrying on business of exhibition of cinematographic films and firm used to be governed by terms and conditions of partnership deed dt. 19th July, 1971. Smt. Bhawani Kaimal, wide of P.K. Kaimal, Smt. Fathima Ismail wife of M.A. Ismail and Smt. PK. Rahmathunnissa wife of M.B. Abdul Rahiman Moopan used to be three partners of firm. M.A.mayakutti Mooppan and M.A. Mohammed Babu so M.A. Ahmed kutti Moopan were minors and they were admitted to benefits of partnership. construction of Priyardharshini' was completed in 1 73 and it was inaugurated on 31st May, 1973 whereas ' Priya' theatre was inaugurated on 20th Aug., 1975. In 1945 Master Mayakutti mooppan became major and expressed his desire to join as full fledged partner of firm. new deed of partnership was executed on 4th June, 1975. Master M.A. Mohammed Babu was admitted to benefits of that partnership also. first of three parties used to have 25 per cent share. whereas Sri M.A. Mayakutty Moopan and his minor brother M.A. Muhammad Babu had only 12-1-2 per cent each of profits and in case losses being incurred , except minor, other four partners agreed to bear losses, in equal proportions. Differences arose between partners. Mr. Mayakutty Moopan was making preparations to start rival business on adjoining compound of 'Priya' and 'Priyadharshini' theatres, constructing and making ready for opening 'Aroma movie house'. Smt. Rohmathunnisa caused notice issued to other partners of firm dt. 19th May, 1978 intimating that partnership in question stands dissolved on 22nd May, 1978, Smt. Bhavani Kaimal and Smt. Fathima Ismail filed suit O.S. no. 167 of 1978 in Court of subordinate Judge , Palghat, for declaration that firm , M/s United film Exhibitors , Palghat stands dissolved as on 22nd May, 1978, that accounts of said partnership should be taken under provisions of Indian partnership Act and for that purpose inquiry is to be made into assets, properties, movable and immovable including books of accounts of documents belonging to entire business of firm and for allied reliefs. While suit was pending on file of that Court, plaintiff filed seeking appointment of receiver to manage affairs of 'Priya ' and 'Priyadharshni ' cinema theatres till disposal of suit. ld. Sub Judge disposed of said application along with petition for grant of injunction in IA No. 1293 of 1978. question posed by subordinate Judge was found in last sentence of para 7 of his order which is as follows. '' therefore, in view of aforesaid principles stated , we have to see, how best interest of partners of dissolved firm can be protected till accounting of assets and liabilities of dissolved firm and distribution of assets among partners is done''. In para 9, ld. Sub-judge stated that under circumstances existing in this case, it appears to me that apprehension of plaintiffs is well founded and cannot be characterised as fanciful and imaginary. In opening sentences of 10th para of his order, he stated that ld counsel for parties have conceded that receiver has to be appointed for management of assets of dissolved firm. He further stated that after taking stock of situation and circumstance of case plaintiffs can be appointed as receivers of management of two theatres for purpose of protecting interests of partners of dissolved firm. He directed plaintiffs to deposit security for Rs.10,000 in Court for their receivership within two weeks. He also directed defendants 2 and 4 to hand over possession of theatres to plaintiffs and defendants 2 and 4 to hand over possession of theatres to plaintiffs and he further directed to produce account books of dissolved firm immediately and to hand over money deposited in bank to plaintiffs. plaintiffs were directed to file statement of accounts regarding daily collections and expenses into Court, once in every week regarding running of theatres. All amounts to be paid to employees of theatres and payment of other investible amount have to be done by cheques by plaintiffs as receivers. Therefore by giving such and similar directions , Sub-Judge allowed receivers positions whereas, he dismissed injunction petition by his common order dt. 17th June, 1978. Smt. P.K. Rahmathunnissa , Shri Mayankutty Mooppan and Master M.A. Mohammed Babu, (minor) went in appeal to High Court of Kerala against appointment of receivers. Hon'ble High Court in CMA No. 113 of 1978 by its order dt 13th July, 1978 except making some modifications confirmed order of ld. Sub Judge appointing plaintiffs as receivers. At pages 2 and 3 of its orders , it was pleased to hold s follows. '' It would appear from discussion of matter by Court below that there was no objection by any party to appointment of receiver as such. In Court below question was as to who among parties should be appointed Receiver. Court below on consideration of all aspects of question thought fit to appoint plaintiffs as Receivers. In suit for dissolution o f partnership and rendition of accounts appointment of receiver is usually claimed ,, and it is desirable and even necessary in most cases to presume property in dispute during pendency of suit and also for property effectuating division of assets among partners. We are of view that in case like this where in matter of dissolution of partnership so as to get best value for firms assets it would be necessary to sell theatres as running concern. In circumstances pointed out by Court below it will not be in interest of members of dissolved firm to entrust business now to defendants who are interested in neighbouring theatre. 