(1) This Act may be called the Indian Income Tax Act, 1922.

1[(2) It extends to the whole of India.]

(3) It shall come into force on the first day of April, 1922.

In this Act, unless there is anything repugnant in the subject or context,

(1) agricultural income means

(a) any rent or revenue derived from land which is used for agricultural purposes, and is either assessed to land-revenue in 2[the taxable territories] or subject to a local rate assessed and collected by officers of the Government as such;

(b) any income derived from such land by

(i) agriculture, or

(ii) the performance by a cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the produce raised or received by him fit to be taken to market, or

(iii) the sale by a cultivator or receiver of rent-in-kind of the produce raised or received by him, in respect of which no process has been performed other than a process of the nature described in sub-clause (ii);

(c) any income derived from any building owned and occupied by the receiver of the rent or revenue of any such land, or occupied by the cultivator, or the receiver of rent-in-kind, of any land with respect to which, or the produce of which any operation mentioned in sub-clauses (ii) and (iii) of clause (b) is carried on:

Provided that the building is on or in the immediate vicinity of the land, and is a building which the receiver of the rent or revenue or the cultivator or the receiver of the rent-in-kind by reason of his connection with the land, requires as a dwelling-house, or as a storehouse, or other out-building;

3[(2) assessee means a person by whom income-tax or any other sum of money is payable under this Act, and includes every person in respect of whom any proceeding under this Act has been taken for the assessment of his income or of the loss sustained by him or of the amount of refund due to him;]

(3) 4[Appellate] Assistant Commissioner means a person appointed to be an 5[Appellate] Assistant Commissioner of Income-tax under Section 5;

6[* * *]

(4) business includes any trade, commerce, or manufacture or any adventure or concern in the nature of trade, commerce or manufacture;

7[(4-A) capital asset means property of any kind 8[* * *] held by an assessee, whether or not connected with his business, profession or vocation, but does not include

(i) any stock-in-trade, consumable stores or raw materials held for the purposes of his business, profession or vocation;

(ii) personal effects, that is to say, movable property (including wearing apparel, jewellery and furniture) held for personal use by the assessee or any member of his family dependent on him;]

9[(iii) any land from which the income derived is agricultural income;]

10[(4-B) the Central Board of Revenue means the Central Board of Revenue constituted under the Central Board of Revenue Act, 1924 (4 of 1924);]

(5) Commissioner means a person appointed to be a Commissioner of Income-tax under Section 5;

11[(5-A) company means

(i) any Indian company, or

(ii) any association, whether incorporated or not and whether Indian or non-Indian, which is or was assessable, or was assessed, as a company for the assessment for the year ending on the 31st day of March, 1948, or which is declared by general or special order of the Central Board of Revenue to be a company for the purposes of this Act;]

12[(5-B) co-operative society means a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912) or under any other law for the time being in force in any State for the registration of co-operative societies;]

13[(6) Director of Inspection means a person appointed to be a Director of Inspection under Section 5, and includes a person appointed to be an Additional Director of Inspection, a Deputy Director of Inspection or an Assistant Director of Inspection;]

14[(6-A) dividend includes

(a) any distribution by a company of accumulated profits, whether capitalised or not, if such distribution entails the release by the company to its shareholders of all or any part of the assets of the company;

(b) any distribution by a company of debentures 15[debenture-stock or deposit certificates in any form, whether with or without interest,] to the extent to which the company possesses accumulated profits, whether capitalised or not;

16[(c) any distribution made to the shareholders of a company on its liquidation, to the extent to which the distribution is attributable to the accumulated profits of the company immediately before its liquidation, whether capitalised or not;]

17[* * *]

(d) any distribution by a company on the reduction of its capital to the extent to which the company possesses accumulated profits which arose after the end of the previous year ending next before the 1st day of April, 1933, whether such accumulated profits have been capitalised or not;

18[(e) any payment by a company, not being a company in which the public are substantially interested within the meaning of Section 23-A, of any sum (whether as representing a part of the assets of the company or otherwise) by way of advance or loan to a shareholder or any payment by any such company on behalf or for the individual benefit of a shareholder, to the extent to which the company in either case possesses accumulated profits;

but dividend does not include

(i) a distribution made in accordance with sub-clause (c) or sub-clause (d) in respect of any share issued for full cash consideration where the holder of the share is not entitled in the event of liquidation to participate in the surplus assets;

(ii) any advance or loan made to a shareholder by a company in the ordinary course of its business where the lending of money is a substantial part of the business of the company;

(iii) any dividend paid by a company which is set off by the company against the whole or any part of any sum previously paid by it and treated as a dividend within the meaning of sub-clause (e), to the extent to which it is so set off.

Explanation. The expression accumulated profits , wherever it occurs in this clause, shall not include capital gains arising before the 1st day of April, 1946, or after the 31st day of March, 1948] 19[and before the 1st day of April, 1956;]

20[(6-AA) earned income means any income of an assessee who is an individual, Hindu undivided family, unregistered firm or other association of persons not being a company, a local authority, a registered firm or a firm 21[assessed] under clause (b) of sub-section (5) of Section 23

(a) which is chargeable under the head Salaries ; or

(b) which is chargeable under the head Profits and gains of business, profession or vocation where the business, profession or vocation is carried on by the assessee or, in the case of a firm, where the assessee is a partner actively engaged in the conduct of the business, profession or vocation; or

(c) which is chargeable under the head Other sources if it is immediately derived from personal exertion or represents a pension or superannuation or other allowance given to the assessee in respect of his past services or the past services of any deceased person;

and includes any such income which, though it is the income of another person, is included in the assessee's income under the provisions of this Act, but does not include any such income which is exempt from tax under sub-section (2) of Section 14 or under a notification issued under Section 60;]

22[(6-B) firm , partner and partnership have the same meanings respectively as in 23[the Indian Partnership Act, 1932 (9 of 1932)]: 24[provided that the expression partner includes any person who being a minor has been admitted to the benefits of partnership];]

25[(6-C) income includes

(i) dividend;

(ii) the value of any perquisite or profit in lieu of salary taxable under Section 7;

(iii) the value of any benefit or perquisite, whether convertible into money or not, obtained from a company either by a director or by any other person who has a substantial interest in the company (that is to say, who is concerned in the management of the business of the company, being the beneficial owner of shares, not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits, carrying not less than twenty per cent. of the voting power), and any sum paid by any such company in respect of any obligation which but for such payment would have been payable by the director or other person aforesaid;

(iv) any sum deemed to be profits under the second proviso to clause (vii) of sub-section (2) of Section 10, and any sum deemed to be profits and gains under sub-section (2-A) of that section or under sub-section (5) of Section 12;

(v) any sum deemed to be profits and gains of business, profession or vocation under sub-section (5-A) of Section 10;

(vi) any capital gain chargeable under Section 12-B;

(vii) the profits and gains of any business of insurance carried on by a mutual insurance association or by a co-operative society computed in accordance with Rule 9 in the Schedule;]

26[(6-D) Inspecting Assistant Commissioner means a person appointed to be an Inspecting Assistant Commissioner of Income-tax under Section 5;]

27[(6-E) Inspector of Income-tax means a person appointed to be an Inspector of Income-tax under Section 5;]

(7) Income-tax Officer means a person appointed to be an Income-Tax Officer under Section 5;

28[(7-A) Indian Company means a company as defined in the Indian Companies Act, 1913 (7 of 1913), 29and includes a company formed and registered under any law in force in the merged territories or 30[in the territories which, immediately before the 1st November, 1956, were comprised in any Part B State] other than the State of Jammu and Kashmir before the extension thereto of the Indian Companies Act, 1913, and in the case of the State of Jammu and Kashmir, any company formed and registered under any law in force in that State:

Provided that the registered office of the company in all cases is in the taxable territories.]

(8) Magistrate means a Presidency Magistrate or a Magistrate of the first class, or a Magistrate of the second class specially empowered by 31[the Central Government] 32[or in the State of Jammu and Kashmir, the State Government] to try offences against this Act;

33[(8-A) manager and managing agent have the meanings respectively assigned to them in the 34Indian Companies Act, 1913;]

(9) person includes a Hindu undivided family 35[and a local authority];

(10) prescribed means prescribed by rules made under this Act;

36[(11) previous year means

(i) in respect of any separate source of income, profits and gains

(a) the twelve months ending on 31st day of March next preceding the year for which the assessment is to be made, or, if the accounts of the assessee have been made up to a date within the said twelve months in respect of a year ending on any date other than the said 31st day of March, then, at the option of the assessee, the year ending on the date to which his accounts have been so made up:

Provided that where in respect of a particular source of income, profits and gains an assessee has once been assessed, or where in respect of a business, profession or vocation newly set up an assessee has exercised the option under sub-clause (c) he shall not, in respect of that source or, as the case may be, business, profession or vocation, exercise the option given by this sub-clause so as to vary the meaning of the expression previous year as then applicable to him except with the consent of the Income-tax Officer and upon such conditions as the Income-tax Officer may think fit to impose; or

(b) in the case of any person, business or company or class of person, business or company, such period as may be determined by the Central Board of Revenue or by such authority as the Board may authorise in this behalf; or

(c) where a business, profession or vocation has been newly set up in the financial year preceding the year for which assessment is to be made, the period from the date of the setting up of the business, profession or vocation to the 31st day of March next following or to the last days of the period determined under sub-clause (b), or, if the accounts of the assessee are made up in respect of a period not exceeding twelve months from the date of the setting up of the business, profession or vocation and the case is not one for which a period has been determined under sub-clause (b), then, at the option of the assessee, the period from the date of the setting up of the business, profession or vocation to the date to which his accounts have been so made up:

Provided that when the date to which the accounts have been so made up does not fall between the setting up of the business, profession or vocation and the next following 31st day of March inclusive, it shall be deemed that there is no previous year for the said assessment year and the previous year which would otherwise have been determined according to the option exercised by the assessee shall be deemed to be the previous year for the next succeeding assessment year:

(ii) in respect of the share of the income, profits and gains of a firm where the assessee is a partner in the firm and the firm has been assessed as such, the period as determined for the assessment of the income, profits and gains of the firm;]

(12) principal officer, used with reference to a local authority or a company or any other public body or 37[any] association, means

(a) the secretary, treasurer, manager or agent of the authority, company, body or association, or

(b) any person connected with the authority, company, body or association upon whom the Income-tax Officer has served a notice of his intention of treating him as the principal officer thereof;

(13) public servant has the same meaning as in the Indian Penal Code (45 of 1860);

38[(14) registered firm means a firm registered under the provisions of Section 26-A;]

39[(14-A) taxable territories means

(a) as respects any period before the 15th day of August, 1947, the territories then referred to as British India, but including Berar,

(b) as respects any period after the 14th day of August, 1947, and before the 26th day of January, 1950, the territories for the time being comprised in the Provinces of India, but excluding the merged territory of Cooch-Behar,

(c) as respects any period after the 25th day of January and before the 1st day of April, 1950, the territories comprised in Part A States, but excluding the merged territory of Cooch-Behar, and the territories comprised in Part C States, but excluding the State of Manipur, Tripura and Vindhya Pradesh,

(d) as respects any period after the 31st day of March, 1950, and before the 13th day of April, 1950, the territory of India excluding the State of Jammu and Kashmir and the Patiala and East Punjab States Union, 40[* * *]

(e) as respects any period after the 12th day of April, 1950, the territory of India excluding the State of Jammu and Kashmir,

41[(f) as respects any period after the 12th day of April, 1954, the whole of the territory of India:]

Provided that the taxable territories shall be deemed to include

(a) the merged territories

(i) as respects any period after the 31st day of March, 1949, for any of the purposes of this Act, and

(ii) as respects any period included in the previous year, for the purpose of making any assessment for the year ending on the 31st day of March, 1950, or for any subsequent year; and

(b) the whole of the territory of India excluding the State of Jammu and Kashmir

(i) as respects any period, for the purposes of Sections 4-A and 4-B,

(ii) as respects any period after the 31st day of March, 1950, for any of the purposes of this Act, and

(iii) as respects any period included in the previous year for the purpose of making any assessment of the year ending on the 31st day of March, 1951, or for any subsequent year,]

42[(c) the whole of the territory of India

(i) as respects any period, for the purposes of Sections 4-A and 4-B;

(ii) as respects any period after the 31st day of March, 1954, for any of the purposes of this Act; and

(iii) as respects any period included in the previous year, for the purpose of making any assessment for the year ending on the 31st day of March, 1955, or for any subsequent year;]

(15) total income means total amount of income, profits and gains 43[referred to in sub-section (1) of Section 4] computed in the manner laid down in 44[this Act]; and 45[ total world income includes all income, profits and gains wherever accuring or arising except income to which, under the provisions of sub-section (3) of Section 4, this Act 46[does not apply and except any capital gain which is not includible in the total income of an assessee];]

(16) unregistered firm means a firm which is not a registered firm.

CHARGE OF INCOME-TAX

Where any 47[Central Act] enacts that income-tax shall be charged for any year at any rate or rates 48[* * *] tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of, this Act in respect of 49[the total income] of the previous year of every 50[individual, Hindu undivided family, 51[company and local authority, and of every firm and other association of persons or the partners of the firm or members of the association individually]].

52[(1) Subject to the provisions of this Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived which

(a) are reversed or are deemed to be received in 53[the taxable territories] in such year by or on behalf of such person; or

(b) if such person is resident in 54[the taxable territories] during such year

(i) accrue or arise or are deemed to accrue or arise to him in 55[the taxable territories] during such year, or

(ii) accrue or arise to him without 56[the taxable territories] during such year, or

(iii) having accrued or arisen to him without 57[the taxable territories] before the beginning of such year and after the 1st day of April, 1933, are brought into or received in 58[the taxable territories] by him during such year, or

(c) if such person is not resident in 59[the taxable territories] during such year, accrue or arise or are deemed to accrue or arise to him in 60[the taxable territories] during such year:

Provided that there shall not be included in any assessment for the year ending on the 31st day of March, 1940, both the amount of the income, profits and gains referred to in sub-clause (ii) of clause (b) and the amount of the income, profits and gains referred to in sub-clause (iii) of clause (b) but only the greater of these two amounts:

Provided further that, in the case of a person not ordinarily resident in 61[the taxable territories], income, profits and gains which accrue or arise to him without 62[the taxable territories] shall not be so included unless they are derived from a business controlled in or a profession or vocation set up in India or unless they are brought into or received in 63[the taxable territories] by him during such year:

64[* * *]

65[Provided further that, in the case of a person who was not resident in the taxable territories in two out of the three years immediately preceding the previous year, so much of the income, profits and gains referred to in sub-clause (iii) of clause (b) as accrued or arose to him without India, shall not be included in his total income chargeable in any year subsequent to the year ending on the 31st day of March, 1951, whether his assessment for that year has or has not been completed before the commencement of the Indian Income-tax (Amendment) Act, 1953:

Provided further that, in the case of a person resident in the taxable territories to whom the preceding proviso or paragraph 8 of the Part B States (Taxation Concessions) Order, 1950, does not apply, so much of the income, profits and gains referred to in sub-clause (iii) of clause (b) as accrued or arose to him without India and were not chargeable under this Act, unless brought into or received in the taxable territories, shall not be included in his total income if

66[(i) such income, profits and gains are brought into or received in the taxable territories after the 2nd day of September, 1951, and the amount of income-tax, interest or penalty or other sum, if any, due from such person under this Act on the date of receipt of such income, profits and gains in the taxable territories is paid within three months of the receipt thereof in the taxable territories; and

(ii) in any case where such income, profits and gains are brought into or received in the taxable territories after the 2nd day of September, 1951, and before the 30th day of September, 1954, half of the amount of such income, profits and gains is invested within three months of the receipt thereof in the taxable territories in securities of the Central Government or of a State Government purchased through the Reserve Bank of India and kept with the said Bank for custody for a minimum period of two years.]]

Explanation 1. Income, profits and gains accruing or arising without 67[the taxable territories] shall not be deemed to be received in or brought into 68[the taxable territories] within the meaning of this sub-section by reason only of the fact that they are taken into account in a balance sheet prepared in 69[the taxable territories].

Explanation 2. Income which would be chargeable under the head Salaries if payable in 70[the taxable territories] 71[* * *] shall be deemed to accrue or arise in 72[the taxable territories] wherever paid if it is earned in 73[the taxable territories] 74[but any pension payable outside India to a person residing permanently outside India shall not be deemed to accrue or arise in the taxable territories, if the pension is payable to a person referred to in Article 314 of the Constitution or to a person, who, having been appointed before the 15th August, 1947, to be a Judge of the Federal Court or of a High Court within the meaning of the Government of India Act, 1935, continues to serve on or after the commencement of the Constitution as a Judge in India].

75[Explanation 2-A. Income which would be chargeable under the head Salaries if payable in the taxable territories but which is paid without the taxable territories by the Government to a citizen of India for rendering service without the taxable territories shall be deemed to accrue or arise in the taxable territories.]

Explanation 3. A dividend paid 76[by an Indian company] without 77[the taxable territories] shall be deemed to be income accruing and arising in 78[the taxable territories] to the extent to which it has been paid out of profits subjected to income-tax in 79[the taxable territories].

80[Explanation 4. For the purposes of sub-clause (iii) of clause (b) of sub-section (1), income, profits and gains accruing, or arising, in any of the 81[merged territories] 82[or any of the Part B States 83[* * *]] before the beginning of a previous year and after the 1st day of April, 1933, shall be deemed to be brought into, or received in 84[the taxable territories] during such year if, and only if, they are brought into, or received in, any part of 85[the taxable territories] other than that 86[merged territory] 87[or State] during such year.]

(2) For the purposes of sub-section (1), where a husband is not resident in 88[the taxable territories], remittances received by his wife resident in 89[the taxable territories] out of any part of his income which is not included in his total income shall be deemed to be income accruing in 90[the taxable territories] to the wife].

(3) 91[Any income, profits or gains falling within the following classes shall not be included in the total income of the person receiving them]:

92[(i) Subject to the provisions of clause (c) of sub-section (1) of Section 16, any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes, in so far as such income is applied or accumulated for application to such religious or charitable purposes as relate to anything done within the taxable territories, and in the case of property so held in part only for such purposes, the income applied or finally set apart for application thereto:

Provided that such income shall be included in the total income

93[(a) if it is applied to religious or charitable purposes without the taxable territories, but in the following cases, namely:

(i) where the property is held under trust or other legal obligation created before the commencement of the Indian Income-tax (Amendment) Act, 1953 (25 of 1953) and the income therefrom is applied to such purposes without the taxable territories; and

(ii) where the property is held under trust or other legal obligation created after such commencement, and the income therefrom is applied without the taxable territories to charitable purposes which tend to promote international welfare in which India is interested,

the Central Board of Revenue may, by general or special order, direct that it shall not be included in the total income;]

(b) in the case of income derived from business carried on on behalf of a religious or charitable institution, unless the income is applied wholly for the purposes of the institution and either

(i) the business is carried on in the course of the actual carrying out of a primary purpose of the institution, or

(ii) the work in connection with the business is mainly carried on by beneficiaries of the institution;

(c) if it is applied to purposes other than religious or charitable purposes or ceases to be accumulated or set apart for application thereto in which case it shall be deemed to be the income of the year in which it is so applied or ceases to be so accumulated or set apart.]

(ii) Any income of a religious or charitable institution derived from voluntary contributions and applicable solely to religious or charitable purposes.

94[(ii-a) Any income of an association or institution established in India having as its object the control, supervision, regulation or encouragement in India of the games of cricket, hockey, football, tennis or such other games or sports as the Central Government may specify in this behalf from time to time by notification in the Official Gazette:

Provided that

(i) the association or institution applies its income, or accumulates it for application, solely to the objects for which it is established;

(ii) no part of the income of the association or institution is distributed in any manner to its members except as grants to any association or institution affiliated to it; and

(iii) the association or institution is, for the time being, approved for the purpose of this clause by the Central Government by general or special order.]

(iii) The income of local authorities 95[except income from a trade or business carried on by the authority so far as that income is not income arising from the supply of a commodity or service within its own jurisdictional area].

(iv) Interest on securities which are held by, or are the property of, any Provident Fund to which the Provident Funds Act, 96[1925] (19 of 1925), applies, 97[and any capital gains of the Fund arising from the sale, exchange or transfer of such securities] 98[* * *].

99[* * *]

100[(vi) any special allowance or benefit, not being in the nature of an entertainment allowance or other perquisite within the meaning of sub-section (1) of Section 7, specifically granted to meet expenses wholly and necessarily incurred in the performance of the duties of an office or employment of profit, to the extent to which such expenses are actually incurred for that purpose.

101[(vi-a) Subject to such conditions as the Central Government may prescribe,

(a) passage moneys or the value of any free or concessional passage by or due to any person, not being a citizen of India, from his employer for himself, his wife and children, in connection with his proceeding on home leave out of India; and

(b) the value of any travel concession or assistance by or due to any person, being a citizen of India, from his employer for himself, his wife and children, in connection with his proceeding on leave to his home-town or village in India.]]

(vii) Any receipts 102[not being capital gains chargeable according to the provisions of Section 12-B and] not being receipts arising from business or the exercise of a profession, vocation or occupation, which are of a casual and non-recurring nature or are not by way of addition to the remuneration of an employee.

(viii) Agricultural income.

103[(ix) Any income received by trustees on behalf of a recognised provident fund as defined in clause (a) of Section 58-A.]

104[(x) Any income received

(a) by the Ruler of an Indian State as his privy purse under Article 291 of the Constitution;

(b) by any ambassador, high commissioner, envoy, minister, charge d'affaires, commissioner, counsellor or the secretary, adviser or attache of an embassy, high commission, legation or commission of a foreign State as remuneration from such State for service in such capacity;

(c) by a consul de carriere, whether called a consul-general, consul, vice-consul, consular agent, pro-consul or by any other name, of a foreign State as remuneration from such State for service in such capacity;

(d) by a trade commissioner or other official representative in India of the Government of a foreign State (not holding office as such in an honorary capacity) as his remuneration, if the remuneration of the corresponding officials, if any, of the Government resident for similar purposes in the country concerned enjoys a similar exemption in that country;

(e) by a member of the staff of any of the officials referred to in clause (b) or clause (c) or clause (d) as his remuneration, if the member

(i) is a subject of the country represented;

(ii) is not engaged in any business, profession, vocation or employment in India otherwise than as a member of such staff; and further, where the individual is a member of the staff of any official referred to in clause (d), if the country represented has made corresponding provisions for similar exemptions in the case of members of the staff of the corresponding officials of the Government.

(x-a) Any allowances or perquisites paid or allowed as such without the taxable territories by the Government to a citizen of India for rendering service without the taxable territories.]

(xi) With effect from the 2nd day of September, 1939, the income chargeable under the head Salaries of a Nepalese member of the Nepalese Military Force serving with His Majesty's Forces 105[or, after the commencement of the Constitution, with the Armed Forces of the Union], or of any member of an Indian State Force so serving, and any other income accruing or arising without 106[the taxable territories] which is received in or brought into 107[the taxable territories] by any such member while the Force to which he belongs is serving with his Majesty's Forces 108[or, after the commencement of the Constitution, with the Armed Forces of the Union].]

109[(xi-a) Any income chargeable under the heads interest on securities , Income from Property and Income from other sources of a registered Trade Union within the meaning of the Indian Trade Unions Act, 1926 (16 of 1926), formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen.]

110[(xii) Any income chargeable under the head Income from property in respect of a building the erection of which is begun and completed between the 1st day of April, 1946 and 31st day of March, 111[1956] (both dates inclusive), for a period of two years from the date of such completion.]

112[(xiii) Any income of a scientific research association which is, for the time being, approved for the purposes of clause (xiii) of sub-section (2) of Section 10 where the income is applied solely to the purposes of that association and accrues or arises after the 31st day of March, 1949.]

113[(xiv) Any income received by an employee of a foreign enterprise, not engaged in any trade or business in the taxable territories, as remuneration for services rendered by him during the course of his stay in the taxable territories, where such stay does not exceed in the aggregate a period of ninety days in any year and where such remuneration is not liable to be deducted from the income, profits and gains chargeable under this Act.

114[(xiv-a) Any income chargeable under the head Salaries received by or due to any person, not being a citizen of India, during the financial year in which he arrived in India and the financial year next following as remuneration for services rendered by him as a technician in the employment of Government or of a local authority or of any corporation set up under any special law or in any business carried on in India, in any case where such person was not resident therein in any of the four financial years immediately preceding the financial year in which he arrived in India:

Provided that where, during the financial year of arrival and the next following such person had been in India for a period of, or for periods amounting in all to, three hundred and sixty-five days or more, only so much of the income aforesaid as is received by or due to him for a period of three hundred and sixty-five days in all commencing from the date of his arrival shall not be included in his total income:

115[Provided further that in the case of a person referred to in this clause whose contract of service was approved by the Central Government before the commencement of his service, this clause shall have effect as if for the words during the financial year in which he arrived in India and the financial year next following , the words during the thirty-six months commencing from the date of his arrival in India had been substituted and as if the proviso immediately preceding had been omitted:

Provided also that where a person referred to in the proviso immediately preceding continues to remain in employment in India after the expiry of the thirty-six months commencing from the date of his arrival in India, the employer may, notwithstanding anything contained in Section 200 of the Companies Act, 1956 (1 of 1956), pay to the Central Government the tax on the income of such person chargeable under the head Salaries for a period not exceeding twenty-four months following the expiry of the said thirty-six months and if the tax is so paid it shall not be included in his total income of the said period.]

116[Explanation. Technician means a person having specialised knowledge and experience in constructional or manufacturing operations, or in mining or in the generation or distribution of electricity or any other form of power, who is employed in India in a capacity in which such specialised knowledge and experience are actually utilised.]]

117[(xiv-b) Any income chargeable under the head Salaries received by or due to a person, not resident in the taxable territories and not being a citizen of India, as remuneration for services rendered in connection with his employment on a foreign ship where his total stay in the taxable territories does not exceed in the aggregate a period of ninety days in the previous year;]

(xv) Any income received as remuneration, whether directly or indirectly, from the Government of a foreign State by any person who is assigned to duties in India in connection with any co-operative technical assistance programmes and projects in accordance with an agreement entered into by the Central Government and the Government of that foreign State (the terms whereof provide for the exemption given by this clause) and any other income of such person or of the members of his family accompanying him to India, which accrues or arises without the taxable territories, and is not deemed to accrue or arise in the taxable territories, upon which such person or the members of his family are required to pay any income or social security tax to the Government of that foreign State.

(xvi) Any income from interest on, or from premium on the redemption of, any bonds issued by the Central Government under a loan agreement between the Central Government and the International Bank for Reconstruction and Development, 118[or under a loan agreement between the Central Government and the Development Loan Fund of the United States of America,] or by any industrial undertaking or financial corporation in India under a loan agreement with the said Bank 119[or Fund, as the case may be,] which is guaranteed by the Central Government, except where the holder of such bond is a person resident in the taxable territories.

120[(xvii) Monthly payments on the 15 Year Annuity Certificates issued by or under the authority of the Central Government or such other annuity certificates issued by or under the authority of that Government as that Government may, by notification in the Official Gazette, specify in this behalf, to the extent to which the amounts of the certificates do not exceed in each case the maximum amount which is permitted to be invested therein;

(xvii-a) Interest on Treasury Savings Deposit Certificates, Post Office Cash Certificates, Post Office National Savings Certificates, National Plan Certificates, 12 year National Plan Savings Certificates and such other certificates issued by the Central Government as that Government may, by notification in the Official Gazette, specify in this behalf, and interest on deposits in Post Office Savings Banks, to the extent to which the amounts of such certificates or deposits do not exceed in each case the maximum amount which is permitted to be invested or deposited therein;]

121[(xvii-b)Interest payable

(i) by Government or a local authority on moneys borrowed by it from sources outside India from any person not resident in India or from any institution established outside India;

(ii) by an industrial undertaking in India on moneys borrowed by it under a loan agreement entered into with any such financial institution in a foreign country as may be approved in this behalf by the Central Government by general or special order;

(iii) by an industrial undertaking in India on any moneys borrowed or debt incurred by it in a foreign country in respect of the purchase outside India of capital plant and machinery in any case where the loan or debt is approved by the Central Government, having regard to its terms generally and in particular, to the terms of its repayment.]

(xviii) Interest on securities held by the Issue Department of the Central Bank of Ceylon constituted under the Ceylon Monetary Law Act, 1949.

(xix) Any daily allowance received by any person, by reason of his membership of the Dominion Legislature or of the Constituent Assembly or of Parliament or of any Provincial or State Legislature or of any Committee thereof.]

122[(xx) Any income from interest payable without the taxable territories on a loan issued for public subscription before the 1st day of April, 1938, where such interest is payable to a person not resident in the taxable territories, but such income shall not be excepted from being included in his total world income notwithstanding anything in clause (15) of Section 2.]

123[(xxi) Any income of a member of a Scheduled Tribe, as defined in clause (25) of Article 366 of the Constitution, residing in any area specified in Part A or Part B of the Table appended to paragraph 20 of the Sixth Schedule to the Constitution 124[or in the Union Territories of Manipur and Tripura], provided that such member is not in the service of Government.

(xxii) Any payment made, whether in cash or in kind, by the Central Government or any State Government in pursuance of gallantry awards instituted or approved by the Central Government.]

In this sub-section charitable purpose includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility 125[, but nothing contained in clause (i), 126[* * *] or clause (ii) shall operate to exempt from provisions of this Act that part of the 127[income from property held under a trust or other legal obligation for private religious purposes] which does not enure for the benefit of the public].

128[4-A. Residence in the taxable territories. For the purposes of this Act

(a) any individual is resident in 129[the taxable territories] in any year if he

(i) is in 130[the taxable territories] in that year for a period amounting in all to one hundred and eighty-two days or more; or

(ii) maintains or has maintained for him a dwelling place in 131[the taxable territories] for a period or periods amounting in all to one hundred and eighty-two days or more in that year, and is in 132[the taxable territories] for any time in that year; or

(iii) having within the four years preceding that year been in 133[the taxable territories], for a period of or for periods amounting in all to three hundred and sixty-five days or more, is in 134[the taxable territories] for any time in that year otherwise than on an occasional or casual visit; 135[or]

136[(iv) is in 137[the taxable territories] for any time in that year and the Income-tax Officer is satisfied that such individual having arrived in 138[the taxable territories] during that year is likely to remain in 139[the taxable territories] for not less than three years from the date of his arrival;]

(b) a Hindu undivided family, firm or other association of persons is resident in 140[the taxable territories] unless the control and management of its affairs is situated wholly without 141[the taxable territories]; and

142[(c) a company is resident in the taxable territories in any year, if

(i) it is an Indian company; or

(ii) during that year the control and management of its affairs is situated wholly in the taxable territories.]

4-B. Ordinary Residence. For the purposes of this Act

(a) an individual is not ordinarily resident in 143[the taxable territories] in any year if he has not been resident in 144[the taxable territories] in nine out of ten years preceding that year or if he has not during the seven years preceding that year been in 145[the taxable territories] for a period of, or for periods amounting in all to, more than two years;

(b) a Hindu undivided family is deemed to be ordinarily resident in 146[the taxable territories] if its manager is ordinarily resident in 147[the taxable territories];

(c) a company, firm or other association of persons is ordinarily resident in 148[the taxable territories] if it is resident in 149[the taxable territories].]

INCOME-TAX AUTHORITIES

150(1) There shall be the following classes of Income-tax authorities for the purposes of this Act, namely:

(a) the Central Board of Revenue,

151[(aa) Directors of Inspection,]

(b) Commissioners of Income-tax,

(c) Assistant Commissioners of Income-tax who may be either Appellate Assistant Commissioners of Income-tax or Inspecting Assistant Commissioners of Income-tax,

(d) Income-tax Officers,

152[(e) Inspectors of Income-tax.]

153[(1-A) The Central Government may appoint as many Directors of Inspection as it thinks fit, and Directors of Inspection shall, subject to the control of the Central Board of Revenue, perform such functions of any other Income-tax authority as may be assigned to them by the Central Government.]

154[(2) The Central Government may appoint as many Commissioners of Income-tax as it thinks fit and they shall perform their functions in respect of such areas or of such persons or classes of persons or of such incomes or classes of incomes or of such cases or classes of cases as the Central Board of Revenue may direct, and where such directions have assigned to two or more Commissioners of Income-tax the same area or the same persons or classes of persons or the same income or classes of incomes or the same cases or classes of cases, they shall have concurrent jurisdiction subject to any orders which the Central Board of Revenue may make for the distribution and allocation of work to be performed.

(3) The Central Government may appoint as many Appellate or Inspecting Assistant Commissioners of Income-tax and Income-tax Officers of Class I service as it thinks fit, and the Commissioner may, subject to the rules and orders of the Central Government regulating the conditions of service of persons in public services and posts, appoint as many Income-tax Officers of Class II service and Inspectors of Income-tax as may, from time to time, be sanctioned by the Central Government.

(3-A) Subject to the rules and orders of the Central Government regulating the conditions of service of persons in public services and posts, an income-tax authority may appoint such executive or ministerial staff as may be necessary to assist it in the execution of its functions.]

(4) Appellate Assistant Commissioners of Income-tax shall be under the direct control of the Central Board of Revenue and shall perform their functions in respect of such persons or classes of persons 155[or of such incomes or classes of income or] in respect of such areas as the Central Board of Revenue may direct 156[and, where such directions have assigned to two or more Appellate Assistant Commissioners of Income-tax, the same persons or classes of persons or the same incomes or classes of income or the same area] in accordance with any orders which the Central Board of Revenue may make for the distribution and allocation of the work to be performed.

(5) Inspecting Assistant Commissioners of Income-tax and Income-tax Officers shall perform their functions in respect of such persons or classes of persons 157[or such incomes or classes of income or] in respect of such areas as the Commissioner of Income-tax may direct 158[and, where such directions have assigned to two or more Inspecting Assistant Commissioners of Income-tax or Income-tax Officers, the same persons or classes of persons or the same incomes or classes of income or the same area] in accordance with any orders which the Commissioner of Income-tax may make for the distribution and allocation of the work to be performed. The Commissioner may, 159[* * *] by general or special order in writing, direct that the powers conferred on the Income-tax Officer and the Appellate Assistant Commissioner by or under this Act shall, in respect of any specified case or class of cases, be exercised by the Inspecting Assistant Commissioner and the Commissioner, respectively, and, for the purposes of any case in respect of which such order applies, references in this Act or in any rules made hereunder to the Income-tax Officer and the Appellate Assistant Commissioner shall be deemed to be references to the Inspecting Assistant Commissioner and the Commissioner, respectively.

160[(5-A) Inspectors of Income-tax shall perform such functions in the execution of this Act as are assigned to them by the Income-tax Officer or other Income-tax authority under whom they are appointed to work, and shall be subordinate to such officer or authority.]

(6) The Central Board of Revenue may, by notification in the Official Gazette, empower Commissioners of Income-tax, Appellate or Inspecting Assistant Commissioners of Income-tax and Income-tax Officers to perform such functions in respect of such classes of persons or such classes of income 161[or such area] as may be specified in the notification, and thereupon the functions so specified shall cease 162[* * *] to be performed in respect of the specified classes of persons or classes of income 163[or area] by the other authorities appointed under sub-sections (2) and (3).

164[(7) For the purposes of this Act,

(i) Inspecting Assistant Commissioners shall be subordinate to the Director of Inspection and to the Commissioner of Income-tax within whose jurisdiction they perform their functions;

(ii) Income-tax Officers shall be subordinate to the Director of Inspection, the Commissioner of Income-tax and the Inspecting Assistant Commissioner of Income-tax within whose jurisdiction they perform their functions.]

