(1) This Act may be called the Gift-tax Act, 1958.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall be deemed to have come into force on the 1st day of April, 1958.

. Vide notification No. S.O. 3912(E), dated 30th October, 2019, this Act is made applicable to the Union territory of Jammuand Kashmir and the Union territory of Ladakh.

In this Act, unless the context otherwise requires,

1

2(ii) Appellate Tribunal means the Appellate Tribunal constituted under section 252 of theIncome-tax Act;

(iii) assessee means a person by whom gift-tax or any other sum of money is payable underthis Act, and includes

(a) every person in respect of whom any proceeding under this Act has been taken for thedetermination of gift-tax payable by him or by any other person or the amount of refund due tohim or such other person;

(b) every person who is deemed to be an assessee under this Act;

(c) every person who is deemed to be an assessee in default under this Act;

3(iiia) Assessing Officer means the 4Assistant Commissioner or Deputy Commissioner orthe Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or ordersissued under sub-section (1) or sub-section (2) of section 120 or any other provision of theIncome-tax Act which apply for the purposes of gift-tax under section 7 of this Act, and also the5Joint Commissioner who is directed under clause (b) of sub-section (4) of the said section 120 toexercise or perform all or any of the powers and functions conferred on or assigned to the AssessingOfficer under that Act;

(iv) assessment includes reassessment;

(iva) assessment year means the period of twelve months commencing on the 1st day of Aprilevery year;

(v) Board means the 6Central Board of Direct Taxes constituted under the Central Boards ofRevenue Act, 1963 (54 of 1963);

7(va) charitable purpose includes relief of the poor, education, medical relief, and theadvancement of any other object of general public utility 8;

9

10

11(vii) the expressions company, Indian company and company in which the public aresubstantially interested shall have the meanings respectively assigned to them under section 2 of theIncome-tax Act;

12

(viii) donee means any person who acquires any property under a gift, and, where a gift ismade to a trustee for the benefit of another person, includes both the trustee and the beneficiary;

(ix) donor means any person who makes a gift;

(x) executor means an executor or administrator of the estate of a deceased person;

13^{(xi) the expressions firm, partner and partnership shall have the meanings respectivelyassigned to them under section 2 of the Income-tax Act;}

(xii) gift means the transfer by one person to another of any existing movable or immovableproperty made voluntarily and without consideration in money or moneys worth, and 14^{includes thetransfer or conversion of any property referred to in section 4, deemed to be a gift under that section.}

15^{Explanation.A transfer of any building or part thereof referred to in clause (iii), clause (iiia)or clause (iiib) of section 27 of the Income-tax Act by the person who is deemed under the said clauseto be the owner thereof made voluntarily and without consideration in money or moneys worth, shallbe deemed to be a gift made by such person;}

16

17^{(xiv) u2015Income-tax Actu2016 means the Income-tax Act, 1961 (43 of 1961);}

18

19

20

21^{(xvib) u2015legal representativeu2016 has the meaning assigned to it in clause (11) of section 2 of theCode of Civil Procedure, 1908 (5 of 1908);}

22

(xviii) u2015personu2016 includes a Hindu undivided family or a company or an association or a body ofindividuals or persons, whether incorporated or not;

(xix) u2015prescribedu2016 means prescribed by rules made under this Act;

(xx) u2015previous yearu2016, in relation to any assessment yearu2014

(a) in the case of an assessee 23^{having no source of income, profits or gains or having asource of income, profits or gains in respect of which there is no previous year under theIncome-tax Act, means the twelve months ending on the 31st day of March immediatelypreceding the assessment year;}

24

(c) in the case of any other assessee, means the previous year as defined in 25^{section 3 of thethe Income-tax Act if an assessment were to be made under that Act for that year :}

26^{Provided that where a person who has not been assessed under this Act for any assessmentyear makes a gift on a date which does not fall within a previous year as defined insub-clause (a)}27 ^{or sub-clause (c), the previous year shall be the twelve months ending on the31st day of March immediately preceding the assessment year;}

28

(xxi) u2015principal officeru2016, used with reference to a company or any association of persons,meansu2014

(a) the secretary and treasurer, manager, managing agent, managing director or agent of thecompany or association; or

(b) any person connected with the management of the affairs of the company or associationupon whom the 29^{Assessing Officer has served a notice of his intention of treating him as theprincipal officer thereof;}

(xxii) u2015propertyu2016 includes any interest in property, movable or immovable;

(xxiii) u2015taxable giftsu2016 means gifts chargeable to gift-tax under this Act;

30^{1(xxiiia) territories to which this Act extends shall be deemed to include the Union territories ofDadra and Nagar Haveli, Goa, Daman and Diu, and Pondicherryu2014}

(a) as respects any period for the purposes of section 5; and(b) as respects any period included in the previous year, for the purposes of making anyassessment for the assessment year commencing on the 1st day of April, 1963, or for anysubsequent year;

(xxiv) u2015transfer of propertyu2016 means any disposition, conveyance, assignment, settlement,delivery, payment or other alienation of property and, without limiting the generality of the foregoing,includesu2014

(a) the creation of a trust in property;

(b) the grant or creation of any lease, mortgage, charge, easement, licence, power,partnership or interest in property;

(c) the exercise of a power of appointment 31^{(whether general, special or subject to anyrestrictions as to the persons in whose favour the appointment may be made) of property vestedin any person, not the owner of the property, to determine its disposition in favour of any personother than the donee of the power; and}

(d) any transaction entered into by any person with intent thereby to diminish directly orindirectly the value of his own property and to increase the value of the property of any otherperson;

32^{(xxv) the expressions u2015Chief Commissioneru2016, u2015Director Generalu2016, u2015Commissioneru2016,u2015Commissioner (Appeals), u2015Director,} 33^{4u2015Additional Director of Income-taxu2016, u2015AdditionalCommissioner of Income-taxu2016, u2015Additional Commissioner of Income-tax (Appeals), u2015}34^{JointDirector}35^{u2015Joint Commissioner, u2015Deputy Commissioner (Appeals),} 36^{u2015Assistant CommissionerCommissioner or Deputy Commissioneru2016, u2015Income-tax Officer, u2015Tax Recovery Officeru2016 andu2015Inspector of Income-tax shall have the meanings respectively assigned to them under section 2of the Income-tax Act.}

1. Clause (i) omitted by Act 4 of 1988, s. 162 (w.e.f. 1-4-1988).

2. Subs. by Act 53 of 1962, s. 2, for clauses (ii), (iii) and (iv) (w.e.f. 1-4-1963).

3. Ins. by Act 4 of 1988, s. 162 (w.e.f. 1-4-1988).

4. Subs. by Act 21 of 1998, s. 76, for Assistant Commissioner (w.e.f. 1-10-1998).

5. Subs. by s. 76, ibid., for Deputy Commissioner (w.e.f. 1-10-1998).

6. Subs. by Act 54 of 1963, s. 5 for Central Board of Revenue constituted under the Central Board of Revenue Act, 1924(w.e.f. 1-1-1964).

7. Ins. by Act 53 of 1962, s. 2 (w.e.f. 1-4-1963).

8. The words not involving the carrying on of any activity for profit omitted by Act 67 of 1984, s. 71 (w.e.f. 1-4-1984).

9. Clause (vi) omitted by Act 4 of 1988, s. 162 (w.e.f. 1-4-1988).

10. Clause (via) omitted by s. 162, ibid. (w.e.f. 1-4-1988).

11. Subs. by s. 162, ibid., for clause (vii) (w.e.f. 1-4-1988).

12. Clause (viia) omitted by s. 162, ibid. (w.e.f. 1-4-1988).

13. Subs. by s. 162, ibid., for clause (xi) (w.e.f. 1-4-1989).

14. Subs. by Act 32 of 1971, s. 37, for includes the transfer of any property deemed to be a gift under section 4(w.e.f. 1-4-1972).

15. Ins. by Act 11 of 1987, s. 90 (w.e.f. 1-4-1988).

16. Clause (xiii) omitted by Act 4 of 1988, s. 162 (w.e.f. 1-4-1989).

!7. Subs. by Act 53 of 1962, s. 2, for clause (xiv) (w.e.f. 1-4-1963).

18. Clause (xv) omitted by Act 4 of 1988, s. 162 (w.e.f. 1-4-1989).

19. Clause (xvi) omitted by, s. 162, ibid. (w.e.f. 1-4-1989).

20. Clause (xvia) omitted by, s. 162, ibid. (w.e.f. 1-4-1989).

21. Ins. by Act 53 of 1962, s. 2 (w.e.f. 1-4-1963).

22. Clause (xvii) omitted by Act 4 of 1988, s. 162 (w.e.f. 1-4-1989).

23. Ins. by Act 12 of 1959, s. 27 (w.e.f. 1-4-1959).

24. Sub-clause (b) omitted by Act 4 of 1988, s. 162 (w.e.f. 1-4-1989).

25. Subs. by Act 53 of 1962, s. 2, for u2015clause (11) of section 2 (w.e.f. 1-4-1963).

26. Ins. by Act 12 of 1959, s. 27 (w.e.f. 1-4-1959).

27. The words u2015or sub-clause (b) omitted by Act 4 of 1988, s. 162 (w.e.f. 1-4-1989).

28. The Second proviso omitted by s.162, ibid, (w.e.f. 1-4-1989).

29. Subs. by s. 161, ibid., for u2015Gift-tax Officer (w.e.f. 1-4-1988).

30. Ins. by The Taxation Laws (Extension to Union Territories) Regulation, 1963 (3 of 1963), by s. 3 and the Schedule(w.e.f. 1-4-1963).

31. Ins. by Act 44 of 1980, s. 42 (w.e.f. 1-4-1980).

32. Ins. by Act 4 of 1988, s. 162 (w.e.f. 1-4-1988).

33. Ins. by Act 32 of 1994, s. 54 (w.e.f. 1-6-1994).

34. Subs. by Act 21 of 1998, s. 76 for u2015Deputy Director (w.e.f. 1-10-1998).

35. Subs. by s. 76, ibid., for u2015Deputy Commissioner (w.e.f. 1-10-1998).

36. Subs. by s. 76, ibid., for u2015Assistant Commissioner (w.e.f. 1-10-1998).

1(1) Subject to the other provisions contained in this Act, there shall becharged for every 2assessment year commencing on and from the 1st day of April, 1958, 3but beforethe 1st day of April, 1987, a tax (hereinafter referred to as gift-tax) in respect of the gifts, if any, made by a person during the previous year (other than gifts made before the 1st day of April, 1957), at the rate orrates specified in 4Schedule I.

5(2)6Subject to the other provisions (including provisions for the levy of additional gift-tax)contained in this Act, there shall be charged for every assessment year commencing on and from the 1stday of April, 1987, gift-tax in respect of the gifts, if any, made by a person during the previous year, at therate of thirty per cent. on the value of all taxable gifts.

7(3) Notwithstanding anything contained in sub-section (2), the provisions of this Act shall cease toapply and shall have no effect whatsoever in respect of any gift made on or after the 1st day of October,1998.

1. Section 3 renumbered as sub-section (1) thereof by Act 23 of 1986, s. 41 (w.e.f. 1-4-1987).

2. Subs. by Act 53 of 1962, s. 3, for u2015financial year (w.e.f. 1-4-1963).

3. Ins. by Act 23 of 1986, s. 41 (w.e.f. 1-4-1987).

4. Subs. by Act 3 of 1989, s. 79, for u2015the Schedule (w.e.f. 1-4-1989).

5. Ins. by Act 23 of 1986, s. 41 (w.e.f. 1-4-1989).

6. Subs. by Act 4 of 1988, s. 163, for u2015Subject to the other provisions contained in this Act (w.e.f. 1-4-1989).

7. Ins. by Act 21 of 1998, s. 75 (w.e.f. 1-1-1998).

1(1) For the purposes of this Act,u2014

(a ) where property is transferred otherwise than for adequate consideration, the amount bywhich the 2value of the property as on the date of the transfer and determined in the manner laiddown in Schedule II, exceeds the value of the consideration shall be deemed to be a gift made by thetransferor :

3Provided that nothing contained in this clause shall apply in any case where the property istransferred to the Government or where the value of the consideration for the transfer is determined orapproved by the Central Government or the Reserve Bank of India;

(b) where property is transferred for a consideration which, having regard to the circumstances ofthe case, has not passed or is not intended to pass either in full or in part from the transferee to thetransferor, the amount of the consideration which has not passed or is not intended to pass shall bedeemed to be a gift made by the transferor;

(c) where there is a release, discharge, surrender, forfeiture or abandonment of any debt, contractor other actionable claim or of any interest in property by any person, the value of the release,discharge, surrender, forfeiture or abandonment to the extent to which it has not been found to thesatisfaction of the 4Assessing Officer to have been bona fide, shall be deemed to be a gift made bythe person responsible for the release, discharge, surrender, forfeiture or abandonment;

(d) where a person absolutely entitled to property causes or has caused the same to be vested inwhatever manner in himself and any other person jointly without adequate consideration and suchother person makes an appropriation from or out of the said property, the amount of the appropriationused for the benefit of the person making the appropriation or for the benefit of any other person shallbe deemed to be a gift made in his favour by the person who causes or has caused the property to beso vested;

5(e) where a person who has an interest in property as a tenant for a term or for life or aremainderman surrenders or relinquishes his interest in the property or otherwise allows his interest tobe terminated without consideration or for a consideration which is not adequate, the value of theinterest so surrendered, relinquished or allowed to be terminated or, as the case may be, the amount by which such value exceeds the consideration received, shall be deemed to be a gift made by suchperson.

6(2) Where, in the case of an individual being a member of a Hindu undivided family, any propertyhaving been the separate property of the individual has been converted by the individual into propertybelonging to the family through the act of impressing such separate property with the character ofproperty belonging to the family or throwing it into the common stock of the family (such property beinghereafter in this sub-section referred to as the converted property), then, notwithstanding anythingcontained in any other provision of this Act or any other law for the time being in force, for the purpose ofcomputation of the taxable gifts made by the individual, the individual shall be deemed to have made agift of so much of the converted property as the members of the Hindu undivided family other than suchindividual would be entitled to, if a partition of the converted property had taken place immediately aftersuch conversion.

1. Section 4 renumbered as sub-section (1) thereof by Act 32 of 1971, s. 37 (w.e.f. 1-4-1972).

2. Subs. by Act 49 of 1991, s. 84, for u2015market value of the property at the date of the transfer (w.e.f. 1-4-1992).

3. The Proviso ins. by Act 25 of 1975, s. 29 (w.e.f. 1-4-1974).

4. Subs. by Act 4 of 1988, s. 161, for u2015Gift-tax officer (w.e.f. 1-4-1988).

5. Ins. by Act 44 of 1980, s. 42 (w.e.f. 1-4-1980).

6. Ins. by Act 32 of 1971, s. 37 (w.e.f. 1-4-1972).

(1) Gift-tax shall not be charged under this Act inrespect of gifts made by any person

(i) of immovable property situate outside the territories to which this Act extends;

(ii) of movable property situate outside the said territories unless the person

(a) being an individual, is a citizen of India and is ordinarily resident in the said territories, or

(b) not being an individual, is resident in the said territories, during the previous year inwhich the gift is made;

1(iia) being an individual who is not resident in India, to any person resident in India, of foreignforeign currency or other foreign exchange as defined respectively, in clause (c) and clause (d) ofsection 2 of the Foreign Exchange Regulation Act, 1947 (7 of 1947), remitted from a country outsideIndia in accordance with the provisions of the said Act and any rules made thereunder, during theperiod commencing on the 26th day of October, 1965, and ending on the 28th day of February, 1966,or such later date as the Central Government may, by notification in the Official Gazette, specify inthis behalf.

Explanation. For the purposes of this clause, the expression resident in India shall have themeaning assigned to it in the Income-tax Act;

2(iib) being a person resident outside India, out of the moneys standing to his credit in aNon-resident (External) Account in any bank in India in accordance with the provisions of theForeign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder.

Explanation. For the purposes of this clause, person resident outside India has the meaningassigned to it in clause (q) of section 2 of the Foreign Exchange Regulation Act, 1973 (46 of 1973);

(iic) being a citizen of India, or a person of Indian origin, who is not resident in India, to anyrelative of such person in India, of convertible foreign exchange remitted from a country outside Indiain accordance with the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973), andany rules made thereunder.

Explanation. For the purposes of this clause and clause (iid),

(a) a person shall be deemed to be of Indian origin if he or either of his parents or any of hisgrand-parents was born in undivided India;

(b) convertible foreign exchange means foreign exchange which is for the time beingtreated by the Reserve Bank of India as convertible foreign exchange for the purposes of theForeign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder;

(c) relative has the meaning assigned to it in clause (41) of section 2 of the Income-taxAct;

(d) resident of India shall have the meaning assigned to it in the Income-tax Act;

(iid) being a citizen of India or a person of Indian origin, who is not resident in India, to anyrelative of such person in India of property in the form of 3any foreign exchange asset as defined inclause (b) of section 115C of the Income-tax Act;

4(iie) being an individual who is a non-resident Indian, once out of the moneys standing to hiscredit in an account opened and operated in accordance with the Non-resident (Non-repatriable)Rupee Deposit Scheme, 1992.

