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Demand u/s 156

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RAHUL B.

CHARTERED ACCOUNTANTS

74 Points Posted on 21 February 2020

a notice of demand u/s 156 is issued to an LLP after best judgement assessment and the AO has also invoked sec. 68.

The LLP has already shut down its operations after a dispute between partners . Also the LLP didnt file any ITR .

My query is , can the IT Department freeze bank accounts or attach properties of the partners ?

Replies (3)

Quick Summary

This discussion addresses a scenario where an LLP received a demand notice under Section 156 after a best judgement assessment, with Section 68 also invoked. The LLP had ceased operations due to partner disputes and failed to file Income Tax Returns. The core question is whether the Income Tax Department can seize the personal bank accounts or properties of the LLP's partners. The advice given suggests that if an appeal hasn't been filed and a stay obtained, the department has recovery rights, including attaching partners' assets.

Raghav Jhunjhunwala

46 Points Posted on 21 February 2020

As per the short facts stated by you, an addition U/s 68 has been made i.e. unexplained cash credits. Against the order, you ought to have file an appeal before the Jurisdictional CIT(Appeal) and get a stay order. If not, the department has all rights for recovery

rama krishnan

5751 Points Posted on 22 February 2020

Yes, very well they can attach partners properties

Kapadia Pravin

10683 Points Posted on 23 February 2020

Similarly you do not have right not to file ITR and shut down anytime you like and thinking all game is over.

You have to either pay off demand immediately or wait for a day when you find your bank account freezed.