1[26. Assessment in case of discontinued company, firm or association2[or dissolved firm]2
3[(1) Notwithstanding anything contained in section 3 where agricultural income is received by a company, firm or association of persons and the 41 business through which such income is received is discontinued or any such firm or association of persons is dissolved in any assessment year, the income for the period from the expiry of the previous year for that assessment year upto the date of such discontinuance or dissolution may, at the discretion of the4[Assistant Commissioner of Agricultural Income Tax] be charged to tax in that assessment year.
(2) The total income of each completed previous year or part of the previous year included in such period shall be chargeable to tax at the rate or rates in force in that assessment year, and separate assessments shall be made in respect of each such completed previous year or part of any previous year.]
5[(3) Any person discontinuing any such business or every member of a firm or association dissolved shall give to the Assistant Commissioner of Agricultural Income Tax notice of such discontinuance or dissolution within thirty days thereof and where any such person or member, as the case may be, fails to give a notice required by this sub-section, such officer may direct that a sum shall be recovered from him by way of penalty not exceeding the amount of agricultural income tax subsequently assessed on him in respect of any agricultural income of the company, firm or association of persons upto the date of such discontinuance or dissolution.]
3[(4) Where any business through which agricultural income is received by a company, firm or association of persons is discontinued or any such firm or association is dissolved in any year, any sum received after the discontinuance or dissolution shall be deemed to be income of the recipient and charged to tax accordingly in the year of receipt if such sum would have been included in the total income of the person who carried on the business had such sum been received before such discontinuance or dissolution.
Explanation.--For the removal of doubts, it is hereby declared that where before the discontinuance of such business or dissolution of a firm or association hitherto assessed as a firm or association, or as the case may be, on the company, the crop is harvested and disposed of, but full payment has not been received for such crop, or the crop is harvested and not disposed of, the income from such crop shall, notwithstanding the discontinuance or dissolution be deemed to be the income of the company, firm or association for the year or years in which it is received or receivable and the firm or association shall be deemed to be in existence, for such year or years and such income shall be assessed as the income of the company, firm or association according to the method of accounting regularly employed by it immediately before such discontinuance or dissolution.
(5) Where an assessment is to be made under sub-section (1) or sub-section (4) the4[Assistant Commissioner of Agricultural Income tax] may serve on the person whose agricultural income is to be assessed or in the case of a firm or association, on any person who was a member of such firm or association at the time of its discontinuance or dissolution or in the case of a company on the principal officer thereof, or on the recipient, as the case may be, a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 18 and the provisions of the Act shall, so far as may be, apply accordingly, as if the notice were a notice issued under that sub-section.]
(6) Where such an order has not been passed in respect of a company, firm or association hitherto assessed as the business not discontinued or in respect of a firm or 42 association hitherto assessed as not dissolved, such firm or association shall not be deemed to have been dissolved or the business of such company, firm or association shall not be deemed to have been discontinued, for the purpose of this Act.
(7) Notwithstanding anything contained in sections 32A, 34, 35, 36, 37 or 55, in cases where before the discontinuance of business or dissolution of the firm or association, hitherto assessed as firm or association or on such company the crop is harvested and disposed of but full payment has not been received for such crop, or the crop is harvested and not disposed of proceedings to assess or reassess the income from such crop or to revise any assessment, or reassessment of such income may be commenced within the period of limitation specified under the provisions of the Act in respect of assessment, reassessment or revision or within two years from the date of commencement of the Karnataka Taxation Law (Second Amendment) Act, 1997 whichever is later.]
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1. Substituted by Act 10 of 1987 w.e.f. 1.4.1987.
2. Inserted by Act 7 of 1997 w.e.f. 1.4.1997.
3. Substituted by Act 18 of 1997 w.e.f. 1.4.1975.
4. Substituted by Act 18 of 1997 w.e.f. 4.2.1993.
5. Substituted by Act 18 of 1997 w.e.f. 20.9.1995.