Explanation. For the purposes of this clause, non-resident Indian shall have the meaningassigned to it in clause (e) of section 115C of the Income-tax Act;

(iii) of property in the form of savings certificates issued by the Central Government, which thatGovernment, by notification in the Official Gazette exempts from gift-tax;

5

6(iiib) of property in the form of Special Bearer Bonds, 1991;

7(iiic)8being an individual or a Hindu undivided family, of property in the form of such CapitalInvestment Bonds as the Central Government may, by notification in the Official Gazette, specify inthis behalf subject to a maximum of rupees ten lakhs in value in the aggregate in one or moreprevious years :

Provided that the exemption conferred by this clause shall be available only to a person who hasinitially subscribed to the said bonds;

9(iiid) being an individual or a Hindu undivided family, of property in the form of such ReliefBonds, as the Central Government may, by notification in the Official Gazette, specify in this behalfsubject to a maximum of rupees five lakhs in value in the aggregate in one or more previous years :

Provided that the exemption conferred by this clause shall be available only to a person who hasinitially subscribed to the said Bonds;

10(iiie) being an individual who is a non-resident Indian, 11of property in the form of the bondsspecified under sub-clause (iid) of clause (15) of section 10 of the Income-tax Act:

Provided that where an individual, who is a non-resident Indian in any previous year in whichthe bonds are acquired, becomes a resident in India in any subsequent year, the provisions of thisclause shall apply in respect of the gifts of property referred to in this clause in such subsequent yearor any year thereafter.

Explanation. For the purposes of this clause, the expressions

12

(b) non-resident Indian shall have the meaning assigned to it in clause (e) of section 115Cof the Income-tax Act;

(iv) to the Government or any local authority 13or any authority referred to in clause (20A) ofsection 10 of the Income-tax Act ;

(v) to any institution or fund established 14or deemed to be established for a charitable purposeto which the provisions of 15section 80G of the Income-tax Act apply ;

16(va) (i) to such temple, mosque, gurdwara, church or other place as has been notified by theCentral Government for the purposes of 17clause (b) of sub-section (2) of section 80G of theIncome-tax Act ; or

(ii) by way of settlement on trust, of property, the income from which, according to the deedof settlement, is to be used exclusively in connection with the temple, mosque, gurdwara, churchor other place specified therein and notified as aforesaid ;

18

(vii) to any relative dependent upon him for support and maintenance, on the occasion of themarriage of the relative, subject to a maximum of rupees 19one hundred thousand in value in respectof the marriage of each such relative ;

20

21

(x) under a will ;

(xi) in contemplation of death ;

(xii) for the education of his children, to the extent to which the gifts are proved to thesatisfaction of the 22Assessing Officer as being reasonable having regard to the circumstances of thecase ;

(xiii) being an employer, to any employee by way of bonus, gratuity or pension or to thedependants of a deceased employee, to the extent to which the payment of such bonus, gratuity orpension is proved to the satisfaction of the 22Assessing Officer as being reasonable having regard tothe circumstances of the case and is made solely in recognition of the services rendered by theemployee;

23

(xv) to any person in charge of any such Bhoodan or Sampattidan movement as the CentralGovernment may, by notification in the Official Gazette, specify.

24

25(1A) Any reference in clause (v)26 of sub-section (1) to charitable purpose in relation to a giftmade on or after the 1st day of April, 1964, shall be construed as not including a purpose the whole orsubstantially the whole of which is of a religious nature.

(2) Without prejudice to the provisions contained in sub-section (1), gift-tax shall not be chargedunder this Act in respect of gifts made by any person during the previous year, subject to a maximum ofrupees 27thirty thousand in value.

28

Explanation.u2014For the purposes of this section,u2014

(a) an individual shall be deemed to be ordinarily resident in the territories to which this Actextends during the previous year in which the gift is made if during that year he is regarded as aresident but not as not ordinarily resident 29within the meaning of section 6 of the Income-tax Act,subject to the modification that references in that section to India shall be construed as references tothe territories to which this Act extends ;

(b) a Hindu undivided family, firm or other association of persons shall be deemed to be residentin the territories to which this Act extends during any previous year unless, during that year, thecontrol and management of its affairs was situated wholly outside the said territories ;

(c) a company shall be deemed to be resident in the territories to which this Act extends duringthe previous year, ifu2014

(i) it is a company formed and registered under the Companies Act, 1956 (1 of 1956), or isan existing company within the meaning of that Act ; or

(ii) during that year, the control and management of that company was situated wholly in thesaid territories ;

(d) gifts made in contemplation of deathu2016 has the same meaning as in section 191 of the IndianSuccession Act, 1925 (39 of 1925).

1. Ins. by Act 13 of 1966, s. 41 (w.e.f. 1-4-1966).

2. Ins. by Act 14 of 1982, s. 38 (w.e.f. 1-4-1983).

3. Subs. by Act 12 of 1983, s. 42, for certain words (w.e.f. 1-4-1984).

4. Ins. by Act 38 of 1993, s. 41 (w.e.f. 1-4-1993).

5. Clause (iiia) omitted by Act 23 of 1986, s. 42 (w.e.f. 1-4-1987).

6. Ins. by Act 7 of 1981, s. 7 (w.e.f. 12-1-1981).

7. Ins. by Act 14 of 1982, s. 38 (w.e.f. 1-4-1983).

8. Subs. by Act 12 of 1983, s. 42 for of property in the form of such Capital Investment Bonds (w.e.f. 1-4-1983).

9. Ins. by Act 26 of 1988, s. 67 (w.e.f. 1-4-1988).

10. Ins. by Act 3 of 1989, s. 80 (w.e.f. 1-4-1989).

11. Subs. by Act 49 of 1991, s. 85, for certain words (w.e.f. 1-4-1991).

12. Clause (a) omitted by Act 49 of 1991, s. 85 (w.e.f. 1-4-1991).

13. Ins. by Act 66 of 1976, s. 28 (w.e.f. 1-4-1977).

14. Ins. by Act 21 of 1973, s. 21 (w.e.f. 1-4-1974).

15. Subs. by Act 32 of 1971, s. 37, for section 88 (w.e.f. 1-4-1968).

16. Ins. by Act 10 of 1965, s. 71 (w.e.f. 1-4-1965).

17. Subs. by Act 43 of 1971, s. 37, for sub-section (6) of section 88 of the Income-tax Act, 1961 (w.e.f. 1-4-1968).

18. Clause (vi) omitted by 23 of 1986, s. 42 (w.e.f. 1-4-1987).

19. Subs. by Act 32 of 1994, s. 55, for thirty thousand (w.e.f. 1-4-1995).

20. Clause (viii) omitted by 23 of 1986, s. 42 (w.e.f. 1-4-1987).

21. Clause (ix) omitted, s. 42, ibid, (w.e.f. 1-4-1987).

22. Subs. by Act 4 of 1988, s. 161, for Gift-tax Officer (w.e.f. 1-4-1988).

23. Clause (xiv) omitted by 23 of 1986, s. 42 (w.e.f. 1-4-1987).

24. Clause (xvi) omitted by 23 of 1986, s. 42, (w.e.f. 1-4-1987).

25. Ins. by Act 15 of 1965, s. 21 (w.e.f. 1-4-1964).

26. The words, brackets and figures or clause (vi)omitted by Act 23 of 1986, s. 42 (w.e.f. 1-4-1987).

27. Subs. by Act 38 of 1993, s. 41, for twenty thousand (w.e.f. 1-4-1994).

28. Sub-section (3) omitted by 23 of 1986, s. 42 (w.e.f. 1-4-1989).

29. Subs. by Act 53 of 1962, s. 4, for in the taxable territories with the meaning of the income-tax Act (w.e.f. 1-4-1963).

1(1) Subject to the provisions of sub-section (2), the value ofany property, other than cash, transferred by way of gift shall, for the purpose of this Act, be its value ason the date on which the gift was made and shall be determined in the manner laid down in Schedule II.

(2) Where a person makes a gift which is not revocable for a specified period, the value of theproperty gifted shall be the capitalised value of the income from such property during the period forwhich the gift is not revocable.

1. Subs. by Act 3 of 1989, s. 81, for section 6 (w.e.f. 1-4-1989).

Aggregation of gifts made during a certain period. u2014 Omitted by the Finance Act, 1986 (23 of1986), s. 43 (w.e.f. 1-4-1987).

1The income-tax authorities specified insection 116 of the Income-tax Act shall be the gift-tax authorities for the purposes of this Act and everysuch authority shall exercise the powers and perform the functions of a gift-tax authority under this Act inrespect of any person within his jurisdiction, and for this purpose his jurisdiction under this Act shall bethe same as he has under the Income-tax Act by virtue of orders or directions issued under section 120 ofthat Act (including orders or directions assigning concurrent jurisdiction) or under any other provision ofthat Act.

Explanation.u2014For the purposes of this section, the gift-tax authority having jurisdiction in relation toa person who has no income assessable to income-tax under the Income-tax Act shall be the gift-taxauthority having jurisdiction in respect of the area in which that person resides.

1. Subs. by Act 4 of 1988, s. 164, for sections 7, 8, 9 and 10 (w.e.f. 1-4-1988).

Powers of Commissioner respecting specified areas, cases, persons, etc. u2014 Omitted by theDirect Tax Laws (Amendment) Act, 1988 (4 of 1988), s. 165 (w.e.f. 1-4-1988).

Concurrent jurisdiction of Inspecting Assistant Commissioner and Gift-tax Officer. u2014Omitted by s. 165, ibid. (w.e.f. 1-4-1988).

Power to transfer cases.u2014 Omitted by s. 165, ibid. (w.e.f. 1-4-1988).

Section 118 of the Income-tax Act and any notification issuedthereunder shall apply in relation to the control of gift-tax authorities as they apply in relation to thecontrol of the corresponding income-tax authorities, except to the extent to which the Board may, bynotification in the Official Gazette, otherwise direct in respect of any gift-tax authority.

Commissioners of gift-tax Appeals. u2014 Omitted by the Direct Tax Laws (Amendment) Act, 1988(4 of 1988), s. 165 (w.e.f. 1-4-1988).

(1) The Board may, from time to time, issue suchorders, instructions and directions to other gift-tax authorities as it may deem fit for the properadministration of this Act, and such authorities and all other persons employed in the execution of thisAct shall observe and follow such orders, instructions and directions of the Board :

Provided that no such orders, instructions or directions shall be issuedu2014

(a) so as to require any gift-tax authority to make a particular assessment or to dispose of aparticular case in a particular manner ; or

(b) so as to interfere with the discretion of the Deputy Commissioner (Appeals) or Commissioner(Appeals) in the exercise of his appellate functions.

(2) Without prejudice to the generality of the foregoing power,u2014

(a) the Board may, if it considers it necessary or expedient so to do, for the purpose of proper andefficient management of the work of assessment and collection of revenue, issue, from time to time(whether by way of relaxation of any of the provisions of sections 113, 14, 15, 16, 16B, 17 and 34or otherwise), general or special orders in respect of any class of cases, setting forth directions orinstructions (not being prejudicial to assessees) as to the guidelines, principles or procedures to be followed by other gift-tax authorities in the work relating to assessment or collection of revenue orthe initiation of proceedings for the imposition of penalties and any such order may, if the Board is ofopinion that it is necessary in the public interest so to do, be published and circulated in the prescribedmanner for general information ;

(b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardshipin any case or class of cases, by general or special order, authorise any gift-tax authority, not being aDeputy Commissioner (Appeals) or Commissioner (Appeals) to admit an application or claim for anyexemption, deduction, refund or any other relief under this Act after the expiry of the period specifiedby or under this Act for making such application or claim and deal with the same on merits inaccordance with law.

1. Subs. by Act 12 of 1990, s. 59, for u201515, 16u2016 (w.e.f. 1-4-1990).

Directors of Inspection. u2014 Omitted by the Direct Tax Laws (Amendment) Act, 1988(4 of 1988), s. 165 (w.e.f. 1-4-1988).

(1) The provisions ofsections 124 and 127 of the Income-tax Act shall, so far as may be, apply for the purposes of this Act asthey apply for the purposes of the Income-tax Act, subject to the modifications specified insub-section (2).

(2) The modifications referred to in sub-section (1) shall be the following, namely :u2014

(a) in section 124 of the Income-tax Act,u2014

(i) in sub-section (3), references to the provisions of the Income-tax Act shall beconstrued as references to the corresponding provisions of the Gift-tax Act ;

(ii) sub-section (5) shall be omitted ;

(b) in section 127 of the Income-tax Act, in the Explanation below sub-section 1(4)references to proceedings under the Income-tax Act shall be construed as including references toproceedings under the Gift-tax Act.

1. Subs. by Act 3 of 1989, s. 82, for u2015(5)u2016 (w.e.f. 1-4-1988).

Inspector of Gift-tax. u2014 Omitted by the Direct Tax Laws (Amendment) Act, 1988 (4 of 1988), s.165 (w.e.f. 1-4-1988).

Commissioner competent to perform any function or functions. u2014 Omitted by s. 165, ibid.(w.e.f. 1-4-1988).

Gift-tax Officer competent to perform any function or functions. u2014 Omitted by s. 165, ibid.(w.e.f. 1-4-1988).

Control of gift-tax authorities. u2014 Omitted by s. 165, ibid. (w.e.f. 1-4-1988).

Gift-tax authorities to follow orders, etc., of the Board. u2014 Omitted by s. 165, ibid. (w.e.f. 1-4-1988).

1 The 2Chief Commissioner or Commissioner and the 3 4JointCommissioner shall be competent to make any enquiry under this Act, and for this purpose, shall haveall the powers that an 5Assessing Officer has under this Act in relation to the making of enquiries.

1. Ins. by Act 53 of 1962, s. 9 (w.e.f. 1-4-1963).

2. Subs. by Act 4 of 1988, s. 161, for Commissioner of Gift-tax (w.e.f. 1-4-1988).

3. Subs. by s. 161, ibid., for Inspecting Assistant Commissioner of Gift-tax (w.e.f. 1-4-1988).

4. Subs. by Act 21 of 1998, s. 76, for Deputy Commissioner (w.e.f. 1-10-1988).

5. Subs. by Act 4 of 1988, s. 161, ibid., for Gift-tax Officer (w.e.f. 1-4-1988).

1(1) Every person who during a previous year has made any taxable gifts, oris assessable in respect of the taxable gifts made by any other person under this Act, which, in either case,exceeded the maximum amount not chargeable to gift-tax, shall, on or before the 30th day of June of thecorresponding assessment year, furnish a return of such gifts in the prescribed form and verified in theprescribed manner and setting forth such other particulars as may be prescribed.

(2) Notwithstanding anything contained in any other provision of this Act, a return which shows theamount of taxable gifts below the maximum amount which is not chargeable to tax shall be deemed neverto have been furnished :

Provided that this sub-section shall not apply to a return furnished in response to a notice undersection 16.

2

1. Subs. by Act 4 of 1988, s. 166, for sub-sections (1) and (2) (w.e.f. 1-4-1989).

2. Sub-section (3) omitted by s. 166, ibid. (w.e.f. 1-4-1989).

1If any person has not furnished a returnwithin the time allowed under sub-section (1) of section 13 or by a notice issued under clause (i) ofsub-section (4) of section 15, or having furnished a return discovers any omission or wrong statementtherein, he may furnish a return or a revised return, as the case may be, at any time before the expiry ofone year from the end of the relevant assessment year or before the completion of the assessment,whichever is earlier :

Provided thatu2014

(a) where such return or revised return relates to the assessment year commencing on the 1st dayof April, 1987, or any earlier assessment year, it may be furnished at any time up to and inclusive ofthe 31st day of March, 1990 or before the completion of the assessment, whichever is earlier;

(b) where such return or revised return relates to the assessment year commencing on the 1st dayof April, 1988, it may be furnished at any time up to and inclusive of the 31st day of March, 1991, orbefore the completion of the assessment, whichever is earlier.

