(2) If the rate at which a shareholder is deemed un- der sub-section (1) to have obtained relief exceeds the rate at which he would have been entitled to relief had such relief been given direct to him by or under the said section or Order, any excess shall be recovered from him either as an addition to the tax payable by him on any assess- ment made on him under sect on 147 or 148 [23] or section 152 [34] or by setting it oif against any relief due to him under section 247 [48]. ' CHAPTER X PROVISIONS AGAINST AVOIDANCE OF TAX. ; _ SC¢t10n 95 Where business is carried on between a resident and a Och . non-resident, .......... .. and it appears to the Income-tax ',':,';$ Ofﬁcer, that owing to the close conn tion between them, at-esmmn. the course of business is so arrange that the business transacted between them prgduces ti) the resident either no proﬁts or less than the or inary proﬁts which mi ht be expected to arise in that business, the Income-tax ﬂicer shall determine the amount of proﬁts .......... .. which may reasonably be deemed to have been? derived therefrom ﬁnd include such amount in the total income of the resi-
ent .......... ..
Explanation.--For the purposes of this section, "non- ~-resident" includes a person who is not ordinarily resident within the meaning of section 6, clause (6) [4B]. V Samoa 96 (1) Where there is a transfer of assets by virtue or in Aioidam, of consequence whereof, either alone or in conjunction with indome-tax associated operations, any income .......... ..becomes payable 1237 transec- to a non-resident, the following provisions shall apply-- "°''' '°''''"'''' [S- p2 (2)1 l in of ' e to no -residents [s.4 D (1), part.
[S- 44 D (2).
part.] [s~ 4413(3)] l=~ 4413(4)]
(a)
(b) (2) 158 \ Clause 96 where any person has by means of any such trans-
fer, .......... .. either alone or in conjunction with as-_ sociated operations, acquired any rights -by virtue .......... ..of which he has. within the meaning of this section, power to enjoy .... ..whether forthwith or in the future, any income of a non-resident per- son which, if it were -income of the ﬁrst--mentioned person received by him in India, would be charge- able to income-tax, that income shall, whether it would or would not have been chargeable to income-tax apart from the provisions of this sec- tion, be deemed to be income of the ﬁrst-men- tioned person for all the purposes of this Act;
where, whether before or after any such transfer, .......... .. any such first mentioned person receiv- es or is entitled to receive .......... .. any capital sum the payment whereof is in any way connected with the transfer or any associated operations, then any income which, by virtue or in consequence of the transfer, either alone or in conjunction' with associated operations, has become the income of a non-resident shall, whether it would or would not have been chargeable to income-tax apart from_ the provisions of this section, be deemed to be the income of the ﬁrst-mentioned person for all the purposes of this Act. .
The provisions of sub-section (1) shall not apply if such first mentioned 'person shows to the satisfaction of the Income-tax Officer either-
(a) that neither the transfer nor any associated ope-
ration had for its purpose or for one of its puifposes the avoidance of liability to taxation; or '
(b) that the transfer and all associated operations? were (3) bona ﬁde commercial transactions and were not designed for the purpose of avoiding liabllijiy to taxation. ;
For the purposes of this section, an "assoéiated operation" means, in relation to any transfer, an operation of any kind effected by any person in relation to-E
(i) any of the assets transferred, or
(ii) any assets representing whether directly or' indi-
rectly any of the assets transferred, or
(iii) .......... ..the income arising from any such assets, OI'
(iv) .......... .. any assets representing whether directly or indirectly the accumulations of income arising from any such assets.
159Clause 96 (4) A person shall, for the purposes of this section, be [S_ 4413(5)]- 'deemed _to have power to enjoy income of a non-resident . . . . . . . . . ..
(a)
(b)
(c)
(d)
(e) the income is in fact so dealt with by any person as to be calculated at some point of time and, whe- ther in the form of income or not, to enure for the beneﬁt of the ﬁrst-mentioned person, or the receipt or accrual of the income operates to in- crease the value to such ﬁrst-mentioned person of any assets held by him or 'for his beneﬁt, or such ﬁrst-mentioned person receives or is entitled to receive at any time any beneﬁt provided or to be provided out pf that income or out of moneys which are or will be available for the purpose by reason of the effect or successive effects of the as- sociated operations on that income and assets which represent that income, or such ﬁrst-mentioned person has power by means of the exercise of any power of appointment or power of revocation or otherwise to obtain for himself, whether with or without the consent of any other person, the beneﬁcial enjoyment of the income, or such ﬁrst-mentioned erson is able, in any man- ner whatsoever and W ether directly or indirectly, to control the application of the income.
(5) _In determining whether a person has power to en- [S-4413(5)] joy income within the meaning of this. section, regard shall.
- be had to the substantial result and effect of the transfer and any associated operations, and all? beneﬁts which may at any time accrue to such person as a result of the trans- fer and any associated operations shall be taken into ac- count irrespective of the nature or form of the beneﬁts.
(6), '(a) For the purposes of this section----
.., .... ..'assets' includes propert' or rights of any kind. and .... ..'transfer' in relat on to rights includes the creation of those rights;
[s. ' .44, D (7) \3) J
(b) .......... ..'beneﬁt' includes a payment of any kind; [s.4',D(-,-)Eb)]
(c) and 'capital sum' means-
(i) any sum paid or payable by way of a loan or re-
payment of a loan; and -
(ii) any other sum paid or payable otherwise than as income, being a sum which is not paid or payable for full consideration in money or money's worth.. ' ' -
[§'a'§'t4.1D M .
160Clauses 96-97 l"44D(7)(d)l (d) references to assets representing any assets. income or accumulations of income include references to shares in or obligation of any company to which, or obligation of any other person to whom, those assets, that income or those accumulations are or have been transferred;
["44D(7)(°)3 (e) any body corporate incorporated outside India shall be treated as if it were a non-resident;
["'44D(') 5' (f) a person shall be treated as a non-resident if he is mp ""1 not ordinarily resident within the meaning of sec- tion 6, clause (6).[4B].
[.4413 (3)] (7) The provisions of this section shall apply .......... ..
also in relation to transfers of assets and associated opera- tions carried out before the commencement of this Act.
[MAD (9)1 (8) Where any person has been charged to income-tax on any income deemed to be his under the provisions of ' this section, and that income is subsequently received by him, whether as income or in any other form, it shall not again be deemed to form part of his income for the pur- poses of this Act.
Section 97 (1) Where the owner of any securities (in this sub- Avoidance of section and in sub-sections (2) and (3) referred to as "the baangzzj owner") sells or transfers those securities, and .... ..', ...... .. mm, in Sew buys back or re-acquires the securities, then, if thegresult mics, of the transaction is that any interest becoming payable in respect of the securities is receivable otherwise? than [344 E(I)] by the owner, the interest payable as aforesaid shall whe- ther it would or would not have been chargeable to i ome- tax apart from the provisions of this sub-section, be eem- ed. for all the purposes of this'Act, to be income 0 the owner and not to be the income of any other person;
[,_4_1E(,)] . (2) The references in sub-section (1) to buying back -A or re-acquiring the securities shall be. demed to include references to buying or acquiring similar securitie' so however, that where. similar; securities are bought r ac- quired, the owner shall be under no greater liabilit to income-tax than he would have been under if the o 'ginal .
securities had been bought back or re-acquired.
[S-4413(1) & (3) Where any person .......... .. has had at any I time ""m;'§l4F during any previous year any beneﬁcial interest in} any Pam] securities, and the result of any transaction relating to such securities or the income thereof is that, in resp ct of such securities, within such year, either no income ;is re- ceived by him or the incomereceived by him is less than the sum to which the income would have amounted if the income from such securities had accrued from day to day and been apportioned accor, ' 'gly, then the incomeifrom such securities for su¢h year all be deemed to be t in- come of such person..§ ' considers necessary for the 161 Clause 97 (4) .......... ..The provision of) sub-section (1) or sub- [s.44p() section (3) shall not apply if has had a beneﬁcial interest in the securities, as the case may be, proves to the satisfaction of the Income-tax Offi- cer-
(a) that here has been no avoidance of income-tax, or
(b) that the avoidance of income-tax ....... .. was excep- tiona1'and not systematic and that there was not in his case in any of the three preceding years any .......... ..avoidance of income-ta_x.........by a trans- action of the nature referred to in sub-section (1) or sub--section (3).
(5) Where any person carrying on a business which consists wholly or partly in dealing in securities bugs or acquires any securities, and .......... ..sells back or 're-t'rans- fers the securities, then. if the result of the transaction is that interest becoming payable in re$ect of the securities is receivable by him, no account shall be taken of the transaction in computing for any of the purposes of this Act the proﬁts arising from or loss sustained in the business. ' (6) Sub-section (5) shall_ have effect, subject to any necessary modiﬁcations, as if references to selling back or re-transferring the securities included references to selling or transferring similar securi;ties_- ' (7) The Income-tax Ofﬁder may by require any person to furnish him vjrithin such time he may direct (not being les than tiventy-eightdays), in respect of all securities of W ch such iperson was the owner or in which he had a beneﬁcial interest at any time during the period speciﬁed in the notice, Sileh particulars as he urposes of this section and for the purpose of discove ng whdther income-taar: has been borne in respect of the intere$ 'on all those securi- ties .......... .. i ' notice in writing (8) For the purpose of sectian_.---.- ('a)' .......... ..'interest' includes a ﬁividend;
(b) .......... ..'securities' includes stocks and shares;
(c) securities shall be deemed to be similar if they entitle their holders to the "same rights against . the same persons as to capital and interest and the same. remedies for the enforciement of those rights', notwithstanding anydiﬁerendte in the total nominal amounts of the respﬁtive s_ urities or in the form in which they are id or' gas-manner in which they can be transfe ed. a i ' . e owner, or the person who proviso.
[S-44 13(3)] ['-;s4 sun I ' .E(6J.
as csagier »---.~.. 4.
I-E44 13(5)] .
Section 98 Charge of super-tax.
[s. 55, main para.] [New] [s.55, 1:! prov.] Section 99 Total income for super-tax, [s. 56.] Section 100 Business, pro-
fession or vocation cha-
rged under 1 91 3 Act.
[Sect 25, proviso (a) below subsec-
uon(4)-l Section 101 Deductions under interest on securities.
[New] 162 Clauses 98-101 CHAPTER XI SUPER-TAX A--Principal provisions (1) In addition to the income-tax charged for any assessment year, and save as otherwise provided in this Act, there shall be charged, levied and paid for that as- sessment year in respect of the total income of the previ- ous year or previous years, as the case may be, of every person, not being a registered ﬁrm ......... ..;.an additional duty of income-tax (in this Act referred to as super-tax) at the rate or rates laid down for that assessment year by any Central Act:
Provided that where by virtue of any provision of this Act super-tar is to be charged in respect of the income of a period other than the previous year, super-tax shall be charged accordingly.
(2) In respect of income chargeable under sub--section (1), super-tax shall be deducted at the source or paid in advance, where it is so deductible or payable under any provision of this Act.
(3) .......... ..In the case of a registered ﬁrm, or an un- registered ﬁrm which has been assessed in the manner ap- plicable to a registered ﬁrm under the provisions of sec- tion 190 (b) [s. 23(5) (b)], su er-tax shall be payablo by each partner of the ﬁrm indi dually on his share in the income...- ....... ..of the ﬁrm and not by the ﬁrm itself.
.... ..Subject to the provisions of this Chapter, the :total income of any person shall, for the purposes of super}-tax, be the total income as assessed .......... ..for the purposes of income-tax, and where an assessment of total incomdl has become ﬁnal and conclusive for the purposes of income-tax for any assessment year, the assessment shall also be ﬁnal and conclusive for the purposes of super-tax for the same assessment year. 1 The provisions of sections 13 and 91 [25(3) whole: and (4) whole] shall not apply to the determination of the total income for the purposes of super-tax except where the' ro- -
ﬁts and gains of the business, rofession or vocation' assesed to super-tax for the st time either for th sessment year 1920-1921 or for the assessment year 1922.
Where and in so far as the total income of an assessee includes any interest on securities or: which no incom tax is payable under section 8'7(i) or section 8 (ii) [section 8 Provisos 2 and 3], the - follow- ing amounts shall be deducted in computing his total in- come for the purposes of super-tax, namely :~--
(i) any reasonable sum expended by the assessee jor the purpose ofrealising interest on such securi- ties; . "1 ' ' ere BS-
_921--
* ' 163 Clauses 101-107
(ii) any interest payable on money borrowed for the purpose of investment in such securities by the as- sessee.
(1) -All» the provisions of this Act relating to the charge Section 102 assessment, collection and recovery of income-tax .... ..sha11 Applicability' apply, so far as may be and save as otherwise provided, of provisions to the'charge, assessment, collection and recovery of su-t°SuPer-"W per-tax. [S-58 (P)Parl] (2) Save as expressly provided in any other section in [Scc.58(x), this Chapter, the provisions of sections 3, 167 174 (a)(i) and Part] (V11)
(ii), 188 and 200 (1) [Section 3, section"19, section 20, and First Proviso to sub--section (1) of section 41, section 8, 3rd proviso] and of Chapters VII, and VIII and sections 295 and 311, and rule 3(c) (ii) of the First Schedule [chapters relating to income on which no income-tax is payable and rebate of income-tax] shall not apply to the charge, assess- ment, collection and recovery of super-tax.
Without prejudice to the generali of the provisions Section I03 of section 99 [section providing that t e total income for Avoidance of income-tax shall be the total income or super-tax also] super-tax- the provisions of sections 97(2), 97(3), 7(4), 97(7), and 279 [NW] [44E(2), 44F(3), Proviso and 44E(6)] apply in relation_ to [05 58- 13 super-tax as they apply in relation to income-tax, with an "F the modiﬁcation that references therein to income--tax shall be construed as references to super-tax.
