Mr. Junaid succeeded Mr. Tariq's manufacturing business on 1 January 2026 (mid-way through the tax year). Mr. Tariq subsequently disappeared and cannot be found by the tax authorities to pay the tax liability for the period up to the date of succession. Under Section 98C, what is the legal recourse for the tax department?

Correct answer: B) B) The tax liability for the period prior to succession shall be recovered from Mr. Junaid (the successor), who is then entitled to recover it from Mr. Tariq.

Explanation

Where the predecessor cannot be found or the tax cannot be recovered from him, the tax liability for the year of succession up to the date of succession (and preceding years) shall be recoverable from the successor. The successor is then entitled to recover it from the predecessor.