(1)Where any business or profession carried on by
a firm has been discontinued or where a firm is dissolved, the 4[Assessing Officer] shall make an
assessment of the total income of the firm as if no such di scontinuance 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.
(2)Without prejudice to the generality of the foregoing sub -section, if the 4[Assessing Officer] or the
5[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 tha t 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 o f 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.
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