1. Subs. by s. 167, ibid., for section 14 (w.e.f. 1-4-1989).

1The return made under section 13 or section 14 shall besigned and verifiedu2014

2(a) in the case of an individual,u2014

(i) by the individual himself ;

(ii) where he is absent from India, by the individual himself or by some person dulyauthorised by him in this behalf ;

(iii) where he is mentally incapacitated from attending to his affairs, by his guardian or anyother person competent to act on his behalf ; and

(iv) where, for any other reason, it is not possible for the individual to sign the return, by anyperson duly authorised by him in this behalf :

Provided that in a case referred to in sub-clause (ii) or sub-clause (iv), the person signing thereturn holds a valid power of attorney from the individual to do so, which shall be attached to thereturn ;

(b) in the case of a Hindu undivided family, by the karta, and, where the karta is absent fromIndia or is mentally incapacitated from attending to his affairs, by any other adult member of suchfamily ;

3(c) in the case of a company, by the managing director thereof or where for any unavoidablereason such managing director is not able to sign and verify the return, or where there is no managingdirector, by any director thereof :

4Provided that where the company is not resident in India, the return may be signed and verifiedby a person who holds a valid power of attorney from such company to do so, which shall be attachedto the return :

Provided further that,u2014

(a) where the company is being wound up, whether under the orders of the court orotherwise, or where any person has been appointed as the receiver of any assets of the company,the return shall be signed and verified by the liquidator referred to in sub-section (1) of section178 of the Income-tax Act ;

(b) where the management of the company has been taken over by the Central Governmentor any State Government under any law, the return of the company shall be signed and verified bythe principal officer thereof ;

(d) in the case of a firm, by the managing partner thereof or where for any unavoidablereason such managing partner is not able to sign and verify the return, or where there is nomanaging partner as such, by any partner thereof, not being a minor ;

(e) in the case of any other association, by any member of the association or the principalofficer thereof ; and

(f) in the case of any other person, by that person, or by some person competent to act on hisbehalf.

1. Ins. by Act 53 of 1962, s. 11 (w.e.f. 1-4-1963).

2. Subs. by Act 4 of 1988, s. 168, for clause (a) (w.e.f. 1-4-1989).

3. Subs. by Act 41 of 1975, s. 111, for clauses (c) and (d) (w.e.f. 1-4-1976).

4. The provisos added by Act 4 of 1988, s. 168 (w.e.f. 1-4-1989).

1(1) Where any tax is payable on the basis of any return furnished undersection 13 or under section 14 or in response to a notice under clause (i) of sub-section (4) of section 15or under section 16, after taking into account the amount of tax, if any, already paid under any provisionof this Act, the assessee shall be liable to pay such tax, together with interest payable under any provisionof this Act for any delay in furnishing the return, before furnishing the return and the return shall beaccompanied by proof of payment of such tax and interest.

Explanation.u2014Where the amount paid by the assessee under this sub-section falls short of theaggregate of the tax and interest as aforesaid, the amount so paid shall first be adjusted towards theinterest payable as aforesaid and the balance, if any, shall be adjusted towards the tax payable.

(2) After the regular assessment under section 15 has been made, any amount paid undersub-section (1) shall be deemed to have been paid towards such regular assessment.

(3) If any assessee fails to pay the whole or any part of such tax or interest or both in accordance withthe provisions of sub-section (1), he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax or interest or both remaining unpaid andall the provisions of this Act shall apply accordingly.

2(4) The provisions of this section shall apply in respect of assessment for the assessment yearcommencing on the 1st day of April, 1989 and subsequent assessment years.

1. Ins. by s. 169, ibid. (w.e.f. 1-4-1989).

2. Ins. by Act 36 of 1989, s. 31 (w.e.f. 1-4-1989).

1(1) (a) Where a return has been made under section 13 or section 14 or inresponse to a notice under clause (i) of sub-section (4),

(i) if any tax or interest is found due on the basis of such return after adjustment of any amountpaid by way of tax or interest, an intimation shall be sent to the assessee specifying the sum sopayable, and such intimation shall be deemed to be a notice issued under section 31 and all theprovisions of this Act shall apply accordingly ; and

(ii) if any refund is due on the basis of such return, it shall be granted to the assessee :

provided that in computing the tax or interest payable by, or refundable to the assessee, thefollowing adjustments shall be made in the taxable gifts declared in the return, namely :

(i) any arithmetical errors in the return, accounts or documents accompanying it shall berectified;

(ii) any exemption or deduction, which, on the basis of the information available in suchreturn, accounts or documents is prima facie admissible but which is not claimed or made in thereturn, shall be allowed;

(iii) any exemption or deduction claimed or made in the return, which, on the basis of theinformation available in such return, accounts or documents, is prima facie inadmissible, shall bedisallowed:

2Provided further that where adjustments are made under the first proviso, an intimation shall be sentto the assessee, notwithstanding that no tax or interest is found due from him after making the saidadjustments:

3 4Provided also that an intimation for any tax or interest due under this clause shall not be sentafter the expiry of two years from the end of the assessment year in which the gifts were first assessable.

(b) Where as a result of an order made under 2sub-section (3) or sub-section (5) of this section orsection 16 or section 22 or section 23 or section 24 or section 26 or section 28 or section 34 relating toany earlier assessment year and passed subsequent to the filing of the return referred to in clause (a), thereis any variation in the exemption or deduction claimed or made in the return, and as a result of which,

(i) if any tax or interest is found due, an intimation shall be sent to the assessee specifying thesum so payable, and such intimation shall be deemed to be a notice of demand issued undersection 31 and all the provisions of this Act shall apply accordingly; and

(ii) if any refund is due, it shall be granted to the assessee:

Provided that an intimation for any tax or interest due under this clause shall not be sent after theexpiry of four years from the end of the financial year in which any such order was passed.

5(1A) (a) Where in the case of any person, the taxable gift, as a result of the adjustments made under6the first proviso to clause (a) of sub-section (1), exceeds the taxable gift declared in the return by anyamount, the Assessing Officer shall,u2014

(i) further increase the amount of tax payable under sub-section (1) by an additional gift-taxcalculated at the rate of twenty per cent. of the tax payable on such excess amount and specify theadditional gift-tax in the intimation to be sent under sub-clause (i) of clause (a) of sub-section (1);

(ii) where any refund is due under sub-section (1), reduce the amount of such refund by anamount equivalent to the additional gift-tax calculated under sub-clause (i).

(b) Where as a result of an order under section 22 or section 23 or section 24 or section 26 orsection 28 or section 34, the amount on which additional gift-tax is payable under clause (a) has beenincreased or reduced, as the case may be, the additional gift-tax shall be increased or reduced accordingly,and,u2014(i) in a case where the additional gift-tax is increased, the Assessing Officer shall serve on theassessee a notice of demand under section 31;(ii) in a case where the additional gift-tax is reduced, the excess amount paid, if any, shall berefunded.Explanation.u2014For the purposes of this sub-section, u2015tax payable on such excess amountu2016 means thedifference between the tax on the taxable gift and the tax that would have been chargeable had suchtaxable gift been reduced by the amount of adjustments.7(1B) Where an assessee furnishes a revised return under section 14 after the issue of an intimation,or the grant of refund, if any, under sub-section (1) of this section, the provisions of sub-sections (1) and(1A) of this section shall apply in relation to such revised return andu2014

(i) the intimation already sent for any gift-tax, additional gift-tax or interest shall be amended onthe basis of the said revised return and where any amount payable by way of gift-tax, additionalgift-tax or interest specified in the said intimation has already been paid by the assessee then, if anysuch amendment has the effect ofu2014

(a) enhancing the amount already paid, the intimation amended under this clause shall besent to the assessee specifying the excess amount payable by him and such intimation shall bedeemed to be a notice of demand issued under section 31 and all the provisions of this Act, shallapply accordingly;

(b) reducing, the amount already paid, the excess amount paid shall be refunded to theassessee;

(ii) the amount of the refund already granted shall be enhanced or reduced on the basis of thesaid revised return and where the amount of refund already granted isu2014

(a) enhanced, only the excess amount of refund due to the assessee shall be paid to him;

(b) reduced, the excess amount so refunded shall be deemed to be the tax payable by theassessee and an intimation shall be sent to the assessee specifying the amount so payable, andsuch intimation shall be deemed to be a notice of demand issued under section 31 and all theprovisions of this Act, shall apply accordingly:

Provided that an assessee, who has furnished a revised return under section 14 after the serviceupon him of the intimation under sub-section (1) of this section, shall be liable to pay additional gift-tax in relation to the adjustments made under the first proviso to clause (a) of sub-section (1) andspecified in the said intimation, whether or not he has made the said adjustments in the revisedreturn.

(2)8Where a return has been made under section 13 or section 14 or in response to a notice underclause (i) of sub-section (4) of this section, the Assessing Officer shall, if he considers it necessary orexpedient to ensure that the assessee has not omitted to disclose any taxable gift or has not understated theamount or value of any such gift or has not under-paid the tax in any manner, 9serve on the assessee anotice requiring him, on a date to be specified therein, either to attend at the office of the AssessingOfficer or to produce, or cause to be produced there, any evidence on which the assessee may rely insupport of the return :

10Provided that no notice under this sub-section shall be served on the assessee after the expiry oftwelve months from the end of the month in which the return is furnished.

(3) On the date specified in the notice issued under sub-section (2) or, as soon afterwards as may be,after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officermay require on specified points, and after taking into account all relevant material which he has gathered,the Assessing Officer shall, by order in writing, assess the value of taxable gifts made by the assessee anddetermine the sum payable by him on the basis of such assessment.(4) For the purposes of making an assessment under this Act, the Assessing Officer may serve, on anyperson who has made a return under section 13 or section 14 or in whose case the time allowed undersub-section (1) of section 13 for furnishing the return has expired, a notice requiring him, on a date to bespecified therein,u2014(i) where such person has not made a return 4within the time allowed under sub-section (1) ofsection 13, to furnish a return of the taxable gifts made by him or of the taxable gifts made by anyother person in respect of which he is assessable under this Act during the previous year, in theprescribed form and verified in the prescribed manner and setting forth such other particulars as maybe prescribed, or(ii) to produce or cause to be produced such accounts, records or other documents as theAssessing Officer may require.(5) If any person,u2014(a) fails to make the return required under sub-section (1) of section 13 and has not made a returnor a revised return under section 14, or(b) fails to comply with all the terms of a notice issued under sub-section (2) or sub-section (4),

the Assessing Officer, after taking into account all relevant material which he has gathered, shall, aftergiving such person an opportunity of being heard, estimate the value of taxable gifts to the best of hisjudgment and determine the sum payable by such person on the basis of such assessment :

Provided that such opportunity shall be given by the Assessing Officer by serving a notice callingupon the person to show cause on a date and time to be specified in the notice, why the assessment shouldnot be completed to the best of his judgment:

Provided further that it shall not be necessary to give such opportunity in a case where a notice undersub-section (4) has been issued prior to the making of the assessment under this sub-section.

(6) Notwithstanding anything contained in section 6, for the purpose of making an assessment underthis Act, 11where under the provisions of section 6 read with Schedule II, the fair market value of anyproperty transferred by way of gifts is to be taken into account in such assessment, the Assessing Officermay refer the valuation of such property to the Valuation Officer,u2014

(a) in a case where the value of the property as returned is in accordance with the estimate madeby a registered valuer, if the Assessing Officer is of opinion that the value so returned is less than itsfair market value ;

(b) in any other case, if the Assessing Officer is of opinionu2014

(i) that the fair market value of the property exceeds the value of the property as returned bymore than such percentage of the value of the property as returned or by more than such amountas may be prescribed in this behalf; or

(ii) that having regard to the nature of the property and other relevant circumstances, it isnecessary so to do,

and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) ofsection 16A, clauses (ha) and (i) of sub-section (1) and sub-sections (3A) and (4) of section 23,sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957(27 of 1957), shall, with the necessary modifications, apply in relation to such reference as they apply inrelation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act.Explanation.u2014In this sub-section, Valuation Officer has the same meaning as in clause (r) ofsection 2 of the Wealth-tax Act, 1957 (27 of 1957).

12(7) Where a regular assessment under sub-section (3) or sub-section (5) is made,u2014

(a) any tax or interest paid by the assessee under sub-section (1) shall be deemed to have beenpaid towards such regular assessments;

(b) if no refund is due on regular assessment or the amount refunded under sub-section (1)exceeds the amount refundable on regular assessment, the whole or the excess amount so refundedshall be deemed to be tax payable by the assessee and the provisions of this Act shall applyaccordingly.

(8) The provisions of this section, except those of sub-section (6), as they stood immediately beforetheir amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and inrelation to any assessment for the assessment year commencing on the 1st day of April, 1988, or anyearlier assessment year and references in this section to the other provisions of this Act shall be construedas references to those provisions as for the time being in force and applicable to the relevant assessmentyear.

13Explanation.u2014An intimation sent to the assessee under sub-section (1) or sub-section (1B) shall bedeemed to be an order for the purposes of sub-section (1) of section 24.

1. Subs. by Act 4 of 1988, s. 170, for section 15 (w.e.f. 1-4-1989).

2. Ins. by Act 36 of 1989, s. 32 (w.e.f. 1-4-1989).

3. Ins. by Act 3 of 1989, s. 83 (w.e.f. 1-4-1989).

4. Subs. by Act 36 of 1989, s. 32, for provided further (w.e.f. 1-4-1989).

5. Ins. by Act 3 of 1989, s. 83 (w.e.f. 1-4-1989).

6. Subs. by Act 36 of 1989, s. 32, for the proviso (w.e.f. 1-4-1989).

7. Ins. by Act 12 of 1990, s. 60 (w.e.f. 1-4-1989).

1. Subs. by Act 36 of 1989, s. 32, for In a case referred to in sub-section (1), if the Assessing Officer (w.e.f. 1-4-1989).

8. Subs. by s. 32, ibid., for he shall serve on the assessee (w.e.f. 1-4-1989).

9. Subs. by Act 49 of 1991, s. 86, for the proviso (w.e.f. 1-10-1991).

10. Subs. by Act 12 of 1990, s. 60, for before the end of the relevant assessment year (w.e.f. 1-4-1990).

11. Ins. by Act 3 of 1989, s. 83 (w.e.f. 1-4-1989).

12. Ins. by Act 36 of 1989, s. 32 (w.e.f. 1-4-1989).

13. Ins. by Act 49 of 1991, s. 86 (w.e.f. 1-10-1991).

1(1) If the Assessing Officer 2has reasons to believe that thetaxable gifts in respect of which any person is assessable under this Act, (whether made by him or by anyother person) have escaped assessment for any assessment year (whether by reason of under-assessment or assessment at too low a rate or otherwise), he may, subject to the other provisions of this section andsection 16A, serve on such person a notice requiring him to furnish within such period, 1 as may bespecified in the notice, a return in the prescribed form and verified in the prescribed manner, setting forththe taxable gifts made by him or by such other person during the previous year mentioned in the notice, inrespect of which he is assessable, along with such other particulars as may be required by the notice, andmay proceed to assess or re-assess such gifts and also any other taxable gifts in respect of which suchperson is assessable, which have escaped assessment and which come to his notice subsequently in thecourse of the proceedings under this section for the assessment year concerned (hereafter in this sectionreferred to as the relevant assessment year); and the provisions of this Act shall, so far as may be, apply asif the return were a return required under section 13 :

Provided that where an assessment under sub-section (3) of section 15 or this section has been madefor the relevant assessment year, no action shall be taken under this section after the expiry of four yearsfrom the end of the relevant assessment year, unless any taxable gift chargeable to tax has escapedassessment for such assessment year by reason of the failure on the part of the assessee to make a returnunder section 13 or section 14 or in response to a notice issued under sub-section (4) of section 15 or thissection or to disclose fully and truly all material facts necessary for his assessment for that assessmentyear :

4Provided further that the Assessing Officer shall, before issuing any notice under this sub-section,record his reasons for doing so.

Explanation.u2014Production before the Assessing Officer of account books or other evidence fromwhich material evidence could with due diligence have been discovered by the Assessing Officer will notnecessarily amount to disclosure within the meaning of the foregoing proviso.

(1A) No notice under sub-section (1) shall be issued for the relevant assessment year,u2014

(a) in a case where an assessment under sub-section (3) of section 15 or sub-section (1) of thissection has been made for such assessment year,u2014

(i) if four years have elapsed from the end of the relevant assessment year, unless the casefalls under sub-clause (ii) or sub-clause (iii);

(ii) if four years, but not more than seven years, have elapsed from the end of the relevantassessment year, unless the value of taxable gifts chargeable to tax which have escapedassessment amounts to or is likely to amount to rupees fifty thousand or more for that year;

(iii) if seven years, but not more than ten years, have elapsed from the end of the relevantassessment year, unless the value of taxable gifts chargeable to tax which have escapedassessment amounts to or is likely to amount to rupees one lakh or more for that year;

(b) in any other case,u2014

(i) if four years have elapsed from the end of the relevant assessment year, unless the casefalls under sub-clause (ii) or sub-clause (iii) ;

(ii) if four years, but not more than seven years, have elapsed from the end of the relevantassessment year, unless the value of taxable gifts chargeable to tax which have escapedassessment amounts to or is likely to amount to rupees twenty-five thousand or more for thatyear ;

(iii) if seven years, but not more than ten years, have elapsed from the end of the relevantassessment year, unless the value of taxable gifts chargeable to tax which have escapedassessment amounts to or is likely to amount to rupees fifty thousand or more for that year.

