Report No. 12
Special Provisions Applicable to firms
189. Assessment of registered firms.-
(1) Notwithstanding anything contained in sections 147 and 148 [section 23(1) to (4)1 and subject to the provisions of sub-section (3), in the case of a registered firm, after assessing the total income of the firm,-
(i) the income-tax payable by the firm itself shall be determined; and
[Section 23(5), opening lines]
(ii) the share of each partner in the income of the firm shall be included in his total income and assessed to tax accordingly.
[Section 23(5)(a), main para.]
(2) 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 72 to 80 [24(1) and (2)].
[Section 23(5)(a), 1st proviso]
(3) When any of the partners of a registered firm is a non-resident, the tax on his share in the income of the firm shall be assessed on the firm at the rate or rates which would be applicable if it were assessed on him personally, and the tax so assessed shall be paid by the firm.
[Section 23(5)(a), 2nd proviso]