Subject NOT available

click here for IIIF manifest

REGISTERED No. D. 221

The Gazette of India

EXTRAORDINARY

PART II—Section 2

PUBLISHED BY AUTHORITY

No 32] NEW DELHI, WEDNESDAY, MAY 9, 1973 VAISAKHA 19, 1895

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

LOK SABHA

The following Bill was introduced in Lok Sabha on the 9th May,

1973.—

BILL NO. 34 OF 1973

A Bill further to amend the Income-tax Act, 1961, the Wealth-tax Act, 1957, the Gift-tax Act, 1958 and the Companies (Profits) Surtax Act, 1964.

BE it enacted by Parliament in the Twenty-fourth Year of the Republic

of India as follows: —

CHAPTER I

PRELIMINARY

1. (1) This Act may be called the Taxation Laws (Amendment) Act,

Short title and com- mence- ment 1973.

(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act

CHAPTER II

43 of 1961

AMENDMENTS TO THE INCOME-TAX ACT, 1961

2. Throughout the Income-tax Act, 1961 (hereafter in this Chapter

referred to as the Income-tax Act),--

Substi- tution of certain expres- sions by certain other ex- pressions.

(i) for the expression 'Appellate Assistant Commissioner¹", wherever it occurs, the expression "Deputy Commissioner (Appeals)" shall be substituted;

(ii) for the expression "Appellate Assistant Commissioners", wherever it occurs, the expression "Deputy Commissioners (Appeals)" shall be substituted;

(tii) for the expression "Inspecting Assistant Commissioner", wherever it occurs, the expression "Deputy Commissioner (Assess- ment)" shall be substituted;

(iv) for the expression "Inspecting Assistant Commissioners", wherever it occurs, the expression "Deputy Commissioners (Assess- ment) " shall be substituted,

and such other consequential amendments as the rules of grammar may require, shall also be made.

3. In section 2 of the Income-tax Act,;—

Amend- mentof section 2.

(i) clauses (3) and (27) shall be omitted; (ii) after clause (19), the following clauses shall be inserted, namely: —

'(19A) "Deputy Commissioner (Appeals)" means a person appointed to be a Deputy Commissioner of Income-tax (Appeals) under sub-section (1) of section 117;

(19B) "Deputy Commissioner (Assessment)" means a per- son appointed to be a Deputy Commissioner of Income-tax (Assessment) under sub-section (1) of section 117;';

(in) for clause (25), the following clause shall be substituted, namely: —

'(25) "Income-tax Officer" means a person appointed to be a Senior Income-tax Officer or an Income-tax Officer under sec- tion 117;';

(iv) after clause (29), the following clause shall be Inserted, namely: —

'(29A) "minor child" includes a step-child and an adopted child;'; (v) In clause (43B), for the words "an Assistant Commissioner of Income-tax", the words "a Deputy Commissioner of Income-tax" shall be substituted.

4. In section 10 of the Income-tax Act, in clause (6), after sub-clause (vi), the following sub-clause shall be inserted, namely:—

Amend- ment of section 10.

"(via) the remuneration received by him as an employee of, or a consultant to, an institution or association or a body established or formed outside India solely for philanthropic purposes, for services rendered by him in India in connection with such purposes, provided that such institution or association or body and the purposes for which his services are rendered in India are approved by the Central Government;".

5. In section 11 of the Income-tax Act,—

(i) in sub-section (1),—

(a) for clauses (a) and (b), the following clauses shall be Amend- ment of •ectlon 11.

substituted, namely: —

" (a) income derived • from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of twenty-five per cent, of the income from such property;

(b) income derived from property held under trust in part only for such purposes, the trust having been created before the commencement of this Act, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of twenty-five per cent, of the income from such property;"; (b) for the Explanation, the following Explanation shall be substituted, namely: —

"Explanation,—For the purposes of clauses (a) and ( b ) ,-

(1) in computing the twenty-five per cent, of the income which may be accumulated or set apart, any such voluntary contributions as are referred to in section 12 shall be deemed to be part of the income;

(2) if, in the previous year, the income applied to charitable or religious purposes in India falls short of seventy-five per cent, of the income derived during that year from property held under trust, or, as the case may be, held under trust in part, by any amount—

(i) for the reason that the whole or any part of the income has not been received during that year, or

(ii) for any other reason,,

then—

(a) in the case referred to in sub-clause (i), so much of the income applied to such purposes in India during the previous year in which the income is received or during the previous year immediately following as does not exceed the said amount; and

(b) in the case referred to in sub-clause (ii), so much of the income applied to such purposes in India during the previous year immediately following the pre- vious year in which the income was derived as does not exceed the said amount,

may, at the option of the person in receipt of the income (such option to be exercised in writing before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139, whether fixed originally or on extension for furnishing the return of income) be deemed to be income applied to such purposes during the previous year in which the income was derived; and the income so deemed to have been applied shall not be taken into account in calculating the amount of income applied to such purposes, in the case referred to in sub-clause (i), during the previous year in which the income is received or during the previous year immediately following, as the case may be, and, in the case referred to in sub-clause (ii),, during the previous year immediately following the previous year in which the income was derived.";

(ii) in sub-section (2), for the portion beginning with the words, brackets, letters and figure "Where any income referred to in clause (a) or clause (b) of sub-section (J)" and ending with the words "the following conditions are complied with, namely:—", the following shall be substituted, namely: —

"Where seventy-five per cent, of the income referred to in clause (a) or clause (b) of sub-section (I) read with the Expla- nation to that sub-section is not applied, or is- not deemed to have been applied, to charitable or religious purposes in India during the previous year but is accumulated or set apart for application to such purposes in India, such income shall not be included in the total income of the previous year of the person in receipt of the income,, provided the following conditions are complied with, namely:—";

(in) to sub-section (3), the following proviso shall be added, namely: —

"Provided that where due to circumstances beyond the con- trol of the trustees, the income referred to in sub-section (2) could not be applied for the purpose for which it was accumu- lated or set apart, the Income-tax Officer may, on an application made in this behalf by the trustees, permit such income to be applied during the period referred to in clause (a) of that sub- section or in the year immediately following the expiry thereof for such other charitable or religious purposes in India as are in conformity with the objects of the trust.".

6. In section 13 of the Income-tax Act,—

(i) in sub-section (1),—

A m e n d- ment oi section 13.

(a) in clause (b), the words "created or established after the commencement of this Act" shall be omitted;

(b) after clause (b), the following clause shall be inserted, namely: —

"(bb) in the case of a charitable trust or institution for the relief of the poor, education or medical relief, which carries on any activity for profit, any income derived from such activity, unless the activity is carried oh in the course of the actual carrying out of a primary purpose of the trust or institution;";

(c) after clause (c) and the provisos thereto, the following clauses shall be inserted, namely: —

"(d) any voluntary contribution received by a trust or institution created or established wholly for a charitable purpose, where the identity of the person who has made' such voluntary contribution is not established to the satis- faction of the Income-tax Officer;

(e) subject to the provisions of clause (bb), in the case of a trust for charitable or religious purposes or a charitable or religious institution, if any funds of the trust or institu- tion are, or continue to remain, invested for any period

during any previous year commencing alter the 31st day ol March, 1978, in any concern (including a company) which is carrying on any business and which is not owned or con- trolled by the Government.";

(ii) after sub-sec I inn (I), the following sub-section shall be

inserted, namely: —

"(1A) On the voluntary contributions referred to in clause (d) of sub-section (1), where the identity of the persons who have made such voluntary contributions is not established to the satisfaction of the Income-tax Officer, the tax shall be charged at the rate of sixty-five per cent.";

(iti) in sub-section (3), for clause (b), the following (clause

shall be substituted, namely: —

"(b) any person who has made a substantial contribution to the trust or institution, that is to sav, any person whose total contribution up to the end of the relevant previous year exceeds five thousand rupees;".

Amend-

ment of

section 16.

7. In section 16 of the Income-tax Act, In clause (i), for the words "five hundred rupees", the words "one thousand rupees" shall be sub- Btituted.

8. In section 23 of the Income-tax Act,—

(i) in sub-section (1), after the second proviso, the following

Amend-

ment ol

section

28.

Eocvlanation shall be inserted, namely: —

"Explanation.—Where any property is in the occupation of a tenant and the amount of annual rent paid or payable by him in respect thereof Is in excess of the annual value as determined under this sub-section, the annual value shall be deemed to be the actual annual rent paid or payable.";

(ii) for sub-section (2), the following sub-sections shall be sub-

stituted, namely: —

"(2) Where the property consists of—

(i) a house in the occupation of the owner for the pur- poses of his own residence, the annual value of such house shall first be determined in the same manner as if the pro- perty had been let and further be reduced bv one-half of the amount so determined or one thousand and eight hundred rupees, whichever is less;

(ii) more than one house in the occupation of the owner for the purposes of his own residence, the provisions of clause (i) shall apply only in respect of one of such houses, which the assessec may, at his option, specify in this behalf:

Provided that for the purposes of clauses (i) and (ii), where the sum so arrived at exceeds ten per cent, of the total income pf the owner (the totnl income for this purpose being computed,

without including therein any income from such property and before making any deduction under Chapter VIA), the excess shall be disregarded.

Explanation.—Where any such residential unit as is referred to in the second proviso to sub-section (I) is in the occupation of the owner for the purposes of his own residence, nothing contained in that proviso shall apply in computing the annual value of that residential unit.

(2A) For the removal of doubt, it is hereby declared that where the property consists of more than one house and such houses are in the occupation of the owner for the purposes of his own residence, the annual value of the houses, other than that the annual value of which is required to be determined under clause (ii) of sub-section (2), shall be determined under sub- section (1) as if such houses had been let.".

9. In section 26 of the Income-tax Act, the following Explanation shall

be inserted, namely: —

Amend- ment of section 26.

"Explanation—For the purposes of this section, in applying the provisions of sub-section (2) of section 23 for computing the share of each such person as is referred to in this section, such share shall be computed, as if each such person is individually entitled to the relief provided in that sub-section.".

10. In sub-section (I) of section 32 of the Income-tax Act, for clause

(i), the following clause shall be substituted, namely: —

Amend- ment of section 32.

" (i) in the case of ships other than ships ordinarily plying on in- land waters, such percentage on the actual cost thereof to the assesaee as may, in any case or class of cases or in respect of any period or periods, be prescribed:

Provided that different percentages may be prescribed for differ-

ent periods having regard to the date of purchase of the ship;".

11. In sub-section (1) of section 35C of the Income-tax Act,—

(!) in clause (a), after the words "Where atiy company", the Amend- ment of section 35C

words "or a co-operative society" shall be inserted;

(ii) for the words "the company", wherever they occur, the

words "the company or co-operative society" shall be substituted.

Insertion 12. In Chapter IV of the Income-tax Act, under the heading "D.~ Profits and gains of business or profession", after section 44A, the follow- ing section shall be inserted, namely:—

of new section 44B.

"44B. (I) Every person carrying on any business or profession shall keep and maintain such books of account and other documents as may enable the Income-tax authority to determine the tax pay- able by him and the exemptions, deductions and other allowances permissible to him under this Act:

Provided that nothing in this sub-section shall apply to any per-

son carrying on any business unless—

Mainte- nance of accounts by cer- tain per- sons carrying on busi- ness or pro- fession,

(i) his annual income from such business exceeds twenty- five thousand rupees or the gross receipts or the value of the

turnover of goods in such business exceed or exceeds two lakhs and fifty thousand rupees, in any one of the three years imme- diately preceding the previous y"ar; or

(ii) where the business is newly set up, his annual income from such business is likely to exceed twenty-five thousand rupees or the gross receipts or the value of the turnover of goods in such business are or is likely to exceed two lakhs and fifty thousand rupees, during the previous year.

(2) The Board may, having regard to the nature of the business or profession carried on by any class of persons, prescribe, by rules, the books of account and other documents (including inventories, wherever necessary) to be kept and maintained under sub-section (1), the particulars to be contained therein and the form and the manner in which and the place at which they shall be kept and maintained.

(3) Without prejudice to the provisions of sub-section (2), the Board may prescribe, by rules, the period for which the books of account and other documents to be kept and maintained under sub- section (1) shall be retained.".

X3. In sub-section (1) of section 49 of the Income-tax Act,—

(a) after clause (in), the following clause shall be inserted,

Amend- ment of section 49.

namely: —

"(iv) such assessee being a Hindu undivided family, by the mode referred to in sub-section (2) of section 64 at any time after the 31st day of December, 1969,";

(b) in the Explanation, for the words, brackets and figures "clause (ii) or clause (Hi)", the words, brackets and figures "clause (ii) or clause (iii) or clause (iv)" shall be substituted.

14. In section 64 of the Income-tax Act,—

(a) for sub-section (1), the following sub-section shall be sub-

Amend- ment of section 64.

stituted, namely: —

"(1) In computing the total income of any individual, there shall be included all such income as arises directly or indirectly—

(i) to the spouse of such individual from the member- ship of the spouse in a firm carrying on a business in which such individual is a partner;

(ii) to the spouse of such individual by way of salary, commission, fees or any other form of remuneration whether in cash or in kind from a concern in which such individual has a substantial interest;

(iii) to a minor child of such individual from the ad- mission of the minor to the benefits of partnership in a firm;

(iv) subject to the provisions of clause (i) of section 27,

to the spouse of such individual from assets transferred directly or indirectly to the spouse by such individual other- wise than for adequate consideration or in connection with an agreement to live apart;

(u) subject to the provisions of clause (i) of section 27, to a minor child (not being a married daughter) of such individual, from assets transferred directly or indirectly to the minor child by such individual otherwise than for ade- quate consideration;

(vi) to the son's wife, or son's minor child, of such in- dividual, from assets transferred directly or indirectly to the son's wife or son's minor child by such individual other- wise than for adequate consideration; and

(vii) to any person or association of persons from assets transferred directly or indirectly otherwise than for adequate consideration to the person or association of persons by such Individual, to the extent to which the income from such assets is for the immediate or deferred benefit of his or her spouse or minor child (not being a married daughter) or both.

Explanation 1.—For the purposes of clause (i), the individual, in computing whose total income the income referred to in that clause is to be included, shall be the husband or wife whose total Income (excluding the income referred to in that clause) is greater; and, for the purposes of clause (Hi) t the income of the minor child from the partnership shall be included in the in- come of that parent whose total income (excluding the income referred to in that clause) is greater; and where any such income is once included in the total income of either spouse or parent, any such income arising in any succeeding year shall not be in- cluded in the total income of the other spouse or parent unless the Income-tax Officer is satisfied, after giving that spouse or parent an opportunity of being heard, that it is necessary so to do.

Eocplanation 2.—For the purposes of clause (ii), an individual shall be deemed to have a substantial interest in a concern—

(i) in a case where the concern is a company, if its shares (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than twenty per cent, of the voting power are, at any time during the previous year, owned beneficially by such person or partly by such person and partly by one or more of his relatives;

(ii) in any other case, if such person is entitled, or such person and one or more of his relatives are entitled in the aggregate, at any time¹ during the previous year, to not less than twenty per cont. of the profits of such concern.

Explanation 3.— For the purposes of clauses (iv) and (v), where the assein transferred directly or indirectly by an indi- vidual to his spouse or minor child are utilised by the spouse or

minor child in any business, that part of the income arising out of the business to the spouse or minor child in any previous year, which bears the same proportion to the income of the spouse or minor child from the business as the value of the assets aforesaid bears to the total investment in the business by the spouse or the minor child, shall be included in the total income of the individual in that previous year.

Explanation 4.—Where in computing the total income of any individual, the income of any person is liable to be included under the provisions of this sub-section, any income arising subsequently out of any investment of the income so liable to be included shall be included in computing the total income of the individual for the relevant previous year.";

(b) in sub-section (2),—

(i) in clause (b), the words ",in so far as it is attributable to the interest of the individual in the property of the family," shall be omitted;

(ii) for clause (c), the following clause shall be substituted, namely: —

" (c) where the converted property has been the subject- matter of a partition (whether partial or total) amongst the members of the family, also the income derived from such converted property as is received by the spouse or minor child on partition shall be deemed to arise to the spouse or minor child from assets transferred indirectly by the individual to the spouse or minor child and the provisions of sub-section (1) shall, so far as may be, apply accordingly:";

(Hi) in the Explanation,—

(A) the brackets and figure "(1)" shall be omitted;

(B) paragraph (2) shall be omitted.

15, In Chapter VI of the Income-tax Act, under the heading "Aggre^- gation of income", after section 69B, the following sections shall be inserted, namely: —

Inser- tion of new sec- tions 69C andOOD.

Unex- plained expendi- ture, etc. "69C. Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the Income-tax Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be may be deemed to be the income of the assessee for such financial year.

Amount borrowed or repaid on hundi.

69D. Where any amount is borrowed on a hundi from, or any amout due thereon is repaid to, any person otherwise than through an account payee cheque drawn on a bank, the amount so borrowed or repaid shall be deemed to be the income of the person borrowing or repaying the amount aforesaid for the previous year in which the amount was borrowed or repaid, as the case may be:

Provided that, if in any case any amount borrowed on a hundi has been deemed under the provisions of this section to be the income of any person, such person shall not be liable to be assessed again in respect of such amount under the provisions of this section on repayment of such amount.

Explanation.—For the purposes of this section, the amount re- paid shall include the amount of interest paid on the amount bor- rowed.".

16. In section 73 of the Income-tax Act, the following Explanation

shall be inserted at the end, namely: —

Amend- ment of section 73.

"Explanation.—Where any part of the business of a company [other than an investment company, as denned in clause (ii) of sec- tion 109, or a company the principal business of which is the business of banking or the granting of loans and advances] consists in the purchase and sale of shares of other companies, such company shall, for the purposes of this section, be deemed to be carrying on a specu- lation business to the extent to which the business consists of the purchase and sale of such shares.".

17. In section 80A of the Income-tax Act,—

(i) in sub-section (1), for the figures and letter "80U", the figures Amend- ment of section 80A.

and letters "80W" shall be substituted;

(ii) in sub-section (3), the words, figures and letter "or section

80H" shall be omitted.

