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15. Demands and Recovery

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  • #16
    Q 16. If a taxable person with pending tax dues, transfers his business to another person, what would happen to the tax dues?

    Ans. The person, to whom the business is transferred, shall jointly and severally be liable to pay the tax, interest or penalty due from the taxable person up to the time of such transfer, whether such dues has been determined before such transfer, but has remained unpaid or is determined thereafter. {Sec. 85(1)}

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    • #17
      Q 17. What happens to tax dues where the Company (taxable person) goes into liquidation?

      Ans. When any company is wound up, every appointed receiver of assets (“Liquidator”) shall give intimation of his appointment to Commissioner within 30 days. On receipt of such intimation Commissioner may notify amount sufficient to recover tax liabilities/dues to the liquidator within 3 months. {Sec. 88(1,2)}

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      • #18
        Q 18. What is the liability of directors of the Company (taxable person) under liquidation?

        Ans: When any private company is wound up and any tax or other dues determined whether before or after liquidation that remains unrecovered, every person who was a director of the company during the period for which the tax was due, shall jointly and severally be liable for payment of dues unless he proves to the satisfaction of the Commissioner that such non-recovery is not attributed to any gross neglect, misfeasance or breach of duties on his part in relation to the affairs of the company. {Sec.88(3),89}

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        • #19
          Q 19. What is the liability of partners of a partnership firm (Taxable person) to pay outstanding tax?

          Ans. Partners of any firm shall jointly and severally be liable for payment of any tax, interest or penalty.

          Firm/ partner shall intimate the retirement of any partner to the Commissioner by a notice in writing.

          Liability to pay tax, interest or penalty up to the date of such

          retirement, whether determined on that date or subsequently, shall be on such partner.

          If no intimation is given within one month from the date of retirement, the liability of such partner shall continue until the date on which such intimation is received by the Commissioner. {Sec.90}

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          • #20
            Q 20. What happens to the tax liability of a taxable person, whose business is carried on by any guardian/ trustee or agent of a minor?

            Ans. Where the business in respect of which any tax is payable is carried on by any guardian / trustee / agent of a minor or other incapacitated person on behalf of and for the benefit of such minor/incapacitated person, the tax, interest or penalty shall be levied upon and recoverable from such guardian / trustee / agent. {Sec.91}

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            • #21
              Q 21. What happens when the estate of a taxable person is under the control of Court of Wards?

              Ans. Where the estate of a taxable person owning a business in respect of which any tax, interest or penalty is payable is under the control of the Court of Wards/ Administrator General / Official Trustee / Receiver or Manager appointed under any order of a Court, the tax, interest or penalty shall be levied and recoverable from such Court of Wards/Administrator General / Official Trustee / Receiver or Manager to the same extent as it would be determined and recoverable from a taxable person. {Sec.92}

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