165[(7-A) The Commissioner of Income-tax may transfer any case from one Income-tax Officer subordinate to him to another, and the Central Board of Revenue may transfer any case from any one Income-tax Officer to another. Such transfer may be made at any stage of the proceedings, and shall not render necessary the reissue of any notice already issued by the Income-tax Officer from whom the case is transferred.]

166[Explanation. 167[* * *]

168[(7-B) The Director of Inspection, the Commissioner or the Inspecting Assistant Commissioner as the case may be, may issue such instructions as he thinks fit for the guidance of any Income-tax Officer subordinate to him in the matter of any assessment, and for the purposes of making any inquiry under this Act (which he is hereby empowered to do), the Director of Inspection, the Commissioner and the Inspecting Assistant Commissioner shall have all the powers that an Income-tax Officers has under this Act in relation to the making of inquires.

(7-C) Whenever, in respect of any proceeding under this Act an Income-tax authority ceases to exercise jurisdiction and is succeeded by another who has and exercises jurisdiction, the Income-tax authority so succeeding may continue the proceeding from the stage at which the proceeding was left by his predecessor:

Provided that the assessee concerned may demand that before the proceeding is so continued the previous proceeding or any part thereof be reopened or that before any order for assessment is passed against him he be re-heard.

Provided further that in computing the period of limitation for the purposes of sub-section (3) of Section 34, the time taken in re-opening the whole or any part of the proceeding or in giving an opportunity to the assessee to be re-heard under the preceding proviso shall be excluded.]

(8) All officers and persons employed in the execution of this Act shall observe and follow the orders, instructions and directions of the Central Board of Revenue:

Provided that no such orders, instructions or directions shall be given so as to interfere with the discretion of the Appellate Assistant Commissioner in the exercise of his appellate functions.]

169[Explanation. In sub-sections (2), (5) and (7-A), the word case in relation to any person whose name is specified in any order or direction issued in pursuance of any of the aforesaid sub-sections means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year.]

170[Chapter II-A

APPELLATE TRIBUNAL]

171[5-A. The Appellate Tribunal. (1) The Central Government shall appoint an Appellate Tribunal consisting of 172[as many persons as it thinks fit] to exercise the functions conferred on the Appellate Tribunal by this Act.

(2) The Appellate Tribunal shall consist 173[* * *] of judicial members and accountant members as hereinafter defined.

174[* * *]

(3) 175[A judicial member shall be a person who has for at least ten years either held a civil judicial post or been in practice as an advocate of a High Court, and an accountant member shall be a person who has for at least ten years been in the practice of accountancy as a chartered accountant under the Chartered Accountants Act, 1949 (38 of 1949), or as a registered accountant under any law formerly in force or partly as a registered accountant and partly as a chartered accountant:]

Provided that the Central Government may appoint as an accountant member of the Tribunal any person not possessing the qualifications required by this sub-section, if it is satisfied that he has qualifications and has had adequate experience of a character which render him suitable for appointment to the Tribunal.

(4) The Central Government shall 176[ordinarily] appoint a judicial member of the Tribunal to be president thereof.

(5) The powers and functions of the Appellate Tribunal may be exercised and discharged by Benches constituted from members of the Tribunal by the president of the Tribunal.

177[(6) Save as hereinafter provided a Bench shall consist of one Judicial Member and one Accountant Member:

Provided that the president or any other member of the Tribunal specially authorised in this behalf by the Central Government may, sitting singly, dispose of any case which has been allotted to the Bench of which he is a member and which pertains to an assessee whose total income as computed by the Income-tax Officer in the case does not exceed Rs 15,000:

Provided further that the president may, for the disposal of any particular case, constitute a special Bench consisting either of two Judicial Members and one Accountant Member or of one Judicial Member and two Accountant Members.]

(7) If the members of a Bench differ in opinion on any point the point shall be decided according to the opinion of the majority, if there is a majority; but if the members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the president of the Tribunal for hearing on such point or points by one or more of the other members of the Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Tribunal who have heard the case, including those who first heard it.

(8) Subject to the provisions of this Act, the Appellate Tribunal shall have power to regulate its own procedure, and the procedure of Benches of the Tribunal in all matters arising out of the discharge of its functions, including the 178[places] at which the Benches shall hold their sittings.]

TAXABLE INCOME

Save as otherwise provided by this Act, the following heads of income, profits and gains, shall be chargeable to income-tax in the manner hereinafter appearing, namely:

(i) Salaries.

(ii) Interest on securities.

179[(iii) Income from property.

(iv) Profits and gains of business, profession or vocation.

(v) Income from other sources.]

180[(vi) Capital gains.]

181[(1) The tax shall be payable by an assessee under the head Salaries in respect of any salary or wages, any annuity, pension or gratuity, and any fees, commissions, perquisites or profits in lieu of, or in addition to, any salary or wages, which are allowed to him by or are due to him, whether paid or not, from, or are paid by or on behalf of, the Government, a local authority, a company or any other public body or association, or any private employer; and for the purposes of this sub-section advances by way of loan or otherwise of income chargeable under this head shall be deemed to be salary due on the date when the advance is received:

Provided that the tax shall not be payable in respect of any sum deducted from the salary payable by or on behalf of the Government to any individual, being a sum deducted in accordance with the conditions of his service, for the purpose of securing to him a deferred annuity or making provision for his wife or children provided that the sum so deducted shall not exceed 182[one-fifth] of the salary:

Provided further that where tax is deductible at the source under Section 18, the assessee shall not be called upon to pay the tax himself unless he has received the salary without such deduction.

Explanation 1. For the purpose of this section, perquisite includes

(i) the value of rent-free accommodation or the value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer;

(ii) the value of any benefit or amenity granted or provided by a company free of cost or at concessional rate to an employee who is a director thereof or who is substantially interested in the company within the meaning of sub-clause (iii) of clause (6-C) of Section 2;

(iii) the value of any benefit or amenity granted or provided to an assessee [not being an assessee to whom the provisions of clause (ii) apply] by his employer free of cost or at concessional rate in any case where the income of the assessee under the head Salaries exclusive of the value of all benefits or amenities not provided for by way of monetary payment exceeds eighteen thousand rupees;

(iv) any sum paid by the employer in respect of any obligation which but for such payment would have been payable by the assessee; and

(v) any sum payable by the employer, whether directly or through a fund to which the provisions of Chapters IX-A and IX-B do not apply, to effect an assurance on the life of the assessee or in respect of a contract for an annuity on the life of the assessee.

Explanation 2. For the purposes of this section, profits in lieu of salary includes,

(i) the amount of any compensation due to or received by an assessee from his employer or former employer at or in connection with, the termination of his employment, whether solely as compensation for loss of employment or for any other consideration.

(ii) any payment due to or received by an assessee from an employer or former employer or from a provident fund or other fund, to the extent to which it does not consist of contributions by the assessee or interest on such contributions:

Provided that nothing herein contained shall render liable to income-tax any payment of death cum retirement gratuity received after the 16th day of April, 1950, under the Revised Pension Rules of the Central Government or under any similar scheme of a 183[State Government, a local authority or a corporation established by a Central, State or Provincial Act] 184[or any payment of retiring gratuity received after the 1st day of June, 1953, under the New Pension Code applicable to the members of the Defence Services] or any payment from a provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies, or any payment from a recognised provident fund within the meaning of Chapter IX-A if such payment is exempted from payment of income-tax under the provisions of Chapter IX-A, or any payment from an approved superannuation fund within the meaning of Chapter IX-B made on the death of a beneficiary or in lieu of or in commutation of an annuity, or by way of refund of contributions on the death of a beneficiary or on his leaving the employment in connection with which the fund is established.

(2) The income chargeable under this section shall be computed after making the following deductions, namely:

(i) any amount not exceeding five hundred rupees, expended by the assessee on the purchase of books and other publications necessary for the purpose of his duties;

185[(ii) in respect of any allowance in the nature of an entertainment allowance specifically granted to the assessee by his employer

(a) in the case of an assessee who is in receipt of a salary from the Government, a sum equal to one-fifth of his salary (exclusive of any special allowance, benefit or other perquisites) or five thousand rupees, whichever is less; and

(b) in the case of any other assessee, a sum equal to one-fifth of the salary (exclusive of any special allowance, benefit or other perquisites) or seven thousand five hundred rupees, whichever is less, except in any case where the assessee was not in receipt of such entertainment allowance regularly from his present employer before the year beginning on the 1st day of April, 1955;]

186[(ii-a) in respect of any conveyance owned by the assessee and used by him for the purposes of his employment, such sum as the Income-tax Officer may estimate in respect of such use as representing the expenditure incurred by the assessee in its maintenance and as representing its normal wear and tear:

Provided that this clause shall not apply in any case where the assessee is in respect of a conveyance allowance, whether as such or as part of his salary;]

(iii) any amount actually expended by the assessee, which he, by the conditions of his service, is required to spend out of his remuneration [exclusive of the allowance referred to in sub-clause (ii)], wholly, necessarily and exclusively in the performance of his duties.]

The tax shall be payable by an assessee under the head Interest on securities in respect of the interest receivable by him on any security of the Central Government or of a State Government, or on debentures or other securities for money issued by or on behalf of a local authority or a company:

187[Provided that no income-tax shall be payable under this section by the assessee 188[in respect of any reasonable sum expended by him for the purpose of realizing such interest] 189[or in respect of any interest payable on money borrowed for the purpose of investment in the securities by the assessee except interest chargeable under this Act which is payable without 190[the taxable territories], not being interest on a loan issued for public subscription before the first day of April, 1938, unless in respect of interest which is so chargeable tax has been paid or deducted under Section 18, or unless there is a person in 191[the taxable territories] who may be appointed an agent under Section 43 in respect of such interest]:]

Provided 192[further] that no income-tax shall be payable on the interest receivable on any security of the Central Government issued or declared to be income-tax free:

Provided further, that the income-tax payable on the interest receivable on any security of a State Government issued income-tax free shall be payable by that State Government.

193[Explanation. In the case of a banking company,

(a) the amount which bears to the aggregate of its expenses as are admissible under sub-section (2) of Section 10, other than under clauses (iii), (iv), (vi-a), (vi-b), (vii), (viii), (xi), (xii), (xiii) and (xiv) thereof, the same proportion as the gross receipts from interest on securities (inclusive of tax deducted at source) chargeable to tax under this section bear to the gross receipts from all sources which are included in the profit and loss account of the company, shall be deemed to be the sum reasonably expended by it for the purposes of realizing such interest; and the amount for which allowance is admissible under sub-section (2) of Section 10 shall be reduced correspondingly; and

(b) money borrowed shall include moneys received by way of deposits; and that amount which bears to the amount of interest payable on moneys borrowed the same proportion as the gross receipts from interests on securities (inclusive of tax deducted at source) chargeable to tax under this section bears to the gross receipts from all sources which are included in the profit and loss account of the company, shall be deemed to be interest payable on money borrowed for the purpose of investment in the securities by the assessee, and the amount of such interest for which allowance is due under sub-section (2) of Section 10 shall be reduced correspondingly.]

(1) The tax shall be payable by an assessee 194[under the head Income from Property ] in respect of the bona fide annual value of property consisting of any buildings or lands appurtenant thereto of which he is the owner, other than such portions of such property as he may occupy for the purposes of 195[any business, profession or vocation carried on by him the profits of which are assessable to tax], subject to the following allowances, namely:

(i) where the property is in the occupation of the owner, or where it is let to a tenant and the owner has undertaken to bear the cost of repairs, a sum equal to one-sixth of such value;

(ii) where the property is in the occupation of a tenant who has undertaken to bear the cost of repairs, the difference between such value and the rent paid by the tenant up to but not exceeding one-sixth of such value:

196[Provided that for the purposes of making any assessment for the year ending on the 31st day of March, 1952, in respect of the property situated in an area affected by the Assam earthquake of 1950, the allowance on account of repairs referred to in clauses (i) and (ii) shall be increased up to a maximum of one-half of the annual value thereof or the amount of expenditure proved to have been actually incurred for repairs, whichever is the less;]

(iii) the amount of any annual premium paid to insure the property against risk of damage or destruction;

197[(iv) where the property is subject to a mortgage or other capital charge, the amount of any interest on such mortgage or charge; where the property is subject to an annual charge not being a capital charge, the amount of such charge; where the property is subject to a ground rent, the amount of such ground rent; and where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital:

Provided that no allowance shall be made in respect of any interest or annual charge payable without 198[the taxable territories] and chargeable under this Act, not being interest on a loan issued for public subscription before the 1st day of April, 1938, except interest or a charge on which tax has been paid or form which tax has been deducted under Section 18 or in respect of which there is an agent for the payee in 199[the taxable territories] who may be assessed under Section 43;]

(v) any sums paid on account of land-revenue in respect of the property;

(vi) in respect of collection charges, a sum not exceeding the prescribed maximum;

200[(vii) in respect of vacancies, that part of 201[the annual value] which is proportional to the period during which the property is wholly unoccupied or where the property is let out in parts, that portion of 202[the annual value] appropriate to any vacant part, which is proportional to the period during which such part is wholly unoccupied.]

203[* * *]

204[Explanation. For the purposes of clause (iv) of this sub-section the expression annual charge does not include any tax in respect of property or income from property levied by a local authority or a State Government or the Central Government.]

205[(2) For the purposes of this section, the annual value of any property shall be deemed to be the sum for which the property might reasonably be expected to let from year to year:

206[Provided that, where the property is in the occupation of the owner for the purposes of his own residence, the annual value thereof shall first be determined in the same manner as if the property had been let to a tenant and the amount so determined shall be reduced by one-half of it or eighteen hundred rupees, whichever is less, so however that where the sum so reduced exceeds ten per cent. of the total income of the owner, the annual value of the property shall be deemed to be ten per cent. of such total income:]

207[Provided further that where the property referred to in the preceding proviso consists of one residential house only and it cannot actually be occupied by the owner by reason of the fact that owing to his employment, business, profession or vocation carried on at any other place, he has to reside at that other place in a building not belonging to him and the residential house is not actually let and no other benefit therefrom is derived by the owner, the income of such property under this section shall, if the property was not occupied during the whole of the previous year be taken to be nil, and if it was occupied for a part of the previous year be computed proportionately, so however that the income in respect of such property shall in no case be a loss:]

Provided further that where the property is in the occupation of a tenant and the taxes levied by any local authority in respect of the property are, under the law authorising such levy, payable wholly by the owner or partly by the owner and partly by the tenant

208[(a) in the case of a property the construction of which was completed before the 1st day of April, 1950, the total amount of such taxes and in the case of any other property, one-half of the total amount of such taxes, shall, notwithstanding anything contained in such law, be deemed to be the tenants, liability for such taxes, and]

(b) in determining the annual value of the property with reference to the rent payable by the tenant, a deduction shall be made equal to that part, if any, of the tenant's liability which is borne by the owner.]

209[Provided further that in respect of a building the erection of which is begun and completed after the 1st day of April, 1961, the annual value for a period of three years from the date of such completion shall be reduced by a sum equal to the aggregate of

(a) in respect of any residential unit (comprised in the building) whose annual value does not exceed six hundred rupees, the amount thereof; and

(b) in respect of any residential unit (comprised in the building) whose annual value exceeds six hundred rupees, an amount of six hundred rupees,

so, however, that the income in respect of any residential unit shall in no case be a loss.

Explanation. Where a residential unit is in the occupation of the owner for the purposes of his own residence, and the annual value thereof is computed in accordance with the first proviso, such computation shall be made as if the fourth proviso had been omitted.]

210[(3) Where property is owned by two or more persons and their respective shares are definite and ascertainable, such persons shall not in respect of such property be assessed as an association of persons, but the share of each such person in the income from the property as computed in accordance with this section shall be included in his total income.]

211[(4) For the purposes of this section

(a) the holder of an impartible estate shall be deemed to be the individual owner of all the properties comprised in the estate;

(b) a member of a co-operative society to whom a building built by the society is allotted or leased under a house-building scheme of the society shall be deemed to be the owner of that building;

212[(c) taxes levied by a local authority in respect of any property shall be deemed to include service taxes levied by the local authority in respect of the property.]]

(1) The tax shall be payable by an assessee under the head 213[Profits and gains of business, profession or vocation] in respect of the profits or gains of any 214[business, profession or vocation] carried on by him.

(2) Such profits or gains shall be computed after making the following allowances, namely:

(i) any rent paid for the premises in which such 215[business, profession or vocation] is carried on, provided that when any substantial part of the premises is used as a dwelling-house by the assessee, the allowance under this clause shall be such sum as the Income-tax Officer may determine having regard to the 216[proportional annual value of the part] so used;

(ii) in respect of repairs, where the assessee is the tenant only of the premises, and has undertaken to bear the cost of such repairs, the amount paid on account thereof, provided that, if any substantial part of the premises is used by the assessee as a dwelling-house, a proportional part only of such amount shall be allowed;

(iii) in respect of capital borrowed for the purposes of the 217[business, profession or vocation,] 218[* * *] the amount of the interest paid:

219[Provided that no allowance shall be made under this clause in any case for any interest chargeable under this Act which is payable without 220[the taxable territories] not being interest on a loan issued for public subscription before the 1st day of April, 1938, except interest on which tax has been paid or from which tax has been deducted under Section 18 or in respect of which there is an agent in 221[the taxable territories] who may be assessed under Section 43 or, in the case of a firm, for any interest paid to a partner of the firm];

Explanation. Recurring subscriptions paid periodically by shareholders or subscribers in such Mutual Benefit Societies as may be prescribed, shall be deemed to be capital borrowed within the meaning of this clause;

(iv) in respect of insurance against risk of damage or destruction of buildings, machinery, plant, furniture, stocks or stores, used for the purposes of the 222[business, profession or vocation], the amount of any premium paid;

(v) in respect of current repairs to such buildings, machinery, plant, or furniture, the amount paid on account thereof;

(vi) in respect of depreciation of such buildings, machinery, plant or furniture being the property of the assessee, a sum equivalent 223[, where the assets are ships other than ships ordinarily plying on inland waters,] to such percentage on the original cost thereof to the assessee as may in any case or class of cases be prescribed 224[and in any other case, to such percentage on the written down value thereof as may in any case or class of cases be prescribed], 225[and where the buildings have been newly erected, 226[or the machinery or plant being new, not being machinery or plant entitled to the development rebate under (vi-b), has been installed,] after the 31st day of March, 1945 227[and before the 1st day of April, 1956], a further sum (which shall however not be deductible in determining the written down value for the purposes of this clause) in respect of the year of erection or installation equivalent,

(a) in the case of buildings the erection of which is begun and completed between the 1st day of April, 1946, and the 31st day of March, 228[1956] (both dates inclusive), to fifteen per cent. of the cost thereof to the assessee;

(b) in the case of other buildings to ten per cent. of the cost thereof to the assessee;

(c) in the case of machinery or plant, to twenty per cent. of the cost thereof to the assessee 229[and where the buildings have been newly erected after the 31st day of March, 1961, such buildings being used solely for the purpose of residence of persons employed in the business and drawing remuneration not exceeding two hundred rupees per mensem or such buildings being used solely or mainly for the welfare of such persons as hospitals, creches, schools, canteens, libraries, recreational centres, shelters, rest rooms and lunch rooms, a sum (which shall not be deductible in determining the written down value for the purposes of this clause) equal to twenty per cent. of the actual cost of the building to the assessee in respect of the previous year of erection of the building:]

Provided that

(a) the prescribed particulars have been duly furnished;

(b) 230[where, in the assessment of the assessee or if the assessee is a registered firm, in the assessment of its partners, full] effect cannot be given to any such allowance in any year 231[not being a year which ended prior to the 1st day of April, 1939,] owing to there being no profits or gains chargeable for that year, or owing to the profits or gains chargeable being less than the allowance. 232[then, subject to the provisions of 233[clause (b) of] the proviso to sub-section (2) of Section 24,] the allowance or part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following year and deemed to be part of that allowance, or, if there is no such allowance for that year, be deemed to be the allowance for that year, and so on for succeeding years; and

(c) 234[the aggregate of all allowances in respect of depreciation made under this clause and clause (vi-a) or under any Act repealed hereby,] or under the Indian Income-tax Act, 1886 (2 of 1886), shall in no case, exceed the original cost to the assessee of the buildings, machinery, plant or furniture, as the case may be;

235[(vi-a) in respect of depreciation of buildings newly erected, or of machinery or plant being new which has been installed, after the 31st day of March, 1948, a further sum (which shall be deductible in determining the written down value) equal to the amount admissible under clause (vi) (exclusive of the extra allowance for double or multiple shift working of the machinery or plant and the initial depreciation allowance admissible under that clause for the first year of erection of the building or the installation of the machinery or plant) 236[in not more than five successive assessments for the financial years next following the previous year in which such buildings are erected and such machinery and plant installed and failing within the period commencing on the 1st day of April, 1949, and ending on the 31st day of March, 1959];

237[* * *]

238[(vi-b) in respect of a new ship acquired or new machinery or plant installed after the 31st day of March, 1954, which is wholly used for the purposes of the business carried on by the assessee, a sum by way of development rebate in respect of the year of acquisition of the ship or of the installation of the machinery or plant, equivalent to,

239[(i) in the case of a ship acquired after the 31st day of December, 1957, forty per cent. and in the case of a ship acquired before the 1st day of January, 1958, twenty-five per cent. of the actual cost of the ship to the assessee; and

(ii) in the case of machinery or plant installed before the 1st day of April, 1961, twenty-five per cent. and in the case of machinery or plant installed after the 31st day of March, 1961, twenty per cent. of the actual cost of the machinery or plant to the assessee.]

Explanation1. In the case of a ship acquired or machinery or plant installed after the 31st day of December, 1957, where the total income of the assessee for the year of acquisition or installation (the total income for this purpose being computed without making any allowance under this clause) is nil or is less than the full amount of the development rebate calculated at the rate applicable thereto under this clause,

(i) the sum to be allowed by way of development rebate for that year under this clause shall be only such amount as is sufficient to reduce the said total income to nil; and

(ii) the amount of the development rebate, to the extent to which it has not been allowed as aforesaid, shall be carried forward to the following year, and the development rebate to be allowed for the following year shall be such amount as is sufficient to reduce the total income of the asessee for that year, computed in the manner aforesaid, to nil, and the balance of the development rebate, if any, still outstanding shall be carried forward to the following year and so on, so however that no portion of the development rebate shall be carried forward for more than eight years.

Explanation2. Where in any year development rebate is to be allowed in accordance with the provisions of Explanation 1 in respect of ships acquired or machinery or plant installed in more than one year, and the total income of the assessee for that year (the total income for this purpose being computed without making any allowance under this clause) is less than the aggregate of the amounts due to be allowed in respect of the assets aforesaid for that year, the following procedure shall be followed, namely:

(i) the allowance under paragraph (ii) of Explanation 1 shall be made before any allowance under paragraph (i) of that Explanation is made; and

(ii) where an allowance has to be made under paragraph (ii) of Explanation 1 in respect of amounts carried forward from more than one year, the amount carried forward from an earlier year shall be allowed before any amount carried forward from a later year:

Provided that no allowance under this clause shall be made unless

(a) the particulars prescribed for the purpose of clause (vi) have been furnished by the assessee in respect of the ship or machinery or plant; and

(b) except where the assessee is a company being a licensee within the meaning of the Electricity (Supply) Act, 1948 (54 of 1948), or where the ship has been acquired or the machinery or plant has been installed before the 1st day of January, 1958, an amount equal to seventy-five per cent. of the development rebate to be actually allowed is debited to the profit and loss account of the relevant previous year and credited to a reserve account to be utilised by him during a period of ten years next following for the purposes of the business of the undertaking, except

(i) for distribution by way of dividends or profits; or

(ii) for remittance outside India as profits or for the creation of any assets outside India,

and if any such ship, machinery or plant is sold or otherwise transferred by the assessee to any person other than the Government 240[or for any consideration not connected with any amalgamation or succession referred to in clause (vi-c)] at any time before the expiry of ten years from the end of the year in which it was acquired or installed, any allowance made under this clause shall be deemed to have been wrongly allowed for the purposes of this Act]:

241[Provided further that no allowance under the clause shall be made in respect of any machinery or plant which consist of office appliances or road transport vehicles].

242[(vi-c) (i) where in a scheme of amalgamation, a company (hereinafter in this sub-clause referred to as the predecessor) sells or otherwise transfers to the company formed in pursuance of the predecessor's amalgamation with that company (hereinafter in this sub-clause referred to as the successor) any ship, machinery or plant in respect of which development rebate has been allowed to the predecessor under clause (vi-b),

(1) the successor shall continue to fulfil the conditions mentioned in the first proviso to clause (vi-b) in respect of the reserve created by the predecessor and in respect of the period within which such ship, machinery or plant shall not be sold or otherwise transferred and in default of any of these conditions, the provisions of sub-section (11) of Section 35 shall apply to the successor as it would have applied to the predecessor had it committed the default;

(2) the balance of development rebate, if any, still outstanding to the predecessor in respect of such ship, machinery or plant shall be allowed to the successor in accordance with Explanations I and II of clause (vi-b), so, however, that the total period for which the balance of development rebate shall be carried forward in the assessments of the predecessor and the successor shall not exceed the period of eight years specified in Explanation I to clause (vi-b) and the successor shall be treated as the assessee in respect of such ship, machinery or plant for the purposes of clause (vi-b) and this sub-clause;

Explanation. For the purposes of this sub-clause, amalgamation means the merger of two companies (each of which is hereinafter in this Explanation referred to as the amalgamating company) to form one company (hereinafter in this Explanation referred to as the amalgamated company) in such a manner that

(a) all the property of the amalgamating companies immediately before the amalgamation becomes the property of the amalgamated company by virtue of the amalgamation;

(b) all the liabilities of the amalgamating companies immediately before the amalgamation become the liabilities of the amalgamated company by virtue of the amalgamation; and

(c) all the shareholders of the amalgamating companies immediately before the amalgamation become shareholders of the amalgamated company by virtue of the amalgamation.

otherwise than as a result of the acquisition of property of one company by another company pursuant to the purchase of such property by the other company or as a result of the distribution of such property to the other company after the winding up of the company;

(ii) where a firm is succeeded to by a private company, as defined in the Companies Act, 1956 (1 of 1956), in the business carried on by it as a result of which the firm sells or otherwise transfers to the private company any ship, machinery or plant, the provisions of sub-clause (i) of this clause shall, so far as may be, apply to the firm and the company;

Explanation. The provisions of this sub-clause shall apply only where

(a) all the property of the firm immediately before the succession becomes the property of the company;

(b) all the liabilities of the firm immediately before the succession become the liabilities of the company; and

(c) all the partners of the firm immediately before the succession become the shareholders of the company;]

243[(vii) in respect of any such building, machinery or plant which has been sold or discarded or demolished or destroyed, the amount by which the written down value thereof exceeds the amount for which the building, machinery or plant, as the case may be, is actually sold or its scrap value:

Provided that such amount is actually written off in the books of the assessee:

Provided further that where the amount for which any such building, machinery or plant 244[is sold, whether during the continuance of the business or after the cessation thereof,] exceeds the written down value, so much of the excess as does not exceed the difference between the original cost and the written down value shall be deemed to be profits of the previous year in which the sale took place:

Provided further that where any insurance, salvage or compensation moneys are received in respect of any such building, machinery or plant which has been discarded or demolished or destroyed, and the amount of such moneys does not exceed the written down value, the amount allowable under this clause shall be the amount, if any, by which the difference between the written down value and the scrap value exceeds the amount of such moneys:

Provided further that where any insurance, salvage or compensation moneys are received in respect of any such building, machinery or plant as aforesaid, and the amount of such moneys exceeds the difference between the written down value and the scrap value no amount shall be allowable under this clause and so much of the excess as does not exceed the difference between the original cost and the written down value less the scrap value shall be deemed to be profits of the previous year in which such moneys were received:

Provided further that for the purposes of this clause, the original cost of a building, the written down value of which is determined in accordance with the first proviso to sub-section (5), shall be deemed to be the written down value so determined as at the date of its being brought into use for the purposes of the business, profession or vocation;]

245[246[(viii)] in respect of animals which have been used for the purposes of the 247[business, profession or vocation] otherwise than as stock in trade and have died or become permanently useless for such purposes, the difference between the original cost to the assessee of the animals and the amount, if any, realised in respect of the carcasses or animals;]

248[(ix)] any sums paid on account or land-revenue, local rates or municipal taxes in respect of such part of the premises as is used for the purposes of the 249[business, profession or vocation];

250[251[(x)] any sum paid to an employee as bonus or commission for services rendered, where such sum would not have been payable to him as profits or dividend if it had not been paid as bonus or commission:

Provided that the amount of the bonus or commission is of a reasonable amount with reference to

(a) the pay of the employee and the conditions of his service;

(b) the profits of the 252[business, profession or vocation] for the year in question; and

(c) the general practice in similar 253[business, professions or vocations];]

254(xi) when the assessee's accounts in respect of any part of his business, profession or vocation are not kept on the cash basis, such sum, in respect of bad and doubtful debts, due to the assessee in respect of that part of his business, profession or vocation and in the case of an assessee carrying on a banking or money-lending business, such sum in respect of loans made in the ordinary course of such business as the Income-tax Officer may estimate to be irrecoverable but not exceeding the amount actually written off as irrecoverable in the books of the assessee:

Provided that if the amount ultimately recovered on any such debt or loan is greater than the difference between the whole debt or loan and the amount so allowed, the excess shall be deemed to be a profit of the year in which it is recovered, and if less, the deficiency shall be deemed to be a business expense of that year;]

255[(xii) any expenditure (not being in the nature of capital expenditure) laid out or expended on scientific research related to the business;

256[(xiii) any sum paid to a scientific research association having as its objects the undertaking of scientific research or to a university, college or other institution to be used for scientific research or to a university, college or other institution to be used for research in social science or statistical research related to the class of business carried on:

Provided that such association, university, college or institution is for the time being approved for the purposes of this clause by the prescribed authority;]

(xiv) in respect of any expenditure of a capital nature on scientific research related to the business, an allowance for each of the five consecutive previous years beginning with the year in which the expenditure was incurred, or where the expenditure was incurred prior to the commencement of the business, for each of the five consecutive previous years beginning with the year in which the business was commenced, equal to one-fifth of such expenditure:

Provided that no allowance shall be made for any expenditure incurred more than three years before the commencement of the business:

Provided further that

(a) where an asset representing scientific research expenditure of a capital nature ceases to be used for scientific research related to such business

(i) no allowance shall be made in respect of any previous year after the previous year in which the cessation takes place, and

(ii) if the aggregate of the amounts allowed under this clause added to the value of the asset immediately before the cessation is less than the said expenditure, there shall also be allowed in respect of the previous year in which the cessation takes place an additional deduction equal to the difference;

(b) where such asset is sold without having been used for other purposes, the sale proceeds shall be taken to be the value of the asset immediately before the cessation, and if an additional allowance or a greater additional allowance would have been made in respect of the previous year in which the cessation occurred on the basis of that value, an amount equal to the additional allowance which would have been made or, as the case may be, to the difference between the additional allowance which would have been made and the additional allowance which was made for that year shall be made in respect of the previous year in which the sale occurs;

(c) where the proceeds of the sale plus the total amount of the allowances made under this clause exceed the amount of the expenditure, the excess or the amount of the allowances so made, whichever is the less, shall be treated as a receipt of the business accruing at the time of the sale;

(d) where a deduction is allowed for any previous year under this clause in respect of expenditure represented wholly or partly by any asset, no deduction shall be allowed under clause (vi) or clause (vii) for the same previous year in respect of that asset;

(e) where an asset is used in the business after it ceases to be used for scientific research related to that business, and a claim for an allowance under clause (vi) or clause (vii) is made in respect of that asset, the actual cost to the assessee of the asset shall be treated as reduced by the amount of any deductions allowed under this clause;

(f) clause (b) of the proviso to clause (vi) shall apply in relation to deductions allowable under this clause as it applies in relation to deductions allowable in respect of depreciation;

(g) if any question arises under clause (xii), clause (xiii) or this clause as to whether, and if so to what extent, any activity constitutes or constituted or any asset is or was being used for, scientific research, the Central Board of Revenue shall refer the question to the prescribed authority, whose decision shall be final.

Explanation. In clause (xii), clause (xiii) and this clause

(i) scientific research means any activities in the fields of natural or applied science for the extension of knowledge;

(ii) references to expenditure incurred on scientific research do not include any expenditure incurred in the acquisition of rights in, or arising out of, scientific research, but, save as aforesaid, include all expenditure incurred for the prosecution of, or the provision of facilities for the prosecution of, scientific research;

(iii) references to scientific research related to a business or class of business include

(a) any scientific research which may lead to or facilitate an extension of that business or, as the case may be, all businesses of that class;

(b) any scientific research of a mechanical nature which has a special relation to the welfare of workers employed in that business or, as the case may be, businesses of that class;]

257[(xiv-a) in respect of any special reserve created by a financial corporation which is engaged in providing long term finance for industrial development in India, an amount not exceeding ten per cent. of the total income carried to such reserve account:

Provided that the corporation is for the time being approved by the Central Government for the purposes of this clause:

Provided further that where the aggregate of the amounts carried to such reserve account from time to time exceeds the paid-up share capital (excluding the amounts capitalised from reserves) of the corporation no allowance under this clause shall be made in respect of such excess;]

258[(xv)] any expenditure 259[260[(not being an allowance of the nature described in any of the clauses (i) to (xiv) inclusive, and not being in the nature of capital expenditure or personal expenses of the assessee)] laid out or expended wholly and exclusively for the purpose of such business, profession or vocation]:

261[Provided that in the case of a company, no expenditure in the nature of entertainment expenditure shall be allowed which exceeds the aggregate amount computed as hereunder

262[* * *]

263[(2-A) Where, for the purpose of computing profits or gains under this section, an allowance or deduction has been made in the assessment for any year in respect of any loss, expenditure or trading liability incurred by the assessee and, subsequently during any previous year, the assessee has received, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or has obtained some benefit in respect of such trading liability by way of remission or cessation thereof, the amount received by him or the value of the benefit accruing to him shall be deemed to be profits and gains of business, profession or vocation and to have accrued or arisen during that previous year.]

264[(2-AA) For the purpose of computing the profits or gains of any business consisting of the prospecting for or extraction or production of mineral oils in relation to which the Central Government has entered into an agreement with any person for the association or participation in such business of the Central Government (which agreement has been laid on the Table of each House of Parliament), there shall be made in lieu of, or in addition to, the allowances admissible under sub-section (2), such allowances as are specified in the agreement in relation

(a) to expenditure by way of infructuous or abortive exploration expenses in respect of any area surrendered prior to the beginning of commercial production by the assessee;

(b) after the beginning of commercial production, to expenditure incurred by the assessee, whether before or after such commercial production, in respect of drilling or exploration activities or services or in respect of physical assets used in that connection except assets on which allowance for depreciation is admissible under sub-section (2); and

(c) to the depletion of mineral oil in the mining area in respect of the assessment year relevant to the previous year in which commercial production is begun and for such succeeding year or years as may be specified in the agreement;

and such allowances shall be computed and made in the manner specified in the agreement, the other provisions of this Act being deemed for this purpose to have been modified to the extent necessary to give effect to the terms of the agreement.]

