189. (1) Where any business or profession carried
on by a firm has been discontinued or where a firm is dissolved, the 34[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.
prejudice to the generality of the foregoing sub-section, if the 35[Assessing] Officer or the 36[***] 37[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.
Explanation.—38[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
(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.