(1) This Act may be called the Interest-tax Act, 1974.
(2) It extends to the whole of India.
In this Act, unless the context otherwise requires,--
(1) "assessee" means a person by whom interest-tax or any other sum of money is payable under thisAct and includes--
(a) every person in respect of whom any proceeding under this Act has been taken for theassessment of his chargeable interest or of the amount of refund due to him or of the chargeableinterest of any other person in respect of which he is assessable or of the amount of refund due tosuch other person;
(b) every person who is deemed to be an assessee in default under any provision of this Act;
(2) "assessment" includes re-assessment;
(3) "assessment year" means the period of twelve months commencing on the 1st day of April, everyyear;
(4) "Board" means the Central Board of Direct Taxes constituted under the Central Boards ofRevenue Act, 1963 (54 of 1963);
(5) "chargeable interest" means the total amount of interest referred to in section 5, computed in themanner laid down in section 6;
1[(5A) "credit institution" means,--
(i) a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies(including any bank or banking institution referred to in section 51 of that Act) 2;
(ii) a public financial institution as defined in section 4A of the Companies Act, 1956 (1 of 1956);
(iii) a State financial corporation established under section 3 or section 3A or an institutionnotified under section 46 of the State Financial Corporations Act, 1951 (63 of 1951); and(iv) any other financial company;
(5B) "financial company" means a company, other than a company referred to in sub-clause (i), (ii)or (iii) of clause (5A), being--
(i) a hire-purchase finance company, that is to say, a company which carries on, as its principalbusiness, hire-purchase transactions or the financing of such transactions;
(ii) an investment company, that is to say, a company which carries on, as its principal business,the acquisition of shares, stock, bonds, debentures, debenture stock or securities issued by theGovernment or a local authority, or other marketable securities of a like nature;
(iii) a housing finance company, that is to say, a company which carries on, as its principalbusiness, the business of financing of acquisition or construction of houses, including acquisition ordevelopment of land in connection therewith;
(iv) a loan company, that is to say, a company [not being a company referred to in sub-clauses (i)to (iii)] which carries on, as its principal business, the business of providing finance, whether bymaking loans or advances or otherwise;
(v) a mutual benefit finance company, that is to say, a company which carries on, as its principalbusiness, the business of acceptance of deposits from its members and which is declared by theCentral Government under section 620A of the Companies Act, 1956 (1 of 1956), to be a Nidhi orMutual Benefit Society; 3
4[(va) a residuary non-banking company [other than a financial company referred to insub-clause (i), (ii), (iii), (iv) or (v)] that is to say, a company which receives any deposit under anyscheme or arrangement, by whatever name called, in one lumpsum or in instalments by way ofcontributions or subscriptions or by sale of units or certificates or other instruments or in any othermanner; or]
(vi) a miscellaneous finance company, that is to say, a company which carries on exclusively, oralmost exclusively, two or more classes of business referred to in the preceding sub-clauses;]
(6) "Income-tax Act" means the Income-tax Act, 1961(43 of 1961);
5(7) '"interest" means interest on loans and advances made in India and includes--
(a) commitment charges on unutilised portion of any credit sanctioned for being availed of inIndia; and
(b) discount on promissory notes and bills of exchange drawn or made in India,
but does not include--
(i) interest referred to in sub-section (1B) of section 42 of the Reserve Bank of India Act,1934 (2 of 1934);
(ii) discount on treasury bills;]
(8) "prescribed" means prescribed by rules made under this Act;
6 ;
(10) all other words and expressions used herein but not defined and defined in the Income-tax Actshall have the meanings respectively assigned to them in that Act.
1[(1) The income-tax authorities specified in section 116 of the Income-tax Actshall be the interest-tax authorities for the purposes of this Act.
(1A) Every such authority shall exercise the powers and perform the functions of an interest-taxauthority under this Act in respect of any person within his jurisdiction.
(1B) The jurisdiction of an interest-tax authority under this Act shall be the same as he has under theIncome-tax Act by virtue of orders or directions issued under section 120 of that Act (including orders ordirections assigning the concurrent jurisdiction) or under any other provision of that Act.
(1C) The interest-tax authority having jurisdiction in relation to a credit institution which has noincome assessable to income-tax under the Income-tax Act shall be the interest-tax authority havingjurisdiction in respect of the area in which that institution carries on its business or has its principal placeof business.
(1D) Section 118 of the Income-tax Act and any notification issued thereunder shall apply in relationto the control of interest-tax authorities as they apply in relation to the control of the correspondingincome-tax authorities, except to the extent to which the Board may, by notification in the OfficialGazette, otherwise direct in respect of any interest-tax authority.]
(2) All officers and persons employed in the execution of this Act shall observe and follow the orders,instructions and directions of the Board:
Provided that no such orders, instructions or directions shall be issued--
(a) so as to require any tax authority to make a particular assessment or to dispose of a particularcase in a particular manner; or
(b) so as to interfere with the discretion of the Appellate Assistant Commissioner in the exerciseof his appellate functions.
