1. This reference under Section 256(1) of the Income-tax Act,1961, relates to the assessment of a registered firm. The firm donatedRs. 8,000 to a charitable trust and claimed rebate under Section 88 of theAct. The Income-tax Officer allowed the said claim.
2. The firm contended that the above rebate should also be granted to its partners. As the income-tax Officer rejected the said claim, the firm filed an appeal, but the Appellate Assistant Commissioner dismissed it on the ground that it was not an appealable order. On further appeal, the Appellate Tribunal held that the appeal lay and the partners were eligible for relief under Section 88 of the Act. We are now concerned with the following questions :
'(1) Whether, on the facts and in the circumstances of the case and on a proper construction of Sections 246 and 247 of the Income-tax Act, 1961, there could be an appeal by the firm in which the rebate as allowable under Section 88 in favour of the partners could be raised
(2) Whether in the event of question No. 1 being answered in the affirmative, the partners of the firm are eligible for relief under Section 88?'
3. Section 67 of the Act provides for computation of the total income of an assessee who is a partner of a firm. Section 182 provides that in the case of a registered firm, the firm's total income should be assessed first and then the income-tax payable by the firm shall be determined and the share of each partner in the income of the firm shall be included in his total income and assessed to tax.
4. Rebate under Section 88 is allowed to the registered firm while computing its total income and, therefore, such rebate cannot again be allowedto the partners of the registered firm, for the Act does not permit double relief in respect of the same allowance or rebate.
5. A registered firm can file an appeal from the assessment order under Section 246 of the Act. When a partner is individually assessed on his share in the total income of the firm he may prefer an appeal under Section 247 under which the- validity of an allocation of firm's income as' between the partners may be gone into.
6. Though an appeal lies under Section 246 from an assessment order at the instance of the firm, the question of apportionment between the partners cannot be raised in that appeal in view of Section 247 of the Act. Accordingly, we agree with the opinion of the Allahabad High Court in the case of Shanker Refrigeration Co. v. Commissioner of Income-tax : 102ITR275(All) , that in a proceeding for assessment of a registered firm any rebate or allowance to which the individual partners are entitled cannot be gone into or raised.
7. In the premises, we answer both the questions in the negative and in favour of the revenue. There will be no order as to costs.
Sankar Pkasad Mitra, C.J.
8. I agree.