3 . From records , it would appear that matter was settled outside Court. Counsel for parties made on endorsement on back of plaint to effect that matter has been settled out of Court. Therefore, suit is dismissed without costs as can be seen from judgement dt. 29th Feb., 1980. regular deed of dissolution of partnership was executed by all partners of firm on 22nd May, 1980. In recitals of said dissolution deed also , it was stated that partnership was executed by all partner of firm on 22nd May, 1980. In receipts of said dissolution deed also , it was stated that partnership stood dissolved w.e.f. 5th May , 1978 inter alia, it is recited that O.S. No. 167 of 1978 on file of sub-judge, Palghat was filed for obtaining decree, for distribution of surplus in money value of assets after paying debts and liabilities of firm and for purpose of adjustment of rights of parties herein, in assets of firm. It is categorically stated that such adjustment of parties hereto in assets of firm is made as on today, that is, on 7th April, 1980. There is balance attached to deed of dissolution. According to balance sheet as on 7th April, 1980, amount remained to be distributed among partners comes to Rs.58,99,106,16. assets of firm shown in schedule were stated to be incapable of division and it was agreed that all those assets and goodwill , money deposits, etc., be taken over by Smt. K. Bhavani Kaimal at aforesaid valuation and other parties be paid money equivalent of their respective shares in distributed assets of firm. books of accounts as well as balance sheet duly signed by all parties are handed over to Smt. Bhavani Kaimal. following amounts are allotted towards shares of each of partners. . . Rs. (1) Fathima Ismail 15,19,991.41 (2) Mr. P.K. Rahmathunnissa 9,28 ,058.88 (3) M.A. Mayankutti Moopan 2,02,812.46 (4) M.A. Mohammed Babu 7,00,757.46 Being money of their share in distributed assets of firm after adjusting initial payments of Rs.5 lacs on 24th Jan., 1980. Thus virtually, Cinema Halls, sites on which they stand , machinery furniture etc. , mentioned in schedule attached to disolution were all given to first party, Mrs. Bahavani Kaimal and money assessment equivalent of their share in assets after meeting all liabilities of firm were distributed among other partner of firm according to their profits sharing ratio. Paragraph 14 of deed of dissolution dt. 7th Feb., 1980 is important and it is as follows. ''14. It is further agreed that parties of 2nd and 3rd part shall not have any right, title claim or interest in any of properties of dissolved firm including those that may arise or accrue in future which are not ascertained and accounted for in balance sheet attached here to. Similarly, they shall also not be liable for any of liabilities in relation to properties and business of firm carried upto this date whether existing or arise in future. party of first part here by under takes to indemnity of parties of second and third parts in case latter have to meet any of aforesaid liabilities. While arriving at distributable assets of firm or their value under dissolution deed dt 7th Feb., 1980, adequate provision was already made to meet pending income tax liabilities as on 7th Feb., 1980. As far as asst. yr. 1979-80 is concerned following amounts were set apart ; '' Asst. yr. 1979-80 Estimated dues Rs.1,83,000 Advance tax paid Rs.1,83,000 . Nil Interest under s. 139 (8) estimated Rs.12,800 we shall consider what is significance of this provision made by firm towards income tax for asst. yr. 1979-80 little later. 4 . Income tax return was submitted for asst. yr. 1979-80 disclosing nil income on 3rd Dec., 1980. As difference between returned income and income sought to be assessed by ITO is more than Rs.100,000 matter was referred to IAC under s. 145B. status of assessee was shown as ' representative assessee'. In letter dt. 24th Feb., 1982, it was claimed that since receiver was appointed by Court , this is representative assessee under s. 160 of ITA and under s. 161 of Act, liability of such representative assessee was specified. According to that provision , assessment is to be made as if income was earned by beneficiaries and tax shall be levied and recovered in same manner from person represented by him. This follows that assessment has to be made as those amounts were realised for and on behalf of partners. In present case, as receivers represented individual partners , status to be adopted is that of those partners. 5 . ITO held that joint receivers are managing affairs of business and they acted jointly for common purpose of producing income. As beneficiaries have common purpose of running business and earning income through their representatives, namely, receivers, status of assessee is undoubtedly is AOP and ITO under his assessment order dt. 27th Feb., 1982 determined status as AOP and determined total income of assessee at Rs.2,82,1 30 , and observed that advance tax paid of Rs.1,83, 30has to be given credit to. 6. Aggrieved against said decision of ITO , assessee carried matter before CIT (A). On basis of decision reported inCIT vs. Indramohun Sharma(1981) 23 CTR (Bom) 117 ; (1982) 138 ITR 696 (Bom), it is contended that joint receivers should be construed as representative assessee representing AOP consisting of all partners of erstwhile firm only, partners of erstwhile firm having given their specific consent for exploiting asset of firm and carrying on its business in its concerted manner by receivers. next argument advanced was that assuming that receivers as representing each partner distinctly and separately. One of stands taken before CIT (A) was that after dissolution no income can be brought to tax as arising from business carried on with asset of dissolved firm , as there is no assessable entity which can be brought to tax with in ITA. ld. CIT (A) after considering arguments advanced before him held that receivers were rightly assessed as association of persons in view of Supreme Court decision inN.V. Shanmughan & Company vs. CIT (1971) 81 ITR 310 (SC). ld. CIT (A) sought to justify findings that carrying on business 310 (SC). ld. CIT (A) sought to justify findings that carrying on business by joint receivers amounts to joint enterprise and on that ground they can be held to constitute association of persons. He called in aid