(3) Every Income-tax Officer 2[or Assistant Commissioner 3[ or Deputy Commissioner]] employed inthe execution of this Act shall observe and follow the orders, instructions and directions issued for hisguidance by the 4[Director] or by the Commissioner or by the 5[Additional Commissioner of Income-taxor the 6[Joint Commissioner]] within whose jurisdiction he performs his functions.
1[(1)] Subject to the provisions of this Act, there shall be charged on everyscheduled bank for every assessment year commencing on or after the 1st day of April, 1975, a tax (inthis Act referred to as interest-tax) in respect of its chargeable interest of the previous year at the rate ofseven per cent. of such chargeable interest:
2[Provided that the rate at which interest-tax shall be charged in respect of any chargeable interestaccruing or arising after the 31st day of March, 1983 shall be three and a half per cent. of such chargeableinterest.]
3[(2) Notwithstanding anything contained in sub-section (1) but subject to the other provisions of thisAct, there shall be charged on every credit institution for every assessment year commencing on and fromthe 1st day of April, 1992, interest-tax in respect of its chargeable interest of the previous year at the rateof three per cent. of such chargeable interest.]
4[Provided that the rate at which interest-tax shall be charged in respect of any chargeable interestaccruing or arising after the 31st day of March, 1997 shall be two per cent. of such chargeable interest.]
5[(3) Notwithstanding anything contained in sub-sections (1) and (2), no interest-tax shall be chargedin respect of any chargeable interest accruing or arising after the 31st day of March, 2000.]
1[5. Scope of chargeable interest.Subject to the provisions of this Act, the chargeable interest ofany previous year of a credit institution shall be the total amount of interest (other than interest on loansand advances made to other credit institutions 2[or to any co-operative society engaged in carrying on thebusiness of banking)] accruing or arising to the credit institution in that previous year:
Provided that any interest in relation to categories of bad or doubtful debts referred to in section 43Dof the Income-tax Act shall be deemed to accrue or arise to the credit institution in the previous year inwhich it is credited by the credit institution to its profit and loss account for that year or, as the case maybe, in which it is actually received by the credit institution, whichever is earlier.]
(1) Subject to the provisions of sub-section (2), incomputing the chargeable interest of a previous year, there shall be allowed from the total amount ofinterest (other than interest on loans and advances made to 1[credit institutions] accruing or arising to theassessee in the previous year, a deduction in respect of the amount of interest which is established to havebecome a bad debt during the previous year:
Provided that such interest has been taken into account in computing the chargeable interest of theassessee of an earlier previous year and the amount has been written off as irrecoverable in the accountsof the assessee for the previous year during which it is established to have become a bad debt.
Explanation.--For the removal of doubts, it is hereby declared that in computing the chargeableinterest of a previous year, no deduction, other than the deduction specified in this sub-section, shall beallowed from the total amount of interest accruing or arising to the assessee.
(2) In computing the chargeable interest of a previous year, the amount of interest which accrues orarises to the assesse 2[before the 1st day of August, 1974 or 3[during the period commencing on the 1stday of April, 1985 and ending with the 30th day of September, 1991] shall not be taken into account.
20. Subs. by Act 49 of 1991, s. 95, for "scheduled banks" (w.e.f. 1-10-1991).
2. Subs. by Act 19 of 1978, s. 33, for "before the 1st day of August, 1974" (1-4-1978).
3. Subs. by Act 49 of 1991, s. 95, for "after the 31st day of March, 1985" (w.e.f. 1-10-1991).
1[(I) In the case of every credit institution, its principal officer, orwhere in the case of a non-resident, credit institution any person has been treated as its agent undersection 163 of the Income-tax Act, such person, shall furnish a return of the chargeable interest of thecredit institution of the previous year in the prescribed form and verified in the prescribed manner andsetting forth such other particulars as may be prescribed, before the 31st day of December of theassessment year.
(2) Without prejudice to the provisions of sub-section (1), the Assessing Officer may, before the endof the relevant assessment year, serve a notice upon the principal officer of any credit institution, or wherein the case of a non-resident credit institution any person has been treated as its agent under section 163 ofthe Income-tax Act, upon such person, requiring him to furnish within thirty days from the date of serviceof the notice a return of the chargeable interest of the credit institution of the previous year in theprescribed form and verified in the prescribed manner and setting forth such other particulars as may beprescribed.
(3) Any assessee who has not furnished a return within the time allowed under sub-section (1) orsub-section (2), or having furnished a return under sub-section (1) or sub-section (2) discovers anyomission or wrong statement therein, may furnish a return or a revised return, as the case may be, at anytime 1[before the expiry of one year from the end of the relevant assessment year or before the completionof the assessment, whichever is earlier.]
