(1) Save as the provisions of section 189, where any business is discontinued in any financial year, in that case assessment shall be made for that year.

(2) For the purpose of assessment in any income year under sub-section (1), the income shall be computed for the period from the beginning of the income year in which the business has discontinued to the date of such discontinuance.

(3) Any person discontinuing any business in any financial year shall give to the Deputy Commissioner of Taxes a notice of such discontinuance within 15 (fifteen) days thereof; and such notice shall be accompanied by a return of total income in respect of the period between the end of the income year and the date of such discontinuance and that financial year shall be deemed to be the
assessment year in respect of the income of the said period.

(4) Where a person fails to give the notice required by sub-section (3), the Deputy Commissioner of Taxes may direct that a sum shall be recovered from him by way of penalty, however, the amount of this penalty shall not exceed the amount of tax assessed for the immediately preceding assessment year.

(5) Where an assessment is to be made under sub-section (1), the Deputy Commissioner of Taxes may serve—

(a) on the person whose income is to be assessed;

(b) in the case of a firm, on the person who was a partner of the firm at the time of discontinuance of the business; and

(c) in the case of a company, on the principal officer of the company,

  a notice to furnish within such time, not being less than 7 (seven) days, a return of his total income giving such particulars and information as are required to be furnished with a return to be filed under section 169 along with such other particulars, records and documents as may be specified in the notice.

(6) The provisions of this Act shall, so far as may be, apply to a notice under sub-section (5) for the purpose of assessment of tax as if it were a notice under section 172.