decision of Kerala High Court in case ofCIT vs. T.V. Suresh Chandran (1980) 121 ITR 985 (Ker) in order to explain meeting of word association of persons'. He held that when there is combination of persons formed for promotion of joint enterprise, those persons joined in common purpose constitute association. He further held that wherever association of persons is formed such association can be brought to tax as distinct assessable entity under ITA. In what manner they happened to come together is not of material consequence. contention that after dissolution of firm, there is no taxable entity and income is any, cannot be taxed anywhere is dismissed as tenable. He held that if income, profits and gains arose in hands of person it has to be subjected to tax if there is no express prohibition against such taxation. He further held that income had arisen to erstwhile partners as group acting through joint receivers and hence it has to be taxed in that form and capacity only. dissolution of firm, ld. CIT (A) held, does not affect taxation of income earned by erstwhile members of dissolved firm. He also held that after dissolution there is no ban, express or implies, in taxing such income. Therefore, he held that income was brought to tax properly in hands of joint receivers as they have derived said income as representative assessee, representing erstwhile partners. 7. We have heard Sri. P.A. Francis and Shri. TGN. Nair ld. Advocates for assessee and Sri. MM. Cherian, ld. Senior Departmental Representative for Department. Besides filing paper book running into 56 pages assessee ld. Advocate on our request filed receiver order passed by sub Judge , order passed by Hon'ble High Court of Kerala besides submitting written arguments so also , ld. DR also filed written argument running into 8 pages. Shri P.A. Francis argued at first instance that there is no provision in ITA, 1961 (hereinafter called Act to assessed dissolved firm in respect of income realised after dissolution and during winding up of affairs of firm. He wanted to impress upon us that this is not fresh plea taken but was advanced even in original stage which we verified and found it correct. Sri P.A. Francis asserted that only provision in ITA which enables assessment of dissolved firm is s. 189. scope of this section was explained by Supreme Court in Shivram Poddar vs. ITO , Calcutta and Anr (1964) 51 ITR 823 at 825 (SC), wherein it is held that object of section only to authorise assessment of income derived by firm before discontinuance of business or before dissolution of firm. Sri Francis , ld. Advocate for assessee contended that ITA as self contained code and provided complete machinery for assessment. Sec. (1975) KLT 253 (Ker) approved by 1976 KLT 333 (Ker) (FB). In support of his arguments he brought to our notice off quoted dictum of Justice Rowlat in 12 tax cases 358 at 366 approved by House of Lords in 27 Tax Cases 205 at 348 (HL) in which it is stated while interpreting while taxing statute one has to took merely at what is clearly said. There is no room for any intendment. There is no equity about tax. There is no presumptions as to tax. Nothing is to be read in., nothing is to be implied. One can only look fairly at language used. Keeping in view these general principles if we read provisions of s. 189 of ITA. , it is clearly indicates that assessment provided for is only in respect of income from business or profession carried on by firm' as full fledged firm before discontinuance of business or profession or before dissolution of firm. He also contended that expression ''total income of fir,'' in s. 189(1) is also indicative of total income derived by firm while it was full fledged firm. He argued that provision in s. 189(1) that ITO shall make assessment of total income of firm as if no such discontinuance or dissolution had taken place. '' clearly shows that income to be assessed is total income derived by firm as full fledged firm, and that fiction is only for purpose of assessment of that income and that firm after it is dissolved. Continuing his argument he submitted that s. 189(1) is thus merely machinery section for purpose of assessment of pre-dissolution income of dissolved firm, and not charging section for any post dissolution income of dissolved firm , his argument continued that portion of provision containing words in s. 189 (1) that '' all provisions of this Act including provisions relating to levy of penalty or any other sum chargeable under any provision of this Act shall apply , so far as may be, to such assessment '' make it clear that applicability of all provisions of ITA including those for penalty is only in respect of ''such assessment '' that is to say , assessment of dissolved firm in respect of its pre-dissolution income. In order to strengthen his argument he bring s to our notice words '' in course of any proceedings under this Act in respect of any such firm'' in s. 189(2) mean only those proceedings that could be taken in normal circumstances against regular firm and not dissolved firm. word ''that firm was guilty of any Act , in s. 189(2) also indicate Act of firm prior to its dissolution. According to ld. Advocate express mention of Chapter XXI in s. 189(2). In order to describe nature of acts, makes it all more clear that acts attracting penalty could be only those acts that could be done by full-fledged firm, and not by dissolved firm. He further argued that words "every person who was at time of such discontinuance or dissolution partner of firm, in s. 189 (3) also indicate that sphere of responsibility under s. 189 is only for acts done upto time of discontinuance or dissolution, and never beyond that. He further submitted that words " share of each partner in income of firm before its discontinuance or dissolution in explanation in s. 189(3) also clearly show that income of firm to be taken into account is only that up time of