(1) For the purposes of making an assessment under this Act, the 2[AssessingOfficer] may serve on any person who has furnished a return under section 7 or upon whom a notice hasbeen served under sub-section (2) of section 7 (whether a return has been furnished or not) a noticerequiring him on a date therein to be specified, to produce or cause to be produced such accounts ordocuments or evidence as the 1[Assessing Officer] may require for the purposes of this Act and may, fromtime to time, serve further notices requiring the production of such further accounts or documents or otherevidence as he may require.
(2) The 2[Assessing Officer], after considering such accounts, documents or evidence, if any, as hehas obtained under sub-section (1) and after taking into account any relevant material which he hasgathered, shall, by an order in writing assess the chargeable interest and the amount of the interest-taxpayable on the basis of such assessment.
3[(3) If any person--
(a) fails to make a return as required under sub-section (1) of section 7 and has not made a returnor a revised return under sub-section (3) of that section, or
(b) fails to comply with all the terms of notice under sub-section (2) of that section,
the Assessing Officer shall, after taking into account all the relevant material which he has gathered andafter giving the assessee an opportunity of being heard, make the assessment of the total chargeableinterest to the best of his judgment and determine the sum payable by the assessee on the basis of suchassessment:
Provided that such opportunity shall be given by the Assessing Officer by serving a notice callingupon the assessee to show cause, on a date and time to be specified in the notice, why the assessmentshould not 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 (1) has been issued prior to the making of an assessment under this section.]
1[9. Self-assessment.(1) Where interest-tax is payable on the basis of any return required to befurnished under section 7 or section 10, after taking into account the amount of interest-tax, if any,already paid under any provision of this Act, the assessee shall be liable to pay such interest-tax, togetherwith interest payable under any provision of this Act for any delay in furnishing the return or any defaultor delay in payment of advance interest-tax, before furnishing the return and the return shall beaccompanied by proof of payment of such interest-tax and interest.
Explanation.--Where the amount paid by the assessee under this sub-section falls short of theaggregate of the interest-tax and interest as aforesaid, the amount so paid shall first be adjusted towardsthe interest payable as aforesaid and the balance, if any, shall be adjusted towards the interest-tax payable.
(2) After the assessment under section 8 has been made, any amount paid under sub-section (1) shallbe deemed to have been paid towards such assessment.
(3) If any assessee fails to pay the whole or any part of interest-tax or interest or both in accordancewith the provisions of sub-section (1), he shall, without prejudice to any other consequences which hemay incur, be deemed to be an assessee in default in respect of the interest-tax or interest; or bothremaining unpaid, and all the provisions of this Act shall apply accordingly.]
If--
(a) the 1[Assessing Officer] has reason to believe that by reason of the omission or failure on thepart of the assessee to make a return under section 7 for any assessment year or to disclose fully andtruly all material facts necessary for his assessment for any assessment year, chargeable interest forthat year has escaped assessment or has been under-assessed or has been made the subject ofexcessive, relief under this Act, or
(b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on thepart of the assessee, the 1[Assessing Officer] has, in consequence of information in his possession,reason to believe that chargeable interest assessable for any assessment year has escaped assessmentor has been under-assessed or has been made the subject of excessive relief under this Act
he may, in cases falling under clause (a), at any time, and in cases falling under clause (b), at any timewithin four years of the end of that assessment year, serve on the assesee a notice containing all or any ofthe requirements which may be included in a notice under section 7, and may proceed to assess orre-assess the amount chargeable to interest-tax, and the provisions of this Act shall, so far as may be,apply, as if the notice were a notice issued under that section.
1[10A. Time limit for completion of assessments and re-assessments.(1) No order of assessmentshall be made under section 8 at any time after the expiry of two years from the end of the assessmentyear in which the interest was first assessable.
(2) No order of assessment or re-assessment shall be made under section 10 after the expiry of twoyears from the end of the financial year in which the notice under that section was served.
(3) Notwithstanding anything contained in sub-sections (1) and (2), and order of fresh assessment inpursuance of an order passed under section 15, section 16, section 19 or section 20, setting aside orcancelling an assessment may be made at any time before the expiry of two years from the end of thefinancial year in which the order under section 15 of section 16 is received by the Commissioner or, as thecase may be, the order under section 19 or section 20 is passed by the Commissioner.
(4) The provisions of sub-sections (1) and (2) shall not apply to the assessment or re-assessment madein consequence of, or to give effect to, any finding or direction contained in an order under section 15 orsection 16 or section 19 or section 20 of this Act or section 256 or section 260 of the Income-tax Act asapplicable to this Act by virtue of section 21 of this Act or in an order of any court in a proceedingotherwise than by way of appeal or reference under this Act and such assessment or re-assessment may,subject to the provisions of sub-section (3), be completed at any time.