18. In section 80G of the Income-tax Act, for sub-section (1), the

following sub-section shall be substituted, namely: —

Amend- ment of section 80G.

"(1) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section, an amount equal to fifty per cent, of the aggregate of the sums specified in sub-section (2).".

19. In Chapter VIA of the Income-tax Act, under the heading "B.— Deductions' in respect of certain payments" after, section 80G, the following section shall be inserted, namely: —

Inser- tion of new sec- tion 80GG. Deduc- tion In respect of rents paid.

'80GG. In computing the total income of an assessee, not being an assessee having any income chargeable under the head "Salaries", there shall be deducted any expenditure incurred by him in excess of ten per cent, of his total income towards payment of rent (by what- ever name called) in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own resi- dence, to the extent to which such excess expenditure does not ex- ceed three hundred rupees per month or fifteen per cent, of his total

income for the year, whichever is less, and subject to such other conditions or limitations as may be prescribed, having regard to the area or place in which such accommodation is situated and other relevant considerations:

Provided that nothing in this section shall apply to an assessee in any case where any residential accommodation is owned by him or by his spouse or minor child, or, where such assessee is a member of a Hindu undivided family, by such family.

Explanation.— In this section, the expressions "ten per cent, of his total income" and "fifteen per cent, of his total income" shall mean ten per cent, or fifteen per cent., as. the case may be, of the assessee's total income before allowing deduction for any expendi- ture under this section.'.

20. Section 80H of the Income-tax Act shall be omitted.

21. In section 80J of the Income-tax Act,—

Omission of section 80H. Amend- ment of section 80J.

(i) in sub-section (I), the brackets, words, figures and letter "(reduced by the deduction, if any, admissible to the assessee under section 80H)" shall be omitted;

(ii) In sub-section (3), for the words, figures and letter "after allowing the deductions, if any, admissible under section 80H and", the words "after allowing the deduction, If any, admissible under" shall be substituted.

22. In sub-section (1) of section 80L of the Income-tax Act, after

clause (vii), the following clause shall be inserted, namely: —

Amend- ment of section 80L.

"(viia) interest on deposits with any authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or Improvement of cities, towns and villages, or for both;".

23. In sub-section (3) of section SOP of the Income-tax Act,—

(i) the words, figures and letter "section 80H or" shall be

Amend- ment of section 80P.

omitted;

(ii) for the words, figures and letters "deductions under section 80H and section 80J", the words, figures and letter "deduction under section 80J" shall be substituted.

24. In sub-section (2) of section 80QQ of the Income-tax Act,—

(i) the words, figures and letter "section 80H or" shall be

Amend- ment of section 80QQ.

omitted;

(ii) the figures and letter "80H," shall be omitted.

25. In Chapter VIA of the Income-tax Act, under the heading "D.— Other deductions", after section 80U, the following sections shall be inserted, namely: —

Inser- tion of new sections 80V and 80W.

"80V. In computing the total income of an assessee, there shall be allowed by way of deduction any interest paid by him In the

Deduction of interest

previous year on any money borrowed for the payment of any tax due from him under this Act.

80VV. In computing the total income of an assessee, there shall be allowed by way of deduction any expenditure incurred by him in the previous year in respect of any proceedings before any Income-tax authority or the Appellate Tribunal or any court relat- ing to the determination of any liability under this Act, by way of tax, penalty or interest:

Provided that no deduction under this section shall, in any case,

exceed in the aggregate two thousand rupees,".

26. In section 104 of the Income-tax Act, for sub-section (4), the

following sub-section shall be substituted, namely: —

" (4) Without prejudice to the provisions of section 108, nothing

on moneys borrowed to pay taxes. Deduc- tion in respect of expenses Incurred in con- nection with certain proceed- ings under the Act. Amend- ment of section 104.

contained in this section shall apply to a company which is neither an Indian company nor a company which has made the prescribed arrangements for the declaration and payment of dividends within India.".

27. In section 109 of the Income-tax Act,—

(a) after clause (i), the following clause shall be inserted,

namely: —

Amend- ment of section 109.

' (ia) "industrial company" means an Indian company whose business consists wholly in the construction of ships or in the manufacture or processing of goods or in mining or in the gene- ration or distribution of electricity or any other form of power;'; (b) in clause (Hi),—

(i) for sub-clause (1), the following sub-clauses shall be

substituted, namely: —

Nil;",

"(1) in the case of an industrial company.... 45%; (2) in the case of an investment company other than an investment company which falls under sub-clause (3) of this clause 90%;"; (ii) in sub-clause (3), for the portion beginning with the words "in the case of an Indian company" and ending with the words "attributable to such business the following shall be substituted, namely: —

"in the case of an Indian company, not being an industrial company, a part of whose gross total income consists of profits and gains attributable to the business of construction of ships or of manufacture or processing of goods or of min- ing or of generation or distribution of electricity or any other form of power—

(a) in relation to the profits and gains

attributable to such business.. 45%;". 28. In section 116 of the Income-tax Act, for clause (d), the following

clause shall be substituted, namely: —

Amend- ment of section 118.

" (d) Deputy Commissioners of Income-tax, who may be either Deputy Commissioners of Income-tax (Appeals) or Deputy Com- missioners of Income-tax (Assessment),".

29. In section 117 of the Income-tax Act,—

Amend- ment of section 117.

(i) in sub-section (1), for the words and figure "Appellate or Inspecting Assistant Commissioners of Income-tax and Income-tax Officers of Class I Service", the words and brackets "Deputy Com- missioners of Income-tax (Appeals), Deputy C6mmissionerB of Income-tax (Assessment) and Senior Income-tax Officers" shall be substituted;

(n) in sub-section (2), for the words and figures "Income-tax Officers of Class II Service", the words "Income-tax Officers" shall be substituted.

Amend- ment of section 124.

30. In sub-section (2) of section 124 of the Income-tax Act, for the portion beginning with the words "and shall perform such functions" and ending with the words "work to be performed.", the following shall be substituted, namely:—

"and shall perform their functions in relation to the said area, or persons or classes of persons, or incomes or classes of income, or cases or classes of cases, in accordance with such general or special (Assessment) authorised by the Commissioner in this behalf, may make for the purpose of facilitating the performance of such functions.".

31. In sub-section (1) of section 125 of the Income-tax Act, in the pro-

viso,—

(i) after the figures and letter "132A,", the figures and letter

Amend- ment of section 125, "132B," shall be inserted;

(ii) for the words, figures and brackets "and 271 to 274 (both inclusive)", the figures, words and brackets "„ 271 to 273 (both in- clusive) and 274" shall be substituted.

32. After section 125 of the Income-tax Act, the following section shall

be inserted, namely: —

"125A. (1) The Commissioner may, by general or special order in writing¹, direct that all or any of the powers or functions conferred on, or assigned to, the Income-tax Officer or Income-tax Officers by or under this Act in respect of any area, or persons or classes of persons, or incomes or classes of income, or cases or classes of cases, shall be exercised or performed concurrently by the Deputy Com- missioner (Assessment).

Inser- tion of new sec- tion 125A. Concur- rent juris- diction of Deputy Com- missioner (Assess- ment) and In- come-tax Officer.

(2) Where under sub-section (1), a Deputy Commissioner (Asl- sessment) exercises concurrent jurisdiction with one or more Income- tax Officers in respect of any area, or persons^ or classes of persons, or incomes or classes of income, or cases or classes of cases, the Income-tax Officer or income-tax Officers shall exercise the powers and perform the functions under this Act in relation thereto as the Deputy Commissioner (Assessment) may direct.

(3) Without prejudice to the generality of the provisions con- tained in sub-section (3) of section 119, every Income-tax Officer shall also observe and follow such instructions as may be issued to him for his guidance by the Deputy Commissioner (Assessment) within whose jurisdiction he performs his functions in relation to any parti- cular proceeding or the initiation of any proceeding under this Act:

869 US.—3.

Provided that no instructions, which are prejudicial to the ad- sessee, shall be issued before an opportunity is given to the assessee to be heard.

Explanation.—For the purposes of this sub-section, no instruc- tion as to the linos on which an investigation connected with the assessment should be made shall be deemed to be an instruction pre- judicial to the assessee.

(4) Where an order is made under sub-section (1) and the Deputy Commissioner (Assessment) exercises the powers or performs the functions of an Income-tax Officer in relation to any area, or persons or classes of persons, or incomes or classes of income, or cases or classes of cases, references in this Act or in any rule made thereunder to the Income-tax Officer shall be construed as including references to the Deputy Commissioner (Assessment), and accordingly—

(i) any provision of this Act requiring approval or sanction of the Deputy Commissioner (Assessment) shall not apply;

(ii) any appeal which Would otherwise have lain to the Deputy Commissioner (Appeals) shall lie to the Commissioner;

(Hi) any appeal which would have lain from an order of the Deputy Commissioner (Appeals) to the Appellate Tribunal shall lie from the order of the Commissioner.'.

3d. In section 127 of the Income-tax Act, for sub-section (I), the fol- lowing sub-section shall be substituted, namely: —

Amend- ment of section 127.

" (1) The Commissioner may, after giving the assessee a reason- able opportunity of being heard in the matter, wherever it is pos- sible to do so, and after recording his reasons for doing so, transfer any case from one or more of the following officers subordinate to him, namely:—

(a) any Income-tax Officer or Income-tax Officers;

(b) any Income-tax Officer or Income-tax Officers having concurrent jurisdiction with the Deputy Commissioner (Assess- ment) ,

to any other Income-tax Officer or Income-tax Officers [whether with or without concurrent jurisdiction with the Deputy Commissioner (Assessment)] and the Board may similarly transfer any case from any one or more of the officers mentioned in clauses (a) and (b) to any one or more of the other officers aforesaid:

Provided that nothing in this sub-section shall be deemed to require any such opportunity to be given where the transfer is from any Income-tax Officer or Income-tax Officers [whether with or without concurrent jurisdiction with the Deputy Commissioner (Assessment)] to any other Income-tax Officer or Income-tax Officers [whether with or without concurrent jurisdiction with the Deputy Commissioner (Assessment) ] and the offices of all such officers are situated in the same city, locality or place:

Provided further that—

(a) where any case has been transferred from any Income- tax Officer or Income-tax Officers to two or more Income-tax Officers, the Income-tax Officers to whom the case is so trans- ferred shall have concurrent jurisdiction over such case and shall perform their functions in accordance with such general or spe-

cial orders in writing as the Board or the Commissioner or the Deputy Commissioner (Assessment) authorised by the Commis- sioner in this behalf, 'may make, for the purpose of facilitating the performance oJ: such functions;

(b) where any case has been transferred from any Income- tax Officer or Income-tax Officers [whether with or without concurrent jurisdiction with the. Deputy Commissioner (Assess- ment)], to two or more Income-tax Officers with concurrent jurisdiction with the Deputy Commissioner (Assessment), the Officers [including the Deputy Commissioner (Assessment)] to whom the case is so transferred shall have concurrent jurisdiction over such case and shall perform their func- tions in accordance with such general or special orders in writing as the Board or the Commissioner may make for the purpose of facilitating the performance of such functions, and the Income-tax Officers shall perform their functions also in accordance with such orders or directions as the Deputy Com- missioner (Assessment) may make under sub-section (2) of section 124 or, as the case may be, under subjection (2) of section 125A.".

34. In section 130A of tke Income-tax Act, after clause (b), the following clause shall be inserted, namely: —

Amend- ment of section 130A.

" (c) in a case, where two or more Income-tax Officers have con- current jurisdiction over such assessee in relation to any function, be the Income-tax Officers empowered to perform such function by the Board or, as the case may be, the Income-tax Officers to whom such function has been assigned by an order of the Commissioner or by an order or a direction of the Deputy Commissioner (Assess- ment) under sub-section (2) of section 124 or, as the case may be, under sub-section (2) of section 125A.".

35. In section 131 of the Income-tax Act,—

(i) after sub-section (1), the following sub-section shall be In- serted, namely: —

Amend- ment of section 131.

"(1A) If the Assistant Director of Inspection has reason to suspect that any income has been concealed, or is likely to be concealed, by any person or class of persons, within his juris- diction, then, for the purpose of making any enquiry or in- vestigation relating thereto, it shall be competent for him to exercise the powers conferred under sub-section (1) on the Income-tax authorities referred to in that sub-section, notwitn- standing that no proceedings with respect to such person or class of persons are pending before him or any other Income- tax authority.";

(ii) in sub-section (3),—

(a) in the opening paragraph, after the word, brackets and figure "sub-section (I)", the words, brackets, figure and lettei "or sub-section (1A)" shall be inserted;

(b) in the proviso, for the words "an Income-tax Officer", the words "an Income-tax Officer or an Assistant Director of Inspection" shall be substituted.

36. In section 132 of the Income-tax Act,—

(a) in sub-section (!),—

Amend- tnent of section 13E.

(i) in the opening paragraph, for the words "Where the Director of Inspection or the Commissioner,", the following shall be substituted, namely:—

"Where the Director of Inspection or the Commissioner or any such Deputy Director of Inspection or Deputy Commis- sioner (Assessment) as may be empowered in this behalf by the Board,";

(ii) in clause (c), for the words "which has not been disclos- ed", the words "which has not been, or would not be, disclos- ed" shall be substituted;

(Hi) for the portion beginning with the words "he may authorise" and ending with the brackets and words "(herein- after referred to as the authorised officer) to—", the following shall be substituted, namely: —

"then,—

(A) the Director of Inspection or the Commissioner, as the case may be, may authorise any Deputy Director of Inspection, Deputy Commissioner (Assessment), Assistant Director of Inspection or Income-tax Officer; or

(B) such Deputy Director of Inspection or Deputy Com- missioner (Assessment), as the case may be, may authorise any Assistant Director of Inspection or Income-tax Officer,

(the officer so authorised in all cases being hereinafter referred to as the authorised officer) to—";

(iv) in clause (i), for the words "building or place", the words "building, place, vessel, vehicle or aircraft" shall be sub- stituted;

(u) after clause (u), the following clause shall be inserted, namely :—

"(iia) search any person who has got out of, or is about to get into, or is in, the building, place, vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such person has secreted about his person any such books of account, other documents, money, bullion, jewellery or other valuable article or thing;";

(in) the following proviso shall be inserted at the end, namely:—

"Provided that where any building, place, vessel, vehi- cle or aircraft referred to in clause (i) is within the area of jurisdiction of any Commissioner, but such Commissioner has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c), then, notwithstanding anything contained in section 121, it shall be competent for him to exercise the powers under this sub-section in all cases where he has reason to believe that any delay in getting the autho- risation from the Commissioner having jurisdiction over

such person may be prejudicial to the interests of the re- venue.";

(b) after sub-section (1), the following sub-section shall be in- serted, namely:—

" (1A) Where any Commissioner, in consequence of informa- tion in his possession, has reason to suspect that any books of account, other documents, money, bullion, jewellery or other valuable article or thing in respect of which an officer has been authorised by the Director of Inspection or any other Commis- sioner or any such Deputy Director of Inspection or Deputy Commissioner (Assessment) as may be empowered In this be- half by the Board to take action under clauses (i) to (v) of sub- section (1) are or is kept in any building, place, vessel, vehicle or aircraft not mentioned in the authorisation under sub-section (1), such Commissioner may, notwithstanding anything contain- ed in section 121, authorise the said officer to take action under any of the clauses aforesaid in. respect of such building, place, vessel, vehicle or aircraft.";

(c) in sub-section (2), after the word, brackets and figure "sub- section (1)", the words, brackets, figure and letter "or sub-section (1A)" shall be inserted;

(d) after sub-section (4), the following sub-section shall be in- serted, namely:—

"(4A) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or Is found in the possession or control of any person in the course of a search, it may be presumed—

(i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person;

(ii) that the contents of such books of account and other documents are true; and

(in) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be In the handwriting of, any particular person, are in that per- son's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.";

(e) in sub-seclion (5),—

(i) for the opening paragraph, the following shall be sub- stituted, namely: —

"Where any money, bullion, jewellery or other valuable article or thing (hereafter in this section and in section!

132A and 132B referred to as the assets) is seized under sub-section (I) or sub-section (1A) or requisitioned under section 132A, the Income-tax Officer, after affording a reason- able opportunity to the person concerned ol being heard and making such enquiry as may be prescribed, shall, within ninety days of the seizure, make an order, with the previous approval of the Deputy Commissioner (Assessment),—";

(Ii) after clause (ii), the following clause shall be inserted,

namely: —

11 of 1922.

" (Ho.) determining the amount of interest payable and the amount of penalty imposable in accordance with the provisions of the Indian Income-tax Act, 1922 or this Act, as if the order estimating the undisclosed income had been the order of regular assessment;";

(Hi) for the words, brackets and figures "clauses (ii) and (Hi)", at both the places where they occur, the words, brackets, figures and letter "clauses (ii), (iia) and (Hi)" shall be sub- stituted;

(iv) in the first proviso, after the words "the financial year In which the assets were seized", the words "and may also determine the interest or penalty, if any, payble or Imposable accordingly" shall be inserted;

(f) in sub-section (6), for the word, figures and letter "section 132A", the word, figures and letter "section 132B" shall be sub- stituted;

(gr) in sub-section (S), after the word, brackets and figure "sub- section (1)", the words, brackets, figure and letter "or sub-section (1A)" shall be inserted;

(h) in sub-section (9), after the word, brackets and figure "sub-section (1)", the words, brackets, figure and letter "or sub- section (1A)" shall be inserted;

(i) after sub-section (9), the following sub-section shall be in-

serted, namely: —

"(9A) Where the authorised officer has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c) of sub-section (1), the books of account or other documents or assets seized under that sub-section shall be handed over by the autkorised officer to the Income-tax Officer having jurisdiction over such person within a period of fifteen days of such seizure and thereupon the powers exercisable by the authorised officer under sub-section (8) or sub-section (9) shall be exercisable by such Income-tax Officer.";

(j) in sub-section (10), after the word, brackets and figure "sub-section (1)", the words, brackets, figure and letter "or sub- section (1A)" shall be inserted;

(k) in sub-section (13) f after the word, brackets and figure "sub-section (1)", the words, brackets, figure and letter "or sub- section (1A)" shall be inserted;

(I) in sub-section (14), in clause (i), for the words "such build- ing or place", the words "any building, place, vessel, vehicle or air- craft" shall be substituted.