B.--Incomes which do not form part of total income for super-tax , .... ..Where the income of an unregistered ﬁrm or other Scct_i-->n I04 association of persons not being a company has been as- share in un-
sessed to super-tax, .......... ..the share of a partner in the Ifgegisiercd income of the ﬁrm or the amount of such income which ci';'m:'0§"'°' is proportionate to' the share of a member of the associa- pmms, tion, as the case may be, _shall not be included in his total [s_ 5» "d income for the purposes of super-tax P,-ov, . . . . Section 105 Any income of a co-operative society, in respect where- Co_ov mm of no income--tax is payable" by it by virtue of the provi-wcie _ sions of section 82 [14(3), for "income_-tax], shall not be [S I -(3) for included in its total income for the purposes of super-tax sﬁpc um] Any dividends received by a' member of a co--o erative lsgctgen :6 society from the society shall not be included in is total ,,;'g~ '(';o_op_ income for the purposes of super-tax. ﬂame mic.
ty.
.......... ..Any income derived from the letting of go- [5°°- I4 (4) downs or warehouses for storage, processing or facilitating f°~'s"P°"'""] the marketing of commodities by an assesse, which is an 5°°'i°".'°7 authority constituted under a y law or the time being Efcﬁbtmg in force for the marketing of c mmodi as, shall not be-in- [s. :15) for cluded in its total income for. .e pu ties of super-tax. xupctttam] l ' i 164 Clause 108 Section 108 Dividend, . _(1) Dividends received by a company .......... .. from an from certain Indian company formed and registered after the 31st 'day of ¢°mP=mi=8- March, 1952, shall not be included in its total income for the, purposes of super-tax, where-
[S- 55A (Mi) (1) the Central Government is satisﬁed that the Indian Pa"-1 company is wholly or mainly engaged in an indus- try for the manufacture or production of any one ordmore of the items specified in sub-section (3), an [,,55A(,)(ii)] (ii) the Indian company fulﬁls the following :condi- tions, namely :-
(a) it is _not formed by the splitting up or recons- truction of business already in existence;;
(b) it is not formed by the transfer to it of building, machinery or plant used in a business whibh was at any time being carried on; and A
(c) it employs ten or more workers in a manufac- turing process carried on with the aid of ' ower, or employs twenty or more workers in annanu- facturing process carried on without thelaid of power. ;
\ [5- 55A (2)) (2) The exclusion speciﬁed in sub-section (1); shall apply also to dividends payable to a company in respect of any fresh capital'. raised by an Indian company after the 28th day of February, 1953, by public subscript n for the purpose of increasing the' production of, or s ing a separate unit of, any one orjmore of the items spec ed in sub-section (3). = [5, son.' m (3) The items referred to in sub-sections (1) and (2)
0) Pm-l are the following, namely:-- f (1) Coal, including coke and other derivatives; § (2) Iron and steel; Q (3) Motor and aviation fuel, kerosene, crude oik and synthetic oils (not being oil exploration);
(4) Heavy chemicals ingluding fertilizers;
(5) Heavy machinery used in industry including ball and roller bearing and gear wheels and parts thereof, boilers and steam generating equipment;
(6) Machinery and equipment for the gen ration, transmission and distribution of electric e ergy;
(7) Non-ferrous 'metals including alloys; (8) Paper including newsprint and paper board; (9) Internal colnbustiongengines; 'I (10) Power-driven pumps?" f § 1 l 165 Clauses 108-111 (11) Automobiles;
(12) Tractors:
(13) Cement:
(14) Electric Motors:
(15) Locomotives:
(16) Rolling Stock:
(17) Machine Tools:
(18) Agricultural Implements:
(19) Ferro--manganese;
(20) Dye--stuffs:
as speciﬁed in the First Schedule to the Industries (Deve- 55 '°Y 1951 lopment and Regulation) Act, 1951. C---Rebate of super-tux. S _ my (1) Where under the provisions of section 39. [1513 for °"":;m for income-tax] an assessee is entitled to a deduction of income- 3;'1";,a,,,e tax in respect of any sum paid as donation, he shall also puqiom. be entitled to a deduction, from the_ amount of super-tax [15]';.fo,,.,p¢, with which he is chargeable on histotal income, of an ta:c,'pan and amount equal to the super-tax calculated at the aver- S-1l(3).Part-] age rate of super-tax on such sum. . (2) The provisions of this sectiondo not apply to a [S- .153 (1) company. - V E' !_'""'-1""
[1011 (1) The assessee shall be entitled to a deduction, 'from NT}, ,,,,,,_ the amount of super-tam with which he is chargeab e on lish d indus-
his total income, of an amount equal to the super-tax cal-g ' undertak-
culated at the average rate of 'super-tatr: on proﬁts or gains '5 15E {or derived from an industrial undertakmg, in cases where gu-,,,,_,,,x at and to the extent to which inicome-tat ':is'not payable on s,1 (3),pa|'t.] suc]h profits or gains under section 85 [15C for income- ' tax .
(2) A shareholder shall be .-entitledto a deduction, from the amount of super-tax with which he is chargeable on his total income, of an amount equal {to the super--taa} cal-_ culated at the average rate of §super-tctrj on so much of any dividend paid or deemed to he paid to' him by an indus- trial undertaking as is attributable to itltat part of the pro- ﬁts or gains on which he is entitled to a deduction of su- per-taa: under this section. 1 z 1 ' Where the assessee is a partner bf a registered ﬁrm, Se¢i°n 1" he shall be entitled to a deduction, from the amount of Share from super-tax with which he is chnrgeablé on his total income, rceristefed of an amount equal to the suyjer-tax "ll:-ulated at the aver- '[is"'!'1'4(2)(") age rate of super--ta.7c on the follow» g sum, that is to ',.p,,., rm'. say--- suﬁer-tax, an Proviso the amount which repres ts thedifference between------ an sec. I7
(i) the assessee's share in the+dtal income of the (3 Pam] ﬁrm d * ~ "
E 9 166 Clauses 111-114
(ii) his share in the total income of the ﬁrm as re- duced by the income-tax, if any, payable by the ﬁrm. at the rate of income-tax applicable to its total income, on the amount of its income from all sources other than from any business carried on by it ............. ..
the shares in either case being computed in the manner laid down in section 69 [section 16(1) (b)]. Section 112 Renemr sa1_ The provisions of section 90 [Section 69(2)] apply in my received relation to super--tax as they apply in relation to income- in arrear etc. tax.
}:f',°°' 62532.: D----Additional super-tax on undistributed proﬁts. tax.] section 113 (1) Subject to the provisions of sub-section (2) and of supemax 0,, sections 114, 115, and 116 [Sec. 23A, su_b-sections (2), (ti) undistributcd and (9)], where the Income-tax Officer is satisﬁed that in income of respect of any previous year the proﬁts and gains distribu- gggafnics ted as dividends by any company within the twelveVmon- [Se IE3,' '(D ths immediately following the expiry of that previous part.] year are less than the statutory percentage of the distri- butable income of the company of that previous year, .... .. iii;"i£{é5meLi;i$é"oiiicer"§ii},iii"f .....'.'.'.'.I'.':h'.3,1'1l:e a}{""'c§'r}ier iii writing that the company shall, apart from the surn de- termined as payable by it on the basis of the assessment under section 147 or 148 [23], be liable to pay super- tax at the 'rate of-- J
(a) ﬁfty per cent, in the case of an investment com- pany, and
(b) .......... ..thirty-seven per cent. in the case cﬁ any other company, ' = on the undistributed balance of the total income of the previous year, that is to say, on the distributable income are reduced by the .......... ..-...dividends actually distributed, 1 any. .
[S- 23A (1) (2) The Income-tax Oﬂiccr shall not make an prder P'""]' under sub-section (1) if he is satisﬁed-- '
(i) that, having regard to the losses incurred by%- the company in earlier years or to the smalln s of the proﬁts made in the previous year, the~pa ' ent of a dividend or a larger dividend than that dee- lared would be unreasonable; or
(ii) that the payment of a dividend or a 1arger§divi- dend than that declared would not have resulted in a beneﬁt to the revenue .......... .. . Section 114 , _ special pmvi_ No order under section 113 [s. 23A(1) operative part] gem go, ee,_ shall be made,-- e e 7 $2 °°mpa' (i) in the case of an investment company which has distributed not less than ninety per cent. of its ts. 23A (2)1 distributable income; or.
i :
i 167 Clauses 1143117
(ii) in the case bf any other company whose distribu- tion falls short of the statutory percentage by not more than ﬁve per cent. of its distributable in- come; or
(iii) in any case where according to the return made by a company under section 143 [22] it has dis- tributed not less than the statutory percentage of its distributable income, but in the assessment made by the Income-tax Ofﬁcer under section 147 or 148 [23] a higher total income is arrived at and the difference in the total income does not arise out of the application of section 150(1) Pro-- viso or section 150(2) [proviso to section 13] or section 148 [sub--section (4) of section 23] or the omission by the company to disclose its income fully and truly; / unless the company, on receipt of a notice from the Income-tax Oﬂicer that he proposes to make such an or-
der, fails to make within three months of the receipt of such notice, a further distribution of its proﬁts and gains so that the total distribution made is not less than the sta-, tutory percentage of the disributable income.
No order shall be made by the Income-tax Oﬂicer under S°°'i°" "5 section 113 [s. 23A(1) operative part] unless the previous Approval of approval of the Inspecting Assistant Commissioner .......... .. ....... ..has been obtained, and the Inspecting Assistant Com- Com,,{;,,i°,,_ missioner shall not give his ap roval to any order proposed er. to be made by the Income-tax fficer until he has given the [S- 23 A (3)-] company.concerned an opportunity of being heard.
Nothing contained in section 113 [s. 23A (1), operative Scction us part] shall apply----- ' Savings for com any in
(a) to any company in which the public are substantial- 3:' 3" "tb'"_' ly interested; or tially iii';-
(b) to a subsidiary company of such company if the A (QM whole of the share capital of such subsidiary com- pany has been held by the parent company or by its nominees throughout the previous year.
(1) For the purposes of ............. .......... .. section 116 'S'°(:;°" 'f7 [23A(9)] a company shall be deemed to be a company-1nwhi'§P""3;;l: which the public are substantially intcrested-- ' Pub -6 an substantially
(a) if it is a company owned by the Government or in interested." which not less than forty per cent. of the shares are 123 A held by the Governmmt; Se (a),
(b) (i) main para, clause
(b) (ii) and clause ( b)
(iii); main par earlier hm? ,.
168Clause 117 1 of 1956 (b) if it is a public company as deﬁned in the Com- panies Act, 1956, and?-
(i) its shares (not being shares entitled to a ﬁxed rate of dividend, whether with or without a fur- ther right to participate in proﬁts) carrying not less than ﬁfty per cent. of the voting power have been allotted unconditionally to, or acquired un- conditionally by, and were throughout the pre- Vious year beneﬁcially held by, the Government or a corporation established by a Central, State or Provincial Act or the public (not including a company to which the provisions of section 113 [23A(1) operative part] apply):
[sec. 23 A, Provided that in the case of any such company: as is Elf?-. 1» °1- referred to in clause (ii) of section 120 [s. 23A, Exp. 2. , this ( H') P'°"'] sub-clause shall apply as if for the words "not less than
-- ﬁfty per cent." the Words "not less than forty per cent." had been substituted; .
(ii) the said shares were' at any time during the pre- vious year the subject of dealing in any'recognised stock exchange in India or were freely transferable by the holder to other members of the public; and
(iii) the affairs of the company or the shares carrying more than ﬁfty per cent. of the total voting ower were at no time duringthe previous year con _ olleda or held by five or less persons .......... ..:
[scc. 23 A, Provided that in the case of any such company' as is l"gI_pl I 01- (b) referred to in clause (ii)' of section 120 [Sec. 23A E p. 2], (ml P'°"'] this sub-clause shall apply as if for the words "morg than ﬁfty per cent." the words "more than sixty per cent' had been substituted. -
(2) In computing the number of ﬁve or less persons E§;f,',:,,§3,,b',§' aforesaid,-- f )' (a) the Government or any corporation establis Ad by
(iii) main a Central, State or Provincial Act oracomp y to para, latter which the provisions pf ...... .;. section '113 [2 A(1), half, part] operative part] do not apply, shall not be aken into account, and g
(b) personsh who are relative? of org: another ger- sons w o are nominea 0 any 0 er person o {e er with that other persotrshall be treated as alsingle {SW1 ,3 A person.
 I» I « s 169 Clauses 118-120 For the purposes of sections 113 and 114 [23A (1), sub- Section 118 stantive part and (2)], "distributable income" means the <<Dig¢.-ibuta-
total income of a company .... ....... .. as reduced by--
(a) the amount of income-tax and super-tax payable by the company in respect of its total income, but excluding the amount of any super-tax payable under section 113 [s. 28A(1) operative part];
(b) the amount of any other tax levied under any law for the time being in force on the company by the Government or by a local authority in excess of the amount, if any, which has been allowed in comput» V ing the total income; ............. ..
(c) any sum in respect of which a deduction of income- tax is allowed under the provisions of section 89 [15B]; and
(d) in the case of a banking company, the amount ac- tually transferred to a. reserve fund under section 17 of the Banking Companies Aet, 1949.
For the purposes of sections 113. 114 and 120, [Sec. 23A, sub-section (1) Operative part, sub-section (2) and Explana- tion 2], "investment company" means a 9' dmpmzy whose busi- ness consists wholly or mainly in the dealing in or holding of investments. ' For the purposes of ....... .. ections 113 and 114 [23A(1), substantive part and 23A (')] "statutory percentage" means,------ T 1
(i) in the case of an investment copipany ....... .. 100%.
(ii) in the case of an In ' company whose business consists wholly in the manuf ture orﬁprocessing of goods or in mining or in the generat n or dikﬁribution of electri- city or any other form of powqr ........ .................. ..45%.
(iii) in the case of an Indihn com (any, a part only of whose business consists in anylof the ctivities speciﬁed in clause (ii)-- ' 1 '
(a) in relation to the said ;part of the company's busi-
ness ..................................... ..,..' .................. ..45%.
(b) in relation to the remaining pm of the company's business-- 3 ' (1) if it is a company which sa. ' ﬁes the conditions speciﬁed in sub-clause (a) of 1 use (iv) ....... ..90%.
(2) in any other case ............. ....I ................... ..60% the said percentages being applied separately with reference to the amounts of proﬁts and gains attributable to the business aforesaid respectively the t 10f the company's 'd amounts were i the companyin blc inccme".
[s. 2 A (1).
part.
10 of194.g.
Sect, :19 7011 "Investment company."
[New] 120 S. A'.