Explanation 1.--In computing the period of limitation for the purposes of this section--
(i) the time taken in reopening the whole or any part of the proceeding; or
(ii) the period during which the assessment proceeding is stayed by an order or injunction of anyCourt,
shall be excluded.
Explanation 2.--Where, by an order referred to in sub-section (4), any interest is excluded from thechargeable interest for an assessment year in respect of an assessee, then, an assessment of such interestfor another assessment year shall, for the purposes of section 10 and this section, be deemed to be onemade in consequence of, or to give effect to, any finding or direction contained in the said order.]
1[11. Advance payment of interest-tax.(1) Interest-tax shall be payable in advance during thefinancial year in respect of the chargeable interest for the assessment year immediately following thatfinancial year in accordance with the provision of this section.
(2) Interest-tax shall be payable in advance in three instalments during each financial year, the duedate of, and the amount payable in, each such instalment being as specified in the following Table:
TABLE
Due date of instalment Amount payable
On or before the 15th September Not less than twenty per cent. of suchinterest-tax Payable in advance.
On or before the 15th December Not less than fifty per cent. of suchinterest-tax payable in advance, asreduced by the amount, if any, paid inthe earlier instalment.
On or before the 15th March The whole amount of such interest-taxpayable in advance as reduced by theamount or amounts, if any, paid in theearlier instalment or instalments:
Provided that any amount paid by way of interest-tax payable in advance on or before the 31st day ofMarch shall also be treated as interest-tax paid in advance during the financial year ending on that day forall the purposes of this Act.]
1[12. Interest for default in furnishing return of chargeable interest.(1) Where the return ofchargeable interest for any assessment year under sub-section (1) of section 7, or in response to a noticeunder sub-section (2), of that section is furnished after the due date, or is not furnished, the assessee shall be liable to pay simple interest at the rate of two per cent. for every month or part of a month comprisedin the period commencing on the date immediately following the due date, and,--
(a) where the return is furnished after the due date, ending on the date of the furnishing of thereturn; or
(b) where no return has been furnished, ending on the date of completion of assessment undersub-section (3) of section 8, on the amount of the interest-tax on the chargeable interest as determinedunder sub-section (2) or sub-section (3) of section 8 as reduced by the interest-tax paid in advance.
Explanation 1.-- In this section, "due date" means the 31st day of December of the relevantassessment year or, as the case may be, the date on which return in response to a notice undersub-section (2) of section 7 is due to be filed.
Explanation 2.--Where in relation an assessment year, an assessment is made for the first time undersection 10, the assessment so made shall be regarded as assessment made under sub-section (2), or, as thecase may be, sub-section (3) of section 8.
Explanation 3.--For the purposes of computing the interest payable under section 9, interest-tax onthe chargeable interest declared in the return shall be deemed to be the interest-tax on total chargeableinterest determined under sub-section (2) or sub-section (3) of section 8.
(2) The interest payable under sub-section (1) shall be reduced by the interest, if any, paid undersection 9 towards the interest chargeable under this section.
(3) Where the return of chargeable interest for any assessment year, required by a notice undersection 10 issued after the completion of assessment under sub-section (2) or sub-section (3) of section 8or section 10 is furnished after the expiry of the time allowed under such notice or is not furnished, theassessee shall be liable to pay simple interest at the rate of two per cent. for every month or part of amonth comprised in the period commencing on the date immediately following the expiry of time allowedas aforesaid, and,--
(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 day of completion of the re-assessmentunder section 10,
on the amount by which the interest-tax on the chargeable interest as determined on the basis of suchreassessment exceeds the interest-tax on chargeable interest on the basis of earlier assessment aforesaid.
(4) Where, as a result of an order under section 15 or section 17 of this Act or section 254 or section260 or section 262 of the Income-tax Act, as applicable to this Act by virtue of section 21 of this Act, theamount on which interest was payable under sub-section (1) or sub-section (3) has been increased orreduced, as the case may be, the interest shall be increased or reduced accordingly, and--
(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 156 of the Income-tax Act as applicable to this Act by virtueof Section 21, and the provisions of this Act shall apply accordingly;
(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, 1992 and subsequent years.]
1[12A. Interest for default in payment of interest-tax in advance.(1) Subject to the otherprovisions of this section, where in any financial year, an assessee, who is liable to pay interest-tax inadvance under section 11 has failed to pay such tax, or where the interest-tax paid in advance by suchassessee is less than ninety per cent. of the assessed interest-tax, the assessee shall be liable to pay simpleinterest at the rate of two per cent. for every month or part of a month comprised in the period from the1st day of April next following such financial year to the date of determination of chargeable interestunder sub-section (2) or, as the case may be, sub-section (3) of section 8 on an amount equal to the assessed interest-tax, or, as the case may be, on the amount by which the interest-tax payable in advancefalls short of the assessed interest-tax.
