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REGISTERED No. D. 221

The Gazette of India

EXTRAORDINARY

PART II—Section 3—Sub-section (ii)

PUBLISHED BY AUTHORITY

No. 131] NEW DELHI , MONDAY, MARCH 6,1972/ PHALGUNA 16,1893

Separate paging is given to this Part in order that it may be filed as a separate compilation

CENTRAL BOARD OF DIRECT TAXES

NOTIFICATION

INCOME-TAX

New Delhi, the 6th March, 1972

S.O. 175(E).—In exercise of the powers conferred by section 295 of the Income- tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (Amendment) Rules, 1972.

(2) Save as otherwise provided, these rules shall be deemed to have come into force on the 1st day of April, 1971.

2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), rule 6AA shall be re-numbered as rule 6AC, and before rule 6AC as so re- numbered, the following rule shall be inserted, namely:—

"6AA. Form of audit report for claiming deductions under sections 35D and 35E.—The report of audit of the accounts of an assessee, other than a company or a co-operative society, which is required to be furnished under sub-section (4) of section 35D or sub-section (6) of section 35E shall be in Form No. 3B.".

( 403)

3. After rule 6AA of the principal rules as so inserted, the following rule Bhall bo inserted with effect from the lBt day of April, 1972, namely:—

"86B. Form of audit report for claiming deductions under sections 8OM1M and 80-O.—-The report o£ audit of the accounts of an assessee, other than a company or a co-operative society, which is required to be furnished under sub-section (2A) of section 80MM or sub-section (2) of section 80-O shall be in Form No. 3C".

4. Alter rule 14 of the principal rules, the following rule shall be inserted with effect from the 1st day of April, 1972, namely.—

"14A- Form of application objecting to an assessment made under section 143(17.—The application to be made an assessee under clause (a) of sub-section (2) of section 143, in a case where he objects to an assessment made under sub-section (1) of that nection, shall be in Form No. 6A.".

0. In Part IV of the principal rules,—

(a) for the heading "TAX EXEMPTIONS", the heading "TAX EXEMPTIONS AND HELIEFS" shall be substituted;

(b) after rule 21, the following rules shall be inserted, namely:—

"21A. Relief when salary is paid in arrears or in advance, etc.—(1) Where, by reason of any portion of an assessee's salary being paid in arrears or in advance or by reason of his having received in any one financial year salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, his income is assessed at a rate higher than that at which it would otherwise have been assessed, the relief to be granted under sub- section (1) of section 89 shall be—

(a) where any portion of the assessee's salary is received in arrears or in advance, in accordance with the provisions of sub-rule (2); (b) where the payment is in the nature of gratuity in respect of past services of the assessee extending over a period of not less than five years, In accordance with the provisions of sub-rule (3);

(c) where the payment Is in the nature of compensation received by the assessoe from his employer or former employer at or in connection with the termination of his employment after continuous service for not less than throe years and where the unexpired portion of his term of employment is olso not less than three years, in accordance with the provisions of sub-rule (4);

(d) where the payment is in commutation of pension, In accordance with

the provisions of sub-rule (5); and

(e) where the payment Is not in the nature of salary paid in arrears or In advance or gratuity in respect of past services or compensation received at or in connection with the termination of employment or In commutation of pension, In accordance with the provisions of sub-rule (6).

(2) (a) In a case referred to in clause (a) of sub-rule (1), the tax payable by the assessee on his total income of the previous year in which the salary Is received in arrears or In advance (such salary and such previous year being hereafter In this sub-rule referred to respectively as the additional salary and the relevant previous year) shall be reduced by the amount, if any, by which the tax on the additional salary, calculated in the manner specified in clause (b), exceeds the tax or the aggregate tax on the additional salary, calculated in the manner specified in clause (c) or clause (d), as the case may be.

(b) Tax shall be calculated on the total Income of the relevant previous year as reduced by the additional salary, as If the total Income so reduced were the total Income of the assessee, and the amount by which the tax so calculated falls short of the tax on the total income before such reduction shall, for the purposes of clause (a), be taken to be the tax on the additional salary under this clause.