discontinuance or dissolution. He further contended that provision in s. 189 (4) that "where such discontinuance or dissolution takes place after any proceedings in respect of assessment year have commenced, proceedings may be continued against persons referred to in sub-s. (3)," also indicates that applicability of s. 189 is only in respect of transactions of firm upto time of discontinuance or dissolution. Therefore, by all above he wanted to strengthen his primary argument that region of s. 189 is only income upto discontinuance or dissolution and its assessment after discontinuance or dissolution. Applying maxim of "expressio unius est exclusio uiterius" irresistable conclusion is that express provision of s. 189 for assessment of dissolved firm in respect of its income upto time of discontinuance or dissolution implies exclusion of assessment of dissolved firm in respect of its income, if any, derived after discontinuance or dissolution. In other words there is no machinery for assessment of dissolved firm in respect of its post-dissolution income, if any, in course of its winding up. If dissolved firm cannot be assessed in respect of its post- dissolution income, can dissolved firm be assessed as association of persons of respect of income that arises during winding up of firm? In answer to these several contentions, Id. DR contended income assessed in this case is income from business namely running of two theatres, during period from 23rd May, 1978 to 31st March, 1979. assessment is made in status of AOP and not in status of dissolved firm. Once firm is dissolved, legal tie that binds partners is broken and so there is no firm in existence from 22nd May, 1978. However, that does not mean that income form business carried on during impugned accounting period would escape assessment. InCIT vs. Indira Balakrishna(1960) 39 ITR 546 (SC) wherein Supreme Court held that AOP as used in s. 3 of IT Act, means association in which two or more persons join in common purpose or common action, and as words occur in section which imposes tax on income, association must be one object of which is to product income profits or gains. In present case, after dissolution of firm, business was carried on by receivers. income earned by receivers also went to partners only and therefore argues ld. DR that assessment in status of AOP is perfectly justified. He also argued that decision of Supreme Court reported in (N.V. Shanmughum and Co. vs. CIT (1971) 81 ITR 310 (SC) fully comes to support assessment in this case. ld. DR invited our attention to earlier decision of Hon ble Supreme Court in Mohamed Noorullah vs. CIT (1961) 42 ITR 115 (SC) which according to him further supports his stand. arguments sought to be advanced against concept of AOP on behalf of assessee, are (1) there was no common purpose or joint action by partners as they were fighting among themselves (2) there was no business carried by them and (3) assessment should be in hands of individual partners. As regards second objection raised by assessee, it can be seen that amount of Rs. 3,82,1 30 was acquired from running of two theatres, income earned by receivers on behalf of partners ultimately went to partners only, receivers filed accounts before Court once in every week and partners were entitled to look into accounts and state their objection. Thus, when receivers ran theatres on behalf of partners as per directions of Court, assessee cannot turn round and say that no business is carried on by them. As regards their objection that they were not consulted and business does not represent joint action by partners as their consent was backing ld. DR submitted that erstwhile partners never objected to carrying on business by receivers. Their objection was against appointment of two ladies (Plaintiffs in suit) as receivers. As can be seen from order of Sub-Judge as well as High Court dispute was not about carrying on business or about appointment of receiver as such but it was concerned with question who should act as receiver. business continued in pursuance of orders of Court. erstwhile members of firm were shown accounts every week. Nobody raised any objection for way in which business was carried on. That means all of them acquiesced in continuance of business. In identical circumstance Supreme Court held in cases mentioned supra that there was joint action by erstwhile partners to justify assessment as AOP. In shanmugham s case also lack of consent between partners was raised as against taking status as AOP. However this was held to be untenable by Hon ble Supreme Court. receivers appointed did not and could not have represented individual interest of erstwhile partners and therefore question of taxing post- dissolution income in hands of individual partners does not arise. existence of specific and defined interest in profits did not make earning any less by AOP. business of running theatres is indivisible business, control and management of which was in hands of receiver. Such control was unified one. receivers had joined for common purpose and had acted jointly. Had receivers represented individuals interest of erstwhile partners there would have been chaos in business. profits were earned on behalf of persons who had common interest created by order of Court and on that account they constitute association of persons. decision of Supreme Court in (1971) 81 ITR 310 (SC) (supra) as well as decision reported in (1961) 42 ITR 115 (SC) (supra) may be referred in this context. InMohamad Noorullah vs. CIT (1961) 42 ITR 115 (SC) Mohamedan was carrying on business of manufacture and sale of beedies of particular brand. He died on 17th Dec., 1942 leaving certain L. Rs. heirs of deceased wanted to continue business and in partition receiver was appointed with direction to continue business. question was in which capacity receivers were assessed. Ultimately, Supreme Court decided that High Court had rightly come to conclusion that business was business carried on by AOP. Giving reasons for its decision following is that is stated as per headnote of decision of Supreme Court : "None of partners wanted to break unity of control of business o r its continuity and business was of such nature that it could not be carried on without such consensus. income of business which was carried on as single business by consent of all parties. mere fact that suit was pending at time for administration of estate of deceased or for separation of shares of co-heirs did not effect incidence of taxation." 