Explanation 1.--In this section "assessed interest-tax" means, --
(a) for the purpose of computing the interest payable under section 9, the interest-tax on thechargeable interest as declared in the return referred to in that section;
(b) in any other case, interest-tax on chargeable interest as determined under sub-section (2) or, asthe case may be, sub-section (3) of section 8.
Explanation 2.--Where, in relation to an assessment year, an assessment is made for the first timeunder section 10, the assessment so made shall be regarded as assessment made under sub-section (2) or,as the case may be, sub-section (3) of section 8.
(2) Where, before the date of completion of assessment under sub-section (2) or sub-section (3) ofsection 8, interest-tax is paid by the assessee under section 9 or otherwise,--
(i) interest shall be calculated in accordance with the foregoing provisions of this section up to thedate on which the tax is so paid, and reduced by the interest, if any, paid under section 9 towards theinterest chargeable under this section;
(ii) thereafter, interest shall be calculated at the rate aforesaid on the amount by which the tax sopaid together with interest-tax paid in advance falls short of the assessed interest-tax.
(3) Where, as a result of an order of reassessment under section 10, the amount on which the interestwas payable under sub-section (1) is increased, the assessee shall be liable to pay simple interest at therate of two per cent. for every month or part of a month comprised in the period commencing on the dayfollowing the completion of the assessment under sub-section (2) or, as the case may be, sub-section (3)of section 8 referred to in sub-section (1) and ending on the date of reassessment under section 10, on theamount by which the interest-tax on the basis of the reassessment exceeds the interest-tax on thechargeable interest determined on the basis of assessment under sub-section (2) or, as the case may be,sub-section (3) of section 8.
(4) Where, as a result of an order under section 15 or section 17 of this Act or section 254 or section260 or section 262 of the Income-tax Act as applicable to this Act by virtue of section 21 of this Act, theamount on which interest was payable under sub-section (1) or sub-section (3) has been increased orreduced, as the case may be, the interest shall be increased or reduced accordingly, and--
(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 156 of the Income-tax Act as applicable to this Act by virtueof section 21 of this Act, and provisions of this Act shall apply accordingly;
(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, 1992 and subsequent assessment years.]
1[12B. Interest for deferment of interest-tax payable in advance.(1) Where in any financial year,the assessee who is liable to pay interest-tax in advance under section 11 has failed to pay the interest-taxand where such tax paid by the assessee on his chargeable interest on or before the 15th day of Septemberis less than twenty per cent. of the interest-tax due on the returned chargeable interest or the amount ofsuch interest-tax paid on or before the 15th day of December is less than fifty per cent. of the tax due onthe returned chargeable interest then, the assessee shall be liable to pay simple interest at the rate of oneand one-half per cent. per month of the shortfall for a period of three months on the amount of shortfallfrom twenty per cent. or; as the case may be, fifty per cent. of the interest-tax due on the returnedchargeable interest.
(2) The provisions of this section shall apply in respect of assessments for the assessment yearcommencing on the 1st day of April, 1992 and subsequent assessment years.]
1[13. Penalty for concealment of chargeable interest.If the Assessing Officer or the Commissioner(Appeals) in the course of any proceeding under this Act, is satisfied that any person has concealed theparticulars of chargeable interest or has furnished inaccurate particulars of such interest, he may directthat such person shall pay by way of penalty, in addition to any interest-tax payable by him, a sum whichshall not be less than, but shall not exceed three times, the amount of interest-tax sought to be evaded byreason of the concealment of particulars of his chargeable interest or the furnishing of inaccurateparticulars of such chargeable interest.]
No order imposing a penalty under section 12 or section 13 shallbe made unless the assessee has been heard, or has been given a reasonable opportunity of being heard.
15. Appeals to the 1[Commissioner (Appeals)].(1) Any person objecting to the amount ofinterest-tax for which he is assessed by the 2[Assessing Officer] or denying his liability to be assessedunder this Act, or objecting to any penalty or fine imposed by the 2[Assessing Officer], or to the amountallowed by the 2[Assessing Officer] by way of any relief under any provision of this Act, or to any refusalby the 2[Assessing Officer] to grant relief or to an order of rectification having the effect of enhancing theassessment or reducing the refund, or to an order refusing to allow the claim made by the assessee for arectification under section 17, may appeal to the 1[Commissioner (Appeals)].
3[(2) Every appeal filed on or after the 1st day of October, 1998 shall be in the prescribed form andshall be verified in the prescribed manner and shall be accompanied by a fee of two hundred and fiftyrupees.]
(3) An appeal shall be presented within thirty days of the following date, that is to say,--
(a) where the appeal relates to assessment or penalty or fine, the date of service of the notice ofthe demand relating to the assessment or penalty or fine, or
(b) in any other case, the date on which the intimation of the order sought to be appealed againstis served:
Provided that the 1Commissioner (Appeals)] may admit an appeal after the expiration of the saidperiod if he is satisfied that the appellant had sufficient cause for not presenting it within that period.