(c) Where the additional salary relates to only one previous year, tax shall be calculated on the total Income of the said previous year as increased by the additional salary, as if the total income so increased were the total income of the assessee, and the amount by which the tax so calculated exceeds the tax payable by the assessee in respect of the total Income of the said previous year shall, for the purposes of clause (a), be taken to be the tax on the additional salary under thia clause.

(d) Where the additional salary relates to more than one previous year,— (i) the previous years to which the additional salary relates and the amount relating to each such previous year shall first be ascertained; (ii) tax shall, then, be calculated on the total income of each such previous year as increased by the amount relating to such previous year ascertained under sub-clause (i), as if the total income so increased were the total income of that previous year, and

the amount by which the aggregate amount of tax in respect of the aforesaid previous years as calculated under sub-clause (ii) exceeds the aggregate amount of tax payable by the assesaee in respect of the total income of the said previous years shall, for the purposes of clause (a), be taken to be the aggregate tax on the additional salary under this clause.

(3) (a) In a case referred to in clause (b) of sub-rule (1), the tax payable by the assessee on his total Income of the previous year in which the payment by way of gratuity is received (such previous year being hereafter In this sub-rule referred to as the relevant previous year) shall be reduced by the amount, if any, by which the tax on the amount of the gratuity included in the total income of the relevant previous year, calculated at the average rate of tax applicable to such total Income, exceeds the tax on the amount of such gratuity calculated at the rate of tax determined under clause (b) or, as the case may be, clause (c).

(b) Where the payment by way of gratuity is made in respect of past services of the assessee extending over a period of not less than five years but less than fifteen years, —

(i) 1he total income of the assessee in respect of each of the two previous years immediately preceding the relevant previous year shall be increased by ;in amount LT,ual to one-half ol the amount of the gratuity included in the tjtul income of the relevant previous vear and the average rate of tnx for each of the said two previous years shall be calculated us If th- total income so Increased were the total Income of that previous year; and

(11) the average of the average rates of tax for the two previous years immediately preceding the ltlevant previous year, calculated in accordance with sub-clause (1), thai], for the purposes of clause (a), be Ihe rate o[ tax ileffrminocl under this clauie

(c) Where the payment by way of gratuity is made in respect of past years — l e s s ee extending over a period of not less than fifteen

(i) the total income of the trsessee in respect of each of the thre^ previ- ous years immediately preceding Ihe relevant previous year shall b° increased by an amount equal to onp-third of the amount of the gratuity included in the total income of the relevant previous year, and the average rate of tax for each of the said three previous years shall be calculated as if the total income so increased were the total income of that previous year; and

(ii) the EKverage of the average rates of tax for the three previous years immediately preceding the relevant previous year, calculated in accordance with sub-clause d ), shall, for the purposes of clause (a), be the rate of tax determined under this clause.

(4) (a) In a case referred to in clause (c) of sub-rule (1), the tax payable by the assessee on his total Income of the previous year )n which the payment by way of compensation is received (such previous year

being hereafter In this sub-rule referred to as the relevant previous year) shall be reduced by the amount, if any, by which the tux on. the amount of the compensation Included, in the total Income of the relevant previous year, calculated at the average rate of tax applicable to such total income, exceeds the tax on the amount of such compensa- tion, calculated at the rate of tax determined under clause (b).

(b) The total income of the assesses in respect of each of the thiee previous years immediately preceding; the relevant previous year shall be increased by an amount equal to ono-thlrd of the amount of the com- pensation Included in the total income of the relevant previous year, and the average rate of tax for each of the said three previous years shall be calculated as If the total Income so increased were the total income of that previous year; and the average of the average rates of tax so calculated for the three previous years shall, for the pur- poses of clause (a), be the rate of tax determined under this clause.

