Assessment of partners in case of a firm. - Income Tax - 1584/CBDT

INSTRUCTION NO. 1584/CBDT Dated: October 29, 1984 Instances continue to come to the notice of the Board that assessments of partners are completed before the completion of the firm's assessments taking the share subject to rectification u/s.155 of the I.T.Act, 1961. The follow up action in such cases is seldom taken with the result that often the assessment of the partners are not revised resulting in the revenue being irretrievably lost. 2. The Board therefore desire that the assessments of partners should be completed only after the completion of the assessments of the firm where the firms and the partners are assessed by the same assessing officers. 3. Where the assessing officers assessing the firm and the partners are different the officer assessing the partners should invariably obtain the assessment order of the firm and complete the assessment of the partner accordingly. 4. Where, however, for unavoidable reasons, assessment of a partner is completed prior to the completion of the assessment of the firm, the officer assessing the firm must communicate to the officer assessing the partner the share of profits allocated u/s.158 of the I.T.Act so as to enable the assessing officer of that partner to rectify his assessment on the basis of the final share determined on assessment of the firm. 5. The above instructions may please be brought to the notice of all the officers working in your charge.