Service of notice in case of discontinued business
[Section-504 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Where an assessment is to be made under section 320, the Assessing Officer may serve on the—
- (a) person whose income is to be assessed; or
- (b) person who was a member of a firm or association of persons at the time of its discontinuance, in the case of a firm or an association of persons; or
- (c) principal officer, in case of a company,
a notice containing all or any of the requirements which may be included in a notice under section 268(1) and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section.
FAQs on Section 504 of Income Tax Act 2025
What is the purpose of Section 504 of the Income Tax Act, 2025?
Section 504 provides the procedure for serving notices when an assessment under Section 320 is to be made in cases where the business has been discontinued.
Who can receive the notice under Section 504 if a business has been discontinued?
The notice can be served to the person whose income is to be assessed, a person who was a member of a firm or association of persons at the time of its discontinuance, or the principal officer in case of a company.
Can the Assessing Officer serve notice to more than one person in case of discontinued firms or AOPs?
Yes, the Assessing Officer may serve the notice to any member who was part of the firm or association at the time of its discontinuance.
What kind of notice is served under Section 504?
The notice served may contain all or any of the requirements that are normally included in a notice under Section 268(1).
Are the procedural provisions applicable to notices under Section 504 the same as those under Section 268(1)?
Yes, the provisions of the Act shall apply accordingly as if the notice under Section 504 were issued under Section 268(1).
Does Section 504 apply to companies as well?
Yes, in the case of a company, the notice shall be served on the principal officer.
Is Section 504 applicable even if the person has ceased business operations?
Yes, the section specifically deals with the situation of discontinued business and ensures that assessment can still be made.
From when is Section 504 effective?
Section 504 is effective from 1st April, 2026.
Does the service of notice under Section 504 initiate assessment proceedings?
Yes, the service of notice is a procedural step that initiates assessment under Section 320 for discontinued businesses.
What is the relevance of Section 320 in connection with Section 504?
Section 504 operates when an assessment is to be made under Section 320, which likely deals with assessment in case of discontinued businesses.
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