Section 189 — the law in short
What the courts have decided on section 189, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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CIT v S.V. Angidi Chettiar
Supreme CourtHelps department
Our firm was dissolved before the penalty order was passed, and as a registered firm it pays no tax of its own. Can a concealment penalty still be levied on it?
Yes. A Constitution Bench of the Supreme Court held that penalty could be imposed on the firm after its dissolution. The provision continuing assessment proceedings against a discontinued firm applies to registered firms as much as unregistered ones, and assessment there means more than computation - it takes in the procedure for declaring and imposing liability and the machinery for enforcing it. Liability to pay tax is not a condition precedent to penalty, as clause (b) shows, since penalty may be imposed for failing to comply with a notice even where there is no assessable income. Jurisdiction depends on the officer's satisfaction before the assessment proceedings conclude.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.