170Clauses 120-122 relation to each of its parts, the amount of divi- dends and taxes also being similarly apportioned, for the purposes of sections 113 and 118 [s. 23A (1)--part regarding "Distributable Income"];
(iv) in the case of any other company not referred to in the preceding clauses.-
(a) where the accumulated proﬁts and reserves (includ- ing the amounts capitalised from the earlier re- serves) representing accumulations of past proﬁts which have not been the subject of an orderunder section 113 [s. 23A(1), operative part] exceed the greater of the following, that is to say,--
either I. the aggregate of--
(i) the paid-up capital of the company exclusive of the capital, if any, created out of its proﬁts and gains which have not been the subject of an order under section "113 [s. 23A(1), operative part];
(ii) any loan capital which is the property of the share-
holders;
or II. the actual cost of the ﬁxed assets of the company, %,
(b) where sub-clause (a) does not apply ....... .. 60%.
CHAPTER XII"
DETERMINATION OF TAX IN CERTAIN SPECIAL CASES ~ Section mi Where there is included in the total income of any Detcrmina.- assessee ................ .. any Income on which no income-tax tion of in- is payable by or under_the provisions of this Act, he shall be_ entitled to a 'deduction, from the amount of income-tax which no with which he 'LS chajrgeable on his total income, ;of an income-tax is amount equal to the income-tax calculated at the average payab1¢'[s- I7.rate of income-tax -on the amount on which no income- ('3:P'"'-] tax is payable. ' Section 122 . . . . .
Tax on "cw participating in a recognised provident fund is inclu ed in mulated his total income, owing to the provisions of sectio 296 balance of [s. 58G(2)] not being applicable, the Income-tam er recognised shall calculate the total of the various sums of income-tax ﬁ::gd°"' and super-tax in accordance with the provisions of section [Neg] 297(1) [s. 58G(3)]_.
(2_) Where the accumulated balance due to an employee participating in a recognised provident fund which is not included in his total income under the provisions of section 296 [Sec_. 58G(2)], becomes p gable, super-tax shall cal- culated in the manner provided by section 297(2) [ G(1) latter half]. '2 f I (1) Where the accumulated balance due to an emgloyee .
. 171 Clause 123 (1) Where the total income of an assessee includes any swim. compensation or other payment which is chargeable as the Tax proﬁts and gains of a business carried on by the managing °.°mP°""- agent, manager or other person, as the case may be, under '['s°T'I'o ( A) the provisions-of section 28(ii), (a), (b), (c) and (d) [10(5A)1a;; gara: opening lines, clauses (a) (b) (c) (cl) and last para, earlier latter half.] half], the tax payable by him on his total income shall, if he so elects, be-
1230|?
(i) the income-tax payable on his total income as re- duced by the amount of such compensation or other payment, at the average rate /of income-tax,
(ii) the super'-tax payable on his total income as re- duced by the amount of such compensation or other payment, at the average rate of super-tax, and
(iii) the tax on such compensation or other payment at the average -of the average rates of income-tax and super-tax applicable to his total income for the three assessment years immediately preceding the assessment year ................ ..
E.7cplanation.--For the purposes of determining the [New] average under clause (iii), the rates of income-tax and super- tacc applicable for any assessment year preceding the assess- ment year shall,'where the assessee had been assessed as a registered ﬁrm, be the rates applicable for such assessment year to an unregistered ﬁrm having the same total income as that declared by the assessee for such assessment year.
(2) Where an assessee is a partner of a registered ﬁrm [NW1 or an unregistered ﬁrm assessed as a registered ﬁrm under the provisions of section 190(b) [23 (5) (b)], and such ﬁrm is in receipt of any such compensation or other payment, the taxbpayable by him on his total income shall, if he so elects, e-- i
(i) the income-tax payable 'on his total income as re- duced by the amount of his share in such compensa- tion or other payment, at the average rate of in- come-tax, '
(ii) the super-tax payable on his total income as reduc- ed by the amount of his share in such compensation or other payment, at the average rate of super-tax, and '
(iii) the tax on his share in such compensation or other payment at the average of the average rates of in- come-tax and super-taag appl' le to his total in- come for the three as ssment years immediately preceding the assessm t year: ~;
12-1 Law. Com/58, 4 ' 172 Clauses 124-125 §>=¢€50§ 124- {3} Where a person is a 'rw'a--residem: and is not a_;com- rax 01;; the pany. _.he_tax .............. .. payable by him or on his be- ;E:';fim_"°"' half on 1115 total income shall be an amount equal to-+-
[s- 37(1) (a) the income-tax which would be payable on his mam para] tatal income at the maximum rate, plus
(b) either the super-tax which would be payable on his total income at the rate of nineteen per cent. or the super--tax which would be payable on his total in- come if it were the total income of a resident, whichever is greater.
E=- I7(I)qst (2) Any nomresidemf, other than a company, may .... .. P"T';"~ °3"""' ........ .. on or before the 30th day of June of the assess- ?" '1 ment year in which he first becomes asseésable, ..... ...... ..
by notice in writing to the Income-tax Ofﬁcer declare §(such declaration being ﬁnal and being applicable to all assess- ments thereafter) that the tax ......................... .. payable by him or on his behalf on his total income shall be deter- mined with reference to his total world income, and Shere- upon notwithstanding the provisions of subsection (1):, such tax shall be determined in accordance with sub-gectioil.' (3).
[._ ,7") m (3) Where under the provisions of sub-section (H) or prom, latter under any similar provision of the Indian Income-tar Act, P3"-If 1922, any non-resident has exercised his option to beltaxed " ° '9" with reference to his total ugorld income. the tax p gable by him or on his behalf on His total income shall be an amount bearing to the total amount of tax .......... ..I ...... .. which would have been payable on his total world i come had it been his total income the same proportion 5 his total income bears to his total world income.
It :7 (I).2nd (4) .......... ..Where any .......... ..person referred to in """"3 sub-section (1) satisﬁes the Income-tax Officer that he was prevented by sufﬁciept cause' from making the declapmtion referred to in that sub-section or in any similar pftmision II $1992 of the Indian Income'-tan: A 1922, on the ﬁrst occa'?'gn on which he became assessable nder this Act or the s ' Act as the case may be, and his failure to make such declration has not resulted in reducing his liability to tax for an' year, the Income-tax Oﬂicer may, with the previous app): val of the Inspecting Assistant Commissioner. allow such erson to make the declaration at 3; time after the expiry of the period specified, and such claration shall have e ct in relation to the assessment for the year in which the clare- tion is made (if such assesmient had notibeeneco pleted before such declaration} and all assessments there ter.
Section r2:;- Where the total income of an assessee. not I ing a if' company, includes any income chargeable under t head cmf?,fassCS_ "Capital gains", the tax. ................... .. payable by im on sesotheg than his total income shall be--
Eim (a) the amount $1' inconjegtax and super-tax payable on panlc (6) .
opegnglincs his total in me as ﬁejzluced by the amount of such 173 Clauses 125-127 inclusion, had the total income so reduced been his total income, plus [s- *x7 _(6) clause (1) part]
(b) an amount of income-tax determined in accordance [s- 1] (6)(ii)' ' with the following formula, that is to say---- mm" Pm") YX99, T--2/3CG where-
X stands for the amount of income-tax referred to in the beginning of this cause.
T stands for the total income of theassessee (which in- cludes capital gains), CG stands for the income chargeable under the head "Capital gains" included in the total income of the ' assessee. and Y stands for the income-tax which would have been payable on the total income of the assessee as re- duced by two-thirds of the amount of the income chargeable under the head "Capital gains" included in his total income. had the total income so reduced been his total income :
Provided that-- [,_ ,3? (5) (ii) s
(i) ....... .. where the total income does _not exceed the P¥°V °-1 sum of ten thousand rupees, the amount payable under clause (b) shall be nil; and
(ii) in no case shall the amount payable under clause
(b) exceeds one-half of the amount, if any, by which the income chargeable under the head "Capital gains" exceeds the sum of ﬁve thousand rupees S€C"lOl'I mfi Where the total income of a company includes any :1?' °;'in:"§;1' income chargeable under the head "Capital gains". the tax case fcom. payable by it shall be-- paniés.
(a) the amount of income-tam with_'which it is charge- [s. 17(7). able on its total income, and Pa"-l
(b) the amount of super--taa< with which it is charge- able on its total income as reduced by the amount of such inclusion. had the total: income so reduced been its total income.
CHAPTER XIII ' INCOME-TAX AUTHoR.i'rIEs A{----Appointment and control Scc..ion 127.
There shall be the following classes of Income-tax IncDmc_-'_I'ax authorities for the purposes offthis Act, 'namely :-- ""'?'°'"'°'-
(a) the Central Board of _evenue,q ( I." 5m]
(b) Directors of Inspection i ' I c) Commissioners of Inco e-tax, 174 Clauses 127-130
(d) Assistant Commissioners of Income-tax, who may be either Appellate Assistant Commissioners of In- come-tax or Inspecting Assistant Commissioners of Income--tax.
(e) Income-tax Oiﬁcers, and
(f) Inspectors of Income--tax.
(1) The Central Government may appoint as many Di- Section 128. rectors of Inspection, Commissioners of Income-tax, Appel- APP°""' late or Inspecting Assistant Commissioners of Income-tar f(')'::,is_m';fI"' and Income-tax Officers of Class 1 Service, as it thinks ﬁt...
 The Commissioner may, sub3ect to earlier part, the rules and orders of the Central Government regulating and S°°~ the conditions of service of persons in public services and 39%] mm" posts, appoint as many Income-tax Oiﬁcers of Class II Ser-
[Sm 5(3) vice and as many Inspectors of Income-tax, as he thinks ﬁt.
1'"'°" P3"-3 (3) Subject to the rules and orders of the Central Gov- ernment regulating the conditions -of service of persons in [566-5(3A)l public services and posts, an Income--tax authority may ap- point such executive or ministerial staff as may be neces- sary 1;o assist it in the execution of its functions.

[Se_c- 5(4), ~ C8.I'll€i' part.] (2) ................ ..
[Sec- 5 (5A), (4) Inspectors of Income-tar shall be subordinate to the lme' Pa"-1 Income-tax Oﬁicer or other Income-tax authority under whom they are appointed to work and to any other Income- tar authority to whom the said Oﬁicer or authority is subordinate. _ .
Explanation.-----For the purposes of sub-section (2). "Di- rector of Inspection" does not include a Deputy Director of Inspection or an Assistant Director, of Inspection; and for the purposes of sub--section (3), "Director of Inspection" 56650,, ,3.,. does not include an Assistant Director of Inspection.
1"5""'°{)i°'§. (1) All 0ﬂ'icers and persons employed in the execution fate 5';u°trh;_' of this Act shall observe and ollow the orders, instructions ,me,, and directions of the Centria Board of Revenue: ! [Sec 5 (8).] I i j 175 Clauses 130-131.
Provided that no such orders, instructions or directions shall be given so as to interfere with the discretion of the Appellate Assistant Commissioner in the exercise of his appellate functions:
Provided further th.at all such orders, instructions and [NW] directions of a general nature affecting assessees shall be published in the of India Gazette.
(2) The Director of Inspection, the Commissioner or the [Sec 5(7B) Inspecting Assistant Commissioner, as the case may be, may earlier part] issue such instructions as he thinks fit for the guidance of any Income-tax Officer subordinate to him in the matter of any assessment ................ ..
B-Jurisdiction (1) .......... .. Directors of In _ection shall, subject to the Section 13: control of the Central Board of evenue, perform such func- Jurisdiction tions of any other Income-tax authority as may be assigned Of indome-tax to them by the Central Government. '['S:'c*f°;i'i(°I5A) latter part.] (2) .......... .. Commissioners shall perform their func- [$60.5 (2), A tions in respect of such areas or of such persons or classes latteﬁpart] of persons or of such incomes -or classes of income or of such cases or classes of cases as the Central, Board of Revenue may direct, and where such directions have assigned to two or more Commissioners ............. .. the same area or the same persons or classes of persons or the same incomes or classes of income or the same cases or classes of cases, they shall have concurrent jurisdiction sub- ject to any orders which the Central Board of Revenue may make for the distribution and allocation of the work to be performed.
(3)~(a) ................ .. Appellate Assistant Commissioners [Sm 5(4), shall perform their functions in respect« of such persons or lame part.] classes of persons or of such incomes or classes of income or in respect of such areas as the Central Board of Revenue may direct, and, where such directions have assigned to 'two or more Appellate Assistant Commissioners .......... .. the same persons or classes of persons or the same incomes or classes of income or the same area, in accordance with any orders which the Central Board of Revenue may make ﬁor the distribution and allocation of the work to be per-
ormed:
(b) The Central Board of Revenue may transfer an appeal from one Appellate Assistant Commissioner to ano- [New] ther.
(4) Inspecting Assistant Co issio rs ............. .. and [S 3 H Income-tax Oﬁicers shall perfo' their' 31 ' 5 5 V nctions. in respect can , pan] of such persons or classes of p rsons 0, of such incomes or 176 A Clause 131 ' classes of income or in respect of such areas as the Com-
,missioner .......... .. may direct, and where such directions [369 5(5), _atter pa.rt.] [Scc. 5 (5A) earlier Part.] [SW 5(5)] [New] [New] have assigned to two or more Inspecting Assistant Commis- sioners ....... .. or Income-tax Officers, the same persons or classes of persons or the same incomes or classes of income or the same area, in accordance with any orders which the Commissioner may make for the distribution and allocation of the work to be performed .......... ..
(5) ............. .. The Commissioner may, by general or special order in writing, direct that the powers coriferred on the Income-tax Officer and the Appellate Assistant Com- missioner by or under this Act shall in respect of any speci- ﬁed case or class of cases or of any speciﬁed person or classes of persons be exercised by the Inspecting Assistant Commis- sioner and the Commissioner respectively. and for the pur- poses of any case or person in respect of which any such. order applies, references in this Act or in any rules made hereunder to the Income-tax Officer and the Appell 'te As- sistant Commissioner, shall be deemed to be refere pces to the Inspecting Assistant Commissioner, and the Commis- sioner, respectively. i func-
them hority tions in the execution of this Act as are assigned t by the Income-tax Officer or other Income-tax au (6) Inspectors of Income-tax shall perform suc|% under whom they are appointed to work ............ ..
. . . . . . . . ..