(5) (a) In a case referred to in clause (d) of sub-rule (1), the tax payable by the assessee on his total income of the previous year in which thet payment in commutation of pension is received (such previous year being hereafter in this sub-rule referred to aa the relevant previous year) shall be reduced by the amount, if any, by which the tax on the payment in commutation of pension included in the total Income of the relevant previous year, calculated at the average rate of tax applicable to such total income, exceeds the tax on the amount of such payment, calculated at the rate of tax determined under clause (b).

(b) The total income of the assessee in respect of each of the three previous years immediately preceding the relevant previous year shall be increased by an amount equal to one-third of the amount of payment In commutation of pension included in the total Income of the relevant previous year, and the average rate of tax for each of the said three previous years shall he calculated as If the total income so increased were the total income oi' that previous year; and the average of the average rates of tax so calculated for the three previous years shall, for the purposes of clause (a), be the rate of tax determined under this clause.

(6) In a case referred to in clause (e) of sub-rule (1), the Board may, having regard to the circumstances of the case, allow such relief as it deems fit.

21B. Relief when interest on. securities Is received- in arrears.—la) Where ^y reason of any portion of an assessee's Income from interest on securities being received in arrears his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the tax payable by the assessee on his total income of the previous year in which the Income from interest on securities is feceived in arrears (such income and such previous year being hereafter In this rule referred to respectively as the additional interest and the relevant previous year) shall be reduced by the amount, If any, by which the tax on the additional Interest, calculated in the manner specified In clause (b), exceeds the tax or tho aggregate tax on the additional interest, calculated in the manner specified in clause (c) or clause (d), as the case may be.

(b) Tax shall be calculated on the total Income of the relevant previous year as reduced by thc^ additional interest, as if the total Income so reduced were th" total income of the assessee, and the amount by which the tax so calculated falls short of tho tax on the total Income before such reduction shall, for the purposes of clause (n), be taken to be the tax on the additional interest under this clause.

(c) Where the additional interest relates to only one previous year, tax shall be calculated on the total Income of the said previous year as increased by the additional interest, as if the total income so Increased were the total Income of the assessee, and the- amount by which the tax so calculated exceeds the tax pay- able by the assessee in respect of the total income of the said previous year shall, for the purposes of clause (a), be taken to be the tax on the additional interest under this clause.

(d}- Where the additional interest relates to more than one previous year,—

(i) the previous years to which the additional interest relates and the amount relating to each such previous year shall first be ascertained; (ii) tax shall, then, be calculated on the total income of each such previous year as increased by the amount relating to such previous year ascertained under sub-clause (1), as if the total income so increased were the total income of that previous year, and

the amount by which the aggregate amount of tax in respect of the aforesaid previous years as calculated under sub-clause (ii) exceeds the aggregate amount of tax payable by the assessee in respect of the total income of the said previous years shall, for the purposes of clause (a), be taken to be the aggregate tax on the additional interest under this clause.".

G. In Appendix II to the principal rules,—

(i) after Form No. 3A, the following form shall be inserted, namely: —

"FORM NO. 3B

[Se? rule OAA]

Audit Report under section 35Df4)/35E(6) of the Income-tax Act, 1961

*I/We have examined the Balance Sheets) of M/s

and the Profit and Loss Account(s) for the as at year(s) ended on* that/those date(s) which are in agreement with the books of account maintained at the head office at and* branches at

*I/We have obtained all the Information and explanations which to the best of *my/our knowledge and belief were necessary for the purposes of the audit. In *my/our opinion, proper books of account have been kept by the head office and the branches of the above-named assessee visited by *me/us so far as appears from *my/our examination of the books, and proper returns adequate for the purposes of audit have been received from branches not visited by *me/us, sub- ject to the comments given below:—

In *my/our opinion and to the best of *my/our information and according to explanations given to *me/us, the said accounts give a true and fair view—

(i) in the case of the Balance Sheet(s), of the state of the above named assessee's affairs as at

; and

(ii) in the case of the Profit and Loss Account(s), of the profit or loss of his accounting year(s) ending on

The statement of particulars required for the purposes of the deduction under section *35D/35E is annexed and in *my/our opinion and to the best of *my/our information and according to explanations given to *me/us, these are true and correct.

