(1) Where any business or profession carried on by a firm has been discontinued or where a firm is dissolved, the 1 Assessing Officer shall make an assessment of the total income of the firm as if no such discontinuance or dissolution had taken place, and all the provisions of this Act, including the provisions relating to the levy of a penalty or any other sum chargeable under any provision of this Act, shall apply, so far as may be, to such assessment.
(2) Without prejudice to the generality of the foregoing sub-section, if the 1 Assessing Officer or the 2 Commissioner (Appeals) in the course of any proceeding under this Act in respect of any such firm as is referred to in that sub-section is satisfied that the firm was guilty of any of the acts specified in Chapter XXI, he may impose or direct the imposition of a penalty in accordance with the provisions of that Chapter.
(3) Every person who was at the time of such discontinuance or dissolution a partner of the firm, and the legal representative of any such person who is deceased, shall be jointly and severally liable for the amount of tax, penalty or other sum payable, and all the provisions of this Act, so far as may be, shall apply to any such assessment or imposition of penalty or other sum.
3 * * * * *
(4) 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 person referred to in sub-section (3) 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.
(5) Nothing in this section shall affect the provisions of sub-section (6) of section 159.
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1. Subs. by s. 2, ibid.,for "Income-tax Officer" (w.e.f.
1-4-1988).
2. The words "Deputy Commissioner (Appeals)" omitted by Act 21 of 1998, s. 65 (w.e.f.
1-4-1998). Earlier "Deputy Commissioner (Appeals)" substituted by Act 4 of 1988,
s. 2, for "Appellate Assistant Commissioner" (w.e.f. 1-4-1988).
3. The Explanation omitted by Act 18 of 1992, s. 68 (w.e.f. 1-4-1993). Earlier
the Explanation reintroduced by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989) and
omitted by Act 4 of 1989, s. 71 (w.e.f. 1-4-1989) which was earlier inserted by
Act 41 of 1975, s. 52 (w.e.f. 1-10-1975) .
Section 180A Consideration for know-how
Section 184 Assessment as a firm
Section 185 Assessment when section 184 not complied with
Section 187 Change in constitution of a firm
Section 188 Succession of one firm by another firm
Section 188A Joint and several liability of partners for tax payable by firm
Section 189 Firm dissolved or business discontinued
Section 189A Provisions applicable to past assessments of firms