Explanation.u2014For the purposes of sub-section (1) and sub-section (1A), the following shall alsobe deemed to be cases where taxable gifts chargeable to tax have escaped assessment, namely :u2014

(a) where no return of taxable gifts has been furnished by the assessee although the taxablegifts made by him or the taxable gifts made by any other person in respect of which he isassessable under this Act during the previous year exceeded the maximum amount which is notchargeable to gift-tax;

(b) where return of taxable gifts has been furnished by the assessee but no assessment hasbeen made and it is noticed by the Assessing Officer that the assessee has understated the amountor value of the taxable gifts or has claimed excessive exemption or deduction in the return.

(1B) (a) In a case where an assessment under sub-section (3) of section 15 or sub-section (1) of thissection has been made for the relevant assessment year, no notice shall be issued undersub-section (1)5by an Assessing Officer, who is below the rank of 6Assistant Commissioner or DeputyCommissioner, unless the 7Joint Commissioner is satisfied on the reasons recorded by such AssessingOfficer that it is a fit case for the issue of such notice :

Provided that, after the expiry of four years from the end of the relevant assessment year, no suchnotice shall be issued unless the Chief Commissioner or Commissioner is satisfied, on the reasonsrecorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice.

(b) In a case, other than a case falling under clause (a), no notice shall be issued undersub-section (1) by an Assessing Officer, who is below the rank of 7Joint Commissioner, after theexpiry of four years from the end of the relevant assessment year, unless the 7Joint Commissioner, issatisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of suchnotice.

(2) Nothing contained in this section limiting the time within which any proceedings for assessmentor reassessment may be commenced shall apply to an assessment or reassessment to be made on theassessee or any person in consequence of or to give effect to any finding or direction contained in anorder under section 22, section 23, section 24, section 26 or section 28 8or by a court in any proceedingsunder any other law.

1. Subs. by Act 4 of 1988, s. 171, for sub-section (1) (w.e.f. 1-4-1989).

2. Subs. by Act 3 of 1989, s. 84, for for reasons to be recorded by him in writing, is of the opinion (w.e.f. 1-4-1989).

3. The words not being less than thirty days omitted by the Act 32 of 2003, s. 101, (w.e.f. 1-4-1989).

4. Ins. by Act 3 of 1989, s. 84 (w.e.f. 1-4-1989).

5. Subs. by Act 12 of 1990, s. 61, for except by an Assessing Officer of the rank of Assistant Commissioner or DeputyCommissioner (w.e.f. 1-4-1990).

6. Subs. by Act 21 of 1998, s. 76, for Assistant Commissioner (w.e.f. 1-10-1998).

7. Subs. by s. 76, ibid., for Deputy Commissioner (w.e.f. 1-10-1998).

8. Added by Act 4 of 1988, s. 171 (w.e.f. 1-4-1989).

1 ,2(1) No order of assessmentshall be made under section 15 at any time after the expiry of 3two years from the end of the assessmentyear in which the gifts were first assessable :

4Provided that,u2014

(a) where the gifts were first assessable in the assessment year commencing on the 1st day ofApril, 1987, or any earlier assessment year, such assessment may be made on or before the 31st dayof March, 1991;

(b) where the gifts were first assessable in the assessment year commencing on the 1st day ofApril, 1988, such assessment may be made on or before the 31st day of March, 1992.

(2) No order of assessment or re-assessment shall be made under section 16 after the expiry of twoyears from the end of the financial year in which the notice under sub-section (1) of that section wasserved :

Provided that,u2014

(i) where the notice under clause (a) of sub-section (1) of section 16 was served during thefinancial year commencing on the 1st day of April, 1985, or the 1st day of April, 1986, suchassessment or re-assessment may be completed on or before the 31st day of March, 1990 ;

(ii) where the notice under clause (b) of sub-section (1) of section 16 relates to the assessment forthe assessment year commencing on the 1st day of April, 1985, or the 1st day of April, 1986, suchassessment or re-assessment may be completed on or before the 31st day of March, 1990, or theexpiry of two years from the end of the financial year in which such notice was served, whichever islater.

Explanation.u2014References to section 16 in the proviso shall be construed as references to that sectionas it stood before its amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988).

(3) Notwithstanding anything contained in sub-sections (1) and (2), an order of fresh assessment inpursuance of an order passed on or after the 1st day of April, 1975, under section 22, section 23 orsection 24, setting aside or cancelling an assessment, may be made at any time before the expiry of 5twoyears from the end of the financial year in which the order under section 22 or section 23 is received bythe 6Chief Commissioner or Commissioner or, as the case may be, the order under section 24 is passedby the Commissioner :

7Provided that where the order setting aside or cancelling the assessment was passed during thefinancial year commencing on the 1st day of April, 1985, or the 1st day of April, 1986, the order of freshassessment may be made on or before the 31st day of March, 1990.

(4) The provisions of sub-sections (1) and (2) shall not apply to the assessment or re-assessment madeon the assessee in consequence of, or to give effect to, any finding or direction contained in an orderunder section 22, section 23, section 24, section 26 or section 28 or in an order of any court in aproceeding otherwise than by way of appeal or reference under this Act and such assessment or reassessment may, subject to the provisions of sub-section (3), be completed at any time.

Explanation 1.u2014In computing the period of limitation for the purposes of this sectionu2014

(i) the time taken in reopening the whole or any part of the proceeding or in giving anopportunity to the assessee to be reheard under the proviso to section 38, or

(ii) the period during which the assessment proceeding is stayed by an order or injunction of anycourt,

shall be excluded:

8Provided that where immediately after the exclusion of the aforesaid time or period, the period oflimitation referred to in sub-sections (1), (2) and (3) available to the Assessing Officer for making anorder of assessment or re-assessment, as the case may be, is less than sixty days, such remaining periodshall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extendedaccordingly.

Explanation 2.u2014Where, by an order referred to in sub-section (4), any gift is excluded from thetaxable gifts for an assessment year in respect of an assessee, then, an assessment of such gift for anotherassessment year shall, for the purposes of sub-section (2) of section 16 and this section, be deemed to beone made in consequence of, or to give effect to, any finding or direction contained in the said order.

1. Ins. by Act 41 of 1975, s. 112 (w.e.f. 1-10-1975).

2. Subs. by Act 4 of 1988, s. 172, for sub-section (1) and (2) (w.e.f. 1-4-1989).

3. Subs. by Act 13 of 1989, s. 31, for one year (w.e.f. 1-4-1989).

4. Subs. by s. 31, ibid., for the proviso (w.e.f. 1-4-1989).

5. Subs. by Act 4 of 1988, s. 172, for four years (w.e.f. 1-4-1989).

6. Subs. by s. 161, ibid., for Commissioner (w.e.f. 1-4-1988).

7. The proviso ins. by s. 171, ibid. (w.e.f. 1-4-1989).

8. The proviso ins. by Act 49 of 1991, s. 87 (w.e.f. 27-9-1991).

1(1) Where a return of gifts for anyassessment year under sub-section (1) of section 13 or section 14, or in response to a notice underclause (i) of sub-section (4) of section 15, is furnished after the 30th day of June of such year, or is notfurnished, the assessee shall be liable to pay simple interest at the rate of two per cent. for every month orpart of a month comprised in the period commencing on the 1st day of July of the assessment year, and,u2014

(a) where the return is furnished after the 30th day of June ending on the date of furnishing of thereturn; or

(b) where no return has been furnished, ending on the date of completion of the assessment undersub-section (5) of section 15,

on the amount of tax payable on the taxable gifts as determined 2under sub-section (1) of section 15 oron regular assessment.

3Explanation 1.u2014In this sub-section, tax payable on the taxable gifts as determined undersub-section (1) of section 15 shall not include the additional gift-tax, if any, payable under section 15.

Explanation 2.u2014Where in relation to an assessment year the assessment is made for the first timeunder section 16, the assessment so made shall be regarded as a regular assessment for the purposes ofthis section.

2Explanation 3.u2014In this sub-section, u2015tax payable on the taxable gifts as determined undersub-section (1) of section 15 or on regular assessmentu2016 shall, for the purposes of computing the interestpayable under section 14B, be deemed to be tax payable on the taxable gifts as declared in the return.

(2) The interest payable under sub-section (1) shall be reduced by the interest, if any, paid undersection 14B towards the interest chargeable under this section.

(3) Where the return of gifts for any assessment year, required by a notice under sub-section (1) ofsection 16 issued 2after the determination of taxable gifts under sub-section (1) of section 15 or after thecompletion of an assessment under sub-section (3) or sub-section (5) of section 15 or section 16, isfurnished after the expiry of the time allowed under such notice, or is not furnished, the assessee shall beliable to pay simple interest at the rate of two per cent. for every month or part of a month comprised inthe period commencing on the day immediately following the expiry of the time allowed as aforesaid,and,u2014

(a) where the return is furnished after the expiry of the time aforesaid, ending on the date offurnishing the return; or

(b) where no return has been furnished, ending on the date of completion of the re-assessmentunder section 16,

on the amount by which the tax on the taxable gifts determined on the basis of such re-assessmentexceeds the tax on the taxable gifts as determined 2under sub-section (1) of section 15 or on the basis ofthe earlier assessment aforesaid.

4

(4) Where, as a result of an order under section 22 or section 23 or section 24 or section 26 orsection 28 or section 34, the amount of tax on which interest was payable under this section has beenincreased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and,u2014

(i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee anotice of demand in the prescribed form specifying the sum payable, and such notice of demand shallbe deemed to be a notice under section 31 and the provisions of this Act shall apply accordingly, and

(ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded.

(5) The provisions of this section shall apply in respect of assessments for the assessment yearcommencing on the 1st day of April, 1989 and subsequent assessment years.

1. Ins. by Act 4 of 1988, s. 173 (w.e.f. 1-4-1989).

2. Ins. by Act 3 of 1989, s. 85 (w.e.f. 1-4-1989).

3. Subs. by s. 85, ibid., for Explanation 1 (w.e.f. 1-4-1989).

4. The Explanation omitted by s. 85, ibid, (w.e.f. 1-4-1989).

1(1) If the 2Assessing Officer, 3Deputy Commissioner (Appeals), 4Commissioner(Appeals), 5Chief Commissioner or Commissioner or Appellate Tribunal, in the course of anyproceedings under this Act, is satisfied that any person

6

(b) has 7 failed to comply with a notice under sub-section (2) or sub-section (4) of section 15;15; or

(c) has concealed the particulars of any gift or deliberately furnished inaccurate particularsthereof, he or it may, by order in writing, direct that such person shall pay by way of penalty

8

9(ii) in the cases referred to in clause (b), in addition to the amount of gift-tax payable byhim, a sum which shall not be less than one thousand rupees, but which may extend totwenty-five thousand rupees for each such failure;

(iii) in the cases referred to in clause (c), in addition to any gift-tax payable by him, a sumwhich shall not be less than twenty per cent. but which shall not exceed one and half times theamount of the tax, if any, which would have been avoided if the return made by such person hadbeen accepted as correct:

10Provided that in the cases referred to in clause (b), no penalty shall be imposable if the personproves that there was a reasonable cause for the failure referred to in that clause.

11Explanation.Where any adjustment is made in the taxable gifts declared in the return underthe proviso to clause (a) of sub-section (1) of section 15 and additional gift-tax charged under thatsection, the provisions of this sub-section shall not apply in relation to the adjustments so made.

(2) No order imposing a penalty under sub-section (1) shall be made unless the assessee has beenheard or has been given a reasonable opportunity of being heard.

12(3) No order imposing a penalty under sub-section (1) shall be made,u2014

(i) by the Income-tax Officer, where the penalty exceeds ten thousand rupees;

(ii) by the 13Assistant Commissioner or Deputy Commissioner where the penalty exceedstwenty thousand rupees,

except with the prior approval of the 14Joint Commissioner.

(4) A 15Deputy Commissioner (Appeals), 16a Commissioner (Appeals), a 17Chief Commissioner orCommissioner or the Appellate Tribunal on making an order under this section imposing a penalty, shallforthwith send a copy of the same to the 18Assessing Officer.

19(5) No order imposing a penalty under this section shall be passedu2014

(i) in a case where the assessment to which the proceedings for imposition of penalty relate is thesubject-matter of an appeal to the Deputy Commissioner (Appeals) or Commissioner (Appeals) undersection 22 or an appeal to the Appellate Tribunal under sub-section (2) of section 23, after the expiryof the financial year in which the proceedings, in the course of which action for the imposition ofpenalty has been initiated, are completed, or six months from the end of the month in which the orderof the Deputy Commissioner (Appeals) or the Commissioner (Appeals) or, as the case may be, theAppellate Tribunal is received by the Chief Commissioner or Commissioner, whichever is later;

(ii) in a case where the relevant assessment is the subject-matter of revision under sub-section (2)of section 24, after the expiry of six months from the end of the month in which such order of revisionis passed;

(iii) in any other case, after the expiry of the financial year in which the proceedings, in thecourse of which action for the imposition of penalty has been initiated, are completed, or six monthsfrom the end of the month in which action for imposition of penalty is initiated, whichever periodexpires later.

Explanation.u2014In computing the period of limitation for the purposes of this section,u2014

(i) the time taken in giving an opportunity to the assessee to be reheard under the proviso tosection 38; and

(ii) any period during which a proceeding under this section for the levy of penalty is stayed byan order or injunction of any court,shall be excluded.

(6) The provisions of this section as they stood immediately before their amendment by the DirectTax Laws (Amendment) Act, 1989 (3 of 1989) shall apply to and in relation to any assessment for theassessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as forthe time being in force and applicable to the relevant assessment year.

1. Subs. by Act 53 of 1962, s. 14, for Section 17 (w.e.f. 1-4-1963).

2. Subs. by Act 4 of 1988, s. 161, for Gift-tax Officer (w.e.f. 1-4-1988).

3. Subs. by s. 161, ibid., for Appellate Assistant Commissioner (w.e.f. 1-4-1988).

4. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).

5. Subs. by Act 4 of 1988, s. 161, for Commissioner (w.e.f. 1-4-1988).

6. Clause (a) omitted by Act 3 of 1989, s. 86 (w.e.f. 1-4-1989).

7. The words without reasonable cause omitted by Act 46 of 1986, s. 40 (w.e.f. 10-9-1986).

8. Clause (i) omitted by Act 3 of 1989, s. 86 (w.e.f. 1-4-1989).

9. Subs. by s. 86, ibid., for clause (ii) (w.e.f. 1-4-1989).

10. Subs. by s. 86, ibid., for the proviso (w.e.f. 1-4-1989).

11. Ins. by s. 86, ibid. (w.e.f. 1-4-1989).

12. Subs. by Act 3 of 1989, s. 86, for sub-section (3) (w.e.f. 1-4-1989).

13. Subs. by Act 21 of 1998, s. 76, for Assistant Commissioner (w.e.f. 1-10-1998).

14. Subs. by s. 76, ibid., for Deputy Commissioner (w.e.f. 1-10-1998).

15. Subs. by Act 4 of 1988, s. 161 for An Appellate Assistant Commissioner (w.e.f. 1-4-1988).

16. Subs. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).

17. Subs. by Act 4 of 1988, s. 161 for Commissioner (w.e.f. 1-4-1988).

18. Subs. by s. 161, ibid., Gift-tax Officer (w.e.f. 1-4-1988).

19. Ins. by Act 3 of 1989, s. 86 (w.e.f. 1-4-1989).

1(1) If a person,u2014

(a) being legally bound to state the truth of any matter touching the subject of his assessment,refuses to answer any question put to him by a gift-tax authority in the exercise of his powers underthis Act; or

(b) refuses to sign any statement made by him in the course of any proceedings under this Act,which a gift-tax authority may legally require him to sign; or

(c) to whom a summons is issued under sub-section (1) of section 36, either to attend to giveevidence or produce books of account or other documents at a certain place and time, omits to attendor produce the books of account or documents at the place and time,

he shall pay, by way of penalty, a sum which shall not be less than five hundred rupees but which mayextend to ten thousand rupees for each such default or failure :

Provided that no penalty shall be imposable under clause (c) if the person proves that there wasreasonable cause for the said failure.

(2) If a person fails to furnish in due time any statement or information which such person is bound tofurnish to the Assessing Officer under section 37, he shall pay, by way of penalty, a sum which shall notbe less than one hundred rupees but which may extend to two hundred rupees for every day during whichthe failure continues :

Provided that no penalty shall be imposable under this sub-section if the person proves that there wasreasonable cause for the said failure.

(3) Any penalty imposable under sub-section (1) or sub-section (2) shall be imposedu2014

(a) in a case where the contravention, failure or default in respect of which such penalty isimposable occurs in the course of any proceeding before a gift-tax authority not lower in rank than a2Joint Director or a 3Joint Commissioner, by such gift-tax authority;

(b) in any other case, by the 2Joint Director or the 3Joint Commissioner.