(4) The 1[Commissioner (Appeals)] shall hear and determine the appeal and, subject to the provisionsof this Act, pass such orders as he thinks fit and such orders may include an order enhancing theassessment or penalty:
Provided that an order enhancing the assessment or penalty shall not be made unless the personaffected thereby has been given a reasonable opportunity of showing cause against such enhancement.
(5) The procedure to be adopted in the hearing and determination of the appeals shall, with anynecessary modification, be in accordance with the procedure applicable in relation to income-tax.
[Appeal to the Commissioner (Appeals).] Omitted by Finance (No. 2) Act, 1991 (49 of 1991),s. 103 (w.e.f. 1-10-1991).
(1) Any assessee aggrieved by an order passed by aCommissioner under section 19, or an order passed by 2[a Commissioner (Appeals)] under any provisionof this Act, may appeal to the Appellate Tribunal against such order.
(2) The Commissioner may, if he objects to any order passed by the 1[Commissioner (Appeals)]under any provision of this Act, direct the 3[Assessing Officer] to appeal to the Appellate Tribunal againstthe order.
(3) Every appeal under sub-section (1) or sub-section (2) shall be filed within sixty days of the dateon which the order sought to be appealed against is communicated to the assessee or to theCommissioner, as the case may be.
(4) The4[Assessing Officer] or the assessee, as the case may be, on receipt of notice that an appealagainst the order of the 5[Commissioner (Appeals)] has been preferred under sub-section (1) orsub-section (2) by the other party may, notwithstanding that he may not have appealed against such orderor any part thereof, within thirty days of the receipt of the notice, file a memorandum of cross-objections,verified in the prescribed manner, against any part of the order of the 5[Commissioner (Appeals)], andsuch memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented withinthe time specified in sub-section (3).
(5) 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 (3) or sub-section (4), ifit is satisfied that there was sufficient cause for not presenting it within that period.
(6) 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) or amemorandum of cross-objections referred to in sub-section (4), be accompanied by a fee of 6[onethousand rupees in the case of an appeal filed on or after the 1st day of October, 1998].
(7) Subject to the provisions of this Act, in hearing and making an order on any appeal under thissection, the Appellate Tribunal shall exercise the same powers and follow the same procedure as itexercises and follows in hearing and making an order on any appeal under the Income-tax Act.
(1) With a view to rectifying any mistake apparent from the record,the Commissioner, the 2[Assessing Officer], the 1[Commissioner (Appeals)] and the Appellate Tribunalmay, of his, or its, own motion or on an application by the assessee in this behalf, amend any order passedby him or it in any proceeding under this Act 3[within four years from the end of the financial year inwhich such order was passed].
(2) An amendment which has the effect of enhancing the 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.
(3) Where an amendment is made under this section, the order shall be passed in writing by theauthority concerned.
(4) Subject to the other provisions of this Act, where any such amendment has the effect of reducingthe assessment, the 2[Assessing Officer] shall make any refund which may be due to such assessee.
(5) Where any such amendment has the effect of enhancing the assessment or reducing the refundalready made, the 2[Assessing Officer] shall serve on the assessee a notice of demand in the prescribedform specifying the sum payable.
1[18. Interest-tax deductible in computing total income under the Income-taxAct.Notwithstanding anything contained in the Income-tax Act, in computing the income of a creditinstitution chargeable to income-tax under the head "Profits and gains of business or profession" or underthe head "Income from other sources", the interest-tax payable by the credit institution for any assessmentyear shall be deductible from the income, under the respective heads, of the credit institution assessablefor that assessment year.]
(1) The Commissioner may call for and examine therecord of any proceeding under this Act, and if he considers that any order passed therein bythe 1[Assessing Officer] is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made suchenquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, includingan order enhancing or modifying the assessment, or cancelling the assessment and directing a freshassessment.
2[Explanation.--For the removal of doubts, it is hereby declared that, for the purposes of thissub-section,--
(a) "record" shall include and shall be deemed always to have included all records relating to anyproceeding under this Act available at the time of examination by the Commissioner;
(b) where any order referred to in this sub-section is the subject matter of any appeal, the power ofthe Commissioner under this sub-section shall extend to all such matters as had not been consideredand decided in such appeal.]
3[(2) No order shall be made under in sub-section (1) after the expiry of two years from the end of thefinancial year in which the order sought to be revised was passed.]
(3) Notwithstanding anything contained sub-section (2), an order-in revision under this section maybe passed at anytime in the case of an order which has been passed in consequence of, or to give effect to,any finding or direction contained in an order of the Appellate Tribunal 4[the National Tax Tribunal], theHigh Court or the Supreme Court.