P I a ce

Signed

D a te

@ (Accountant)"

1. *Delete whichever is not applicable.

2. (5),Tbis Report is to be given by—

(i) ft Chartered Accountant within the meaning of the Chartered Accountants Act IQ40 (38 of 1949), or

' y⁴bl

(ii) any person who, in relwion to any State, i.v by virtue of the provisions of sub-section (2) of nectlon 226 of the Companies Act, 195ft ' 1 of 1956), entitled to he appointed to act as an auditor of comptnie* registered in that State.

3. Where any of the mutter* srjtert in this Report is answered in the negative or "'with • qualification, the Report shall state the rf*f.ons for the same.

Annexure to form No. 3B

SECTION A

Statement of particulars required for the purposes of deduction under sectiOr jj D

1. Date of commencement of business

"

2. Where the deduction is claimed with reference to the expenditure incurred in connection with the extension of the industrial u n- taking or the setting up of a new industrial unit, the date on which yhe extension was completed or the new industrial unit commenced production or operation

, ,,

r j

03. Qualifying amount of expenditure :

•(a) Expenditure in connection witl —

(i) preparation of feasibility report Rs

(11) preparation of project report Rs

(ili) conducting market survey or any other survey necessary for

the business of the assessce Rs

, .,

(iv) engineering services relating to the business of the asseasee Rs

(b~) Leagal chaigas for drafting any agreement between the asscssee

and any other person for any purpose relating to the setting up or conduct of the business ot the as^essfe Rs

Total

Rs

(5)4. Cost of the project, i.e. actual cost of

(IJ land and building (including expenditure on development) Rs

(11) leaseholds

R^

(in) plant und machinery

R&

(IV) turnicure and

fittings Rs

..

(v) railways hidings

Rs

Total

Rs>

5. Deduction claimed under section 33D Rs

Place

Signed

Date

(.Accountant)

% Where the qualifying expenditure was Incurred during more than one year, j arwise deLilis of the expenditure should be given.

* Expenditure under tins head should lie clain.ed only whe^e tliu work in connection with the preparation of the feasibility report or project ippovi. or conducting aur kt-L s j r wj or any other survey or engineer- ing i=o vice5 hab been cirrled en, oy the osscsssec himseif or by a conctrn Xi'hirh I n. n"°:: jpprusrd hi tbii pet\Li't hy the Board. @ In n case where J,hc cialiA teldleh lo preliminary expenses incurred before the commencement uf busi "'esiS, tha aclu:il cost ot the specified as< "'t'! which aro shovvn in the books ot the assessee as on t'ae last day of the previous year in which the business was commenced should be fiiven In a case where tho expenses were incurred in connection with the extension of the Industrial undertal ing or the setting up of a new industrial unit, tho actual cost of the specified assets which are shown in the books cf account as on the last day of the previous year in which, tho extension of the industrial undertaking was completed or tho new industrial unit commenced production or operation (in so far ss such assets have been acquired or developed In connection with the extension of the Industrial undertaking or the setting up Of the new Industrial unit) should be tfiven.

"SECTION B

Statement of particulars required for purposes of deduction under section 35Z?

1. Name (s) of mineral(s) or group(a) of associated minerals in respect

of which operations relating to prospecting or development were undertaken

2. Year of commercial production

3. Qualifying amount of expenditure 1

Year In which expenditure was incurred Amount of expendi-

ture (Gi'-c details)

I

2.

