Section 504 — Service of notice in case of discontinued business. Successor to s.284 of the 1961 Act.
Section 504 is in Chapter XXIII — Miscellaneous, which runs from section 499 to section 536.
Where an assessment is to be made under section 320, the Assessing Officer may serve a notice containing all or any of the requirements which may be included in a notice under section 268(1) on the person whose income is to be assessed; in the case of a firm or an association of persons, on a person who was a member at the time of its discontinuance; and in the case of a company, on the principal officer. The Act then applies, so far as may be, as if the notice were a notice issued under section 268(1).
A discontinued business may leave no one obviously answerable — a firm may have dissolved and its partners dispersed — yet an assessment under section 320 still has to be made. The section names who may be served in each case and gives the notice the standing and consequences of an inquiry notice under section 268(1), so no separate procedure is needed.
The notice is not a species of its own: because the Act applies as if it were issued under section 268(1), both the requirements it may contain and the consequences of non-compliance are those of that section. Who may be served is the practical point — for a firm or association, membership is tested at the time of discontinuance and not at the date of the notice, so a former partner cannot answer that the firm no longer exists. The notice need not carry the whole of section 268(1), and the section operates only where an assessment is to be made under section 320.
A firm discontinues its business and its partners go their separate ways. For an assessment under section 320, the Assessing Officer serves the notice on a person who was a partner at the time of discontinuance. That person must deal with it as he would a notice under section 268(1), and the dissolution of the firm is no answer to the service.
As a notice served after a business has been discontinued. It reads like, and is answerable as, a section 268(1) inquiry notice, and it may reach a former partner or member personally, or a company's principal officer, rather than the entity itself.
person who was a member of a firm or association of persons at the time of its discontinuance
the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that section
See the full 1961 to 2025 concordance.