(7) The Central Board of Revenue may, by notification in the Official Gazette, empower Commissioners. ....... .. Appellate Assistant Commissioners and Income-tax ﬁicers to perform such functions in respect of such classes f per- sons or such classes of income or such area as may b speci- ﬁed in the notiﬁcation, and thereupon the functions 5 speci- ﬁed shall cease to be performed, in respect of the s ciﬁed classes of persons or classes of income or area, by the other authorities appointed under "sub-sections (2), (3) and{ (4).
Such notiﬁcation shall not render necessary the 'V -issue of any notice already issued ' the Income-tax Oﬁic r who was previously exercising such functions.
(8) For the purposes of any case or person in respect whereof an order under sub,»-section (5) applies.---- 2
(a) any provision of Act requiring the a mval or sanction of the linspecting Assistant C m'mis- sioner in any/matter shall not apply;
(b) any appeal which would otherwise lie to the Ap- pellate Assistant Commissioner shall lie to the Oommissionerr; and
(c) any appeal which would have lain from any order of the App late A ' tan: Commissioner' ,- the High Court ll lie': 'm the order of "the C mis- sioner to thy High _ _ rt. i ' i ' 177 Clauses 132-134 (1) The Commissioner .......... .. may, for reasons to sect,~a,,3g be recorded in writing, transfer any case from one In- Tramps, or come-tax Officer subordinate to him to another also sub- case ftomonc ordinate to him, and the Central Board of Revenue may, 1n°°I¥°"3«" for reasons to be so recorded, transfer any case from any 033°" '° 'm' h .
.......... "Income-tax Officer to any other............ 5(7A) (2) The Commissioner or the Central Board of Reve- nae, as the case may be, shall, before passing any order an- [New] der sub~section (1), give the assessee cl reasonable oppor- tunity of being heard in respect of the proposed transfer.
(3) The Commissioner or the Central Board of Reve- [New nue, as the case may be, may, in special cases and for reasons to be recorded in writing, dispense with the giving of such opportunity as is referred to in sub-section ((2), but the assessee shall, in every such case, be entitled to make a representation to the Commissioner or the Central Board of Revenue, as the case may be, againa the order of trans- fer within one month of the date on which he comes to know of the order. ' . (4) .......... ..Transfer of a case under sub-section (1)[s.5 (7A), may be made at any stage of the proceedings, and shall mam Pan» no. render necessary the re-issue of any notice already is- 1""? 9"") sued by the Income-tax Officer from whom the case is ' transferred.
Explanation.--In this section, "case", in relation to any [5 (M) person whose name is speciﬁed in the order of the trans-- "M15 fer, means all proceedings under this Act in respect pf ., any year (including a past year) which may be pending on ' the date of the transfer, and, includ 6 -all proceedings un- der this Act which may in respect $ any year (including a past or a future year) be commenced after the date of the transfer .......... .. ' .
Whenever in respectmf any proceeding under this Act Section I33 an Income-tax authority ceases to exercise jurisdiction, 9 angc of and is succeeded by another who has and exercises jurisdic- 1 umbcm °' tion, the Income-tax authority so succeeding may continue[ °'5°°('7C) the proceeding from the stage at which the proceeding was min p'Z,a»_] ' left by his predecessor : 6 6 Provided that the assessee concerned may .demand [' 5' (7C). 18¢ that before the proceeding 'is so continued the previous K "-3 proceeding or any part thereof be re-opened or that be---
fore any order for assessment is passed against him he be ' reheard.
(1) For the purposes of sections 260, 265, 267(2), 271 S-cction :34 and 272 [Section 33(2), earlier partgsection 33(4), section uthnrity 33A. section 33B(1), section 66(1), section 66(2), 66(3), 66(5), '?°;nP¢t¢'1t t9 66(7)] the Commissioner re erred therein shall, in rela-'3 ° °' °°'""
tion to an assessee, be t "Comm aner having for the "° am"
time being jurisdiction V the 3 Nawj mg'.
178Clauses 134-135 (2) For the purposes of sections 230 to 239 and 275 [section 33(5), sec. 46] the Income-tar Oﬂicer referred to therein shall, in relation to an assessee. be the Income-tax Oﬁicer having for the time being jurisdiction over the as- sessee.
5<=Cti0n I35 (1) Where an assessee carries on a business, profes- Ingo:notax_ sion or vocation at any place, he shall be assessed by the '(B3103 0111:' Income-tax Officer of the area in which that place is situ-
""°'s ate or, where the business, profession or vocation is carried [S' 64(1)] on in more places than one. by the Income-tax Oiﬁcer of the area in which the principal place of his business, pro- fession or vocation is situate. .
[S. 64(2)] (2) In all'other cases, an assessee shall be assessed by the Income-tax Oﬁ'icer of the area in which he resides.
[S64 (3), (3) Where any question arises under this section as to main P*"''-3 the place of assessment, such question shall be deterrrlined» by the Commissioner. or. where the question is between places within the jurisdiction of different Commissioners, by the Commissioners concerned or, if they, are not in agreement, by the Central Board of Revenue:
{S5543}: W Provided that, before any such question is determined. P' "'3 the assessee shall have had a reasonable opportunity of being heard in respect of the question. (4) .......... ..The place of assessment shall not be cal- led in question by an assessee---- S' ' (a) if he has made a return ............................... .... .. ;[;ro%i(3¢e)ariiI:: , under section' 143(1) [Section 22(1)] and has Parl]- stated therein his principal place of business, pro- fession or vocation, or [g,5,._(3),2,,d (b) (if he has not- made such a return), ....... .. after prov. latter the expiry of the time allowed by the notice under Part-] section 143(2) [sub-section (2) of section 22] or under section 154 [34] for the making of a re- turn.
[s. 64(3), 3rd (5) .... ..If the place of assessment is called in question Prov-l by an assessee, then, subject to the provisions of sub-sedtion (4), the Income-tax Oﬂicer shall, if not satisﬁed withi the correctness of the claim, refer the matter for determination under sub-section (3).before assessment is made.
[s. 64(4)] (6) Notwithstanding anything contained in this ';sec- tion,» every Income-tax Oﬁicer shall have all the powers conferred by or- under this Act on an Income-tax Oﬂicer in respect of any income .......... ..accruing, or arising or received within the area for which he is appointed. 2 [g_ 54(5)] (7) The provisions of sub~section (1) and sub-section (2) shall not apply .......... ..to any assessee---
(a) on whom an assessment ..or re-assessment for ,.u the purposes of th Act hajsﬁbeen, is being or is t be made in the c e of any case in respect of w$ich E i .
179Clauses 135-136 a Commissioner .......... .. appointed without refer- ence to area under section 131(2) [Sec. 5(2), latter part] is exercising the functions of a Commissioner, . . . . . . ..'....OI'
(b) where by any direction given or any distribution or allocation of work made by the Commissioner .......... ..under section 131(4)......[Sec. 5(5), earlier- part] or in consequence of any transfer made un- der section 132 [Sec. 5(7A), main para], a particular Income-tax Officer has been charged with the function of assessing that assessee, or
(c) who or whose income is included in a class of per- sons or a class of incomes speciﬁed in any notiﬁ-
cation issued under section 131(7) [S. 5(6)]; but the assessment of such person; ......... ..shall be made by the Income-tax Ofﬁcer for the time being charged with the function of making such assessment by the Central Board of Revenue or by the Commissioner .......... .. to whom he is subordinate, as the case may be. .
C--Powers.
(1) The Income-tax Ofﬁcer, Ap ellate Assistant Com- 36°"-"' 135 missioner and Commissioner .... ..shall," for the purposes of *'9""'-"' .'°3'"' this Act have the same powers as are vested in a court d'"gm'3i':°c':i'; under the Code of Civil Procedure, 1908 when trying ;¥'p¢vid,,n¢., a suit in respcet of the following matters, namely- :~-- etc.
(a) discovery and inspection; [Sec-37(1)]
(b) enforcing the attendance of any person, inc1uding5°"9°3 any officer of a banking company and examining him on oath;
(c) compelling the production of books of account and other documents; and
(d) issuing commissions.
(2) Where any Income-tax authority exercises ' any powers referred to in sub-section (1),. it shall follow, so far as may be, the same procedure as a court under the said Code. ' (3) Subject to any rules made in this behalf, any au- [Sec-137(3)] thority referred to in sub-section (1) may impound and retain in its custody for such period as it thinks ﬁt any books of account or other documents produced before it inany proceeding under this Act:
Provided that an Income-tax Ofﬁoer shall not----
(a) impound any ooks of account or' other documents without recording his reasons for so doing, or [New]
(b) retain in his custody any such books or documents for a period exceedin ﬁfteensdays (exclusive of holidays) without obt ining tlle; approval of the Commissioner therefor; 4 ' - -
180'Clauses 136-138 [New] _ (4) Where any person, whether a party to the proceed- ing or not, is desirous of receiving back any book of ac- count or other document produced by him in any pro- ceeding under this Act before any Income-tax authority, the Income-tax authority may, unless the book 'of account or other document is impounded under sub-section (3), re-
turn the same to such person on an application made for the purpose.
[3- 37(4)] _ (_5) Any proceeding before any authority referred to in this section shall be deemed to be a judicial' proceeding within the meaning of sections 193 and 228 and for the-_ 45 of186o purposes of section 196 of the Indian Penal Code.
Section 137- Subject to any rules made in this behalf, any Income-
Powers of s§- tax Ofﬁcer specially authorised by the Commissioner in arch and 5°" this behalf may,---- _ ZUYC. .7 [5- 37(9)} (i) enter and search any building or place where he has reason to 'believe that any books of account or other documents which in his opinion will beiuse- ful for, or relevant to, any proceeding under this Act. may be found, and examine them, if fdund;
(ii) seize any such booksiof account or other documents and have them removed to his oﬁice, if necpssary;
(iii) place marks of identiﬁcation on any such books of account or -other documents or make or cause to be made extracts or copies therefrom;
(iv) make a note or an .inventory of any articles or things found in the course of any search under this section which in his opinion will be useful fox; or relevant 'to, any proceeding under this Act;
5 of 1393- and the provisions of the Code of Criminal Proce- dure, 1898, relating to searches shall apply, so far as may be, to searches under this section.
a Section X38 The Income-tax Olﬁcer, _the Appellate Assistant Com- powc, to can missioner or the Inspecting ?Assistant Commissioner may, or inrorma- for the purposes of this Act,----- 3 - U011. .
[SW 33] (1). require any ﬁrm .... .:to furnish him with a return of the names and addresses of the partners of the ﬁiirmvand their respective shares;
(2) require any Hindu undivided family to furnish him with a return of the names and addresses of thb man- ager and the members of the family;
(3) require any. person whom he has rea n to believe to be a trus ee, guadian or agent, to furni h him with a return of th names3>ﬁ the persons fpr or of whom he is trustee, guard or a' ept, and of their addr es;
181' Clauses 9.138-141 (4) require any assessee to furnish a statement of the names and addresses of all persons to whom he has paid in any previous year rent, interest, commission, royalty or brokerage, or any annuity, riot being an annuity taxable under the head "Salaries", amounting to more than four hundred rupees, together with particulars of all such pay- ments made;
(5) require any dealer, broker or', agent or any person concerned in the management of a 'stock or commodity Ex- change to furnish a statement of the ' names and addresses of all persons to whom he or: the Exchange has paid any sum in connection with the sale. exchange or transfer of a capital asset, or on whose behalf or from whom he or the Exchange has received any such sum. together with parti- culars of all such payments and receipts;
(6) require any person, including a banking company or any officer thereof. to furnish i Vormation in relation to such points or matters, or to furnish statements of ac- counts and affairs veriﬁed in the manner speciﬁed by the Income-tax Officer. the Appellate Atsistant Commissioner or the Inspecting Assistant Commissioner, giving informa- tion in relation to such points or matters as, in the opinion of the' Income-tax Ofﬁcer, the Appellate "Assistant Commis- sioner or the Inspecting Assistant Commissioner, will be useful for. or relevant to, any proceeding under this Act.
The Income-tax Officer, the Ag) fllate Assistant Com- section .39 missioner or the Inspecting Assis nt Commissioner, or _P§Wcr *0 any person subordinate to him authorised in writ--1 * "Sit: ing in this behalf by the Income-tax,.Oﬂicer, the Appellate: pmics_° Assistant Commissioner or the Inspecting Assistant Com- [,4_ 393 missioner, may inspect, and if necessary, take copies, or cause copies to be taken. of:any register of the members. ; debenture holders or mortgagees-of any company or of any entry in such register. » i The Director of Inspection. the Commissioner and the l5_;°°"°n 14°' Inspecting Assistant Commiqsionerﬂzi. ll be competent to Em" 3; makqany enquiry under this'Act, a A" gar this purpose shall Inspection have all the powers that an Income-tax Officer has under and Inspect- this Act in relation to the making oﬁ enquiries. '$8 rsctc.
[. 5 (713).
limcrpmt.] D--DiscIosurei of information. , (1) All particulars contained in": any statement made. %_¢'i°n 14!' return furnished or accounts or documents produced under i» the provisions of this Act, or -in any; evidence given, or af- ,oh;b;.cd_ fidavit or deposition made, in the course of anv proceedings . 54 (in under this Act, other than proceedin under Chapter XXIII ' [Existing Chapter VIII-Oﬁences an? penalties], or in any A record of any assessment ﬁancee ' °f '87' , or any proceed-
demand, prepared , : shall be {treated ing relating' to the recov of a for the -purposes of 's v r I of 1872 [S- _54 (2), earlier part] Is-54 (3) (a)] 45 of 1860 [s- 54 (3)(b)] [New] [S- 54 (3) (0)1 [S- 54 (3) (d)] [New] [9 of 1908 1 of 1956 I82 Clause 141 as confidential, and notwithstanding anything contained in the Indian Evidence Act. 1872, no court shall, save as pro- vided in this Act, be entitled to require any public servant to produce before it any such return, accounts, documents or record or any part of any such record, or to give evidence before it in respect thereof. .
(2) No public servant shall disclose any particulars contained in any such statement. return, accounts, docu- ments, evidence, aﬂidavit, deposition or record .......... ..
