Retirment and admission in partnership firm

DVat 6568 views 3 replies

ranjitkarmakar

service

313 Points Joined May 2008

One Partnership firm having two partner Mr.A and Mr.B. After two year Mr. B left the firm as a retirement partner and the firm become dissolve, and the said Retirement cum dissolve deed was file with Sales Tax Department but not inform to ITO. But the business was continued under same VAT No and PAN NO. and after one month one new partner is coming in to the business as a new admission and a new Partnership deed is prepared. Now my question is-

Whether the same TIN (VAT) No can be continued after the change of partnership.
Whether the same PAN No. continued.
Or surrender of existing PAN No. and applied for a new PAN No.
If there is two pan card then we have to file two separate Income Tax Return for a single financial year i.e. after retirement and admission.
We have to applied for amendment with Sale Tax Dept with New Partnership Deed and the same TIN No continued.

Please help me

Replies (3)

Mahesh Paryani

Chartered Accountant

365 Points Joined June 2007

Dear Sir

As per section 184 (B) if there is a change in the constitution of a partnership firm the assessee has to intimate the department for the same.

Section 187 states that at the time of making an assesment under section 144, 143. if the change is not intimated the firm would be assed as if the change had not taken place.

Section 188A the partners would have a jointly and several liability towards income tax.

As per the defination of Person as per Section 2(31) read with section 139A partnership firm is as defined under partnership act. as per your given case technically the partnership ended when you 2 got separated (i.e. A and B) (in this case it cannot be said retirement of partner and admission of new partner as there is a time gap of 1 month)

and there was a new partnership formed thereafter.

these 2 partnership would be considered as a separate person and a seprate PAN card would be required.

The discontinued businesses would be assesed under section 176 i.e. partnership of A and B

and the new partnership would be assesed under regular scheme of taxation.

(The above is as per my openion. please consult a professional)

Mahesh Paryani

Chartered Accountant

365 Points Joined June 2007

regarding VAT form 101 itself gives out weather you are filing due to change in constitution of firm. this statement itself solves your query

CS RAJESH C.CHOUDHARY

ASSISTANT MANAGER

14607 Points Joined July 2011

Whether the same TIN (VAT) No can be continued after the change of partnership.

Whether the same PAN No. can be continued.

Answer to both are negative

Or surrender of existing PAN No. and applied for a new PAN No.

Ans. Surrender old PAN card and obtain new.

If there is two pan card then we have to file two separate Income Tax Return for a single financial year i.e. after retirement and admission.

Ans, Technically the old firm is dead so the tax return must be filed with old PAN and then the Assessing officer must be intimated about the dissolution of the old firm.

We have to applied for amendment with Sale Tax Dept with New Partnership Deed and the same TIN No continued.

New TIN should be obtained