(2-B) 265[* * *]

(2-C) 266[* * *]

267[(3) Where any building, machinery, plant or furniture in respect of which any allowance is due under clause (iv), clause (v), clause (vi) or clause (vii) of sub-section (2) is not wholly used for the purposes of the business, profession or vocation, the allowance shall be restricted to the fair proportional part of the amount which would be allowable if such building, machinery, plant or furniture was wholly so used.

(4) Nothing in clause (ix) or 268[clause (xv)] of sub-section (2) shall be deemed to authorise the allowance of any sum paid on account of any cess, rate or tax levied on the profits or gains of any business, profession or vocation or assessed at a proportion of or otherwise on the basis of any such profits or gains; and nothing in 269[clause (xv)] of sub-section (2) shall be deemed to authorise

(a) any allowance in respect of a payment which is chargeable under the head Salaries if it is payable without 270[the taxable territories] and tax has not been paid thereon nor deducted therefrom under Section 18; or

(b) any allowance in respect of any payment by way of interest, salary, commission or remuneration made by a firm to any partner of the firm; or

(c) any allowance in respect of a payment to a provident or other fund established for the benefit of employees unless the employer has made effective arrangements to secure that tax shall be deducted at source from any payments made from the fund which are taxable under the head Salaries .

271[(4-A) Nothing in sub-section (2) shall, in the computation of the profits and gains of a company, be deemed to authorise the making of

(a) any allowance in respect of any expenditure which results directly or indirectly in the provision of any remuneration or benefit or amenity to a director or a person who has a substantial interest in the company within the meaning of sub-clause (iii) of clause (6-C) of Section 2, or

(b) any allowance in respect of any assets of the company used by any person referred to in clause (a) either wholly or partly for his own purposes or benefit,

if in the opinion of the Income-tax Officer any such allowance is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by or accruing to it therefrom.

Explanation. The provisions of this sub-section shall apply notwithstanding that any amount disallowed under this sub-section is included in the total income of any person referred to in clause (a).]

272[(4-B) Nothing in clause (vi) or clause (vi-a) of sub-section (2) shall be deemed to authorise the allowance for any previous year of any sum in respect of any building, machinery, plant or furniture sold, discarded, demolished or destroyed in that year.]

(5) In sub-section (2), paid means actually paid or incurred according to the method of accounting upon the basis of which the profits or gains are computed under this section; plant includes vehicles, books, scientific apparatus and surgical equipment purchased for the purposes of the business, profession or vocation; and written down value means

(a) in the case of assets acquired in the previous year, the actual cost to the assessee:

273[Provided that where, before the date of acquisition by the assessee, the assets were at any time used by any other person for the purposes of his business and the Income-tax Officer is satisfied that the main purpose of the transfer of such assets, directly or indirectly to the assessee, was the reduction of a liability to income-tax (by claiming depreciation with reference to an enhanced cost), the actual cost to the assessee shall be such an amount as the Income-tax Officer may, with the previous approval of the Inspecting Assistant Commissioner, determine having regard to all the circumstances of the case]:

274[Provided further that where before the date of acquisition by the assessee, the assets, which belonged to the assessee and had been used by him for the purposes of his business, profession or vocation, had ceased to be his property by reason of transfer or otherwise, the actual cost to the assessee shall be the actual cost to him when he first acquired the assets less all depreciation actually allowed to him under this Act or under any Act repealed hereby or under executive orders issued when the Indian Income-tax Act, 1886 (2 of 1886), was in force;]

275[(b) in the case of assets acquired before the previous year the actual cost to the assessee less all depreciation actually allowed to him under this Act, or any Act repealed thereby, or under executive orders issued when the Indian Income-tax Act, 1886 (2 of 1886) was in force:]

276[Provided that in the case of a building previously the property of the assessee and brought into use for the purposes of the business, profession or vocation after the 28th day of February, 1946, written down value means the actual cost to the assessee reduced by an amount equal to the depreciation calculated at the rate in force on that date that would have been allowable had the building been used for the aforesaid purposes since the date of its acquisition by the assessee and had the provisions of this Act relating to the allowance for depreciation been in force on and from the date of acquisition]:

Provided 277[further] that where the provisions of the proviso to sub-section (2) of Section 26 are applicable, the actual cost to the assessee referred to in 278[clauses (a) and (b)] shall be the actual cost to the person succeeded in the business, profession or vocation;

279[* * *]

280[(c) in the case of assets acquired by the assessee by way of gift or inheritance, the written down value as in the case of the previous owner or the market value thereof whichever is the less.]

281[Explanation. For the purposes of this sub-section, the expression actual cost means the actual cost of the assets to the assessee reduced by that portion of the cost thereof, if any, as has been met directly or indirectly by Government or by any public or local authority, and any allowance in respect of any depreciation carried forward under clause (b) of the proviso to clause (vi) of sub-section (2) shall be deemed to be depreciation actually allowed .]

282[(5-A) Any compensation or other payment due to or received by,

(a) a managing agent of an Indian Company at or in connection with the termination or modification of his managing agency agreement with the company;

(b) a manager of an Indian Company at or in connection with the termination of his office or modification of the terms and conditions relating thereto;

(c) any person, by whatever name called, managing the whole or substantially the whole affairs of any other company in the taxable territories, at or in connection with the termination of his office or the modification of the terms and conditions relating thereto;

(d) any person, by whatever name called, holding an agency in the taxable territories for any part of the activities relating to the business of any other person, at or in connection with the termination of his agency or the modification of the terms and conditions relating thereto,

shall be deemed to be profits and gains of a business carried on by the managing agent, manager or other person, as the case may be, and shall be liable to tax accordingly; and the tax on such compensation or other payment shall, if the assessee so elects, be computed at the average of the rates of income-tax and super-tax applicable to his total income for the three years immediately preceding the previous year in which the compensation or other payment was due or received.]

(6) A trade, professional or similar association performing specific services for its members for remuneration definitely related to those services shall be deemed for the purpose of this section to carry on business in respect of those services, and the profits and gains therefrom shall be liable to tax accordingly.

(7) Notwithstanding anything to the contrary contained in Section 8, 9, 10, 12, or 18, the profits and gains of any business of insurance and the tax payable thereon shall be computed in accordance with the rules contained in the Schedule to this Act.]

[Repealed by the Indian Income-tax (Amendment) Act, 1939 (7 of 1939), Section 12.]

(1) The tax shall be payable by an assessee under the head 283[Income from other sources] in respect of income, profits and gains of every kind 284[which may be included in his total income] (if not included under any of the preceeding heads).

285[(1-A) Income from other sources shall include dividends and any dividend declared by a company or distributed or paid by it within the meaning of sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-clause (d) or sub-clause (e) of clause (6-A) of Section 2, shall be deemed to be the income of the previous year in which it is so declared, distributed or paid, as the case may be.]

(1-B) Any payment by a company to a shareholder by way of advance or loan which would have been treated as a dividend within the meaning of clause (e) of sub-section (6-A) of Section 2 in any previous year relevant to any assessment year prior to the assessment year ending on the 31st day of March, 1956 had that clause been in force in that year, shall be treated as a dividend received by him in the previous year relevant to the assessment year ending on the 31st day of March, 1956, if such loan or advance remained outstanding on the first day of such previous year.]

(2) Such income, profits and gains shall be computed after making allowance for any expenditure (not being in the nature of capital expenditure) incurred solely for the purpose of making or earning such income, profits or gains 286[and further in the case of any income by way of dividend, for any reasonable sum paid by way of commission or remuneration to a banker or any other person realising such dividend on behalf of the assessee] 287[provided that no allowance shall be made on account of

(a) any personal expenses of the assessee, or

(b) any interest chargeable under this Act which is payable without 288[the taxable territories], not being interest on a loan issued for public subscription before the 1st day of April, 1938, or not being interest on which tax has been paid or from which tax has been deducted under Section 18, or

(c) any payment which is chargeable under the head Salaries , if it is payable without 289[the taxable territories] and tax has not been paid thereon nor deducted therefrom under Section 18.]

290[(3) Where an assessee lets on hire machinery, plant or furniture belonging to him, he shall be entitled to allowances in accordance with the provisions of clauses (iv), (v), (vi) and (vii) of sub-section (2) of Section 10.]

291[(4) Where an assessee lets on hire machinery, plant or furniture belonging to him and also buildings, and the letting of the buildings is inseparable from the letting of the said machinery, plant or furniture, he shall be entitled to allowances in accordance with the provisions of clauses (iv), 292[(v), (vi) and (vii)] of sub-section (2) of Section 10 in respect of such buildings.]

293[(5) The provisions of 294[sub-sections (2-A) and (4-A)] of Section 10 shall apply, so far as may be, in computing income, profits and gains of an assessee under this section as they apply in computing profits or gains of an assessee under that section.]

295[12-A. Managing Agency Commission. Where a managing agent of a company is liable under an agreement made for adequate consideration to share managing agency commission with a third party or parties, the said agent and the said party or parties shall file a declaration showing the proportion in which such commission is shared between them, and on proof to the satisfaction of the Income-tax Officer of the facts contained in such declaration such agent and each such party shall be chargeable only on the share to which such agent or party is entitled under the agreement.]

296[12-AA. Royalties or copyright fees for literary or artistic works. Where the time taken by the author of a literary or artistic work in the making thereof is

(a) more than twelve but less than twenty-four months, or

(b) more than twenty-four months,

the amount received or receivable by him during any previous year on account of any lump sum consideration for the assignment or grant of any of his interests in the copyright of that work, or of royalties or copyright fees (whether receivable in lump sum or otherwise), in respect of that work, shall, if he so claims, be allocated for purposes of assessment as hereunder

(i) in the case referred to in clause (a), one-half of the amount of such lump sum, royalties or fees as the income of the previous year in which the whole amount is received or receivable, and the other half as the income of the next succeeding previous year; and

(ii) in the case referred to in clause (b), one-third of the amount of such lump sum, royalties or fees as the income of the previous year in which the whole amount is received or receivable, and one-third of the said amount as the income of each of the two next succeeding previous years.

Explanation. For the purposes of this section, the expression author includes a joint author and the expression lump sum in regard to royalties or copyright fees includes an advance payment on account of such royalties or copyright fees which is not returnable.]

297[12-B. Capital gains. (1) The tax shall be payable by an assessee under the head Capital Gains in respect of any profits or gains arising from the sale, exchange, relinquishment or transfer of a capital asset effected after the 31st day of March, 1956, and such profits and gains shall be deemed to be income of the previous year in which the sale, exchange, relinquishment or transfer took place:

Provided that any distribution of capital assets on the total or partial partition of a Hindu undivided family or under a deed of gift, bequest or will shall not for the purposes of this section be treated as a sale, exchange, relinquishment or transfer of the capital assets:

Provided further that the transfer of a capital asset by a company to a subsidiary company, the whole of the share capital of which is held by the parent company or by the nominees thereof, shall not be treated as a sale, exchange or transfer within the meaning of this section where the subsidiary company is resident in the taxable territories and is registered under the Indian Companies Act, 1956 (1 of 1956), so however that for the purposes of clause (vi) or clause (vii) of sub-section (2) of Section 10, the cost or the written down value, as the case may be, of the transferred capital asset shall be taken to be the same as it would have been if the parent company had continued to hold the capital asset for the purposes of its business.

(2) The amount of a capital gain shall be computed after making the following deductions from the full value of the consideration for which the sale, exchange, relinquishment or transfer of the capital asset is made, namely:

(i) expenditure incurred solely in connection with such sale, exchange, relinquishment or transfer;

(ii) the actual cost to the assessee of the capital asset, including any expenditure of a capital nature incurred and borne by him in making any additions or alterations thereto, but excluding any expenditure in respect, of which any allowance is admissible under any provision of Sections 8, 9, 10 and 12:

Provided that where a person who acquires a capital asset from the assessee, whether by sale, exchange, relinquishment or transfer is a person with whom the assessee is directly or indirectly connected, and the Income-tax Officer has reason to believe that the sale, exchange, relinquishment or transfer was effected with the object of avoidance or reduction of the liability of the assessee under this section, the full value of the consideration for which the sale, exchange, relinquishment or transfer is made shall, with the prior approval of the Inspecting Assistant Commissioner of Income-tax, be taken to be the fair market value of the capital asset on the date on which the sale, exchange, relinquishment or transfer took place:

Provided further that where the capital asset is an asset in respect of which the assessee has obtained depreciation allowance in any year, the actual cost of the asset to the assessee shall be its written down value, as defined in Section 10, increased or diminished, as the case may be, by any adjustment made under clause (vii) of sub-section (2) of that section:

Provided further that where the capital asset became the property of the assessee, or of the previous owner where the cost of the capital asset to the previous owner is to be taken in accordance with sub-section (3), before the 1st day of January, 1954, he may, on proof of the fair market value thereof on the said date to the satisfaction of the Income-tax Officer, substitute for the actual cost such fair market value which shall be deemed to be the actual cost to him of the asset, and which shall be reduced by the amount of depreciation, if any, allowed to the assessee after the said date and increased or diminished, as the case may be, by any adjustment made under clause (vii) of sub-section (2) of Section 10:

Provided further that where the capital asset was on any previous occasion the subject of negotiations for its sale, exchange, relinquishment or transfer, any option or other money received and retained by the assessee in respect of such negotiations shall be deducted in computing the actual cost to him of such asset.

(3) Where any capital asset became the property of the assessee by succession, inheritance or devolution or on any distribution of capital assets on the total or partial partition of a Hindu undivided family or on the dissolution of a firm or other association of persons or on the liquidation of a company or under a deed of gift, or transfer on irrevocable trust, its actual cost allowable to him for the purposes of this section shall be its actual cost to the previous owner thereof, and the provisions of sub-section (2) shall apply accordingly; and where the actual cost to the previous owner cannot be ascertained, the fair market value at the date on which the capital asset became the property of the previous owner shall be deemed to be the actual cost thereof:

Provided that where the capital asset became the property of the assessee

(i) before the 1st day of April, 1956, under a deed of gift or on the partition of a Hindu undivided family, the actual cost allowable to him shall be the fair market value of the capital asset on the date of the gift or the date of the partition, as the case may be, if such value is greater than the actual cost to the previous owner or the fair market value thereof on the 1st day of January, 1954, where the third proviso to sub-section (2) applies;

(ii) on or after the 1st day of April, 1956, on the partition of a Hindu undivided family, the cost allowable to him shall be the fair market value on the date of the partition.

(4) Notwithstanding anything contained in sub-section (1)

(a) where a capital gain arises from the sale, exchange or transfer of one or more capital assets being property the income of which is chargeable under Section 9, and the full aggregate value of the consideration for which the sale, exchange or transfer is made does not exceed the sum of twenty-five thousand rupees, the capital gain shall not be charged under this section and shall not also be included in the total income of the assessee:

Provided that this clause shall not apply in any case where the aggregate of the fair market values of all capital assets, being property the income of which is chargeable under Section 9, owned by the assessee immediately before the sale, exchange or transfer aforesaid is made, exceeds the sum of rupees fifty thousand;

(b) where a capital gain arises from the sale, exchange, relinquishment or transfer of a capital asset to which the provisions of clause (a) are not applicable, being pro-property the income of which is chargeable under Section 9, which in the two years immediately preceding the date on which the sale, exchange, relinquishment or transfer took place, was being used by the assessee or a parent of his mainly for the purposes of his own or the parent's own residence, and the assessee has within a period of one year before or after that date purchased a new property for the purposes of his own residence, then instead of the capital gain being charged to tax as income of the previous year in which the sale, exchange, relinquishment or transfer took place, it shall, if the assessee so elects in writing before the assessment is made, be dealt with in accordance with the following provisions of this clause, that is to say,

(i) if the amount of the capital gain is greater than the cost of the new asset, the difference between the amount of the capital gain and the cost of the new asset shall be charged under this section as income of the previous year, or

(ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under this section.]

Income, profits and gains shall be computed, for the purposes of Sections 10, 298[* * *] and 12, in accordance with the method of accounting regularly employed by the assessee:

Provided that, if no method of accounting has been regularly employed, or if the method employed is such that, in the opinion of the Income-tax Officer, the income, profits and gains cannot properly be deduced therefrom, then the computation shall be made upon such basis and in such manner as the Income-tax Officer may determine.

(1) The tax shall not be payable by an assessee in respect of any sum which he receives as a member of a Hindu undivided family 299[where such sum has been paid out of the income of the family] 300[or in the case of an impartible estate where such sum has been paid out of the income of the holder of the estate belonging to the family].

301[(2) The tax shall not be payable by an assessee

(a) if a partner of an unregistered firm, in respect of any portion of his share in the profits and gains of the firm computed in the manner laid down in clause (b) of sub-section (1) of Section 16 on which the tax has already been paid by the firm; or

302[(aa) if a partner of a registered firm, in respect of that portion of his share in the profits or gains of the firm as is equal to the difference between his share in the total income of the firm and his share in such total income excluding the income-tax, if any, payable by the firm, the shares in either case being computed in the manner laid down in clause (b) of sub-section (1) of Section 16:

Provided that in relation to super-tax the provisions of this clause shall have effect as if for the words excluding the income-tax, if any, payable by the firm , the words excluding the income-tax, if any, payable by the firm, at the rate of income-tax applicable to its total income, on the amount of its profits or gains from all sources other than from any business carried on by it had been substituted.]

(b) if a member of an association of persons other than a Hindu undivided family, a company or a firm, in respect of any portion of the amount which he is entitled to receive from the association on which the tax has already been paid by the association] 303[* * *].

304[* * *].

305[(3) The tax shall not be payable by a co-operative society

(i) in respect of its profits and gains of business carried on by it, if it is

(a) a society engaged in carrying on the business of banking or providing credit facilities to its members; or

(b) a society engaged in a cottage industry; or

(c) a society engaged in the marketing of the agricultural produce of its members; or

(d) a society engaged in the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to its members; or

(e) a society engaged in the processing without the aid of power of the agricultural produce of its members; or

(f) a primary society engaged in supplying milk raised by its members to a federal milk co-operative society:

Provided that, in the case of a co-operative society which is also engaged in activities other than those mentioned in this clause, nothing contained herein shall apply to that part of its profits and gains as is attributable to such activities and as exceeds fifteen thousand rupees;

(ii) in respect of so much of its profits and gains of business carried on by it as does not exceed fifteen thousand rupees, if it is a co-operative society other than a co-operative society referred to in clause (i);

(iii) in respect of interest and dividends derived from its investments with any other co-operative society;

(iv) in respect of any income derived from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities;

(v) in respect of any interest on securities chargeable under Section 8 or any income from property chargeable under Section 9, where the total income of the co-operative society does not exceed twenty thousand rupees and the society is not a housing society or an urban consumer's society or a society carrying on transport business or a society engaged in the performance of any manufacturing operations with the aid of power:

Provided that nothing contained in this sub-section shall apply to

(i) the Sanikatta Salt Owner's Society;

(ii) a co-operative society carrying on insurance business in respect of the profits and gains of that business computed in accordance with Rule 9 in the Schedule.

Explanation. For the purposes of this sub-section, an urban consumer's co-operative society means a society for the benefit of consumers within the limits of a municipal corporation, municipality, municipal committee, notified area committee, town area or cantonment.]

(4) The tax shall not be payable by an assessee, who is a member of a co-operative society, in respect of any dividends received by him from the society.

(5) The tax shall not be payable by an assessee, which is an authority constituted under any law for the time being in force for the marketing of commodities, in respect of any income derived from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities.]

(1) The tax shall not be payable 306[in respect of any sums paid by an assessee to effect an insurance on the life of the assessee or on the life of a wife or husband of the assessee or in respect of a contract for a deferred annuity on the life of the assessee or on the life of a wife or husband of the assessee], or as a contribution to any Provident Fund to which the Provident Funds Act, 307[1925 (19 of 1925)], applies 308[* * *].

(2) Where the assessee is a Hindu undivided family, there shall be exempted under sub-section (1) any sums paid to effect an insurance on the life of any male member of the family or of the wife of any such member.

309(2-A) Nothing in sub-section (1) or sub-section (2) shall apply to so much of any premium or other payment made on a policy other than a contract for a deferred annuity as is in excess of ten per cent. of the actual capital sum assured; and in calculating any such capital sum no account shall be taken of the value of any premiums agreed to be returned or of any benefit by way of bonus or otherwise which is to be or may be received either before or after death either by the person paying the premium or by any other person and which is not the sum actually assured.]

(3) The aggregate of any sums exempted under this section shall not, together with any sums exempted under the 310[first proviso] to sub-section (1) of Section 7 311[and any sums exempted under 312[Section 58-F]] 313[exceed in the case of an individual, 314[one-fourth] of the total income of the assessee or eight thousand rupees, whichever is less, and in the case of a Hindu undivided family, 315[one-fourth] of the total income of the assessee or sixteen thousand rupees, whichever is less].

316[15-A. Exemption of portion of earned income. The tax shall not be payable by an assessee in respect of such portion, if any, of the earned income included in his total income as is directed by the annual 317[Central Act] fixing the rate or rates of tax for any year to be deducted in making an assessment for that year, and for the purposes of determining the rates at which income-tax (but not super-tax) is payable by the assessee for that year his total income shall be deemed to be the total income reduced by the said portion.]

318[15-B. Exemption on account of donations for charitable purposes. 319[(1) The tax shall not be payable by an assessee in respect of any sums paid by him on or after the 1st day of April, 1953, as donations to any institution or fund to which this section applies 320[or in respect of any sums paid by him on or after the 1st day of April, 1960, as donations to the Government or to any local authority to be utilised for any charitable purpose as defined in sub-section (3) of Section 4]:

Provided that in the case of a company this exemption shall apply only in respect of income-tax, and not in respect of super-tax payable by it:

Provided further that this exemption shall not apply

(a) if the aggregate of the sums so paid by the assessee is less than two hundred and fifty rupees,

(b) to any sums paid in excess of 321[seven and a half per cent. of the assessee's total income] as reduced by any portion thereof exempt from tax under any other provisions of this Act, or 322[one hundred and fifty thousand rupees], whichever is less.

(2) This section applies to any institution or fund established in the taxable territories for a charitable purpose

(i) the income whereof is exempt under clause (i) of sub-section (3) of Section 4,

(ii) which is not expressed to be for the benefit of any particular religious community,

(iii) which maintains regular accounts of its receipts and expenditure, and

(iv) which is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (21 of 1860), or under Section 26 of the Indian Companies Act, 1913 (7 of 1913)323, or is a university established by law or is any other educational institution recognised by Government or by a university or affiliated to any university, or

(v) which is an institution financed wholly or in part by the Government or a local authority.

Explanation. An institution or fund established for the benefit of scheduled castes, backward classes, scheduled tribes or of women and children shall not be deemed to be an institution or fund expressed to be for the benefit of a religious community within the meaning of clause (ii).

(2-A) For the removal of doubts, it is hereby declared that in respect of sums paid as donations on or after the 1st day of April, 1948, and before the 1st day of April, 1953, the provisions of sub-sections (1) and (2) shall apply as if the amendments made by clause (c) of Section 3 of the Finance Act, 1953 (25 of 1953), had not been made.]

(3) The amount by which the tax payable by an assessee is reduced on account of an exemption under this section shall not in any case exceed half the amount in respect of which the exemption is allowed under this section.]

324[15-C. Exemption from tax of newly established industrial undertakings. (1) Save as otherwise hereinafter provided, the tax shall not be payable by an assessee on so much of the profits or gains derived from any industrial undertaking 325[or hotel] to which this section applies as do not exceed six per cent. per annum on the capital employed in the undertaking 326[or hotel], computed in accordance with such rule as may be made in this behalf by the Central Board of Revenue.

(2) This section applies to any industrial undertaking which

(i) is not formed by the splitting up, or the reconstruction of, business already in existence or by the transfer to a new business of building, machinery or plant 327[previously used in any other business];

(ii) has begun or begins to manufacture or produce articles in 328[any part of the taxable territories] at any time within a period of 329[eighteen] years from the 1st day of April, 1948, or such further period as the Central Government may, by notification in the Official Gazette, specify with reference to any particular industrial undertaking;

330[(iii) employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power:]

Provided that the Central Government may, by notification in the Official Gazette, direct that the exemption conferred by this section shall not apply to any particular industrial undertaking.

331[(2-A) This section applies to any hotel which

(a) starts functioning on or after the first day of April, 1961 and is not formed by the splitting up, or the reconstruction of, business already in existence or by the transfer to a new business of building, machinery or plant previously used in any other business;

(b) is owned and run by a company registered in the taxable territories with a paid-up capital of not less than five hundred thousand rupees;

(c) is run in premises which are owned by the company;

(d) has such number and types of guest rooms and provides such amenities as may be prescribed, having regard to the population and the tourist importance of the place in which the hotel is located; and

(e) is for the time being approved for the purposes of this sub-section by the Central Government.]

(3) The profits or gains of an industrial undertaking 332[or a hotel] to which this section applies shall be computed in accordance with the provisions of Section 10.

(4) The tax shall not be payable by a shareholder in respect of so much of any dividend paid or deemed to be paid to him by an industrial undertaking 333[or a hotel] as is attributable to that part of the profits or gains on which the tax is not payable under this section.

334[Explanation. The amount of dividend in respect of which the tax is not payable under this sub-section shall be computed in accordance with such rules as may be made in this behalf by the Central Board of Revenue.]

(5) Nothing in this section shall affect the application of Section 23-A in relation to the profits or gains of an industrial undertaking 335[or a hotel] to which this section applies 336[* * *].

337[(6) The provisions of this section 338[shall, in relation to an industrial undertaking, apply] to the assessment for the financial year next following the previous year in which the assessee begins to manufacture or produce articles and for the four assessments immediately succeeding:]]

339[Provided that where the assessee is a co-operative society, this sub-section shall have effect as if for the words four assessments the words six assessments had been substituted.]

340[(7) The provisions of this section shall, in relation to a hotel, apply to the assessment for the financial year next following the previous year in which the hotel starts functioning and for the four assessments immediately succeeding.]

341[(1) In computing the total income of an assessee

(a)342[any sums exempted under the first proviso to sub-section (1) of Section 7, the second and third provisos to Section 8, sub-sections (2), (3), (4) and (5) of Section 14], 343[Section 15, 344[Section 15-B, Section 15-C and Section 58-F] shall be included 345[and any sum exempted under Section 15-A shall also be included except for the purpose of determining the rates at which income-tax (but not super-tax) is payable by the assessee to whom the exemption is given];

(b) when the assessee is a partner of a firm, then, whether the firm has made a profit or a loss, his share (whether a net profit or a net loss) shall be taken to be any salary, interest, commission or other remuneration payable to him by the firm in respect of the previous year increased or decreased respectively by his share in the balance of the profit or loss of the firm after the deduction of any interest, salary, commission or other remuneration payable to any partner in respect of the previous year:

Provided that if his share so computed is a loss, such loss may be set off or carried forward and set off in accordance with the provisions of Section 24;

(c) all income arising to any person by virtue of a settlement or disposition whether revocable or not, and whether effected before or after the commencement of the Indian Income-tax (Amendment) Act, 1939 (7 of 1939), from assets remaining the property of the settlor or disponer shall be deemed to be income of the settlor or disponer, and all income arising to any person by virtue of a revocable transfer of assets shall be deemed to be income of the transferor:

Provided that for the purposes of this clause a settlement, disposition or transfer shall be deemed to be revocable if it contains any provision for the retransfer directly or indirectly of the income or assets to the settlor, disponer or transferor, or in any way gives the settlor, disponer or transferor a right to reassume power directly or indirectly over the income or assets:

Provided further that the expression settlement or disposition shall for the purposes of this clause include any disposition, trust, covenant, agreement, or arrangement, and the expression settlor or disponer in relation to a settlement or disposition shall include any person by whom the settlement or disposition was made:

Provided further that this clause shall not apply to any income arising to any person by virtue of a settlement or disposition which is not revocable for a period exceeding six years or during the life time of the person and from which income the settlor or disponer derives no direct or indirect benefit but that the settlor shall be liable to be assessed on the said income as and when the power to revoke arises to him.

(2) 346[* * *]

347[(3) In computing the total income of any individual for the purpose of assessment, there shall be included

(a) so much of the income of a wife or minor child of such individual as arises directly or indirectly

(i) from the membership of the wife in a firm of which her husband is a partner;

(ii) from the admission of the minor to the benefits of partnership in a firm of which such individual is a partner;

(iii) from assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart; or

(iv) from assets transferred directly or indirectly to the minor child, not being a married daughter, by such individual 348[otherwise than for adequate consideration]; and

(b) so much of the income of any 349[person or association of persons] 350[* * *] as arises from assets transferred, 351[otherwise than for adequate consideration to the person or association] by such individual 352[for the benefit of his wife or a minor child or both].]

353[354[(1) Where a person is not resident in the taxable territories and is not a company, the tax, including super-tax, payable by him or on his behalf on his total income shall be an amount equal to

(a) the income-tax which would be payable on his total income at the maximum rate, plus

(b) either the super-tax which would be payable on his total income 355[at the rate of 356[nineteen per cent.]], or the super-tax which would be payable on his total income if it were the total income of a person resident in the taxable territories, whichever is greater:

Provided that any such person may, on the first occasion on which he is assessable for any year subsequent to the year ending on the 31st day of March, 1951, and before the 30th day of June in that year, or where the first occasion on which he is so assessable falls during the year ending on the 31st day of March, 1952, before such date as the Central Board of Revenue may, by notification in the Official Gazette, specify in this behalf, by notice in writing to the Income-tax Officer declare (such declaration being final and being applicable to all assessments thereafter) that the tax, including super-tax payable by him or on his behalf on his total income shall be determined with reference to his total world income, and thereupon such tax shall be an amount bearing to the total amount of tax including super-tax which would have been payable on his total world income had it been his total income the same proportion as his total income bears to his total world income]:

357[Provided further that where any such person satisfies the Income-tax Officer that he was prevented by sufficient cause from making such declaration on the first occasion on which he became assessable and his failure to make such declaration has not resulted in reducing his liability to tax for any year, the Income-tax Officer may, with the previous approval of the Inspecting Assistant Commissioner, allow such person to make the declaration at any time after the expiry of the period specified, and such declaration shall have effect in relation to the assessment for the year in which the declaration is made (if such assessment had not been completed before such declaration) and all assessments thereafter.]

358[(1-A) Notwithstanding anything contained in sub-section (1), where a citizen of India, not resident in the taxable territories, is in receipt of salary from the Government for rendering service without the taxable territories, the tax, including super-tax payable by him on his total income for the assessment years commencing with the assessment year 1960-61 shall be determined with reference to his total world income in the manner specified in the first proviso to sub-section (1).]

(2) Where there is included in the total income of any assessee any income (including income from a share in an unregistered firm, if assessed as such) exempted from tax by or under the provisions of this Act, the income-tax excluding super-tax payable by the assessee shall be an amount bearing to the total amount of the income-tax excluding super-tax which would have been payable on the total income had no part of it been exempted the same proportion as the unexempted portion of the total income bears to the total income.

359[(3) Where there is included in the total income of any assessee any income exempted from tax under 360[clause (aa) or] clause (c) of sub-section (2) of Section 14, 361[or under Section 15-B] 362[or under Section 15-C], the super-tax payable by the assessee shall be an amount bearing to the total amount of the super-tax which would have been payable on the total income had no part of it been so exempted the same proportion as the total income less the portion so exempted bears to the total income.

(4) Where any income exempted from tax under clause (c) of sub-section (2) of Section 14 which has been taken into account under sub-section (2) or sub-section (3) of this section as part of the total income of an assessee for the purpose of determining the income-tax or super-tax payable by him is in a subsequent year brought into or received in 363[the taxable territories] by the assessee and becomes chargeable with tax accordingly, the tax including super-tax payable by the assessee on his total income of that subsequent year shall be

(a) the amount which bears to the total amount of the tax including super-tax which would have been payable on his total income as reduced by the amount of the income so brought into or received in 364[the taxable territories] had such reduced income been his total income the same proportion as his total income bears to such reduced income, or

(b) the amount which bears to the total amount of the tax including super-tax which would have been payable on the amount of the income so brought into or received in 365[the taxable territories] had such income been his total income the same proportion as his total income bears to the amount of the income so brought into or received in 366[the taxable territories],

whichever is the greater.]

367[(5) Where the amount of the total income of any assessee is deemed to be the total income reduced under the provisions of Section 15-A by an allowance for earned income, the expression total income in this section shall, for the purpose of determining the amount of income-tax (but not super-tax) payable by the assessee, be deemed to refer to his total income so reduced.]

368[(6) Where the total income of an assessee, not being a company, includes any income chargeable under the head Capital Gains , the tax, including super-tax, payable by him on his total income shall be

(i) income-tax and super-tax payable on his total income as reduced by the amount of such inclusion, had such reduced income been his total income, plus

369(ii) on the whole amount of such inclusion, income-tax equal to the amount which bears to the income-tax which would have been payable on his total income as reduced by two-thirds of the amount of such inclusion the same proportion as the whole amount of such inclusion bears to such reduced total income:

Provided that where the amount of such inclusion does not exceed the sum of five thousand rupees or the total income does not exceed the sum of ten thousand rupees such income-tax shall be nil and in any other case such income-tax shall not exceed one-half of the amount by which the amount of such inclusion exceeds the sum of five thousand rupees.]

370[(7) Where the total income of a company includes any income chargeable under the head Capital Gains , the super-tax payable by it shall be the aggregate of the tax calculated

(i) at the rate of ten per cent. on the amount of Capital Gains so included, and

(ii) at the rate applicable to the company on its total income as reduced by the amount of the Capital Gains, had such reduced income been its total income.]]

DEDUCTIONS AND ASSESSMENT

371[* * *]

(2) Any person responsible for paying any income chargeable under the head Salaries shall, at the time of payment, deduct income-tax 372[and super-tax] on the amount payable 373[at a rate representing the average of the rates in force for the financial year in which he is required to deduct the tax which are applicable to the estimated total income of the assessee under this head]:

Provided that such person may, at the time of making any deduction, increase or reduce the amount to be deducted under this sub-section for the purpose of adjusting any excess or deficiency arising out of any previous deduction or failure to deduct.

374[(2-A) Notwithstanding anything hereinbefore contained, for the purpose of making the deduction under sub-section (2), there shall be included in the amount payable any income chargeable under the head Salaries which is payable to the assessee out of India by or on behalf of the Government, and the value in rupees of such income shall be calculated at the prescribed rate of exchange.]

375[(2-B) Any person responsible for paying any income chargeable, under the head Salaries 376[to a person not resident in the taxable territories, not being a person referred to in sub-section (1-A) of Section 17, shall, at the time of payment, deduct income-tax and super-tax at the prescribed rates on the estimated income of the assessee under this head]:

377[Provided that where

(i) the person not so resident has obtained a certificate in writing from the Income-tax Officer (which certificate the Income-tax Officer shall be bound to give in every proper case on the application of the assessee) stating that income-tax and super-tax may be deducted at the rates specified therein, or

(ii) the Income-tax Officer has, by an order in writing, required the person responsible for making payment to deduct income-tax and super-tax at the rates specified in that order,

the person responsible for making payment shall, until such certificate or order is cancelled by the Income-tax Officer, deduct income-tax and super-tax at the rates specified in such certificate or order, as the case may be.]]

378[(3) The person responsible for paying any income chargeable under the head Interest on Securities shall, at the time of payment, deduct income-tax and super-tax at the prescribed rates on the amount of interest payable:

Provided that where, in the case of any recipient, the Income-tax Officer gives a certificate in writing (which certificate he shall give in every proper case on the application of the assessee) that to the best of his belief the total income or the total world income of the recipient will be less than the minimum liable to income-tax or will be liable to income-tax at a rate which is less than the prescribed rate, the person responsible for paying the interest to such recipient shall, until such certificate is cancelled by the Income-tax Officer, pay the interest without deduction or deduct the tax at such lesser rate, as the case may be:

Provided further that where the recipient is not a company, the proviso to sub-section (2-B) shall apply to the deduction of super-tax under this sub-section as it applies to the deduction of super-tax under sub-section (2-B).]

