HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Sarupchand Hukamchand & Co. v. Union of India and Others
Civil Appeal No. 172 of 1955
[1959] Supp. (2) SCR 986 ·
Indian Income-tax Act, 1922, sections 23(5)(b), 24(2) proviso (d), 31(3), 31(4)
Sources & disclosures includedDownload original judgment / order
3-judge bench · S. R. Das · N. H. Bhagwati · M. Hidayatullah
Assessment years: 1940–41, 1941–42, 1942–43
01 · Facts of the case
Unregistered firm was treated as registered under revenue-benefit option after officer found 1940–41 profit. Consolidated appeal found non-residence and a first-year loss. Officer nevertheless allocated loss to partners and refunded tax instead of reconsidering firm-level carry-forward; departmental and writ remedies initially failed.
Source: Primary report: SCR 988–992
02 · Discussion by the Hon’ble Court
Appellate reversal of profit removed foundation for original section 23(5)(b) decision. Officer had to reconsider option consistently with revenue-benefit condition. Section 24(2) proviso (d) did not independently authorize treating a firm as registered to Revenue’s detriment. Finality doctrine did not preserve a premise overturned on assessment appeal.
Source: Primary report: SCR 993–1001
03 · Judicial decision
Mandamus lay to require appropriate officer to hear and determine matter afresh in light of appellate order and Court’s construction.
Source: Primary report: SCR 1001–1002
04 · Outcome / in whose favour
Appeal allowed; partners must first return earlier refunds as undertaken, in manner directed by officer. Respondents 2 and 3 pay costs throughout; Union bears own costs. This was a direction for lawful redetermination, not a quantified final carry-forward award.
Source: Primary report: SCR 1002
05 · AKHB REVIEW POINT
Preserve both operative conditions: reconsider firm taxation after appellate loss finding, and reverse partner refunds before redetermination. Historical firm-registration regime only.
Source: Primary report: SCR 999–1002
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
Source checked 2026-10-23. Subsequent treatment and present-law applicability have not been comprehensively checked.
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General legal and tax research only; not legal or tax advice. Verify the complete judgment, applicable statutory version and subsequent treatment before reliance. AKHB REVIEW POINT is editorial analysis, not the Court’s holding.