177. (1) Where any business or profession carried on by an association of persons
has been discontinued or where an association of persons is dissolved, the 1[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 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
(2) Without prejudice to the generality of the
foregoing sub-section, if the 2[Assessing] Officer or the 3[* * *] 4[Commissioner (Appeals)] in the course of any proceeding under this Act
in respect of any such association of persons as is 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 in accordance with the provisions of that Chapter.
(3) Every person who was at the time of such
discontinuance or dissolution a 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 be, shall apply to any such
assessment or imposition of penalty or other sum.
(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 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 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.