Assessment on Dissolution or Discontinuance of AOP or Firm
Introduction
If an Association of Persons (AOP) or firm is dissolved or discontinued, its assessment is made as if dissolution had not occurred. Every member, partner, or legal representative is jointly and severally liable for tax dues, penalties, or other sums payable.
Applicability
- Applies to: Dissolution or discontinuance of AOP or firms.
- Assessment continues: The Assessing Officer computes total income as if business continued.
- Tax, penalties, and other sums remain chargeable.
Imposition of Penalty
- If the AOP or firm is found guilty of offences under Chapter XXI, penalties can be imposed.
- The Assessing Officer, Joint Commissioner (Appeals), or Commissioner (Appeals) may levy penalties.
Recovery of Dues
- All partners/members (or their legal representatives) at the time of dissolution are jointly and severally liable for tax, penalty, or other sums.
- Legal representatives are liable only to the extent of the estate’s assets [as perSection 159(6)].
Continuance of Proceedings
- If proceedings were initiated before dissolution, they continue against the partners/members or legal representatives.
- The proceedings resume from the stage at which they were left.