(3) Nothing in this section shall apply to the disclo- sure----
(a) of any such particulars for the purposes of a prose- cution for any offence under the Indian Penal Code, 1860 in respect of any such statement, return, accounts, documents, evidence, affidavit or deposi- tion, or for the purposes of a prosecution for any oﬁence under this Act; or of any such particulars to any person acting in, the execution of this Act .... ..where it is necessary or desirable to disclose the same to him for the pur- poses of this Act .... ..; or
(b)
(c) the substance of any material to an assessee, being relevant material gathered for the purposes of making an assessment under section 147(3) [Sec- tion 23(3)] or under section 148 [Section 23(4)], without disclosing any information which might enable the assessee to identify the person to whom the material relates; or
(d) of any such particulars, where the disclosure is oc- casioned by the lawful employment under this Act of any process for the service of any notice or the recovery of any demand; (or
(e) of any such particulars to a civil. court in any suit or proceeding to which Government or 'any Income-tax authority is a party, which relates to any matter arising out of any proceeding under this Act or under any other law for the time being in force authorising any Income-tax authority to exercise any powers thereunder; or
(f) (i) of any such particulars contained in any ac- counts, or
(ii) of any registered document of which a certiﬁed copy can be obtained under the provisions of the Indian Registration Act, 1908, or i
(iii) of a balance sheet' or audit report or proﬁ and lossoccounts led u 17 the Companies Act, , 956, or any other ct rel ing to companies, 183 Clause 141 l to a civil court in any suit orlproceeding to which (3) {hi (1)
(j) of any such particulars relevant to any inquiry
(ii) (1) of such facts. to an authorised ofﬁqer of the Gov-
the person who produced the accounts, registered document, balance sheet, audit report or profit and loss account, or his representative-in-interest, is a party, if the particulars, registered document, ba- lance sheet, audit report, or proﬁt and loss account are relevant to any matter in issue in such suit or proceeding;
of any such particulars to the Comptroller and Au- [s. 54 (3) (c} ditor-General of India for the purpose of enabling him to discharge his functions under the Consti-
tution; or oi any such particulars to any officer apoointed by [5, 54(3) (r; the Comptroller and Auditor-General of India or the Central Board of Revenue to audit income-tax receipts or refunds; or of any such particulars, relevant to any inquiry [Se-:. 54 (3) into the conduct of an ofﬁcial of the Income-tax (S) Department. to any persons appointed Commis-
sioners under the Public Servants (Inquiries) Act, 1850, or to an otﬁcer otherwise appointed to hold 37 oflB50 such inquiry, or to a Public Service Commission established under the Constitution, when exercis-
ing its functions in relation to any matter arising out of any such inquiry; or Es . 5+ . (3) into a charge of misconduct in connection 'with 35-] income-tax proceedings against a legal practitioner or chartered accountant. to the authority referred -
to in section 324 (3) [Section 61(3)], when exer-
cising the functions referred-tlo in that sub-section .......... .., or ~ of any such particulars by any public servant, [Scc. 54 (3)- where the disclosure is occasioned by the lawful (bill exercise by him of his powers under the Indian Stamp . Act. 1899. to impound an insuﬁiciently 90f 1599 stamped document; or [ - (> 5"' 3 ernment of any country outside India which has entered into an agreement with India for the grant- ing of relief in respect of or avoidance of double tax_ation .... .., as may be necessary for the purpose of enabling such relief or a refund under section 92 [49A] to be given or such avoidance under that section to be made effective ; or
(m) of such facts, to an oﬂicer of a State Government I3'-'€« 5-4. {3} as may be necessary for the purpose of enabling,'-W that Government to; levy at realise any tax im- f posed by it; or ' 3 t * [New] 54 (3) 7 of 1878 54 (3) [Scc- 54 (3)
(m).] [Sea 54 (3) (HM [Sea 54 (3) (9)-] [Sea 54 (3)
(p).] 31 of 1950 560- 54(4)] [NW] Section 142.
Saving regar-
ding Volun-
tary disclosu-
184Clauses 14~1-142
(n) of such facts, to an officer of the Central Govern- ment as may be necessary for the purpose of en- abling that Government to levy or realise any tax imposed by it; or
(o) of such facts, to any authority exercising powers under the Sea Customs Act, 1878, or any Central Act imposing a duty of excise as may be neces- sary for enabling it duly to exercise such powers; or
(p) of such facts, to any person charged by law with the duty of inquiring into the qualiﬁcations 'of electors as may be necessary to establish whether a a person is or is not entitled to be entered on an electoral roll; or
(q) of so much of such particulars, to the appropriate authority, as may be necessary to establish whe- ther a person has or has not been assessed to in- come-tax in any particular year or years, where under the provisions of any law for the time be- ing in force such fact is required to be established; 01'
(r) of such particulars to the Reserve Bank of India as are required by that Bank to enable it to ;com- pile ﬁnancial statistics of international investment and balance of payments; or
(s) of such information as may be required by any officer or department of the Central Government or of a State Government for the purpose qf in- vestigation into the conduct and affairs of; any public servant; or
(t) of any such particulars to the Custodian of [Eva- cuee Property appointed under the Administ tion of Evacuee Property Act, 1950, for the purp e of enabling him to discharge the duties imposed %upon him by or under the said Act. ' (4) Nothing in this sectionshall apply to the produc- tion by a public servant before a court of any document, declaration or aﬂidavit ﬁled, or the record of any state- ment or deposition made _in a proceeding under section 181 [25A] or sections 191 to 193 or._ to the giving of evidente by a public servant in respect thereof. . ' (5) In this section, "public servant" means any public servant employed in the execution of this Act.
Nothing in section 141 [54(1), 54(2) and' 54(3), as re- duced in preceding section] shall prohibit the voluntary disclosure of any particulars referred to in sub-section (1) res by persons of that section, by the person by whom the statement was making . [New] thc made, the return fu SKECCIIICIH CIC.
'shed, t e, accounts or documen _pro- duced, the evidence iven it-he affidavit or depo tion made, as the case ma be. ' i8-5 ~ Clause 143 CHAPTER XIV PROCEDURE FOR ASSESSMENT (1) (a) Every person, .......... ..if his total income, or the Section I_4,3 total income of any other person in respect of R°""" °f"1' which he is assessable under this Act, during °°m°' the previous year exceeded the maximum [s. 22 0)] amount which is not chargeable to income-tax shall furnish, to the Incomegtaa: Officer having jurisdiction to assess him, on or before the 30th day of June of each: ﬁnancial year, a return of his income or the income of; such other person during the previous year, in the prescribed form and veriﬁed in the prescribed manner and set-
ting forth .......... ..such -other particulars as may be prescribed:
Provided that the Income-ta;x Office; may in his discre- tion extend the date for the delivery of the return in the case of any person or class of persons:
Provided further that no such return need be furnished by any such person if he has already furnished a return - of income for such year in accordance with the provisions of sub-section (2) .......... ..[22(2)].
(b) Where a return of income has been sent under . clause (a) to an Income-tan: Officer who has no jurisdiction to make the essment, it shall be his duty to forwartl the urn to the Income- taa: Oﬂicer having jiurisdictibn.
_ (2) In the case of any person whd. in the Income-tax ts. 22 (9)1- Oﬂicer's opinion .......... .., is assessable wider this Act, whe- ther on his own total income or on theitotal income of any other person during the previous year, the Income-tax Offi- cer may before the end of the relevant assessment year ; serve a notice upon him requiring him to furnish, within i thirty days from the date of service oﬁ the notice, a return of his income or the income of such other person during that
-year, in the prescribed form and veriﬁed in the prescribed manner and setting forth ..... other particulars as may be prescribed ..........
Provided that the Incorné-tax Officer may, in his dis- cretion, extend the date for the delivery of the return.
(3) If any person ........... ..has sustained a loss .......... ..in [s.;22 (2-A). any previous year under the head 'Proﬁts and gains of busi- P3-it-1 ness, profession 'or vocation', and such =1oss or any part there- of would ordinarily have been carried forward under sec- tion 73(2) or 74(2) [Sub-section (2) of section 24], such per- son. or the person assessable 'n resp: of the total income of- such person. shall, if he not be ' ed with a notice h under sub-section (2), .... .. ' h:on.f: before the 3o§h.dq'y ! E --' E [s- 22 (3)1 Ls- 22 (5)) Section I . Return whom to signed.
[New] Section I145. _ .
provisional receipt of a return, niade un assessment. make, in a summary; mann ,a provisional assessm_nt of, 2 'J 186 Clauses 143-145 of June of the assessment year or within such further time as the Income-tax Oﬁicer in any case may allow. a return of loss in the prescribed form and veriﬁed in the prescribed manner and containing such other particulars as may be prescribed; and all the provisions of this Act shall apply as if it were a return under sub--section (1).
(4) If any person has not furnished a return within the time allowed by or under sub-section (1) or sub--section (2), or having furnished a return under either of those sub- sections discovers any omission or Wrong statement therein, he may furnish a return or a revised return. as the case may be, at any time before the assessment is made.
(5) The prescribed form of the returns referred to in sub--sections ( 1), (2) and (3) shall, in the case of an assessee engaged in any business, profession or vocation, require him to furnish particulars of the location and style of the prin- cipal place wherein he carries on the business, profession or vocation and of the branches thereof. the names and ad- dresses of his partners, if any, in such business, profession or vocation and the extent of the share of the assessee and the shares of all such partners in the proﬁts of the busi- ness, profession or vocation and any branches thereof;
The return under section 143 [22(1) or 22(2) or 22(3)] 45: shall be signed and veriﬁ.ed----
(a) in the case of an individual, by the individual him- self; where the individual is absent from India, by some person duly authorised by him in this behalf; and where the individual is mentally incapa 'tated from attending to his affairs, by his guard 11. or committee or by any other person competent ;to act on his behalf;
(b) in the case of a Hindu undivided family, by the Karta, and, where the Karta is absent from India or is mentally incapacitated from attending to his , affairs, by any other adult member of such family;
(c) in the case of a company or local authority, by the principal oiﬁcer thereof; »
(d) the case of a firm, by any partner thereof, not be- mg a minor; '
(e) in the case of any other association, by any member of the association or the principal oﬁicer thereof; and
(f) in the case of any other person, by that person or by some person competent to act on his behalf.
( 1) The Income-tax Officer may, at any time aft r the 1' section l43[22], pr ed to 4 : i ~ 187 Clause 145 the tax payable by the assessee, on the basis of his return [s. 2_3B (1), and the accounts and documents, if any, accompanying carlwr part] it ................... ..
(2) In making any assessment under this section due [at 233 (I). effect shall be given 190-. 13"" Pam]
(a) the allowance referred to in section 32(2) [para (b) of the proviso to section 10(2)(vi)], and
(b) any loss carried forward under section 73(2) or 74 <_2) [24(2>1.
(3) A partner of a ﬁrm may 'be provisionally assessed [s. 23 B (2)] under sub-section (1) in respect of his share in the income of the ﬁrm, if its return has been received, even if the return of the partner himself has not been received.
(4) A ﬁrm may be provisionally assessed under sub- [=- 23 3 (3)1 section (1) as an unregistered ﬁrm, except in the following cases, where it shall be assessed as a registered firm-
(a) where the firm was assessed as a registered ﬁrm for [Ncw. see the latest assessment year for which its assessment N°'iﬁ¢8ti°n has been completed, and it has before the date 1I"°'33:ff prescribed for the purposes of this clause, ﬁled its 52,433,, of application for registration or declaration under Finhncc, section 191(7) [section for declaration] for the as- R.¢*5=I}"° sessmgnt year for which the provisional assessment D"'"'°"-1 is to be ma e;
(b) where no regular assessment has been made on the ﬁrm for any assessment year preceding the assess- ment year for which the provisional' assessment is to be made, and the firm has, before the date pres- cribed for the purposes of this clause, filed its appli- cation for registration, or declaration as aforesaid, for the assessment year for which the provisional assessment is to be made.
(5) After a regular assessment hw been made .... ..any [3, ,3 B (7) amount paid' or deemed to have been paid towards the pro- visional assessment made under sub-section (1) shall be deemed to have been paid towfards the regular assessment; andwhere the amount paid or deemed "to have been paid towards the provisional assessment exceeds the amount pay- able under the regular assessment, the excess shall be re- funded to the assessee.
(6) Nothing d-one or suffered by reason or in consequ- [s- 23 B (8)1 ence of any provisional assessment made under this section shall prejudice the determination, on- the merits, of any , issue which may arise in the tourse of 'the regular assess- ment ........ .. 5 4 13-1 Law Com.I58 i :0 [=- 23 13 (4)1 Section 14.6.
Enquiry be-
fore asses-
sment.
Is~ 22 (4)] [New] [New] Section 1 47 Assessment.
[=- 23 0)] [s- 23 ml 188 Clauses 145-147 (7) There shall be no right of appeal against a provi- sional assessment made under sub-section (1).
(1) For the purpose of making an assessment under this Act, the Income-tax Ofﬁcer may serve on any person who has made a return under section 143(1) [22(1)] or section 143(3) [22(2A)] or upon whom a ﬁotice has been served under se_ct'1on 143(2) [22(2)] (whether a return has been made or not), a notice requiring him, on a date to be there- in speciﬁed,--
(i) to produce, or cause to be produced, such accounts or documents as the Income-tax Ofﬁcer may require, or
(ii) to furnish in writing and veriﬁed in the prescribed manner information in such form and on such points or matters (including a statement of all as- sets and liabilities of the assessee, whether inclu- ded in the accounts or not) as the Income-tax Offi- cer may require : .
Provided that the previous approval of the Commis- sioner shall be obtained before requiring the assessee to furnish a statement of all assets and liabilities not included in the accounts:
Provided further that the Income--tax Officer shall not require the production of any accounts relating to a period more than three years prior to the previous year.
(2) For the purpose of obtaining full information 'in respect of the income or loss of any person, the Income-tax Oﬂicer may make such enquiry as he considers necessary.
(3) The assessee shall, except where the assess- ment is made under section 148 [s. 23(4), part regarding best judgment assessment], be given an opportunity of rebutting the substance of any material gathered on the basis of any enquiry under sub-section (2) and proposed to be utilised- for the purpose of the assessment.
