Amended and updated notes on section 167C of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to Liability of partners of limited liability partnership in liquidation.
Chapter XV (Sections 159 to 180A) of the Income Tax Act 1961 deals with the provisions related to liability in special cases. Section 167C of IT Act 1961 provides for Liability of partners of limited liability partnership in liquidation.
Recently, we have discussed in detail section 167B (Charge of tax where shares of members in association of persons or body of individuals unknown, etc.) of IT Act 1961. Today, we learn the provisions of section 167C of Income-tax Act 1961. The amended provision of section 167C is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 167C of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.
Section-167C: Liability of partners of limited liability partnership in liquidation
Notwithstanding anything contained in the Limited Liability Partnership Act, 2008 (6 of 2009), where any tax due from a limited liability partnership in respect of any income of any previous year or from any other person in respect of any income of any previous year during which such other person was a limited liability partnership cannot be recovered, in such case, every person who was a partner of the limited liability partnership at any time during the relevant previous year, shall be jointly and severally liable for the payment of such tax unless he proves that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the limited liability partnership.
Explanation: For the purposes of this section, the expression “tax due” includes penalty, interest or any other sum payable under the Act.