(Querist) 15 August 2022
This query is : Resolved
Earlier three partners promoted one firm and done business it is a registered firm. Every year compliance part is taken by 1 partner 2 financial by another 3 business by 1. Post three years business went on loss and partners moved out but now I came to know from email that income tax return not filed and other two partners are not reachable at my level. Now demand under section 147 is issued can I pay my portion of demand and can ask department to find other two partners or since they absconded whether I need to pay all dues. Since demand is 1.3 crores I can discharge by liability of 1 third.please advice
(Expert) 15 August 2022
Yes. As per the registered partnership deed, the three partners are liable to pay the tax. So inform the fact to IT authorities, that you are ready to pay 1/3rd share tax to them. You shall give paper notice regarding the partners whose whereabouts are not known.
Advocate Bhartesh goyal
(Expert) 16 August 2022
Better consult to your C.A or any tax expert for solution of your query.
Adv. Ravish Bhatt, ADIT, CIOT
(Expert) 17 August 2022
You need to understand that partners of a partnership firm are jointly and severally liable along with the firm for amount of tax, penalty or other sum payable by the firm in terms of s.188A of the Income Tax Act, 1961 and also in terms of s.25 of the Indian Partnership Act, 1932.
Therefore, hastening to pay 1/3rd of the share will not bring any substantive relief to you; rather explore other options including pursuing a challenge against the demand. Whether or not you pay 1/3rd of the demand, you could be chased for remaining 2/3rd and also for any possible penalties.
There may be solutions however about excluding your liability for penalty etc on facts specific defenses.
Author: Advocate Ravish Bhatt Gmail: firstname.lastname@example.org Link to Linkedln Profile: https://bit.ly/3IDGfsU
Dr J C Vashista
(Expert) 19 August 2022
Well analysed, opined and advised by expert Mr. Ravish Bhatt, I endorse and appreciate the same. Income tax liability is for the partnership firm, which cannot be distributed among partners. Consult your CA.