37. Section 132A of the Income-tax Act shall be re-numbered as section 132B thereof, and—

(i) before that section as so-numbered, the fallowing section

Amend- ment of section 132A.

shall be inserted, namely: —

'132A. (I) Where the Director of Inspection or the Com- missioner, in consequence of information in his possession, has reason to believe that—

(a) any person to whom a summons under sub-section 1 1922.

Power to requisi- tion books of account, etc. (1) of section 37 of the Indian Income-tax Act, 1922 or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income- tax Act, 1922 or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents, as required by such summons or notice and the said books of account or other documents have been taken into custody by any officer or authority under any other law for the time being in force, or

11 of 1f>22.

(b) any books of account or other documents will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 or under this Act and any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, such books of account or other documents on the return of such books of account or other documents by any officer or authority by whom or which such books of account or other documents have been taken into custody under any other law for the time being in force, or

H of 1922.

(c) any assets represent either wholly or partly income or property which has not been, or would not have been, disclosed for the purposes of the Indian Income-tax Act, 1922 or this Act by any person from whose possession or control such assets have been taken into custody by any officer or authority under any other law for the time being in force,

then, the Director of Inspection or the Commissioner may authorise any Deputy Director of Inspection, Deputy Commis- sioner (Assessment), Assistant Director of Inspection or Income- tax Officer (hereafter in this section and in sub-section (2) of section 278D referred to as the requisitioning officer) to require the' officer or authority referred to in clause (a) or clause (b) or clause (c), as the case may be, to deliver such books of ac- count, other documents or assets to the requisitioning officer.

(2) On a requisition being made under sub-section (1), the officer or authority referred to in clause (a) or clause (b) or clause (c), as the case may be, of that sub-section shall deliver the books of account, other documents or assets to the requisi- tioning officer either forthwith or when such officer or autho- rity is of the opinion that it is no longer necessary to retain the same in his or its custody.

(3) Where any books of account, other documents or assets have been delivered to the requisitioning officer, the provisions of sub-sections (4A) to (14) (both inclusive) of section 132 and section 132B shall, so far as may be, apply as if such books of account,, other documents or assets had been seized under sub- section (1) of section 132 by the requisitioning officer from the custody of the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of this section and as if for the words "the authorised officer", occurring in any of the aforesaid sub-sections (4A) to (14), the words, "the requisitioning officer" were substituted.';

(n) in section 132B as so re-numbered, in sub-section (1), in clause (i), after the word "relates", the brackets and words "(inclu- ding any penalty levied or interest payable in connection with such assessment or re-assessment)" shall be inserted.

38. For section 133A of the Income-tax Act, the following section shall be substituted, namely: —

Substitu- tion of new sec- tion for section 133A.

'133A. (1) Notwithstanding anything contained In any other

provision of this Act, an Income-tax authority may enter—

Power of sur- vey.

or

|

(a) any place within the limits of the area assigned to him, • .'"('l" (b) any place occupied by any person in respect of whom he exercises jurisdiction,

at which a business or profession is carried on, whether such place be the principal place or not of such business or profession, and require any proprietor, employee or any other person who may at that time and place be attending in any manner to, or helping in, the carrying on of such business or profession—

(i) to afford him the necessary facility to inspect such books of account or other documents as he may require and which may be available at such place,

(ii) to afford him the necessary facility to check or verify the cash, stock or other valuable article or thing which may he found therein, and

(Hi) to furnish such information as he may require as to any matter which may be useful for, or relevant to, any pro- ceeding under this Act. Explanation*—For the purposes of this sub-section, a place where a business or profession is carried on shall also include any other place, whether any business or profession is carried on there- in or not, in which the person carrying on the business or profession states that any of his books of account or other documents or any part of his cash or stock or other valuable article or thing relating to his business or profession are or is kept.

(2) An Income-tax authority may enter any place of business or profession referred to In sub-section (1) only during the hours at which such place is open for the conduct of business or profession and, In the case of any other place, only after sunrise and before sunset,

13) An Income-tax authority acting under this section may,—

(i) if he ao deems necessary, place marks of identification on the books of account or other documents inspected by him and make or cau.se to be m^de extracts or copies therefrom,

(u) make an inventory of any cash, stock or other valuable

article or thing checked or verified by him,

(iii) record the statement of any person which may b" ua"-

ful for, or relevant to, any proceeding under this Act,

(4) An Income-tax authority acting under this section ihall, OQ no account, remove or cause to be removed from the place wherein he has entered, any books of account or other documents or any rash, stock or other valuable article or thing.

(5) Where, having regard to the nature and scale of expenditure incurred by an assessee, in connection with any function, ceremony or event, the Income-tax authority is of the opinion that it Is nece*- sary or expedient so to do, he may, at any time after such function, ceremony or event, require the assessee by whom such expenditure has been incurred or any person who, in the opinion of the Income- tax authority, is Hkely to possess information as respects the ex- penditure incurred, to furnish snch information as he may require as to any matter which may be useful for, or relevant to, any pro- ceeding under this Act and may have the statements of the anassm or any other person recorded and any statement so recorded may thereafter be used in evidence in any proceeding under this Act.

(S) If a person under this section is required to afford facility to the Income-tax authority to inspect books of account or other docarnentu or to check or verify any cash, stock or other valuable article or thing or to furnish any information or to have hl" state- ment recorded either refuses or evaded to do wi. the Income-tax authority shall have all the powers under ffub-sectlonn (1) and f£> of <;"x*t5on 131 for enforcing complianep with the requirement martf

Explanation.—In this section,—

(a) "Income-tax authority" means a Deputy Commi"ic""r (Assessment), an Assistant TMrPctor of Inspection or Income-tax Officer, and for the purposes of clause (i) of sub-section (1), clause (i) of sub-section (3) and sub-sectinn (5). include! an Inspector of Income-tax, if so authorised by the Income-tax Officer;

(b) "proceeding" mean* any proceeding under thii Act In respect of any year which may be pending on the date on which the powers under this section are exercised or which mav havw been completed on or before such date and includes also all proceedings under this Act which may be commenced after such date in respect of any year.'.

39. In section 139 of the Income-tax Act,—

(?) after sub-section (I), the following sub-section* shall be in-

Amend- ment of Mctlon IM.

serted namely: —

"(1A) Every person other than a company,—

(i) carrying on anv business, whose total sales, turn- over or receipts exceed r>r exceeds flve hundred thousand

rupees or whose profits before deducting the tax payable under this Act exceed fifty thousand rupees, in any pre- vious year, or

(ii) carrying on any profession, whoso total receipts exceed live hundred thou.nnd rupees or whose income be- fore deducting the tax payable under this Act exceeds fifty thousand rupees, in any previous year,

shall, while furnishing a return of his income, also furnish a report of the audit of the accounts on which such return is based.

(IB) For the purposes of sub-section (1A), the audit shall be conducted by an accountant as denned in the Explanation to section 288 and the report shall be in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed.";

(ii) in sub-section (2), for the words "serve a notice upon him", the words "issue a notice to him and serve the same upon him" ihall be substituted;

(Hi) for sub-section (6), the following sub-sections shall be substituted, namely: —

" (6) The prescribed form of the returns referred to in sub- sections (1), (2) and (3) shall, in such cases as may be pres- cribed, require the assessee to furnish the particulars of income exempt from tax, assets of the prescribed nature and value and belonging to him, expenditure exceeding the prescribed limits incurred by him under prescribed heads and such other outgoings as may be prescribed.

(6A) Without prejudice to the provisions of sub-section (6), the prescribed form of the returns referred to in sub-secttons (1), (2) and (3) shall, in the case of an assessee engaged in any business or profession, also require him to furnish particulars of the location and style of the principal place where he carries on the business or profession and all the branches thereof, the names and addresses of his partners, if any, in such business or profession and if he is a member of an association or body of individuals, the names of the other members of the associa- tion or the body of individuals and the extent of the share of the assessee and the shares of all such partners or the members, as the case may be, in the profits of the business or profession and any branches thereof,"-

40. After section 139 of the Income-tax Act, the following section shall

be inserted, namely:—

'139A (2) Every person, if his total income or the income of any other person in respect of which he is assessable under this Act dur- ing any accounting year exceeded the maximum amount which i* not chargeable to income-tax and who has not heen allotted any

lnsetf- tion of new sec- tion 139A. Perma- nent ac- count numbers,

permanent account number, shall, within such time as may be pres- cribed, apply to the Income-tax Officer for the allotment of a per- manent account number.

(2) Notwithstanding anything contained in sub-section (1), every person not falling under that sub-section, but carrying on any busi- ness whose total sales, turnover or receipts are or is likely to exceed iifty thousand rupees in any accounting year and who has not been allotted any permanent account number, shall, within such time as may be prescribed, apply to the Income-tax Officer for the allotment of a permanent account number.

(3) The Income-tax Officer may also allot to any other persou by whom tax is payable, a permanent account number.

(4) Where a permanent account number had been allotted to any assessee before the commencement of the Taxation. Laws (Amend- ment) Act, 1973, the Board may, by notification in the Official Gazette, declare that such permanent account number shall be deemed to kave been allotted under the provisions of this section with effect from such date as may be specified in the notification.

(5) Where a permanent account number has been allotted or deemed to have been allotted to any person under this section, he ihall—

(a) quote such number in all his returns to, or correspon- dence with, any income-tax authority;

(b) quote such number in all documents pertaining to such transactions as may be prescribed by the Board in the interests of the revenue, and entered into by him,-

(c) intimate the Income-tax Officer any change in his address or in the name and nature of his business-

(6) The Board may make rules providing for—

(a) the form and the manner in which an application may be made for the allotment of a permanent account number and the particulars which such application shall contain;

(b) the categories of transactions iu relation to which per- manent account numbers shall be quoted by the persons to whom such numbers have been allotted, in the documents pertaining to such transactions-

Explanation.—In tin's section,—

(a) "accounting year" means,—

(i) in relation to a person maintaining accounts, the year ending on the day on which such accounts are or are to be closed a>id balanced;

(n) in relation to any other person, the financial year;

(b) "permanent account number" means a number which the Income-tax Officer may allot to any person for the purpose of identification.'.

43, In section 140 of the Income-tax Act, for clauses (c) and (d), the following clauses shall be substituted, namely:—

Amend- ment of section 140.

"(c) in the case of a company, by the managing director thereof, or where for any unavoidable reason ouch managing director is not able to sign and verify the return, or where there is no managing director, by any other director thereof or any other person, for the time being mainly in charge of the affairs ot the company;

(cc) In the case of a firm, by the managing partner thereof, or where for any unavoidable reason such managing partner ia not able to sign and verify the return, or where there is no managing partner as such, by any partner for the time being mainly in charge of the affair3 of the firm;

(d) in the case of a local authority, by the principal officer thereof;".

42. In section 140A of the Income-tax Act,—

(i) for lub-section (1), the following sub-action shall be substi- Amend- ment of ractlon 140A,

tuted, namely:—

"(1) Where the tax payable on the basis of any return fur- nished under section 139 or section 148, as reduced by any tax already paid under any provision of this Act, exceeds five hundred rupees, the assessee shall be liable to pay ouch tax on or before furnishing the return and the return shall be accompanr ied by proof of payment of such tax-";

(ti) for sub-section (3), the following sub-section shall be sub- stituted, namely: —

"(3) If any assessee fails to pay the tax or any part thereof in accordance with the provisions of sub-section (1), the Income- tax Officer may direct that a sum equal to two per cent of such tax or part thereof, as the case may be, shall be recovered from him by way of penalty for every month during which the de- fault continues:

Provided that before levying any such penalty, the asseflsee shall be given a reasonable opportunity of being heard.".

43. In section 141A of the Income-tax Act, for sub-section (1), the fol- lowing sub-section shall be substituted, namely:—

Amend- ment of

141A.

"(1) Where a return has been furnished under section 139 and the asMisee claims that the tax paid or deemed to have been paid under the provisions of Chapter XV11-E, or Chapter XVII-C, exceeds the tax payable on the basis of the return and the accounts and documents accompanying it, the Income-tax Officer, if he is of the opinion that the regular assessment of the assessee is not likely to be made within, six months from the date of furnishing of the return, shall make in a nummary manner within the said six months a pro- visional asteanment of the sum refundable to the assenm, after

making such adjustments to the income or loss declared in the return as are required to be made under sub-section (2) with reference to such return, accounts and documents, and, for the purposes of the adjustments referred to in clause (iv) of sufcv-section (2), also with reference to the records of the assessments, if any, of past years.".

44. In sub-section (1) of section 142 of the Income-tax Act, for the

Amend- ment of section 142.

words, brackets and figures "or upon whom a notice has been served under sub-section (2) of section 139", the words, brackets and figures "or to whom a notice has been issued under sub-section (2) of section 139" shall be substituted-

45. After section 144 of the Income-tax Act, the following sections shall be inserted, namely:---

Insertion of new sections 144 A and 144E.

Power of Depu- ty Com- missionef C Assess- ment) to issue directions in cer- tain cases.

"144A. (1) A Deputy Commissioner (Assessment) may, on his own motion or on a reference being made to him by the Income-tax Officer or on the application of an assessee, call for and examine the record of any proceeding in which an assessment is pending and, if he considers that, having regard to the nature of the case or the amount involved or for any other reason it is necessary or expedi- ent so to do, he may issue such directions as he thinks fit for the guidance of the Income-tax Officer to enable, him to complete the assessment and such directions shall be binding on the Income-tax Officer:

Provided that no directions which are prejudicial to the assessee shall be issued before an opportunity is given, to the assessee to be heard.

Explanation.—For the purposes of this sub-section, no direction as to the lines on which an investigation connected with the assess- ment should be made, shall be deemed to be a direction prejudicial to the assessee

(2) The provisions of this section shall be in addition to, and not in derogation of, the provisions contained in sub-section (3) of section 119.

144B. (1) Notwithstanding anything contained in this Act, where an addition to the income returned or n disallowance of any deduc- tion claimed which is proposed to be made by an Income-tax Officer is in the aggregate not less than the amount fixed by the Board under sub-section (2), the Income-tax Officer shall, in the first instance, forward a draft of the proposed order of assessment to the assessee and, if the assessee objects to the addition or disallowance, he may apply to the Deputy Commissioner (Assessment) within seven days of the date of receipt by Mm of the draft order or within such ex- tended period not exceeding fifteen days as the Deputy Commissioner (Assessment) may allow on an application made to him in this be- half, and the Deputy Commissioner (Assessment) may make an as- sessment of the total income or loss of the assessee and determine the sum payable by him or refundable to him on the basis of such assess- ment, whether as proposed in the draft order or by making such alter- ations therein as may be necessary, and for this purpose he ghall have all the powers conferred on an Income-tax Officer under thin Act:

Provided that before making an order of assessment under this nib-section, the Deputy Commissioner (Assessment) shall ffive an opportunity to the assessee and the Income-tax Officer to be heard.

(2) For the purposes of sub-section (I), the Board may, having regard to the proper and efficient management of the work of assess- ment, by order, fix, from time to time, such amount as it deems fit:

Provided that different amounts may be fixed for different areas:

Provided further that the amount fixed under this sub-section shall, in no case, be less than twenty-five thousand rupees.

(3) Where any order of assessment is made by the Deputy Com- missioner (Assessment) under .sub-section (I), it shall be competent for him to exercise, in relation to such order of assessment, the powers of an Income-tax Officer under sections 271 and 273,

(4) Where a Deputy Commissioner (Assessment) passes any order under this section,—

(t) any provision of this Act requiring approval or snno tion of the Deputy Commissioner (Assessment) shall not apply:

(ii ) any appeal which would otherwise have lain to the Deputy Commissioner (Appeals) shall lie to the Commissioner;

(i-ii) any appeal which would have lain from an order of the Deputy Commissioner (Appeals) to the Appellate Tribunal shall lie from the order of the Commissioner.''.

46, Section 146 of the Income-tax Act shall be re-numbered as sub- section (I) thereoi, and aftei that sub-section as so re-numbered, the following sub-section shall be inserted, namely:—

Armmd- ment of section 146.

"(2) Every application made under sub-section (1) shall be dis- posed of within thirty days from the date of receipt thereof by the Income-tax Officer:

Provided that in computing the period of thirty days aforesaid, any delay in disposing of the application which is attributable to the assessee shall be excluded.".

47. In section 153 of the Income-tax Act, for Explanation 7, the following Explanation shall be substituted, namely: —

"Explanation l.--In computing the period of limitation for the Amend- ment of section 153.

purposes of this section—

(i) the time taken in re-openii g the whole or any part of the proceeding,

(li) the time taken in giving an opportunity to the assessee to be re-heard under the proviso to section 129,

(iii) the time taken in the prosecution of any person for any offence under this Act committed by him in the course of an> assessment proceeding under this Act (such time being computed from the date of the filing of the complaint to the dat" of its final disposal), and

(iv) the period during which the assessment proceeding la

•tayed by an order or injunction of any court,

•hall be excluded.".

48- In sub-section (I) of section 154 of the Income-tax Act, clause

(bb) shall be omitted.

49. Tn section 176 of the Income-tax Act, after sub-section (3), the

following sub-section shall be inserted, namely:—•

Amend- ment of section 15*. Amend- ment ol section 176.

" (3A) Where any business is discontinued in any year, any sum received after the discontinuance shall be deemed to be the income of the recipient and charged to tax accordingly in the year of receipt, if such sum would have been included in the total income nf the person who carried on the business had such sum been received before such discontinuance.".

50. In section 179 of the Income-tax Act, for the portion beginning

with the word "Notwithstanding" and erding with the words "after its liquidation", the following shall be substituted, namely: —

Amend- ment of section 179.