379[(3-B) Any person responsible for paying to a person, not being a company, who is not resident in the taxable territories or to a company which is neither an Indian company nor a company which has made the prescribed arrangements for the declaration and payment of dividends within India, any interest, not being Interest on Securities , or any other sum, not being dividends, chargeable under the provisions of this Act, shall, at the time of payment, unless he is himself liable to pay any income-tax and super-tax thereon as an agent, deduct income-tax and super-tax at the prescribed rates:

Provided that where the recipient is not a company, the proviso to sub-section (2-B) shall apply to the deduction of income-tax and super-tax under this sub-section as it applies to the deduction of income-tax and super-tax under sub-section (2-B):

Provided further that nothing in this sub-section shall apply to any payment made in the course of transactions in respect of which a person responsible for payment is deemed under the first proviso to Section 43 not to be an agent of the recipient.]

(3-C) Where the person responsible for paying any sum chargeable under this Act other than interest, to a person not resident in the taxable territories, considers that the whole of such sum would not be income chargeable in the case of the recipient, he may make an application to the Income-tax Officer to determine, by general or special order, the appropriate proportion of such sum so chargeable and upon such determination tax shall be deducted therefrom by the person responsible for making such payment in accordance with the provisions of sub-section (3-B).

380[(3-D) The principal officer of an Indian company or a company which has made the prescribed arrangements for the declaration and payment of dividends 381[(including dividends on reference shares)] within India shall, before making any payment in cash, or before issuing any cheque or warrant in respect of any dividend or before making any distribution or payment to a shareholder of any dividend within the meaning of sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-clause (d) or sub-clause (e) of clause (6-A) of Section 2, deduct on the amount of such dividend, income-tax and super-tax at the prescribed rates:

Provided that where, in the case of any shareholder, not being a company, the Income-tax Officer gives a certificate in writing (which certificate he shall give only in accordance with the rules made in this behalf) that to the best of his belief the total income or the total world income of the shareholder will be less than the minimum liable to income-tax, the principal officer responsible for paying any dividend to such shareholder shall, until such certificate is cancelled by the Income-tax Officer, pay the dividend without deduction.

(3-E) 382[* * *]

(3-F) Where the principal officer of a company considers that by reason of the provisions of Section 15-C no income-tax or super-tax will be payable by the recipient on the whole or any portion of the dividend referred to in sub-section (4) of that section he may, before paying the dividend to the shareholder, or issuing any cheque or warrant in respect thereof, make an application to the Income-tax Officer to determine the appropriate proportion of the dividend on which income-tax or super-tax is not payable by the recipient under the provisions of Section 15-C; and on such determination by the Income-tax Officer, no income-tax or super-tax shall be deducted on such proportionate amount.]

(4) All sums deducted in accordance with the provisions of this section shall, for the purpose of computing the income of an assessee, be deemed to be income received.

(5) Any deduction made 383[and paid to the account of the Central Government] in accordance with the provisions of this section 384[* * *] shall be treated as a payment of income-tax 385[or super-tax] on behalf of the person from whose income the deduction was made, or of the owner of the security 386[or of the shareholder], as the case may be, and credit shall be given to him therefor 387[on the production of the certificate furnished under sub-section (9) 388[* * *],] in the assessment, if any, made for the following year under this Act:

Provided that, if such person or such owner obtains, in accordance with the provisions of this Act, a refund of any portion of the tax so deducted, no credit shall be given for the amount of such refund:

389[Provided further that where such person or owner is a person whose income is included under the provisions of 390[clause (c) of sub-section (1) or sub-section (3) of Section 16, Section 44-D or Section 44-E] in the total income of another person 391[such other person] shall be deemed to be the person or owner on whose behalf payment has been made and to whom credit shall be given in the assessment for the following year.]

392[Provided further that where any security or share in a company is owned jointly by two or more persons not constituting a partnership, credit in respect of the tax deducted 393[* * *] may be given to each such person in the same proportion in which the interest on such security or dividend on such share has been included in his total income.]

(6) All sums deducted in accordance with the provisions of this section shall be paid within the prescribed time by the person making the deduction to the credit of the Central Government or as 394[the Central Board of Revenue] directs.

(7) 395[If any person or the principal officer of a company does not deduct tax or after deducting fails to pay the sums deducted as required by or under this section, he, or the company, as the case may be,] shall, without prejudice to any other consequences which 396[he or it] may incur, be deemed to be 397[an assessee] in default in respect of the tax:

398[Provided that the Income-tax Officer shall not make a direction under sub-section (1) of Section 46 for the recovery of any penalty from such person unless satisfied that such person has wilfully failed to deduct and pay the tax.]

(8) The power to levy by deduction under this section shall be without prejudice to any other mode of recovery.

(9) Every person deducting income-tax 399[or super-tax] in accordance with the provisions of 400[sub-sections (3), 401[* * *] (3-B), 402[or (3-D)]] shall, 403[at the time of payment of the sum 404[or, as the case may be, at the time of issue of a cheque or warrant for payment of any dividend to a shareholder furnish to the person to whom such payment is made or the cheque or warrant is issued]] a certificate to the effect that income-tax 405[or super-tax] has been deducted, and specifying the amount so deducted, the rate at which the tax has been deducted, and such other particulars as may be prescribed.

406[(10) Notwithstanding anything contained in this section, no deduction of tax shall be made on any interest or dividend payable to the Government or to the Reserve Bank of India in respect of any securities or shares owned by it or in which it has full beneficial interest.

(11) For the purposes of deduction of tax under sub-sections (2-B), (3), (3-B) and (3-D) the expression prescribed rates means the rates prescribed in this behalf by the Finance Act of the year in which such deduction is required to be made.]

407[Explanation. For the purposes of this section and Section 20-A, the expression person responsible for paying means

(i) in the case of payments of income chargeable under the head Salaries other than payments by the Central Government or the Government of a State, the employer himself or if the employer is a company, the company itself including the principal officer thereof;

(ii) in the case of payments of income chargeable under the head Interest on securities , other than payments made by or on behalf of the Central Government or the Government of a State, the local authority or company including the principal officer thereof;

(iii) in the case of payment of interest not being Interest on securities , the payer himself or if the payer is a company, the company itself including the principal officer thereof].

408[18-A. Advance payment of tax. (1)(a) 409[In the case of income other than income chargeable under the head Salaries ], the Income-tax Officer may, on or after the 1st day of April in any financial year, by order in writing, require an assessee to pay quarterly to the credit of the Central Government on the 15th day of June, 15th day of September, 15th day of December and 15th day of March in that year, respectively, an amount equal to one-quarter of the income-tax and super-tax payable on so much of such income as is included in his total income of the latest previous year in respect of which he has been assessed, 410[if that total income exceeded the maximum amount not chargeable to tax in his case by two thousand five hundred rupees]. Such income-tax and super-tax shall be calculated at the rates in force for the financial year in which he is required to pay the tax, and shall bear to the total amount of income-tax and super-tax so calculated on the said total income the same proportion as the amount of such inclusions bears to his total income 411[the income-tax and super-tax so calculated shall be reduced by the amount of income-tax and super-tax which would be deductible during the said financial year in accordance with the provisions of Section 18 on any income (other than income chargeable under the head Salaries ) included in the said total income:] or, in cases where under the provisions of sub-section (1) of Section 17 both income-tax and super-tax or super-tax are chargeable with reference to the total world income, shall bear to the total amount of income-tax and super-tax which would have been payable on his total world income of the said previous year had it been his total income the same proportion as the amount of such inclusions bears to his total world income:

Provided that, where the previous year of the assessee in respect of any source of income ends after the 31st day of December and before the 30th day of April, the order in writing issued by the Income-tax Officer requiring the payment of income-tax and super-tax on that source of income shall substitute for the four quaterly payments hereinbefore specified, three payments of equal amount to be made on the 15th day of September, the 15th day of December and the 15th day of March, respectively:

Provided further that, if the assessee is a partner of a registered firm and an assessment of the firm has been completed for a previous year later than that for which the assessee's last assessment has been completed, his share in the profits of the firm shall, for the purposes of this sub-section, be included in his total income on the basis of the latest assessment of the firm:

Provided further that, if after the making of an order by the Income-tax Officer and before the 15th day of February of the financial year an assessment of the assessee or of the registered firm of which he is a partner is completed in respect of a previous year later than that referred to in the order of the Income-tax Officer, the Income-tax Officer may make an amended order requiring the assessee to pay in one instalment on the specified date, or in equal instalments on the specified dates if more than one, falling after the date of the amended order, the tax computed on the revised basis as reduced by the amount, if any, paid in accordance with the original order; but if the amount already paid exceeds the tax determined on the revised basis, the excess shall be refunded.

(b) If the notice of demand issued under Section 29 in pursuance of the order under clause (a) of this sub-section is served after any of the dates on which the instalments specified therein are payable, the tax shall be payable in equal instalments on each of such of those dates as fall after the date of the service of the notice of demand, or in one sum on the 15th day of March if the notice is served after the 15th day of December.

(2) If any assessee who is required to pay tax by an order under sub-section (1) estimates at any time before the last instalment is due that the part of his income to which that sub-section applies for the period which would be the previous year for an assessment for the year next following is less than the income on which he is required to pay tax and accordingly wishes to pay an amount less than the amount which he is so required to pay, he may send to the Income-tax Officer an estimate of the tax payable by him calculated in the manner laid down in sub-section (1) on that part of his income for such period, and shall pay such amount as accords with his estimate in equal instalments on such of the dates specified in sub-section (1)(a) as have not expired or in one sum if only the last of such dates has not expired:

Provided that the assessee may send a revised estimate of the tax payable by him before any one of the dates specified in sub-section (1)(a) and adjust any excess or deficiency in respect of any instalment already paid in a subsequent instalment or in subsequent instalments.

(3) Any person who has not hitherto been assessed shall, before the 15th day of March in each financial year, if his total income of the period which would be the previous year for an assessment for the financial year next following 412[is likely to exceed the maximum amount not chargeable to tax in his case by two thousand five hundred rupees], send to the Income-tax Officer an estimate of the tax payable by him on that part of his income 413[which is not chargeable under the head Salaries ] of the said previous year calculated in the manner laid down in sub-section (1), and shall pay the amount, on such of the dates specified in that sub-section as have not expired, by instalments which may be revised according to the proviso to sub-section (2).

(4) Where part of the income to which sub-section (1), (2) or (3) applies consists of any income of the nature of commission which is receivable periodically and is not received or adjusted by the payer in the assessee's account before any of the quaterly instalments of tax become due, he may defer payment of tax on that part of his income to the date on which such income would be normally received or adjusted and if he does so he shall communicate to the Income-tax Officer the date to which such payment is deferred:

Provided that, if the tax of which the payment is deferred is not paid within fifteen days of the date on which such income or part thereof is received or adjusted by the payer in the assessee's account, the tax shall be payable with six per cent. simple interest per annum from the date of such receipt or adjustment to the date of payment of the tax.

(5) 414[The Central Government shall pay simple interest

(i) at two per cent. per annum on any amount payable in accordance with the provisions of this section before the 1st day of April, 1955, and paid accordingly;

(ii) at four per cent. per annum on any amount payable in accordance with the provisions of this section after the 1st day of April, 1955, and paid accordingly;

from the date of payment] 415[to the date of the provisional assessment made under Section 23-B, or if no such assessment has been made,] to the date of the assessment (hereinafter called regular assessment ) made under Section 23 of the income, profits and gains of the previous year for an assessment for the year next following the year in which the amount was payable:

Provided that on any portion of such amount which is refunded under the foregoing provisions of this section interest shall be payable only up to the date on which the refund was made:

416[Provided further that for any period beginning with the 1st day of April, 1952, interest shall be payable only on the amount by which the aggregate sum of any instalments paid during any financial year in which they are payable under this section exceeds the amount of the tax determined on regular assessment calculated as hereunder

(i) in respect of such instalments paid in any financial year before the said date, from the said date to the date of the regular assessment;

(ii) in respect of such instalments paid after the said date, from the beginning of the financial year next following to the date of the regular assessment.]

(6) Where in any year an assessee has paid tax under sub-section (2) or sub-section (3) on the basis of his own estimate, and the tax so paid is less than eighty per cent. of the tax determined on the basis of the 417[regular assessment (reduced by the amount of tax deductible in accordance with the provisions of Section 18 on any income, other than income chargeable under the head Salaries , included in such assessment), so far as such tax relates to income other than income chargeable under the head Salaries ] and so far as it is not due to variations in the rates of tax made by the Finance Act enacted for the year for which the regular assessment is made, simple interest at the rate of six per cent. per annum from the 1st day of January in the financial year in which the tax was paid up to the date of the said regular assessment shall be payable by the assessee upon the amount by which the tax so paid falls short of the said eighty per cent.:

418[Provided that for any period after the 31st day of March, 1952 interest shall be payable at the rate of four per cent. per annum:]

419[Provided 420[further] that where a provisional assessment is made under Section 23-B, interest shall be calculated in accordance with the foregoing provision up to the date on which the tax as provisionally assessed is paid, and thereafter interest shall be calculated at the rate aforesaid on the amount by which the tax as so assessed (in so far as it relates to income 421[other than income chargeable under the head Salaries ]) falls short of the said eighty per cent.:]

Provided 422[also] that, where, as a result of an appeal under Section 31 or Section 33 or of a revision under Section 33-A or of a reference to the High Court under Section 66, the amount on which interest was payable under this sub-section has been reduced the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded together with the amount of income-tax that is refundable:

Provided further that, where a business, profession or vocation is newly set up and is assessable on the income, profits and gains of its first previous year in the financial year following that in which it is set up, the interest payable shall be computed from the 1st day of April of the said financial year:

423[Provided further that in such cases and under such circumstances as may be prescribed, the Income-tax Officer may reduce or waive the interest payable by the assessee.]

(7) Where, on making the regular assessment, the Income-tax Officer finds that any assessee has

(a) under sub-section (2) or sub-section (3) underestimated the tax payable by him and thereby reduced the amount payable in any of the first three instalments, or

(b) under sub-section (4) wrongly deferred the payment of tax on a part of this income,

he may direct that the assessee shall pay simple interest at six per cent. per annum, in the case referred to in clause (a) for the period during which the payment was deficient on the difference between the amount paid in each such instalment and the amount which should have been paid having regard to the aggregate tax actually paid under this section during the year, and in the case referred to in clause (b) for the period during which the payment of tax was wrongly deferred on the amount of which the payment was so deferred:

Provided that for the purposes of this sub-section any instalment due before the expiry of six months from the commencement of the previous year in respect of which it is to be paid shall be deemed to have become due fifteen days after the expiry of the said six months.

(8) Where, on making the regular assessment, the Income-tax Officer finds that no payment of tax has been made in accordance with the foregoing provisions of this section, interest calculated in the manner laid down in sub-section (6) shall be added to the tax as determined on the basis of the regular assessment.

(9) If the Income-tax Officer, in the course of any proceedings in connection with the regular assessment, is satisfied that any assessee

(a) has furnished under sub-section (2), or sub-section (3) estimates of the tax payable by him which he knew or had reason to believe to be untrue, or

(b) has without reasonable cause failed to comply with the provisions of sub-section (3),

the assessee shall be deemed, in the case referred to in clause (a), to have deliberately furnished inaccurate particulars of his income, and in the case referred to in clause (b), to have failed to furnish the return of his total income; and the provisions of Section 28, so far as may be, shall apply accordingly:

Provided that the amount of penalty leviable shall, in the case referred to in clause (a), be a sum not exceeding one-and-a-half times the amount by which the tax actually paid during the year under the provisions of this section falls short of the tax that should have been paid by the assessee under sub-section (1) or eighty per cent. of the tax determined on the basis of the regular assessment as modified in the manner provided in sub-section (6), whichever is the less, and, in the case referred to in clause (b), one-and-a-half times the said eighty per cent.

(10)(a) If any assessee does not pay on the specified dates any instalment of tax that he is required to pay under sub-section (1) and does not, before the date on which any such instalment as is not paid becomes due, send under sub-section (2) an estimate or a revised estimate of the tax payable by him, he shall be deemed to be an assessee in default in respect of such instalment or instalments.

(b) If any assessee has sent under sub-section (2) or sub-section (3) an estimate or a revised estimate of the tax payable by him, but does not pay any instalment in accordance therewith on the date or dates specified in sub-section (1), he shall be deemed to be an assessee in default in respect of such instalment or instalments:

Provided that the assessee shall not, under clause (a) or (b), be deemed to be in default in respect of any amount of which the payment is deferred under sub-section (4) until after the date communicated by him to the Income-tax Officer under that sub-section.

(11) Any sum other than a penalty or interest paid by or recovered from an assessee in pursuance of the provisions of this section shall be treated as a payment of tax in respect of the income of the period which would be the previous year for an assessment for the financial year next following the year in which it was payable, and credit therefor shall be given to the assessee in the regular assessment.]

424[(12) Any income chargeable under the head Capital gains shall not be taken into account for any of the purposes of this section.]

425[In the case of income in respect of which provision is not made under Section 18 for deduction of income-tax at the time of payment, and in any case where income-tax has not been deducted in accordance with the provisions of Section 18, income-tax shall be payable by the assessee direct.]

426[19-A. Supply of information regarding dividends. The principal officer of every company 427[which is an Indian company or a company which has made such effective arrangements as may be prescribed for the declaration and payment of dividends in 428[the taxable territories]] shall, on or before the 15th day of June in each year, furnish to the prescribed officer a return in the prescribed form and verified in the prescribed manner of the names and of the addresses, as entered in the register of shareholders maintained by the company, of the shareholders to whom a dividend or aggregate dividends exceeding such amount as may be prescribed in this behalf has or have been distributed during the preceding year and of the amount so distributed to each such shareholder.]

429[* * *]

430[20-A. Supply of information regarding interest. The person responsible for paying any interest not being Interest on Securities shall, on or before the fifteenth day of June in each year, furnish to the prescribed officer a return in the prescribed form and verified in the prescribed manner of the names and addresses of all persons to whom during the previous financial year he has paid interest or aggregate interest exceeding such amount not being less than 431[four hundred] rupees as may be prescribed in this behalf, together with the amount paid to each such person.]

The prescribed person in the case of every Government office, and the principal officer or the prescribed person in the case of every local authority, company or other public body or association, and every private employer shall prepare, and, within thirty days from the 31st day of March in each year, deliver or cause to be delivered o the Income-tax Officer in the prescribed form 432[and verified in the prescribed manner], a return in writing showing

(a) the name and, so far as it is known, the address, of every person who was receiving on the said 31st day of March, or has received 433[or to whom was due] during the year ending on that date, from the authority, company, body, association or private employer, as the case may be, any income chargeable under the head Salaries of such amount as may be prescribed;

(b) the amount of the income so received 434[or so due] by each such person, and the time or times at which the same was paid 435[or due, as the case may be];

(c) the amount deducted in respect of income-tax 436[and super-tax] from the income of each such person.

437(1) The Income-tax Officer shall, on or before the 1st day of May in each year, give notice, by publication in the press and by publication in the prescribed manner, requiring every person whose total income during the previous year exceeded the maximum amount which is not chargeable to income-tax to furnish, within such period not being less than sixty days as may be specified in the notice, a return, in the prescribed form and verified in the prescribed manner, setting forth (along with such other particulars as may be required by the notice) his total income and total world income during that year:

Provided that the Income-tax Officer may in his discretion extend the date for the delivery of the return in the case of any person or class of persons.]

(2) In the case of any person 438[* * *] whose total income is, in the Income-tax Officer's opinion, of such an amount as to render such person liable to income-tax, the Income-tax Officer 439[may serve] a notice upon him requiring him to furnish, within such period, not being less than thirty days, as may be specified in the notice, a return in the prescribed form and verified in the prescribed manner setting forth (along with such other particulars as may be provided for in the notice) his total income 440[and total world income] during the previous year:

441[Provided that the Income-tax Officer may in his discretion extend the date for the delivery of the return.]

442[(2-A) If any person, who has not been served with a notice under sub-section (2) has sustained a loss of profits or gains in any year under the head Profits and gains of business, profession or vocation , and such loss or any part thereof would ordinarily have been carried forward under sub-section (2) of Section 24, he shall, if he is to be entitled to the benefit of the carry forward of loss in any subsequent assessment, furnish within the time specified in the general notice given under sub-section (1) or within such further time as the Income-tax Officer in any case may allow, all the particulars required under the prescribed form of return of total income and total world income in the same manner as he would have furnished a return under sub-section (1) had his income exceeded the maximum amount not liable to income-tax in his case, and all the provisions of this Act shall apply as if it were a return under sub-section (2).]

(3) If any person has not furnished a return within the time allowed by or under sub-section (1) or sub-section (2), or having furnished a return under either of those sub-sections, discovers any omission or wrong statement therein, he may furnish a return or a revised return, as the case may be, at any time before the assessment is made 443[* * *].

(4) The Income-tax Officer may serve 444[* * *] on any person 445[who has made a return under sub-section (1) or] upon whom a notice has been served under sub-section (2) a notice requiring him, on a date to be therein specified, to produce, or cause to be produced, such accounts or documents as the Income-tax Officer may require 446[or to furnish in writing and verified in the prescribed manner information in such form and on such points or matters (including, with the previous approval of the Commissioner, a statement of all assets and liabilities not included in the accounts) as the Income-tax Officer may require for the purposes of this section]:

Provided that the Income-tax Officer shall not require the production of any accounts relating to a period more than three years prior to the previous year.

447[(5) The prescribed form of the returns referred to in sub-sections (1) and (2) shall, in the case of an assessee engaged in any business, profession or vocation, require him to furnish particulars of the location and style of the principal place wherein he carries on the business, profession or vocation and of any branches thereof, the names and addresses of his partners, if any, in such business, profession or vocation and the extent of the share of the assessee and the shares of all such partners in the profits of the business, profession or vocation and any branches thereof.]

(1) If the Income-tax Officer is satisfied 448[without requiring the presence of the assessee or the production by him of any evidence] that a return made under Section 22 is correct and complete, he shall assess the total income of the assessee, and shall determine the sum payable by him on the basis of such return.

(2) If the Income-tax Officer 449[is not satisfied without requiring the presence of the person who made the return or the production of evidence that a return made under Section 22 is correct and complete, he shall serve on such person] a notice requiring him, on a date to be therein specified, either to attend at the Income-tax Officer's Office or to produce, or to cause to be there produced, any evidence on which such person may rely in support of the return.

(3) On the day specified in the notice issued under sub-section (2), or as soon afterwards as may be, the Income-tax Officer, after hearing such evidence as such person may produce and such other evidence as the Income-tax Officer may require, on specified points, shall, by an order in writing, assess the total income of the assessee, and determine the sum payable by him on the basis of such assessment.

(4) 450[If any person fails to make the return required by any notice given under sub-section (2) of Section 22 and has not made a return or a revised return under sub-section (3) of the same section], or fails to comply with all the terms of a notice issued under sub-section (4) of the same section or, having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of this section, the Income-tax Officer shall make the assessment to the best of his judgment 451[and determine the sum payable by the assessee on the basis of such assessment] 452[and, 453[in the case of a firm, may refuse to register it or may cancel its registration if it is already registered]]:

454[Provided that the registration of a firm shall not be cancelled until fourteen days have elapsed from the issue of a notice by the Income-tax Officer to the firm intimating his intention to cancel its registration.]

455[(5) Notwithstanding anything contained in the foregoing sub-sections when the assessee is a firm and the total income of the firm has been assessed under sub-section (1), sub-section (3) or sub-section (4), as the case may be,

(a) in the case of a registered firm,

456[(i) the income-tax payable by the firm itself shall be determined; and

(ii) the total income of each partner of the firm, including therein his share of its income, profits and gains of the previous year, shall be assessed and the sum payable by him on the basis of such assessment shall be determined:]

Provided that if such share of any partner is a loss it shall be set off against his other income or carried forward and set off in accordance with the provisions of Section 24:

Provided further that when any of such partners is a person not resident in 457[the taxable territories], his share of the income, profits and gains of the firm shall be assessed on the firm at the rates which would be applicable if it were assessed on him personally, and the sum so determined as payable shall be paid by the firm:

458[Provided also that if at the time of assessment of any partner of a registered firm, the Income-tax Officer is of opinion that the partner is residing in Pakistan, the partner's share of the income, profits and gains of the firm shall be assessed on the firm in the manner laid down in the preceding proviso and the sum so determined as payable shall be paid by the firm; and]

459[(b) in the case of an unregistered firm, the Income-tax Officer may, instead of determining the sum payable by the firm itself, proceed to assess the total income of each partner of the firm, including therein his share of its income, profits and gains of the previous year, and determine the tax payable by each partner on the basis of such assessment, if, in the Income-tax Officer's opinion, the aggregate amount of the tax including super-tax if any, payable by the partners under such procedure would be greater than the aggregate amount which would be payable by the firm and the partners individually, if separately assessed; and where the procedure specified, in this clause is applied to any unregistered firm, the provisos to clause (a) of this sub-section shall apply thereto as they apply in the case of a registered firm;]]

460[(6) Whenever the Income-tax Officer makes a determination in accordance with the provisions of sub-section (5), he shall notify to the firm by an order in writing the amount of the total income on which the determination has been based and the apportionment thereof between the several partners.]

461[23-A. Power to assess companies to super-tax on undistributed income in certain cases. 462[(1) Where the Income-tax Officer is satisfied that in respect of any previous year the profits and gains distributed as dividends by any company within the twelve months immediately following the expiry of that previous year are less than the statutory percentage of the total income of the company of that previous year as reduced by

(a) the amount of income-tax and super-tax payable by the company in respect of its total income, but excluding the amount of any super-tax payable under this section;

(b) the amount of any other tax levied under any law for the time being in force on the company by the Government or by a local authority in excess of the amount, if any, which has been allowed in computing the total income; and

(c) in the case of a banking company, the amount actually transferred to a reserve fund under Section 17 of the Banking Companies Act, 1949 (10 of 1949);

the Income-tax Officer shall 463[unless he is satisfied

(i) that, having regard to the losses incurred by the company in earlier years or to the smallness of the profits made in the previous year, the payment of a dividend or a larger dividend than that declared would be unreasonable; or

(ii) that the payment of a dividend or a larger dividend than that declared would not have resulted in a benefit to the revenue; 464[or]]

465[(iii) that at least 75 per cent. of the share capital of the company is throughout the previous year beneficially held by an institution or fund established in the taxable territories for a charitable purpose the income whereof is exempt under clause (i) of sub-section (3) of Section 4;]

make an order in writing that the company shall, apart from the sum determined as payable by it on the basis of the assessment under Section 23, be liable to pay super-tax at the rate of fifty per cent. in the case of a company whose business consists wholly or mainly in the dealing in or holding of investments, and at the rate of thirty-seven per cent. in the case of any other company on the undistributed balance of the total income of the previous year, that is to say, on the total income as reduced by the amounts, if any, referred to in clause (a), clause (b) or clause (c) and the dividends actually distributed, if any.

(2) No order under sub-section (1) shall be made,

(i) in the case of a company whose business consists wholly or mainly in the dealing in or holding of investments which has distributed not less than 466[eighty per cent.] of its total income as reduced by the amounts, if any, referred to in clause (a), clause (b) or clause (c) of sub-section (1); or

(ii) in the case of any other company whose distribution falls short of the statutory percentage by not more than five per cent. of its total income as reduced by the amounts, if any, aforesaid; or

(iii) in any case where according to the return made by a company under Section 22 it has distributed not less than the statutory percentage of its total income as reduced by the amounts, if any, aforesaid, but in the assessment made by the Income-tax Officer under Section 23 a higher total income is arrived at and the difference in the total income does not arise out of the application of the proviso to Section 13 or sub-section (4) of Section 23 or the omission by the company to disclose its income fully and truly;

unless the company, on receipt of a notice from the Income-tax Officer that he proposes to make such an order, fails to make within three months of the receipt of such notice a further distribution of its profits and gains so that the total distribution made is not less than the statutory percentage of the total income of the company as reduced by the amounts, if any, aforesaid.]

467[* * *]

(8) 468[* * *] No order shall be made by the Income-tax Officer under sub-section (1) unless the previous approval of the Inspecting Assistant Commissioner of Income-tax has been obtained, and the Inspecting Assistant Commissioner shall not give his approval to any order proposed to be made by the Income-tax Officer until he has given the company concerned an opportunity of being heard.

(9) Nothing contained in this section shall apply to any company in which the public are substantially interested or to a subsidiary company of such company if the whole of the share capital of such subsidiary company has been held by the parent company or by its nominees throughout the previous year.

469[Explanation 1]. For the purposes of this section, a company shall be deemed to be a company in which the public are substantially interested

(a) if it is a company owned by the Government or in which not less than forty per cent. of the shares are held by the Government;

(b) if it is not a private company as defined in the Indian Companies Act, 1913 (7 of 1913)470, and

(i) its shares (not being shares entitled to a fixed rate of dividend, whether with or without a further right to participate in profits) carrying not less than fifty per cent. of the voting power have been allotted unconditionally to, or acquired unconditionally by, and were throughout the previous year beneficially 471[held by the Government or a corporation established by a Central, State or Provincial Act or the public] (not including a company to which the provisions of this 472[section] apply:

Provided that in the case of any such company as is referred to in 473[clause (ii) of Explanation 2], this sub-clause shall apply as if for the words not less than fifty per cent. , the words not less than forty per cent. had been substituted;

(ii) the said shares were at any time during the previous year the subject of dealings in any recognised stock exchange in India or were freely transferable by the holder to other members of the public; and

(iii) the affairs of the company or the shares carrying more than fifty per cent. of the total voting power were at no time during the previous year controlled or held by less than six persons 474[and in computing the number of six persons aforesaid, the Government or any corporation established by a Central, State or Provincial Act or a company to which the provisions of this section do not apply shall not be taken into account, and persons who are relatives of one another and persons who are nominees of any other person together with that other person shall be treated as a single person, the expression relative in this context meaning husband, wife, lineal ascendant or descendant, brother or sister]:

Provided that in the case of any such company as is referred to in 475[clause (ii) of Explanation 2], this clause shall apply as if for the words more than fifty per cent. , the words more than sixty per cent. had been substituted.]

476[Explanation 2. For the purposes of this section, statutory percentage means,

482[23-B. Power to make provisional assessment in advance of regular assessment. (1) The Income-tax Officer may, at any time after the receipt of a return made under Section 22, proceed to make in a summary manner, a provisional assessment of the tax payable by the assessee, on the basis of his return and the accounts and documents, if any, accompanying it, after giving due effect to (i) the allowance referred to in paragraph (b) of the proviso to clause (vi) of sub-section (2) of Section 10, and (ii) any loss carried forward under sub-section (2) of Section 24.

(2) A partner of a firm may be provisionally assessed under sub-section (1) in respect of his share in the firm's income, profits and gains, if its return has been received, although the return of the partner himself may not have been received.

(3) A firm may be provisionally assessed under sub-section (1) as if it were an unregistered firm, unless the firm fulfils such conditions as the Central Government may, by notification in the Official Gazette, specify in that behalf.

(4) There shall be no right of appeal against a provisional assessment made under sub-section (1).

(5) For the avoidance of doubt, it is hereby declared that the provisions of Section 45 (except the first proviso) and Section 46 apply in relation to any tax payable in pursuance of a provisional assessment made under sub-section (1) as if it were a regular assessment made under Section 23.

(6) Income-tax paid 483[* * *] under Section 18 or Section 18-A in respect of any income provisionally assessed under sub-section (1), shall be deemed to have been paid towards the provisional assessment.

(7) After a regular assessment has been made under Section 23, any amount paid or deemed to have been paid towards a provisional assessment made under sub-section (1), shall be deemed to have been paid towards the regular assessment; and where the amount paid or deemed to have been paid towards the provisional assessment, exceeds the amount payable under the regular assessment, the excess shall be refunded to the assessee.

(8) Nothing done or suffered by reason or in consequence of any provisional assessment made under this section shall prejudice the determination on the merits, of any issue which may arise in the course of the regular assessment under Section 23.]

(1) Where any assessee sustains a loss of profits or gains in any year under any of the heads mentioned in Section 6, he shall be entitled to have the amount of the loss set off against his income, profits or gains under any other head in that year:

484[* * *]

485[Provided 486[* * *] that in computing the profits and gains chargeable under the head Profits and gains of business, profession or vocation , any loss sustained in speculative transactions which are in the nature of a business shall not be taken into account except to the extent of the amount of profits and gains, if any, in any other business consisting of speculative transactions:]

487[Provided 488[further] that where the assessee is an unregistered firm which has not been assessed under the provisions of clause (b) of sub-section (5) of Section 23 489[* * *], any such loss shall be set-off only against the income, profits and gains of the firm and not against the income, profits and gains of any of the partners of the firm; and where the assessee is a registered firm, any loss which cannot be set off against other income, profits and gains of the firm shall be apportioned between the partners of the firm and they alone shall be entitled to have the amount of the loss set off under this section.]

490[Explanation 1. Where the speculative transactions carried on are of such a nature as to constitute a business, the business shall be deemed to be distinct and separate from any other business.

Explanation 2. A speculative transaction means a transaction in which a contract for purchase and sale of any commodity including stocks and shares is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips:

Provided that for the purposes of this section,

(a) a contract in respect of raw materials or merchandise entered into by a person in the course of his manufacturing or merchanting business to guard against loss through future price fluctuations in respect of his contracts for actual delivery of goods manufactured by him or merchandise sold by him; or

(b) a contract in respect of stocks and shares entered into by a dealer or investor therein to guard against loss in his holdings of stocks and shares through price fluctuations; or

(c) a contract entered into by a member of a forward market or a stock exchange in the course of any transaction in the nature of jobbing or arbitrage to guard against loss which may arise in the ordinary course of his business as such member;

shall not be deemed to be a speculative transaction.]

491[(2) 492[Where any assessee sustains a loss of profits or gains in any year, being a previous year not earlier than the previous year for the assessment for the year ending on the 31st day of March, 1940, in any business, profession or vocation, and the loss cannot be wholly set off under sub-section (1), so much of the loss as is not so set off or the whole loss where the assessee had no other head of income shall be carried forward to the following year, and

(i) where the loss was sustained by him in a business consisting of speculative transactions, it shall be set off only against the profits and gains, if any, of any business in speculative transactions carried on by him in that year;

(ii) where the loss was sustained by him in any other business, profession or vocation, it shall be set off against the profits and gains, if any, of any business, profession or vocation carried on by him in that year: provided that the business profession or vocation in which the loss was originally sustained continued to be carried on by him in that year; and

(iii) if the loss in either case cannot, be wholly so set off, the amount of loss not so set off shall be carried forward to the following year and so on;] 493[but no loss shall be so carried forward for more than eight years]:]

494[Provided that

495[* * *]

496[(b)] Where depreciation allowance is, under clause (b) of the proviso to clause (vi) of sub-section (2) of Section 10, also to be carried forward, effect shall first be given to the provisions of this sub-section;

497[498[(c)]] Nothing herein contained shall entitle any assessee being a registered firm, to have carried forward and set off any loss which has been apportioned between the partners, under the proviso to sub-section (1), or entitle any assessee, being a partner in an unregistered firm which has not been assessed under the provisions of clause (b) of sub-section (5) of Section 23 499[* * *], to have carried forward and set off against his own income any loss sustained by the firm;

500[501[(d]] Where an unregistered firm is assessed 502[* * *], under clause (b) of sub-section (5) of Section 23, during any year, its losses shall also be carried forward and set off under this section as if it were a registered firm;

503[504[(e)]] Where a change has occurred in the constitution of a firm, nothing in this section shall be deemed to entitle the firm to have set off so much of the loss proportionate to the share of a retired or deceased partner computed in accordance with the provisions of clause (b) of sub-section (1) of Section 16 as exceeds his share of profits, if any, of the previous year in the firm, or to entitle any partner to the benefit of any portion of the said loss which is not apportionable to him under the said clause (b), and where any person carrying on any business, profession or vocation has been succeeded in such capacity by another person, otherwise than by inheritance, nothing in this section shall be deemed to entitle any person other than the person incurring the loss to have it set off against his income, profits or gains;]

505[(f) A loss arising in the previous years for the assessment for the years ending on the 31st day of March of the years 1940, 1941, 1942, 1943 and 1944 shall be carried forward for one, two, three, four and five years respectively and a loss arising in the previous years for the assessment for the years ending on the 31st day of March of the years 1945, 1946, 1947, 1948 and 1949 shall be carried forward for six years, and such loss shall be set off only against the profits and gains, if any, of the assessee from the same business, profession or vocation.]