8. We wish to take up for consideration plea of assessee that post dissolution income is not assessable to income tax under existing provisions of said Act Sri Francis ld. counsel for assessee argued that Supreme Court in (1964) 51 ITR 823 at 825 (SC) (supra) held that but for section 189 dissolved firm should not be assessed. He also argued that dissolved firm is foreign to scheme of IT Act, Sec., 4 of IT Act speaks of person. person is defined under s. 2(31) of IT Act and among list of persons dissolved firm is not done. firm is defined in s. 2(23) of IT Act. He urged that we cannot say that firm and AOP are one and same within meaning of Indian Partnership Act. Therefore, ultimately his argument is that legislature either by innocent or deliberate omission has left out post- dissolution income of firm, from incidence of income-tax. He referred us to two more Supreme Court decisions one reported inCIT vs. Indira Balakrishna39 ITR 546 and 551 and 552 (SC) in said case what is meant by AOP is defined by Supreme Court. It is held therein that AOP must be one in which two or more persons join in common purpose or common action and as words occur in section which impose tax on income association must be one object of which is to produce income profits or gains. In that case co-windows of Hindu governed by Mitakshare law inherited his estate which consisted of immovable properties shares money lying in deposit and share in registered firm. Except for receiving dividends from shares and interest from deposits jointly they had done no act which had helped to produce income. Ultimately Supreme Court held that since there is no finding that 3 windows combined in joint enterprise to produce income they did not constitute AOP. InChamparan Cane Concern vs. produce income they did not constitute AOP. InChamparan Cane Concern vs. State of Bihar and Anr.(1963) 49 ITR 152 (SC) question which fell for determination was whether assessee was partnership or co-ownership concern belonging to two persons. Supreme Court ultimately held that question is to be decided having regard to facts and circumstances of case and they ultimately found that facts and circumstances of case were consistent with claim of assessee that it is co-ownership concern in which case common manager was liable to assessment under s. 13 of Bihar Agricultural IT Act, 1948. Therefore, above said two cases do not help us in any way except knowing general principles of essentials of association of persons and distinction between firm and co-ownership concern. We shall take up case of Supreme Court reported in (1964) 51 ITR 833 (SC) little later at appropriate place. For present we defer discussion on said decision. ld. counsel for assessee strongly urged that since date of dissolution there is no partnership in existence. In this case, partnership is at will. Due to difference between partners one of partners issued notice of dissolution on 19th May, 1978 and it came into effect from receipt of said notice by partners i.e. on 23rd May, 1978. Therefore for accounting period from 23rd May, 1978 to 31st March, 1979 which is relevant for asst. yr. 1979-80, there is no partnership in existence. There is no question of mutual agreement between partners and so there is no question of partnership being assessed any longer for past dissolution income. According to ld. counsel there is only one s. 189 in IT Act, to govern situation of taxing income of dissolved firm. Sec. 189(1) contemplated income earned in business or profession carried on by firm till it is discontinued or till is dissolved. For taxing income earned till dissolution or discontinuance only, it should deemed that no dissolution of firm took place. But it does not speak of taxability of post dissolution income of firm. He specifically argued that though there is likehood of firm doing business in between period from dissolution of firm and winding up of affairs of firm s. 189 does not specifically provide necessary machinery to assess such income. Now we have to see whether each of concepts pressed before us by learned counsel for assessee are correct under law. Sec. 47 of Indian Partnership Act is as follows : "After dissolution of firm authority of each partner to bind firm, and other mutual rights and obligations of partners, continue not withstanding dissolution, so far as may be necessary to wind up affairs of firm and to complete transaction begun but unfinished at time of dissolution but not otherwise. Provided that firm is in no case bound by acts of partner who has been adjudicated insolvent but, this proviso does not effect liability of any person who has after adjudication represented himself or knowingly permitted to be represented as partner of insolvent". It is very clear from above provisions that so far as it is necessary to wind up affairs of firm partner of dissolved firm has got authority to bind firm. So concept that firm came to end even on 25th May, 1978 which is admittedly date of dissolution of firm in this case and that no firm existed subsequent to that date is not correct. In our opinion, for purpose of winding up of affairs of firm, firm existed and mutual rights and liabilities of partnership continued in Saligram Ruplal Khanna vs. Kanwar Rajnath AIR 1974 Supreme Court 1094 Supreme Court held that after dissolution partnership subsists merely