Explanation.--In computing the period of limitation for the purposes of sub-section (2), 5[the timetaken in giving an opportunity to the assessee to be reheard under the proviso to section 129 of theIncome-tax Act, as applicable to this Act by virtue of section 21 of this Act, and] any period during whichany proceeding under this section is stayed by an order or injunction of any court shall be excluded.
(1) The Commissioner may, either of his own motion oron an application by the assessee for revision, call for the record of any proceeding under this Act whichhas been taken by an 1[Assessing Officer] 2 subordinate to him and may make such enquiry or causesuch enquiry to be made and, subject to the provisions of this Act, may pass such order thereon, not beingan order prejudicial to the assessee, as he thinks fit.
(2) The Commissioner shall not of his own motion revise any order under this section if the order hasbeen made more than one year previously.
(3) In the case of an application for revision under this section by the assessee, the application shall bemade within one year from the date on which the order in question was communicated to him or the dateon which he otherwise came to know of it, whichever is earlier:
Provided that the Commissioner may, if he is satisfied that the assessee was prevented by sufficientcause from making the application within that period, admit an application made after the expiry of thatperiod.
(4) The Commissioner shall not revise any order under this section in the following cases--
3[(a) where an appeal against the order lies to the Commissioner (Appeals) but has not been madeand the time within which such appeal may be made has not expired, or the assessee has not waivedhis right of appeals; or
(b) where the order has been made the subject of an appeal to the Commissioner (Appeals).]
(5) Every application by an assessee for revision under this section shall be accompanied by a fee oftwenty-five rupees.
4[(6) On every application by an assessee for revision under this sub-section, made on or after the 1stday of October, 1998, an order shall be passed within one year from the end of the financial year in whichsuch application is made by the assesse for revision.
Explanation.--In computing the period of limitation for the purposes of this sub-section, the timetaken in giving an opportunity to the assessee to be re-heard under the proviso to section 21 and anyperiod during which any proceeding under this section is stayed by an order or injunction of any courtshall be excluded.
(7) Notwithstanding anything contained in sub-section (6), an order in revision under sub-section (6)may be passed at any time in consequence of or to give effect to any finding or direction contained in anorder of the 5[Appellate Tribunal, the National Tax Tribunal, the High Court or the Supreme Court].]
Explanation.--An order by the Commissioner declining to interfere shall, for the purposes of thissection be deemed not to be an order prejudicial to the assessee.
The provisions of the following sections andSchedules of the Income-tax Act and the Income-tax (Certificate Proceedings) Rules, 1962, as in forcefrom time to time, shall apply with necessary modifications as if the said provisions and the rules referredto interest-tax instead of to income-tax:--
1[2(44) 2[,119],129,131,132,132A, 132B, 133 to 136 (both inclusive), 138,140,145, 156, 160, 161,162, 163, 166, 167, 170, 173, 175, 176, 178, 179, 220 to 227 (both inclusive), 228A, 229, 232, 237 to 245(both inclusive), 254 to 262 (both inclusive), 265, 266, 268, 269, 281, 281B, 282, 284, 287, 288, 288A,288B, 289 to 293 (both inclusive), the Second Schedule and the Third Schedule:]
Provided that references in the said provisions and the rules to the "assessee" shall be construed asreferences to an assessee as defined in this Act.
(1) Notwithstanding anythingcontained in the Income-tax Act, all information contained in any statement or return made or furnishedunder the provisions of that Act or obtained or collected for the purposes of that Act may be used for thepurposes of this Act.
(2) All information contained in any statement or return made or furnished under the provisions ofthis Act or obtained or collected for the purposes of this Act may be used for the purposes of theIncome-tax Act.
1[23. Failure to comply with notices.If any person fails, without reasonable cause, to produce orcause to be produced, any accounts or documents required to be produced under section 8, he shall pay byway of penalty, a sum which shall not be less than one thousand rupees, but which may extend totwenty-five thousand rupees, for each such failure.]
1[24. False statements.If a person makes a statement in any verification under this Act or any rulemade thereunder, or delivers an account or statement which is false, and which he either knows orbelieves to be false or does not believe to be true, he shall be punishable with rigorous imprisonment for aterm which shall not be less than three months but which may extend to seven years and with fine.]
1[25. Wilful attempt to evade tax, etc.If a person wilfully attempts in any manner whatsoever toevade any interest-tax, penalty or interest chargeable or imposable under this Act, he shall, withoutprejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable with rigorous imprisonment for a term which shall not be less than three months but whichmay extend to seven years and with fine.
Explanation.--For the purposes of this section, a wilful attempt to evade any interest-tax, penalty orinterest chargeable or imposable under this Act or the payment thereof shall include a case where anyperson--
(i) has in his possession or control any books of account or other documents (being books ofaccount or other documents relevant to any proceeding under this Act) containing a false entry orstatement; or
(ii) makes or causes to be made any false entry or statement in such books of account or otherdocuments; or
(iii) wilfully omits or causes to be omitted any relevant entry or statement in such books ofaccount or other documents; or
(iv) causes any other circumstances to exist which will have the effect of enabling such person toevade any interest-tax, penalty or interest chargeable or imposable under this Act or the paymentthereof.]
