(1) Except as provided in section 189, where a business is closed in a financial year, the tax shall be assessed for that year.

(2) In determining the tax for any income year under sub-section (l), the income shall be computed for the period from the beginning of the income year in which the business closed to the date on which the business closed.

(3) Any person discontinuing any business in any financial year shall give to the Deputy Commissioner of Taxes a notice of such discontinuance within fifteen days thereof; and such notice shall be accompanied by a return of total income in respect of the period between the end of the income year and the date of such discontinuance and that financial year shall be deemed to be the assessment year in respect of the income of the said period

(4) For failure to give notice under sub-section (3), the Deputy Commissioner of Taxes may direct the recovery of any sum as penalty for the period up to the date of closure of business, provided that the sum of such penalty shall not exceed the sum of tax for the immediately preceding tax year.

(5) In determining the tax under sub-section (l), the Deputy Commissioner of Taxes may serve—

(a)   the person on whom the tax is to be assessed;

(b)   in the case of a firm, who was a partner of the firm at the time of closure; and

(c)   in the case of a company, the principal employee of the company-

a notice giving at least 7 (seven) days’ time, for filing the return by attaching the statements, records and documents mentioned in the notice along with the statements and information applicable to the filing of returns as per section 169.

(6) For the purpose of assessment of tax, the notice given under sub-section (5) shall be deemed to be a notice under section 172 and the provisions of this Act shall apply to the extent applicable.