506[(2-A)] Notwithstanding anything contained in sub-section (1), where the loss sustained is a loss falling under the head Capital gains , such loss shall not be set off except against any profits and gains falling under that head.

(2-B) Where an assessee sustains a loss such as is referred to in sub-section (2-A) and the loss cannot be wholly set off in accordance with the provisions of that sub-section, the portion not so set off shall be carried forward to the following year and set off against capital gains for that year, and if it cannot be so set off, the amount thereof not so set off shall be carried forward to the following year and so on, 507[so however that no such loss shall be carried forward for more than eight years] 508[* * *]:

509[Provided that where the loss sustained by an assessee, not being a company, in any previous year does not exceed five thousand rupees, it shall not be carried forward.]]

(3) When, in the course of the assessment of the total income of any assessee, it is established that a loss of profits or gains has taken place which he is entitled to have set off under the provisions of this section, the Income-tax Officer shall notify to the assessee by order in writing the amount of the loss as computed by him for the purposes of this section.]

510[24-A. Assessment in case of departure from the taxable territories. (1) When it appears to the Income-tax Officer that any person may leave 511[the taxable territories] during the current financial year, or shortly after its expiry, and that he has no present intention of returning, the Income-tax Officer may proceed to assess him on his total income 512[of the period from the expiry of the last previous year of which the income has been assessed in his hands to the probable date of his departure from 513[the taxable territories], or where he has not been previously assessed, on his total income of the period up to the probable date of his departure from 514[the taxable territories]. The assessment shall be made on the total income of each completed previous year included in such period at the rate at which such income would have been charged had it been fully assessed, and as respects the period from the expiry of the last of such completed previous years to the probable date of departure the Income-tax Officer shall estimate the total income of such person during such period and assess it at the rate in force for the financial year in which such assessment is made]:

Provided that nothing herein contained shall authorise an Income-tax Officer to assess any income, profits or gains which have escaped assessment 515[or have been under-assessed, or have been assessed at too low a rate, or have been the subject of excessive relief under this Act but] in respect of which he is debarred from issuing a notice under Section 34.

(2) For the purpose of making an assessment under sub-section (1), the Income-tax Officer may serve a notice upon such person requiring him to furnish, within such time not being less than seven days as may be specified in the notice, a return in the same form and verified in the same manner as a return under sub-section (2) of Section 22, setting forth (along with such other particulars as may be provided for in the notice) his total income for each of the completed previous years 516[comprised in the relevant period referred to in the first sentence of] sub-section (1) and his estimated total income for the period from the expiry of the last such completed previous year to the probable date of his departure; and the provisions of this Act shall, so far as may be, apply as if the notice were a notice issued under sub-section (2) of Section 22.

24-B. Tax of deceased person payable by representative. (1) Where a person dies, his executor, administrator or other legal representative shall be liable to pay out of the estate of the deceased person to the extent to which the estate is capable of meeting the charge the tax assessed as payable by such person, or any tax which would have been payable by him under this Act if he had not died.

517[(2) Where a person dies before the publication of the notice referred to in sub-section (1) of Section 22 or before he is served with a notice under sub-section (2) of Section 22 or Section 34, as the case may be, his executor, administrator or other legal representative shall, on the serving of the notice under sub-section (2) of Section 22 or under Section 34, as the case may be, comply therewith, and the Income-tax Officer may proceed to assess the total income of the deceased person as if such executor, administrator or other legal representative were the assessee.

(3) Where a person dies, without having furnished a return which he has been required to furnish under the provisions 518[* * *] of Section 22, or having furnished a return which the Income-tax Officer has reason to believe to be incorrect or incomplete, the Income-tax Officer may make an assessment of the total income of such person and determine the tax payable by him on the basis of such assessment, and for this purpose may 519[, by the issue of the appropriate notice which would have had to be served upon the deceased person had he survived,] require from the executor, administrator or other legal representative of the deceased person any accounts, documents or other evidence which he might under the provisions of Sections 22 and 23 have required from the deceased person.]

(1) Where any business, profession or vocation 520[to which sub-section (3) is not applicable], is discontinued in any year, an assessment may be made in that year on basis of the income, profits or gains of the period between the end of the previous year and the date of such discontinuance in addition to the assessment, if any, made on the basis of the income, profits or gains of the previous year.

(2) Any person discontinuing any such business, profession or vocation shall give to the Income-tax Officer notice of such discontinuance within fifteen days thereof, and, where any person fails to give the notice required by this sub-section, the Income-tax Officer may direct that a sum shall be recovered from him by way of penalty not exceeding the amount of tax subsequently assessed on him in respect of any income, profits or gains of the business, profession or vocation up to the date of its discontinuance.

(3) Where any business, profession or vocation 521[* * *] on which tax was at any time charged under the provisions of the Indian Income-tax Act, 1918 (7 of 1918), is discontained, 522[then, unless there has been a succession by virtue of which the provisions of sub-section (4) have been rendered applicable,] no tax shall be payable in respect of the income, profits and gains of the period between the end of the previous year and the date of such discontinuance, and the assessee may further claim that the income, profits and gains of the previous year shall be deemed to have been the income, profits and gains of the said period. Where any such claim is made, an assessment shall be made on the basis of the income, profits and gains of the said period, and if an amount of tax has already been paid in respect of the income, profits and gains of the previous year exceeding the amount payable on the basis of such assessment, a refund shall be given of the difference.

523[(4) Where the person who was at the commencement of the Indian Income-tax (Amendment) Act, 1939 (7 of 1939), carrying on any business, profession or vocation on which tax was at any time charged under the provisions of the Indian Income-tax Act, 1918 (7 of 1918), is succeeded in such capacity by another person, the change not being merely a change in the constitution of a partnership, no tax shall be payable by the first mentioned person in respect of the income, profits and gains of the period between the end of the previous year and the date of such succession, and such person may further claim that the income, profits and gains of the previous year shall be deemed to have been the income, profits and gains of the said period. Where any such claim is made, an assessment shall be made on the basis of the income, profits and gains of the said period, and, if an amount of tax has already been paid in respect of the income, profits and gains of the previous year exceeding the amount payable on the basis of such assessment, a refund shall be given of the difference:

524[Provided that sub-sections (3) and (4) shall not apply

(a) to super-tax except where the income, profits and gains of the business, profession or vocation were assessed to super-tax for the first time either for the year beginning on the 1st day of April, 1920, or for the year beginning on the 1st day of April, 1921;

(b) to a business, profession or vocation on which income-tax was at any time charged in the hands of a company under the Indian Income-tax Act, 1886 (2 of 1886), or on which income-tax would have been charged in the hands of a company for the assessment year ending on the 31st day of March, 1918, if the company having been in existence in that year had also been in existence in the year ending on the 31st day of March, 1917.]

(5) No claim to the relief afforded under sub-section (3) or sub-section (4) shall be entertained unless it is made before the expiry of one year from the date on which the business, profession or vocation was discontinued or the succession took place, as the case may be.]

525[(6)] Where an assessment is to be made under 526[sub-section (1), sub-section (3) or sub-section (4)], the Income-tax Officer may serve on the person whose income, profits and gains are to be assessed, or, in the case of a firm, on any person who was a member of such firm at the time of its discontinuance, or, in the case of a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of Section 22, and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section.

527[25-A. Assessment after partition of a Hindu undivided family. (1) Where, at the time of making an assessment under Section 23, it is claimed by or on behalf of any member of a Hindu family hitherto 528[assessed as] undivided that a partition has taken place among the members of such family, the Income-tax Officer shall make such inquiry thereinto as he may think fit, and, if he is satisfied 529[* * *] that the joint family property has been partitioned among the various members or groups of members in definite portions, 530[* * *] he shall record an order to that effect:

Provided that no such order shall be recorded until notices of the inquiry have been served on all the members of the family.

(2) Where such an order has been passed, 531[or where any person has succeeded to a business, profession or vocation formerly carried on by a Hindu undivided family whose joint family property has been partitioned on or after the last day on which it carried on such business, profession or vocation], the Income-tax Officer shall make an assessment of the total income received by or on behalf of the joint family as such, as if no 532[* * *] partition had taken place, and each member or group of members shall, in addition to any income-tax for which he or it may be separately liable and notwithstanding anything contained in sub-section (1) of Section 14, be liable for a share of the tax on the income so assessed according to the portion of the joint family property allotted to him or it; and the Income-tax Officer shall make assessments accordingly on the various members and groups of members in accordance with the provisions of Section 23:

Provided that all the 533[members and groups of members whose joint family property has been partitioned] shall be liable jointly and severally for the tax assessed on the total income received by or on behalf of the joint family as such.]

534[(3) Where such an order has not been passed in respect of a Hindu family hitherto assessed as undivided, such family shall be deemed, for the purposes of this Act, to continue to be a Hindu undivided family.]

535[(1) Where, at the time of making an assessment under Section 23, it is found that a change has occurred in the constitution of a firm or that a firm has been newly constituted, 536[the assessment shall be made on the firm as constituted] at the time of making the assessment:

537[Provided that the income, profits and gains of the previous year shall, for the purpose of inclusion in the total incomes of the partners, be apportioned between the partners who in such previous year were entitled to receive the same:

Provided further that when the tax assessed upon a partner cannot be recovered from him it shall be recovered from the firm as constituted at the time of making the assessment.]

538[(2) Where a person carrying on any business, profession or vocation has been succeeded in such capacity by another person, such person and such other person shall, subject to the provisions of sub-section (4) of Section 25, each be assessed in respect of his actual share, if any, of the income, profits and gains of the previous year:

Provided that, when the person succeeded in the business, profession or vocation cannot be found, the assessment of the profits of the year in which the succession took place up to the date of succession, and for the year preceding that year shall be made on the person succeeding him in like manner and to the same amount as it would have been made on the person succeeded or when the tax in respect of the assessment made for either of such years assessed on the person succeeded cannot be recovered from him, it shall be payable by and recoverable from the person succeeding, and such person shall be entitled to recover from the person succeeded the amount of any tax so paid.]]

539[26-A. Procedure in registration of firms. (1) Application may be made to the Income-tax Officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purposes of this Act and of any other enactment for the time being in force relating to income-tax or super-tax.

(2) The application shall be made by such person or persons, and at such times and shall contain such particulars and shall be in such form, and be verified in such manner, as may be prescribed; and it shall be dealt with by the Income-tax Officer in such manner as may be prescribed.]

Where an assessee 540[* * *] within one month from the service of a notice of demand issued as hereinafter provided, satisfies the Income-tax Officer that he was prevented by sufficient cause from making the return required by Section 22, or that he did not receive the notice issued under sub-section (4) of Section 22, or sub-section (2) of Section 23, or that he had not a reasonable opportunity to comply, or was prevented by sufficient cause from complying, with the terms of the last-mentioned notices, the Income-tax Officer shall cancel the assessment and proceed to make a fresh assessment in accordance with the provisions of Section 23.

541[542[(1) If the Income-tax Officer, the Appellate Assistant Commissioner [543or the Appellate Tribunal], in the course of any proceedings under this Act, is satisfied that any person

(a) has without reasonable cause failed to furnish the return of his total income which he was required to furnish by notice given under sub-section (1) or sub-section (2) of Section 22 or Section 34 or has without reasonable cause failed to furnish it within the time allowed and in the manner required by such notice, or

(b) has without reasonable cause failed to comply with a notice under sub-section (4) of Section 22 or sub-section (2) of Section 23, or

(c) has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income,

544[he or it may direct] that such person shall pay by way of penalty, in the case referred to in clause (a), in addition to the amount of the income-tax and super-tax, if any, payable by him, a sum not exceeding one and a half times that amount, and in the cases referred to in clauses (b) and (c), in addition to any tax payable by him, a sum not exceeding one and a half times the amount of the income-tax and super-tax, if any, which would have been avoided if the income as returned by such person had been accepted as the correct income:

Provided that

(a) no penalty for failure to furnish the return of his total income shall be imposed on an assessee whose total income is less than three thousand five hundred rupees unless he has been served with a notice under sub-section (2) of Section 22;

(b) where a person has failed to comply with a notice under sub-section (2) of Section 22 or Section 34 and proves that he has no income liable to tax, the penalty imposable under this sub-section shall be a penalty not exceeding twenty-five rupees;

(c) no penalty shall be imposed under this sub-section upon any person assessable under Section 42 as the agent of a person not resident in 545[the taxable territories] for failure to furnish the return required under Section 22 unless a notice under sub-section (2) of that section or under Section 34 has been served on him;]

546[(d) 547[when the person liable to penalty is a registered firm or an unregistered firm which has been assessed under clause (b) of sub-section (5) of Section 23, then, notwithstanding anything contained in the other provisions of this Act, the amount of income-tax and super-tax payable by the firm itself shall be taken to be] an amount equal to the tax which would have been payable by an unregistered firm on an income equal to the firm's total income, and, in the cases referred to in clauses (b) and (c), the amount of the income-tax and super-tax which would have been avoided if the income as returned had been accepted as the correct income, shall be taken to be the difference between the amount of the tax which would have been payable by an unregistered firm on an income equal to the firm's total income and the amount of the tax payable by an unregistered firm on an income equal to the income of the firm as actually returned by the firm.]

(2) If the Income-tax Officer, the 548[Appellate Assistant Commissioner] 549[or the Appellate Tribunal], in the course of any proceedings under this Act, is satisfied that the profits of a registered firm have been distributed otherwise than in accordance with the shares of the partners as shown in the instrument of partnership registered under this Act governing such distribution, and that any partner has thereby returned his income below its real amount, 550[he or it may direct] that such partner shall, 551[in addition to the income-tax and super-tax, if any, payable by him], pay by way of penalty a sum 552[not exceeding one and a half times the amount of income-tax and super-tax] which has been avoided, or would have been avoided if the income returned by such partner had been accepted as his correct income; and no refund or other adjustment shall be claimable by any other partner by reason of such direction.

(3) No order shall be made under sub-section (1) or sub-section (2), unless the assessee or partner, as the case may be, has been heard, or has been given a reasonable opportunity of being heard.

(4) No prosecution for an offence against this Act shall be instituted in respect of the same facts on which a penalty has been imposed under this section.

(5) An 553[Appellate Assistant Commissioner] 554[or the Appellate Tribunal on making] an order under sub-section (1) or sub-section (2), shall forthwith send a copy of the same to the Income-tax Officer.]

555[(6) The Income-tax Officer shall not impose any penalty under this section without the previous approval of the Inspecting Assistant Commissioner.]

556[When any 557[tax, penalty or interest] is due in consequence of any order passed under or in pursuance of this Act, the Income-tax Officer shall serve upon the assessee or other person liable to pay such 558[tax, penalty or interest] a notice of demand in the prescribed form specifying the sum so payable.]

(1) Any assessee objecting to the amount 559[of income assessed under Section 23 or Section 27, or the amount of loss computed under Section 24 or the amount of tax determined under Section 23 or Section 27], or denying his liability to be assessed under this Act, 560[or objecting to the cancellation by an Income-tax Officer of the registration of a firm under sub-section (4) of Section 23 or to a refusal to register a firm under sub-section (4) of Section 23 or Section 26-A], 561[or] to make a fresh assessment under Section 27, or 562[objecting] to any order 563[* * *] under sub-section (2) of Section 25 564[or Section 25-A] 565[or sub-section (2) of Section 26] or Section 28, made by an Income-tax Officer 566[or objecting to any penalty imposed by an Income-tax Officer under sub-section (6) of Section 44-E or sub-section (5) of Section 44-F or sub-section (1) of Section 46], 567[or objecting to a refusal of an Income-tax Officer to allow a claim to a refund under Section 48, 49 or 49-F, or to the amount of the refund allowed by the Income-tax Officer under any of those sections, and any assessee, being a company, objecting to an order made by an Income-tax Officer under sub-section (1) of Section 23-A], may appeal to the 568[Appellate Assistant Commissioner] against the assessment or against such refusal or order:

569[Provided that no appeal shall lie against an order under sub-section (1) of Section 46 unless the tax has been paid:

Provided further that where the partners of a firm are individually assessable on their shares in the total income of the firm, any such partner may appeal to the Appellate Assistant Commissioner against any order of an Income-tax Officer determining the amount of the total income or the loss of the firm or the apportionment thereof between the several partners, but in respect of matters which are determined by such order may not appeal against the assessment of his own total income:

Provided further that a shareholder in a company in respect of which an order under Section 23-A has been passed by an Income-tax Officer, may not in respect of matters determined by such order appeal against the assessment of his own total income.]

570[(1-A) Any person having, in accordance with the provisions of sub-section 571[* * *] (3-B) 572[* * *] of Section 18, read with sub-section (6) of that section, deducted and paid tax in respect of any sum chargeable under this Act other than interest who denies his liability to make such deduction may appeal to the Appellate Assistant Commissioner to be declared not liable to make such deduction.]

(2) The appeal shall ordinarily be presented within thirty days 573[of the payment of the tax deducted under sub-section (3-A), (3-B) or (3-C) of Section 18 or] of receipt of the notice of demand relating to the assessment or penalty objected to 574[or of the order in writing notifying the amount of total income on which the determination under sub-section (5) of Section 23 was based and the apportionment thereof between the several partners or of the loss computed under Section 24] 575[or of the intimation of the refusal 576[to pass an order under sub-section (1) of Section 25-A, or] to register a firm under Section 26-A,] or of the date of the refusal to make a fresh assessment under Section 27, 577[or of the intimation of an order under sub-section (1) of Section 23-A or under Section 48, 49 or 49-F], as the case may be; but the 578[Appellate Assistant Commissioner] may admit an appeal after the expiration of the period if he is satisfied that the appellant had sufficient cause for not presenting it within that period.

(3) The appeal shall be in the prescribed form and shall be verified in the prescribed manner.

(1) The 579[Appellate Assistant Commissioner] shall fix a day and place for the hearing of the appeal, and may from time to time adjourn the hearing.

(2) The 580[Appellate Assistant Commissioner] may, before disposing of any appeal, make such further inquiry as he thinks fit, or cause further inquiry to be made by the Income-tax Officer.

581[(2-A) The Appellate Assistant Commissioner may, at the hearing of an appeal, allow an appellant to go into any ground of appeal not specified in the grounds of appeal, if the Appellate Assistant Commissioner is satisfied that the omission of that ground from the form of appeal was not wilful or unreasonable.]

(3) In disposing of an appeal the 582[Appellate Assistant Commissioner] may, in the case of an order of assessment,

(a) confirm, reduce, enhance or annul the assessment, 583[* * *]; or

(b) set aside the assessment and direct the Income-tax Officer to make a fresh assessment after making such further inquiry as the Income-tax Officer thinks fit or the 584[Appellate Assistant Commissioner] may direct, and the Income-tax Officer shall thereupon proceed to make such fresh assessment 585[and determine where necessary the amount of tax payable on the basis of such fresh assessment];

586[587[or, in, the case of an order cancelling the registration of a firm under sub-section (4) of Section 23 or refusing to register a firm under sub-section (4) of Section 23 or Section 26-A] 588[or] to make a fresh assessment under Section 27;

(c) confirm such order, or cancel it and direct the Income-tax Officer 589[to register the firm or to make a fresh assessment, as the case may be];]

or, in the cases of an order under sub-section (2) of 590[Section 25, or sub-section (1) of Section 23-A or sub-section (2) of Section 26 or Section 48, 49 or 49-F];

591[(d)] confirm, cancel or vary such order;

592[or, in the case of an order under sub-section (1) of Section 25-A;

(e) confirm such order or cancel it and either direct the Income-tax Officer to make further inquiry and pass a fresh order or to make an assessment in the manner laid down in sub-section (2) of Section 25-A;

or, in the case of an order under Section 28 or sub-section (6) of Section 44-E or sub-section (5) of Section 44-F or sub-section (1) of Section 46;

(f) confirm or cancel such order or vary it so as either to enhance or reduce the penalty;

or, in the case of an appeal against a computation of loss under Section 24;

(g) confirm or vary such computation;]

593[or, in the case of an appeal under sub-section (1-A) of Section 30;

(h) decide that the person is or is not liable to make the deduction and in the latter case direct the refund of the sum paid under sub-section (6) of Section 18:]

Provided that the 594[Appellate Assistant Commissioner] shall not enhance an assessment 595[or a penalty] unless the appellant has had a reasonable opportunity of showing cause against such enhancement:

596[Provided further that at the hearing of any appeal against an order of an Income-tax Officer, the Income-tax Officer shall have the right to be heard either in person or by a representative.]

597[(4) Where as the result of an appeal any change is made in the assessment of a firm or association of persons or a new assessment of a firm or association of persons is ordered to be made, the Appellate Assistant Commissioner may authorise the Income-tax Officer to amend accordingly any assessment made on any partner of the firm or any member of the association.

(5) The Appellate Assistant Commissioner shall, on the conclusion of the appeal, communicate the orders passed by him to the assessee and to the Commissioner.]

[Repealed by the Indian Income-tax (Amendment) Act, 1939 (7 of 1939), Section 87.]

598[(1) Any assessee objecting to an order passed by an Appellate Assistant Commissioner under Section 28 or Section 31 may appeal to the Appellate Tribunal within sixty days of the date 599[on which such order is communicated to him].

(2) The Commissioner may, if he objects to any order passed by an Appellate Assistant Commissioner under Section 31, direct the Income-tax Officer to appeal to the Appellate Tribunal against such order, and such appeal may be made 600[within sixty days of the date on which the order is communicated to the Commissioner by the Appellate Assistant Commissioner].

601[(2-A) The Tribunal may admit an appeal after the expiry of the sixty days referred to in sub-sections (1) and (2) if it is satisfied that there was sufficient cause for not presenting it within that period.]

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

(4) The Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, and shall communicate any such orders to the assessee and to the Commissioner.

602[(5) Where as the result of an appeal any change is made in the assessment of a firm or association of persons or a new assessment of a firm or association of persons is ordered to be made, the Appellate Tribunal may authorise the Income-tax Officer to amend accordingly any assessment made on any partner of the firm or any member of the association.]

603[(6)] Save as provided in Section 66 orders passed by the Appellate Tribunal on appeal shall be final.]

604[33-A. Power of revision by Commissioner. (1) The Commissioner may of his own motion call for the record of any proceeding under this Act in which an order has been passed by any authority subordinate to him and may make such inquiry or cause such inquiry to be made and, subject to the provisions of this Act, may pass such order thereon, not being an order prejudicial to the assessee, as he thinks fit:

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

(a) where an appeal against the order lies to the Appellate Assistant Commissioner or to the Appellate Tribunal, the time within which such appeal may be made has not expired; or

(b) the order is pending on an appeal before the Appellate Assistant Commissioner or has been made the subject of an appeal to the Appellate Tribunal; or

(c) the order has been made more than one year previously.

(2) The Commissioner may, on application by an assessee for revision of an order under this Act passed by any authority subordinate to the Commissioner, made within one year from the date of the order, 605[(or within such further period, as the Commissioner may think fit to allow on being satisfied that, the assessee was prevented by sufficient cause from making the application within that period)], call for the record of the proceeding in which such order was passed, and on receipt of the record may make such inquiry or cause such inquiry to be made, and, subject to the provisions of this Act, may pass such order thereon, not being an order prejudicial to the assessee, as he thinks fit:

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

(a) where an appeal against the order lies to the Appellate Assistant Commissioner or to the Appellate Tribunal but has not been made, the time within which such appeal may be made has not expired, or, in the case of an appeal to the Appellate Tribunal, the assessee has not waived his right of appeal; or

(b) where an appeal against the order has been made to the Appellate Assistant Commissioner, the appeal is pending before the Appellate Assistant Commissioner; or

(c) the order has been made the subject of an appeal to the Appellate Tribunal:

Provided further that an order by the Commissioner declining to interfere shall be deemed not to be an order prejudicial to the assessee.

606[Explanation. For the purposes of sub-sections (1) and (2), the Appellate Assistant Commissioner shall be deemed to be an authority subordinate to the Commissioner.]

(3) Every application by an assessee under sub-section (2) shall be accompanied by a fee of twenty-five rupees.]

607[33-B. Power of Commissioner to revise Income-tax Officer's orders. (1) The Commissioner may call for and examine the record of any proceeding under this Act and if he considers that any order passed therein by the Income-tax 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 such enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment.

(2) No order shall be made under sub-section (1)

(a) to revise an order of re-assessment made under the provisions of Section 34; or

(b) after the expiry of two years from the date of the order sought to be revised.

(3) Any assessee objecting to an order passed by the Commissioner under sub-section (1) may appeal to the Appellate Tribunal within 60 days of the date on which the order is communicated to him.

(4) An appeal to the Appellate Tribunal under sub-section (3) shall be in the prescribed form and shall be verified in the prescribed manner and shall be accompanied by a treasury receipt in support of having paid the fee of Rs. 100, and such appeal shall be dealt with in the same manner as if it were an appeal under sub-section (1) of Section 33.]

608[(1) If

(a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under Section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income-tax have escaped assessment for that year, or have been under-assessed or assessed at too low a rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, or

(b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income-tax have escaped assessment for any year, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under this Act, or that excessive loss or depreciation allowance has been computed,

he may in cases falling under clause (a) at any time 609[* * *] and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of Section 22 and may proceed to assess or reassess such income, profits or gains or recompute the loss or depreciation allowance; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section:

610[Provided that the Income-tax Officer shall not issue a notice under clause (a) of sub-section (1)

(i) for any year prior to the year ending on the 31st day of March, 1941;

(ii) for any year, if eight years have elapsed after the expiry of that year, unless the income, profits or gains chargeable to income-tax which have escaped assessment or have been under-assessed or assessed at too low a rate or have been made the subject of excessive relief under this Act, or the loss or depreciation allowance which has been computed in excess, amount to, or are likely to amount to, one lakh of rupees or more in the aggregate, either for that year, or for that year and any other year or years after which or after each of which eight years have elapsed, not being a year or years ending before the 31st day of March, 1941;

(iii) for any year, unless he has recorded his reasons for doing so, and, in any case falling under clause (ii), unless the Central Board of Revenue, and, in any other case, the Commissioner, is satisfied on such reasons recorded that it is a fit case for the issue of such notice:

Provided further that the Income-tax Officer shall not issue a notice under this sub-section for any year, after the expiry of two years from that year, if the person on whom the assessment or reassessment is to be made in pursuance of the notice is a person deemed to be the agent of a non-resident person under Section 43:

Provided further that the tax shall be chargeable at the rate at which it would have been charged had the income, profits or gains not escaped assessment or full assessment, as the case may be.]

Explanation. Production before the Income-tax Officer of account books or other evidence from which material facts could with due diligence have been discovered by the Income-tax Officer will not necessarily amount to disclosure within the meaning of this section.

611[(1-A) If, in the case of any assessee, the Income-tax Officer has reason to believe

(i) that income, profits or gains chargeable to income-tax have escaped assessment for any year in respect of which the relevant previous year falls wholly or partly within the period beginning on the 1st day of September, 1939, and ending on the 31st day of March, 1946; and

(ii) that the income, profits or gains which have so escaped assessment for any such year or years amount, or are likely to amount, to one lakh of rupees or more;

he may, notwithstanding that the period of eight years or, as the case may be, four years specified in sub-section (1) has expired in respect thereof, serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of Section 22, and may proceed to assess or reassess the income, profits or gains of the assessee for all or any of the years referred to in clause (i), and thereupon the provisions of this Act [excepting those contained in clauses (i) and (iii) of the proviso to sub-section (1) and in sub-sections (2) and (3) of this section] shall, so far as may be, apply accordingly:

Provided that the Income-tax Officer shall not issue a notice under this sub-section unless he has recorded his reasons for doing so, and the Central Board of Revenue is satisfied on such reasons recorded that it is a fit case for the issue of such notice:

Provided further that no such notice shall be issued after the 31st day of March, 1956.

(1-B) Where any assessee 612[to whom a notice has been issued under clause (a) of sub-section (1) or under sub-section (1-A) for any of the years ending on the 31st day of March of the years 1941 to 1948, inclusive] applies to the Central Board of Revenue at any time within six months from the receipt of such notice or before the assessment or reassessment is made, whichever is earlier, to have the matters relating to his assessment settled, the Central Board of Revenue may, after considering the terms of settlement proposed and subject to the previous approval of the Central Government, accept the terms of such settlement, and, if it does so, shall make an order in accordance with the terms of such settlement specifying among other things the sum of money payable by the assessee.

(1-C) Any sum specified in a settlement arrived at in pursuance of sub-section (1-B) may be recovered and any penalty for default in making payment of any such sum may be imposed and recovered in the manner provided in Chapter VI.

(1-D) Any settlement arrived at under this section shall be conclusive as to the matters stated therein; and no person, whose assessments have been so settled, shall be entitled to reopen in any proceeding for the recovery of any sum under this Act or in any subsequent assessment or reassessment proceeding relating to any tax chargeable under this Act or in any other proceeding whatsoever before any Court or other authority any matter which forms part of such settlement.]

(2) Where an assessment is reopened in circumstances falling under clause (b) of sub-section (1), the assessee may, if he has not impugned any part of the original assessment order for that year either under Section 30 or under Section 33-A, claim that the proceedings under sub-section (1) of this section shall be dropped on his showing that he had been assessed on an amount or to a sum not lower than what he would be rightly liable for even if the items alleged to have escaped assessment had been taken into account, or the assessment or computation had been properly made:

Provided that in so doing he shall not be entitled to reopen matters concluded by an order under Section 33-B or Section 35, or by a decision 613[* * *], under Section 614[66 or] Section 66-A.

(3) 615[No order of assessment or reassessment, other than an order of assessment under Section 23 to which clause (c) of sub-section (1) of Section 28 applies or an order of assessment or reassessment in cases falling within clause (a) of sub-section (1) or sub-section (1) of this section shall be made after the expiry of four years from the end of the year in which the income, profits or gains were first assessable:

Provided that where a notice under clause (b) of sub-section (1) has been issued within the time therein limited, the assessment or reassessment to be made in pursuance of such notice may be made before the expiry of one year from the date of the service of the notice even if at the time of the assessment or re-assessment the four years aforesaid have already elapsed:]

Provided further that nothing contained in this 616[section limiting the time within which any action may be taken or any order, assessment or reassessment may be made] shall apply to a re-assessment made under Section 27 or 617[to an assessment or re-assessment made on the assessee or any person in consequence of or to give effect to any finding or direction contained in] an order under Section 31, Section 33, Section 33-A, Section 33-B, Section 66 or Section 66-A.]

618[(4) A notice under clause (a) of sub-section (1) may be issued at any time notwithstanding that at the time of the issue of the notice the period of eight years specified in that sub-section before its amendment by clause (a) of Section 18 of the Finance Act, 1956 (18 of 1956), had expired in respect of the year to which the notice relates.]

(1) 619[The Commissioner or 620[Appellate Assistant Commissioner] may, at any time 621[within four years] from the date of any order passed by him in appeal or, in the case of the Commissioner, in revision under 622[Section 33-A] and] the Income-tax Officer may, at any time 623[within four years] from the date of any 624[assessment order 625[or refund order] passed by him] on his own motion rectify any mistake apparent from the record 626[of the appeal, revision, 627[assessment or refund] as the case may be], and shall within the like period rectify any such mistake which has been 628[brought to his notice by an assessee]:

Provided that no such rectification shall be made, having the effect of enchancing an assessment 629[or reducing a refund] unless 630[the Commissioner, the 631[Appellate Assistant Commissioner] or the Income-tax Officer, as the case may be], has given notice to the assessee of his intention so to do and has allowed him a reasonable opportunity of being heard:

632[Provided further that no such rectification shall be made of any mistake in any order passed more than one year before the commencement of the Indian Income-tax (Amendment) Act, 1939 (7 of 1939).]

633[(2) The provisions of sub-section (1) apply also in like manner to the rectification of mistakes by the Appellate Tribunal.]

634[(3)] Where any such rectification has the effect of reducing the assessment, the Income-tax Officer shall make any refund which may be due to such assessee.

635[(4)] Where any such rectification, has the effect of enhancing the assessment 636[or reducing a refund] the Income-tax Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be issued under Section 29, and the provisions of this Act shall apply accordingly.

637[(5) Where in respect of any completed assessment of a partner in a firm it is found on the assessment or reassessment of the firm or on any reduction or enhancement made in the income of the firm under Section 31, Section 33, Section 33-A, Section 33-B, Section 66 or Section 66-A that the share of the partner in the profit or loss of the firm has not been included in the assessment of the partner or, if included, is not correct, the inclusion of the share in the assessment or the correction thereof, as the case may be, shall be deemed to be a rectification of a mistake apparent from the record within the meaning of this section, and the provisions of sub-section (1) shall apply thereto accordingly, the period of four years referred to in that sub-section being computed from the date of the final order passed in the case of the firm.

(6) Where the excess profits tax or the business profits tax payable by an assessee has been modified in appeal, revision or any other proceeding, or where any excess profits tax or business profits tax has been assessed after the completion of the corresponding assessment for income-tax [whether before or after the commencement of the Indian Income-tax (Amendment) Act, 1953], and in consequence thereof it is necessary to re-compute the total income of the assessee chargeable to income-tax, such recomputation shall be deemed to be a rectification of a mistake apparent from the record within the meaning of this section, and the provisions of sub-section (1) shall apply accordingly, the period of four years referred to in that sub-section being computed from the date of the order making or modifying the assessment of such excess profits tax or business profits tax.

Explanation. For the purposes of sub-section (6), where the assessee is a firm, the provisions of sub-section (5) shall also apply as they apply to the rectification of the assessment of the partners of the firm.

(7) Where the assessment of a company in whose case an order under Section 23-A has been made is modified in appeal, revision or any other proceeding or the order under Section 23-A is cancelled, or varied, and in consequence thereof it is necessary to re-compute the total income of the shareholders, such recomputation shall be deemed to be a rectification of a mistake apparent from the record within the meaning of this section, and the provisions of sub-section (1) shall apply thereto accordingly, the period of four years referred to in that sub-section being computed from the date of the final order passed in the case of the company.]