(4) No order under this section shall be passed by any gift-tax authority referred to in sub-section (3)unless the person on whom penalty is proposed to be imposed has been heard or has been given areasonable opportunity of being heard in the matter by such authority.

Explanation.u2014In this section, gift-tax authority includes a Director General, Director, 2JointDirector, 4Assistant Director or Deputy Director or Valuation Officer while exercising the powersvested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of thematters specified in sub-section (1) of section 36.

1. Subs. by Act 3 of 1989, s. 87, for section 17A (w.e.f. 1-4-1989).

2. Subs. by Act 21 of 1998, s. 76, for Deputy Director (w.e.f. 1-10-1998).

3. Subs. by s. 76, ibid., for Deputy Commissioner (w.e.f. 1-10-1998).

4. Subs. by s. 76, ibid., for Assistant Director (w.e.f. 1-10-1998).

1If a person making a taxable gift pays into the treasurywithin fifteen days of his making the gift any part of the amount of tax due on the gift calculated at rates specified in the Schedule 2or at the rate specified in sub-section (2) of section 3, he shall, at the time ofassessment under section 15, be given creditu2014

(i) for the amount so paid; and

(ii) for a sum equal to one-ninth of the amount so paid, so however, that such sum shall in nocase exceed one-tenth of the tax due on the gift.

Explanation.u2014If a person makes more than one taxable gift in the course of a previous year, theamount of tax due on any one of such gifts shall be the difference between the total amount of tax due onthe aggregate value of all the taxable gifts so far made, including the taxable gift in respect of which taxhas to be paid, calculated at the rates specified in the Schedule or, as the case may be 3at the ratespecified in sub-section (2) of section 3, and the total amount of tax on the aggregate value of all the giftsmade during that year, excluding the taxable gift in respect of which tax has to be paid, calculated at therates specified in the Schedule or, as the case may be, 3at the rate specified in sub-section (2) ofsection 3.

1. Subs. by Act 41 of 1975, s. 115, for section 18 (w.e.f. 1-4-1976).

2. Subs. by Act 23 of 1986, s. 44, for or, in case where the provisions of Section 6-A are applicable to a gift, in the mannerspecified in that section (w.e.f. 1-4-1987).

3. Subs. by s. 44, ibid., for in the manner specified in section 6A (w.e.f. 1-4-1987).

1Where any stamp duty has been paidunder any law relating to stamp duty in force in any State on an instrument of gift of property, theassessee shall be entitled to a deduction from the gift-tax payable by him of an amount equal to the stampduty so paid or one-half of the gift-tax payable, before making the deduction under this section,whichever is less.

2

1. Subs, by Act 14 of 1982, s. 39 for section 18A (w.e.f. 1-4-1983).

2. Chapter IV-A containing section 18-B omitted by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989). Earlier it was inserted by Act 4 of1988, s. 175 (w.e.f. 1-4-1989).

(1) Where a person dies, hisexecutor, administrator or other legal representative shall be liable to pay out of the estate of the deceasedperson, to the extent to which the estate is capable of meeting the charge, the gift-tax determined aspayable by such person, or any sum which would have been payable by him under this Act if he had notdied.

(2) Where a person dies without having furnished a return under section 13, or after having furnisheda return which the 1Assessing Officer has reason to believe to be incorrect or incomplete, the1Assessing Officer may make an assessment of the value of the taxable gifts made by such person anddetermine the gift-tax payable by him, and for this purpose may, by the issue of the appropriate noticewhich would have had to be served upon the deceased person if he had survived, require from theexecutor, administrator, or other legal representative of the deceased person any accounts, documents, orother evidence which might, under the provisions of section 15, have been required from the deceasedperson.

(3) The provisions of sections 13, 14 and 16 shall apply to an executor, administrator or other legalrepresentative as they apply to any person referred to in 2those sections.

1. Subs. by Act 4 of 1988, s. 161, for u2015Gift-tax Officeru2016 (w.e.f. 1-4-1988).

2. Subs. by Act 58 of 1960, s. 3 and the Second Schedule, for that section (w.e.f. 26-12-1960)

1 (1) Notwithstanding anything contained in section3, when it appears to the 2Assessing Officer that any individual may leave India during the currentassessment year, or shortly after its expiry and that he has no present intention of returning to India, thegifts made by such individual during the period from the expiry of the previous year for that assessmentyear up to the probable date of his departure from India, shall be chargeable to gift-tax in that assessmentyear.

(2) The taxable gifts made in each completed previous year or part of any previous year included insuch period shall be chargeable to gift-tax at the rate or rates specified in the Schedule 3or, as the casemay be, at the rate specified in sub-section (2) of section 3, and separate assessment shall be made inrespect of each such completed previous year or part of any previous year.

(3) The 2Assessing Officer may estimate the value of the gifts made by such individual during suchperiod or any part thereof, where it cannot be readily determined in the manner provided in this Act.

(4) For the purpose of making an assessment under sub-section (1), the 2Assessing Officer mayserve a notice upon such individual requiring him to furnish, within such time, not being less than sevendays, as may be specified in the notice, a return in the same form and verified in the same manner as4a return under sub-section (1) of section 13, giving particulars of the gifts made by him during eachcompleted previous year comprised in the period referred to in sub-section (1) and during any part of theprevious year comprised in that period; and the provisions of this Act shall, so far as may be, and subjectto the provisions of this section, apply 5as if the notice were a notice issued under clause (i) ofsub-section (4) of section 15.

(5) The gift-tax chargeable under this section shall be in addition to the tax, if any, chargeable underany other provision of this Act.

(6) Where the provisions of sub-section (1) are applicable, any notice issued by the 2AssessingOfficer under 6clause (i) of sub-section (4) of section 15 or under section 16 in respect of any gift-taxchargeable under any other provisions of this Act may, notwithstanding anything contained in 6clause (i)of sub-section (4) of section 15, or section 16, as the case may be, require the furnishing of the return bysuch individual within such period, not being less than seven days, as the 2Assessing Officer may thinkproper.

1. Ins. by Act 53 of 1962, s. 15 (w.e.f. 1-4-1963).

2. Subs. by Act 4 of 1988, s. 161, for Gift-tax Officer (w.e.f. 1-4-1988).

3. Ins. by Act 23 of 1986, s. 45 (w.e.f. 1-4-1987).

4. Subs. by Act 4 of 1988, s. 186, for a return under sub-section (2) of section 13 (w.e.f. 1-4-1989).

5. Subs. by s. 186, ibid., for as if the notice were a notice issued under sub-section (2) of section 13 (w.e.f. 1-4-1989).

6. Subs. by s. 186, ibid., for sub-section (2) of section 13 (w.e.f. 1-4-1989).

(1) Where, at the time of makingan assessment, it is brought to the notice of the 1Assessing Officer that a partition has taken place amongthe members of a Hindu undivided family, and the 1Assessing Officer, after enquiry, is satisfied that thejoint family property has been partitioned among the various members or groups of members in definiteportions, he shall record an order to that effect and he shall make assessments 2on the value of the taxabletaxable gifts made by the family as such as if no partition had taken place and each member or group ofmembers shall be liable jointly and severally for the tax assessed on the value of the taxable gifts made bythe joint family as such.

(2) Where the 1Assessing Officer is not so satisfied, he may, by order, declare that such family shallbe deemed for the purposes of this Act to continue to be a Hindu undivided family.

1. Subs. by Act 4 of 1988, s. 161, for Gift-tax Officer (w.e.f. 1-4-1988).

2. Subs. by Act 58 of 1960, s. 3 and the Second Schedule, for on the amount of taxable gifts (w.e.f. 26-12-1960).

(1) Where a firm orassociation of persons liable to pay gift-tax has been discontinued or dissolved, the 1Assessing Officershall determine the gift-tax payable by the firm or association of persons as such as if no suchdiscontinuance or dissolution had taken place.

(2) If the 1Assessing Officer, the 2Deputy Commissioner (Appeals), 3the Commissioner(Appeals) or the Appellate Tribunal in the course of any proceeding under this Act in respect of any suchfirm or other association of persons as is referred to in sub-section (1) is satisfied that the firm orassociation is guilty of any of the acts specified in clause (a) or clause (b) or clause (c) of sub-section (1)of section 17, he or it may impose or direct the imposition of a penalty in accordance with the provisionsof that section.

(3) Every person who was at the time of such discontinuance or dissolution a partner of the firm or amember of the association, as the case may be, shall be jointly and severally liable for the amount of taxor penalty payable, and all the provisions of Chapter VII, so far as may be, shall apply to any suchassessment or imposition of penalty.

1. Subs. by Act 4 of 1988, s. 161, for Gift-tax Officer (w.e.f. 1-4-1988).

2. Subs. by s. 161, ibid., for Appellate Assistant Commissioner (w.e.f. 1-4-1988).

3. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).

2(1) Where an 1AssessingOfficer after using all due and reasonable diligence cannot find the donor who had made any taxablegifts, for the purpose of service of notice under sub-section (2) of section 13 or under section 16, the1Assessing Officer may make an assessment of the value of all such taxable gifts made by him anddetermine the gift-tax payable by him and for this purpose may, by the issue of the appropriate noticewhich would have had to be served upon the donor, require from the donee or donees any accounts,documents or other evidence which might, under the provisions of section 15, have been required fromthe donor.

(2) Where any assessment in respect of the taxable gifts made by the donor has been made under subsection (1), every donee shall be liable for the gift-tax so assessed :

Provided that where the donees are more than one, they shall be jointly and severally liable for theamount of the gift-tax so assessed :

Provided further that the amount of the gift-tax which may be recovered from each donee shall notexceed the value of the gift made to him as on the date of the gift.

(3) The provisions of sections 13, 14 and 16 shall apply to a donee as they apply to any personreferred to in those sections.

1. Subs. by Act 4 of 1988, s. 161, for Gift-tax Officer (w.e.f. 1-4-1988).

2. Ins. by Act 53 of 1962, s. 16 (w.e.f. 1-4-1963)

1 ,2(1)3Subject to the provisions of sub-section (1A), any person,

(a) objecting to the value of 4 taxable gifts determined under this Act; or

(b) objecting to the amount of gift-tax determined as payable by him under this Act; or

(c) denying his liability to be assessed under this Act; or

5(d) objecting to any penalty imposed by the Assessing Officer under section 17 6 ; or

(e) objecting to any order of the 7Assessing Officer under sub-section (2) of section 20; or

(f) objecting to any penalty imposed by the 7Assessing Officer under 8sub-section (1) ofsection 221 of the Income-tax Act as applied under section 33 for the purposes of gift-tax; 9or

10(g) objecting to an order of the 7Assessing Officer under section 34 having the effect ofenhancing the assessment or reducing a refund or an order refusing to allow the claim made by theassessee under that section; or

11

may appeal to the 12Deputy Commissioner (Appeals) against the assessment or order, as the case may be,be, in the prescribed form and verified in the prescribed manner :

Provided that no appeal shall lie under clause (f) unless the tax has been paid before the appeal isfiled.

13(1A) Notwithstanding anything contained in sub-section (1), any person,

(a) objecting to the value of taxable gifts determined under this Act or objecting to the amount ofgift-tax determined as payable by him or denying his liability to be assessed under this Act where thevalue of taxable gifts determined on assessment exceeds two lakh rupees; or

14(b) objecting to any assessment or order referred to in clauses (a) to (g) (both inclusive) ofsub-section (1), where such assessment or order has been made by the 15Joint Commissioner inexercise of the powers or functions conferred on or assigned to him under section 7 or section 10; or

16(c) objecting to any penalty imposed under sub-section (1) of section 17 with the previousapproval of the 15Joint Commissioner as specified in sub-section (3) of that section;

(d) objecting to any penalty imposed by the 17Joint Director or the 15Joint Commissionerunder section 17A; or

(e) objecting to any order made by an 7Assessing Officer in the case of such persons or classesof persons as the Board may, having regard to the nature of the cases, the complexities involved andother relevant considerations, direct,

may appeal to the Commissioner (Appeals) against the assessment or order, as the case may be, in theprescribed form and verified in the prescribed manner:

Provided that no appeal shall lie under clause (b) of this sub-section against any order referred to inclause (f) of sub-section (1) unless the tax has been paid before the appeal is filed.

18(1B) Notwithstanding anything contained in sub-section (1), the Board or the Director General orthe Chief Commissioner or the Commissioner, if so authorised by the Board, may, by order in writing,transfer any appeal which is pending before a Deputy Commissioner (Appeals) and any matter arising outof or connected with such appeal and which is so pending, to the Commissioner (Appeals), if the Boardor, as the case may be, the Director General, the Chief Commissioner or the Commissioner (at the requestof the appellant or otherwise) is satisfied that it is necessary or expedient so to do having regard to thenature of the case, the complexities involved and other relevant considerations and the Commissioner(Appeals) may proceed with such appeal or matter from the stage at which it was before it was sotransferred :

Provided that the appellant may demand that before proceeding further with the appeal or matter, theprevious proceeding or any part thereof be reopened or that he be reheard.

(2) An appeal shall be presented within thirty days of the receipt of the notice of demand relating tothe assessment or penalty objected to, or the date on which any order objected to, is communicated tohim, but the 19Deputy Commissioner (Appeals) 20or, as the case may be, the Commissioner (Appeals)may admit an appeal after the expiration of the period aforesaid if he is satisfied that the appellant hadsufficient cause for not presenting the appeal within that period.

(3) The 19Deputy Commissioner (Appeals) 20or, as the case may be, the Commissioner (Appeals)shall fix a day and place for the hearing of the appeal and may from time to time adjourn the hearing.

(4) The 19Deputy Commissioner (Appeals) 20or, as the case may be, the Commissioner (Appeals)may,u2014

(a) at the hearing of an appeal allow an appellant to go into any ground of appeal not specified inthe grounds of appeal;

(b) before disposing of an appeal, make such further inquiry as he thinks fit or cause furtherenquiry to be made by the 21Assessing Officer.

(5) In disposing of an appeal, the 19Deputy Commissioner (Appeals) 20or, as the case may be, theCommissioner (Appeals) may pass such order as he thinks fit which may include an order enhancing theamount of gift-tax determined or penalty imposed:

Provided that no order enhancing the amount of gift-tax determined or penalty imposed shall be madeunless the person affected thereby has been given a reasonable opportunity of showing cause against suchenhancement.

22(5A) In disposing of an appeal, the 19Deputy Commissioner (Appeals) 20or, as the case may be, theCommissioner (Appeals) may consider and decide any matter arising out of the proceedings in which theorder appealed against was passed, notwithstanding that such matter was not raised before the 19DeputyCommissioner (Appeals) 20or, as the case may be, the Commissioner (Appeals) by the appellant.

(5B) The order of the 19Deputy Commissioner (Appeals) 20or, as the case may be, the Commissioner(Appeals) disposing of the appeal shall be in writing and shall state the points for determination, thedecision thereon and the reasons for the decision.

(6) A copy of every order passed by the 23Deputy Commissioner (Appeals) 24or, as the case may be,the Commissioner (Appeals) under this section shall be forwarded to the appellant and the 25ChiefCommissioner or Commissioner.

1. Subs. by Act 4 of 1988, s. 161, for Gft-tax Officer (w.e.f. 1-4-1988).

2. Subs. by s. 161, ibid., for Appellate Assistant Commissioner (w.e.f. 1-4-1988).

3. Subs. by Act 29 of 1977, s. 39 and the Fifth Schedule, for Any person (w.e.f. 10-7-1978).

4. The word his omitted by Act 53 of 1962, s. 17 (w.e.f. 1-4-1963)

5. Subs. by Act 4 of 1988, s. 176, for clause (d) (w.e.f. 1-4-1989).

6. The words, figures, letters and bracket as it stood immediately before the 1st day of April, 1989 or under section 17 asamended by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988) omitted by Act 3 of 1989, s. 88 (w.e.f. 1-4-1989).

7. Subs. by Act 4 of 1988, s. 161, for Gift tax Officer (w.e.f. 1-4-1988).

8. Subs. by Act 53 of 1962, s. 17, for sub-section (1) of section 46 of the Income-tax Act (w.e.f. 1-4-1963).

9. Added by s. 17, ibid. (w.e.f. 1-4-1963).

10. Ins. by s. 17, ibid, (w.e.f. 1-4-1963).

11. Clause (h) omitted by Act 4 of 1988, s. 176 (w.e.f. 1-4-1989).

12. Subs. by s. 161, ibid., for Appellate Assistant Commissioner (w.e.f. 1-4-1988).

13. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).

