Amendment of section 167C
40. In section 167C of the Income-tax Act, the following Explanation shall be inserted with effect from the 1st day of June, 2013, namely:––
‘Explanation.––For the purposes of this section, the expression “tax due” includes penalty, interest or any other sum payable under the Act.’.
Notes on Clauses:
Clause 40 of the Bill seeks to amend section 167C of the Income-tax Act relating to liability of partners of limited liability partnership in liquidation.
The existing provisions of the aforesaid section 167C provide that where any tax is 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, then, 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.
It is proposed to insert an Explanation to the aforesaid section so as to clarify that the expression “tax due” includes penalty, interest or any other sum payable under the Act.
This amendment will take effect from 1st June, 2013.