638[(8) Where, as a result of proceedings initiated under clause (a) of sub-section (1) or under sub-section (1-A) of Section 34,

(a) a firm or an association of persons is assessed or reassessed, or

(b) a company is assessed or reassessed and in respect thereof an order under Section 23-A is subsequently made,

and the Income-tax Officer concerned is of opinion that it is necessary to compute or recompute the total income of a partner in the firm or a member of the association of persons or a shareholder in the company, as the case may be, the Income-tax Officer may proceed to compute or recompute the total income and determine the sum payable on the basis of such computation or recomputation as if the computation or recomputation is a rectification of a mistake apparent from the record within the meaning of this section; and the provisions of sub-section (1) shall apply accordingly, the period of four years specified therein being reckoned from the date of the final order passed in the case of the firm, association or company, as the case may be.

(9) Where the Income-tax Officer is satisfied that the income-tax payable by a company on its profits and gains out of which the company has declared a divided, has not been paid within three years after the financial year in which the dividend was declared, the amount of income-tax which a shareholder of the company is deemed himself to have paid in respect of such dividend under Section 49-B, or the amount for which credit is due to him under sub-section (5) of Section 18 in respect of such dividend, shall be deemed to have been wrongly computed; and the Income-tax Officer may, notwithstanding anything contained in this Act, proceed to recompute such amount by reducing it in the same proportion as the amount of income-tax remaining unpaid by the company bears to the amount of income-tax payable by it on such profits and gains, as if the recomputation is a rectification of a mistake apparent from the record within the meaning of this section; and the provisions of sub-section (1) shall apply accordingly, the period of four years specified therein being reckoned from the date on which the period of three years aforesaid has expired:

639[Provided that this sub-section shall not apply in relation to dividends payable by a company in respect of any previous year relevant to any assessment year commencing on or after the 1st day of April, 1960.]

(10) 640[* * *]]

641(11) Where an allowance by way of development rebate has been made wholly or partly to an assessee in respect of a ship, machinery or plant in any year of assessment under clause (vi-b) of sub-section (2) of Section 10, and subsequently at any time before the expiry of ten years from the end of the year in which the ship was acquired or the machinery or plant was installed

(i) the ship, machinery or plant is sold or otherwise transferred by the assessee to any person other than the Government 642[or for any consideration not connected with any amalgamation or succession referred to in clause (vi-c) of sub-section (2) of Section 10]; or

(ii) The assessee utilises the amount credited to the reserve account under that clause

(a) for distribution by way of dividends or profits; or

(b) for remittance outside India as profits or for the creation of any asset outside India; or

(c) for any other purpose which is not a purpose of the business of the undertaking;

the development rebate originally allowed shall be deemed to have been wrongly allowed, and the Income-tax Officer may, notwithstanding anything contained in this Act, proceed to re-compute the total income of the assessee for the relevant year as if the re-computation is a rectification of a mistake apparent from the record within the meaning of this section, and the provisions of sub-section (1) shall apply accordingly, the period of four years specified therein being reckoned from the end of the year in which the transfer takes place or the money is so utilised.]

643[Explanation. For the purposes of this sub-section, a successor referred to in sub-clause (i) or sub-clause (ii) of clause (vi-c) of sub-section (2) of Section 10 shall be deemed to be the assessee even in respect of an allowance by way of development rebate made to the predecessor, and any tax resulting from the recomputation of the total income for any previous year of the predecessor shall be payable by the successor.]

[Repealed by the Finance Act, 1957 (5 of 1957), Section 3.]

644[(1) The Income-tax Officer Appellate Assistant Commissioner, Commissioner and Appellate Tribunal shall, for the purposes of this Act, have the same powers as are 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:

(a) discovery and inspection;

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

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

(d) issuing commissions.

(2) Subject to any rules made in this behalf, any Income-tax Officer specially authorised by the Commissioner in this behalf may,

(i) enter and search any building or place where he has reason to believe that any books of account or other documents which in his opinion will be useful for, or relevant to, any proceeding under this Act may be found and examine them, if found;

(ii) seize any such books of account or other documents or place marks of identification thereon or make extracts or copies therefrom;

(iii) make a note or an inventory of any other article or thing found in the course of any search under this section which in his opinion will be useful for, or relevant to, any proceeding under this Act;

and the provisions of the Code of Criminal Procedure, 1898 (5 of 1898), relating to searches shall apply so far as may be to searches under this section.

(3) Subject to any rules made in this behalf, any authority referred to in sub-section (1) may impound and retain in its custody for such period as it thinks fit any books of account or other documents produced before it in any proceeding under this Act:

Provided that an Income-tax Officer shall not

(a) impound any books of account or other documents without recording his reasons for so doing; or

(b) retain in his custody any such books or documents for a period exceeding fifteen days (exclusive of holidays) without obtaining the approval of the Commissioner therefor.

(4) Any proceeding before any authority referred to in this section shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228, and for the purposes of Section 196 of the Indian Penal Code (45 of 1860).]

The Income-tax Officer or Assistant Commissioner may, for the purposes of this Act,

(1) require any firm, or Hindu undivided family to furnish him with a return of the members of the firm, or of the manager or adult male members of the family, as the case may be, and of their addresses;

(2) require any person whom he has reason to believe to be a trustee, guardian, or agent, to furnish him with a return of the names of the persons for or of whom he is trustee, guardian, or agent, and of their addresses;

645[(3) require any assessee to furnish a statement of the names and addresses of all persons to whom he has paid in any year rent, interest, commission, royalty or brokerage, or any annuity not being an annuity taxable under the head Salaries , amounting to more than four hundred rupees, together with particulars of all such payments made;]

646[(4) require any dealer, broker or agent or any person concerned in the management of a stock or commodity Exchange to furnish a statement of the names and addresses of all persons to whom he or the Exchange has paid any sum in connection with the sale, exchange or transfer of a capital asset, or on whose behalf or from whom he or the Exchange has received any such sum, together with particulars of all such payments and receipts;]

647[(5) require any person, including a banking company or any officer thereof, to furnish information in relation to such points or matters, or to furnish statements of accounts and affairs verified in the manner specified by the Income-tax Officer or the Assistant Commissioner giving information in relation to such points or matters, as, in the opinion of the Income-tax officer or the Assistant Commissioner, will be useful for, or relevant to, any proceeding under this Act.]

The Income-tax Officer or Assistant Commissioner, or any person authorised in writing in this behalf by the Income-tax Officer or Assistant Commissioner, may inspect and, if necessary, take copies, or cause copies to be taken, of any register of the members, debenture-holders or mortgagees of any company or of any entry in such register.

LIABILITY IN SPECIAL CASES

648[(1) Where the guardian or trustee of any person being a minor, lunatic or idiot (all of which persons are hereinafter in this sub-section included in the term beneficiary ) is entitled to receive on behalf of such beneficiary, or is in receipt on behalf of such beneficiary of, any income, profits or gains chargeable under this Act, the tax shall be levied upon and recoverable from such guardian or trustee, as the case may be, in like manner and to the same amount as it would be leviable upon and recoverable from any such beneficiary if of full age or sound mind and in direct receipt of such income, profits or gains, and all the provisions of this Act shall apply accordingly.

(2) Where the trustee or agent of any person not resident in 649[the taxable territories] and not being a minor, lunatic or idiot (such person being hereinafter in this sub-section referred to as a beneficiary) is entitled to receive on behalf of such beneficiary, or is in receipt on behalf of such beneficiary of, any income, profits or gains chargeable under this Act, the tax, if not levied on the beneficiary direct, may be levied upon and recovered from such trustee or agent, as the case may be, in like manner and to the same amount as it would be leviable upon and recoverable from the beneficiary if in direct receipt of such income, profits or gains, and all the provisions of this Act shall apply accordingly.]

650[(1)] In the case of income, profits or gains chargeable under this Act which 651[* * *] the Courts of Wards, the Administrators-General, the Official Trustees or 652[* * *] any receiver or manager (including any person whatever his designation who in fact manages property on behalf of another) appointed by or under any order of a Court, 653[or any trustee or trustees 654[appointed under a trust declared by a duly executed instrument in writing whether testamentary or otherwise] (including the trustee or trustees under any Wakf deed which is valid under the Mussalman Wakf Validating Act, 1913 (6 of 1913)), are entitled to receive on behalf of any person], the tax shall be levied upon and recoverable from such Court of Wards, Administrator-General, Official Trustee, receiver or manager 655[or trustee, or trustees], in the like manner and to the same amount as it would be leviable upon and recoverable from 656[the person on whose behalf such income, profits or gains are receivable], and all the provisions of this Act shall apply accordingly:

657[Provided that where any such income, profits or gains or any part thereof are not specifically receivable on behalf of any one person, or where the individual shares of the persons on whose behalf they are receivable are indeterminate or unknown, the tax shall be levied and recoverable at the maximum rate 658[but, where such persons have no other personal income chargeable under this Act and none of them is an artificial juridical person, as if such income, profits or gains or such part thereof were the total income of an association of persons]:

Provided further that when part only of the income, profits and gains of a trust is chargeable under this Act, that proportion only of the income, profits and gains receivable by a beneficiary from the trust which the part so chargeable bears to the whole income, profits and gains of the trust shall be deemed to have been derived from that part.

(2) Nothing contained in sub-section (1) shall prevent either the direct assessment of the person on whose behalf income, profits or gains therein referred to are receivable, or the recovery from such person of the tax payable in respect of such income, profits or gains.]

42.659[Income deemed to accrue or arise within the taxable territories]. (1) 660[All income, profits or gains accruing or arising], whether directly or indirectly, through or from any business connection 661[in 662[the taxable territories], or through or from any property in 663[the taxable territories], or through or from any asset or source of income in 664[the taxable territories], or through or from any money lent at interest and brought into 665[the taxable territories] in cash or in kind] 666[or through or from the sale, exchange or transfer of a capital asset in 667[the taxable territories]], shall be deemed to be income accruing or arising within 668[the taxable territories] and 669[where the person entitled to the income, profits or gains is not resident in 670[the taxable territories], shall be chargeable to income tax either in his name or in the name of his agent, and in the latter case] such agent shall be deemed to be, for all the purposes of this Act, the assessee in respect of such income-tax:

671[Provided that where the person entitled to the income, profits or gains is not resident in 672[the taxable territories], the income-tax so chargeable may be recovered by deduction under any of the provisions of Section 18 and that] any arrears of tax may be recovered also in accordance with the provisions of this Act from any assets of the non-resident person which are, or may at any time come within 673[the taxable territories]:

674[Provided further that any such agent, or any person who apprehends that he may be assessed as such an agent, may retain out of any money payable by him to such non-resident person a sum equal to his estimated liability under this sub-section, and in the event of any disagreement between the non-resident person and such agent or person as to the amount to be so retained, such agent or person may secure from the Income-tax Officer a certificate stating the amount to be so retained pending final settlement of the liability, and the certificate so obtained shall be his warrant for retaining that amount:

Provided further that the amount recoverable from such agent or person at the time of final settlement shall not exceed the amount specified in such certificate except to the extent to which such agent or person may at such time have in his hands additional assets of such non-resident person.]

(2) Where a person not resident 675[or not ordinarily resident] in 676[the taxable territories] 677[* * *] carries on business with a person resident in 678[the taxable territories], and it appears to the Income-tax Officer, 679[* * *] that owing to the close connection 680[between such persons, the course of business is so arranged that the business done by the resident person with the person not resident or not ordinarily resident] produces to the resident either no profits or less than the ordinary profits which might be expected to arise in that business, the profits derived therefrom or which may reasonably be deemed to have been derived therefrom, shall be chargeable to income-tax in the name of the resident person who shall be deemed to be, for all the purposes of this Act, the assessee in respect of such income-tax.

681[(3) In the case of a business of which all the operations are not carried out in 682[the taxable territories], the profits and gains of the business deemed under this section to accrue or arise in 683[the taxable territories] shall be only such profits and gains as are reasonably attributable to that part of the operations carried out in 684[the taxable territories].]

Any person employed by or on behalf of a person residing out of 685[the taxable territories], or having any business connection with such person, or through whom such person is in the receipt of any income, profits or gains upon whom the Income-tax Officer has caused a notice to be served of his intention of treating him as the agent of the non-resident person shall, for all the purposes of this Act, be deemed to be such agent:

686[Provided that where transactions are carried on in the ordinary course of business through a broker in 687[the taxable territories] in such circumstances that the broker does not in respect of such transactions deal directly with or on behalf of a non-resident principal but deals with or through a non-resident broker who is carrying on such transactions in the ordinary course of his business and not as a principal, such first-mentioned broker shall not be deemed to be an agent under this section in respect of such transactions:]

Provided 688[further] that no person shall be deemed to be the agent of a non-resident person, unless he has had an opportunity of being heard by the Income-tax Officer as to his liability.

689[Explanation. A person, whether residing in or out of 690[the taxable territories], who acquires, after the 28th day of February, 1947, whether by sale, exchange or transfer, a capital asset in 691[the taxable territories] from a person residing out of 692[taxable territories] shall, for the purposes of charging to tax the capital gain arising from such sale, exchange or transfer, be deemed to have a business connection, within the meaning of this section, with such person residing out of 693[the taxable territories].]

694[(1) Where any business, profession or vocation carried on by a firm or other association of persons has been discontinued or where a firm or other association of persons is dissolved, the Income-tax Officer shall make an assessment of the total income of the firm or other association of persons as such as if no such discontinuance or dissolution had taken place.

(2) If the Income-tax Officer, the Appellate Assistant Commissioner or the Appellate Tribunal in the course of any proceedings under this Act in respect of any such firm or other association of persons as is referred to in sub-section (1) is satisfied that the firm or other association is guilty of any of the acts specified in clause (a) or clause (b) or clause (c) of sub-section (1) of Section 28, he or it may impose or direct the imposition of a penalty in accordance with the provisions of that section.

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

695[Chapter V-A

SPECIAL PROVISIONS RELATING TO CERTAIN CLASSES OF SHIPPING

44-A. Liability to tax of occasional shipping. The provisions of this Chapter shall, notwithstanding anything contained in the other provisions of this Act, apply for the purpose of the levy and recovery of tax in the case of any person who resides out of 696[the taxable territories] and carries on business in 697[the taxable territories] in any year as the owner or charterer of a ship (such person hereinafter in this Chapter being referred to as the principal), unless the Income-tax Officer is satisfied that there is an agent of such principal from whom the tax will be recoverable in the following year under the other provisions of this Act.

44-B. Return of profits and gains. (1) Before the departure from any port in 698[the taxable territories] of any ship in respect of which the provisions of this Chapter apply, the master of the ship shall prepare and furnish to the Income-tax Officer a return of the full amount paid or payable to the principal, or to any person on his behalf, on account of the carriage of all passengers, live-stock or goods shipped at that port since the last arrival of the ship thereat.

(2) On receipt of the return, the Income-tax Officer shall assess the amount referred to in sub-section (1) and for this purpose may call for such accounts or document as he may require, and 699[one-sixth] of the amount so assessed shall be deemed to be the amount of the profits and gains accruing to the principal on account of the carriage of the passengers, live-stock and goods shipped at the port.

(3) When the profits and gains have been assessed as aforesaid, the Income-tax Officer shall determine the sum payable as tax thereon at the rate for the time being applicable to the total income, of a company, and such sum shall be payable by the master of the ship, and a port clearance shall not be granted to the ship until the Customs-collector, or other officer duly authorised to grant the same, is satisfied that the tax has been duly paid.

44-C. Adjustment. Nothing in this Chapter shall be deemed to prevent a principal from claiming, 700[in the year] following that in which any payment has been made on his behalf under this Chapter, that an assessment be made of his total income in the previous year, and that the tax payable on the basis thereof be determined in accordance with the other provisions of this Act, and, if he so claims, any such payment as aforesaid shall be treated as a payment in advance of the tax and the difference between the sum so paid, and the amount of tax found payable by him shall be paid by him or refunded to him, as the case may be.]

701[Chapter V-B

SPECIAL PROVISIONS RELATING TO AVOIDANCE OF LIABILITY TO INCOME-TAX AND SUPER-TAX

44-D. Avoidance of income-tax by transactions resulting in the transfer of income to persons resident or ordinarily resident abroad. (1) Where any person has, by means of a transfer of assets, by virtue or in consequence whereof, either alone or in conjunction with associated operations, any income which if it were the income of such person would be chargeable to income-tax becomes payable to a person not resident or to a person resident but not ordinarily resident in 702[the taxable territories], acquired any rights by virtue or in consequence of which he has within the meaning of this section power to enjoy such income, whether forthwith or in the future, that income shall, whether it would or would not have been chargeable to income-tax apart from the provisions of this section, be deemed to be income of such first-mentioned person for all the purposes of this Act.

(2) Where any person receives or is entitled to receive, whether before or after any transfer of assets by virtue or in consequence whereof either alone or in conjunction with associated operations any income becomes payable to a person not resident or resident but not ordinarily resident in 703[the taxable territories], any sum paid or payable by way of a loan or repayment of a loan or any other sum, being a sum which is not paid or payable for full consideration in money or money's worth, paid or payable otherwise than as income, such income shall, whether it would or would not have been chargeable to income-tax apart from the provisions of this section, be deemed to be the income of the first-mentioned person for all the purposes of this Act.

(3) Sub-sections (1) and (2) shall not apply if such first-mentioned person shows to the satisfaction of the Income-tax Officer either

(a) that neither the transfer nor any associated operation had for its purpose or for one of its purposes the avoidance of liability to taxation; or

(b) that the transfer and all associated operations were bona fide commercial transactions and were not designed for the purpose of avoiding liability to taxation.

(4) For the purposes of this section, an associated operation means, in relation to any transfer, an operation of any kind effected by any person in relation to any of the assets transferred or any assets representing whether directly or indirectly any of the assets transferred, or to the income arising from any such assets, or to any assets representing whether directly or indirectly the accumulations of income arising from any such assets.

(5) A person shall, for the purposes of this section, be deemed to have power to enjoy income of a person not resident, or resident but not ordinarily resident, in 704[the taxable territories], if

(a) the income is in fact so dealt with by any person as to be calculated at some point of time and, whether in the form of income or not, to enure for the benefit of the first-mentioned person; or

(b) the receipt or accrual of the income operates to increase the value to such first-mentioned person of any assets held by him or for his benefit; or

(c) such first-mentioned person receives or is entitled to receive at any time any benefit provided or to be provided out of that income or out of moneys which are or will be available for the purpose by reason of the effect or successive effects of the associated operations on that income and on any assets which represent that income; or

(d) such first-mentioned person has power by means of the exercise of any power of appointment or power of revocation or otherwise to obtain for himself, whether with or without the consent of any other person, the beneficial enjoyment of the income; or

(e) such first-mentioned person is able, in any manner whatsoever and whether directly or indirectly, to control the application of the income.

(6) In determining whether a person has power to enjoy income within the meaning of this section, regard shall be had to the substantial result and effect of the transfer and any associated operations, and all benefits which may at any time accrue to such person as a result of the transfer and any associated operations shall be taken into account irrespective of the nature or form of the benefits.

(7) For the purposes of this section

(a) the expression assets includes property or rights of any kind, and the expression transfer in relation to rights includes the creation of those rights;

(b) the expression benefit includes a payment of any kind;

(c) references to income of a person not resident or of a person not ordinarily resident in 705[the taxable territories] shall, where the amount of the income of a company for any year or period has been deemed to have been distributed under sub-section (1) of Section 23-A, include references to so much of the income of the company for that year or period as is equal to the amount deemed to have been distributed to that person;

(d) references to assets representing any assets, income or accumulations of income include references to shares in or obligations of any company to which, or obligation of any other person to whom, those assets, that income or those accumulations are or have been transferred;

(e) any body corporate incorporated outside 706[the taxable territories] shall be treated as if it were resident out of 707[the taxable territories] whether it is so resident or not.

(8) The provisions of this section shall apply for the purposes of assessment to income-tax and super-tax for the year ending on the 31st day of March, 1940, and subsequent years, and shall apply, in relation to transfers of assets and associated operations whether carried out before or after the commencement of the Indian Income-tax (Amendment) Act, 1939 (7 of 1939).

(9) Where any person has been charged to tax on any income deemed to be his under the provisions of this section, and that income is subsequently received by him, whether as income or in any other form, it shall not again be deemed to form part of his income for the purposes of this Act.

44-E. Avoidance of tax by certain transactions in securities. (1) Where the owner of any securities (in this sub-section and in sub-section (2) referred to as the owner ) agrees to sell or transfer those securities, and by the same or any collateral agreement

(a) agrees to buy back or re-acquire the securities; or

(b) acquires an option, which he subsequently exercises, to buy back or re-acquire the securities;

then, if the result of the transaction is that any interest becoming payable in respect of the securities is receivable otherwise than by the owner, the interest payable as aforesaid shall, whether it would or would not have been chargeable to tax apart from the provisions of this section, be deemed for all the purposes of this Act to be the income of the owner and not to be the income of any other person.

(2) The references in sub-section (1) to buying back or re-acquiring the securities shall be deemed to include references to buying or acquiring similar securities, so, however, that where similar securities are brought or acquired, the owner shall be under no greater liability to tax than he would have been under if the original securities had been bought back or re-acquired.

(3) Where any person carrying on a business which consists wholly or partly in dealing in securities agrees to buy or acquire any securities, and by the same or any collateral agreement

(a) agrees to sell back or re-transfer the securities; or

(b) acquires an option, which he subsequently exercises, to sell back or re-transfer the securities;

then, if the result of the transaction is that any interest becoming payable in respect of the securities is receivable by him, no account shall be taken of the transaction in computing for any of the purposes of this Act the profits arising from or loss sustained in the business.

(4) Sub-section (3) shall have effect, subject to any necessary modifications, as if references to selling back or re-transferring the securities included references to selling or transferring similar securities.

(5) For the purpose of this section

(a) the expression interest includes a dividend;

(b) the expression securities includes stocks and shares;

(c) securities shall be deemed to be similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred.

(6) The Income-tax Officer may by notice in writing require any person to furnish him within such time as he may direct (not being less than twenty-eight days), in respect of all securities of which such person was the owner at any time during the period specified in the notice, such particulars as he considers necessary for the purposes of this section and for the purpose of discovering whether tax has been borne in respect of the interest on all those securities; and, if that person without reasonable excuse fails to comply with the notice, he shall be liable to a penalty not exceeding five hundred rupees and to a further penalty of the like amount for every day after the infliction of such penalty during which the failure continues.

44-F. Avoidance of tax by sales cum dividend. (1) Any person upon whom notice is served by the Income-tax Officer requiring him to furnish a statement of particulars relating to any securities in which, at any time during the period specified in the notice, he has had any beneficial interest, and in respect of which, within such period, either no income was received by him, or the income received by him was less than the sum to which the income would have amounted if the income from such securities had accrued from day to day and been apportioned accordingly, shall, whether an assessment to income-tax or super-tax in respect of his total income has or has not been made for the relevant year or years of assessment, furnish such a statement and such particulars in the form and within the time (not being less than twenty-eight days) required by the notice.

(2) If it appears to the Income-tax Officer by reference to all the circumstances in relation to the securities of any such person (including circumstances with respect to sales, purchases, dealings, contracts, arrangements, transfers, or any other transactions relating to such securities) that such person has thereby avoided or would avoid more than ten per cent. of the amount of the income-tax or super-tax for any year which would have been payable in his case in respect of the income from those securities if the income had been deemed to accrue from day to day and had been apportioned accordingly, and the income so deemed to have been apportioned to him had been treated as part of his total income from all sources for the purposes of income-tax or super-tax, then those securities shall be deemed to be securities to which sub-section (3) applies.

(3) For the purposes of assessment to income-tax or super-tax in the case of any such person, the income from any securities to which this sub-section applies shall be deemed to accrue from day to day, and in the case of the sale or transfer of any such securities by or to him shall be deemed to have been received as and when it is deemed to have accrued:

Provided that this section shall not apply if such person proves to the satisfaction of the Income-tax Officer that the avoidance of income-tax or super-tax was exceptional and not systematic and that there was not in his case in any of the three preceding years any such avoidance of income-tax or super-tax, or that the provisions of Section 44-E have been applied in his case in respect of such income.

(4) If any person fails to furnish any statement or particulars required under this section, or if the Income-tax Officer is not satisfied with any statement or particulars furnished under this section, the Income-tax Officer may make an estimate of the amount of the income which, under the foregoing provisions of this section, is to be deemed to form part of the person's total income for the purposes of income-tax or super-tax.

(5) If any person without reasonable excuse fails to furnish any statement or particulars required under this section, he shall be liable to a penalty not exceeding five hundred rupees, and to a further penalty of the like amount for every day after the infliction of such penalty during which the failure continues.

(6) For the purpose of this section the expression securities includes stocks and shares.]

RECOVERY OF TAX AND PENALTIES

Any amount specified as payable in a notice of demand 708[709[under sub-section (3)] of Section 23-A or] under Section 29 or an order under Section 31 710[* * *] or Section 33, shall be paid within the time, at the place and to the person mentioned in the notice or order, or if a time is not so mentioned, then on or before the first day of the second month following the date of the service of the notice or order, and any assessee failing so to pay shall be deemed to be in default, provided that, when an assessee has presented an appeal under Section 30 711[* * *] the Income-tax Officer may in his discretion treat the assessee as not being in default as long as such appeal is undisposed of:

712[Provided further that where an assessee has been assessed in respect of income arising outside 713[the taxable territories] in a country the laws of which prohibit or restrict the remittance of money to 714[the taxable territories], the Income-tax Officer shall not treat the assessee as in default in respect of that part of the tax which is due in respect of that amount of his income which by reason of such prohibition or restriction cannot be brought into 715[the taxable territories], and shall continue to treat the assessee as not in default in respect of such part of the tax until the prohibition or restriction is removed.

Explanation. For the purposes of this section income shall be deemed to have been brought into 716[the taxable territories] if it has been utilized or could have been utilized for the purposes of any expenditure actually incurred by the assessee without 717[the taxable territories] or if the income whether capitalized or not has been brought into 718[the taxable territories] in any form.]

(1) When an assessee is in default in making a payment of income-tax, the Income-tax Officer may in his discretion direct that, in addition to the amount of the arrears, a sum not exceeding that amount shall be recovered from the assessee by way of penalty.

719[(1-A) For the purposes of sub-section (1), the Income-tax Officer may direct the recovery of any sum less than the amount of the arrears and may enhance the sum so directed to be recovered from time to time in the case of a continuing default, so however that the total sum so directed to be recovered shall not exceed the amount of the arrears payable.]

(2) The Income-tax Officer may forward to the Collector a certificate under his signature specifying the amount of arrears due from an assessee, and the Collector, on receipt of such certificate, shall proceed to recover from such assessee the amount specified therein as if it were an arrear of land-revenue.

720[Provided that without prejudice to the powers conferred by this sub-section, the Collector shall, for the purpose of recovering the amount specified in the certificate, have also all the powers which

(a) a Collector has under the Revenue Recovery Act, 1890 (1 of 1890);

(b) a civil court has under the Code of Civil Procedure, 1908 (5 of 1908), for the purpose of the recovery of an amount due under a decree.]

(3) In any area with respect to which the Commissioner has directed that any arrears may be recovered by any process enforceable for the recovery of an arrear of any municipal tax or local rate imposed under any enactment for the time being in force in any part of the State, the Income-tax Officer, may proceed to recover the amount due by such process.

(4) The Commissioner may direct by what authority any powers or duties incident under any such enactment as aforesaid to the enforcement of any process for the recovery of a municipal tax or local rate shall be exercised or performed when that process is employed under sub-section (3).

(5) If any assessee is in receipt of any income chargeable under the head Salaries , the Income-tax Officer may require any person paying the same to deduct from any payment subsequent to the date of such requisition any arrears due from such assessee, and such person shall comply with any such requisition, and shall pay the sums so deducted to the credit of the Central Government, or as 721[the Central Board of Revenue] directs.

722[(5-A) The Income-tax Officer may at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the assessee at his last address known to the Income-tax Officer) require any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee to pay to the Income-tax Officer, either forthwith upon the money becoming due or being held or at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the tax-payer in respect of arrears of income-tax and penalty or the whole of the money when it is equal to or less than that amount.

The Income-tax Officer may at any time or from time to time amend or revoke any such notice or extend the time for making any payment in pursuance of the notice.

Any person making any payment in compliance with a notice under this sub-section shall be deemed to have made the payment under the authority of the assessee and the receipt of the Income-tax Officer shall constitute a good and sufficient discharge of the liability of such person to the assessee to the extent of the amount referred to in the receipt.

Any person discharging any liability to the assessee after receipt of the notice referred to in this sub-section shall be personally liable to the Income-tax Officer to the extent of the liability discharged or to the extent of the liability of the assessee for tax and penalties, whichever is less.

If the person to whom a notice under this sub-section is sent fails to make payment in pursuance thereof to the Income-tax Officer, further proceedings may be taken by and before the Collector on the footing that the Income-tax Officer's notice has the same effect as an attachment by the Collector in exercise of his powers under the proviso to sub-section (2) of Section 46.

Where a person to whom a notice under this sub-section is sent objects to it on the ground that the sum demanded or any part thereof is not due to the assessee or that he does not hold any money for or on account of the assessee, then, nothing contained in this section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, to the Income-tax Officer.]

723[(6) If the recovery of income-tax in any area has been entrusted to a State Government under 724[Article 258(1) of the Constitution], the State Government may direct with respect to that area or any part thereof, that income-tax shall be recovered therein with, and as an addition to, any municipal tax or local rate, by the same person and in the same manner as the municipal tax or local rate is recovered.]

(7) Save in accordance with the provisions of sub-section (1) of Section 42, 725[or of the proviso to Section 45], no proceedings for the recovery of any sum payable under this Act shall be commenced after the expiration of one year from the last day of 726[the financial year] in which any demand is made under this Act:

727[Provided that the period of one year herein referred to shall

(i) where an assessee has been treated as not being in default under Section 45 as long as his appeal is undisposed of, be reckoned from the date on which the appeal is disposed of;

(ii) where recovery proceedings in any case have been stayed by any order of a Court, be reckoned from the date from which the order is withdrawn;

(iii) where the date of payment of tax has been extended by an income-tax authority, be reckoned from the date up to which the time for payment had been extended;

(iv) where the sum payable is allowed to be paid by instalments, from the date on which the last of such instalments was due:

Provided further that nothing in the foregoing proviso shall have the effect of reducing the period within which proceedings for recovery can be commenced, namely, after the expiration of one year from the last day of the financial year in which the demand is made.

Explanation. A proceeding for the recovery of any sum shall be deemed to have commenced within the meaning of this section, if some action is taken to recover the whole or any part of the sum within the period hereinbefore referred to, and for the removal of doubts it is hereby declared that the several modes of recovery specified in this section are neither mutually exclusive, nor affect in any way any other law for the time being in force relating to the recovery of debts due to Government, and it shall be lawful for the Income-tax Officer, if for any special reasons to be recorded he so thinks fit, to have recourse to any such mode of recovery notwithstanding that the tax due is being recovered from an assessee by any other mode.]

728[(7-A) For the purposes of this section, the expression Collector shall include

(a) an additional collector or any other officer authorised to exercise the powers of a Collector under any law for the time being in force in a State relating to land revenue; and

(b) a Collector in Pakistan.

(8) The Income-tax Officer may forward a certificate under sub-section (2) to a Collector in Pakistan through the Central Board of Revenue of Pakistan if the assessee has property in the district of that Collector.]

(9) Where a Collector in 729[the taxable territories] receives through the Central Board of Revenue of India a certificate under the signature of an Income-tax Officer in Pakistan, the Collector shall proceed to recover the amount specified therein in the manner in which he would proceed to recover the amount specified in a certificate received from an Income-tax Officer in 730[the taxable territories], and shall remit any sum so recovered by him to the Income-tax Officer in Pakistan, after deducting his expenses in connection with the recovery proceedings.

(10) The provisions of sub-sections (8) and (9) shall remain in force only so long as there are in force similar provisions in this Act as in force as part of the law of Pakistan or under any other similar Act forming part of the law of Pakistan, for the recovery of tax by a Collector in Pakistan on receipt of a certificate from an Income-tax Officer in 731[the taxable territories].]

732[46-A. Persons leaving India to obtain tax clearance certificates. (1) Subject to such exceptions as may be made by the Central Government, no person who is not domiciled in India, or who, even if domiciled in India at the time of his departure, has, in the opinion of an Income-tax authority, no intention of returning to India, shall leave the territory of India by land, sea or air unless he first obtains from such authority as may be appointed by the Central Government in this behalf (hereinafter in this section referred to as the competent authority ) a certificate stating that he has no liabilities under this Act, the Excess Profits Tax Act, 1940 (15 of 1940), or the Business Profits Tax Act, 1947 (21 of 1947), or that satisfactory arrangements have been made for the payment of all or any of such taxes which are or may become payable by that person:

Provided that if the competent authority is satisfied that such person intends to return to India, he may issue an exemption certificate either in respect of a single journey or in respect of all journeys to be undertaken by that person within such period as may be specified in the certificate.

(2) If the owner or charterer of any ship or aircraft carrying persons from any place in the territory of India to any place outside the territory allows any person to whom sub-section (1) applies, to travel by such ship or aircraft without first satisfying himself that such person is in possession of a certificate as required by that sub-section, he shall be personally liable to pay the whole or any part of the amount of tax, if any, payable by such person as the Income-tax Officer may, having regard to the circumstances of the case, determine.

Explanation. For the purposes of this sub-section the expressions owner and charterer include any representative, agent or employee empowered by the owner or charterer to allow persons to travel by the ship or aircraft.

(3) In respect of any sum payable by the owner or charterer of any ship or aircraft under sub-section (2), the owner or charterer, as the case may be, shall be deemed to be an assessee in default within the meaning of sub-section (1) of Section 46.

(4) The Central Government may make rules for regulating any matter necessary for, or incidental to, the purpose of carrying out the provisions of this section.]

Any sum imposed by way of penalty under the provisions of sub-section (2) of Section 25, Section 28, 733[sub-section (6) of Section 44-E, sub-section (5) of Section 44-F] or sub-section (1) of Section 46, 734[and any interest payable under the provisions of sub-section (4), (6), (7) or (8) of Section 18-A] shall be recoverable in the manner provided in this Chapter for the recovery of arrear of tax.

REFUNDS

735[(1) If any individual, Hindu undivided family, company, local authority, firm or other association of persons, or any partner of a firm or member of an association individually satisfies the Income-tax Officer or other authority appointed by the Central Government in this behalf that the amount of tax paid by him or on his behalf or treated as paid on his behalf for any year exceeds the amount with which he is properly chargeable under this Act for that year, he shall be entitled to a refund of any such excess.

(2) 736[The Appellate Assistant Commissioner or the Appellate Tribunal in the exercise of their appellate powers] if satisfied to the like effect shall cause a refund to be made by the Income-tax Officer of any amount found to have been wrongly paid or paid in excess.

(3) Where income of one person is included under any provision of this Act in the total income of any other person such other person only shall be entitled to a refund under this section in respect of such income.

(4) Nothing in this section shall operate to validate any objection or appeal which is otherwise invalid or to authorise the revision of any assessment or other matter which has become final and conclusive, or the review by any officer of a decision of his own which is subject to appeal or revision, or, where any relief is specifically provided elsewhere in this Act, to entitle any person to any relief other or greater than that relief or to entitle any person to claim a refund of tax payable before the commencement of the Indian Income-tax (Amendment) Act, 1939 (7 of 1939), which he would not be entitled to claim but for the passing of that Act.]

73748-A. General power to make refunds. [Repealed by the Indian Income-tax (Amendment) Act, 1939 (7 of 1939) Section 56.]

[Repealed by the Income-tax and Business Profits Tax (Amendment) Act, 1948 (48 of 1948), Section 10 (w.e.f. 30-3-1948).]