for purpose of completing pending transactions, winding up business, and adjusting rights of partners and for these purposes, and these only, authority rights and obligations of partners continued. Sec. 25 of Partnership Act speaks about continued liability of partner for acts of firms as follows : " Every partner is liable jointly with all other partners and also severally and also done while he is partner". In our opinion, even when rights and liabilities of partner continued for limited purposes of winding up affairs of firm or for completing transactions previously undertaken by firm they continue upto completion of winding up process of firm. That means in this case as suit was ultimately compromised out of Court and regular dissolution deed was executed on 22nd Feb., 1980 rights and liabilities of partners continued upto that date. Dissolution of firm is process by which legal existence of firm comes to end. firm continues to exist until its affairs are finally and completely wound up (SeeAIR 1972 All 1). Therefore, simply because there is dissolution of firm it automatically does not bring to end existence of firm. firm continues until its affairs are thus completely wound up, firm can be said to be in existence and liability of partners under s. 25 for acts of firm also continues upto winding up of affairs of firm. Now in this case admittedly said winding up took place only on 7th Feb., 1980. Therefore, firm continued to be in existence till 7th Feb., 1 28 . Allahabad High Court inAIR1972All 5 of reported decision held as follows : " From provisions of partnership Act noted above it will be clear that mere dissolution of firm does not bring about complete extinction of firm itself. firm even though for limited purpose mentioned in relevant sections continues to exist until its affairs are finally and completely wound up. It is only after dissolution of firm that its affairs can be wound up at instance of any of partners. Till debts and liabilities of firm have been fully paid off no partner can claim any particular property is his own nor can he claim that he has any specific share or interest in any property of firm:. Therefore, we are sufficiently fortified in view we have taken that for purpose of winding up of firm continued even though it was dissolved on 22nd May, 1978. precursor of s. 189 of IT Act, 1961 is s. 44 of Indian IT Act, 1922 and is used to be follows : 44 Liability in case of firm of association discontinued or dissolved. (1) where any business, profession or vocation carried on by firm or other AOP has been discontinued or where firm or other AOP is dissolved, ITO shall make assessment of total income of firm or other AOP as such as if no such discontinuance or dissolution had taken place. (2) If ITO, AAC or Tribunal in course of any proceedings under this Act in respect of any such firm or other AOP as is referred to in sub- section (1) is satisfied that firm or other association is guilty of act specified in clause (a) or clause (b) or clause (c) of sub-section(1) of section 28 , he or it may impose or direct imposition of penalty in accordance with provisions of that section. (3) Every person who at time of such discontinuance or dissolution was partner of firm or member of association, as case may be, shall be jointly and severally liable for amount of tax or penalty payable and all provisions of Chapter IV so far as may be, shall apply to any such assessment or imposition of penalty." In Kanga and Palkhivala s law and Practice of Income Tax at page 10 28 difference between s. 44 and s. 189(3) is explained as under : " However, tax payable referred to in sub-s(3) means tax payable by firm and not tax assessed on partners personally. If dissolved firm is assessed as registered firm, although all partners would be jointly and severally liable under this section to pay registered firm s tax one partner would not be liable to pay tax assessed on another partner individually. On this point there is no difference between position under this section and position under s. 44 of 1922 Act either before or after its amendment in 1958. But there is exception to this rule. To extent specified in s. 182 (4) is to convert partner s liability into firm s liability to limited extent specified therein and upon dissolution it becomes liability of partners jointly and severally under s. 189(3). This is now made explicit by Expln. to sub-s. (3). section applies where business of firm is discontinued or firm is dissolved. If business is not discontinued but there is succession to business, and firm is not dissolved but continues to exist, this section would have no application. However, even if there is succession to firm s business but firm is dissolved, this section would apply. From wording of s. 189 it is sought to be argued that it only deals with income derived by firm prior to dissolution but it never intended to tax post-dissolution income of firm or tax income earned by firm after dissolution and before affairs of firm are wound up. In support of its contention, decision of Hon ble Supreme Court in (1964) 51 ITR 823 (SC) (supra) is cited before us. In said decision at page 825, Supreme Court held as follows : " object of enactment is clear : it is to authorise assessment of tax of income, profits or gains earned in business, profession or vocation carried on by firm or association before discontinuance of business, profession or vacation, or before dissolution of association and to impose joint and several liability upon every person who was at time of discontinuance partner of firm or member of association or at time of dissolution member to association." Sri. P. A. Francis argued that from above, it is very clear that s. 44 of Indian IT Act, 1922 was never intended to govern income derived for post-dissolution period upto winding of affairs of firm. However, having regard to facts of case and ultimate decision rendered by