3-

4-

5-

Plate

Signed

[ Date

(Accountant)",

(ii) affer Form Wo, HB as so Inferlfd, tile following form shall be inserted, with effect from (.he 1st 1 .iy of April, 1972, namely:—

"FonM No. AC

[Ere u ]r 6AE1

Audit Tici^ri -u, C< - ccct'nn 80 MM (I'A)/80-0(?) of the Income-tax Act. 1961

*I/W> have u-wmiued Lhe Balance Sneet(sj of M/:

as at nrn.\ the Profit, and T,OHS Acrount(y) for the year(s) endyd on *that/those dnte(.-) which R>e in Li^reement with the booka of account maintained at the head office at and* branches at

*I/Wc hav^ ohl ii^od nil the triform,ilion ynd e.-cplanaiions which to the best of *my/oiii' know!'-''KB tuiri belief were n^cn^siry for the pur[jo!=es ol the audit. In *my/our opinion, prjpcr books of acci ui't ha^e been kept by tho head office and the branches of the above-named ast,essce vi.slted by *me/us so [ar as appears from *rrv/our evaniJn ition of the books, and proper returns adequate for the purposes of audit have bt'^n received from branches not visited by *me/us, subject to t he c o m m e n t 's ; ; i v -M I J ' JJ . -•

In *my/our opinion and to the best of *my/our information and according to explanations given to *me/us, the said accounts give a true and fair view—

(i) in the case of the Balance Sheet (a), of the state of the above named assessee's affairs as at ; and

(ii) In the case of the Profit and Losa Account(s), of the profit or loss of his accounting year(s) ending on

The statement of particulars required for the purposes of the deduction under section *80MM/80-0 is annexed and in *my/our opinion and to the beat of *my/our information and according to explanations given to "ma/us, these are true and correct

Signed

@ (Accountant)

Place •

Date

1. 'Delete whichever is not applicable,

2. @ This Report is to be given by—>

(1) a Chartered Accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949); or

(ii) any person who, in relation to any State, is, by virtue of the provisions of sub-section (2) of section 226 of the Companies Act, 1958 (1 of 1956), entitled to ho appointed to act as an auditor of companies registered in that State.

3. Where any of the matters stated in this Report is answered in the negative or with a qualification, the Report shall state the reasons for the same.

Annexure to Form No. 3C

SECTION A

Staumint of particulars required for purposes of deduction under section 80 MM

s.

Amo- unt No.

Nature of pay- ment, e.ij. royalty, commission, '/eea, etc.

Dace of agree- ment with the person making the payment

Name* and addresses of per- sons from whom income In re"pect of which deduc- tion under section 80MM Is claimed, was received

Where agree- ment his already been approved by the Board, No. 6t date of the letter un- der which Bpprovil was communicated

I.

Rs.

2,

3-

4.

5-

Total

Signed

[Place

(Accountant)

Date

•l Where the agreement was approvrd by the Central Government brfore 1-4-1972, the Dame of ihe Minhtnf/Department granting the approval and the No. and date of the letter under which approval was communicated, should be indicated.

2. Where deduction in respect ot my inco'ne is sought for the nnr time, a copy of th?

agreement with the person making the payment should be annexed.

SFCTION B

Statement of particulars required for purposes of the deduction under section So—O

SI No. Names and addresses of Nature of payment, e.g. royalty, commission, fees, etc.

the foreign State/enter- prise from whom Income in respect of which dedu- ction under section 80—0 is claimed was received

Date of agreo- Where agreement has Amount ment with already been approved, the foreign by the Boardj No. & State/ enter- date of the letter under prise mak- which approval was ing the communicated* payment

Total:

1. 2, 3- 4- 5- etc

Signed (Accountant"!

Place Date

•1 Where the agreement was approved by the Central Government before 1-4-1972, the name of the Ministry/Department granting the approval and the No. and date of the letter which approval vr"s communicated should be indicated.

2. Where deduction in respect of any income Is sought for the first time, a copy of the agreement with the foreign State/enterprise making the payment should be annexed,"' ;

(111) after Form No. 6, the following Form shall be Inserted with effect from the 1st day of April, 1972, namely:—

(See rule 14A)

" F O HM No. 6A.