1 Of I960.

"Notwithstanding anything contained in the Companies Act, 1956, where any tax assessed on a private company during its existence or in the course of or after its liquidation".

51. In Chapter XV of the Income-tax Act, under the heading "N.— Special provisions for certain kinds of inco?ne", after section 180, the following section shall be inserted, namely:—

Insertion of new section 180 A.

Special provision for ftctom, film artista*,

C i C. "180A. (1) Where any part of the remuneration payable to a per- son to whom this section applies (hereafter in this section referred to as the annuitant) is in the form of an annuity and the contract theretor providing for the payment of periodical sums thereunder is approved by the Commissioner under sub-section (2), then, such annuitant shall be taxed in respect of such remuneration only when such pei"ind;cal sums become payable and tax shall be charged for any assessment year on the sum so receivable by him in the relevant previous year.

(2) Subiect to any rules made by the Board in this behalf, tho Commissioner shall not approve any contract for the payment of an annuity unless he is satisfied that—

(a) such contract provides for the flist of the periodical sums referred to in sub-section (1) to become payable before the expiry of a period of five years from the date on which it has been entered into;

(b) such contract provides for the payment of annuity over

a period which shall in no case exceed ten years;

(c) not more than seventy-five per cent, of the entire re- muneration payable to the annuitant is converted into the forrn of annuity;

(d) such contract provides that in case of death of the annuitant before the annuity ceases to be payable, payment under such contract shall continue to be made to his heirs 01

assigns, as the case may be, on the same periodical basis is before his death.

(3) Where a contract for the payment of an annuity approved by the Commissioner under sub-section (2) provides for the pay- ment thereof to the heirs or assigns of an annuitant in case of his death, any payment made under the contract to such heirs or assigns In pursuance thereof shall be liable to tax under this Act as if it were a part of the income of such heirs or assigns in the previous year in which it was made.

(4) Where a contract for the payment of an annuity approved by the Commissioner under sub-section (2) provides for the surren- der, commutation or assignment of the annuity payable under such contract by the annuitant or by his heirs or assigns, then, the whole of the sum payable on such surrender, commutation or assignment shall be liable to tax as part of the income of the annuitant or, as the case may be, of the heirs or assigns for the previous year In which the surrender, commutation or assignment is made, at the rate or rates of tax in force in the assessment year relevant to such previous year.

(5) This section applies to any person who is engaged—

(a) as a professional actor on the stage;

(b) as a professional sportsman;

(

(d) in any other activity in thf> film industry to which, having regard to thf duration of the period for which a person is likely to be engaged in such other activity, the Central Gov- ertrment^ by notification in the Official G-azette, declares this section to apply-".

52, In section 185 of the Income-tax Act, in sub-Bection (1), for the Explanation, the following Explanation shall be substituted, namely: —

Amend- ment ol i erf ion its.

"Explanation.—For the purposes of this section and section 19ft. a firm shall not be regarded as a genuine firm if any partner of the firm was, in relation to the whole or any part of his share in the income or property of the firm, at any time during the previous year, a benamular—

(a) of any other partner to whom the first-mentioned part- ner does not stand in the relationship of a npoufie or minor child, or

(b) of any person, not being a. partner of the firm, and any

of the other partners knew or had reason to believe that the first-mentioned partner wag such benamidar.".

53. In section 189 of the Income-tax Act, in sub-section (3), the

following Explanation shall be inserted, namely: —

Amend- ment of itection 189

"Explanation.- -The amount of tax referred to in this sub-section shall also include that part of the share of each partner in the income of the firm before its discontinuance or dissolution which the firm could have retained under sub-section (4) of section 182 but which has not been so retained."-

54. In sub-section (2) of section 221 of the Income-tax Act, after the second proviso, the following Explanation shall be inseited, namely: —

Amend- ment of section 221.

".Explanation.—-For the removal of doubt, it is hereby declared that an assessee shall not cease to be liable to any penalty under this sub-section merely by reason of the fact that before the levy of such penalty he has paid the tax.".

55. In sub-section (1) of section 222 of the Income-tax Act, the following Explanation shall be inserted, namely: —

Amend- ment of section ^22.

"Explanation,—For the purposes of this sub-section, the assessee's movable or immovable property shall include any property whicl* has been transferred by the assessee to his spouse or minor child or son's wife or son's minor child, otherwise than lor adequate con- sideration, and which is held by, or stands in the name of, any of the persons aforesaid; and so far as the movable or immovable pro- perty so transferred to his minor child or his son's minor child is concerned, it shall even after the date of attainment of majority by such minor child or son's minor child, as the case may be, continue to be included in the assessee's movable or immovable property for recovering any arrears due from the assessee in respect of any period prior to such date.".

56. In section 223 of the Income-tax Act, for sub-section (2), the following sub-section shall be substituted, namely: —

Amend- ment of section 223.

" (2) Where an assessee has property within the jurisdiction of more than one Tax Recovery Officer and the Tax Recovery Officer to whom a certificate is sent by an Income-tax Officer—

(a) is not able to recover the entire amount by the sale of the property, movable or immovable, within his jurisdiction, or

(b) is of the opinion that, for the purpose of expediting or securing the recovery of the whole or any part of the amount under this Chapter, it is necessary so to do,

he may send the certificate or, where only a part of the amount is to be recovered, a copy of the certificate certified in the prescribed manner and specifying the amount to be recovered to a Tax Re- covery Officer within whose jurisdiction the assessee resides or has property, and thereupon that Tax Recovery Officer shall also pro- ceed to recover the amotint under this Chapter as if the certificate or the copy thereof had been the certificate sent to him by the Income-tax Officer.".

57. In section 244 of the Income-tax Act, after sub-section (1), the following sub-section shall be inserted, namely: —

Amend- ment of section 144.

"(1A) Where the whole or any part of the refund referred to in sub-section (1) is due to the assessee, as a result of any amount having been paid by him in pursuance of any order of assessment or penalty and such amount or any part thereof having been found in appeal or other proceeding under this Act to be in excess of the amount which such assessee is liable to pay as tax or penalty or both, as the case may be, under this Act,, the Central Government shall pay to such assessee simple interest at the rate specified in sub-section (1) on the amount so found to be in excess—

(i) from the date such amount was paid; or

(ii) where such amount was paid in instalments, from the date or dates on which any payment made came to be in excess of the amount due from such assessee as a result of the appeal or other proceeding,

to the date on which the refund is granted:

Provided that no interest under this sub-section shall be payable

for a period of one month from the date of the passing of the order in appeal or other proceeding:

Provided further that where any interest is payable to an assessee under this sub-section, no interest under sub-section (1) shall be payable to him in respect of the amount so found to be in excess.".

58. After Chapter XIX of the Income-tax Act, the following Chapter

shall be inserted, namely: —

Insertlon of new Chapter XIXA.

'CHAPTER XIXA

SETTLEMENT OF CASES

245A. In this Chapter, unless the context otherwise requires,—

Defini- tions,

11 of 1922.

(a) "case" means any proceeding under the Indian Income- tax Act, 1922, or under this Act for or in connection with the assessment or re-assessment of any person in respect of any year or years which may be pending before an Income-tax authority on the date on which an application under sub-section (1) of section 245C is made;

(b) "Income-tax authority" means a Director of Inspection, a Commissioner, a Deputy Commissioner (Appeals), a Deputy Com- missioner (Assessment) or an Income-tax Officer.

Income- tax

Settle-

ment Committee.

245B. (1) The Board may constitute from amongst its mem- bers a committee to be known as the Income-tax Settlement Com- mittee (hereafter in this Chapter referred to as the Settlement Committee) for the settlement of cases under this Chapter.

(2) The Settlement Committee constituted under sub-section (!) shall consist of not less than three members and shall function for such period as the Board may specify in this behalf.

Applica- tion for settle- ment of cases.

245C. (1) An assessee may, at any stage of a case relating to him, make an application in such form and in such manner and containing such particulars as may be prescribed to the Settlement Committee to have the case settled and any such application shall be disposed of in the manner hereinafter provided.

(2) Every application made under sub-section (1) shall be

accompanied with such fees as may be prescribed.

(3) An application made under sub-section (1) shall not be

allowed to be withdrawn by the applicant.

Proce- dure on receipt of an applica- tion under section 245C.

245D. (1) On receipt of an application under section 245C, the Settlement Committee may call for a report from the Income-tax authority concerned and on the basis of the materials contained In such report and having regard to the interests of the revenue and having regard to the nature and circumstances of the case or the complexity of the investigation involved therein, the Settlement Committee may, by order, allow all the matters covered by the appli- cation or any part thereof to be proceeded with Or reject the appli- cation:

Provided that no matter covered by the application shall be proceeded with if the Settlement Cbmmittee is of the opinion that concealment of particulars of the income on the part of the appli- cant or perpetration of fraud by him on any Income-tax authority for evading any tax or other sum payable under this Act has been established by any Income-tax authority:

Provided further that no order under this sub-section rejecting an application or disallowing any matter covered by it to be pro- ceeded with shall be passed unless an opportunity has been given to the applicant of being heard.

(2) A copy of every order passed under sub-section (1) shall be sent to the applicant and to the Income-tax authority concerned.

(3) Where all the matters or any part thereof covered by the application is allowed to be proceeded with under sub-section (1), the Settlement Committee 'may call for the relevant records from the Income-tax authority concerned and after examination of such records, if the Settlement Committee is of the opinion that any further enquiry or investigation in the matter is necessary, it may direct the Income-tax authority concerned to make such further en- quiry or investigation and furnish a report thereof.

(4) After examination of the records and the report, if any, ot the Income-tax authority concerned, received under sub-section (3), and after giving an opportunity to the applicant and to the Income- tax authority concerned to be heard, either in person or through a representative duly authorised in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Committee may pass such order on the application, in accordance with the provisions of this Act, a # it thinks fit.

(5) The materials brought on record before the Settlement Com- mittee shall be considered by all the members thereof before pass- ing any order under sub-section (4) and, in the case of a difference of opinion among the members, the opinion of the majority shall prevail and such order shall be expressed in terms of the views of the majority.

(6) Every order passed under sub-section (4) shall provide for the terms of settlement including any demand by way of tax, penalty or interest, the manner in which any sum due under the settlement shall be paid and all other matters to make the settle- ment effective and shall also provide that the settlement shall be void if it is subsequently found by the Settlement Committee that it has been obtained by fraud or misrepresentation of facts.

11 of 1923,

245E. If the Settlement Committee is of the opinion (the reasons for such opinion to be recorded by it in writing) that, for the proper disposal of the case pending before it, it is necessary or expedient to reopen any proceeding connected with the case but which has been completed under the Indian Income-tax Act, 1922t or under this Act by any Income-tax authority before the application under sec- tion 245C was made, it may, with the concurrence of the applicant, reopen such proceeding and pass such orders thereon as it thinks

Power of Settle- ment Commit- tee to re- open com- pleted proceed- ings.

fit, as if the case in relation to which the application for settlement had been made by the applicant under that section covered such proceeding also:

Provided that no proceeding shall be reopened by the Settle- ment Committee under this section after the expiry of a period ol eight years from the end of the assessment year to which such pro- ceeding relates.

245F. (1) In addition to the powers conferred on the Settlement Committee under this Chapter, it shall have all the powers which are vested in an Income-tax authority under this Act.

Po^ers and pro- cedure of Settle- ment

Ccrnmittee.

(2) Where the matters covered by an application made under section 245C or any part thereof have been allowed to be proceeded with under section 245D, the Settlement Committee shall, until an order is passed by it under sub-section (4) of section 245D, have exclusive jurisdiction to exercise the powers and perform the func- tions of an Income-tax authority under this Act in relation to such matters.

(3) Notwithstanding anything contained in sub-section (2) and Jn the absence of any express direction to the contrary by the Settle- ment Committee, nothing contained in this section shall affect the operation of any other provision of this Act requiring the applicant lo pay tax on the basis of self-assessment or by way of advance tax in relation to the matter or matters allowed to be proceeded with by the Settlement Committee.

(4) For the removal of doubt, it is hereby declared thai in the absence of any express direction to the contrary by the Settlement Committee, nothing in this Chapter shall affect the operation of the provisions of this Act in so far as they relate to any matter other than that allowed to be proceeded with by the Settlement Com- mittee.

(5) The Settlement Committee shall, subject to the provisions of this Chapter, have power to regulate its own procedure (including the fixation of places and times of its meetings) and may act not' withstanding that all the members of the Settlement Committee are not present at any of its meetings.

Inspec- tion, etc., cf re- ports.

245G. No person shall be entitled to inspect, or obtain copies of, any reports made by any Income-tax authority to the Settle- ment Committee; but the Settlement Committee may, in its discretion, furnish copies thereof to any such person on an applicati"n made to it in this behalf and on payment of the prescribed fee:

Provided that, for the purpose of enabling any person whose case is under consideration to rebut any evidence brought, on record against him in any such report, the Settlement Committee shall, on an application made in this behalf, and on payment of the prescribed foe by such person, furnish him with a certified copy of any such report or part thereof relevant for the purpose.

45 of 18G0.

Power of Settle- ment Commit- tee to grant immunity from pro- sec ulion and penalty.

245H. (1) The Settlement Committee may, if it is satisfied that any person who made the application for settlement under section 245C has co-operated with the Settlement Committee in the proceed- ings before it and has made a full and true disclosure of his income and the manner in which .such income has been derived, grant to such person, subject to such conditions as it may think fit to impose, im- munity from prosecution for any offence under this Act or under the Indian Penal Code or under any other Central Act for the time being in force and also from the imposition of any penalty under this Act, with respect to the case covered by the settlement.

(2) An immunity granted to a person under sub-section (2) may, at any time, be withdrawn by the Settlement Committee, if it is satisfied that such person has not complied with the conditions subject to which the immunity was granted or that such person had, in the course of the settlement proceedings, concealed any particulars material to the settlement or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which he appears to have been guilty in connection with the settlement and shall also become liable to the imposition of any penalty under this Act to which such person would have been liable, had not such immunity been granted.

Order of settle- ment to be con- clusive.

2451. Every order of settlement passed under sub-section (4) of section 245D shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in this Chapter, be reopened in any proceeding under this Act or under any other law for the time¹ being in force.

Recovery of slums due un- der order of settle- ment 245J. Any sum specified in an order of settlement passed under sub-section (4) of section 24r>D may, subject to such conditions, ii any, as may be specified therein, be recovered, and any penalty for default in making payment of such sum may be imposed and recover- ed in accordance with the provisions of Chapter XVII, by the Income-tax Officer having jurisdiction over the person who made the application for settlement under section 245C.

245K. Where —

(i) an order of settlement passed under sub-section (4) of section 245D provides for the imposition of a penalty on the person who made the application under section 245C for settle- ment, on the ground of concealment of particulars of his income; or

(ii) after Ihe passing of an order of settlement under the said sub-section (4) in relation to a case, such pe^on in convicted of any offence under Chapter XXII in relation to th³t cafe,

th n, he shall not be entitled to app]v for settlement nndor section 2450 in relation to any other matter.',

.IO. In seclion 24G of the Income-tax Aft, in clause (0),-

(I) after sub clause {in), the following sub-clause fchall ha

Amend- ment of action 246.

inserted, nnmely: —

'(me/) section 271A, or";

"(iva) section 272B, or".

60. In section 249 of the Income-tax Act,—

(i) in sub-section (2), for clause (b), the following clause shall

Amend- ment of section 249.

be substituted, namely: —

" (b) where the appeal relates to any assessment or penalty, the date of service of the notice of demand relating to the assessment or penalty:

Provided that where an application has been filed under section 146 for reopening an assessment, the period from the date on which the application is made to the date on which the order passed on the application is served on the assessee shall be ex- cluded, or";

(ii) after sub-section (3), the following sub-section shall be

inserted, namely: —

" (4) No appeal under this section shall be admitted unless

at the time of filing of the appeal—

(a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or

(b) where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him:

Provided that, on an application made by the appellant in this behalf, the Deputy Commissioner (Appeals) may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provisions of this sub-section/.

61. In sub-section (2) of section 252 of the Income-tax Act, for the words "who has served as an Assistant Commissioner of Income-tax for at least three years.", the following shall be substituted, namely: —

Amend- ment of section 252.

"who has served for at least three years,—•

(i) before the commencement of the Taxation Laws (Amendment) Act, 1973, as an Assistant Commissioner of Income-tax; or

(ii) after such commencement, as a Deputy Commissioner

of Income-tax,

or partly as an Assistant Commissioner of Income-tax and partly as a Deputy Commissioner of Income-tax,".

62. In section 253 of the Income-tax Act, in sub-section (1),—

Amend- ment of

section 253.

(i) in clause (a), for the words and figures "or section 271", the words, figures and letters ", section 271, section 271A or section 272A" shall be substituted;

(ii) in clause (b), for the words, brackets and figures ''sub- section (2) of section 274", the word, figures and letter "section 272A" shall be substituted;

(Hi) in clause (c), after the words and figures "under section 263", where they occur for the first time, the words, figures and letter "or under section 272A" shall be inserted.

63. In section 269A of the Income-tax Act, in clause (b), for the words "an Assistant Commissioner of Income-tax", the words "a Deputy Com- missioner of Income-tax" shall be substituted.

Amend- ment ol section 269A.

64. In section 271 of the Income-tax Act,—

(i) in sub-section (I),—

Amend- ment of section 271.

(a) after clause (a), the following clause shall be inserted, namely: —-

"(aa) has, without reasonable cause, failed to furnish the r e t u rn of total income which he was required to furnish under sub-section (4A) of section 139 or has, without rea- sonable cause, failed to furnish it within the time allowed and in the manner required by sub-section (1) of section 139, o r ';

(b) in clause (i), the words "but not exceeding in the aggre- gate fifty per cent, of the tax'' shall be omitted;

(c) after clause (i), the following clause shall be inserted, n a m e l y: —

"(ia) in the cases r e f e n ed to in clause (eta), in addition to the amount of the tax, if any, payable by him, a sum not exceeding one per cent, of the total income of the trust (the total income for this purpose being computed under this Act without giving effect to the provisions of sections 11 and 12) for each year or part thereof during which the default continued;";

(d) for clause (Hi) and the Explanation, the following clause and Explanations shall be substituted, namely: —

'(Hi) in the cases referred to in clause (c) in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed twice, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or the furnishing of inaccurate particulars of such income:

Provided that if in a case falling under clause (c), the amount of income (as determined by the Income-tax Officer on assessment) in respect of which the particulars have been concealed or inaccurate particulars have been furnished, exceeds a sum of twenty-five thousand rupees, the Income- tax Officer shall not issue any direction for payment by way of penalty without the previous approval of the Deputy Commissioner (Assessment).

