Report No. 12

F-Succession to business, profession or vocation.

180. Succession to business otherwise than on death.-

(1) Where a person carrying on any business, profession or vocation, (such person hereinafter in this section being referred to as the predecessor) has been succeeded therein by another person (hereinafter in this section referred to as the successor) who continues to carry on that business, profession or vocation, the predecessor and the successor shall, subject to the provisions of sections 13(2), 13(3), 91(1) and 100 [section 25(4)] each be assessed in respect of his actual share, if any, of the income of the previous year, that is to say,-

(a) the predecessor shall be assessed in respect of the income of the previous year upto the date of succession, and

(b) the successor shall be assessed in respect of the income of the previous year after the date of succession.

[Section 26(2), main para.]

(2) Notwithstanding anything contained in sub-section (1), when the predecessor cannot be found, the assessment of the income of the previous year in which the succession took place upto the date of succession and for the previous year preceding that year shall be made on the successor in like manner and to the same amount as it would have been made on the predecessor.

[Section 26(2), proviso, earlier half]

(3) When the tax in respect of the income of such business, profession or vocation, for the previous year in which the succession took place upto the date of succession or for the previous year proceeding that year, assessed on the predecessor, cannot be recovered from him, it shall be payable by and recoverable from the successor, and the successor shall be entitled to recover from the predecessor the amount of any tax so paid.

[Section 26(2), proviso, latter half]

(4) Where any business, profession or vocation carried on by a Hindu undivided family is succeeded to, and simultaneously with the succession or after the succession there has been a partition of the joint family property between the members or groups of members, the tax due in respect of the business, profession or vocation succeeded to upto thc. date of succession shall be assessed and recovered in the manner provided in section 181(4) and 181(6) [section 25A(2), remaining part, as embodied in section on partition], but without prejudice to the provisions of this section.

[Section 25A(2), main para., part]