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I.T.A. No.365 (PH) of 1986-87, decided on 4th March, 1987.

---S. 69(3) (a)--Clubbing of income--Clubbing of income of husband and wife being as partners of the same firm, irrespective of the fact that wife had her own independent income as well, held was legal.

---Assessment order of a partnership firm--Formal order for facility of assessee so as to let him know how the tax demand had been created against him and necessary details about shares of partners, was required to hp passed--Where not only no such order was passed but even the details were not mentioned, such order, held, was not an 'order' in any sense of the term--Order was set aside with direction that a fresh order may be made according to the relevant details. Jan Ali for Appellant.

Irshad Shaheen, D.R. for Respondent.

The assessee has preferred this appeal to question the order of learned A.A.C. dated 1-11-1986 by which he upheld action of the I.-T.O. clubbing assessee's income to that of his wife.

The assessee is a partner in a firm alongwith his wife. His income as such was clubbed with that of his wife. Aggrieved, he appealed but without success and came here on further appeal.

He also objected to the manner in which action in clubbing the income was taken. He pointed out that no order formally was recorded to that effect. On reverse of the demand notice whereby assessee was required to pay tax on his own share of firm's income, total share income was indicated, determining the amount payable as tax. This, he said, was not a correct way of making assessment, as from the same it could not be gathered what was the share of the assessee's wife as a partner in the firm's income. That aside, it was not even possible to gather whose share income had been added to that of the assessee. There is total lack of the necessary details.

Under section 69, subsection (3), clause (a) of the Income-tax Ordinance, 1979 it is open to the Assessing Officer to club income of the assessee where assessee and his/her spouse are partners in the same firm. Same was the position in the case of the appellant. He and his wife were both partners in the same firm. Clubbing of income,' therefore, legally could take place.

However, in failing to record a formal order for facility of the assessee so as to let him know how the tax demand had been created against him, a proper order stating the necessary details was required to be passed. Not only no such order was passed, but also the relevant details were not mentioned. It is not an order in any sense of the term. It does not show what is the amount of awn share of the assessee,, or what is that of his wife. It does .not even show if it was the income of wife which was being clubbed. It only sets out these details:-

This can in no way be construed a proper order, however, leniently one may view it. Accordingly I feel constrained to set it aside and direct that a fresh order may be made recording the relevant' details.

M.B.A./373/T Order accordingly.

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