Explanation 1.—Where in respect of any facts material to the computation of the total income of any person under this Act,—

(A) such person fails to offer an explanation, or

(B) such person offers an explanation which he is not able to substantiate or which is found by the Income-tax Officer or the Deputy Commissioner (Appeals) to be false,

then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed.

Explanation 2.—Where the source of any receipt, deposit, outgoing or investment in any assessment year is claimed by any person to be an amount which had been added in computing the income or deducted in computing the loss in the assessment of such person for any earlier assessment year or years but in respect of which no penalty under clause (Hi) of this sub-section had been levied, that part of the amount so added or deducted in such earlier assessment year immediately preceding the year in which the receipt, deposit, outgoing or investment appears (such earlier assessment year hereafter in this Explanation refer- red to as the first preceding year) which is sufficient to cover the amount represented by such receipt, deposit or outgoing or value of such investment (such amount or value hereafter in this Explanation referred to as the utilised amount) shall be treated as the income of the assessee, particulars of which had been concealed or inaccurate parti- culars of which had been furnished for the first preceding year; and where the amount so added or deducted in the first preceding year is not sufficient to cover the utilised amount, that part of the amount so added or deducted in the year immediately preceding the first preceding year which is sufficient to cover such part of the utilised amount as is not so covered shall be treated to be the income of the assessee, particulars of which had been concealed or inaccu- rate particular of which had been furnished for the year immediately preceding the first preceding year and so on, until the entire utilised amount is covered by the amounts so added or deducted in such earlier assessment years.

l l of 1U22 Explanation 3.—Where any person who has not previ- ously been assessed under the Indian Income-tax Act, 1922, or under this Act, fails, without reasonable cause, to furnish within the period specified in sub-clause (iii) of clause (a) of sub-section (1) of section 153 a return of his income which he is required to furnish under section 139 in respect of any assessment year commencing on or after the 1st day of April, 1972, and, until the expiry of the period aforesaid, no notice has been issued to him under sub-section (2) of sec- tion 139 or section 148 and the Income-tax Officer or the Deputy Commissioner (Appeals) is satisfied that in respect of such assessment year such person has taxable income, then, such person shall, for the purposes of clause (c) of this sub-section, be deemed to have concealed the parti- culars of his income in respect of such assessment year, notwithstanding that such person furnishes a return of his income at any time after the expiry of the period aforesaid in pursuance of a notice under section 148.

Explanation 4.—For the purposes of clause (Hi) of this sub-section, the expression "the amount of tax sought to be evaded"—

(a) in any case where—

(i) the amount of the income in respect of

which particulars have been concealed: or

(u) the amount of difference between the in- come returned and the income assessed in so far as it is due to the furnishing of inaccurate particulars of income; or

(Hi) the aggregate of such amounts,

exceeds the total income assessed, means the tax that would have been assessable on the income in respect of which particulars have been concealed or on the amount of difference or, as the case may be, on the aggregate of such amounts, had such amount or the amount of difference or the aggregate, as the case may be, been the total income;

(b)in any other case, means the difference between the tax on the total income assessed and the tax that would have been assessable had the assessed total in- come been reduced by—

(i) the amount of income in respect of which

the particulars have been concealed; or

(it) the amount of difference between the in- come returned and the income assessed in so far as it is due to the furnishing of inaccurate particulars of income; or

(Hi) the aggregate of such amounts,

as the case may be,;

(H) after sub-section (1), the following sub-section shall be Inserted, namely: —

"(1A) Where any penalty is imposable by virtue of Expla- nation 2 to sub-section (1), proceedings for the imposition of such penalty may be initiated notwithstanding that any pro- ceedings under this Act in the course of which such penalty pro- ceedings could have been initiated under sub-section (1) have been completed.";

(Hi) in sub-section (3), after clause (c), the following clause shall be inserted, namely: —

" (d) the penalty imposed under clause (i) of sub-section (1) and the penalty imposed under clause (Hi) of that sub-sec- tion, read with Explanation 3 thereto, shall not exceed in the aggregate twice the amount of the tax sought to be evaded.";

(iv) sub-sections (4A) and (4B) shall be omitted.

G5. After section 271 of the Income-tax Act, the following section shall be Inserted, namely: —

Insertion of new section 271A.

369 L.S.—6

Failure to keep, maintain or re- tain bocks of ac- count, docu- ments, etc.

"271A. Without prejudice to the provisions of section 271, if any person, without reasonable cause, fails to keep and main- tain any such books of account and other documents as required by section 44B or the rules made thereunder, in respect of any previ- ous year or to retain such books of account and other documents for the period specified in the said rules, the Income-tax Officer or the Deputy Commissioner (Appeals) may direct that such person shall pay, by way of penalty, a sum which shall not be less than ten per cent, but which shall not exceed fifty per cent, of the amount of the tax, if any, which would have been avoided if the income returned by such person had been accepted as the correct income.".

66. After section 272 of the Income-tax Act, the following sections

sliall be inserted, namely: —

Insertion olnew sections 272A and 272B.

"272A. (1) If a person,—

(o) being legally bound to state the truth of any matter touching the subject of his assessment, refuses to answer any question demanded of him by an Income-tax Officer or a Deputy Commissioner (Appeals) or a Deputy Commissioner (Assessment) or a Commissioner in the exercise of his powers under this Act; or

Penalty for fail- ure to answer questions, sign state- ments,, allow inspec- tions, etc.

(b) refuses to sign any statement made by him in the course of any proceeding under this Act which an Income-tax Officer or a Deputy Commissioner (Appeals) or a Deputy Commissioner (Assessment) or a Commissioner may legally require him to sign,

he shall pay, by way of penalty, a sum which may extend to one thousand rupees.

(2) If a person, without reasonable cause or excuse, fails,—

(a) to furnish in due time any of the returns or state- ments mentioned in section 133, section 206, section 285 or sec- tion 286; or

(b) to allow inspection of any register referred to in sec- tion 134 or of any entry in such register or to allow copies of such register or of any entry therein to be taken; or

(c) to furnish a certificate as required by section 203; or

(d) to deduct and pay tax as required by sub-section (2) of

section 226,

he shall pay, by way of penalty, a sum which may extend to ten rupees for every day during which the failure continues.

(3) No order shall be made under this section except by a Deputy Commissioner (Appeals) or a Deputy Commissioner (Assess- ment) or a Commissioner and where a contravention of the provi- sions of this section occurs in the course of any proceeding before an Income-tax Officer, the Income-tax Officer shall refer the case to the Deputy Commissioner (Assessment) for passing such orders as he deems fit.

(4) No order under this section shall be passed by any officer referred to in sub-section (3) unless the person on whom the

penalty is proposed to be imposed is given an opportunity of being heard in the matter by such officer.

272B. (1) If a person, without reasonable cause, fails to comply with the provisions of section 139A, he shall, on an order passed by the Income-tax Officer, pay, by way of penalty, a sum which may extend to five hundred rupees.

Penalty for failure to com- ply with the pro- visions of section 139A.

(2) No order under sub-section (1) shall be passed unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter.".

67. After section 273 of the Income-tax Act, the¹ following section shall be inserted, namely: —

Insertion of new section 273A.

"273A. (1) Notwithstanding anything contained in this Act, the Commissioner may, in his discretion, whether on his own motion or otherwise,—

Power to reduce or waive penalty, etc., in certain cases.

(i) reduce or waive the amount of penalty imposed or im- posable on a person under clause (i) of sub-section (1) of sec- tion 271 for failure, without reasonable cause, to furnish the return of total income which he was required to furnish under sub-section (1) of section 139; or

(U) reduce or waive the amount of penalty imposed or imposable on a person under clause (in) of sub-section (1) of section 271; or

(Hi) reduce or waive the amount of interest paid or payable under sub-section (8) of section 139 or section 215 or section 217 or the penalty imposed or imposable under section 273,

If he is satisfied that such person—

(a) in the case referred to in clause (i), has, prior to the issue of a notice to him under sub-section (2) of section 139, voluntarily and in good faith made full and true disclosure of his income;

(b) in the case referred to in clause (ii), has, prior to the detection by the Income-tax Officer, of the concealment of parti- culars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars;

(c) in the cases referred to in clause (Hi), has, prior to the issue of a notice to him under sub-section (2) of section 139, or where no such notice has been issued and the period for the issue of such notice has expired, prior to the issue of notice to him under section 148, voluntarily and in good faith made full and true disclosure of his income and has paid the tax on the basis of his return,

and also has, in all the cases referred to in clauses (a), (b) and (c), co-operated in any enquiry relating to the assessment of his income and has either paid or made satisfactory arrangements for the pay- ment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year.

Explanation,—For the purposes of this sub-section, a person shall be deemed to have made full and true disclosure of his income or of the particulars relating thereto in any case where the excess of income assessed over the income returned is of such a nature as not to attract the provisions of clause (c) of sub-section (1) of section 271.

(2) Notwithstanding anything contained in sub-section (1),—

(a) if in a case the penalty imposed or imposable under clause (i) of sub-section (1) of section 271 or the minimum penalty im- posable under section 273 for the relevant assessment year, or, where such disclosure relates to more than one assessment year, the aggregate of the penalty imposed or imposable under the said clause and the minimum penalty imposed or imposable under the said section for those years, exceeds a sum oC fifty thousand rupees, or

(b) if in a case falling under clause (c) of sub-section (2) of section 271, the amount of income in respect of which the penalty is imposed or imposable for the relevant assessment year, or, where such disclosure relates to more than one assessment year, the aggregate amount of such income for those years, exceeds a sum of five hundred thousand rupees,

no order reducing or waiving the penalty under sub-section (1) shall be made by the Commissioner except with the previous approval of the Board.

(3) Where an order has been made under sub-section (2) in favour of any person, whether such order relates to one or more assessment years, he shall not be entitled to any relief under this section in rela- tion to any other assessment year at any time after the making of such order.

(4) Without prejudice to the powers conferred on him by any other provision of this Act, the Commissioner may, on an application made in this behalf by an assessee, and after recording his reasons tor so aoing, reduce or waive the amount of any penalty payable by the assessee under this Act or stay or compound any proceeding for the recovery of any such amount, if he is satisfied that—

(i) to do otherwise would cause genuine hardship to the

assessee, having regard to the circumstances of the case; and

(ii) the assessee has co-operated in any enquiry relating to the assessment or any proceeding for the recovery of any amount due from him.

(5) Every order made under this section shall be final and shall

not be called into question by any court or any other authority,"

G8. In section 274 of the Income-tax Act, sub-section (2) shall be

omitted.

Amend- ment of section 274.

69. In section 275 of the Income-tax Act, for the Explanation, the following Eocplanation shall be substituted, namely: —

"Eocplanation.—In computing the period of limitation for the

Amend- ment of section 275.

purposes of this section,—

(i) the time taken in giving an opportunity to the assessee to be re-heard under the proviso to section 129;

(ii) any period during which the immunity granted under section 245H remained in force; and

(Hi) any period during which a proceeding under this Chapter for the levy of ponalty is stayed by an order or injunc- tion of any court,

shall be excluded.".

70. Section 276 of the Income-tax Act shall be omitted.

Omis- sion of section 27G.

71. For sections 2T6B and 27GC of the Income-tax Act, the following sections shall be substituted, namely:—

Substitu- tion of new sec- tions for sections 276B and 276C.

"276B. If a person, without reasonable cause or excuse, fails to Failure to deduct or pay tax.

deduct or after deducting, fails to pay the tax as required by or under the provisions of sub-section (9) of section 80E or Chapter XVII-B, he shall be punishable,—

(i) in a case where the amount of tax which he has failed to deduct or pay exceeds one hundred thousand rupees, with rigor- ous imprisonment for a term which may extend to seven years and with fine:

Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six months;

(ii) in any other case, with rigorous imprisonment for a term which may extend to three years or with fine or with both.

Wilful attempt to evade tax, etc. 276C. (1) If a person wilfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act, he shall, without prejudice to any penalty that may be im- posable on him under any other provision of this Act, be punish- able,—

(i) in a case where the amount sought to be evaded exceeds one hundred thousand rupees, with rigorous imprisonment for a term which may extend to seven years and with fine:

Provided that in the absence of special aM adequate reasons to the contrary to be recorded in the judgment of the court, such Imprisonment shall not be for less than six months;

(ii) in any other case, with rigorous imprisonment for a term)

which may extend to three years or with fine or with both. (2) If a person wilfully attempts in any manner whatsoever to evade the payment of any tax, penalty or interest chargeable or im- posable under this Act, he shall, without prejudice to any penalty

that may be imposable on him under any other provision of this Act, be punishable with rigorous imprisonment for a term which, may extend to three years and shall, in the discretion of, the court, also be liable to fine:

, < ' I tj

Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such im- prisonment shall not be for less than throe months-

Explanation.—For the purposes of this section, a wilful attempt

to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof shall include a case where any person—

(i) has in his possession or control any books of account or other documents (being books of account or other documents re- levant to any proceeding under this Act) containing a false entry or statement; or

(it) makes or causes to be made any false entry or statement

in such books of account or other documents; or

(in) wilfully omits or causes to be omitted any relevant entry

or statement in such books of account or other documents; or

(iv) causes any other circumstance to exist which will have the effect of enabling such person to evade any tax, penalty or interest chargeable or imposable. under this Act or the payment thereof-

276CC. If a person wilfully fails to furnish in due time the return

of income which he is required to furnish < under sub-section (1) of section 139 or by notice given under sub-section (2) of section 139 or section 148, he shall be punishable,—

Failure to furnish returns of in- Come,

(i) in a case where the amount of tax, which would have been evaded if the failure had not been discovered, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which, may extend to seven years and with fine:

Provided that, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six months;

(ii) in any other case, with imprisonment for a term which

may extend to three years or with fine or with both:

Provided that a person shall not be proceeded against under this section for failure to furnish in due time the return of income under sub-section (1) of section 139—

(i) for any assessment year commencing.prior to the 1st

day of April, 1971; or

(ii) for any assessment year commencing on or after the

1st day of April, 1971, if—

(a) the return is furnished by him before the expiry

of the assessment year; or

(t>) the tax payable by him on the total income deter- mined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source, does not exceed three thousand rupees.".

72. For sections 277 and 278 of the Income-tax Act, the following sec-

tions shall be substituted, namely:—

Substitu- tion of new sec- tions for sections 277 and 278.

'277. If a person makes a statement in any verification under this Act or under any rule made thereunder, or delivers an accoum or statement which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable,—•

False state- ment in veri- fication, etc. (i) in a case where the amount of tax, which would have been evaded if the statement or account had been accepted as true, exceeds one hundred thousand rupees, with regorous im- prisonment for a term which may extend to seven years and with fine:

Provided that, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six months;

(it) in any other case, with rigoious imprisonment for a term

Abetment of false return, etc. which may extend to three years or with fine or with both. 278. If a person abets or induces in any manner another person to make and deliver an account or a statement or declaration relat- ing to any income chargeable to tax which is false and which he either knows to be false or does not believe to be true or to commit an offence under sub-section (1) of section 276C, he shall be punish- able—

(i) in a case where the amount of tax, penalty or interest which would have been evaded, if the declaration, account or statement had been accepted as true, or otherwise, exceeds one hrndred thouFand rupees, with rigorous imprir."nment for a term which may extend to seven years and with fine:

Provided that, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six months;

(ii) in any other case, with rigorous imprisonment for a term

which may extend to three years or with fine or with both .

Punish- ment for second and sub- sequent offences.

278A. If any person convicted of an offence under section 276B or sub-section (2) of section 276C or section 276CC or section 277 or section 278 is again convicted for the same offence, he shall be punishable for the second and for every subsequent offence with rigorous imprisonment for a term which may extend to seven years and with fine:

Provided that, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six months.

Offences by com- panies.

278B. (1) Where an offence under this Act has been commit- ted by a company, every person who, at the time the offence was com- mitted, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be pro- ceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he had exer- cised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or con- nivance of, or is attributable to any neglect on the part of, any direc- tor, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation.—For the purposes of this section—

(a) "company" means a body corporate, and includes—

(i) a firm; and

(ii) an association of persons or a body of individuals whether incorporated or not; and

(b) "director", in relation to—

(i) a firm, means a partner in the firm;

(ii) an association of persons or a body of individuals, means any member controlling the affairs thereof.

278C. (1) Where an offence under this Act has been committed, by a Hindu undivided family, the Karta thereof shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Offences by Hindu undivi- ded fami- lies.

Provided that nothing contained in this sub-section shall render the Karta liable to any punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a Hindu undivided family and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any member of the Hindu undivided family, such member shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Presump- tion as to assets, books of account, etc., in certain cases.

278D- (1) Where during the course of any search made under section 132, any money, bullion, jewellery or other valuable article or thing (hereafter in this section referred to as the assets) or any books of account or other documents has or have been found in the posses- sion or control of any person and such assets or books of account or other documents are tendered by the prosecution in evidence against such person or against such person and the person referred to in sec- tion 278 for an offence under this Act, the provisions of sub-section (4A) of section 132 shall, so far as may be, apply in relation to such assets or books of account or other documents.

(2) Where any assets or books of account or other documents taken into custody, from the possession or control of any person, by the officer or authority referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of section 132A are delivered to the requisitioning officer under subjection (2) of that section and such assets, books of account or other documents are ten- dered by the prosecution in evidence against such person or against such person and the person referred to in section 278 for an offence under this Act, the provisions of sub-section (4A) of section 132 shall, so far as may be, apply in relation to such assets or books of account or other documents.'.