Application under section 143(2) (a) objecting to the assessment made under

Dated

section 143(1). Gin No To

The Income-tax Officer,

Sir,

Re: Assessment for assessment year 19, 19 in the case of _- . (Name of the aesessee and Status )

The a^etsment of my total income/loss has been made by you under section 143(1) on (data) and the notice of demand issued in consequence of such assessment has been served on

(date of service of notice)

2. I do hereby object to the said assessment in respect of the under-mentioned adjustments made by you to the income/loss declared in the return. (3)

1 2 3

Yours faithfully,

Address:

(Signature) '

Notes: 'Here state whether individual, Hindu undtvideTlamilyTTlrm, company^

@Here slate the nature and amount of each adjustment which is objected to Add a separate sheet of p"nw, if necessary.";

—T (iv) for Form No. 7, the following Form shall be substituted with effect from 1st day of April, 1972, namely:—

"FOBM No. 7 LSet? rule 15] Notice of Demand u^der Section 156 of the Income-Tux Act, 1961 To

Status G. I. R. No. This is to give you notice that for the assessment year a sum oi Rs. ... details of which are given on the reverse has been determined to be payabio by you.

2. The amount should be paid to the Treasury Officer/Sub-Treasury Officer/ Agent, State Bunk of India/Reserve Bank of India at within 35/ days of the service of this notice. The previous approval of the Inspecting Assist- ant Commissioner of Income-tax has been obtained for allowing a period of less than 35 days i!or the payment oi' the above sum. A challan is enclosed tor the purpose of payment.

3. If you do not pay the amount within the period specified above, you will be liable to pay simple interest at nine per cent, per annum from the date commenc- ing after the end of the penod aforesaid in accordance with section 220(2).

4. If you do not pay the amount of the tax within the period sptdhed above, penalty (which may be AS much as tnr- amount of tax in arrcar) may be imposed upon you after giving you a reasonable opportunity of being heard in accordance with section 221.

5. If you do not pay the amount within the period specified above, proceedings ior the recovery thereof will be taken in accordance with sections 222 to 229, 231 and 232 of the Income-tax Act, 19GJ.

G. The assessment has been completed under section 143(1) of the Income-tax Act, HiCii In case you object to the assessment, you may apply to me in Fovm No. GA ob]fccting io the asses ment, within one month from the date o£ service of this notice of demand.

7. Thd assebsme>il has beon made under bectlon 144 of the Income-tax Act, 1961, becau = e you tailed to make the rc'i'in e[ itv'om ' under section i:i9<2) and did not make a return or a revised return under section 139(4) or section 139(5)/ comply with a notice issued unJer section 142(1)/comply with a notice issued under section 14:>('M. However, if you were prevented by sufficient cause from making the return under section 130(2) or did not receive the notice issued under section 142(1) or section 143(2) or did not have a reasonable oppoitunvty to comply, o: were prevented b;, sufficient cause from complying, with the terms of a notice Issi ed umW section 14:;< 1> or sc'-tior. H3C!), j n.i may apply to me, within one month from the data ol service of this notice, under section 146, to cancel the a-'-esssoient and piocced Lo make a fiesh assessment.

8. If you intend to appeal ur,"iinst he asses meMt nre/peiiulty/interei.1 payable under section 21t3, >ou ma>* -oirsent, ?n app v.l under Part A of Chapter XX of the IncoTT-e-t-i-< Act 1901 to the Appellate Assistant Commissioner of In"jme-tax... within thir'y days of the •-'•Mot of this notice, In Form No. 35, duly stamped -.-•[id \ori'ied as> laid down In that form.

Income-tax Officer, lJ. Thf amount has become UUP ns a re=uU of the order of the Appellate Assist- ant Commissioner of Income-tax/Inspecting Assistant Commissioner ol Income- tax/Commissioner of Incomp-tax under section of the Inrome-tax Act, 1941. If you intend to appeal against the aforesa'd order, you may present an appeil U'i'ler Part B of Chapter XX of tb<" said Act to the Income-tax Appellate Tribunal within sixty days of the receipt of that order, In Form No. 38, duly stamped and verified as laid down in that form. Dated Place

Address

NOTES.—(1) Delete inappropriate paragraphs and words. (2) If you wish to pay ttin amount by cheque, the cheque should be drawn" in favour of the Treasury Officer/Sub-Treasury Officer/Agent, State Bank of India/ Reserve Bank of India.