14. Subs. by Act 4 of 1988, s. 176, for clauses (b), (c) and (d) (w.e.f. 1-4-1989).

15. Subs. by Act 21 of 1998, s. 76, for Deputy Commissioner (w.e.f. 1-10-1998).

16. Subs. by Act 3 of 1989, s. 88, for clause (c) (w.e.f. 1-4-1989).

17. Subs. by Act 21 of 1998, s. 76, for Deputy Director (w.e.f. 1-10-1998).

18. Subs. by Act 4 of 1988, s. 176, for sub-sections (1B) and (1C) (w.e.f. 1-4-1989).

19. Subs. by s. 161, ibid., for Appellate Assistant Commissioner (w.e.f. 1-4-1988).

20. Ins. by Act 29 of 1977, s. 39 and Fifth Schedule (w.e.f. 10-7-1978).

21. Subs. by Act 4 of 1988, s. 161, for Gift-tax Officer (w.e.f. 1-4-1988).

22. Ins. by Act 53 of 1962, s. 17 (w.e.f. 1-4-1963).

23. Subs. by Act 4 of 1988, s. 161, for Appellate Assistant Commissioner (w.e.f. 1-4-1988).

24. Ins. by 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).

25. Subs. by Act 4 of 1988, s. 161, for Commissioner (w.e.f. 1-4-1988).

Application by the assessee in certain cases. Omitted by the Direct Tax Laws (Amendment)Act, 1989 (3 of 1989), s. 95 (w.e.f. 1-4-1989). Which was inserted by the Direct Tax Laws (Amendment)Act, 1987 (4 of 1988), s. 177 (w.e.f. 1-4-1989).

1(1) An assessee, objecting to an order passed by theDeputy Commissioner (Appeals) 2or the Commissioner (Appeals) 3under section 17 or section 17A17A or section 22 4 or sub-section (2) of section 36 5 , may appeal to the Appellate Tribunalwithin sixty days of the date on which the order is communicated to him.

(2) The Commissioner may, if he is not satisfied as to the correctness of any order passed by a1Deputy Commissioner (Appeals) 2or a Commissioner (Appeals) under section 22, direct the6Assessing Officer to appeal to the Appellate Tribunal against such order, and such appeal may be mademade at any time before the expiry of sixty days of the date on which the order is communicated to theCommissioner.

7(2A) The 6Assessing Officer or the assessee, as the case may be, on receipt of the notice that anappeal against the order of the 1Deputy Commissioner (Appeals) 5or the Commissioner (Appeals) hasbeen preferred under sub-section (1) or sub-section (2) by the other party, may, notwithstanding that hemay not have appealed against such order or any part thereof, within thirty days of the receipt of thenotice, file a memorandum of cross-objections, verified in the prescribed manner, against any part of theorder of the 1Deputy Commissioner (Appeals) 5or the Commissioner (Appeals), and suchmemorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within thetime specified in sub-section (1) or sub-section (2).

8(3) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum ofcross-objections after the expiry of the relevant period referred to in sub-section (1) or sub-section (2) orsub-section (2A), if it is satisfied that there was sufficient cause for not presenting it within that period.

(4) An appeal to the Appellate Tribunal shall be in the prescribed form and shall be verified in theprescribed manner and shall, except in the case of an appeal referred to in sub-section (2), beaccompanied by a fee of9two hundred rupees.

(5) The Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard,pass such orders thereon as it thinks fit, and any such orders may include an order enhancing the amountof gift-tax determined or penalty imposed:

Provided that no order enhancing the amount of gift-tax determined or penalty imposed shall be madeunless the person affected thereby has been given a reasonable opportunity of showing cause against suchenhancement.

10

11

12

(9) A copy of every order passed by the Appellate Tribunal under this section shall be forwarded tothe assessee and the Commissioner.

(10) Save as provided in section 26, any order passed by the Appellate Tribunal on appeal shall befinal.

(11) The provisions of 13sub-sections (1), (4) and (5) of section 255 of the Income-tax Act shallapply to the Appellate Tribunal in the discharge of its functions under this Act as they apply to it in thedischarge of its functions under the Income-tax Act.

1. Subs. by Act 53 of 1962, s. 18, for sub-section (1) (w.e.f. 1-4-1963).

2. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).

3. Subs. by Act 41 of 1975, s. 116, for under section 17u2016 (w.e.f. 1-4-1976).

4. The words, figure and letters or section 22Au2016 omitted by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989). Earlier inserted by Act 4 of1988, s. 186 (w.e.f. 1-4-1989).

5. The Words or to an order passed by the Inspecting Assistant Commissioner under section 17Au2016 omitted by Act 29 of 1977,s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).

6. Subs. by Act 4 of 1988, s. 161, for Gift-tax Officeru2016 (w.e.f. 1-4-1988).

7. Ins. by Act 53 of 1962, s. 18 (w.e.f. 1-4-1963).

8. Subs. by s. 18, ibid., for sub-section (3) (w.e.f. 1-4-1963).

9. Subs. by Act 16 of 1981, for u2015one hundred and twenty-five rupeesu2016 (w.e.f. 1-6-1981).

10. Sub-section (6) omitted by Act 45 of 1972, s. 22 (w.e.f. 1-1-1973).

11. Sub-section (7) omitted by s. 22, ibid, (w.e.f. 1-1-1973).

12. Sub-section (8) omitted by s. 22, ibid, (w.e.f. 1-1-1973).

13. Subs. by Act 53 of 1962, s. 18, for u2015sub-sections (5), (7) and (8) of section 5-Au2016 (w.e.f. 1-4-1963).

(1) TheCommissioner may, either on his own motion or on application made by an assessee in this behalf, callfor the record of any proceeding under this Act in which an order has been passed by any authoritysubordinate to him, and may make such inquiry, or cause such inquiry to be made, and subject to theprovisions of this Act, pass such order thereon, not being an order prejudicial to the assessee, as theCommissioner thinks fit :

Provided that the Commissioner shall not revise any order under this sub-section in any caseu2014

(a) where an appeal against the order lies to the 1Deputy Commissioner (Appeals) 2or to theCommissioner (Appeals) or to the Appellate Tribunal and the time within which such appeal can bemade has not expired or, 3in the case of an appeal to the Commissioner (Appeals) or to the AppellateAppellate Tribunal, the assessee has not waived his right of appeal;

(b) where the order is pending in appeal before the 1Deputy Commissioner (Appeals) or hasbeen the subject of an appeal 2to the Commissioner (Appeals) or to the Appellate Tribunal;

(c) where the application is made by the assessee for such revision unlessu2014

(i) the application is accompanied by a fee of rupees twenty-five; and

(ii) the application is made within one year from the date of the order sought to be revised orwithin such further period as the Commissioner may think fit to allow on being satisfied that theassessee was prevented by sufficient cause from making the application within that period; and

(d) where the order is sought to be revised by the Commissioner of his own motion, if such orderis made more than one year previously.

Explanation.u2014For the purposes of this sub-section,u2014

(a) the 4Deputy Commissioner (Appeals) shall be deemed to be an authority subordinate tothe Commissioner; and

(b) an order by the Commissioner declining to interfere shall be deemed not to be an orderprejudicial to the assessee.

(2) Without prejudice to the provisions contained in sub-section (1), the Commissioner may call forand examine the record of any proceeding under this Act, and, if he considers that any order passedtherein by an 5Assessing Officer is erroneous in so far as it is prejudicial to the interests of revenue, hemay, after giving the assessee an opportunity of being heard, and after making or causing to be made suchinquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, includingan order enhancing or modifying the assessment or cancelling it and directing a fresh assessment.

6Explanation.u2014For the removal of doubts, it is hereby declared that, for the purposes of thissub-section,u2014

(a) an order passed 7on or before or after the 1st day of June, 1988 by the Assessing Officershall include an order passed by the 8Joint Commissioner in exercise of the powers or inperformance of the functions of an Assessing Officer conferred on or assigned to him under orders ordirections issued by the Board or by the Chief Commissioner or Director General or Commissionerauthorised by the Board in this behalf under section 120 of the Income-tax Act read with section 7 ofthis Act;

(b) u2015recordu2016 9shall include and shall be deemed always to have included all records relating toany proceeding under this Act available at the time of examination by the Commissioner;

(c) where any order referred to in this sub-section and passed by the Assessing Officer had beenthe subject matter of any appeal, 7filed on or before or after the 1st day of June, 1988, the powers ofthe Commissioner under this sub-section shall extend 7and shall be deemed always to have extendedto such matters as had not been considered and decided in such appeal.

(3) No order shall be made under sub-section (2) after the expiry of two years 10from the end of thefinancial year in which the order sought to be revised was passed.

11Explanation.u2014In computing the period of limitation for purposes of this sub-section, the time takentaken in giving an opportunity to the assessee to be reheard under the proviso to section 38 and any periodduring which any proceeding under this section is stayed by an order or injunction of any court shall beexcluded.

1. Subs. by Act 4 of 1988, s. 161, for u2015Appellate Assistant Commissioneru2016 (w.e.f. 1-4-1988).

2. Ins. by Act 29 of 1977, s. 39 of the Fifth Schedule (w.e.f. 10-7-1978).

3. Subs. by s. 39 ibid., of the Fifth Schedule, u2015in the case of the Appellate Tribunalu2016 (w.e.f. 10-7-1978).

4. Subs. by Act 4 of 1988, s. 161, for u2015Appellate Assistant Commissioneru2016 (w.e.f. 1-4-1988).

5. Subs. by s. 161, ibid., for u2015Gift-tax Officeru2016 (w.e.f. 1-4-1988).

6. Subs. by Act 26 of 1988, s. 68, for Explanation (w.e.f. 1-6-1988).

7. Ins. by Act 13 of 1989, s. 32 (w.e.f. 1-6-1988).

8. Subs. by Act 21 of 1998, s. 76, for u2015Deputy Commissioneru2016 (w.e.f. 1-10-1998).

9. Subs. by Act 13 of 1989, s. 32, for u2015includesu2016 (w.e.f. 1-6-1988).

10. Subs. by Act 67 of 1984, s. 74, for u2015form the date of the order sought to be revisedu2016 (w.e.f. 1-10-1984).

11. Explanation added by Act 53 of 1962, s. 19 (w.e.f. 1-4-1963).

2(1) An assessee objecting to an order passed by the 1Chief Commissioner orCommissioner3under section 17 or section 17A or to an order of enhancement passed by him under section 24 4or an order passed by the Director-General or Director under section 17A may appeal to theAppellate Tribunal within sixty days of the date on which the order is communicated to him.

(2) An appeal to the Appellate Tribunal under sub-section (1) shall be in the prescribed form and shallbe verified in the prescribed manner and shall be accompanied by a fee of 5two hundred rupees.

(3) The provisions of 6sub-sections (3), (5), (9) and (10) of section 23 shall apply in relation to anyappeal under this section as they apply in relation to any appeal under that section.

1. Subs. by Act 4 of 1988, s. 161, for Commissioneru2016 (w.e.f. 1-4-1988).

2. Subs. by Act 53 of 1962, s. 20 (w.e.f. 1-4-1963).

3. Subs. by Act 41 of 1975, s. 117, for under Section 17u2016 (w.e.f. 1-4-1976).

4. Ins. by Act 3 of 1989, s. 89 (w.e.f. 1-4-1989).

5. Subs. by Act 16 of 1981, s. 33, for one hundred and twenty-five rupeesu2016 (w.e.f. 1-6-1981).

6. Subs. by Act 45 of 1972, s. 23 for sub-sections (3) and (5) to (10) inclusiveu2016 (w.e.f. 1-1-1973)

1(1) The assessee or the2Chief Commissioner or CommissionerCommissioner may, within sixty days of the date upon which he is served with notice of an order undersection 23 or section 3or clause (e) of sub-section (1) of section 34 by application in the prescribed formaccompanied, where the application is made by the assessee, by a fee of 4two hundred rupees, requirethe Appellate Tribunal to refer to the High Court any question of law arising out of such order and,subject to the other provisions contained in this section, the Appellate Tribunal shall, within one hundredand twenty days of the receipt of such application, draw up a statement of the case and refer it to the HighCourt.

(2) The Appellate Tribunal may, if it is satisfied that the applicant was prevented by sufficient causefrom presenting the application within the period specified in sub-section (1), allow it to be presentedwithin a further period not exceeding thirty days.

(3) If, on an application made under sub-section (1), the Appellate Tribunal,u2014

(a) refuses to state a case on the ground that no question of law arises, or

(b) rejects it on the ground that it is time barred,

the applicant may, within ninety days from the date on which he is served with a notice of refusal orrejection, as the case may be, apply to the High Court, and the High Court may, if it is not satisfied withthe correctness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state the caseto the High Court, and on receipt of such requisition the Appellate Tribunal shall state the case:

Provided that, if in any case where the Appellate Tribunal has been required by an assessee to state acase, the Appellate Tribunal refuses to do so on the ground that no question of law arises, the assesseemay, within thirty days from the date on which he receives notice of refusal to state the case, withdraw hisapplication, and if he does so, the fee paid by him under sub-section (1) shall be refunded to him.

5(3A) If, on an application made under this section, the Appellate Tribunal is of the opinion that onaccount of a conflict in the decisions of High Courts in respect of any particular question of law, it isexpedient that a reference should be made direct to the Supreme Court, the Appellate Tribunal may drawup a statement of the case and refer it through its President direct to the Supreme Court.

(4) The statement to the High Court 5or the Supreme Court shall set forth the facts, thedetermination of the Appellate Tribunal, and the question of law which arises out of the case.

(5) If the High Court 6or the Supreme Court is not satisfied that the case as stated is sufficient toenable it to determine the question of law raised thereby, it may require the Appellate Tribunal to makesuch modification therein as it may direct.

(6) The High Court 6or the Supreme Court, upon hearing any such case, shall decide the question oflaw raised therein, and in doing so, may, if it thinks fit, alter the form of the question of law and shalldeliver judgment thereon containing the grounds on which such decision is founded and shall send a copyof the judgment under the seal of the court and the signature of the Registrar to the Appellate Tribunaland the Appellate Tribunal shall pass such orders as are necessary to dispose of the case conformably tosuch judgment.

7(7) The costs of any reference to the High Court or the Supreme Court which shall not include thefee for making the reference shall be in the discretion of the court.

1. Subs. by Act 53 of 1962, s. 21, for sub-section (1) and (2) (w.e.f. 1-4-1963).

2. Subs. by Act 4 of 1988, s. 161, for Commissioneru2016 (w.e.f. 1-4-1988).

3. Ins. by Act 49 of 1991, s. 88 (w.e.f. 27-9-1991).

4. Subs. by Act 16 of 1981, s. 34, for one hundred and twenty-five rupeesu2016 (w.e.f. 1-6-1981).

5. Ins. by Act 53 of 1962, s. 21, (w.e.f. 1-4-1963).

6. Ins. by Act 53 of 1962, s. 21 (w.e.f. 1-4-1963).

7. Subs. by s. 21, ibid., for sub-section (7), (8) and (9) (w.e.f. 1-4-1963).

When a case has been stated to the High Court under section 26, itshall be heard by a Bench of not less than two Judges of the High Court and shall be decided inaccordance with the opinion of such Judges or of the majority of such Judges, if any:

Provided that where there is no such majority, the Judges shall state the point of law upon which theydiffer and the case shall then be heard upon that point only by one or more of the Judges of the HighCourt, and such point shall be decided according to the opinion of the majority of the Judges who haveheard the case, including those who first heard it.

(1) An appeal shall lie to the Supreme Court from any judgmentof the High Court delivered on a case stated under section 26 in any case which the High Court certifiesas a fit case for appeal to the Supreme Court.

(2) Where the judgment of the High Court is varied or reversed on appeal under this section, effectshall be given to the order of the Supreme Court in the manner provided in sub-section (6) of section 26.

(3) The High Court may, on application made to it for the execution of any order of the SupremeCourt in respect of any costs awarded by it, transmit the order for execution to any court subordinate tothe High Court.

1Notwithstanding that a reference hasbeen made to the High Court or the Supreme Court, or an appeal has been preferred to the SupremeCourt, tax shall be payable in accordance with the assessment made in the case.

1. Ins. by s. 22, ibid, (w.e.f. 1-4-1963).

In this Chapter, u2015High Courtu2016 means u2014

(i) in relation to any State, the High Court of that State;

1(ii) in relation to the Union territory of Delhi, the High Court of Delhi;

2

3(iii) in relation to the Union territories of Arunachal Pradesh and Mizoram, the Gauhati HighCourt (the High Court of Assam, Nagaland, Meghalaya, Manipur and Tripura);

(iv) in relation to the Union territory of Andaman and Nicobar Islands, the High Court ofCalcutta;

(v) in relation to the Union territory of 4Lakshadweep, the High Court of Kerala;

5(va) in relation to the Union territory of Chandigarh, the High Court of Punjab and Haryana;

6(vi) in relation to the Union territories of Dadra and Nagar Haveli and Goa, Daman and Diu, theHigh Court at Bombay;

(vii) in relation to the Union territory of Pondicherry, the High Court at Madras.

1. Subs. by the Punjab Reorganisation and Delhi High Court (Adaptation of Laws on Union Subjects) Order, 1968, for clause (ii)(w.r.e.f. 1-11-1966).