1[26. Abetment of false returns, etc.If a person abets or induces in any manner another person tomake and deliver any account or a statement or declaration relating to any chargeable interest which isfalse and which he either knows or believes to be false or does not believe to be true or to commit anoffence under section 25, he shall be punishable with rigorous imprisonment for a term which shall not beless than three months but which may extend to seven years and with fine.]
1[26A. Offences by credit institutions.(1) Where an offence under this Act has been committed by acredit institution every person who, at the time the offence was committed, was in charge of, and wasresponsible to, the credit institution or the conduct of the business of the credit institution as well as thecredit institution shall be deemed to be guilty of the offence and shall be liable to be proceeded againstand 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 credit institution 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 credit institution, such director, manager, secretary or other officer shall also be deemed tobe guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.--For the purposes of this section, "director", in relation to a co-operative society, meansany member controlling the affairs thereof.]
1[26B. Institution of proceedings and composition of offences.(1) A person shall not beproceeded against for any offence under section 24 or section 25 or section 26 or for any offence underthe Indian Penal Code (45 of 1860), except with the previous sanction of the Commissioner orCommissioner (Appeals):
Provided that the Chief Commissioner or, as the case may be, Director General may issue suchinstructions or directions to the aforesaid interest-tax authorities as he may deem fit for institution ofproceedings under this sub-section.
(2) Any offence under the sections referred to in sub-section (1) may, either before or after theinstitution of proceedings, be compounded by the Chief Commissioner or Director General.
Explanation.--For the removal of doubts, it is hereby declared that the power of the Board to issueorders, instructions or directions under this Act shall include the power to issue instructions or directions(including instructions or directions to obtain the previous approval of the Board) to other interest-taxauthorities for the proper composition of offences under this section.]
1[26C. Power of credit institutions to vary certain agreements.Notwithstanding anythingcontained in any agreement under which any term loan has been sanctioned by the credit institutionbefore the 1st day of October, 1991, it shall be lawful for the credit institution to vary the agreement, so asto increase the rate of interest stipulated therein to the extent to which such institution is liable to pay theinterest-tax under this Act in relation to the amount of interest on the term loan which is due to the creditinstitution.
Explanation.--For the purposes of this section, "term loan" means a loan which is not repayable ondemand.]
(1) The Board may, subject to the control of the Central Government, bynotification in the Official Gazette, make rules for carrying out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules mayprovide for all or any of the following matters, namely:--
(a) the form in which returns under section 7 may be furnished and the manner in which they maybe verified;
(b) the form in which appeals under section 15 or section 16 may be filed and the manner inwhich they may be verified;
(c) the procedure to be followed on applications for rectification of mistakes and applications forrefunds;
(d) any other matter which by this Act is to be, or may be, prescribed.
(3) The power to make rules conferred by this section shall on the first occasion of the exercisethereof include the power to give retrospective effect to the rules or any of them from a date not earlierthan the date of commencement of this Act.
(4) The Central Government shall cause every rule made under this section to be laid, as soon as maybe 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 or in two or more successive sessions, and if, before the expiry ofthe session immediately following the session or the successive sessions aforesaid, both Houses agree inmaking any modification in the rule or both Houses agree that the rule should not be made the rule shallthereafter have effect only in such modified form or be of no effect, as the case may be; so, however, thatany such modification or annulment shall be without prejudice to the validity of anything previously doneunder that rule.
Where the Central Government is of the opinion that it is necessary orexpedient so to do either in the public interest or having regard to the peculiar circumstances of the case,it may, by notification, and subject to conditions, if any, as may be specified in the notification, exempt1[any credit institution or any class of credit institutions or any interest on any category of loans oradvances] from the levy of interest-tax:
Provided that no such exemption shall be made except on the recommendation of the Reserve Bankof India.
1[(1)] If any difficulty arises in giving effect to the provisions ofthis Act, the Central Government may, by order, not inconsistent with the provisions of this Act, removethe difficulty:
Provided that no such order shall be made after the expiry of a period of two years from thecommencement of this Act.
2[(2) If any difficulty arises in giving effect to the provisions of this Act, as amended by the Finance(No.2) Act, 1991(49 of 1991), the Central Government may, by order, do anything not inconsistent withsuch provisions for the purpose of removing the difficulty:
Provided that no such order shall be made after the expiry of two years from the 1st day of October,1991.
(3) Every order made under sub-section (2) shall be laid before each House of Parliament.]
[Repeal.] Rep. by Repealing and Amending Act, 1978 (38 of 1978), s. 2 and the First Schedule(w.e.f. 26-11-1978).