738[49-A.Agreement for granting relief in respect of double taxation or for avoidance thereof. The Central Government may enter into an agreement

(a) 739[* * *] with the Government of any country outside India for the granting of relief in respect of income on which have been paid both income-tax (including super-tax) under this Act and income-tax 740[in that country]; or

(b) with the Government of any country outside India for the avoidance of double taxation of income, profits and gains under this Act and under the corresponding law in force in that country;

and may, by notification in the Official Gazette, make such 741provisions as may be necessary for implementing the agreement.]

742[49-B. Relief to shareholders in respect of agricultural income-tax attributable to dividends. Where a company pays to a shareholder any divided out of its profits and gains which is assessed to agricultural income-tax by any State Government, the shareholder shall be entitled to a reduction from the tax payable by him under this Act, of a sum equal to

(a) that proportion of the agricultural income-tax (including super-tax, if any) paid by the company as the amount of the dividend attributable to the profits of the company assessed to agricultural income-tax bears to its total profits assessed to agricultural income-tax, reduced by the amount of refund, if any, allowed to him by the State Government; or

(b) where the shareholder

(i) is not a company, the amount of income-tax (but not super-tax) payable by him under this Act; and

(ii) is a company, 20 per cent.;

on that portion of the dividend which is attributable to the profits of the company assessed to agricultural income-tax;

whichever is less.]

743[49-BB. Relief to company in respect of dividend paid out of past taxed profits. Where in respect of any previous year relevant to the assessment year commencing after the 31st day of March, 1960, an Indian company or a company which has made the prescribed arrangements for the declaration and payment of dividends within India, pays any dividend wholly or partly out of its profits and gains actually charged to income-tax for any assessment year ending before the 1st day of April, 1960, and deducts tax therefrom in accordance with the provisions of Section 18, credit shall be given to the company against the income-tax, if any, payable by it on the profits and gains of the previous year during which the dividend is paid, of a sum calculated in accordance with the provisions of sub-section (2), and where the amount of credit so calculated exceeds the income-tax payable by the company as aforesaid, the excess shall be refunded.

(2) The amount of income-tax to be given as credit under sub-section (1) shall be a sum equal to ten per cent. of so much of the dividends referred to in sub-section (1) as are paid out of the profits and gains actually charged to income-tax for any assessment year ending before the 1st day of April, 1960.

Explanation I. For the purposes of this section, the aggregate of the dividends declared by a company in respect of any previous year shall be deemed first to have come out of the distributable income of that previous year and the balance, if any, out of the undistributed part of the distributable income of one or more previous years immediately preceding that previous year as would be just sufficient to cover the amount of such balance and as has not likewise been taken into account for covering such balance of any other previous year.

Explanation II. The distributable income of any previous year shall mean the total income assessed for that year as reduced by

(i) the amount of income-tax and super-tax payable by the company in respect of the said total income;

(ii) the amount of any other tax levied under any law for the time being in force on the company by the Governmnet or by a local authority in excess of the amount, if any, which has been allowed in computing the total income;

(iii) the amount paid to any charitable institution or fund to the extent to which it is exempt from tax under Section 15-B; and

(iv) in the case of a banking company, the amount actually transferred to a reserve fund under Section 17 of the Banking Companies Act, 1949 (10 of 1949),

and as increased by

(a) any profits and gains or receipts of the company not included in its total income; and

(b) any amount attributable to any allowance made in computing the profits and gains of the company for purposes of assessment, which the company has not taken into account in its profit and loss account.]

744[49-C. Relief granted to a company to be deemed relief granted to shareholder. 745[* * *]]

746[49-D. Relief in respect of incomes accruing or arising outside the taxable territories. (1) If any person who is resident in the taxable territories in any year proves that, in respect of his income which accrues or arises during that year without the taxable territories (and which is not deemed to accrue or arise in the taxable territories), he has paid in any country, with which there is no reciprocal arrangement for relief or avoidance of double taxation, income-tax, by deduction or otherwise, under the law in force in that country, he shall be entitled to the deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income at the Indian rate of tax or the rate of tax of the said country, whichever is the lower.

(2) The Central Government may, by notification in the Official Gazette, declare that the provisions of sub-section (1) shall also apply in relation to any such income accruing or arising in the United Kingdom and chargeable under this Act for the year ending on the 31st day of March, 1950, or for the year ending on the 31st day of March, 1951 or for the year ending on the 31st day of March, 1952.

747[(3) If any person who is resident in the taxable territories in any year proves that in respect of his income which accrues or arises to him during that year in Pakistan he has paid in that country, by deduction or otherwise, tax payable to the Government under any law for the time being in force in that country relating to taxation of agricultural income, he shall be entitled to a deduction from the Indian income-tax payable by him

(a) of the amount of the tax paid in Pakistan under any law aforesaid on such income which is liable to tax under this Act also; or

(b) of a sum calculated on that income at the Indian rate of tax;

whichever is less.

(4) Sub-section (3) shall apply in relation to all assessments for the years subsequent to the year ending on the 31st day of March, 1948, and, notwithstanding anything contained in Section 50, a claim for refund in respect of any of the years ending on the 31st day of March of the years, 1949 to 1952 inclusive, may be entertained if made before the 31st day of March, 1957.]

Explanation. In this section,

(i) the expression Indian income-tax means income-tax and super-tax charged in accordance with the provisions of this Act;

(ii) the expression Indian rate of tax means the rate determined by dividing the amount of Indian income-tax after deduction of any relief due under the other provisions of this Act but before deduction of any relief due under this section, by the total income;

(iii) the expression rate of tax of the said country means income-tax and super-tax actually paid in the said country in accordance with the corresponding laws of the said country after deduction of all reliefs due, but before deduction of any relief due in the said country in respect of double taxation, divided by the whole amount of the income assessed in the said country;

(iv) the expression income-tax in relation to any country includes any excess profits tax or business profits tax charged on the profits by the Government of that country and not by the Government of any part of that country or a local authority in that country.]

748[49-E. Power to set off amount of refunds against tax remaining payable. Where under any of the provisions of this Act, a refund is found to be due to any person, the Income-tax Officer, 749[Appellate Assistant Commissioner] or Commissioner, as the case may be, may, in lieu of payment of the refund, set off the amount to be refunded, or any part of that amount 750[against the tax, interest or penalty], if any, remaining payable by the person to whom the refund is due.]

751[49-EE. Power to set off in certain cases moneys in the possession of Government against tax found due under assessments etc., thereafter to be made. (1) Where in pursuance of any settlement relating to the assessment, re-assessment or case of any person made or purported to have been made before the 17th day of January, 1959, whether under this Act or otherwise, any sum of money or any security for the payment of any sum of money has been paid or furnished by him, or on his behalf by any other person, no claim for the refund of any sum so paid or for the return of any security so furnished shall be entertained or allowed on the ground that the settlement is invalid

(a) in any case where a notice under Section 34 in respect of the income, profits or gains relating to the settlement aforesaid has been issued before the 17th day of January, 1959, and

(b) in any other case, for a period of two years from that date and, if during the period of the said two years any notice under Section 34 is issued, pending the completion of the assessment, re-assessment or settlement in pursuance of such notice;

and, accordingly, no application, suit or other legal proceeding for the refund of any such money or the return of any such security shall lie or be allowed to continue

(i) pending the completion of the assessment, re-assessment or settlement in pursuance of the notice referred to in clause (a); or

(ii) during the period of two years referred to in clause (b) or pending the completion of the assessment, re-assessment or settlement in pursuance of the notice referred to in that clause.

(2) The Income-tax Officer, Appellate Assistant Commissioner or the Commissioner, as the case may be, may set off the amount referred to in sub-section (1) or the amount of the security referred to in that sub-section which may be realised for the purpose against the tax, interest, penalty or any other sum which may become payable by reason of any assessment, re-assessment or settlement made in pursuance of the notice referred to in clause (a) of that sub-section or in pursuance of any such notice issued within the period of two years referred to in clause (b) of that sub-section.

(3) In computing the period of limitation prescribed for any legal proceeding in relation to any such sum or security aforesaid, the time during which any such proceeding cannot be instituted by reason of the provisions contained in sub-section (1) shall be excluded.]

752[49-F. Power of representative of deceased person or person disabled to make claim on his behalf. Where through death, incapacity, bankruptcy, liquidation or other cause, a person who would but for such cause have been entitled to a refund under any of the provisions of this Act, or to make a claim under Section 48 753[* * *] or 49, is unable to receive such refund or to make such claim, his executor, administrator or other legal representative, or the trustee or receiver, as the case may be, shall be entitled to receive such refund or to make such claim for the benefit of such person or his estate.]

No claim to any refund of income-tax 754[or super-tax] under this Chapter shall be allowed, unless it is made within 755[four years from the last day of the financial year commencing next after the expiry of the previous year in which the income arose, accrued or was received or was deemed to have arisen, accrued or been received or was brought into 756[the taxable territories]:

Provided that where the claim is to a refund of income-tax or super-tax paid prior to the commencement of the Indian Income-tax (Amendment) Act, 1939 (7 of 1939), the claim shall not be allowed unless it is made within one year from the last day of the year in which the tax was recovered or before the last day of the financial year commencing after the expiry of the previous year as defined in clause (11) of Section 2 in which the income arose on which the tax was recovered, whichever period may expire later:]

757[Provided 758[further] that a claim to refund under Section 49 759[of tax paid prior to the commencement of the Indian Income-tax (Amendment) Act, 1939 (7 of 1939)], may be admitted after the period of limitation herein prescribed, when the applicant satisfies the Commissioner, or an Assistant Commissioner of Income-tax specially empowered in this behalf by the Central Board of Revenue, that he had sufficient cause for not making the claim within such period.]

76050-A. Appeal against refusal of refund. [Repealed by the Indian Income-tax (Amendment) Act, 1939 (7 of 1939), Section 62.]

OFFENCES AND PENALTIES

If a person fails without reasonable cause or excuse

(a) to deduct and pay any tax as required by Section 18 or under sub-section (5) of Section 46;

(b) to furnish a certificate required by sub-section (9) of Section 18 761[* * *] to be furnished;

(c) to furnish in due time any of the returns mentioned in 762[Section 19-A], 763[Section 20-A], Section 21, 764[sub-section (2) of] Section 22, or Section 38;

(d) to produce, or cause to be produced, on or before the date mentioned in any notice under sub-section (4) of Section 22, such accounts and documents as are referred to in the notice;

(e) to grant inspection or allow copies to be taken in accordance with the provisions of Section 39;

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

If a person makes a statement in a verification mentioned in 765[Section 19-A or] 766[Section 20-A 767[or Section 21] or] Section 22 768[or sub-section (2) of Section 26-A] or sub-section (3) of Section 30, 769[or sub-section (3) of Section 33] 770[or furnishes a certificate under sub-section (9) of Section 18] 771[* * *] which is false, and which he either knows or believes to be false, or does not believe to be true, he shall 772[be punishable, on conviction before a Magistrate, with simple imprisonment which may extend to six months, or with fine which may extend to one thousand rupees, or with both].

(1) A person shall not be proceeded against for an offence under Section 51 or Section 52 except at the instance of the 773[Inspecting Assistant Commissioner].

774[(2) The Inspecting Assistant Commissioner may either before or after the institution of proceedings compound any such offence.]

(1) All particulars contained in any statement made, return furnished or accounts or documents produced under the provisions of this Act, or in any evidence given, or affidavit or deposition made, in the course of any proceedings under this Act other than proceedings under this Chapter, or in any record of any assessment proceeding, or any proceeding relating to the recovery of a demand, prepared for the purposes of this Act, shall be treated as confidential, and notwithstanding anything contained in the Indian Evidence Act, 1872 (1 of 1872), no Court shall, save as provided in this Act, be entitled to require any public servant to produce before it any such return, accounts, documents or record or any part of any such record, or to give evidence before it in respect thereof.

(2) If a public servant discloses any particulars contained in any such statement, return, accounts, documents, evidence, affidavit, deposition or record, he shall be punishable with imprisonment which may extend to six months, and shall also be liable to fine.

775[* * *] 776[(3)] Nothing in this section shall apply to the disclosure

(a) of any such particulars for the purposes of a prosecution under 777[* * *] the Indian Penal Code (45 of 1860), in respect of any such statement, return, accounts, documents, evidence, affidavit or deposition, or for the purposes of a prosecution under this Act; or

778[(b) of any such particulars to any person acting in the execution of this Act or of the Taxation on Income (Investigation Commission) Act, 1947 (30 of 1947), where it is necessary or desirable to disclose the same to him for the purposes of either this Act or the Taxation on Income (Investigation Commission) Act, 1947; or]

(c) of any such particulars occasioned by the lawful employment under this Act of any process for the service of any notice or the recovery of any demand; or

779[(d) of any such particulars to a Civil Court in any suit 780[or proceeding] to which Government 781[or any Income-tax authority] is a party, which relates to any matter arising out of any proceeding under this Act 782[or under any other law for the time being in force authorising any Income-tax authority to exercise any powers thereunder]; or

783[(e) of any such particulars as the Comptroller and Auditor-General of India for the purpose of enabling him to discharge his functions under the Constitution; or]

(f) of any such particulars to any officer appointed by the 784[Comptroller and Auditor-General of India] or the Central Board of Revenue to audit income-tax receipts or refunds; or

(g) of any such particulars, relevant to any inquiry into the conduct of an official of the Income-tax Department, to any persons appointed Commissioners under the Public Servants (Inquiries) Act, 1850 (37 of 1850), or to an officer otherwise appointed to hold such inquiry, or to a Public Service Commission established under 785[the Constitution], when exercising its functions in relation to any matter arising out of any such inquiry; or]

786[(gg) of any such particulars, relevant to any inquiry into a charge of misconduct in connection with income-tax proceedings against a lawyer or 787[chartered accountant], to the authority referred to in sub-section (3) of Section 61, when exercising the functions referred to in that sub-section]; 788[or]

789[(h) of any such particulars occasioned by the lawful exercise by a public servant of his powers under the Indian Stamp Act, 1899 (2 of 1899), to impound an insufficiently stamped document; or]

790[(i) of such facts, to an authorised officer of the United Kingdom, 791[* * *] or of any part of His Majesty's Dominions which has entered into an agreement with 792[India] for the granting of double taxation relief, as may be necessary for the purpose of enabling such relief or a refund under Section 49 793[or Section 49-AA] of this Act to be given; or

(j) of such facts, to an officer of a State Government, as may be necessary for the purpose of enabling that Government to levy or realise any tax imposed by it 794[* * *]; or

(k) of such facts, to any authority exercising powers under the Sea Customs Act, 1878 (8 of 1878), or any 795[Central Act] imposing a duty of excise as may be necessary for enabling it duly to exercise such powers; or

(l) of such facts, 796[to any person charged by law with the duty of inquiring into the qualifications of electors], as may be necessary to establish whether a person is or is not entitled to be entered on an electoral roll; or

(m) 797[of] so much of such particulars, to the appropriate authority, as may be necessary to establish whether a person has or has not been assessed to income-tax in any particular year or years, where under the provisions of any law for the time being in force such fact is required to be established;] 798[or]

799[(n) of such particulars to the Reserve Bank of India as are required by that Bank to enable it to compile financial statistics of international investments and balance of payments; or

(o) of such information as may be required by any officer or department of the Central Government or of a State Government for the purpose of investigation into the conduct and affairs of any public servant;]

800[(p) of any such particulars to the Custodian of Evacuee Property appointed under the Administration of the Evacuee Property Act, 1950 (31 of 1950), for the purpose of enabling him to discharge the duties imposed upon him by or under the said Act.]

801[802[* * *] 803[(4)] Nothing in this section shall apply to the production by a public servant before a Court of any document, declaration or affidavit filed, or the record of any statement or deposition made in a proceeding under 804[Section 25-A or] Section 26-A, or to the giving of evidence by a public servant in respect thereof.]

805[* * *] 806[(5)] No prosecution shall be instituted under this section except with the previous sanction of the Commissioner.

SUPER-TAX

In addition to the income-tax charged for any year, there shall be charged, levied and paid for that year in respect of the total income of the previous year of any 807[individual, Hindu undivided family, 808[company, local authority, unregistered firm or other association of persons], not being a registered firm], 809[or the partners of the firm or members of the association individually,] an additional duty of income-tax (in this Act referred to as super-tax) at the rate or rates laid down for that year by 810[a Central Act]:

811[Provided that where under the provisions of clause (b) of sub-section (5) of Section 23 an unregistered firm has been assessed in the manner applicable to a registered firm, super-tax shall be payable by each partner of the firm individually on his share in the income, profits and gains of the firm and not by the firm itself:]

Provided 812[further] that, where the profits and gains of an unregistered firm 813[or other association of persons not being a company] have been assessed to super-tax, super-tax shall not be payable by 814[a partner of the firm or a member of the association, as the case may be,] in respect of the amount of such profits and gains which is proportionate to his share.

815[Except in cases to which 816[Section 15-A applies or to which] by clause (a) of the proviso to sub-sections (3) and (4) of Section 25 those sub-sections do not apply and] subject to the provisions of this Chapter, the total income of any 817[individual, Hindu undivided family, company, 818[local authority], unregistered firm or other 819[association of persons]] shall, for the purposes of super-tax, be the total income as assessed for the purposes of income-tax, and where an assessment of total income has become final and conclusive for the purposes of income-tax for any year, the assessment shall also be final and conclusive for the purposes of super-tax for the same year.

820[* * *]

821[56-A. Exemption from super-tax of certain dividends. (1) No super-tax shall be payable by a company on such part of its total income as consists of dividends received from an Indian company formed and registered after the 31st day of March, 1952, where

(i) the Central Government is satisfied that the Indian company is wholly or mainly engaged in an industry for the manufacture or production of any one or more of the following, namely:

(1) Coal, including coke and other derivatives;

822[(2) Iron and steel (metal), ferro-alloys, and special steels;]

(3) Motor and aviation fuel, kerosene, crude oils and synthetic oils (not being oil exploration);

823[(4) Chemicals (other than fertilisers) of the following types:

(i) Inorganic heavy chemicals;

(ii) Organic heavy chemicals;

(iii) Fine chemicals including photographic chemicals;

(iv) Synthetic rubber;

(v) Man-made fibres other than viscose rayon;

(vi) Coke oven by-products;

(vii) Coal tar distillation products like napthalene, anthracene and the like;

(viii) Explosives including gun powder and safety fuses;

(4-A) Inorganic, organic and mixed fertilisers;]

824[(5) Industrial machinery of the following types (including gear wheels and parts thereof, boilers and steam generating plants):

A. Major items of specialised equipment used in specific industries:

(i) Textile machinery (such as frames, carding machines, powerlooms and the like) including textile accessories;

(ii) Jute machinery;

(iii) Rayon machinery;

(iv) Sugar machinery;

(v) Tea machinery;

(vi) Mining machinery;

(vii) Metallurgical machinery;

(viii) Cement machinery;

(ix) Chemical machinery;

(x) Pharmaceuticals machinery;

(xi) Paper machinery;

B. Genera items of machinery used in several industries, such as the equipment required for various unit processes :

(i) Size reduction equipment crushers, ball mills and the like;

(ii) Conveying equipment bucket elevators, skip hoists, cranes, derricks and the like;

(iii) Size separation units screens, classifiers and the like;

(iv) Mixers and reactors kneading mills, turbo mixers and the like;

(v) Filtration equipment filter presses, rotary filters and the like;

(vi) Centrifugal machines;

(vii) Evaporators;

(viii) Distillation equipment;

(ix) Crystallisers;

(x) Driers;

(xi) Power driven pumps reciprocating, centrifugal and the like;

(xii) Air and gas compressors and vacuum pipes (excluding electrical furnaces);

(xiii) Refrigeration plants for industrial use;

(xiv) Fire fighting equipment and appliances including fire engines;

(i) Ball, roller and tapered bearings;

(ii) Speed reduction units;

(iii) Grinding wheels and abrasives;]

(6) Machinery and equipment for the generation, transmission and distribution of electric energy;

(7) Non-ferrous metals including alloys;

(8) Paper including newsprint and paper board;

(9) Internal combustion engines;

(10) Power-driven pumps;

825[(11) Automobiles;

(12) Tractors;

(13) Cement;

(14) Electric Motors;

(15) Locomotives;

(16) Rolling Stock;

(17) Machine Tools;

(18) Agricultural Implements;

(19) Ferro-manganese;

(20) Dye-stuffs;]

826[(21) Refractories;]

as specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 (65 of 1951), and

(ii) the income of the Indian company would have been exempt under the operation of Section 15-C if the provisions of that section had been applicable thereto.

(2) The exemption specified in sub-section (1) shall apply also to dividends payable to a company in respect of any fresh capital raised by an Indian company after the 28th day of February, 1953, by public subscription for the purpose of increasing the production of, or starting a separate unit of, any one or more of the items specified in clause (i) of sub-section (1).]

57.Non-resident partners and shareholders. [Repealed by the Indian Income-tax (Amendment) Act, 1939 (7 of 1939), Section 69.]

(1) All the provisions of this Act 827[relating to the charge, assessment, collection and recovery of income-tax except those contained in] Section 3, 828[the first proviso] to sub-section (1) of Section 7, 829[the second and third provisos to Section 8], 830[clauses (a) and (b) of sub-section (2) of Section 14], and Sections 15, 831[15-A] 832[* * *] 833[* * *] 19, 834[835[* * *] and the first proviso to sub-section (1) of Section 41 and section] 836[* * *] 837[838[* * *] 58-F and 839[sub-section (2)] of Section 58-G] shall apply, so far as may be, to the charge, assessment, collection and recovery of super-tax.

840[* * *]

(2) Save as provided in 841[842[sub-sections (2), (2-A), (2-B), 843[844[(3)], (3-B), (3-C) and (3-D)]] of Section 18], 845[* * *] 846[and Section 58-H] super-tax shall be payable by the assessee direct.

847[Chapter IX-A

SPECIAL PROVISIONS RELATING TO CERTAIN CLASSES OF PROVIDENT FUNDS

58-A. Definitions. In this Chapter, unless there is anything repugnant in the subject or context,

(a) a recognised provident fund means a provident fund which has been and continues to be recognised by the Commissioner, in accordance with the provisions of this Chapter;

(b) an employer means

(i) a Hindu undivided family, company, firm or other association of 848[* * *] persons, or

(ii) an individual engaged in a business, profession or vocation whereof the profits and gains are assessable to income-tax under Section 10, 849[* * *]

maintaining a provident fund for the benefit of his or its employees;

(c) an employee means an employee participating in a provident fund, but does, not include a personal or domestic servant;

(d) a contribution means any sum credited by or on behalf of any employee out of his salary, or by an employer out of his own monies, to the individual account of an employee, but does not include any sum credited as interest;

(e) the balance to the credit of an employee means the total amount to the credit of his individual account in a provident fund at any time;

(f) the annual accretion to the balance to the credit of an employee means the increase to such balance in any year, arising from contributions and interest;

(g) the accumulated balance due to an employee means the balance to his credit, or such portion thereof as may be claimable by him under the regulations of the fund, on the day he ceases to be an employee of the employer maintaining the fund; and

(h) the regulations of a fund means the special body of regulations governing the constitution and administration of a particular provident fund.

58-B. The according and withdrawal of recognition. (1) The Commissioner of Income-tax may accord recognition to any provident fund which, in his opinion, satisfies the conditions prescribed in Section 58-C and the rules made thereunder, and may, at any time, withdraw such recognition if, in his opinion, the provident fund contravenes any of those conditions.

850[* * *]

851[(2)] An order according recognition shall take effect on such date as the Commissioner may fix in accordance with any rules the Central Board of Revenue may make in this behalf, such date not being later than the last day of the financial year in which the order is made.

852[(3)] An order withdrawing recognition shall take effect from the day on which it is made.

853(3-A) An order according recognition to a provident fund shall not, unless the Commissioner otherwise directs, be affected by the fact that the fund is subsequently amalgamated with another provident fund on the occurrence of an amalgamation of the undertakings in connection with which the two funds are maintained, or that it subsequently absorbs the whole or a part of another provident fund belonging to an undertaking which is wholly or in part transferred to or merged in the undertaking of the employer maintaining the first-mentioned fund.]

854[(4)] An employer objecting to an order of the Commissioner refusing to recognise 855[or an order withdrawing recognition from] a provident fund may appeal, within sixty days of such order, to the Central Board of Revenue.

The appeal shall be in the form and shall be verified in the manner prescribed by the Central Board of Revenue.

58-C. Conditions to be satisfied by a recognised provident fund. (1) In order that a provident fund may receive and retain recognition, it shall satisfy the conditions set out below and any other conditions which the Central Government may, by rule, prescribe

(a) All employees shall be employed in India, or shall be employed by an employer whose principal place of business is in 856[the taxable territories]:

857[Provided that the Commissioner may, if he thinks fit and subject to such conditions, if any, as he thinks proper to attach to the recognition, accord recognition to a fund maintained by an employer whose principal place of business is not in 858[the taxable territories] notwithstanding that a proportion not exceeding ten per cent. of the employees is employed outside India.]

(b) The contributions of an employee in any year shall be a definite proportion of his salary for that year, and shall be deducted by the employer from the employee's salary in that proportion, at each periodical payment of such salary in that year, and credited to the employee's individual account in the fund:

859[Provided that an employee who retains his employment while serving in 860[the Armed Forces of the Union] or when taken into or employed in the national service under the National Service (European British Subjects) Act, 1940 (18 of 1940), or the National Service (Technical Personnel) Ordinance, 1940 (2 of 1940), may, notwithstanding that he receives from the employer no salary or a salary less than he would have received had he not entered 861[the Armed Forces of the Union], or been so taken into or employed in the national service, contribute to the fund during his service in 862[the Armed Forces of the Union] or while so taken into or employed in the national service a sum not exceeding the amount he would have contributed had he continued to receive from the employer the same salary (including increments, if any) as he would have received had he not entered 863[the Armed Forces of the Union] or been taken into or employed in the national service.]

(c) Subject to the provisions of Section 58-D, the contributions of an employer to the individual account of an employee in any year shall not exceed the amount of the contributions of the employee in that year, and shall be credited to the employee's individual account at intervals not exceeding one year.

(d) The fund shall consist of contributions as above specified 864[and of donations, if any, received 865[by the trustees]], of accumulations thereof, and of interest (simple and compound), credited in respect of such 866[contributions, donations and accumulations], and of securities purchased therewith 867[and of any capital gains arising from the sale, exchange or transfer of capital assets of the fund,] and of no other sums:

868[Provided that the fund may consist also of the accumulated balance due to an employee who has ceased to be an employee, and of interest (simple and compound) in respect thereof where such balance is retained in the fund in accordance with the provisions of clause (g).]

(e) The fund shall be vested in two or more trustees 869[or in the Official Trustee], under a trust which shall not be revocable save with the consent of all the beneficiaries.

(f) The employer shall not be entitled to recover any sum whatsoever from the fund, save in cases where the employee is dismissed for misconduct or voluntarily leaves his employment otherwise than on account of ill-health or other unavoidable cause before the expiration of the term of service specified in this behalf in the regulations of the fund.

In such cases the recoveries made by the employer shall be limited to the contributions made by him to the individual account of the employee, and to interest (simple and compound) credited in respect of such contributions and accumulations thereof, in accordance with the regulations of the fund.

(g) The accumulated balance due to an employee shall be payable on the day he ceases to be an employee of the employer maintaining the fund 870[unless at the request of the employee made in writing, the trustees of the fund consent to retain the whole or any part of the accumulated balance due to the employee in the fund to be drawn by him at any time on demand].

(h) Save as provided in clause (g), or in accordance with such conditions and restrictions as the Central Government may, by rules, prescribe, no portion of the balance to the credit of an employee shall be payable to him.

(2) Where there is a repugnance between any regulation of a recognised provident fund and any provision of this Chapter or of the rules made thereunder, the regulation shall, to the extent of the repugnance, be of no effect.

The Commissioner may, at any time, require that such repugnance shall be removed from the regulations of the fund.

58-D. Power to relax restrictions of employer's contributions in certain cases. Subject to any rules which the Central Government may make in this behalf, the Commissioner may, in respect of any particular fund, relax the provisions of condition (c) of sub-section (1) of Section 58-C

(a) so as to permit the payment of larger contributions by an employer to the individual accounts of employees whose salary does not exceed five hundred rupees per mensem; and

(b) so as to permit the crediting by employers to the individual accounts of employees of periodical bonuses or other contributions of a contingent nature, where the calculation and payment of such bonuses or other contributions is provided for on definite principles by the regulations of the fund.

871[58-E. Annual contributions of employers and interest when deemed to be income received. That portion of the annual accretion in any year to the balance at the credit of an employee participating in a recognised provident fund as consists of

(a) contributions made by the employer in excess of ten per cent. of the salary of the employee, and

(b) interest credited on the balance to the credit of the employee in so far as it exceeds one-third of the salary of the employee or is allowed at a rate exceeding the rate fixed by the Central Government in this behalf by notification in the Official Gazette,

shall be deemed to have been received by him in that year and shall be included in his total income for that year, and shall be liable to income-tax and super-tax.]

872[58-F. Exemption of employees' contributions from income-tax. An employee shall not be liable to pay income-tax on his own contributions to his individual account in a recognised provident fund in so far as the aggregate of such contributions in any year does not exceed one-fifth of his salary in that year or eight thousand rupees, whichever is less.]

58-G. Exemption of accumulated balance from income-tax and super-tax. 873[(1) Where the accumulated balance due to an employee participating in a recognised provident fund becomes payable, such accumulated balance shall be exempt from payment of super-tax except to the extent of an amount equal to the aggregate of the amounts of super-tax on annual accretions that would have been payable under Section 58-E up to the first day of April, 1933, if the Indian Income-tax (Second Amendment) Act, 1933 (18 of 1933), had come into force on the 15th March, 1930.]

874[(2)] Where an employee participating in a recognised provident fund has rendered continuous service with his employer for a period of not less than five years, and the accumulated balance due to him becomes payable, such accumulated balance shall be exempt from payment of income-tax 875[* * *], and shall be excluded from the computation of his total income:

Provided that the Commissioner of Income-tax may allow such exemption and exclusion where the employee has rendered continuous service with the employer for a period of less than five years, if, in his opinion, the service has been terminated by reason of the employee's ill-health, or by the contraction or discontinuance of the employer's business, or other cause beyond the control of the employee.

876[(3)] Where exemption from payment of income-tax is not allowed under the provisions of 877[sub-section (2)], the Income-tax Officer shall calculate the total of the various sums of income-tax 878[and super-tax which would have been payable by the employee in respect of his total income for each of the years concerned if the fund had not been a recognised provident fund, and the amount by which such total exceeds the total of all sums paid by or on behalf of such employee by way of tax for such years shall be payable by the employee in addition to any other income-tax and super-tax] for which he may be liable for the year in which the accumulated balance due to him becomes payable.

58-H. Deduction at source of income-tax payable on accumulated balances due. The trustees of a recognised provident fund, or other person authorised by the regulations of the fund to make payment of accumulated balances due to employees, shall, at the time an accumulated balance due to an employee is paid, deduct therefrom any income-tax payable under 879[sub-section (3)] of Section 58-G and any income-tax and super-tax payable on an employee's total income as determined under sub-section (3) of Section 58-J, and sub-sections (4) to (9) of Section 18 shall apply as if the sum to be deducted were income-tax payable under the head Salaries .

58-I. Accounts of recognised provident funds. (1) The accounts of a recognised provident fund shall be maintained by the trustees of the fund and shall be in such form and for such periods, and shall contain such particulars as the Central Board of Revenue may prescribe.

(2) The accounts shall be open to inspection at all reasonable times by Income-tax authorities, and the trustees shall furnish to the Income-tax Officer such abstracts thereof as the Central Board of Revenue may prescribe.

58-J. Treatment of balances in newly recognised provident funds. (1) Where recognition is accorded to a provident fund with existing balances, an account shall be made of the fund up to the day before the day on which the recognition takes effect, showing the balance to the credit of each employee on such day, and containing such further particulars as the Central Board of Revenue may prescribe.

(2) The account shall also show in respect of the balance to the credit of each employee the amount thereof which is to be transferred to that employee's account in the recognised provident fund, and such amount (hereinafter called his transferred balance) shall be shown as the balance to his credit in the recognised provident fund on the date on which the recognition of the fund takes effect, and sub-sections (3) and (4) shall apply thereto.

Any portion of the balance to the credit of an employee in the existing fund which is not transferred to the recognised fund shall be excluded from the accounts of the recognised fund and shall be liable to income-tax and super-tax in accordance with the provisions of this Act other than this Chapter.

(3) Subject to such rules as the Central Board of Revenue may make in this behalf, the Income-tax Officer shall make a calculation of the aggregate of all sums comprised in a transferred balance which would have been liable to income-tax if this Chapter had been in force from the date of the institution of the fund, without regard to any tax which may have been paid on any such sum, and such aggregate (if any) shall be deemed to be income received by the employee in the year in which the recognition of the fund takes effect, and shall be included in the employee's total income for that year; and, for the purposes of assessment, the remainder of the transferred balance shall be disregarded, but no other exemption or relief, by way of refund or otherwise, shall be granted in respect of any sum comprised in such transferred balance:

Provided that, in cases of serious accounting difficulty, the Commissioner shall have power subject to the said rules, to make a summary calculation of such aggregate.

(4) Notwithstanding anything contained in condition (h) of sub-section (1) of Section 58-C, an employee, in order to enable him to pay the amount of tax assessed on his total income as determined under sub-section (3), shall be entitled to withdraw from the balance to his credit in the recognised provident fund a sum not exceeding the difference between such amount and the amount to which he would have been assessed if the transferred balance had not been included in his total income.

(5) Nothing in this section shall affect the rights of the persons administering an unrecognised provident fund or dealing with it, or with the balance to the credit of any individual employee, before recognition is accorded, in any manner which may be lawful.

58-K. Treatment of fund transferred by employer to trustee. (1) Where an employer who maintains a provident fund (whether recognised or not) for the benefit of his employees and has not transferred the fund or any portion of it, transfers such fund or portion to trustees in trust for the employees participating in the fund, the amount so transferred shall be deemed to be of the nature of capital expenditure.

(2) When an employee participating in such fund is paid the accumulated balance due to him therefrom, any portion of such balance as represents his share in the amount so transferred to the trustee (without addition of interest, and exclusive of the employee's contributions and interest thereon) shall, 880[if the employer has made effective arrangements to secure that tax shall be deducted at source from the amount of such share when paid to the employee] be deemed to be an expenditure by the employer within the meaning of 881[clause (xv)] of sub-section (2) of Section 10, incurred in the year in which the accumulated balance due to the employee is paid.

58-L. Provisions relating to rules. (1) All rules made under this Chapter shall be subject to the provisions of sub-sections (4) and (5) of Section 59.

(2) In addition to any power conferred by this Chapter, the Central Government may make rules

(a) prescribing the statements and other information to be submitted with an application for recognition;

(b) limiting the contributions to a recognised provident fund by employees of a company who are shareholders in the company;

(c) providing for the assessment by way of penalty of any consideration received by an employee for an assignment of, or creation of a charge upon, his beneficial interest in a recognised provident fund;

(d) determining the extent to and the manner in which exemption from payment of income-tax and super-tax may be granted in respect of contributions and interest credited to the individual accounts of employees in a provident fund from which recognition has been withdrawn; and

(e) generally, to carry out the purposes of this Chapter and to secure such further control over the recognition of provident funds and the administration of recognised provident funds as it may deem requisite.

