REGISTERED NO. D. (D)-72
The Gazette of India
EXTRAORDINARY
PART II—Section 1
PUBLISHED BY AUTHORITY
No. 31]
NEW DELHI, WEDNESDAY, MAY 21, 1975/VAISAKHA 31, 1897
Separate paging is given to this Part in order that it may be filed
as a separate compilation.
MINISTRY OF LAW, JUSTICE AND COMPANY AFFAIRS
(Legislative Department)
New Delhi, the\ 21st May, 1975/Vaisafcha 31, 1897 (Saka)
The following Act of Parliament received the assent of the President
on the 21st May, 1975, and is hereby published for general information: —
THE COMPANIES (TEMPORARY RESTRICTIONS ON
DIVIDENDS) AMENDMENTS ACT, 1975
No. 28 OF 1975
[21st May, 1975]
An Act to amend the Companies (Temporary Restrictions on Divi-
dends) Act, 1974.
BE it enacted by Parliament in the Twenty-sixth Year of the Republic
of India as follows: —
1. (I) This Act may be called the Companies (Temporary Restrictions
on Dividends) Amendment Act, 197,5.
(2) It shall be deemed to have come into force on the 1st day of
March, 1975.
Short title
and com-
mence-
ment.
2. In the Companies (Temporary Restrictions on Dividends) Act, 1974
(hereinafter referred to as the principal Act), in section 4, in sub-section
(1), for the words "For a period of two years", the words "Save as other-
wise provided in section 5A, for a period of two years" shall be substituted.
35 of 1974.
Amend-
ment of
section 4.
3, In section 5 of the principal Act, for the words "For a period of two
years", the words "Save as otherwise provided in section 5A, for a period
of two years" shall be substituted.
Amend-
ment of
section 5.
(199)
2OO
THE GAZETTE OF INDIA EXTRAORDINARY
[PART I I -
4. After section 5 of the principal Act, the following section shall be
inserted, namely: —
Insertion
of new
section
5A.
'5A. (2) On and from the commencement of the Companies
(Temporary Restrictions on Dividends) Amendment Act, 1975, and
subject to the provisions of sub-section (2), it shall be lawful for a
company to which this Act applies to declare, out of its profits for any
financial year, dividend exceeding, in the aggregate, its distributable
profits for that financial year.
Restric-
tions
under
which
dividends
in excess
ol distri-
butable
profits
maybe
declared.
(2) Where, after the commencement of the Companies (Tempo-
rary Restrictions on Dividends) Amendment Act, 1975, a company
to which this Act applies declares dividend for any financial year
exceeding, in the aggregate, its distributable profits for that financial
year, such company shall not, for a period of two years from the ap-
pointed day, make payment of so much of such dividend as1 exceeds
its distributable profits for that financial year and, on the expiry of
the said period, so much of the dividend as is in excess of the dis-
tributable profits of the company for the financial year aforesaid (the
amount in excess as aforesaid being hereinafter referred to as the
"deferred dividend"), shall be payable, together with interest due
thereon at the rate of eight per cent, per annum, in two equal annual
instalments, the first of which shall become due and payable on the
date on which the said period of two years expires.
(3) The provisions of sections 4 and 5 shall, except to the extent
they are inconsistent with the provisions of this section, apply to a
dividend declared under this section.
(4) No dividend shall be declared under sub-section (1) except
after complying with the provisions of sub-section (2A) of section 205
of the Companies Act, 1956.
1 of 1956.
(5) The provisions of section 205A of the Companies Act, 1956,
shall not apply to any instalment of deferred dividend:
1 of 1930.
Provided that if the whole or any part of an instalment of de-
ferred dividend remains unpaid after the expiry of a period of thirty
days from the date on which such instalment becomes due and pay-
able, the provisions of the said section 205A shall apply to the amount
so remaining unpaid.
(6) Where, after the commencement of the Companies (Tem-
porary Restrictions on Dividends) Amendment Act, 1975, a company
to which this Act applies declares dividend for any financial year
exceeding in the aggregate, its distributable profits for that financial
year, the provisions of the Income-tax Act, 1961, shall subject to the
provisions of sub-section (10)r apply in relation to the whole of the
dividend so declared, as they apply in relation to dividend which is
declared but payment of no part of which is deferred.
43 of 1061.
(7) Where, after the commencement of the Companies (Tem-
porary Restrictions on Dividends) Amendment Act, 1975, a company
to which this Act applies declares dividend for a financial year ex-
ceeding, in the aggregate, its distributable profits for that financial
S»e ]]
THE GAZETTE OF INDIA EXTRAORDINARY
iol
year, the company shall post, within forty-two days from the date of
such declaration, to every shareholder entitled to the payment of the
dividend, a warrant authorising the payment of the dividend so de-
clared, but the said warrant shall be so prepared aa to authorise—
(a) immediate payment of so much of the dividend as does
not exceed the distributable profits of the company for the fin-
ancial year aforesaid (hereinafter referred to as the "immediate
dividend"), and
(b) the payment of the deferred dividend on the respective
dates on which each instalment of the deferred dividend becomes
due and payable.
(8) Income-tax deducted under sub-section (6) from dividends
shall be so apportioned between the immediate dividend and each inj
stalment of the deferred dividend as to ensure that the income-tax
deducted from the immediate dividend and each instalment of the
deferred dividend bears the same proportion to the gross amount of
the immediate dividend and the gross amount of each instalment of
the deferred dividend as the total amount of the income-tax so de^
ducted bears to the gross amount of the total dividend declared by
thei company.
(9) Every warrant issued under sub-section (7) shall be in such
form and contain such particulars as may be specified by rules made
under this Act.
(10) Notwithstanding anything to the contrary contained in the
Income-tax Act, 1961, the Income-tax Officer shall not, for the purposes
of that Act, treat an asseesee to whom any instalment of deferred
dividend is payable as in default in respect of that part of income-tan
which is due in respect of such instalment of deferred dividend, at
reduced by the income-tax, if any, deducted at source from such in
stalment, and shall continue to treat the assessee as not in default ir
respect of the said part of the income-tax, as so reduced, until thi
expiry of thirty-five days from, the date on which such instalmeni
becomes due and payable to the assessee or the warrant in resped
of such instalment is transferred by the assessee to any person
whichever is earlier, and no interest shall be chargeable under sub
section (2) of section 220 of that Act in respect of the said part of
the income-lax, as so reduced, for the period during which the
assessee is treated as not in default.
i3 of 1961.
Explanation.—In this sub-section, "assessee" has the meaning
assigned to it in clause (7) of section 2 of the Income-tax Act, 1961.'.
43 of 1961.
K. K. SUNDAHAM,
Secy, to the Govt of India.
PRINTED BY THE GENERAL MANAGER, GOVERNMENT OF INDIA PRESS,, MINTO RbAfl,
NEW DELHI AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI, 1975