(1) Where a return has been made under section 143 [22] and the Income-tax Officer is satisﬁed without requir- ing the presence of the assessee or the production by him of any evidence that the retum .......... .. is correct and§com- plete, he shall assess the total income or loss of the assessee, and shall determine the sum payable by him or refundable to him on the basis of such return. ' (2) Where a return has been made under section 143 [22] but the Income-tax Oﬂicer is not satisﬁed without re- quiring the presence of the person who made the return or the production of evidence thgat the return ............. cor- rect and complete, h shall 'r,ve on such person a otice requiring him, on a ante to e therein speciﬁed, eit er to E i ,= L 189 Clauses 147-149 attend at thellncome-tax Ofﬁcer's ofﬁce or to produce, or to cause to be there produced, any evidence on which such person may rely in support of the return.
(3) On the day speciﬁed in-the notice issued under sub- [s. 23 (3)] section (2), or as soon afterwards as may be, the Income-tax Officer, after hearing such evidence as such person may pro- duce and such other evidence as the Income-tax'Ofﬁcer may require, on speciﬁed points, and after taking into account all relevant material which the Income-tax Officer has gathered and which the Income-tax Officer is competent to take into account, shall, by an order in writing, assess the total income or loss of the assessee, and determine the sum payable by him or refundable to him on the basis of such assessment.
(1) If any Person'' Section 148.
(a) fails to make the return reguired by any notice 3°" J"dS' given under section 143 ( ), [sub-section (2) 0 mm. section 22] and has not made a return or a revised - return under section 143(4) [sub-section (3) of sec- [5- .23 (4)
- main para, non 22]! or earlier part
(b) fails to comply with all the terms of a notice is- sued under section 146(1) [sub-section (4) of sec- tion 22], or
(c) having made a return, fails to comply with all the terms of a notice issued under section 147 [section re: assessment under 23(1) (2) & 23(3)], the Income-tax Officer, after taking into account all rele- vant material which the Income-tax Officer has gathered and which the Income-tax Oﬁicer is competent to take into account, shall make the assessment of the total income or loss to the best of his judgment and determine the sum payable by the assessee or refundable to the assessee on the basis of such assessment.
(2) The Income-tax Officer shall, in every order under [NC-W] sub-section (1), refer to the material on the basis of which the assessment is made.
f ment. Assess-
For the purposes oflsections 147 and 148, [two preced- section :49.
ing sections regarding assessment and best judgment] the "R lcyagt relevant material which the Income-tax Officer is compe- '""l°"a' gent to take into account in respect of an assessee inclu- [Ndw] es----
(a) market conditions in the previous year of the trade in which the assessee -was engaged in the previous year,
(b) rates of proﬁts disclosed by the accounts of other persons engaged in the same ﬁne of trade, and
(c) rates of proﬁts dete ned in 7 1 case of the asses- see in assessments f earlier subsequent years.
Section I 50-
Mcthod of accounting.
[s. 13, main para] [s. 13, Provi-
so, part] [s. 13, Provi-
so, part.] Section 151.
Reopening of assessment at the instance of the asses-
566. [S. 27] Section 152.
Income es-
caping assess-
mcnt.
[s- 34 first clause part.] £5.
rst clause part] .
(I)~ para, (3') 2 34 0)' para, (13).
\ ' 190 Clauses 150-152 (1) Income ....... .. chargeable under the head "Proﬁts and gains of business, profession or vocation" or "Income from other sources" shall be computed .... .. in accordance with the method of accounting regularly employed by the assessee: . , Provided that, if, though the accounts are correct and complete to the satisfaction of the Income-tax Officer, the method employed is such that, in the opinion of the In- come-tax Officer, the income ....... .. cannot properly be de- duced therefrom, then the computation shall be made upon such basis and in such manner as the Income-tax Oiﬁcer may determine.
(2) Where the Income-tax Oﬂicer is not satisﬁed about the correctness or the com leteness of the accounts of the assessee, or where no met 0d of accounting has been re- gularly employed by the assessee, the Income-tax Oﬂicer may make an assessment in the manner provided in sec- tion 148 [23(4) main para, part regarding best judgment assessment].
\ Where an assessee assessed under section 148 [23(4)] makes an application to the Income-tax Officer, within one month from the service of a notice of demand issued in consequence of the assessment, for cancellation of the assessment on the ground---
(i) that he was prevented by suﬂicient cause from making the return required by section 143 [22], or
(ii) that he did not receive the notice issued under section 146(1) [22(4)] or section 147 [23(2)], or
(iii) that he had not a reasonable opportunity to comply, or was prevented by sufﬁcient cause from comply- ing, with the terms of the ....... .. notices referred to in clause (ii), --
the Income-tax Officer shall, if satisﬁed about the exis-
tence of such ground, cancel the assessment and proceed to make a fresh assessment in 'accordance with the provi-
sions of sections 147 and 148 [section 23] If--
(a) the Income-tax Officer has reason to believe; that by reason of the omission or failure on the part of an assessee to make a return of his income tmder section 143 [22] for any assessment year or to dis- close fully and truly all material facts necessary for his assessment for that year, income .... .. char-
geable to tax has escaped assessment for that year, or
(b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Oﬁicer has in§con- sequence of informatipn in his possession reason I91 Clauses 152-155 to believe that income . .. chargeable to tax has escaped assessment for any assessment year.
. . . . . . . . . . ..
he may, subject to the provisions of sections 153 to 159 [9- 34 [other sections in group dealing with escaped in- 22"] come] assess or reassess such income ....... .. or recompute P the loss or the depreciation allowance, as the case may be, - for the assessment year concerned (hereafter in sections 153 to 159 [other sections in the group for escaped income] referred to as the relevant assessment year).
(1)para 0 Ea:planation.---Production before the Income-tax Ofﬁ- [s. 4 (1) cer of account books or other evidence from which mate- Expll rial evidence could with due diligence have been discover- ed by the Income-tax Officer will not necessarily amount to disclosure within the meaning of this section.' ............ ..
' For the purposes of section 152 [section regarding in- Section :53. come escaping assessment], the following shall also be "1I!°°m'= deemed to be cases where income chargeable to tax has h';_ escaped assessment, namely----
sessmcnt"
Meaning.
(a) where income .... ..chargeable to tax has been un- 34 (,)_ der-assessed; or rs! pan, clause (3.),
(b) where such income .... .. has been assessed at too part, and low a rate ; or - clause (b), part].
(c) where such income has been made the subject of excessive relief under this Ant; or
(d) where excessive loss or depreciation allowance has been computed. c (1) Before making the assessment, reassessment, or re- SW50" I53, computation under section 152 [section regarding income whm escaping assessment], the Income-tax Officer shall serve on g,-Nome M, the assessee, or, if the assessee is a company, on the prin- esqaped as- cipal officer thereof; a notice containing all or any of the ==Sm¢nt~ requirements which may be included in a notice under [:1 34 (1), section 143(2) [section 22(2)]; and the provisions of this '°¢°"d P3"- Act shall, so far as may be, apply accordingly as if the 94"] notice were a notice issued under that sub-section.
(2) The Income-tax Oﬂicer shall, before issuing any [so 34 (I) notice under this section, record his reasons for doing so... must PE§i")' ' part.) \ (1) The notice under section 154 [section regarding So'ction_ 355. notice] may, subject to the provisions of sub-section (2)'f"m°'1!m" and of section 157 [section regarding sanction], be issued-- °'"°"°°'
(a) in cases falling under clause (a) of section 1525* 34 ('ls [section .... .. regarding' income escaping assess- ;°:,°t3'd pan' ment],----
(i) at any time, if the 'ncome..,.......chargeab1e to tax [" 34 M' "' . . . cl which has escape assess ent or has been un-( °v' 1:3:
der-assessed or asﬁassed a gtpo a low rate or hash i put] 3 [s. 34 (1), ist Ptov., clause
(ii), latter half, part-
modiﬁed] 0 II of 1922 [S' (I): [st Prov. Cl. (ii) earlier half] ' [s- 34 (I) second para, part] [s~ 34 2nd l'rov.] Section 156.
Provision for cases where assessment is in pursuance of an order on appeal etc_ [s- 34 <3)» 2nd Prov.
latter half, part Section 157.
Sanction for issue of notice.
[s. 34, (i), ist Prov. .
(iii), part] (1)5.
192Clauses 155-157 been made the subject of excessive relief under this Act, or the loss or depreciation allowance which has been computed in excess, amounts to or is likely to amount to ﬁfty thousand "upees or more for the relevant assessment year;
within a period of sixteen years fromthe end of the relevant assessment year, where the case does not fall under sub-clause (i) of this clause and the income chargeable to tax which has escaped assessment or has been under-assessed or assessed at too low a rate or has been made the subject of excessive relief under this Act or under the Indian Income-tax Act, 1922, or the loss or depreciation allowance which has been computed in excess under this Act or under the said Act, amounts to or is likely to amount to one lakh of rupees or more in the aggregate for the sixteen assessment years (including assess- ment years under the said Act) immediately pre- ceding the assessment year in which such notice is issued; ' within a period of eight years from the end of the relevant assessment year, in any other case;
(b) in cases falling under clause (b) of section 152 [section regarding income escaping assessment], within a period of four years from the end of the relevant assessment year.
(2) .... ..If the person on whom a notice under section 154 [section re: notice] is to be served is a person tredted as the agent of a non-resident under section 173 [s.,43] and the assessment or reassessment to be made in pursu- ance of the notice is to be made on him as agent of such non-resident, the notice shall not be issued after the ex- piry of a' period of two years from the end of the relevant assessment year. ' Notwithstanding anything contained in sub-section; (1) or sub-section (2) of section 155 [preceding section], :but subject to the provisions of section 157, [section regar ing sanction], the notice under section 154 [section regar ing notice] may be issued at any time for the purpose of mak- ing an assessment or re-assessment on the assessee or 'any person in consequence of or to give effect to any ﬁnding or direction contained in an order under section 259, 3263 269, 271, or 272 [section 31, 33, 33A, 33B, 66 or 66A] passed in the case of the assessee. '
(ii)
(iii) (1) No notice shall be issued under section 154 [sec-
tion regarding notice] after the expiry of eight years from the end of the relevant assessment year, unless the Gen- tral Board of Revenue .... .. is satisﬁed on the reasons re-
; corded by the Income-ma: that ittis a ﬁt case or the issue of such notice} 193 Clauses 157-160 (2) No notice shall be issued under section 154 [section 34 (I)..lSt _ regarding notice] after the expiry of four years from the 'Um' end of the relevant assessment year, unless the Commis- sioner is satisﬁed on the reasons recorded by the Income- tax Officer that it is a ﬁt case for the issue of such notice.
(1) In an assessment or re-«assessment made under Section 158' section 152 [section regarding income escaping assessment], 0.93" Pm' the tax shall be chargeable at the rate or rates at which it '"s'°"s would have been charged had the income .... ..not escaped as- ['r'o5:4](') 2"' sessment or full assessment, as. the case may be. P ' (2) Where an assessment is reopened in circumsta_n-- [8- 34 (2)1 ces falling under clause (b) of section 152 [section regard- ing income escaping assessment], the assessee may, if he has not impugned any part of the original assessment order for that year either under sections 254 to 256 [30] or under section 272 [33A], claim that the proceedings under section 152 [section regarding income escaping assessment] shall be dropped on his showing that he had been assessed on an amount or to a sum not lower than what he would be right- ly liable for even if the items alleged to have escaped asses- sment had been taken into account, or the assessment or computation had been properly made:
Provided that in so doing he shall not be entitled to reopen matters concluded by an order under section 271 [33B] or section 161 or 162 [35] or -by a decision under section 263 [66] or section 269 [66A].
An assessment or re-assessment under section 152 Sfclion I59« [section regarding income escaping ssessment] shall be ga ff' mg:
completed within the time, if any, limi ed by section 160 [34 1- , go, ' E2" p:l'ction.
(1) No order of assessment .... .. shall be made under Section' _z69. section 147 or 148 [23] .... .. at any time after-- 4 E1r'1|°cOn1l'p'1£1;f
(a) the expiry of _four years from the end of the ass-"O Ofasserslz essment year in which the lnqoine ....... .. was ﬁrst 2°-"' mints assessable; or [,_ 34 (3), main para, parﬂ
(b) the expiry of four years fromthe issue of a notice [Now] under section 283(1) [28(3)], 'n, a case falling under (Contrast _s. section 280(1) (c) [s. 28(1) (c)]; or 34- 3): "W"
_ pa , words "o cr than _ _ . . applies").
(c)]the expiry of one year from the date of the ﬁling [NW] of a return or a revised return under section 143 (4) [23(3)];
whichever is latest.
(2)' No order of assessment or re--assessment shall be [NW] made under section 152 [section re :=-income escaping as- , sessment]-- =' _ i -, ' '
(a) where the assessrnewit or 1-e+1fsessment is to be (3), para, [=- , 34 main part] [s.
[St 34 (3), Prov.] [s- 34 (3).
and Prov.
earlier half] is. 34 (3).
ov 2nd .
latter half, part] [s. 5 (7C):
2nd Prov.] [New] [New] 194 Clause 160 made under clause (a) of that section .... .., [sec- tion re: income escaping assessment], after the expiry of four years from the end of the assess- ment year in which the notice under section 154 [section re: notice] was served;
(b) where the assessment or re-assessment is to be made under clause (b) of that section [section re:
income escaping assessment], after--
(i) the expiry of four, years from the end of the assessment year in which the income was first assessable, or the expiry of one ear from the date of service of the notice un er section 154, [section re: notice], whichever is later.
( 3) The provisions of sub-sections (1) and (2) shall not apply to the following classes of assessments and re-assess- ments, which may be completed at any time-
(i) where a re-assessment is made under section 15] ( ii) 3
(ii) where the assessment or re-assessment is made on the assessee or any rson in consequence of7or to give effect to any ding or direction contained in an order under section 259, 263, 269, 271, or 272 [section 31, 33, 33A, 33B, 66 or 66A].
Explanation 1.-- ....... .. In computing the period of ii- mitation for the purposes of this section, the time talien in reopening the whole or any part of the proceedin 101- in giving an opportunity to the assessee to be rehear under section 133, Proviso [5 (7C) 1st Prov.], or any period dur- ing which the assessment proceeding is stayed by an order or injunction of any court, shall be excluded.
