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Report No. 12

186. Association dissolved or business discontinued.-

(1) Where any business, profession or vocation carried on by an association of persons has been discontinued or where an association of persons is dissolved,-

(a) the Income-tax Officer shall make an assessment of the total income of the association of persons as if no such discontinuance or dissolution had taken place; and

[Section 44(1), part]

(b) every person who was at the time of such discontinuance or dissolutiona member of the association, and the legal representative of any such member who is deceased, shall in respect of the income of the association be jointly and severally liable for the amount of tax payable, and all the provisions of this Act, so far as may be, shall apply to any such assessment.

[Section 44(3), part]

(2) Where such discontinuance or dissolution takes place after any proceedings in respect of an assessment year have commenced, the proceedings may be continued against the persons referred to in sub-section (1) from the stage at which the proceedings stood at the time of such discontinuance or dissolution, and all the provisions of this Act shall, so far as may be, apply accordingly.

(3) The provisions of sub-sections (1) and (2) shall, so far as may be and mutatis mutandis, apply in relation to any penalty or other sum, chargeable under any provision of this Act, as they apply in relation to tax.

[New] [Section 44(2), part, section 44(3) part]

(4) Nothing in this section shall affect the provisions of section 170(2) [24B(1), portion limiting liability of legal representative to extent of estate].

Income-Tax Act, 1922 Back

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