Hon ble Supreme Court on those facts, we are not prepared to agree with ld counsel for assessee that s. 44 of IT Act 1922 does not concern itself to tax post-dissolution income upto winding up of firm. In facts before Hon ble Supreme Court firm was dissolved, in Feb., 1950. On 28 th March, 1955 notice was issued under s. 34 r/w s. 22(2) of Indian IT Act, 1922 which was addressed to assessee as partner of firm at time of its dissolution calling upon him to submit return of income of firm for year ending on 31st March, 1950. Therefore, obviously notice is intended to tax income derived by firm even after its dissolution. Whereas dissolution took place in Feb., 1950 return of income was called for upto 31st March, 1950 which is much beyond date of dissolution. writ petition was filed commanding ITO to forbear from giving effect to notice. question which fell for determination was whether income earned by firm in year ending March, 1950 would be assessed to tax under s. 44 of Indian IT Act, 1922 after firm was dissolved. At pages 827 and 8 28 of 51 ITR following is what is held by Hon ble Supreme Court : " Under ordinary law governing partnerships, modification in constitution of firm in absence of special agreement to contrary amounts to dissolution of firm and reconstitution thereof, firm at common law being group of individuals who have agreed to share profits of business carried on by all or any of them acting for all, and supersession of agreement brings about end of relation. But IT Act recognises firm for purpose of assessment as unit independent of partners constituting if ; for purpose of assessment as unit independent of partners constituting if ; it invests firm with personality which survives reconstitution. firm discontinuing its business may be assessed in manner provided by s. 25 (1) in year of account in which it discontinues its business, it may also be assessed in year of assessment. In either case it is assessment of income of firm. Where firm is dissolved, but business is not discontinued, there being change in constitution of firm, assessment has to be made under s. 26(1), and if there be succession to business assessment has to be made under s. 26(2). provisions relating to assessment on reconstituted or newly constituted firms, and on succession to business are obligatory. Therefore, even when there is change in ownership of business carried on by firm on reconstitution or because of new constitution assessment must still be made upon firm. When there is succession, successor and person succeeded have to be assessed each in respect of his actual share.' Ultimately,. writ petition was dismissed by Hon'ble Supreme Court Therefore, ratio of Supreme Court should be taken to have contained not only in prior but also in pages extracted from page 827 and of reported decision. reason why no provision is made to bring to tax post- dissolution income upto winding up of firm is clearly given by Hon'ble Supreme Court in extracted portion of judgment from pages 827 and 8 28 given above. In facts before us also what took place on 22nd May, 1978 was only dissolution of firm but not discontinuance of business. discontinuance of business can be said to have taken place on 22nd Feb., 1980 o r on 7th Feb., 1980 which fall very much after close of accounting period. To our understandingShivram Poddar vs. ITO (1964) 51 ITR 823 (SC) is clear authority for proposition that firm only would be liable to income earned upto discontinuance of business of firm and provisions of s. 44 of Indian IT Act, 1922 do not lay down anything contrary to said proposition. Therefore, in view of said decision it is highly difficult to appreciate either that s. 189 did not concern itself with assessment of post-dissolution period or legislature by oversight did not provide adequate machinery to tax such income. Therefore, primary argument that impugned income in this case is not liable to tax as there is no machinery section provided for it to cannot be accepted to be sound. 9. Now let us see whetherN.V. Shanmugham & Co. vs. CIT (1971) 81 ITR 310 (SC) completely justifies taxing of impugned income as income of AOP. Sri Francis wanted to distinguish this decision. Firstly, on ground that real point in controversy as pointed out by Supreme Court itself is to decide between Revenue and assessee whether profits earned in business or whether they should be considered as having been earned by individuals. decision reached by Hon'ble Supreme Court was that profits were earned on behalf of persons who had common interest created by order of Court and were on that account, AOP. On facts of that case, their Lordships held that in law erstwhile partners of firm carried on business through their representatives. So question whether erstwhile partnership can be considered to be proper person to be assessed to income-tax for impugned income earned was not one of questions which was posed before Hon'ble Supreme Court or considered by it. It is further submitted that provisions of s. 47 Indian Partnership Act, 1932 which say that though firm was dissolved it continued for purpose of winding up of firm and also for completing transactions began by erst-while firm were not considered at all nor any decision given thereon and therefore for above two reasons (1971) 81 ITR 580 (SC) (supra) does not lay down ratio to govern all cases of taxing post-dissolution income upto winding up of firm. We agree with this contention. We are of view that scope of enquiry before Hon'ble Supreme Court was limited to question whether profits earned in business should be considered as profits earned by association of persons or should be considered by having been earned by individuals. In this case, orders delivered by ld. Sub-judge clearly revealed that there is no dispute among parties for appointment of receiver but we only dispute among them was whom to appoint as receivers. Ultimately, receivers were