1. A suit for the dissolution of a partnership was filed on the 28th of March, 1947, and in that suit a consent decree was passed on the 24th September, 1947. Under the consent decree joint receivers were appointed to wind up the affairs of the firm and on the 11th August, 1950, the court receiver stepped into the shoes of the joint receivers and he has been assessed to tax in respect of the income of the partnership for the assessment years 1949-50, 1950-51, 1951-52, and 1952-53.
2. Now the first question that has been submitted to us is :
'Whether in the circumstances of the case section 41 (1) of the Indian Income-tax Act applied ?' It is difficult to understand how this question arises on the facts before us. The Department itself invoked section 41 (1) and proceeded to tax the receiver under the provisions of that section. What Mr. Joshi wants to argue before us is that, inasmuch as the receiver carried on business under the terms of the consent decree, he should have been assessed under section 10, and that section 41 (1) had no application. He also wanted to argue that, to the extent that the income derived was from property, section 41 (1) also would not apply to this case because under section 9 the owner of the property has got to be assessed to tax. Now undoubtedly these contentions raise very interesting questions and Mr. Joshi has also relied on a judgment of this Court in Saifuddin Alimohamed v. Commissioner of Income-tax. In that case, as in the case before us, the Department assessed a guardian under section 40 and then it was sought to be argued before us that the assessment should be under section 10 : and we rejected that contention and pointed our that, inasmuch as the assessment was under section 40, the only question that remained to be considered was under section 40, the only question that remained to be considered was what was the liability of the guardian under section 40. Precisely the same is the position here. The Department having assessed the receiver under section 41 (1), the only question is : what is the extent of his liability under that section Now, as has been pointed out, the liability of the receiver under section 41 is a vicarious liability and it is co-extensive with the liability to the person of whose property he is the receiver. If the case falls under the first proviso, in other words, if the income, profits or gains received by the receiver are not specifically receivable on behalf of any one person, or where the individual shares of the persons, on whose behalf they are receivable, are indeterminate or unknown then the previous lays down that the tax shall be levied and recoverable at the maximum rate. If the case does not fall under the proviso, then the receiver is liable to pay tax in respect of the share which comes to him on behalf of the various persons of whose property he is the receiver. Now the second question which has been raised, namely, 'If so, whether in the circumstances of the case, there was material for the Tribunal's holding that the shares of the beneficiaries in the income are known and determinate ?' is a proper question which arises on the facts of this case. But Mr. Joshi does not press that question. If he does not press the question and if the case does not fall under the first proviso, then it is obvious that the liability of the receiver to pay tax must be determined under the provisions of section 41 unaffected by what is contained in the first proviso. Therefore, the liability of the receiver to pay tax is identical with the liability of the various persons whose property is vested in him and whose property he is administering.
3. Therefore, we will decide the first question submitted to us in the affirmative. The second question is not pressed.
4. Commissioner to pay the costs.
5. Question answered in the affirmative.