69.  Assessment of firms and partners.-

(1)   Notwithstanding anything contained in this Ordinance, where the assessee is a firm and the total income of the firm has been determined or assessed under sections 59, 59A, 60, 62, 63 and 65, as the case may be,-

(a)    in the case of a registered firm,-

(i)     the tax payable by the firm itself shall be determined;

(ii)    the total income of each partner of the firm, including therein his share of its income, profits and gains of the income year shall be assessed and the sum payable by him on the basis of such assessment shall be determined;

(iii)   if such share of any partner is a loss, it shall be set off against his other income or carried forward and set off in accordance with the provisions of sections 34, 35, 36, 37 and 38;

(iv)   where any of such partners is a non-resident, his share of the income, profits and gains of the firm shall be assessed on the firm at the rates which would be applicable if it were assessed on him personally, and the sum so determined as payable shall be paid by the firm; and

(b)    in the case of an unregistered firm, the Deputy Commissioner-

(i)     may determine the tax payable by the firm on the basis of the total income of the firm; or

(ii)    may proceed in the manner laid down in clause (a) as applicable to a registered firm, if, in his opinion, the aggregate amount of tax (including the tax payable under sub-clause (i) of that clause) would be greater than the aggregate amount which would be payable by the firm and the partners individually if the firm were assessed as an unregistered firm :

Provided that this sub-clause shall not apply in respect of any assessment year commencing on or after the first day of July, 1986.

(2)   Whenever the Deputy Commissioner makes a determination in accordance with the provisions of sub-section (1), he shall notify to the firm, by an order in writing, the amount of tax payable by it, if any, and the amount of the total income on which the determination has been based and the apportionment thereof between the several partners.

(3)   Notwithstanding anything contained in sub-section (1) of this section or sub-section (4) of section 83, there shall be included in the total income of an assessee, being a partner in a firm,-

(a)    share income of the spouse or a minor child of the assessee from the firm in which the assessee is a partner; and

(b)    share income of the spouse of the assessee from a firm in which the assessee is not a partner unless the capital contribution, in any form, of the spouse in such firm is not provided, directly or indirectly, by the assessee; and

(c)    share income of a minor child of the assessee from a firm in which the assessee is not a partner unless the capital contribution, in any form, of the minor child in such firm is derived from inheritance passed on to him:

Provided that nothing in this sub-section shall apply unless the assessee, in the cases referred to in clauses (b) and (c), and the spouse in the case referred to in clause (b), has been given a reasonable opportunity of being heard.

(4)   For the purposes of this section, the share of a partner in the income of any firm means the aggregate of-

(a)    the proportionate share in the total income of the firm as reduced by the tax, if any, payable by the firm and any sum referred to in clause (b); and

(b)    any salary, brokerage, interest or commission receivable by the partner from the firm.