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CS Professional · Advanced Direct Tax Laws and Practice · Computation of Total Income, Tax Liability and Filing of Return of Companies

A specified person is dissolved and fails to transfer all its assets to another registered non-profit organisation within twelve months from the end of the month of dissolution. Under section 352, who may be treated as an assessee in default for the tax on accreted income?

The specified person, its principal officer or trustee, and the transferee of any asset included in the accreted income computation are deemed assessees in default. The transferee's liability is limited to the extent the asset received can meet the liability.

  1. AOnly the specified person, since it alone earned the income
  2. BOnly the principal officer or trustee of the specified person
  3. CThe specified person and its principal officer or trustee, and the person to whom an asset was transferred, limited to the asset's capacity to meet the liabilityCorrect
  4. DEvery member of the specified person without any limit on liability

Explanation

Section 352(7) deems the specified person and its principal officer or trustee assessees in default, and for the dissolution case (Sl. No. 9) also the transferee of any asset forming part of the accreted income computation. Section 352(8) limits the transferee's liability to the extent the asset received can meet it. Option D ignores both the limit and the statutory class of persons.

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