appointed by Court. appointment of receivers is not permanent feature but it was only step to wind up affairs of firm. In fact, Hon'ble High Court of Kerala expressed its wish that sale of arrears should be conducted within three months of their orders dt. 13th July, 1978. However, ultimately, matter was settled between parties themselves and all partners had chosen 7th Feb., 1980 as date on which affairs of firm should be wound up. They made adequate provision to meet income-tax liability for asst. yr. 1979-80 also. From facts and circumstances of case, we have no hesitation to hold that all affairs of firm were settled upto 7th Feb., 1980 and firm was in existence for purpose of winding up and completing transactions earlier undertaken by it upto 7th Feb., 1980 and ultimate deed of dissolution was drafted on 22nd Feb., 1980. Therefore, having regard to facts and circumstances of case of dissolution of firm took place on 7th Feb., 1980 if not on 22nd Feb., 1980, and upto that date firm continued. Sec. 47 of Partnership Act is clear and it has stated that "after dissolution of firm, authority of each partner to bind firm, and other mutual rights and obligations of partners, continue notwithstanding dissolution so for as may be necessary to wind up affairs of firm and to complete transactions begun but unfinished at time of dissolution, but not otherwise proviso not extracted. Therefore, firm continued upto 7th Feb., 1980 at least for purpose of winding up firm. appointment of receivers and carrying on business of receivers is towards winding up affairs of firm only. appointment of receives is step to which all partners agreed. Under orders of Sub-Judge any amount to be disbursed by plaintiffs for running theatres is to be done after getting sanction of Court only. receivers though parties in suit, they are officers of Court any they are bound to obey directions of Court, even when those directions were given with regard to method of management. Therefore, under circumstances, it would be difficult to postulate that joint receivers had any scope to earn income by reason of their association and scope of their functions would stop at mere receipt of income and therefore they cannot be called AOP and in our opinion by virtue of s. 47 of Partnership Act, r/w 189(3) of IT Act firm, M/s. United Film Exhibitors should have been assessed for impugned income for asst. yr. 1979-80 in capacity of firm. Therefore we set aside status as AOP and we direct that assessment be completed in status of firm. We also hold that it is open to partners of erstwhile firm to make use of cl. 14 of deed of dissolution dt. 22nd Feb., 1980 for purpose of reimbursement or otherwise which is available to them under law. In view of our finding in main appeal that firm only should be assessed for asst. yr. 1979-80, it is also entitled to depreciation as admittedly assets were not only owned but also used by Receivers for and on behalf firm. 10. Hence appeal is allowed and Cross Objection is dismissed. A. Satyanarayana, A.M.-I agree with conclusion of my ld. Brother including that firm only should be assessed to tax for asst. yr. 1979-80. But I wish to add few lines. In case ofMangatram & Anr.vs. CIT (1968) 67 ITR 788 (P&H) three individuals and firm consisting of four partners, formed themselves into partnership and applied for registration as firm under s. 26A of IT Act. Registration was refused on ground that one of partners was firm, and partnership was assessed as unregistered firm by ITO and this assessment was upheld by AAC. On further appeal, Tribunal took view that partnership was not "firm" at all and assessed it in status of "AOP". It was contended that Tribunal had no power to uphold assessment changing status of assessee but could only annul assessment or remand case to ITO to make fresh assessment on assessee in status of "AOP". It was held by High Court of Punjab and Haryana that: "(i) assessee was "an AOP" and not "firm"; (ii) Tribunal had power to uphold assessment changing status of assessee into that of AOP as question whether assessee should be assessed as unregistered "firm" or as "an AOP" was raised before ITO and AAC and before Tribunal also". 2 . Andhra Pradesh High Court in recent decision in case ofPonnabal vs. CIT (1985) 47 CTR (AP) 91 (FB): (1985) 153 ITR 608 (AP) (FB) considered competence of Tribunal to change status. In that case K was partner in firm. He died intestate leaving behind him his wife P and six minor children. P entered into agreement with other partners and was allotted share in firm held by K.P. claimed that she was assessable only on 1/7th of share from firm because all seven heirs of K were entitled to income form firm. ITO negatived claim and assessed entire share income in her hands. AAC upheld this order. On further appeal, Tribunal held that correct status of assessee was "body of individual" On reference, it was held that "neither before AAC nor before Tribunal was it claimed by Revenue that there could be assessment in status of "body of individuals". Tribunal having held that P could not be assessed as individual on income derived from firm was incompetent to modify or alter status to that of "body of individual" without notice to that body of individuals mandatorily required under s. 139(2). Tribunal should have annulled assessment with liberty to ITO to assess income in status of body of individuals, if permitted by law, after issuing notice to that body of individuals, if permitted by law, after issuing notice to that body of individuals to submit return as required by s. 139(2). 3. In instant case Departmental Representative in course of arguments specifically urged that if Tribunal, finds that assessment should have been made in status of firm finding may be given accordingly. So, in instant case, Tribunal is perfectly competent to alter status to that of firm. *** JOINT RECEIVERS, UNITED FILM EXHIBITERS v. INCOME TAX OFFICER