2. Clause (iia) omitted by State of Himachal Pradesh (Adaptation of Laws on Union Subjects) Order, 1973 (w.r.e.f. 25-1-1971).

3. Subs. by the North-Eastern Areas (Reorganisation) (Adaptation of Laws on Union Subjects) Order, 1974, for clause (iii)(w.r.e.f. 21-1-1972.)

4. Subs. by the Laccadive, Minicoy and Amindivi Islands (Alteration of Name) Adaptation of Laws Order, 1974, for theLaccadive, Minicoy and Amindivi Islandsu2016 (w.r.e.f. 1-11-1973).

5. Ins. by the Punjab Reorganisation and Delhi High Court (Adaptation of Laws on Union Subjects) Order, 1968(w.r.e.f. 1-11-1966).

6. Ins. by the Taxation Laws (Extension to Union Territories) Regulation, 1963 (3 of 1963), s. 3 and the Schedule(w.e.f. 1-4-1963).

1Subject to the provisions of this Act, gift-tax shall be payableby the donor but when in the opinion of the 2Assessing Officer the tax cannot be recovered from thedonor, it may be recovered from the donee:

Provided that where the donees are more than one, they shall be jointly and severally liable for theamount of tax determined to be payable by the donor:

Provided further that the amount of tax which may be recovered from each donee shall not exceed thevalue of the gift made to him as on the date of the gift.

1. Ins. by Act 53 of 1962, s. 23 (w.e.f. 1-4-1963).

2. Subs. by Act 4 of 1988, s. 161, for Gift-tax Officeru2016 (w.e.f. 1-4-1988).

Gift-tax payable in respect of any gift comprisingimmovable property shall be a first charge on that property but any such charge shall not affect the title ofa bona fide purchaser for valuable consideration without notice of the charge.

2When any tax, interest, penalty, fine or any other sum is payable inconsequence of any order passed under this Act, the 1Assessing Officer shall serve upon the assessee anotice of demand in the prescribed form specifying the sum so payable.

1. Subs. by Act 4 of 1988, s. 161, for Gift-tax Officeru2016 (w.e.f. 1-4-1988).

2. Subs. by Act 53 of 1962, s. 24, for Section 31, 32 and 33 (w.e.f. 1-4-1963).

(1) Any amount specified as payable in a notice of demandunder section 31 shall be paid within2thirty days of the service of the notice at the place and to theperson mentioned in the notice:

Provided that, where the1Assessing Officer has any reason to believe that it will be detrimental torevenue if the full period of2thirty days aforesaid is allowed, he may, with the previous approval of the³⁴Joint Commissioner, direct that the sum specified in the notice of demand shall be paid within suchsuch period being a period less than the period of 2thirty days aforesaid, as may be specified by him inthe notice of demand.

(2) If the amount specified in any notice of demand under section 31 is not paid within the periodlimited under sub-section (1), the assessee shall be liable to pay simple interest at ⁵one and one-half percent. for every month or part of a month comprised in the period commencing from the day immediatelyfollowing the end of the period mentioned in sub-section (1) and ending with the day on which theamount is paid:

⁶Provided that where as a result of an order under section 22, or section 23, or section 24, orsection 25, or section 26, or section 28, or section 34, the amount on which interest was payable underthis section had been reduced, the interest shall be reduced accordingly and the excess interest paid, ifany, shall be refunded:

⁷Provided further that in respect of any period commencing on or before the 31st day of March, 19891989 and ending after that date, such interest shall, in respect of so much of such period as falls after thatdate, be calculated at the rate of one and one-half per cent. for every month or part of a month.

(3) Without prejudice to the provisions contained in sub-section (2), on an application made by theassessee before the expiry of the due date under sub-section (1), the ⁸Assessing Officer may extend thetime for payment or allow payment by instalments subject to such conditions as he may think fit toimpose in the circumstances of the case.

(4) If the amount is not paid within the time limited under sub-section (1) or extended undersub-section (3), as the case may be, at the place and to the person mentioned in the said notice, theassessee shall be deemed to be in default.

(5) If, in a case where payment by instalments is allowed under sub-section (3), the assessee commitsdefault in paying any one of the instalments within the time fixed under that sub-section, the assesseeshall be deemed to be in default as to the whole of the amount then outstanding, and the other instalmentor instalments shall be deemed to have been due on the same date as the instalment actually in default.

(6) Where the assessee has presented an appeal under section 22, the ⁸Assessing Officer may in hisdiscretion and subject to such conditions as he may think fit to impose in the circumstances of the case,treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though thetime for payment has expired as long as such appeal remains undisposed of.

1. Ins. by the Punjab Reorganisation and Delhi High Court (Adaptation of Laws on Union Subjects) Order, 1968(w.r.e.f. 1-11-1966).

2. Subs. by Act 4 of 1988, s. 178, for u2015thirty-five daysu2016 (w.e.f. 1-4-1989).

3 Subs. by s. 161, ibid, for u2015Inspecting Assistant Commissioneru2016 (w.e.f. 1-4-1988).

4. Subs. by Act 21 of 1998, s. 76, for u2015Deputy Commissioneru2016 (w.e.f. 1-10-1998).

5. Subs. by Act 4 of 1988, s. 178, for u2015fifteen per cent. annum from the day commencing after the end of the periodmentioned in sub-section (1)u2016 (w.e.f. 1-4-1989).

6. The proviso added by Act 5 of 1964, s. 52 (1-4-1963).

7. The proviso ins. by Act 4 of 1988, s. 178 (w.e.f. 1-4-1989).

8. Subs. by s. 161, ibid., for u2015Gift-tax Officeru2016 (w.e.f. 1-4-1988).

The provisions contained in 1sections 221 to 227, 228A, 229, 231 and232 of the Income-tax Act and the Second and Third Schedules to that Act and any rules made thereundershall, so far as may be, apply as if the said provisions were provisions of this Act and referred to gift-taxand sums imposed by way of penalty, fine and interest under this Act instead of to income-tax and sumsimposed by way of penalty, fine and interest under that Act 2and to the corresponding gift-tax authoritiesinstead of to the income-tax authorities specified therein.

Explanation I.u2014 Any reference to sub-section (2) or sub-section (6) of section 220 of theIncome-tax Act in the said provisions of that Act or the rules made thereunder shall be construed asreferences to sub-sections (2) and (6) respectively of section 32 of this Act.

3Explanation II.u2014The Chief Commissioner or Commissioner and the Tax Recovery Officerreferred to in the Income-tax Act shall be deemed to be the corresponding gift-tax authorities for thepurpose of recovery of gift-tax and sums imposed by way of penalty, fine and interest under thisAct.

1. Subs. by Act 16 of 1972, s. 53, for sections 221 to 227u2016 (w.e.f. 1-4-1972).

2. Subs. by Act 4 of 1988, s. 179, for Gift-tax Officer and Commissioner of Gift-tax instead of to Income tax Officer andCommissioner of Income-taxu2016 (w.e.f. 1-4-1988).

3. Subs. by Act 4 of 1988 s. 179, for Explanation IIu2016 (w.e.f. 1-4-1989).

1(1) Where, as a result of any order passed in appeal or other proceeding underthis Act, refund of any amount becomes due to the assessee, the 2Assessing Officer shall, except asotherwise provided in this Act, refund the amount to the assessee without his having to make anyclaim in that behalf:

3Provided that where, by the order aforesaid,u2014

(a) an assessment is set aside or cancelled and an order of fresh assessment is directed to bemade, the refund, if any, shall become due only on the making of such fresh assessment;

(b) the assessment is annulled, the refund shall become due only of the amount, if any, of thetax paid in excess of the tax chargeable on the 4taxable gifts returned by the assessee.

5(2) Where refund of any amount becomes due to the assessee as a result of an order under thisAct or under the provisions of sub-section (1) of section 15 after a return has been made undersection 13 or section 14 or in response to a notice under clause (i) of sub-section (4) of section 15 andthe Assessing Officer is of the opinion, having regard to the fact that,u2014

(i) a notice has been issued, or is likely to be issued, under sub-section (2) of section 15 inrespect of the said return; or

(ii) the order is the subject-matter of an appeal or further proceeding; or

(iii) any other proceeding under this Act is pending,

that the grant of the refund is likely to adversely affect the revenue, the 2Assessing Officer may, with theprevious approval of the Chief Commissioner or Commissioner, withhold the refund till such time as theChief Commissioner or Commissioner may determine.

1. Ins. by Act 53 of 1962, s. 25 (w.e.f. 1-4-1963).

2. Subs. by Act 4 of 1988, s. 161, for Gift-tax Officeru2016 (w.e.f. 1-4-1988).

3. The proviso added by Act 4 of 1988, s. 180 (w.e.f. 1-4-1989).

4. Subs. by Act 3 of 1989, s. 90, for total incomeu2016 (w.e.f. 1-4-1989).

5. Subs. by Act 36 of 1989, s. 33, for sub-section (2) (w.e.f. 1-4-1989).

1(1) With a view to rectifying any mistake apparent from therecordu2014

(a) the Assessing Officer may amend any order of assessment or of refund or any other orderpassed by him;

2(aa) a gift-tax authority may amend any intimation sent by it under sub-section (1) of section 1515 or enhance or reduce the amount of refund granted by it under that sub-section;

3(b) the 4Joint Director or 5Joint Commissioner or Director or Commissioner or DeputyCommissioner (Appeals) or Commissioner (Appeals) may amend any order passed by him undersection 17A;

(c) the Deputy Commissioner (Appeals) or Commissioner (Appeals) may amend any orderpassed by him under section 22 6 ;

(d) the Commissioner may amend any order passed by him under section 24;

(e) the Appellate Tribunal may amend any order passed by it under section 23 or section 25.

(2) Subject to the other provisions of this section, the authority concernedu2014

(a) may make an amendment under sub-section (1) of its own motion; and

(b) shall make such amendment for rectifying any such mistake which has been brought to itsnotice by the assessee, and where the authority concerned is the 7Deputy Commissioner (Appeals)

8or the Commissioner (Appeals) or the Appellate Tribunal, by the 9Assessing Officer also.

(3) An amendment, which has the effect of enhancing an assessment or reducing a refund orotherwise increasing the liability of the assessee, shall not be made under this section unless the authorityconcerned has given notice to the assessee of its intention so to do and has allowed the assessee areasonable opportunity of being heard.

(4) Where an amendment is made under this section, an order shall be passed in writing by thegift-tax authority concerned.

(5) Subject to the provisions of sub-section (2) of 10section 33A, where any such amendment has theeffect of reducing the assessment, the 9Assessing Officer shall make any refund which may be due tosuch assessee.

(6) Where any such amendment has the effect of enhancing the assessment or reducing a refundalready made, the 9Assessing Officer shall serve on the assessee a notice of demand in the prescribedform specifying the sum payable, and such notice of demand shall be deemed to be issued undersection 31 and the provisions of this Act shall apply accordingly.

(7) No amendment under this section shall be made after the expiry of four years 11from the end of thethe financial year in which the order sought to be amended was passed.

1. Subs. by Act 53 of 1962, s. 26, for section 34 (w.e.f. 1-4-1963).

2. Ins. by Act 4 of 1988, s. 181 (w.e.f. 1-4-1989).

3. Subs. by s. 186, ibid., for clauses (b), (c), (d) and (e)u2016 (w.e.f. 1-4-1989).

4. Subs. by Act 21 of 1998, s. 76, for Deputy Directoru2016 (w.e.f. 1-10-1998).

5. Subs. by s. 76, ibid., for Deputy Commissioneru2016 (w.e.f. 1-10-1998).

6. The words, figures and letter or section 22Au2016 omitted by Act 3 of 1989, s. 91 (w.e.f. 1-4-1989).

7. Subs. by Act 4 of 1988, s. 161, for Appellate Assistant Commissioneru2016 (w.e.f. 1-4-1988).

8. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).

9. Subs. by Act 4 of 1988, s. 161, for Gift-tax Officeru2016 (w.e.f. 1-4-1988).

10. Subs. by Act 5 of 1964, s. 52, for section 33u2016 (w.e.f. 1-4-1963).

11. Subs. by Act 67 of 1984, s. 76, for from the date of the order sought to be amendedu2016 (w.e.f. 1-10-1984).

(1) If any person fails without reasonable cause,u2014

(a) to furnish in due time any return of gifts under this Act;

(b) to produce, or cause to be produced, on or before the date mentioned in any notice under1 sub-section (4) of section 15, such accounts, records and documents as are referred to in thenotice;

2

he shall, on conviction before a magistrate, be punishable with fine which may extend to rupees ten forevery day during which the default continues.

(2) If a person makes a statement in a verification in any return of gift furnished under this Act or in averification mentioned in section 22, 23 or 25 which is false, and which he either knows or believes to befalse, or does not believe to be true, he shall, on conviction before a magistrate, be punishable with simpleimprisonment which may extend to one year, or with fine which may extend to rupees one thousand, orwith both.

3(2A) If a person abets or induces in any manner another person to make and deliver an account,statement or declaration relating to any gifts chargeable to tax which is false and which he either knows tobe false or does not believe to be true, he shall, on conviction before a magistrate, be punishable withsimple imprisonment which may extend to six months or with fine which may extend to one thousandrupees, or with both.

4(3) A person shall not be proceeded against for an offence under this Act except with the previoussanction of the Commissioner or Commissioner (Appeals):

Provided that the Chief Commissioner or, as the case may be, Director General may issue suchinstructions or directions to the aforesaid gift-tax authorities as he may deem fit for institution ofproceedings under this sub-section.

(4) Any such offence may, either before or after the institution or proceedings, be compounded by theChief Commissioner or Director General.

56 Explanation 1.u2014For the purposes of this section, u2015magistrateu2016 means a presidency magistrate oror a magistrate of the first class.

7Explanation 2.u2014 For the removal of doubts, it is hereby declared that the power of the Board toissue orders, instructions or directions under this Act shall include and shall be deemed always to haveincluded the power to issue instructions or directions (including instructions or directions to obtain theprevious approval of the Board) to other gift-tax authorities for the proper composition of offences underthis section.

1. The words, brackets and figure u2015sub-section (2)u2016 omitted by Act 41 of 1975, s. 119 (w.e.f. 1-4-1976).

2. Clause (c) omitted by s. 119. ibid, (w.e.f. 1-4-1976).

3. Ins. by Act 53 of 1962, s. 27 (w.e.f. 1-4-1963).

4. Subs. by Act 49 of 1991, s. 90, for sub-sections (3) and (4) (w.e.f. 1-10-1991).

5. Subs. by Act 53 of 1962, s. 27, for Explanation (w.e.f. 1-4-1963).

6. The Explanation renumbered as Explanation 1 thereof by Act 49 of 1991, s. 90 (w.e.f. 1-4-1963).

7. Ins. by s. 90, ibid, (w.r.e.f. 1-4-1958.)

1(1) Where an offence under this Act has been committed by acompany, every person who, at the time the offence was committed, was in charge of and was responsibleto, the company for the conduct of the business of the company, as well as the company, shall be deemedto be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

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

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

Explanation.u2014For the purposes of this section,u2014

(a) u2015companyu2016 means a body corporate, and includesu2014

(i) a firm, and

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

(b) directoru2016, in relation tou2014

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

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

1. Ins. by Act 41 of 1975, s. 120 (w.e.f. 1-10-1975).

(1) Where an offence under this Act has beencommitted by a Hindu undivided family, the karta thereof shall be deemed to be guilty of the offence andshall be liable to be proceeded against and punished accordingly:

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

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

Nothing contained in section 360 of the Code of Criminal Procedure, 1973 (2of 1974), or in the Probation of Offenders Act, 1958 (20 of 1958), shall apply to a person convicted of anoffence under this Act unless that person is under eighteen years of age.

1(1) In any prosecution for any offence under thisAct which requires a culpable mental state on the part of the accused, the court shall presume theexistence of such mental state but it shall be a defence for the accused to prove the fact that he had nosuch mental state with respect to the act charged as an offence in that prosecution.

Explanation.u2014In this sub-section, u2015culpable mental stateu2016 includes intention, motive or knowledge ofa fact, or belief in or reason to believe, a fact.

(2) For the purposes of this section, a fact is said to be proved only when the court believes it to existbeyond reasonable doubt and not merely when its existence is established by a preponderance ofprobability.

1. Ins. by Act 46 of 1986, s. 41 (w.e.f. 10-9-1986).

²Entries in the records or other documents in thecustody of a gift-tax authority shall be admitted in evidence in any proceedings for the prosecution of anyperson for an offence under this Act, and all such entries may be proved either by the production of therecords or other documents in the custody of the gift-tax authority containing such entries, or by theproduction of a copy of the entries certified by the gift-tax authority having custody of the records orother documents under its signature and stating that it is a true copy of the original entries and that suchoriginal entries are contained in the records or other documents in its custody.