73. In section 279 of the Income-tax Act,—

(i) for sub-sections (1) and (1A), the following sub-sections

Amend- ment of section 279.

shall be substituted, namely;—

"(1) A person shall not be proceeded against for an offence under section 275A, section 276A, section 276B, section 276C, section 276CC, section 276D, section 277, section 278 or section 278A except at the instance of the Commissioner.

(1A) A person shall not be proceeded against for an offence under section 276C or section 277 in relation to the assessment for an assessment year in respect of which the penalty impos- able on him under clause (in) of sub-section (1) of section 271 has been reduced or waived by an order under section 273A.";

(li) in sub-section (3), for the words, brackets, figures and letter "under sub-section (4A) of section 271", the words, figures and letter "under section 273A" shall be substituted.

74. After section 279 of the Income-tax Act, the following section

shall be inserted, namely: —

Insertion of new section 279A.

5 of 1898.

"279A. Notwithstanding anything contained in the Code of Criminal Procedure, 1898, an offence punishable under section 276B or section 276C or section 276CC or section 277 or section 278 shall be deemed to be non-cognizable within the meaning of that Code.".

Certain offences to be non- cogni- zable.

75. For section 281 of the Income-tax Act, the following section shall

be substituted, namely: —

Substitu- tion of new sec- tion for section 281.

Certain transfers to be void.

'281. (1) Where, during the pendency of any proceeding under this Act or after the completion thereof, but before the service of notice under rule 2 of the Second Schedule, any assessee creates a charge on, or parts with the possession (by way of sale, mortgage, gift, exchange or any other mode of transfer whatsoever) of, any of his assets in favour of any other person, such charge or transfer shall be void as against any claim in respect of any tax or any other turn payable by the assessee as a result of the completion of the said proceeding or otherwise:

Provided that such charge or transfer shall hot be void If it is

made—

(i) for adequate consideration and without notice of the pendency of such proceeding or, as the case may be, without notice of such tax or other sum payable by the assessee; or

(ii) with the previous permission of the Income-tax Officer.

(2) This section applies to cases where the amount of tax pay- able or likely to be payable exceeds five thousand rupees and the assets charged or transferred exceed ten thousand rupees in value.

Explanation,—In this section, "assets" means land, building, machinery, plant, shares, securities and fixed deposits In banks, to the extent to which any of the assets aforesaid does not form part of the stock in trade of the business of the assessee.'.

76. After section 281A of the Income-tax Act, the following section

shall be Inserted, namely: —

Inser- tion of. new sec- tion 281B.

Provision- al attach- ment to protect revenue in cer- tain cases.

"2B1B. (1) Where, during the pendency of any proceeding for the assessment of any income or for the assessment or re-assessment of any income which has escaped assessment, the Income-tax Officer is of the opinion that for the purpose of protecting the interests of the revenue it is necessary so to do, he may, with the previous ap- proval of the Commissioner, by order in writing, attach provisionally any property belonging to the assessee in the manner provided in the Second Schedule.

(2) Every such provisional attachment shall cease to have effect after the expiry of a period of six months from the date of the order made under sub-section (1):

Provided that the Commissioner may, for reasons to be recorded in writing, extend the aforesaid period by such further period or periods as he thinks fit, so however, that the total period of exten- sion shall not in any case exceed two years.".

Amend- ment of section 28 5 A.

77. In section 285A of the Income-tax Act, in sub-section (1), for the words "for the construction of a building for, or the supply of goods or services in connection therewith to, any other person, the value of which exceeds fifty thousand rupees", the following shall be substituted, namely: —

"with another person for carrying out any work or for the supply of goods or services, the value of which work or supply or both ex- ceeds fifty thousand rupees".

78. After section 285A of the Income-tax Act, the following section

shall be inserted, namely: —

Insertion of new aection 285B.

Submis- sion of state- ments by- producers of cinema- tograph films.

"285B. Any person carrying on the production of a cinemato- graph film during the whole or any part of any financial year shall,, in respect of the period during which such production is carried on by him in such financial year, prepare and deliver or cause to be delivered to the Income-tax Officer, within thirty days from the end of such financial year or within thirty days from the date of the completion of the production of the film, whichever is earlier, a statement in the prescribed form containing particulars of all pay- ments of over five thousand rupees made by him to persons engaged by him in such production as employees or otherwise,"'.,

79. In section 287 of the Income-tax Act,—

(i) In sub-section (2), after the word "proceedings", the words

Amend- ment of section 287.

"or prosecutions" shall be inserted;

(ii) for sub-section (2), the following sub-section shall be sub-

stituted, namely: —

"(2) No publication under this section shall be made in relation to any penalty imposed under this Act until the time for presenting an appeal to the Deputy Commissioner (Appeals) has expired without an appeal having been presented or the appeal, if presented, has been disposed of.".

80. After section 292 of the Income-tax Act, the following sections

shall be inserted, namely:—•

S of 1898. 20 of 1958.

"292A. Nothing contained in section 562 of the Code of Criminal Procedure, 1898 or in the Probation of Offenders Act, 1958, shall apply to a person convicted of an offence under this Act unless that person is under eighteen years of age.

Insertion of new sections 292A and 292B. Section 562 of the Code of Crimi- nal Proce- dure, 1898 and the Plro- batlon of Offenders Act, 1958, not to apply-

Return of income, etc., not to be in- valid on certain grounds.

292B. No return of income, assessment, notice, summons or other proceeding furnished or made or issued or taken or purported to have been furnished or made or issued or taken In pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other pro- ceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.".

81. In sub-section (2) of section 295 of the Income-tax Act,—

Amend-

(i) after clause (dd)A the following clause shall be inserted,

namely: —

ment of section 295.

"(dda) the matters specified in sub-sections (2) and (3) of

section 44B;"; (ii) after clause (e), the following clauses shall be inserted,

namely: —

"(ec) the conditions or limitations subject to which any payment of rent made by an assessee shall be deducted under section 80GG;

(eea) the form of the report of audit and the particulars which such report shall contain under sub-section (IB) of sec- tion 139;

(eeb) the cases, the nature and value of assets, the limits and heads of expenditure and the outgoings, which are requir- ed to be prescribed under sub-section (6) of section 139;

(eec) the time within which any person may apply for the allotment of a permanent account number, the form and the manner In which such application may be made and the parti- culars which such application shall contain and the transactions with respect to which permanent account numbers shall be quoted on documents relating to such transactions under section 139A;";

(iii) after clause (f), the following clause shall be inserted, namely: —

" iff) the conditions subject to which the Commissioner may approve a contract for the payment of annuity under section 180A;";

(iv) after clause (mm), the following clause shall be inserted, namely: —

"(mma) the form in which the statement under section 285B shall be delivered to the Income-tax Officer;".

82. In section 296 of the Income-tax Act,—

(i) for the words "or in two successive sessions", the words "or in two or more successive sessions" shall be substituted;

Amend- ment of section 290.

(ii) for the words "in which it is so laid or the session imme- diately following", the words "immediately following the session or the successive sessions aforesaid" shall be substituted.

S3. In the Second Schedule to the Income-tax Act,—

Amend- ment of Second Schedule.

(i') rule 19A shall be re-numbered as sub-rule (2) thereof, and before that sub-rule as so re-numbered, the following sub-rule shall be inserted, namely: —

"(1) A Tax Recovery Officer, being a Gazetted Officer of the Central Government who is authorised to exercise the powers of a Tax Recovery Officer under ithis Act, may entrust any of his functions as Tax Recovery Officer to any other officer lower than him in rank (not being lower in rank than an Inspector of Income-tax) and such officer shall, in relation to the functions so entrusted to him, be deemed to be a Tax Recovery Officer:

Provided that where the Tax Recovery Officer is an Income- tax Officer any entrustment under this sub-rule shall be made only with the approval of the Deputy Commissioner (Assess- ment)."; (ii) in rule 53, in clause (c), the word "and" occurring at the end shall be omitted, and after that clause, the following clause shall be inserted, namely:— ,

"(cc) the reserve price, if any, below which the property- may not be sold; and"; (iii) to rule 56, the following proviso shall be added, namely: —

"Provided that no sale under this rule shall be made if the amount bid by the highest bidder is lese than the reserve price, if any, specified under clause (oc) of rule 53."; (iv) rule 59 shall be re-numbered as sub-rule (2) thereof, and before that sub-rule es sb re-numbered, the following sub-rule shall be inserted, namely: —

" (1) Where the sale of a property, for which a reserve price

has been specified under clause (cc) of rule 53, has been post- poned for want of a bid of an amount not less than such reserve price, it shall be lawful for an Income-tax Officer, If so autho- rised by the Commissioner in this behalf, to bid for the property on behalf of the Central Government at any subsequent sale.";

(v) in Part III, after rule 68, the following rule shall be inserted, namely: —

Accep- tance of property in satis- faction of amount due from the de- faulter.

"68A. (1) Without prejudice to the provisions contained in. this Part, an Income-tax Officer, duly authorised by the Commis- sioner in this behalf, may accept in satisfaction of the whole or any part of the amount due from the defaulter the property, the sale of which has been postponed for the reason mentioned in sub-rule (1) of rule 59, at such price as may be agreed upon between the Income-tax Officer and the defaulter.

(2) Where any property is accepted under sub-rule (1) the defaulter shall deliver possession of such property to the Income-tax Officer and on the date the possession of the property Is delivered to the Income-tax Officer, the property shall vest In the Central Government and the Central Government shall, where necessary, intimate the concerned Registering Officer appointed under the Registration Act, 1908, accordingly.

16 of 1908.

(3) Where the price of the property agreed upon under sub- rule (1) exceeds the amount due from the defaulter, such excess shall be paid by the Income-tax Officer to the defaulter within a period of three months from the date of delivery of possession of the property and where the Income-tax Officer fails to pay such excess within the period aforesaid, the Central Government shall, for the period commencing on the expiry of such period and ending with the date of payment of the amount remaining unpaid, pay simple interest at twelve per cent, per annum to the defaulter on such amount,";

(vi) in rule 73,—

(i) after sub-rule (3), the following sub-rule shall be in- serted, namely: —

"(3A) A warrant of arrest issued by a Tax Recovery Officer under sub-rule (2) or sub-rule (3) may also be exe- cuted by any other Tax Recovery Officer within whose jurisdiction the defaulter may for the time being be found";

(ii) in sub-rule (4),—

(a) for the words, brackets and figures "sub-rule (2) or sub-rule (3)", the words "this rule" shall be substituted, and after the words "Tax Recovery Officer", the words "issuing the warrant" shall be inserted;

(b) after the proviso, the following Explanation shall be inserted, namely: —

"Explanation.—For the purposes of this rule, where the defaulter is a Hindu undivided family, the Karta thereof shall be deemed to be the defaulter.".

CHAPTER III

AMENDMENTS TO THE WEALTH-TAX ACT, 1957

84. Throughout the Wealth-tax Act, 1957 (hereafter in this Chapter 27 of l"07.

referred to as the Wealth-tax Act),—

(i) for the expression "Appellate Assistant Commissioner", wherever it occurs, the expression "Deputy Commissioner (Appeals)" shall be substituted;

Substi- tution of certain expres- sions by- certain other ex- pressions.

(ii) for the expression "Inspecting Assistant Commissioner of Wealth-tax" or the expression "Inspecting Assistant Commissioner", wherever it occurs, the expression "Deputy Commissioner (Assess- ment)" shall be substituted,

and such other consequential amendments, as the rules of grammar may require, shall also be made.

85. In section 2 of the Wealth-tax Act,—

Amend- ment of section 2.

(i) clauses (o) and (I) shall be omitted;

(ii) clause (Kb) shall be re-lettered as clause (hd) and before that clause as so re-lettered, the following clauses shall be inserted, namely:—

l(hb) "Deputy Commissioner (Appeals)" meang a person empowered to exercise the functions of a, Deputy Commissioner of Wealth-tax (Appeals) under section 9;

(he) "Deputy Commissioner (Assessment)" means a person empowered to exercise the functions of a Deputy Commissioner of Wealth-tax (Assessment) under section 11;';

(Hi) for clause (7c), the following clause shall be substituted, namely:—

'(k) "Income-tax Officer" means a person appointed to be a Senior Income-tax Officer or an Income-tax Officer under section 117 of the Income-tax Act;¹.

86. In section 4 of the Wealth-tax Act,—

(i) in clause (a) of sub-section (1),—

Amende ment of section 4.

(a) in sub-clause (Hi), after the words "by the individual", the words ", directly or indirectly," shall be inserted;

(b) in sub-clause (iv), the word "or" shall be inserted at the end and after that sub-clause, the following sub-clause shall be inserted, namely: —

"(v) by the son's wife, or the son's minor child, of such individual, to whom such assets have been transferred by the individual, directly or indirectly, otherwise than for adequate consideration,";

(ii) In sub-section (1A) —

(a) in clause (b), the words ", in so far as it is attributable to the interest of the individual in the property of the family," shall be omitted;

(b) for clause (c), the following clause shall be substituted,

namely:—

"(c) where the converted property has been the subject- matter of a partition (whether partial or total) amongst the members of the family, the converted property or any part thereof which is received by the spouse or minor child of the individual on such partition shall be deemed to be assets transferred indirectly by the individual to the spouse or minor child and the provisions of sub-section (1) shall, so for as may be, apply accordingly.'';

(i}i) after sub-section (5), the following sub-section shall be

inserted, namely:—

" (5A) Where a gift of money from one person to another is made by means of entries in the books of account maintained by the person making the gift or by an individual or a Hindu undivided family or a firm or an association or body of individuals with whom or which he has business or other relationship, the value of such gift shall be liable to be included in computing the net wealth of the person making the gift unless he proves to the satisfaction of the Wealth-tax Officer that the money has actually been delivered to the other person at the time the entries were made.";

(iv) in the Explanation —

(a) after clause (a), the following clause shall be inserted,

namely: —

'(aa) the expression "minor child" includes a step-child

and an adopted child;';

(b) in clause (b), the word "and" shall be inserted at the

end;

(c) in clause (c), the word "and" occurring at the end shall

be omitted;

(d) clause (d) shall be omitted.

87. In sub-section (1) of section 5 of the Wealth-tax Act, in clause (v), for the proviso, the following proviso shall be substituted, namely: —

Amend, ment of section 5.

"Provided that they are held by him in his own right as the inventor or author of such patent or copyright, as the case may be, and have not been assigned to, or acquired by, him under a contract or by way of inheritance or otherwise;".

Amend- ment at section 8.

88. In section 8 of the Wealth-tax Act, in the proviso, for the portion beginning with the words "and perform such functions" and ending with the words "work to be performed", the following shall be substituted, namely:—

"and shall perform their functions in respect of such individual, Hindu undivided family or company, as the case may be, in accord- ance with such general or special orders in writing as the Com- missioner or the Deputy Conr—¹'Tinner (Assessment) authorised by the Commissioner in this behalf may make for the purpose of facili- tating the performance of such functions",

89. After section 8A of the Wealth-tax Act, the following section shall

be inserted, namely:—

Insertion of new sec- tion 8AA,

"BAA. (1) The Commissioner may, by general or special order In writing, direct that all or any of the powers or functions conferred on or assigned to the Wea?th-tax Officer or Wealth-tax Officers by or under this Act in respect of any area, or cases or classes of cases, or persons or classes of persons shall be exercised or performed concur- rently by the Deputy Commissioner (Assessment).

Concur- rent jurisdic- tion oi Deputy Commis- sioner (Assess- ment) and Wealth- tax Offi- cer.

(2) Where under sub-section (1), a Deputy Commissioner (As- sessment) exercises concurrent jurisdiction with one or more Wealth- tax Officers In respect of any area, cases or classes of cases, or per- sons or classes of persons, the Wealth-tax Officer or Wealth-tax Offi- cers shall exercise the powers and perform the functions under this Act in relation thereto as the Deputy Commissioner (Assessment) may direct.

(3) Without prejudice to the generality of the provisions con- tained in sub-section (2) of section 13, every Wealth-tax Officer shall also observe and follow such instructions as may be issued to him for his guidance by the Deputy Commissioner (Assessment) within whose jurisdiction he performs his functions in relation to any parti- cular proceeding or the initiation of any proceeding under this Act:

Provided that no Instructions which are prejudicial to the asses- see shall he issued before an opportunity is given by the Deputy Com- missioner (Assessment) to the assessec to be heard.

Explanation.—For the purposes of this sub-section, no instruction as to the lines on which an investigation connected with the assess- ment should be made shall be deemed to be an instruction prejudi- cial to the assessee.

(4) Where an order is mado under sub-section (1) and the De- puty Commissioner (Assessment) exercises the powers or performs the functions of a Wealth-tax Officer in respect of any case or person or proceeding, references in this Act or in any ride made thereunder to the Wealth-tax Officer shall bo construed as including references to the Deputy Commissioner (Assessment) and, accordingly,—

(i) any provision of this Act requiring approval or sanction

of the Deputy Commissioner (Assessment) shall not apply;

(ii) any appeal which would otherwise have lain to the De-

puty Commissioner (Appeals) shall lie to the Commissioner;

(Hi) any appeal which would have lain from an order of the Deputy Commissioner (Appeals) to the Appellate Tribunal shall lie from the order of the Commissioner.".

90. In section 8B of the Wealth-tax Act, for sub-section (1), the fol- lowing sub-section shall be substituted, namely: —

Amend- ment of section 8B.

