Association dissolved or business discontinued

Where any business or profession carried on by an association persons has been discontinued or where an association of persons is dissolved, Assessing 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 all provisions of this Act, including the provisions relating to the levy of a penalty any other sum chargeable under any provision of this Act shall apply, so far as may be, to such assessment.

Regardless of the generality of sub-section (1), if the Assessing Officer the Joint Commissioner (Appeals) or the Commissioner (Appeals) in the course any proceeding under this Act in respect of any such association of persons as referred to in that sub-section is satisfied that the association of persons was guilty of any of the acts specified in Chapter XXI, he may impose or direct the imposition of a penalty as per the provisions of that Chapter.

Every person who was at the time of such discontinuance or dissolution member of the association of persons, 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 shall apply to any such assessment or imposition of penalty or other sum.

Where such discontinuance or dissolution takes place after any proceedings in respect of a tax year have commenced, the proceedings may continued against the persons referred to in sub-section (3) from the stage at which the proceedings stood at the time of such discontinuance or dissolution, and all provisions of this Act shall, so far as may be, apply accordingly.