2. Ins. by Act 3 of 1989, s. 92 (w.e.f. 1-4-1989).

1(1) The 2Assessing Officer, the3Deputy Commissioner (Appeals) 4the Commissioner (Appeals), the 5Chief Commissioner orCommissioner and the Appellate Tribunal shall, for the purposes of this Act, have the same powers asare vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the following matters, namely :u2014

(a) discovery and inspection;

(b) enforcing the attendance of any person, including any officer of a banking company andexamining him on oath;

(c) compelling the production of books of account and other documents; and

(d) issuing commissions.

6(1A) If the Director General or Director or 7Joint Director or 8Assistant Director or DeputyDirector has reason to suspect that any gifts chargeable to tax under this Act have been concealed, or arelikely to be concealed, by any person or class of persons within his jurisdiction, then, for the purposes ofmaking any inquiry or investigation relating thereto, it shall be competent for him to exercise the powersconferred under sub-section (1) on the gift-tax authorities referred to in that sub-section, notwithstandingthat no proceedings with respect to such person or class of persons are pending before him or any othergift-tax authority.

9

1. Subs. by Act 53 of 1962, s. 28, for section 36 (w.e.f. 1-4-1963).

2. Subs. by Act 4 of 1988, s. 161, for Gift-tax Officeru2016 (w.e.f. 1-4-1988).

3. Subs. by s. 161, ibid., for Appellate Assistant Commissioneru2016 (w.e.f. 1-4-1988).

4. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).

5. Subs. by Act 4 of 1988, s. 161, for Commissioneru2016 (w.e.f. 1-4-1988).

6. Ins. by Act 26 of 1988, s. 70 (w.e.f. 1-6-1988).

7. Subs. by Act 21 of 1998, s. 76, for u2015Deputy Directoru2016 (w.e.f. 1-10-1998).

8. Subs. by s. 76, ibid., for Assistant Directoru2016 (w.e.f. 1-10-1998).

9. Sub-section (2) omitted by Act 4 of 1988, s. 182 (w.e.f. 1-4-1989).

1 Where, for the purposes of this Act, it appears necessary forany gift-tax authority to obtain any statement or information from any person or banking company,

2such gift-tax authority may serve a notice requiring such person, on or before a date to be thereinspecified, to furnish such statement or information on the points specified in the notice, and that personshall, notwithstanding anything in any law to the contrary, be bound to furnish such statement orinformation to 2such gift-tax authority:

Provided that no legal practitioner shall be bound to furnish any statement or information under thissection based on any professional communications made to him otherwise than as permitted by section126 of the Indian Evidence Act, 1872 (1 of 1872).

1. Subs. by s. 183, ibid., for u2015Where, for the purposes of determining the gift-tax payable by any person, it appears necessary forthe Gift-tax Officer to obtain any statement or information from any personu2016 (w.e.f. 1-4-1989).

2. Subs. by s. 183, ibid., for u2015the Gift-tax Officeru2016 (w.e.f. 1-4-1989).

Whenever in respect of anyproceeding under this Act any gift-tax authority ceases to exercise jurisdiction and is succeeded byanother who has and exercises such jurisdiction, the authority so succeeding may continue the proceedingfrom the stage at which the proceeding was left by his predecessor:

1Provided that the assessee concerned may demand that before the proceeding is so continued theprevious proceeding or any part thereof be reopened or that before any order of assessment is passedagainst him, he be reheard.

1. The Proviso added by Act 53 of 1962, s. 29 (w.e.f. 1-4-1963).

1In computing the period of limitation prescribed foran appeal or an application under this Act, the day on which the order complained of was served and ifthe assessee was not furnished with a copy of the order when the notice of the order was served upon him,the time requisite for obtaining a copy of such order shall be excluded.

1. Subs. by s. 30, ibid., for section 39 (w.e.f. 1-4-1963).

(1) A notice or a requisition under this Act may be served on the persontherein named either by post or as if it were a summons issued by a court under the Code of CivilProcedure, 1908 (5 of 1908).

(2) Any such notice or requisition may, in the case of a firm or a Hindu undivided family, beaddressed to any member of the firm or to the manager or any adult male member of the family, and inthe case of a company or association of persons be addressed to the principal officer thereof.

1(3) After a finding of total partition has been recorded by the 2Assessing Officer under section 20in respect of any Hindu family, notices under this Act in respect of the gifts made by the family, shall beserved on the person who was the last manager of the Hindu family, or if such person is dead, then on allsurviving adults who were members of the Hindu family immediately before the partition.

(4) Where a firm or other association of persons is dissolved, notices under this Act in respect of thegifts made by the firm or association may be served on any person who was a partner (not being a minor)or member of the association, as the case may be, immediately before its dissolution.

1. Ins. by Act 53 of 1962, s. 31 (w.e.f. 1-4-1963).

2. Subs. by Act 4 of 1988, s. 161, for Gift-tax Officeru2016 (w.e.f. 1-4-1988)

Prohibition of disclosure of information. u2014Omitted by the Finance Act, 1964 (5 of 1964),s. 52 (w.e.f. 1-4-1964). Earlier, this section was substituted by the Gift-tax (Amendment) Act, 1962 (53 of1962), s. 32 (w.e.f. 1-4-1963).

1(1) If the Central Government is ofopinion that it is necessary or expedient in the public interest to publish the names of any assessees andany other particulars relating to any proceedings 2or prosecutions under this Act in respect of suchassessees, it may cause to be published such names and particulars in such manner as it thinks fit.

3(2) No publication under this section shall be made in relation to any penalty imposed under this ActAct until the time for presenting an appeal to the 4Deputy Commissioner (Appeals) 5or, as the case maymay be, the Commissioner (Appeals) has expired without an appeal having been presented or the appeal,if presented, has been disposed of.

Explanation.u2014In the case of a firm, company or other association of persons, the names of thepartners of the firm, directors, managing agents, secretaries and treasurers or managers of the company, orthe members of the association, as the case may be, may also be published if, in the opinion of the CentralGovernment, the circumstances of the case justify it.

1. Subs. by Act 5 of 1964, s. 52, for sections 41A and 41B (w.e.f. 1-4-1964).

2. Ins. by Act 41 of 1975, s. 121 (w.e.f. 1-10-1975).

3. Subs. by s. 121, ibid., for sub-section (2) (w.e.f. 1-10-1975).

4. Subs. by Act 4 of 1988, s. 161, for Appellate Assistant Commissioneru2016 (w.e.f. 1-4-1988).

5. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).

Where a person makes an application tothe 1Chief Commissioner or Commissioner in the prescribed form for any information relating to anyassessee in respect of any assessment made under this Act, the 1Chief Commissioner or Commissionermay, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished theinformation asked for in respect of that assessment only and his decision in this behalf shall be final andshall not be called in question in any court of law.

1. Subs. by Act 4 of 1988, s. 161, for Commissioneru2016 (w.e.f. 1-4-1988).

1No return of gifts,assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported tohave been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall beinvalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of gifts, assessment, notice summons or other proceeding, if such return of gifts, assessment, noticesummons or other proceeding is in substance and effect in conformity with or according to the intent andpurpose of this Act.

1. Ins. by Act 41 of 1975, s. 122 (w.e.f. 1-10-1975).

No suit shall lie in any civil court to set aside or modify1any proceeding taken or order made under this Act, and no prosecution, suit or other legal proceedingsproceedings shall lie against 2the Government or any officer of the Government for anything in goodfaith done or intended to be done under this Act

1. Subs. by Act 26 of 1988, s. 71, for any order madeu2016 (w.e.f. 1-3-1988).

2. Ins. by Act 5 of 1964, s. 52 (w.e.f. 1-4-1964).

1An assessee who isentitled to or required to attend before any gift-tax authority or the Appellate Tribunal in connection withany proceeding under this Act, except where he is required under this Act to attend in person, may attendby a person who would be entitled to represent him before any income-tax authority or the AppellateTribunal under section 288 of the Income-tax Act.

1. Subs. by Act 53 of 1962, s. 34, for section 43 (w.e.f. 1-4-1963).

1Any assessee who is entitled orrequired to attend before any gift-tax authority or the Appellate Tribunal in connection with any matterrelating to the valuation of any asset, except where he is required under this Act to attend in person, mayattend by a registered valuer.

Explanation.u2014In this section, u2015registered valueru2016 has the same meaning as in clause (oaa) ofsection 2 of the Wealth-tax Act, 1957 (27 of 1957).

1. Ins. by Act 45 of 1972, s. 24 (w.e.f. 1-1-1973)

1TheCentral Government may enter into an agreement with the Government of any reciprocating countryu2014

(a) for the avoidance or relief of double taxation with respect to gift-tax payable under this Actand under the corresponding law in force in the reciprocating country, or

(b) for exchange of information for the prevention of evasion or avoidance of gift-tax chargeableunder this Act or under the corresponding law in force in that country or investigation of cases ofsuch evasion or avoidance, or

(c) for recovery of tax under this Act and under the corresponding law in force in that country,and may, by notification in the Official Gazette, make such provision as may be necessary forimplementing the agreement.

Explanation.u2014The expression u2015reciprocating countryu2016 for the purposes of this Act means any countrywhich the Central Government may, by notification in the Official Gazette, declare to be a reciprocatingcountry

1. Subs. by Act 16 of 1972, s. 54, for the portion beginning with words u2015The Central Government mayu2016 and ending with thewords u2015for implementing the agreement.u2016 (w.e.f. 1-4-1972).

1The amount assessed in accordance with the foregoingprovisions of this Act as being the value of all taxable gifts shall be rounded off to the nearest multiple often rupees and, for this purpose, any part of a rupee consisting of paise shall be ignored and thereafter, ifsuch amount is not a multiple of ten rupees, then, if the last figure in that amount is five or more, theamount shall be increased to the next higher amount which is a multiple of ten and, if the last figure is lessthan five, the amount shall be reduced to the next lower amount which is a multiple of ten ; and the amount so rounded off shall be deemed to be the value of all taxable gifts of the assessee for the purposesof this Act.

1. Ins. by Act 42 of 1970, s. 70 (w.e.f. 1-4-1971).

The amount of gift-tax, interest, penalty, fine or any other sumpayable, and the amount of refund due, under the provisions of this Act, shall be rounded off to thenearest rupee and, for this purpose, where such amount contains a part of a rupee consisting of paise, then,if such part is fifty paise or more, it shall be increased to one rupee, and if such part is less than fifty paise,it shall be ignored.

1No tax shall be levied under this Act in respect of giftsmade byu2014

2(a) a company in which the public are substantially interested;

(b) any company to an Indian company in a scheme of amalgamation;

3(e) any institution or fund the income whereof is exempt from income-tax under4section 11 or section 12 of the Income-tax Act.

5Explanation 1.u2014For the purposes of clause (b), the term u2015amalgamationu2016 shall have the meaningassigned to it in clause (1B) of section 2 of the Income-tax Act.

6Explanation 3.u2014For the removal of doubts, it is hereby declared that the exemption admissibleunder clause (e) in relation to gifts made by an institution or fund referred to in that clause shall not bedenied merely on either or both of the following grounds, namely :u2014

(i) that, subsequent to the gift, any part of the income of the institution or fund has becomechargeable to tax due to non-compliance with any of the provisions of 7section 11 or section 12 orsection 12A of the Income-tax Act ;

(ii) that, under clause (c) of sub-section (1) of section 13 of the Income-tax Act, the exemptionunder 8section 11 or section 12 of that Act is denied to the institution or fund in relation to anyincome arising to it from any investment referred to in clause (h) of sub-section (2) of section 13 ofthe said Act where the aggregate of the funds invested by it in a concern referred to in the saidclause (h) does not exceed five per cent. of the capital of that concern.

1. Subs. by Act 4 of 1988, s. 184, for u2015The provisions of this Act shall not apply to gifts made byu2016 (w.e.f. 1-4-1989).

2. Subs. by s. 184, ibid., for clause (a), (b), (c), (d) and (da) (w.e.f. 1-4-1989).

3. Subs. by s. 184, ibid., for clause (e) (w.e.f. 1-4-1989).

4. Subs. by Act 16 of 1972, s. 55, for section 11u2016 (w.e.f. 1-4-1973).

5. Subs. by Act 3 of 1989, s. 93, for Explanations 1 and 2 (w.e.f. 1-4-1989).

6. Ins. by Act 32 of 1971, s. 37 (w.e.f. 1-4-1972).

7. Subs. by Act 16 of 1972, s. 55, for u2015section 11u2016 (w.e.f. 1-4-1973).

8. Subs. by s. 55, for u2015section 11u2016 (w.e.f. 1-4-1973).

(1) The Board may, by notification in the Official Gazette, make rulesfor carrying out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, rules made under thissection may provide foru2014

(a) the manner in which the value of any property may be determined;

(b) the form in which returns under this Act shall be made and the manner in which they shall beverified;

(c) the form in which appeals and applications under this Act may be made, and the manner inwhich they shall be verified;

1(cc) the circumstances in which, the conditions subject to which and the manner in which, the2Deputy Commissioner (Appeals) 3or the Commissioner (Appeals) may permit an appellant toproduce evidence which he did not produce or which he was not allowed to produce before the4Assessing Officer;

(d) the form of any notice of demand under this Act;

(e) the refunds of gift-tax paid in respect of gifts which are revoked on the happening of anyspecified event which does not depend on the will of the donor or of any amount paid under section18;

5(ee) the procedure to be followed in calculating interest payable by assessees or interestpayable by the Government to assessees under any provisions of this Act, including the rounding offof the period for which such interest is to be calculated in cases where such period includes a fractionof a month, and specifying the circumstances in which and the extent to which petty amounts ofinterest payable by assessees may be ignored;

(f) the areas for which lists of valuers may be drawn up;

(g) any other matter which has to be, or may be, prescribed for the purposes of this Act.6(3) The power to make rules conferred by this section shall include the power to give retrospectiveeffect, from a date not earlier than the date of commencement of this Act, to the rules or any of them and,unless the contrary is permitted (whether expressly or by necessary implication), no retrospective effectshall be given to any rule so as to prejudicially affect the interests of assessees.

7(4) The Central Government shall cause every rule made under this Act to be laid as soon as may bebe after it is made before each House of Parliament while it is in session for a total period of thirty dayswhich may be comprised in one session 8or in two or more successive sessions, and if, before the expiryexpiry of the session 9immediately following the session or the successive sessions aforesaid bothHouses agree in making any modification in the rule or both Houses agree that the rule should not bemade, the rule shall thereafter have effect only in such modified form or be of no effect, as the case maybe, so however, that any such modification or annulment shall be without prejudice to the validity ofanything previously done under that rule.

1. Ins. by Act 16 of 1972, s. 56, (w.e.f. 1-4-1972).

2. Subs. by Act 4 of 1988, s. 161, for Appellate Assistant Commissioner (w.e.f. 1-4-1988).

3. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).

4. Subs. by Act 4 of 1988, s. 161, for u2015Gift-tax Officeru2016 (w.e.f. 1-4-1988).

5. Ins. by Act 42 of 1970, s. 71 (w.e.f. 1-4-1971).

6. Subs. by Act 26 of 1974, s. 19, for sub-section (3) (w.e.f. 18-8-1974).

7. Subs. by Act 53 of 1962, s. 36, for u2015sub-section (4) (w.e.f. 1-4-1963).

8. Subs. by Act 41 of 1975, s. 123, for u2015or in two successive sessionsu2016 (w.e.f. 1-4-1976).

9. Subs. by s. 123, ibid., for u2015in which it is so laid or the session immediately followingu2016 (w.e.f. 1-4-1976).

1(1) If theCentral Government considers it necessary or expedient so to do for avoiding any hardship or anomaly orremoving any difficulty that may arise as a result of the application of this Act to the Union territories ofDadra and Nagar Haveli, Goa, Daman and Diu and Pondicherry, or in the case of the Union territory ofPondicherry, for implementing any provision of the Treaty of Cession concluded between France andIndia on the 28th day of May, 1956, the Central Government may, by general or special order, make anexemption, reduction in rate or other modification in respect of gift-tax in favour of any class of gifts or inregard to the whole or any part of the gifts made by any assessee or class of assessees :

Provided that the power conferred by this section shall not be exercisable after the 31st day of March,1967, except for the purpose of rescinding an exemption, reduction or modification already made.

1. Ins. by The Taxation Laws (Extension to Union Territories) Regulation, 1963 (3 of 1963), by s. 3 and the Schedule(w.e.f. 1-4-1963).

1 (1) If any difficulty arises in giving effect to the provisions ofof this Act as amended by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), the CentralGovernment may, by order, do anything not inconsistent with such provisions for the purpose ofremoving the difficulty :

Provided that no such order shall be made after the expiration of three years from the 1st day of April,1988.

(2) Every order made under sub-section (1) shall be laid before each House of Parliament.

1. Ins. by Act 4 of 1988, s. 185 (w.e.f. 1-4-1988)