"(1) The Commissioner may, after Riving the assessee a reason- able opportunity of being hoard in 1he matter, wherever it is pos- sible to do so, and after recording his reasons for doing so, transfer

any case from one or more of the following Officers subordinate to him, namely: —

(a) any Wealth-tax Officer or Wealth-tax Officers; (b) any Wealth-tax Officer or Wealth-tax Officers having concurrent jurisdiction with the Deputy Commissioner (Assess- ment),

to any other Wealth-tax Officer or Wealth-tax Officers [whether with or without concurrent jurisdiction with the Deputy Commissioner (Assessment)] and the Board may similarly transfer any case from any one or more of the Officers mentioned in clauses (a) and (b) to any one or more of the other Officers aforesaid:

Provided that nothing in this sub-section shall be deemed to re- quire any such opportunity to be given where a transfer is from any Wealth-tax Officer or Wealth-tax Officers [whether with or with- out concurrent jurisdiction with the Deputy Commissioner (Assess- ment)] to any other Wealth-tax Officer or Wealth-tax Officers [whether with or without concurrent jurisdiction with the Deputy Commissioner (Assessment)] and the offices of all such Officers are situated in the same city, locality or place;

Provided further that—

(a.) where any case has been transferred from any Wealth" tax Officer or Wealth-tax Officers to two or more Wealth-tax Officers, the Wealth-tax Officers to whom the case is eo trans- ferred shall have concurrent jurisdiction over such case and shall perform their functions in accordance with such general or special orders in writing as the Board or the Commissioner or the De- puty Commissioner (Assessment) authorised by the Commis- sioner in this behalf, may make for the purpose of facilitating the performance of such functions;

(b) where any case has been transferred from any Wealth- tax Officer or Wealth-tax Officers [whether with or without concurrent jurisdiction with the Deputy Commissioner (Assess- ment) ] to two or more Wealth-tax Officers with concurrent juris- diction with the Deputy Commissioner (Assessment), the Offi- cers [including the Deputy Commissioner (Assessment) ] to whom the case is so transferred shall have concurrent jurisdic- tion over such case and shall perform their functions in accord- ance with such general or special orders in writing as the Board or the Commissioner may make for the purpose of facili- tating the performance of such functions and the Wealth-tax Officers shall perform their functions also in accordance with such orders or directions as the Deputy Commissioner (Assess- ment) may make under section 8 or, as the case may be, under sub-section (2) of section 8AA".

91. In section 9 of the Wealth-tax Act,—

Amend- ment of sec- tion 9.

(i) for the words "an Appellate Assistant Commissioner of Wealth-tax", the words and brackets "a Deputy Commissioner of Wealth-tax (Appeals)" shall be substituted;

(ii) for the words "Appellate Assistant Commissioners", at both the places where they occur, the words and brackets "Deputy Com- missioners of Wealth-tax (Appeals)" shall be substituted.

92. In section 11 of the Wealth-tax Act,—

Amend-

ment 01

suction 11.

(i) for the words "an Inspecting Assistant Commissioner of Wealth-tax", the words and brackets "a Deputy Commissioner of Wealth-tax (Assessment)" shall be substituted;

(it) for the words "Inspecting Assistant Commissioners of Wealth-tax" and the words "Inspecting Assistant Commissioners", the words and Drackets "Deputy Commissioners of Wealth-tax (Assessment)'' shall be substituted.

93. In section 11B of the Wealth-tax Act, after clause (b), the follow- ing clause shall be inserted, namely:—

Amend-

ment of

section

11B.

" (c) in a case where two or more Wealth-tax Officers have con- current jurisdiction over such assessee in respect of such function, be the Wealth-tax Officers empowered to perform such function by the Board or, as the case may be, the Wealth-tax Officers to whom such function has been assigned by an order of the Commissioner or by an order or a direction of the Deputy Commissioner (Assess- ment) under section 8 or, as the case may be, under sub-section (2) of section SAA.".

94. In sub-section (2) of section 12 of the Wealth-tax Act, for the Amend- ment of section 12.

words "Inspecting Assistant Commissioners", the words and brackets "Deputy Commissioners (Assessment)" shall be substituted.

Amend-

ment of

•ection 13.

95. In sub-section (1) of section 13 of the Wealth-tax Act, in the pro- viso, for the words "Appellate Assistant Commissioner of Wealth-tax", the words and brackets "Deputy Commissioner (Appeals)" shall be sub- stituted.

96. In section 15A of the Wealth-tax Act, for clause (c), the following clause shall be substituted, namely:—

Amend-

ment of

section

ISA.

"(c) in the case of a company, by the managing director there- of, or where for any unavoidable reason such managing director is not able to sign and verify the return or where there is no manag- ing director, by any other director thereof, or any other person, for the time being mainly in charge of the affairs of the company.".

97. In section 15B of the Wealth-tax Act,—

(i) for sub-section (1), the following sub-section shall be substi- tuted, namely: —

Amend-

ment of

section

IBB.

"(i) Where the tax payable on the basis of any return fur- nished under section 14 or section 15 exceeds five hundred rupees, the assessee shall be liable to pay such tax on or before furnish- ing the return and the return shall be accompanied by proof of payment of such tax.";

(ii) for sub-section (3), the following sub-section shall be substi- tuted, namely: —

"(3) If any assessee fails to pay the tax or any part thereof in accordance with the provisions of sub-section (1J, the Wealth- tax Officer may direct that a sum equal to two per cent, of such tax or part thereof, as the case may be, shall be recovered from him by way of penalty for every month during which the default continues:

Provided that before levying any such penalty, the assessee shall be given a reasonable opportunity of being heard.".

98. After section 17 of the Wealth-tax Act, the following section shall be inserted, namely: —

"17A. (1) No order of assessment shall be made under section 16 at any time after the expiration of a period of—

((a) four years from the 1st day of April, 1973, where the assessment year is an assessment year commencing on or before that date;

Insertion of n*w SMUon 17A. Tim"- limit for comple- tion of aiaeesment and re- assess- ment.

(b) four years from the end of the assessment year in which the net wealth was first assessable, where the assessment year is an assessment year commencing on or after the 1st day of April, 1974.

(2) No order of assessment or re-assessment shall be made under section 17,—

(a) where the assessment or re-assessment is to be made in relation to any proceeding under this Act which is pending on the 1st day of April, 1973, at any time after the expiration of a period of four years from tb j 1st day of April, 1973;

(b) where the assessment or re-assessment is to be made in a case falling within clause (a) of sub-section (1) of section 17 for which a notice has been served under that sub-section on or after the 1st day of April, 1973, at any time after the expiration of a period of four years from the end of the assessment year in which such notice was served;

(c) where the assessment or re-assessment is to be made in a case falling within clause (b) of sub-section (I) of section 17 for which a notice has been served under that sub-section on or after the 1st day of April, 1973, after the expiration of a period of—

(i) four yerrs from the end of the assessment year In which the net wealth was first assessable, or

(iH one year from the date of service of such mt ce,

whichever period expires later.

Explanation —In computing the period of limitation for the pur- poses of this section—

(i) the time taken in rc-^pening the whole or any part of the proceeding;

(ii) the time taken in givinp an opportunity to the assessee to be re-heard under the proviso to section 39;

(Hi) the time taken in the prosecution of any person for any offence under this Act committed by him in the course of any assessment proceeding under this Act (such time being computed from the date of the filing of the complaint to the date of its final disposal); and

(iv) the period during which the assessment proceeding Is stayed by an order or injunction of any court,

dhall be excluded.".

99. In section 18 of the Wealth-tax Act,—

Ajnead- ment of section 18.

(i) in sub-section (1), for clauses (i), (ii), (Hi) and the Ex- planations, the following clauses and Explanations shall be substitut- ed, namely: —

'(i) in the cases referred to in clause (a), in addition to the amount of wealth-tax, if any, payable by him, a sum equal to two per cent, of the tax for every month during which the default continued;

(ii) in the cases referred to in clause (b), in addition to the amount of wealth-tax payable by him, a sum which shall not be less than ten per cent., but which shall not exceed fifty per cent, of the amount of the wealth-tax, if any, which would have been avoided if the net wealth returned by such person had been accepted as the correct net wealth;

(in) in the cases referred to in clause (c), in addition to any wealth-tax payable by him, a sum which shall not be less than, but which shall not exceed five times, the amount of tax sought to be evaded by reason of the concealment of particulars of any assets or the furnishing of inaccurate particulars in respect of any assets or debts.

Explanation 1.—For the purposes of clause (Hi) of this sub- section, the expression "the amount of tax sought to be evaded",—

(a) in any case where—

(i) the amount representing the value of any asset in respect of which particulars have been concealed; or (ii) the amount of difference between the value of any asset or debt returned and the value thereof on assessment, as a result of the furnishing of inaccurate particulars in respect thereof; or

(Hi) the aggregate of such amounts,

exceeds the net wealth assessed, means the tax that would have been assessable on the amount representing the value of the asset in respect of which the particulars have been concealed or on the amount of difference or, as the case may be, on the aggregate of such amounts, had such amount or the amount of difference or the aggregate, as the case may be, been the net wealth;

(b) in any other case, means the difference between the tax on the net wealth assessed and the tax that would have been assessable had the assessed net wealth been reduced b y-

(i) the amount representing the value nf the asset in respect of which particulars have been concealed; or

(H) the amount of difference between the value of any asset or debt returned and the value thereof on assessment, as a result of the furnishing rrf inaccurate particulars in respect thereof; or

(Hi) the aggregate of such amounts*,

as the case mav be,

Explanation 2.—Where in respect of any facts material to the computation of the net wealth of any person under this Act,—

(A) such person fails to offer an explanation, or

(B) such person offers an explanation which he is not able to substantiate or which is found by the Wealth-tax Officer or the Deputy Commissioner (Appeals) to be false,

then, the amount added or disallowed in computing the net wealth of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, bo deemed to represent the value of the assets in respect of which particulars have been concealed.

Eocplanation 3.—Where any person who has not previously been assessed under this Act fails, without reasonable cause, to furnish within the period specified in clause (a) or, as the case may be, clause (b) of sub-section (1) of section 17A a return of his net wealth which he is required to furnish under section 14 in respect of any assessment year and, until the expiry of either of the periods applicable to him, no notice had been issued to him under sub-section (2) of section 14 or sub-section (1) of section 17 and the Wealth-tax Officer or the Deputy Commis- sioner (Appeals) is satisfied that in respect of such assessment year such person has assessable¹ net wealth, then, such person shall, for the purposes of clause (ic) of this sub-section, be deem- ed to have concealed the particulars of his assets or furnished inaccurate particulars of any assets or debts in respect of such assessment year, notwithstanding that such person furnishes a return of his net wealth at any time after the expiry of either of the periods aforesaid applicable to him in pursuance of a notice under section ]7.

Eocplanation 4.—Where the value of any asset returned by any person is less than seventy per cent, of the value of such asset as determined in an assessment under section 16 or section 17, such person shall be deemed to have furnished inaccurate particulars of such asset within 1he meaning of clause (c) of this sub-section, unless he proves that the value of the asset as return- ed by him is the correct value.';

(ii) sub-section (1A) shall be omitted; (iii) sub-sections (2A) and (2B) shall be omitted; (iv) for sub-section (3), the following sub-sections shall be substituted, namely: —

"(3) Notwithstanding anything contained in clause (iii) of sub-section (1), if, in a case falling under clause (c) of that sub- section, the amount (as determined by the Wealth-tax Officer on pqc/i-crpo'-it") m respect of which penalty is imposable under cla- use^) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under sub- section (1) for payment by way of penalty without the previous approval of the Deputy Compti^sioner (Assessment).

(3A) Notwithstandinp inT 'hing contained in this section the penalty imposed under clause (iii) of sub-section (7) reku with Explanation 3 to that sub-section and the penalty impose '

under clause (i) of that sub-section shall not exceed, in the aggregate, five times the amount of the tax sought to be evaded.". (v) for the Explanation below sub-section (5), the following Ex- planation shall be substituted, namely: —

"Explanation,—In ci mputing the period of limitation for the purposes of this section,—

(i) any period during which the immunity granted under section 22H remained in force;

(u) the time taken in giving an opportunity to the assessee to be re-heard under the proviso to section 39; and

(Hi) any period during which a proceeding under this section for the levy of penalty is stayed by an order or in- junction of any court,

shall be excluded.".

100, In Chapter IV of the Wealth-tax Act, after section 18, the following sections shall be inserted, namely: —

Insertion. of new sections ISA and 18B.

"18A. (1) If a person,—

(a) being legally bound to state the truth of any matter touching the subject of his assessment, refuses to answer any question demanded of him by a Wealth-tax Officer or a Deputy Commissioner (Appeals) or a Deputy Commissioner (Assess ment) or a Commissioner, in the exercise of his powers under this Act; or

Penalty for .failure to answer questions, sign state- ments, allow inspec- tions, etc.

(b) refuses to sign any statement made by him in the course of any proceeding under this Act which a Wealth-tax Officer or a Deputy Commissioner (Appeals) or a Deputy Commissioner (Assessment) or a Commissioner may legally require him to sign,

he shall pay, by way of penalty, a sum which may extend to one thousand rupees.

(2) If a person, without reasonable cause, fails to furnish in due time such statement or information which such person is bound to furnish to the Wealth-tax Officer under section 38, he shall pay, by way of penalty, a sum which may extend to ten rupees for every day during which the failure continues.

(3) No order shall be made under this section except by a Deputy Commissioner (Appeals) or a Deputy Commissioner (Assess- ment) or a Commissioner, and where a contravention of the provi- sions of this section occurs in the course of any proceeding before a Wealth-tax Officer, the Wealth-tax Officer shall refer the case to the Deputy Commissioner (Assessment) for passing such orders as he deems fit.

(4) No order under this section shall be passed by any Officer referred to in sub-section (3), unless the person on whom the penal- ty Is proposed to be imposed is given an opportunity of being heard in the matter by such Officer.

18B. (1) Notwithstanding anything contained in this Act, the Commissioner may, in his discretion, whether on his own motion or otherwise,—

Power to reduce or waive penalty- iii certain cases.

(i) reduce or waive the amount of penalty imposed or im- posable on a person under clause (i) of sub-section (1) of sec- tion 18 for failure without reasonable cause to furnish the return of net wealth which such person was required to furnish under sub-section (1) of section 14; or

(ii) reduce or waive U,e amount of penalty imposed or im- posable on a person under clause (Hi) of sub-section (1) of section 18,

if he is satisfied that such person,—

(a) in the case referred to in clause (i), has prior to the issue of a notice to him under sub-section (2) of section 14, voluntarily and in good faith, made full and true disclosure of his net wealth, and

(b) in the case referred to in clause (ii), has, prior to the detection by the Wealth-tax Officer, of the concealment of parti- culars of assets or of the inaccuracy of particulars furnished in respect of any asset or debt in respect of which the penalty is imposable, voluntarily and in good faith made full and true dis- closure of such particulars,

and also has co-operated in any inquiry relating to the assessment of his net wealth and has either paid or made satisfactory arrange- ments for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assess- ment year.

Explanation.—For the purposes of this sub-section, a person shall be deemed to have made full and true disclosure of the parti- culars of his assets or debts in any case where the excess of net wealth assessed over the net wealth returned is of such a nature as not to attract the provisions of clause (c) of sub-section (1) of section 18.

(2) Notwithstanding anything contained in sub-section (1), if in a case falling under clause (c) of sub-section (1) of section 18, the net wealth in respect of which the penalty is imposed or impos- able for the relevant assessment year, or, where such disclosure relates to more than one assessment year, the net wealth for any one of the relevant assessment years, exceeds five hundred thousand rupees, no order reducing or waiving the penalty under sub-section (1) shall be made by the Commissioner, except with the previous approval of the Board.

(3) Where an order has been made under sub-section (1) in favour of any person, whether such order relates to one or more assessment years, he shall not be entitled to any relief under this section in'relation to any other assessment year at any time after the making of such order.

(4) Without prejudice to the powers conferred on him by any other provision of this Act, the Commissioner may, on an applica- tion made in this behalf by an assessee, and after recording his rea- sons for so doing, reduce or waive the amount of any penalty payable

by the assessee under this Act or stay or compound any proceeding for the recovery of any such amount, if he is satisfied that—

(i) to do otherwise would cause genuine hardship to the

asscssee, having regard to the circumstances of the case, and

(ii) the assessee has co-operated in any inquiry relating to the assessment or an^ proceeding for the recovery of any amount due from him. (5) Every order made under thi= section shall be final and shall

not be called into question by any court or any other authority.".

101. After Chapter V oi the Wealth-uix Act, the following Chapter

shall be inserted, namely: —

Insertion of new Chapter VA.

'CHAPTER VA

SETTLEMENT OF CASES

22A. In this Cliaptei, unless the context otherwise requires,—

Defini- tions.

(a) "case" means any proceeding under this Act for or in connection with the assessment or re-assessment of any person in respect of any year or years which may be pending before a Wealth-tax authority on the date on which an application referred to in section 22C is made;

(b) "Wealth-tax authority'¹ means a Director of Inspection, a Commissioner, a Deputy Commissioner (Appeals), a Deputy Commissioner (Assessment) or a Wealth-tax Officer.

22B, (1) The Board may constitute from amongst its members a Committee to be known as the Wealth-tax Settlement Committee (hereafter in this Chapter referred to as the Settlement Committee) for the settlement of cases under this Chapter.

Wealth- tax Set- tlement Com- mittee.

(2) The Settlement Committee constituted under sub-section (2) shall consist of not less than three members and shall function for such period as the Board may specify in this behalf.

Applica- tion for settle- ment of cases.

22C. (I) An assessee may, at any stage of a case relating to him, make an application in such form and in such manner and contain- ing such particulars as may be prescribed to the Settlement Com- mittee to have the case settled and any such application shall be dis- posed of in the manner hereinafter provided.

(2) Every application made under sub-section (1) shall bo

accompanied with such fees as may be prescribed.

(3) An application made under sub-section (1) shall not be

allowed to be withdrawn by the applicant.

Procedure on receipt of an appli- cation under section 22C.

22D. (1) On receipt of an application under section 22C, the Settlement Committee may call for a report from the Wealth-tax authority concerned and on the basis of the materials contained in such report and having regard to the interests of the revenue and having regard to the nature and circumstances of the case or the complexity of the investigation involved therein, the Settlement Committee may, by order, allow all the matters covered by the ap- plication or any part thereof to be proceeded with or reject the application:

Provided that no matter covered by the application shall be pro- ceeded with if the Settlement Committee is of the opinion that concealment of particulars of the net wealth on the part of the

applicant or perpetration of fraud by him on any Wealth-tax autho- rity for evading any tax or other sum payable under this Act has been established by any Wealth-tax authority:

Provided further that no order under this sub-section rejecting an application or disallowing any matter covered by it to be pro- ceeded with shall be passed unless an opportunity has been given to the applicant of being heard.

