HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Firm of Bhagat Ram Mohanlal v. Commissioner of Excess Profits Tax, Madhya Pradesh, Nagpur and Another
Civil Appeal 139 of 1953
[1956] SCR 143 ·
Excess Profits Tax Act 1940, sections 2(17), 7, 8(1), 20 and 22 · Indian Income-tax Act 1922, section 26A
Sources & disclosures includedDownload original judgment / order
3-judge bench · S. R. Das · N. H. Bhagwati · T. L. Venkatarama Ayyar
Assessment years: Accounting years ending 1943, 1944 and 1945
01 · Facts of the case
A firm obtained refund by setting a later deficiency against earlier excess profits. After the HUF partner partitioned, its karta and two brothers joined a reconstituted firm individually. The Commissioner rectified the refund to the extent of the former family share.
Source: Primary report: SCR 145–148
02 · Discussion by the Hon’ble Court
Other coparceners did not become partners merely because the karta joined. The 1944 constitution changed persons carrying on business under section 8(1). Income-tax registration records could be used in the excess-profits rectification under section 22; record was not confined to the refund order alone.
Source: Primary report: SCR 148–153
03 · Judicial decision
Appeal dismissed with costs; the rectification and recovery of the family-share refund stood.
Source: Primary report: SCR 147 and 153
04 · Outcome / in whose favour
Revenue succeeded; the maintained refunds of the two continuing partners were not disturbed by the challenged order.
Source: Primary report: SCR 147–148, 153
05 · AKHB REVIEW POINT
Identify actual partners before and after partition and distinguish a mere change in profit shares from changed persons. The case applies the special 1940 Act scheme and inter-use of records; it does not establish unrestricted rectification of debatable questions.
Source: Primary report: SCR 148–153
Source & verification
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Statutory scope
Historical legislation expressly identified in this note. This is not a decision under the Income-tax Act, 1961 or the Income-tax Act, 2025. Verify enacted wording, commencement, transition and subsequent judicial treatment independently before modern reliance.
Later treatment
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