Explanation 2.---Where, by an order under section 259, 263, 269, 271 or 272, [31 section 33, section 33A, section 33B, section 66 or section 66A] any income is excluded from the total income of the assessee for an assessment year, then, an assessment of such income for another as- sessment 'year shall, for the purposes of section 156 and this section [34(3), 2nd Proviso, latter half both parts], be deemed to be one made in consequence of or to give eﬁect to any ﬁnding or direction contained in the said order.
Explanation 3.--Where, by an order under section 259, 263, 2.69, 271 or 272, [31, section 33, section 33A, section 33B, section 66 or section' 66A] any income is ex- cluded from the total. income of one person and heldto be the income of another person, then an assessment of such income on such othergperson, hall, for the purposes sec- tion 156 and this seetion [ (3), 2nd Proviso, latte half 195 Clauses V160-161 both parts] be deemed to be one made in consequence of or to give etfect to any ﬁnding or direction contained in the said order, provided such other person was given an opportunity of being heard before the said order was passed.
(1) With a view to rectifying any mistake apparent Section' 16:.
_ Reotiﬁcation from the record of mimkc
(a) the Income-tax Oﬁicer may amend any order of |_s. .35 (1), assessment or of refund or any other order, passed mam Para» by him.' Pm]
(b) the Appellate Assistant Commissioner may amend [s. 35 (1)' any order passed by him in appeal under section main para' 259 [31]; ' Pm]
(c) the Commissioner may amend any order passed by [.. 35 (1), him in revision under section 272 [33A] or section main Para.
271 [33B]. Pm] . (2) Subject to the other provisions of this section, the [,_ 35 m authority concerned-- main para
(a) may make an amendment Imder sub-section (1) P of its own motion, and
(b) shall make such amendment for rectifying any . such mistake which has been brought to its notice by the assessee.
(3) An amendment which has the eﬁect of enhancing [-5- 35 (I). m an assessment or reducing a refund or otherwise increas- P'°'-1 ing the liability of the assessee, shall' not be made under this section unless the authority concerned has given no-
tice to the assessee of its intention so 120 do and has allow-
ed the assessee a reasonable opportunity of being heard.
(4) Where an amendment is made under this section, [Neil] an order shall be passed in writing by the Income-tax authority concerned. ' (5) Where any such amendment has the effect of re-[s- 35 (§)] ducing the assessment, the Income-tax Officer shall make any refund which may be due to such assessee.
(6) Where any such amendment has the effect of en- [3, 35 (4)1 hancing the assessment or reducing' a_ refund already _ * made, the Income-tax Ofﬁcer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be issued under section 163 [section 29], and the provi- sions of this Act shall apply accordingly.
(7) Save as otherwise provided in section 162 or sec- [seqa 35 (1), tion 193 (4), [s. 35(5) to 35(10) or see. re: cancellation ofmmﬁ P3"- registration], no amendment under t is section shall be pm] made after the expiry of four; years am the date of the order sought to be amended. 2 1 Section 162.
other amend-
mcnts [s- 35 (5)1 [New] [s- 35 (3)1 196 Clause 162 (1) Where in respect of any completed assessment of a partner in a ﬁrm it is found-
(a) on the assessment or reassessment of the ﬁrm, or
(b) on any reduction or enhancement made in the in- come of the ﬁrm under section 161(1), 259, 263, 269, 271 or 272, [section 31, section 33, section 33A, section 33B, section 66, section 66A -or section 35(1)], that the share of the partner in the income of the ﬁrm has not been included in the assessment of the partner or, if included, is not correct, the Income-tax Oﬂicer may amend the order of assessment of the partner with a view to the inclusion of the share in the assessment or the correction thereof, as the case may be; and the provisions of - ection 161 [35(1) to (4)] shall, mutatis-mutandis, apply t ereto, the period of four years speciﬁed in sub-section (7) of that section being recluoned from the date of the ﬁnal order passed in the case of the ﬁrm.
(2) Where in respect of any completed assessment of a member 0)' an association of persons it is found-
ia) on the assessment or re-assessment of the associa- tion, or
(b) on any reduction or enhancement made in t e in- come of the association under section 161(1 , 259,
263. 269. 271 or 272, [section 31, section 33, section 33A, section 33B, section 66, section 66A or spcti-on 35(1)} i that the share of the member in the income of the ; asso- ciation has not been included in the assessment of the E'mem- be)" or, if included, is not correct, the Income-taa: er may amend the order 0')' assessment of the member ith a view to the inclusion of the share in the assessment 7' the correction thereof, as the case may be; and the prquisi in of section 161 [35(1) to (4)] shall, mutatis-mutandis, pply thereto, the period of four years specified in sub-secti (7) of that section_being reckoned from the date of theg final order passed in the case of the association : z > Provided that nothing in this sub-section shall iaﬁect the provisions of section 87, clause (v) [14(2)(b)]. ' (3) Where, as a result of proceedings initiated nder clause (a) of section 152, [section corresponding to exvsting section 34(1) and (2)] ' ......................... .. a ﬁrm or an;asso- ciation of persons is assessed orreassessed .......... .., and the Income-tax Otﬁcer concerned is of opinion that it is necessary to compute or recompute the total income of a partner in the ﬁrm or a mem er of the association oligar- sons, ............. .. as the case 1' be, the Income-tax G cer may proceed to compttte or r pute the total income' and I . E ?
1 197\ Clause 162 determine the sum payable on the basis of such computation
- or recomputation and make the necessary amendment; and the provisions of section 161 [35(_1) to (4)] shall mutatis- mutandis apply thereto, the period of four years speciﬁed in sub-section (7) of that section being reckoned from the date of the ﬁnal order passed in the case of the ﬁrm or association, ................ .. as the case may be.
(4) Where the Income-tax Officer is satisﬁed that the [S- 35(9)] income-tax payable by a company on its proﬁts and gains out of which the company has declared a dividend, has not been paid within three years after the ﬁnancial year in which the dividend was declared -or within one year after the ﬁnancial year in which the assessment of the company for the assessment year concerned was made, whichever is later, the amount of income-tax which a shareholder of the company is deemed himself to have paid in respect of such dividend under section 246 [49B], or the amount for which credit is due to him under section 246 [sub-section (5) of section 18] in respect of such dividend,'sha1l be deemed to have been wrongly computed; and the Income--tax Oﬁicer may, notwithstanding anything contained in this Act, pro- ceed to recompute such amount by reducing it in the same proportion as the amount of income-tax remaining unpaid by the company bears to the amount of income-tax'payable by it on such proﬁts and gains, and make the necessary amendment: ............. .. and the provisions of section 161 [35(1) to (4)] shall mutatis mutandis apply thereto, the pe- riod of four years speciﬁed in sub-section (7) of that section being reckoned from the date on which the period of three years aforesaid has expired or the date on which the period of one year aforesaid has expired, whichever is later.
(5) Where an allowance by way of development rebate [1 35 has been made wholly or partly to an éassessee in respect of a ship, machinery or plant in any assessment year under section 33 [clause (vib) of subsection (2) of section 10], and subsequently at any time before the expiry of ten years from the end of the previous year in which the ship was ac- quired or the machinery or plant was installed-
(i) the ship, machinery or plant is sold or otherwise transferred by the assessee to any person other than the Government: or
(ii) the assessee utilises the amount credited to _the reserve account under the said section read with section 34 [section for conditions]-
(a) for distribution by way of dividends or proﬁts; or
(b) for remittance outside India as proﬁts or for the creation of any asset outside India; or (C) for any other purposekwhich " snot a purpose of the business of the un rtakin _ a (")1 198 Clauses 162-166 the development rebate originally allowed shall be deemed to have been wrongly allowed, and the Income-tax Ofﬁcer may, notwithstanding anything contained -in this Act, .... .. ....... .. recompute the total income of the assessee for the relevant previous year and make the necessary amendment; and the provisions of section 161 [s. 35(1) to (4)] shall, muta- tis mutandis, apply thereto, the period of four years speciﬁed' in sub-section (7) of that section being reckoned from the end of the previous year in which the transfer takes place or the money is so utilised.
[NW] (6) Where any such debt or part (Of debt as is referred to in section 36(6)(i) [sub-clause (i) of clause (6) of secti-on relating to deductions from business] is written 011' as irre- coverable in the accounts of the assessee for a previous year, and the Income-tax Oﬂicer is satisﬁed that such debt or part thereof became a bad debt in an earlier previous year, the Income-tax Oﬂicer may, notwithstanding anything con- tained in this Act, allow such debt or part of debt as a deduction for such earlier previous year, and recompute the total income of the assessee for such earlier previous year and make the necessary amendment; and the provisions of section 161 [35(1) to (4)] shall, mutatis mutandis,: apply thereto, the period of four years speciﬁed in sub-section (7) of that section being reckoned from the end of the previous year in which the debt is actually written oﬂ' as irrecover-
able.
Section 163- When any tax, penalty or interest is due in consequence §°"°°d ''f of any order passed under or in pursuance of this Act, the "m" ' Income-tax Officer shall serve upon the assessee ..; .... .. a I" 29] notice of demand in the prescribed form specifying the sum so payable.
section ,54_ When, in the course of the assessment of the total in- Intimation of come of any assessee, it is established that a loss .......... .. 1059- has taken place which the assessee is entitled to have carri-
[s- 24 (3)] ed forward and set off under the provisions of section 73(2), 74(2) or 75(2) [24(2) (2B)], the Income-tax Officer shall notify to the assessee by an order in writing the amount of the loss as computed by him for the purposes of section 73 (2), 74(2) or 75(2) [24(2), (2B)].
Section _x65. Whenever a registered ﬁrm is assessed, or an unregister- 1'""'""'°'t' ed ﬁrm is assessed under the provisions of_ section 190(b) 2';f:'m°" [23(5)(b)], the Income-tax Officer shall notify to the ﬁrm 6 ] by an order in writing the amount of its total income ....... .. B' 23 ( ) assessed and the apportionment thereof between the several partners. .
Section 166. (1) The person responsible for paying any interest, Information not being "Interest on securities", shall, on or before the 3' '°'"""'*- ﬁfteenth day of June in each year, furnish to the Income-
[8- 20A and tax Ofﬁcer having jurisdiction to assess him, a return, in .
fax?' 4" & the prescribed formdand veriﬁed in the prescribed manner, of the names and a dresses pf all persons to whomiduring I 199 Clauses 166-167 the previous ﬁnancial year he has paid interest or aggregate interest exceeding such amount, not being less than four hundred rupees, as may be prescribed in this behalf, to- gether with the amount paid to each such person.
(2) The prescribed person in the case of every Gov-- [s_ 2,_] ernment office, and the principal officer or the prescribed person in the case of every local authority, company or other public body or association, and every" private employer shall prepare. and within thirty days from the 31st day of
- March in each year, deliver or cause to be delivered to the Income-tax Oﬁicer in the prescribed form and veriﬁed in the prescribed manner, a return in writing shoWing----
(a) the name and, so far 3 it is known, the address, of every person who was receiving on the 31st day of March, or has received or to whom was due during the year ending that date, from the Govern- ment, the authority, company, body, association or private employer, as the case may be, any income chargeable under the head "Salaries" of such amount as may be prescribed; -
(b) the amount of the income so received by or so du to each such person, and the time or times at which the same was paid or due, as the case may be;
(c) the amount deducted in respect of income~tax and super-tax from the income of each such person.
(3) Where an employer deducts from the emoluments [, 53¢} paid to an employee or pays on his behalf any contribu- tions of that employee to an approved superannuation fund, he shall include all such deductions or payments in the return which he is required to furnish under sub- section (2), as provided by section 314 [58T].
(4) The principal oﬁicer ofevery company which is an [,_ ,9A1 Indian company or a company which has made such effec- tive arrangements as may be prescribed for the declara- tion and payment of dividends in India shall, on or before the 15th day of June in each year, furnish to the rescribed ' officer a return in the prescribed form 'and veri ed in the prescribed manner of the names and of the addresses, as entered in the register of shareholders maintained by the company, of the shareholders to whom a dividend or aggre- gate dividends exceeding such amount may be prescribed in this behalf has or have been distributed during the pre-
ceding year and of the amount so distributed to each share- holder.
The principal ofﬁcer of every company shall, at the Section :67. time of distribution of dividends, furnish to every person Ceftiﬁvatebv receiving a dividend a certiﬁcate to the effect that the :§;"l_;P::]';,m'° company has paid or will pay income-tax or that no income- me, - tax is payable (as the case may be) on proﬁts which are divi ndl. being distributed and specifying such er particulars as [., 2 may be prescribed. - i ' ' Section 168.
Legal repre-
sentatives.
[s- 243 (1), part] z[3i«iisB>i2)' [New] [New] Is- 24 B (I).
pm] IS- 943 (I).
13.4"] 200 Clause 168 CHAPTER XV LIABILITY IN SPECIAL CASES A----Legal representatives.
(1) Where a person dies, his ................ ..legal repre- sentative shall be liable to pay any tax, penalty or other sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased.
(2) For the purpose of making an assessment (includ- ing an assessment under section 152 [section 34] ) of the in- come of the deceased and for the purpose of levying any tax, penalty or other sum in the hands of the legal repre- sentative in accordance with the provisions of sub--section (1)):
(a) any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be con- tinued against the legal representative from the stage at which it stood on the date of the death of the deceased; :
(b) any proceeding which could have been 'taken against the deceased if he had survived, may be taken against the legal representative; and
(c) all the provisions of this Act shall apply accdrding- ly. ' (3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessce.
(4) The provisions of sub-section (3) of section 170 [section relating to liability ofrepresentative assesse , sub- section (3)], section 171 [new section regarding ri ht of representative assessee to recover tax paid] secti 172, [new section providing when representative asse ee is personally liable] and section 176 [new section rela 'ng to remedies against properties in case of representati e as- sessee] shall, so far as may be and to the extent to hich they are not inconsistent with the provisions of this sec- tion, apply in relation to a representative assesseeg (5) The liability of a legal representative under this section shall, subject to the provisions of sub-section (4), be limited to the extent to which the estate is capable of meet- ing the liability.
(6) In this Chapter, "legal representative" includes an executor or adminisvtatnr. " ,.
201Clauses 169-170 B----Representative assessees--General provisions.
"(1) For the purposes of this Act, "representative asses- Section :69. see means-- 'fRepresenta-
_ _ _ . . tlve assessee.