(2) A copy of every order passed under sub-section (1) shall be sent to the applicant and to the Wealth-tax authority concerned.

(3) Where all the matters or any part thereof covered by the application is allowed to be proceeded with under sub-section (1), the Settlement Committee may call for the relevant records from the Wealth-tax authority concerned and after examination of such records if the Settlement Committee is of the opinion that any fur- ther enquiry or investigation in the matter is necessary, it may direct the Wealth-tax authority concerned to make such further enquiry or investigation and furnish a report thereof.

(4) After examination of the records and the report, if any, of the Wealth-tax authority concerned, received under sub-section (3), and after giving an opportunity to the applicant and to the Wealth-tax authority concerned to be heard, either in person or through a representative duly authorised in this behalf, and after examining such further evidence as may be placed before It or obtained by it, the Settlement Committee may pass such order on the application, in accordance with the provisions of this Act, as it thinks fit.

(5) The materials brought on record before the Settlement Committee shall be considered by all the members thereof before passing any order under sub-section (4) and, in the case of a differ- ence of opinion among the members, the opinion of the majority shall prevail and such order shall be expressed in terms of the views of the majority.

(6) Every order passed under sub-section (4) shall provide for the terms of settlement including any demand by way of tax, penalty or Interest, the manner In which any sum due under the settlement shall be paid and all other matters to make the settlement effective and shall also provide that the settlement shall be void if it is subsequently found by the Settlement Committee that It has been obtained by fraud or misrepresentation of facts.

Power of Set- tlement Commit- tee to re-open completed proceed- ings.

22E If the Settlement Committee is of the opinion (the reasons for such opinion to be recorded by it in writing) that, for the pro- per disposal of the case pending before it, it is necessary or expe- dient to re-open any proceeding connected with the case, but which has been completed under this Act by any Wealth-tax authority before the application under section 22C was made, it may, with the concurrence of the applicant, re-open such proceeding and pass such orders thereon as It thinks fit as if the case in relation to which the application for settlement had been made by the applicant under that section covered such proceeding also:

Provided that no proceeding shall 'be re-opened by the Settle- ment Committee under this section after the expiry of a period of

369 L.S.—9.

eight years from the end of the assessment year to which such pro- ceeding relates.

22F. (i) In addition to the powers conferred on the Settlement Committee under this Chapter, it shall have all the powers which ire vested in a Wealth-tax authority under this Act.

Powers and pro- cedure of Settle- meat Commit- tee.

(2) Where the matters covered by an application made under section 22C or any part thereof have been allowed to be proceeded with under section 22D, the Settlement Committee shall, until an order is passed by it under sub-section (4) of section 22D, have exclusive jurisdiction to exercise the powers and perform the func- tions of a Wealth-tax authority under this Act in relation to such matters.

(3) Notwithstanding anything contained in sub-section (2) and in the absence of any express direction to the contrary by the Settlement Committee, nothing contained in this section shall affect the operation of any other provision of this Act requiring the appli- cant to pay tax on the basis of self-assessment in relation to the matter or matters allowed to be proceeded with by the Settlement Committee.

(4) For the removal of doubt, it is hereby declared that In the absence of any express direction to the contrary by the Settlement Committee, nothing in this Chapter shall affect the operation of the provisions of this Act in so far as they relate to any matter other than that allowed to be proceeded with by the Settlement Com- mittee.

(5) The Settlement Committee shall, subject to the provisions of this Chapter, have power to regulate its own procedure (includ- ing the fixation of places and times of its meetings) and may act notwithstanding that all the members of the Settlement Com- mittee are not present at any of its meetings.

Inspection, etc., of reports.

22G. No person shall be entitled to inspect, or obtain copies of, any reports made by any Wealth-tax authority to the Settlement Committee; but the Settlement Committee may, in its discretion, furnish copies thereof to any such person on an application made to it in this behalf and on payment of the prescribed fee:

Provided that, for the purpose of enabling any person whose case Is under consideration to rebut any evidence brought on the record against him in any such report, the Settlement Committee shall, on an application made in this behalf and on payment of the prescribed fee by such person, furnish him with a certified copy of any such report or part thereof relevant for the purpose-

Powers of Settle- ment Com- mittee to grant im- munity from pro- secution.

" of 1866.

22H. (1) The Settlement Committee may, if It is satisfied that any person who made the application for settlement under section 22C has co-operated with the Settlement Committee in the proceed- ings before it and has made a full and true disclosure of his net wealth and the manner in which such wealth has been acquired, grant to such person, subject to such conditions as It may think fit to impose, immunity from prosecution for any offence under this Act or under the Indian Penal Code or under any other Central Act for the time being in force and also from the Imposition of any

penalty under this Act, with respect to the case covered by the settlement.

(2) An immunity granted to a person under sub-section (1) may, at any time, be withdrawn by the Settlement Committee, if it is satisfied that such person has not complied with the condi- tions subject to which the immunity was granted or that such per- son had, in the course of the settlement proceedings, concealed any particulars material to the settlement or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which he appears to have been guilty in connection with the settle- ment and shall also become liable to the imposition of any penalty under this Act to which such person would have been liable, had no such immunity been granted.

Order of settle- ment to be con- clusive.

221. Every order of settlement passed under sub-section (4) of secti&n 22D shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in this Chapter, be re-opened in any proceeding under this Act or under any other law for the time being in force.

Recovery of sums due under order of settle- ment. 22J- Any sum specified In an order of settlement passed under sub-section (4) of section 22D may, subject to such conditions, if any, as may be specified therein, be recovered, and any penalty for default in making payment of such sum may be Imposed and recovered in accordance with the provisions of section 32 by the Wealth-tax Officer having jurisdiction over the person who made the application for settlement under section 22C.

22K. Where—

(i) an order of settlement passed under sub-section (4) of section 22D provides for the imposition of a penalty on the person who made the application under section 22C for settle- ment, on the ground of concealment of particulars of his net wealth; or

Bar on subse- quent ap- plication for set- tlement in certain cases.

(ii) after the passing of an order of settlement under the said sub-section (4) in relation to a case, such person is convicted of any offence under Chapter VIII in relation to that case,

then, he shall not be entitled to apply for settlement under section 22C in relation to any other matter.'.

102. In section 23 of the Wealth-tax Act, after sub-section (2), the

following sub-section shall be inserted, namely:—

Amend- ment o£ section 23.

"(2A) Where a return has been filed by an assessee, no appeal under this section shall be admitted unless at the time of filing of the appeal he has paid the tax due on the net wealth returned by him:

Provided that, on an application made by the appellant in this behalf, the Deputy Commissioner (Appeals) may, for any good and

sufficient reason, to be recorded in writing, exempt him from the operation of the provision of this sub-section.'¹.

103. In section 24 of the Wealth-tax Act, for sub-section (1), the following sub-section shall be substituted, namely: —

Amend-

ment of

section 24,

"(I) An assessee objecting to an order passed by the Deputy Commissioner (Appeals) under section 18 or section ISA or section 23 or sub-section (2) of section 37, or to an order passed by the De- puty Commissioner (Assessment) under section ISA, may appeal to the Appellate Tribunal within sixty days of the date on which the order is communicated to him.".

104. In sub-section (1) of section 26 of the Wealth-tax Act, after $he Amend- .•nent of section 26.

word and figures "section 18", the words, figures and letter "or section ISA" shall be inserted.

105. In section 34A of the Wealth-tax Act, after sub-section (3), the following sub-section shall be inserted, namely: —

Amend-

ment of

section

34A.

"(3A) Where the whole or any part of the refund referred to In sub-section (3) is due to the assessee as a result of any amount having been paid by him in pursuance of any order of assessment or penalty and such amount or any part thereof having been found in appeal or other proceeding under this Act to be In excess of the amount which such assessee is liable to pay as tax or penalty or both, as the case may be, under this Act, the Central Government shall pay to such assessee simple Interest at the rate specified in Bub-section (3) on the amount so found to be in excess;—

(i) from the date such amount was paid; or (ii) where such amount was paid in instalments, from the date or dates on which any payment made came to be in excess of the amount due from such assessee as a result of the appeal or other proceeding,

to the date on which the refund is granted:

Provided that no interest under this sub-section shall be pay- able for a period of one month from the date of the passing of the order in appeal or other proceeding:

Provided further that where any Interest is payable to an assessee under this sub-section, no interest under sub-section (3) shall be payable to him in respect of the amount so found to be in excess.".

106. For section 34B of the Wealth-tax Act, the following sections shall be substituted, namely: —

Substi-

tution of

new sec-

tions

for section

34B.

Transfers

to defraud

revenue

to be void.

'34B. (1) Where, during the pendency of any proceeding under this Act or after the completion thereof, but before the service of notice under rule 2 of the Second Schedule to the Income-tax Act as made applicable to this Act by section 32, any assessee creates a charge on, or parts with (by way of sale, mortgage, gift, exchange or any other mode of transfer whatsoever) the possession of, any of his assets in favour of any other person, such charge or transfer

shall be void as against any claim in respect of any tax or any other sum payable by the assessee as a result of the completion of the said proceeding or otherwise:

Provided that such charge or transfer shall not be void, if it is made—

(i) for adequate consideration and without notice of the pendency of such proceeding or, as the case may be, without notice of such tax or other sum payable by the assessee; or

(li) with the previous permission of the Wealth-tax Officer. (2) This section applies to cases where the amount of tax payable or likely to be payable exceeds five thousand rupees and the assets charged or transferred exceed ten thousand rupees In value.

Explanation.—In this section, "assets" means land, building, machinery, plant, shares, securities and fixed deposits in bankB to the extent to which any of the assets aforesaid does not form part of the stock in trade of the business of the assessee.

Provi- sional attaoh- ment to protect revenue in certain cases.

34C. (1) Where, during the pendency of any proceeding for the assessment of net wealth or for the assessment or re-assessment of net wealth which has escaped assessment, the Wealth-tax Officer is of the opinion that for the purpose of protecting the interests of the revenue it is necessary so to do, he may, with the previous approval of the Commissioner, by order in writing, attach provisionally any property belonging to the assessee in the manner provided in the Second Schedule to the Income-tax Act as made applicable to this Act by section 32.

(2) Every such provisional attachment shall cease to have effect after the expiry of a period of six months from the date of the order made under sub-section (1):

Provided that the Commissioner may, for reasons to be recorded in writing, extend the aforesaid period by such further period or periods as he thinks fit, so however, that the total period of exten- sion shall not in any case exceed two years.'.

X07, In sub-section (1) of section 35 of the Wealth-tax Act, clause (c) shall be omitted.

Amend- ment of section 35.

108. After section 35 of the Wealth-tax Act, the following sections shall be inserted, namely: —

Insertion of new sections 35A to 35N.

Wilful attempt to evade tax, etc. "35A. (I) If a person wilfully attempts In any manner whatso- ever to evade any tax, penalty or interest chargeable or imposablo under thia Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable,—

(i) in a case where the amount sought to be evaded exceeds one hundred thousand rupees, with rigorous imprisonment for a term which may extend to seven years and with fine:

Provided that, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six months;

(ii) in any other case, with rigorous imprisonment for a term which may extend to three years or with fine or with both.

(2) If a person wilfully attempts in any manner whatsoever to evade the payment of any tax, penalty or interest chargeable or imposable under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable with rigorous imprisonment for a term which may extend to three years and shall, in the discretion of the court, also be liable to fine:

Provided that, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such im- prisonment shall not be for less than three months.

Explanation.—For the purposes of this section, a wilful attempt to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof shall include a case where any person—

(a) has in his possession or control any books of account or other documents (being books of account or other documents relevant to any proceeding under this Act) containing a false entry or statement, or

(b) makes, or causek to be made, any false entry or state-

ment in such books of account or other documents, or

(c) wilfully omits, or causes to be omitted, any relevant entry or statement in such books of account or other documents, or

(d) causes any other circumstance to exist which will have the effect of enabling such person to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof.

35B. If a person wilfully fails to furnish in due time the return of his net wealth which he is required to furnish under sub-section (1) of section 14 or by notice given under sub-section (2) of section 14 or under sub-section (1) of section 17, he shall be punishable,—

Failure to furnish returns of net wealth

(i) in a case where the amount of tax, which would have been evaded if the failure had not been discovered, exceeds one hundred thousand rupees, with rigorous Imprisonment for a term which may extend to seven years and with fine:

Provided that, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six months;

(ii) in any other case, with rigorous imprisonment for a term which may extend to three years, or with fine or with both:

Provided that a person shall not be proceeded against under this section for failure to furnish in due time the return of net wealth under sub-section (1) of section 14—

(i) for any assessment year commencing prior to the

1st day of April, 1974; or

(ii) for any assessment year commencing on or after

the 1st day of April, 1974, if—

(a) the return is furnished by him before the expiry

of the assessment year; or

(b) the tax payable by him on his net wealth deter- mined on regular assessment does not exceed three thousand rupees.

Failure to produce accounts, records,

etc. 35C. If a person wilfully fails to produce, or cause to be pro- duced, on or before the date specified in any notice under sub-section (4) of section 16, such accounts, records and documents as are refer- red to in the notice, he shall be punishable with rigorous imprison- ment for a term which may extend to one year or with fine equal to a sum calculated at a rate which shall not be less than four rupees or more than ten rupees for every day during which the default continues or with both.

35D, If a person makes a statement in any verification under this Act (other than under section 34AB) or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable,—

False statement in verifi- cation, etc., made under certain provi- sions of the Act (i) in a case where the amount of tax which would have been evaded if the statement or account had been accepted as true, exceeds one hundred thousand rupees, with rigorous im- prisonment for a term which may extend to seven years and with fine:

Provided that, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six months;

(ii) in any other case, with rigorous imprisonment for a term which may extend to three years or with fine or with both,

35E. If a person makes a statement In a verification mentioned in section 34AB which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both.

False .state- ment in verifi- cation mention- ed in sec- tion 34AB

Abetment of false return, etc. 35F, If a person abets or induces in any manner another person to make and deliver an account, statement or declaration relating to any net wealth chargeable to tax which is false and which he either knows to be false or does not believe to be true or to commit an offence under sub-section (1) of section 35A, he shall be punish- able,—

(i) In a case where the amount of tax, penalty or interest, which would have been evaded, if the declaration, account or statement had been accepted as true, or otherwise, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which may extend to seven years and with fine:

Provided that, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six months;

(ii) in any other case, with rigorous imprisonment for a term which may extend to three years, or with fine or with both.

Punish- ment for second and sub- sequent offences.

35G. If any person convicted of an offence under sub-section (1) of section 35A or section 35B or section 35D or section 35F, is again convicted for the same offence, he shall be punishable for the second and for every subsequent offence with rigorous imprisonment for a term which may extend to seven years and with fine:

Provided that, in the absence of special and adequate reasons

to the contrary to be recorded in the judgment of the court, such

imprisonment shall not be for less than six months.

35H. (2) Where an offence under this Act has been committed

by a Hindu undivided family, the Karta thereof shall be deemed to be guilty of the offence and shall be liable to be proceeded against Offences by Hindu undivided families.

and punished accordingly:

Provided that nothing contained in this sub-section shall render the Karta liable to any punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (I), where an offence under this Act has been committed by a Hindu undivided family and it is proved that the offence has been com- mitted with the consent or connivance of, or is attributable to any neglect on the part of, any member thereof, such member shall also be deemed to be guilty of that offence and shall be liable to be pro- ceeded against and punished accordingly.

351. (1) A person shall not be proceeded against for an offence

under this Act except at the instance of the Commissioner.

Prosecu- tions at the ins-

(2) The Commissioner may, either before or after the institution

of proceedings, compound any offence under this Act.

tance of Cammis- '.loner and power of Commis- siomer to compound offences.

6 of 1898.

Certain offerees to be non- en gni- zabJe.

35J. Notwithstanding anything contained in the Code of Crimi- nal Procedure, 1898, an offence punishable under section 35A or section 35B or section 35D or section 35F shall be deemed to be non- cognizable within the meaning of that Code.

35K. (1) A person shall not be proceeded against for an offence

under section 35A or section 35D in relation to the assessment for

an assessment year in respect of which the penalty imposable on him under clause (Hi) of sub-section (1) of section 18 has been

reduced or waived by an order under section 18B.

Bar on prosecu- tions and on in- admissi- bility of evidence in certain circums- tances.

(2) Where any proceeding for prosecution has been taken against any person under this Act, any statement made or account or other document produced by such person before any of the Wealth-tax authorities specified in sections 8, 9', 10, 10A and 11 shall not be in- admissible as evidence for the purpose of such proceedings merely on the ground that such statement was made or such account or other document was produced in the belief that the penalty impos- able would be reduced or waived under section 18B or that the offence in respect of which such proceeding was taken would be compounded.

35L. No court inferior to that of a presidency magistrate or a

magistrate of the first class shall try any offence under this Act,

Jurisdic- tion of courts.

5 of 1898.

20 of 1958.

35M. Nothing contained in section 562 of the Code of Criminal Procedure, 1898 or in the Probation of Offenders Act, 1958 shall apply to a person convicted of an offence under this Act unless that, person is under eighteen years of age.

Section 562 of the Code 0/ Criminal Procedure, 1R08 and the Pro- bation of Offender? Act, 1958 not to apply.

35N. (1) Where during the course of any search made under section 37A, any books of account or other documents, articles or

Presump- tion as to books of account, etc., in certain eases.

things including money have been found in the possession or control of any person and such books of account or other documents are tendered, or such articles or things including money are relied upon,

by the prosecution in evidence against such person or against such person and the person referred to in section 35F for an offence under

this Act, the provisions of sub-section (5) of section 37A shall, so

far as may be, apply in relation to such books of account or ot^or

documents, articles or things including money.

369 L.S.—10