(3) If you intend to seek extension of time for payment of the amount or pro- pose to make the payment by instalments, the application for surh extension or, as the case may be, permission to pay by Instalments, should be made to the Income-tax Officer before the expiry of the period specified in paragraph 2. Any request received after the expiry of the said period will not be entertained in view of t'tie specific provisions of section 220(3).";

' (v) In Form No. 21,—

(a) column 2 shall be omitted and columns 3, 4, 5 6, 7, 0, 0 and 10 shall be re- numbered as columns 2, 3, 4, 5, 6, 7, 8 and 9 thereof respectively;

(b) after column 9 as renumbered, a new column 10 shall be inserted with the heading "Date on which tax was deducted";

(vi) in Form No. 36—

(a) lor lt"m 12, the following items shall be substituted, namely:—

¹ 12. Dato on which the return of income, if any, for the assessment year referred to in item 3 was filed.

13. Date on which the assesscc was served with a notice, if any, calling upon him to file the return for the assessment year referred to in item 3.

14 Relief claimed in appeal.

(b) in Notr No. ", for the words "one hundred rupees", the words and figures "one hundred rupees in a rase where either of the dates shown against items 12 and 13 falls before 1st April, 1971, and one hundred and t'.veiily-f)ve rupees in any other case" shall be substituted;

(vil) In Form No. 37,—

(aj for paragraph t>, the following paragraphs shall be substituted, namely:—

"C. thit the date on which the return o[ income, for the assessment year in connection with which )hr rrfciencr- application is bein'^ made, was filed is and the date un which the assessee was served wilh a notice calling upon him to tlte file the return of income for that that Assessment year is

7 that tlj" rlnc^ments or copies thereof as specified below (the translation in ErvjlitiH oJ! thr do rum on K where necessary, "• annexed) be forwarded to the Kigh Court wHh the statement of the case.";

(b) in the Note, for the words "one hundred rupees", the words and figures "one hundred rupees fn a ea&p where either of the dates mentioned ii paragraph 6 fails before W Aiii', 1971, r.nl on*-- hundred and twenty-five rupees u> any other case" shall be substituted.

[No. 52/F.No. 142(29)/71-TPL.]

Explanatory Memorandum

The Taxation Laws (Amendment) Act, 1970 has amended several provisions of the Inc >me-ta\ Act with effect from 1st April, 1971. Sorne of these amendments necesgit fi2, wi'h effect (mm th*> 1st April, 1071 as under:---

(i) The Taxation J aws (Amendment) Act, 1070 inserted a new section 35D in the Incomp-1ax Act for amortisation of fxoenditure incurred by an assessee before the commencement of business or in connection with the extension of hia industrial undertaking or the setting up of a new industrial unit. That Act also introduced another provision in section 35E of the Income-tax Act for amortisation of the ex- penditure incurred by an assesses on prospecting for certain minerals as also in developing a mine or other natural deposit of any such mineral. Both these provisions apply to Indian companies and resident taxpayers other than companies. However, in the case of a taxpayer other than a company or a co-operative society the admissibility of amortisation Is conditional on the accounts of ther

assessee for the relevant years being audited by a Chartered Acwunt^ ant or other accountant who is qualified to audit the accounts of companies. The relevant provisions also require an assessee to furnish along with his return of income for the first year in which amortisation is claimed the report of such audit in the prescribed form duly signed and verified by the accountant and setting forth such particulars as may be prescribed. A' new rule HAA and form No. 3B are proposed to be Included in the Income-tax Rules, 1962 to prescribe the form of audit report and also to prescribe the particulars which have to be furnished in such report for the purpose of deduction under sections 35D and 3SE of the Income-tax Act.

As the reliefs to be given under the above provisions will be relatable to and from the assessment year 1971-72, the Interests of no one will be prejudicially affected by reason of the retrospective effect being given to these amendments.

B. R. KHOSLA, Secy

Central Board of Direct Taxes.

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