Section 36 of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
- (1)Every person, being a participant in an unincorporated body at any time during the financial year, or the representative assessee of the deceased participant, shall be jointly and severally liable, along with the unincorporated body, for payment of any amount payable by the unincorporated body under this Act and all the provisions of this Act shall apply accordingly.
- (2)In case of a limited liability partnership, the provisions of sub-section (1) shall not apply, if the partner proves that non-recovery cannot be attributed to any neglect, misfeasance or breach of duty on his part in relation to the affairs of the partnership.
- (3)The provisions of this section shall prevail over anything to the contrary contained in the Limited Liability Partnership Act, 2008 (6 of 2009).
Summary
- Every person who is a participant in an unincorporated body is responsible for paying that body's tax dues.
- This responsibility is joint and several, which means the tax office can collect the full amount from any one participant or all of them together.
- If a participant has died, their legal representative becomes responsible for the payment.
- In a limited liability partnership, a partner is not liable if they can prove the tax was not collected for reasons other than their own neglect or wrongful actions, known as misfeasance.
- These liability rules take precedence over anything written in the Limited Liability Partnership Act, 2008.
Practical examples
FAQ
1. Who can be held responsible for a firm's tax under Section 36 of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015?
Every partner or participant is jointly and severally liable for the amount payable by the unincorporated body under Section 36 of the Black Money Act.
2. Can a partner in an LLP be protected from these tax debts under Section 36 of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015?
Yes, a partner in a limited liability partnership is not liable under Section 36 of the Act if they prove the non-recovery was not caused by their neglect or breach of duty.
3. What happens if a participant in a group dies before paying the tax under Section 36 of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015?
The representative assessee of the deceased participant becomes liable for the payment along with the unincorporated body under Section 36 of the 2015 Act.
Test yourself
Q1.Under Section 36 of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, what is the liability status of participants in an unincorporated body?
Q2.According to Section 36 of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, which Act does this provision specifically override regarding limited liability partnerships?
Q3.Under Section 36 of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, a partner in an LLP can avoid liability if they prove non-recovery was not due to which of the following?
Q4.Who is responsible for the tax dues of a deceased participant under Section 36 of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015?