(1) in respect of the income of a non-resident specified [$420) main in section 9(1) [Section 42(1), mam para, earlier para, latter part], the agent of the non-resident, including a per- half» Part] son who is treated as such under section 173 [43];
(ii) in respect of income of a minor, lunatic or idiot, the [s. 4.0 (u), guardian or committee or manager or trustee who part] is entitled to receive or is in receipt of such income on behalf of such minor, lunatic or idiot;
(iii) in respect of income ......................... .. which the [s- _4l (1): Court of Wards, the Administrator-General, the ":;'t']'iP""» Ofﬁcial Trustee or any receiver or manager (in-P cluding any person. whatever his designation, who in fact manages property on behalf of another) appointed by or under any order of a court, ....... .. ................ .. receives or is entitled to receive, on behalf of any person, ............. .. such Court of Wards, Administrator-General, Official Trustee, re- ceiver or manager ...................... ..;
(iv) ............. .. in respect of income which a trustee or [5, 4, (0 trustees appointed under a trust declared by a main para. duly executed instrument in writing whether tes- Pm] tamentary or otherwise (including any Wakf deed which is valid under the Mussalman Wakf Valid- ing Act, 1913) receive or are entitled to receive on 6of!9I3 behalf of any person, ................ .. such trustee or trustees ................ ..
(2) Every representative assessee shall be deemed to {New-of. s. 42 be an assessee for the purposes of this Act. ')1 (1) Every representative assessee, as regards the in- Section :70. come in respect of which he is a representative assessee, Liability of shall be subject to the same duties, responsibilities and lia- ;§,';'¢'°"'"' V bilities as if the income were income received by or accru- I "s°"°°' ing to or in favour of him beneﬁcially, and shall be liable £5'; S)'InP;'; to assessment in his own name in respect of that income; pg, ' pm, but any such assessment shall be deembd to be made upon 5.4.2 I),main him in his representative capacity onl 1', and the tax shall, Pam 13"" subject to the other provisions contai ed in this Chapter, half'? Pm] be levied upon and recovered from him in like manner and to the same amount as it would be leviable upon and re- coverable from the person represented by him.
(2) Any tax payable in respect of any such assessment [New] shall be recoverable from the representative assessee, but to the extent only of assets be onging to the person whom he represents which may be 0 may j in his possession or under his management, di al or» ntrol:
202Clauses 170-173 Provided that nothing in this sub-section snall aﬂect the provisions of section 172 ........................................... .. [newly added section laying down when representative as- sessee personally liable.] [New] (3) Where any person is, in respect of any income, as- sessable under this (ﬂiapter in the capacity of a represen- tative assessee, he shall not, in respect of that income, be assessed under any other provision -of this Act.
Section m.  Any representative assessee, or any PIOV-] person who apprehends that he may be assessed as a repre- sentative assessee, may retain out of any money payable by him to the person on whose behalf he is liable to pay tax (hereinafter in this section referred to as the principal), 'a sum equal to his estimated liability under this Chapter, and in the event of any disagreement between the principal and such representative assessee or person as to the amount to be so retained, such representative assessee or gerson may secure from the Income-tax Oﬁicer a certiﬁcate ating the amount to be so retained pending final settlement of the liability, and the certiﬁcate so obtained shall be his warrant for retaining that amount. -
[5- 42 (1): 31d (3) ................... .. The amount recoverable from such p'°"'] representative assessee or person at the time of ﬁnal settle- ment shall not exceed the amount speciﬁed in such certi- ﬁcate except to the extent to which such representative assessee or person may at such time have in his hands addi- tional assets of the principal.
Section 172. Every representative assessee shall be personally;lia'.ble sV;'x*l't";':iv'c°P'°' for any tax_ payable by him in his representative cazacity, if, while his liability for tax remains undischarge , he :::=as1sl:rc1i§§1r; charges, disposes of or parts with any assets, which are in [Ncw] his possession or come to him after the tax is payablej when from or out of such assets, the tax could legally have been paid. .
C-----Representative assessee--special cases. Section I73.
Who may be (1) For the purposes of this Act, "agent", in relation to.
gggﬁded 35 a non-resident, includes any person in India--
[s. 43 main (a) who is employed by or on behalf of the rwn-resi- para] dent, or
(b) who has any business connection with the non- resident, or _ 203 Clauses 173-174
(c) through whom the non-resident is in receipt of any income, .................. ., ..... .. or
(d) who is the trustee of the non-resident ............. .. : [s. 40 (2)) Provided that a broker in India who .......... .., in res- [s.43,» lst pect of any transactions, does not ................ .. deal directly P'°"-1 with or on behalf of a non-resident principal but deals with or through a non-resident broker ................ .. shall not.be deemed to be an agent under this section in respect of such transactions, if the following conditions are fulﬁlled, name- ly :--
(a) the transactions are carried on in the ordinary course of business through the first-mentioned broker; and '
(b) the non-resident broker is carrying on such tran- sactions in the ordinary course of his business and not as a principal. .
E.7:planation.----A person, whether a resident or a non- [s.4_-,,I-'.xpIn.] resident, who acquires ...................... .. whether by sale, A 1 exchange, ...................... .. transfer or relinquishment, a capital asset in India from a non-resident shall, for the pur- poses of charging to tax the capital gain arising from such sale, exchange, ................ .. transfer or relinquishment, be deemed to have a business connection, within the meaning S of this section, with such non-resident. .
(2) .......... .. No person shall be treated as the agent 3.43, 2nd of a non-resident ................... .. unless he has had an' oppor- p,°._] tunity of being heard by the Income-tax Ofﬁcer as to his liability to be treated as such.
................... .. Where any incomexin respect of which See on :74. the persons mentioned in section 169 1) (iii) and (iv), [S. Ch eof tax 41(1) Part, as embodied in the clauses , ling with Court of '"f "ih¥° Wards etc. and trustees in the newly added section deﬁning "° °"' representative assessee] are liable as éepresentative asses- [5 2 m m sees, or any part thereof, is not speciﬁcally receivable on p,',°'$t ,a;.1i,,,. behalf of any one person, or where thefindividual shares of half,: part] the persons on whose behalf sudh income or such part there- of is receivable (which persons are herleinafter in this sec- tion referred to as the beneficiaries) are indeterminate or unknown,-- *
(a) income-taa: shall be charged-- '
(i) ................... .. as if such incoriie .... .. or such [s.4i (If, us: part thereof were the total income of an association Pr°Vg» me!' of persons, or "' h"1f""""] nknown
(ii) if such income or such part thereof is received by [s. 4; (1), _m a beneficiary, then at the rate or rates applicable Pmfv» earhe_r to the beneﬁciary, , haJ,~. m0dl-
' ' ﬁcdli as the Income-tax Oﬂicer may direct; and é 14-] Law Com /58. ' . " ' 204 Clauses 174-178 [New] (b) super-tax shall be charged as if such income or J such part thereof were the total income of an asso- ciation-of persons.» %;°s'ei°"'~ ................ .. Where part only of the income ................ ..
pan of mm of a trust is chargeable under this Act, that proportion only income is of the income, ................... receivable by a beneﬁciary chargeable. from the trust which the part so chargeable bears to the [$.41 (1) 2nd whole income ................ .. of,the trust shall be deemed to PI'°V- have been derived from that part.
D--Representative assessees--General.
Secti°(rl1_I76- _The Income-tax Oﬂicer shall have the same remedies §g°;':St'°;w_ against all property of any kind vested in or under the con- pmyin cases trol or management of any representative assessee as he of xepresema- would have against the property of any person liable to pay fivc assessew any tax, and in as full and ample a manner. [New] lS)°_¢ti°" 177- Nothing in the foregoing sections in this Chapter shall prevent either the direct assessment of the person on whose mi behalf income .......... ..therein referred to is receivable, or [MI (2) and the recovery from such person of the tax payable in respect s.4.2(1), main Of such income .......... .. ' para, latter :':::nde,f']"" ' E------Executors. K Section 178. (1) Subject as hereinafter provided, the income of the Ex<=°"l°r-S estate of a deceased person shall be chargeable to tax in the [New] hands of the executor,-
(a) if there is only one executor, then as if the executor were an individual, or
(b) if there are more than one executor, then as if the executors were an association of persons.
(2) -The assessment of an. executor under this section shall be made separately ;from any assessment; that may be made on him in respect of his own income. g , (3) Separate assessments shall be made under th sec-
tion on the total income of each completed previous y ar or part thereof as is included i ' the period from the the death to the date of co ete distribution to the ciaries of the estate according to their several inter te of eneﬁ-
sts.
(4) In computingtthe total income of any prev' year under this section, a inco ' of the estate of that pr ious year distributed to, I applie to the beneﬁt of, an bene- ﬁciary of the estate during that previous year s ll be excluded; but the income so excluded shall be inclu d in the total income of the previous year of such beneﬁ ry.
Explanation.--In this section, "executor" includes an administrator or other person administering the estate of a ,deceased person. 'I I r 205 Clauses 179-180 The provisions of section 171 [New section' authorising S<2°ti°n 179. a representative assessee to recover tax paid from the prin- exfcum for cipal] shall, mutatis--mutand_is, apply in the case_ of an exe-- ,e¢ov¢,. tax cutor in respect of tax paid or payable by him as they paid. apply in the case of a representative assessee. . [New] F---Succession to business, profession or vocation.
(1) Where a person carrying on any business, profes- Section; :80. sion or vocation, (such person hereinafter in this section 5"".°°"'°" '° being referred to as the predecessor) has been succeeded °:';f;fji:c therein by another person (hereinafter in this section refer- thgnondmh red to as the successor) who continues to carry on that busi- [s. _ 26(2), ness, profession or vocation, the predecessor and the succes- mam Pm] sor shall. subject to the prov'sions of sections 13(2), 13(3), 91(1) and 100 [section 25(4)] each be assessed in respect of his actual share, if any, of the income ................... ..of the previous year, that is to say ,--
(a) the predecessor shall be assessed in respect of the income of the previous year upto the date of succes- _ sion, and l
(b) the successor shall be assessed in respect of the in- come of the previous year after'. the date of succes- sion. ' (2) Notwithstanding anything contained in sub-section [s- 26(f2). (1), when the predecessor carinot [be lound, the. assessment °'""'°" of the income of the previous ,year in which the succession , took place upto the date of succession, dnd for the previous year preceding that year shall? be maxieion the successor in like manner and to the same amount dsiit would have been made on the predecessor .......... ..
(3) .......... ..When the tax in respect of the income of [I-2 25(2)» such business, profession or vacation, or the previous year ha] '""°' in which the succession took lace up, jthe date of succes- sion or for the previous year A ceding that year, assessed on the predecessor. cannot be re vered rbm him, it shall be r payable by and recoverable rom t afsuccessor, and the successor shall "be entitled to recover' rbm the predecessor the amount of any tax so pdid. I J (4) .......... ..Where any ..... ..',....business, profession or vo- l*- 25-4(2)», cation ................... ..carried oniby a ; du undivided family 'If 1 P""' ............. ..is succeeded to, and isimulta. _ ' ly with the suc-- , cession or after the succession there» ' been a partition of the joint family propert betwe the members or groups of members, the tax d in re ' ' profession or vocation succee ed to j; o the date of suc- cession shall be assessed and iiecover in the manner pro- vided in section 181(4) and 1 (6) [s ' 'on 25A(2), remain- ing part, as embodied in secti 'on tion], but without prejudice to the provisions oft is se ' i 206 Clause 181 G--Partition.
(1) .......... ..A Hindu family hitherto assessed as undivi- afmpmition ded .......... ..shall be deemed, for the purposes of this Act, of a Hindu to continue to be a Hindu undivided family, except where tgmd_ilvided and in so far as a ﬁnding of partition has been given under am: . ' ' ' ~ -
[s_ 25YA(3)} this section in respect of the Hindu family.
[s. 25A(1), (2) Where, at the time of making an assessment under "'"_i." Pa" section 147 or 148 [23], it is claimed by or on behalf of '5" '°' Pm] any member of a Hindu family .......... ..assessed as undivid- ed that a partition. whether total or partial, has taken place among the members of such family, the Income--tax Ofﬁcer [S- 25A(I).- shall make an inquiry thereinto .......... ..after giving notice I"°"'] of the inquiry to all the members of the family.
ls-_ 25-4(1)» (3) On the completion of the inquiry, the Income-tam P333' Officer shall record a ﬁnding as to whether there has been a total or partial partition of the joint family pnoperty, _and, if there has been such a partition, the date on which it has taken place. ' [s- , 25A(2)» (4) Where a finding of total or partial partition has been magi Pam» recorded by the Income-tax Ofﬁcer under this section and pa the partition took place during the previous year,-
(a) .......... ..the total income received by or on behalf of the joint family in re V ect of the period upto the date of partition shall e assessed as if no partition had taken place; and [s-_ 25A(2) (b) each member or group of members shall, 'in addition Pam to any tax for which he or it may be separately P liable and notwithstanding anything contain in section 11. clause (2) [section 14(1)], be jointlyé and severally liable for .......... ..the tax on the income so assessed .............. .. » [New] (5) Where a ﬁnding of total or partial partition i has been recorded by the Inncome-tax Officer under this se tion and the partition took place after the expiry of the pr ious year, the total income of the previous year of the oint family shall be assessed as if no partition had taken p cc: and the provisions of clause Eb) of sub-section (4) all, mutatis mutandis, apply to the case.
is. 2sA<2>, (6) For the purposes of clause (b) of sub-sectioni-(4), mm" para' the several liability of any member or group of members.
[s. 25A(2), Prov.] pm] thereunder shall be computed according to the portion of _the joint family property allotted to him or it at the partqtion. [New] (7) After a ﬁnding of total partition has been recdrded by the Income-tax Oﬂicer under this section in respect of any Hindu family, the Income_~taac Oﬂicer having ju ' dic_- tion to assess the Hi family shall, subject to the pom-
sions of section 135(7) 64(5)] ,~_y_~ . 2 ! the 207 Clauses 181-182 / (a) if the Hindu family carried on any business, pro- fession or vocation, be the Income-tax Oﬁicer of the area in which its principal place of business, pro- fession or vocation was situate immediately before the partition; and
(b) in other cases, be the Income-tax Oﬁicer of the area in which the person who was the last manager of I the Hindu family was residing immediately before the partition.