58-M. Application of this Chapter. This Chapter shall not apply to any provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies.]

882[Chapter IX-B

SPECIAL PROVISIONS RELATING TO CERTAIN CLASSES OF SUPERANNUATION FUNDS

58-N. Definitions. In this Chapter, unless there is anything repugnant in the subject or context,

(a) approved superannuation fund means a superannuation fund or any part of a superannuation fund which has been and continues to be approved by the Central Board of Revenue in accordance with the provisions of this Chapter;

(b) employer , employee and contribution have, in relation to superannuation funds, the meanings assigned to those expressions in Section 58-A in relation to provident funds;

(c) ordinary annual contribution means an annual contribution of a fixed amount or an annual contribution computed on some definite basis by reference to the earnings, the contributions or the number of members of the fund.

58-O. Approval and withdrawal of approval. (1) The Central Board of Revenue may accord approval to any superannuation fund or any part of a superannuation fund which in its opinion complies with the requirements of Section 58-P, and may at any time withdraw such approval, if in its opinion the circumstances of the fund or part cease to warrant the continuance of the approval.

(2) The Central Board of Revenue shall communicate in writing to the trustees of the fund the grant of approval with the date on which the approval is to take effect, and, where the approval is granted subject to conditions, those conditions.

(3) The Central Board of Revenue shall communicate in writing to the trustees of the fund any withdrawal of approval with the reasons for such withdrawal and the date on which the withdrawal is to take effect.

(4) The Central Board of Revenue shall neither refuse nor withdraw approval to any superannuation fund or any part of a superannuation fund unless it has given the trustees of that fund a reasonable opportunity of being heard in the matter.

58-P. Conditions for approval. In order that a superannuation fund may receive and retain approval, the following conditions shall be satisfied, namely:

(a) the fund shall be a fund established under an irrevocable trust in connection with a trade or undertaking carried on in 883[the taxable territories];

(b) the fund shall have for its sole purpose the provision of annuities for employees in the trade or undertaking on their retirement at or after a specified age or on their becoming incapacitated prior to such retirement, or for the widows, children or dependants of persons who are or have been such employees on the death of those persons; and

(c) the employer in the trade or undertaking shall be a contributor to the fund:

Provided that the Central Board of Revenue may, if it thinks fit and subject to such conditions, if any, as it thinks proper to attach to the approval, approve a fund or any part of a fund

(i) notwithstanding that the rules of the fund provide for the return in certain contingencies of contributions paid to the fund, or

(ii) if the main purpose of the fund is the provision of such annuities as aforesaid, notwithstanding that such provision is not its sole purpose, or

(iii) notwithstanding that the trade or undertaking in connection with which the fund is established is carried on only partly in 884[the taxable territories].

58-Q. Application for approval. (1) An application for approval of a superannuation fund or part of a superannuation fund for any year of assessment shall be made in writing before the end of that year by the trustees of the fund to the Income-tax Officer, and shall be accompanied by a copy of the instrument under which the fund is established and by two copies of the rules and of the accounts of the fund for the last year for which such accounts have been made up. The Central Board of Revenue may require such further information to be supplied as it thinks proper.

(2) If any alteration in the rules, constitution, objects or conditions of the fund is made at any time after the date of the application for approval, the trustees of the fund shall forthwith communicate such alteration to the Income-tax Officer, and in default of such communication any approval given shall, unless the Central Board of Revenue otherwise orders, be deemed to have been withdrawn from the date on which the alteration took effect.

58-R. Exemption of superannuation fund from income-tax. Income derived from investments or deposits of an approved superannuation fund 885[and any capital gains arising from the sale, exchange or transfer of capital assets of such fund] shall be exempt from payment of income-tax, and any sum paid by an employer or an employee by way of contribution towards an approved superannuation fund shall, in the case of an employer, be deducted in computing his income, profits or gains for the purpose of assessment, and, in the case of an employee, be treated for all the purposes of this Act as if it were a sum to which the provisions of Section 15 apply:

Provided that no such exemption shall be allowable to an employee in respect of any sum which is not an ordinary annual contribution:

Provided further that where a contribution by an employer is not an ordinary annual contribution it shall, for the purposes of this section, be treated, as the Central Board of Revenue may direct, either as an expense incurred in the year in which the sum is paid, or as an expense to be spread over such period of years as the Central Board of Revenue thinks proper.

58-S. Treatment of repaid contributions. (1) Where any contributions (including interest on contributions, if any) are repaid to an employee, the amount so repaid shall be deemed for the purposes of income-tax 886[* * *] to be income of the employee for that year.

(2) Where any contributions (including interest on contributions, if any) are repaid to an employee during his lifetime but not at or in connection with the termination of his employment, income-tax on the amount so repaid or paid shall, except in the case of an employee whose employment was carried on abroad, be deducted by the trustees of the fund at the average rate of tax at which the employee was liable to income-tax 887[* * *] during the preceding three years or during such period, if less than three years, as he was a member of the fund, and shall be paid by the trustees to the credit of the Central Government within the prescribed time and in such manner as the Central Board of Revenue may direct.

58-T. Deduction from pay of, and contributions on behalf of, employee to be included in return under Section 21. Where an employer deducts from the emoluments paid to an employee or pays on his behalf any contributions of that employee to an approved superannuation fund, he shall include all such deductions or payments in the return which he is required to furnish under Section 21.

58-U. Liabilities of trustees on cessation of approval of fund. If a fund or a part of a fund for any reason ceases to be an approved superannuation fund, the trustees of the fund shall nevertheless remain liable to account for tax on any sum paid

(a) on account of returned contributions (including interest on contributions, if any); and

(b) in commutation or in lieu of annuities;

in so far as the sum so paid is in respect of contributions made before the fund or part of the fund ceased to be an approved fund under the provisions of this Chapter.

58-V. Particulars to be furnished in respect of superannuation funds. The trustees of an approved superannuation fund and any employer who contributes to an approved superannuation fund shall, when required by notice from the Income-tax Officer, within twenty-one days of the date of such notice

(a) furnish to the Income-tax Officer a return containing such particulars of contributions made to the fund as the notice may require;

(b) prepare and deliver to the Income-tax Officer a return containing

(i) the name and place of residence of every person in receipt of an annuity from the fund,

(ii) the amount of the annuity payable to each annuitant,

(iii) particulars of every contribution (including interest on contributions, if any) returned to the employer or to employees, and

(iv) particulars of sums paid in commutation or in lieu of annuities;

(c) furnish to the Income-tax Officer a copy of the accounts of the fund to the last date prior to such notice to which such accounts have been made up, together with such other information and particulars as the Central Board of Revenue may reasonably require.]

MISCELLANEOUS

(1) 888[The Central Board of Revenue] may, subject to the control of the Central Government, make rules for carrying out the purposes of this Act and for the ascertainment and determination of any class of income. Such rules may be made for the whole of 889[the taxable territories] or for such part thereof as may be specified.

(2) Without prejudice to the generality of the foregoing power, such rules may

(a) prescribe the manner in which, and the procedure by which, the income, profits and gains shall be arrived at in the case of

(i) incomes derived in part from agriculture and in part from business;

890[* * *]

891[(ii)] persons residing out of 892[the taxable territories];

893[(aa) provide for the determination of the value of any perquisite chargeable to tax under this Act in such manner and on such basis as appears to the Central Board of Revenue to be proper and reasonable:

Provided that the rules made in respect of the matters specified in this clause on the first occasion they are made shall not be subject to the condition of previous publication and may be given retrospective effect from such date as the Central Board of Revenue thinks fit;]

(b) prescribe the procedure to be followed on applications for refunds;

894[(c) prescribe the procedure for giving effect to the terms of any agreement 895[for the granting of relief in respect of double taxation or for the avoidance of double taxation which may be entered into by the Central Government under this Act];]

(e) provide for any matter which by this Act is to be prescribed.

896[(3) In cases coming under clause (a) of sub-section (2), where the income, profits and gains liable to tax cannot be definitely ascertained, or can be ascertained only with an amount of trouble and expense to the assessee which, in the opinion of the Central Board of Revenue, is unreasonable, the rules made under that sub-section may

(a) prescribe methods by which an estimate of such income, profits and gains may be made; and

(b) in cases coming under sub-clause (i) of clause (a) of sub-section (2), prescribe the proportion of the income which shall be deemed to be income, profits and gains liable to tax;

and an assessment based on such estimate or proportion shall be deemed to be duly made in accordance with the provisions of this Act.]

897[(4)] The power to make rules conferred by this section shall, except on the first occasion of the exercise thereof, be subject to the condition of previous publication.

898[(5)] Rules made under this section shall be published in the Official Gazette, and shall thereupon have effect as if enacted in this Act.

899[59-A. Publication of information respecting penalties in certain cases. (1) The Central Government shall cause to be published, by notification in the Official Gazette, the names and such other particulars as may be relevant of

(a) persons on each of whom a penalty amounting to not less than five thousand rupees or such lower amount as may be fixed by the Central Government, by notification in the Official Gazette, has been imposed at any time on or after the 1st day of April, 1960, under clause (c) of sub-section (1) of Section 28; and

(b) persons who have been convicted as a result of any proceedings initiated on or after the 1st day of April, 1960, under Section 52 or under any provision of the Indian Penal Code (45 of 1860) for any offence connected with any proceedings under this Act.

(2) If in the interests of revenue the Central Government considers it necessary so to do, it may also cause to be published, by notification in the Official Gazette, the names and such other particularts as may be relevant of

(a) persons on each of whom a penalty has been imposed at any time on or after the 1st day of April, 1960, under clause (a) or clause (b) of sub-section (1) of Section 28; or

(b) persons on each of whom a penalty of an amount not exceeding the amount referred to in clause (a) of sub-section (1) has been imposed at any time on or after the 1st day of April, 1960, under clause (c) of sub-section (1) of Section 28; or

(c) persons who have been convicted as a result of any proceedings initiated on or after the 1st day of April, 1960, under any provision of this Act other than Section 52.

(3) No publication under this section shall be made

(i) in the case of an assessee mentioned in clause (a) of sub-section (1) or in clause (a) or clause (b) of sub-section (2) who has presented an appeal under Section 30 against the order of penalty, until the appeal is disposed of by the Appellate Assistant Commissioner;

(ii) in the case of an assessee mentioned in clause (b) of sub-section (1) or clause (c) of sub-section (2), until the time for appealing has expired without an appeal having been presented, or an appeal if presented has been disposed of.

(4) Notwithstanding anything contained in this section, the Central Government may refrain from publishing the name of any person if it is satisfied that in the interests of revenue it is necessary so to do, and where the Central Government refrains from publishing the name of any person, the reason for not publishing the name shall be recorded in writing.

(5) Every notification issued under this section shall be laid before Parliament as soon as may be after it is made.

(6) The provisions of this section shall have effect notwithstanding anything to the contrary contained in Section 54.

Explanation. In the case of a firm, company or other association of persons, the names of the partners of the firm, directors, managing agents, secretaries and treasurers, or managers of the company, or the members of the association, as the case may be, may also be published if, in the opinion of the Central Government, the circumstances of the case justify it.]

900[59-B. Disclosure of information respecting tax payable. Where a person makes an application to the Commissioner in the prescribed form and after payment of the prescribed fee for information as to the amount of tax determined as payable by any assessee in respect of any assessment made on or after the 1st day of April, 1960, the Commissioner may, notwithstanding anything contained in Section 54, if he is satisfied that there are no circumstances justifying its refusal, furnish or cause to be furnished the information asked for.]

901[(1)] The Central Government may, by notification in the Official Gazette, make an exemption, reduction in rate or other modification, in respect of income-tax in favour of any class of income, or in regard to the whole or any part of the income of any class of persons.

902[(2) Where, by reason of any portion of an assessee's salary being paid in arears or in advance, 903[or by reason of his having received in any one financial year salary for more than twelve months], 904[or a payment which is under the provisions of sub-section (1) of Section 7 a profit in lieu of salary] his income is assessed at a rate higher than that at which it would otherwise have been assessed, the Central Government may grant 905[the appropriate relief].]

906[(3) After the commencement of the Indian Income-tax (Amendment) Act, 1939 (7 of 1939), the power conferred by sub-section (1) shall not be exercisable except for the purpose of rescinding an exemption, reduction or modification already made.]

907[60-A. Power to make exemption, etc., in relation to merged territories. If the Central Government considers it necessary or expedient so to do for avoiding any hardship or anomaly, or removing any difficulty, that may arise as a result of the extension of this Act to the 908[merged territories], 909[or 910[to the territories which, immediately before the 1st November, 1956, were comprised in any Part B State] or to Chandernagore], the Central Government may, by general or special order, make an exemption, reduction in rate or other modification in respect of income-tax in favour of any class of income, or in regard to the whole or any part of the income of any person or class of persons:

Provided that the power conferred by this section shall not be exercisable 911[in the case of merged territories and 912[the territories which, immediately before the 1st November, 1956, were comprised in Part B States] other than the State of Jammu and Kashmir, after the 31st day of March, 1955, 913[and, in the case of the State of Jammu and Kashmir and Chandernagore], after the 31st day of March, 1959] except for the purpose of rescinding an exemption, reduction or modification already made.]

914[60-B. Tax may be levied for period other than previous year or deducted at source or paid in advance, wherever so provided. (1) Where by virtue of any provision of this Act income-tax or super-tax is to be charged in respect of the income of a period other than the previous year, income-tax or super-tax, as the case may be, shall be charged accordingly.

(2) In respect of income chargeable under this Act, income-tax or super-tax shall be deducted at the source or paid in advance, where it is so deductible or payable under any provision of this Act.]

915[(1) Any assessee who is entitled or required to attend before 916[the Appellate Tribunal or] any Income-tax authority in connection with any proceeding under this Act otherwise than when required under Section 37 to attend personally for examination on oath or affirmation, may attend by a person authorised by him in writing in this behalf, being a relative of or a person regularly employed by the assessee, or a lawyer or accountant or income-tax practitioner, and not being disqualified by or under sub-section (3).

(2) In this section

(i) a person regularly employed by the assessee shall include any officer of a Scheduled Bank with which the assessee maintains a current account or has other regular dealings;

(ii) lawyer means a Barrister-at-Law or Solicitor or any other person entitled to plead in any Court of law in 917[the taxable territories];

(iii) accountant means a registered accountant enrolled in the Register of Accountants maintained by the Central Government under the 918Auditors Certificate Rules, 1932, or a holder of a restricted certificate under the Restricted Certificate Rules, 1932, or a member of an association of accountants recognised in this behalf by the Central Board of Revenue;

(iv) Income-tax practitioner means

(a) any person who, before the 1st day of April, 1938, 919[in 920[the taxable territories], or before the 1st day of April, 1949, in any of the 921[merged territories]] 922[or before the 1st day of April, 1950, in any Part B State other than the State of Jammu and Kashmir] 923[or before the 14th day of May, 1954, in the State of Jammu and Kashmir] attended before an Income-tax authority on behalf of any assessee otherwise than in the capacity of an employee or relative of that assessee;

(b) any person who has passed any accountancy examination recognised in this behalf by the Central Board of Revenue; or

(c) any person who has acquired such educational qualifications as the Central Board of Revenue may prescribe for this purpose.

(3) No person who has been dismissed from Government service after the 1st day of April, 1938, shall be qualified to represent an assessee under sub-section (1); and if any lawyer or registered accountant is found guilty of misconduct in connection with any income-tax proceedings by the authority empowered to take disciplinary action against members of the profession to which he belongs, or if any other person is found guilty of such misconduct by the Commissioner of Income-tax, the Commissioner of Income-tax may direct that he shall be thenceforward disqualified to represent an assessee under sub-section (1):

Provided that

(a) no such direction shall be made in respect of any person unless he is given a reasonable opportunity of being heard,

(b) any person against whom such direction is made may, within one month of the making of the direction, appeal to the Central Board of Revenue to have the direction cancelled, and

(c) no such direction shall take effect until one month from the making thereof or, when an appeal is preferred, until the disposal of the appeal.]

A receipt shall be given for any money paid or recovered under this Act.

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

(2) Any such notice or requisition may, in the case of a firm or a Hindu undivided family, be addressed to any member of the firm or 924[to the] manager, or any adult male member of the family 925[and, in the case of any other 926[association of persons] be addressed to the principal officer thereof].

(1) Where an assessee carries on 927[a business, profession or vocation] at any place, he shall be assessed by the Income-tax Officer of the area in which that place is situate or, where the 928[business, profession or vocation] is carried on in more places than one, by the Income-tax Officer of the area in which 929[the principal place of his business, profession or vocation] is situate.

(2) In all other cases, an assessee shall be assessed by the Income-tax Officer of the area in which he resides.

(3) Where any question arises under this section as to the place of assessment, such question shall be determined by the Commissioner, or, where the question is between places in more States than one, by the Commissioners concerned; or, if they are not in agreement, by 930[the Central Board of Revenue]:

Provided that, before any such question is determined, the assessee shall have had an opportunity of representing his views:

931[Provided further that the place of assessment shall not be called in question by an assessee if he has made a return in response to the notice under sub-section (1) of Section 22 and has stated therein the principal place wherein he carries on his business, profession or vocation, or if he has not made such a return shall not be called in question after the expiry of the time allowed by the notice under sub-section (2) of Section 22 or under Section 34 for the making of a return:

Provided further that if the place of assessment is called in question by an assessee the Income-tax Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under this sub-section before assessment is made.]

(4) Notwithstanding anything contained in this section, every Income-tax Officer shall have all the powers conferred by or under this Act on an Income-tax Officer in respect of any income, profits or gains accruing, or arising or received within the area for which he is appointed.

932[(5) The provisions of sub-section (1) and sub-section (2) shall not apply and shall be deemed never at any time to have applied to any assessee

(a) on whom an assessment or re-assessment for the purposes of this Act has been, is being or is to be made in the course of any case in respect of which a Commissioner of Income-tax appointed without reference to area under sub-section (2) of Section 5 is exercising the functions of a Commissioner of Income-tax, or

(b) whereby 933[any direction given or] any distribution or allocation of work made by the Commissioner of Income-tax under sub-section (5) of Section 5 934[or in consequence of any transfer made 935[* * *] under sub-section (7-A) of Section 5], a particular Income-tax Officer has been charged with the function of assessing that assessee; or

(c) who or whose income is included in a class of persons or a class of incomes specified in any notification issued under sub-section (6) of Section 5;

but the assessment of such person, whether the proceedings for such assessment began before or after the 1st day of April, 1939, shall be made by the Income-tax Officer for the time being charged with the function of making such assessment by the Central Board of Revenue or by the Commissioner of Income-tax to whom he is subordinate, as the case may be.]

Every person deducting, retaining or paying any tax in pursuance of this Act in respect of income belonging to another person is hereby indemnified for the deduction, retention or payment thereof.

936[(1) Within sixty days of the date upon which he is served with notice of an order under sub-section (4) of Section 33, the assessee or the Commissioner may, by application in the prescribed form, accompanied where application is made by the assessee by a fee of one hundred rupees, require the Appellate Tribunal to refer to the High Court any question of law arising out of such order, and the Appellate Tribunal shall within ninety days of the receipt of such application draw up a statement of the case and refer it to the High Court:

Provided that, if, in the exercise of its powers under sub-section (2), the Appellate Tribunal refuses to state a case which it has been required by the assessee to state, the assessee may, within thirty days from the date on which he receives notice of the refusal to state the case, withdraw his application and, if he does so, the fee paid shall be refunded.

(2) If on any application being made under sub-section (1) the Appellate Tribunal refuses to state the case on the ground that no question of law arises, the assessee or the Commissioner, as the case may be, may, within six months from the date on which he is served with notice of the refusal, apply to the High Court, and the High Court may, if it is not satisfied of the correctness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state the case and to refer it, and on receipt of any such requisition the Appellate Tribunal shall state the case and refer it accordingly.

(3) If on any application being made under sub-section (1) the Appellate Tribunal rejects it on the ground that it is time-barred, the assessee or the Commissioner, as the case may be, may, within two months from the date on which he is served with notice of the rejection, apply to the High Court, and the High Court, if it is not satisfied of the correctness of the Appellate Tribunal's decision, may require the Appellate Tribunal to treat the application as made within the time allowed under sub-section (1).

(4) If the High Court is not satisfied that the statements in a case referred under this section are sufficient to enable it to determine the question raised thereby, the Court may refer the case back to the Appellate Tribunal to make such additions thereto or alterations therein as the Court may direct in that behalf.

(5) The High Court upon the hearing of any such case shall decide the questions of law raised thereby and shall deliver its judgment thereon containing the grounds on which such decision is founded and shall send a copy of such judgment under the seal of the Court and the signature of the Registrar to the Appellate Tribunal which shall pass such orders as are necessary to dispose of the case conformably to such judgment.]

(6) Where a reference is made to the High Court 937[* * *] the costs shall be in the discretion of the Court.

(7) Notwithstanding that a reference has been made under this section to the High Court, income-tax shall be payable in accordance with the assessment made in the case:

Provided that, if the amount of an assessment is reduced as a result of such reference, the amount overpaid shall be refunded with such interest as the Commissioner may allow 938[unless the High Court, on intimation given by the Commissioner within thirty days of the receipt of the result of such reference that he intends to ask for leave to appeal to 939[Supreme Court], makes an order authorising the Commissioner to postpone payment of such refund until the disposal of the appeal to 940[Supreme Court].]

941[(7-A) Section 5 of the Indian Limitation Act, 1908 (9 of 1908), shall apply to an application to the High Court by an assessee 942[under sub-section (2) or sub-section (3)].]

943[(8) For the purposes of this section, the High Court means

(a) in relation to any State, the High Court for that State;

(b) in relation to the Union Territories of Delhi and Himachal Pradesh, the High Court of Punjab;

(c) in relation to the Union Territories of Manipur and Tripura, the High Court of Assam;

(d) in relation to the Union Territory of the Andaman and Nicobar Islands, the High Court at Calcutta; and

(e) in relation to the Union Territory of the Laccadive, Minicoy and Amindivi Islands, the High Court of Kerala.]

944[66-A. References to be heard by Benches of High Courts, and appeal to lie in certain cases to the Supreme Court. (1) When any case has been referred to the High Court under Section 66, it shall be heard by a Bench of not less than two Judges of the High Court, 945[and shall be decided in accordance with the opinion of such Judges or of the majority (if any) of such Judges:

Provided that where there is no such majority, the Judges shall state the point of law upon which they differ, and the case shall then be heard upon that point only by one or more of the other Judges of the High Court, and such point shall be decided according to the opinion of the majority of the Judges who have heard the case, including those who first heard it.]

946[* * *]

(2) An appeal shall lie to 947[the Supreme Court] from any judgment of the High Court delivered on a reference made under Section 66 in any case which the High Court certifies to be a fit one for appeal to 948[the Supreme Court].

(3) The provisions of the Code of Civil Procedure, 1908 (5 of 1908), relating to appeals to 949[the Supreme Court] shall, so far as may be, apply in the case of appeals under this section in like manner as they apply in the case of appeals from decrees of a High Court:

Provided that nothing in this sub-section shall be deemed to affect the provisions of sub-section (5) or sub-section (7) of Section 66:

Provided, further, that the High Court may, on petition made for the execution of the order of 950[the Supreme Court] in respect of any costs awarded thereby, transmit the order for execution to any Court subordinate to the High Court.

(4) Where the judgment of the High Court is varied or reversed in appeal under this section, effect shall be given to the order of 951[the Supreme Court] in the manner provided in sub-sections (5) and (7) of Section 66 in the case of a judgment of the High Court.

952[* * *]

No suit shall be brought in any Civil Court to set aside or modify any assessment made under this Act, and no prosecution, suit or other proceeding shall lie against any 953[officer of the Government] for anything in good faith done or intended to be done under this Act.

954[67-A. Computation of periods of limitation. In computing the period of limitation prescribed for an appeal under this Act or for an application under Section 66, the day on which the order complained of was made, and the time requisite for obtaining a copy of such order, shall be excluded.]

955[67-B. Act to have effect pending legislative provision for charge of income-tax. If on the 1st day of April in any year provision has not yet been made by 956[a Central Act] for the charging of income-tax for that year, this Act shall nevertheless have effect until such provision is so made as if the provision in force in the preceding year or the provision proposed in the Bill then before 957[Parliament], whichever is more favourable to the assessee, were actually in force.]

[Repealed by the Repealing Act, 1927 (12 of 1927), Section 2 and Schedule.]

958[Schedule

[See Section 10(7)]

1. In the case of any person who carries on, or at any time in the preceding year carried on, life insurance business, the profits and gains of such person from that business shall be computed separately from his income, profits or gains from any other business.

2. The profits and gains of life insurance business shall be taken to be either

(a) the gross external incomings of the preceding year from that business less the management expenses of that year; or

(b) the annual average of the surplus 959[arrived at by adjusting the surplus of deficit] disclosed by the 960[actuarial valuation made in accordance with the Insurance Act, 1938 (4 of 1938), in respect of the last inter-valuation period] ending before the year for which the assessment is to be made, 961[* * *] so as to exclude from it any surplus or deficit included therein which was made in any earlier inter-valuation period and any expenditure other than expenditure which may under the provisions of Section 10 of this Act be allowed for in computing the profits and gains of a business,

whichever is the greater:

Provided that the amount to be allowed as management expenses shall not exceed

(a) 7 per cent. of the premiums received during the preceding year in respect of single premium life insurance policies, plus

(b) in respect of the first year's premiums received in respect of other life insurance policies for which the number of annual premiums 962[payable] is less than twelve, or for which the number of years during which premiums are payable is less than twelve, for each such premium or each such year per cent. of such first year's premiums received during the preceding year, plus

963[(c) 90 per cent. of the first year's premiums received during the preceding year in respect of all other life insurance policies, plus

964[(d) in respect of all renewal premiums received during the preceding year an amount calculated at such percentage thereof as is permissible under sub-section (2) of Section 40-B of the Insurance Act, 1938 (4 of 1938), as reduced by any expenditure which is not admissible under Section 10 of this Act.]]

3. In computing the surplus for the purpose of Rule 2,

(a) 965[four-fifths] of the amounts paid to or reserved for or expended on behalf of policy-holders shall be allowed as a deduction:

Provided that in the first such computation made under this rule of any such surplus no account shall be taken of any such amounts to the extent to which they are paid out of or in respect of any surplus brought forward from a previous inter-valuation period:

Provided further that if any amount so reserved for policy-holders ceases to be so reserved, and is not paid to or expended on behalf of policy-holders 966[that proportion of such amount (one-half or four-fifths, as the case may be)], if it has been previously allowed as a deduction, shall be treated as part of the surplus for the period in which the said amount ceased to be so reserved;

(b) any amount either written off or reserved in the accounts or through the actuarial valuation balance-sheet to meet depreciation of or loss on the realisation of securities or other assets, shall be allowed as a deduction, and any sums taken credit for in the accounts or actuarial valuation balance-sheet on account of appreciation of or gains on the realisation of the securities or other assets shall be included in the surplus:

Provided that if upon investigation it appears to the Income-tax Officer after consulation with the 967[Controller of Insurance] that having due regard to the necessity for making reasonable provision for bonuses to participating policy-holders and for contingencies, the rate of interest or other factor employed in determining the liability in respect of outstanding policies is materially inconsistent with the valuation of the securities and other assets so as artificially to reduce the surplus, such adjustment shall be made to the allowance for depreciation of, or to the amount to be included in the surplus in respect of appreciation of, such securities and other assets, as shall increase the surplus for the purposes of these rules to a figure which is fair and just;

968[(c) interest received in respect of any securities of the Central Government which have been issued or declared to be income-tax free shall not be excluded but the whole amount of such interest received during the inter-valuation period shall be exempt from income-tax under the second proviso to Section 8 though not from super-tax].

4. Where for any year an assessment is made in accordance with the annual average of a surplus disclosed by a valuation for an inter-valuation period exceeding twelve months, then, in computing the tax payable for that year, credit shall not be given in accordance with sub-section (5) of Section 18 for the tax paid in the preceding year, but credit shall be given for the annual average of the income-tax paid by deduction at source from interest on securities or otherwise during such period.

5. For the purposes of these rules

(i) preceding year means that year for which annual accounts are required to be prepared under the Insurance Act, 1938 (4 of 1938), immediately preceding the year for which the assessment is to be made or until the commencement of the Insurance Act, 1938, the previous year as defined in Section 2 of this Act;

(ii) gross external incomings means the full amount of incomings from interest, dividends, fines and fees and all other incomings from whatever source derived (except premiums received from policy-holders and interest and dividends on any annuity fund) and includes also profits from reversions and on the sale or the granting of annuities, but excludes profits on the realisation of securities 969[or other assets]:

Provided that incomings, including the annual value of the property occupied by the assessee, which but for the provisions of sub-section (7) of Section 10 would have been assessable under Section 9 shall be computed upon the basis laid down in the last-named section, and that there shall be allowed from such gross incomings such deductions as are permissible under that section;

(iii) management expenses means the full amount of expenses (including commissions) incurred exclusively in the management of the business of life insurance, and in the case of a company carrying on other classes of business as well as the business of life insurance in addition thereto a fair proportion of the expenses incurred in the general management of the whole business. Bonuses or other sums paid to or reserved on behalf of policy-holders, depreciation of, and losses on the realisation of, securities 970[or other assets], and any expenditure other than expenditure which may under the provisions of Section 10 of this Act be allowed for in computing the profits and gains of a business are not management expenses for the purposes of these rules;

(iv) life insurance business means life insurance business as defined in clause (11) of Section 2 of the Insurance Act, 1938 (4 of 1938);

(v) securities includes stocks and shares.

6. The profits and gains of any business of insurance other than life insurance shall be taken to be the balance of the profits disclosed by the annual accounts, copies of which are required under the Insurance Act, 1938 (4 of 1938), to be furnished to the 971[Controller of Insurance] after adjusting such balance so as to exclude from it any expenditure, other than expenditure which may under the provisions of Section 10 of this Act be allowed for in computing the profits and gains of a business. Profits and losses on the realisation of investments, and depreciation and appreciation of the value of investments shall be dealt with as provided in Rule 3 for the business of life insurance.

7. The profits and gains of companies carrying on dividing society or assessment business shall be taken to be 15 per cent. of the premium income of the previous year, or in the case of non-resident companies 15 per cent. of the 972[premimum income of the previous year derived from the taxable territories].

973[8. The profits and gains of the branches in the taxable territories of a person not resident in the taxable territories and carrying on any business of insurance, may, in the absence of more reliable data be deemed to be that proportion of the world income of such person which corresponds to the proportion which his premium income derived from the taxable territories bears to his total premium income.

For the purposes of this rule, the world income in relation to life insurance business of a person not resident in the taxable territories shall be computed in the manner laid down in these rules for the computation of the profits and gains of life insurance business carried on in the taxable territories.]

9. These rules apply to the assessment of the profits of any business of insurance carried on 974[by a mutual insurance association] 975[or by a Co-operative Society].]

1. Substituted by Act 41 of 1954, Section 2 and Schedule, for the former sub-section.

2. Substituted by the A.O. 1950, for British India .

3. Substituted by Act 25 of 1953, Section 2, for the original clause (w.e.f. 1-4-1952).

4. Inserted by Act 7 of 1939, Section 2.

5. Inserted by Act 7 of 1939, Section 2.

6. Clause (3-A) inserted by G.G.O. 31, dated 10-12-1947 and amended by Act 67 of 1949, Section 8, omitted by the A.O. 1950

7. Inserted by Act 22 of 1947, Section 2.

8. The words (other than agricultural land) omitted by Act 44 of 1947, Section 2.

9. Added by Act 44 of 1947, Section 2.

10. Inserted by Act 4 of 1924, Section 4 and Schedule, as clause (4-A) and renumbered by Act 22 of 1947, Section 2 as clause (4-B).

11. Substituted by Act 14 of 1949, Section 8 (w.e.f. 1-4-1949), as clause (6) and renumbered by Act 25 of 1953, Section 2, as clause (5-A).

12. Inserted by Act 15 of 1955, Section 3.

13. Inserted by Act 25 of 1953, Section 2.

14. Inserted by Act 7 of 1939, Section 2.

15. Substituted by Act 15 of 1955, Section 3, for or debenture stock .

16. Substituted by Act 18 of 1956, Section 3, for the former sub-clause (w.e.f. 1-4-1956).

17. The proviso and the word and at the end thereof omitted by Act 15 of 1995, Section 3.

18. Substituted by Act 15 of 1995, Section 3, for the two provisos (w.e.f. 1-4-1955).

19. Inserted by Act 77 of 1956, Section 2 (w.e.f. 1-4-1957).

20. Inserted by Ordinance 9 of 1945, Section 2 (for indefinite period from 28-4-1945).

21. Substituted by Act 18 of 1956, Section 3, for treated as registered (w.e.f. 1-4-1956).

22. Inserted by Act 21 of 1930, Section 2 as clause (6-A) and renumbered by Act 7 of 1939, Section 2 as clause (6-B).

23. Substituted by Act 7 of 1939, Section 2, for the Indian Contract Act, 1872 .

24. Inserted by Act 7 of 1939, Section 2.

25. Substituted by Act 15 of 1955, Section 3, for clause (6-C).

26. Inserted by Act 7 of 1939, Section 2.

27. Inserted by Act 25 of 1953, Section 2.

28. Substituted by Act 41 of 1954, Section 2 and Schedule, for clause (7-A).

29. See now the Companies Act, 1956 (1 of 1956).

30. Substituted by the Adaptation of Laws (No. 3) Order, 1956, for in any Part B State .

31. Substituted by the A.O. 1937, for the L.G. .

32. Inserted by Act 41 of 1954, Section 2 and Schedule.

33. Inserted by Act 15 of 1955, Section 3, formerly clause (8-A), inserted by Act 67 of 1948, Section 8, was omitted by the A.O. 1950.

34. See now the companies Act, 1956 (1 of 1956).

35. Inserted by Act 7 of 1939, Section 2.

36. Substituted by Act 25 of 1953, Section 2, for clause (ii).

37. Inserted by Act 11 of 1924, Section 2.

38. Substituted by Act 21 of 1930, Section 2, for the former clause.

39. Substituted by Act 25 of 1950, Section 3, for clause (14-A) inserted by the A.O. 1950 (w.e.f. 1-4-1950).

40. The word and omitted by Act 41 of 1954, Section 2 and Schedule.

41. Sub-clause (f) inserted by Act 41 of 1954, Section 2 and Schedule.

42. Clause (c) inserted by Act 41 of 1954, Section 2 and Schedule.

43. Substituted by Act 7 of 1939, Section 2, for from all sources to which this Act applies.

44. Substituted by Act 7 of 1939, Section 2, for Section 16 .

45. Added by Act 7 of 1939, Section 2.

46. Substituted by Act 22 of 1947, Section 2 for does not apply; and .

47. Substituted by the A.O. 1950 for Act of the Central Legislature .

48. The words applicable to the total income of an assessee omitted by Act 7 of 1939, Section 3.

49. Substituted by Act 7 of 1939, Section 3, for all income, profits and gains .

50. Substituted by Act 11 of 1924, Section 3, for individual, company, firm and Hindu undivided family (w.e.f. 1-4-1923).

51. Substituted by Act 7 of 1939, Section 3, for company, firm and other association of individuals .

52. Substituted by Act 7 of 1939, Section 4, for the former sub-sections (1) and (2).

53. Substituted by the A.O. 1950 for British India .

54. Substituted by the A.O. 1950 for British India .

55. Substituted by the A.O. 1950 for British India .

56. Substituted by Act 7 of 1939, Section 4, for the former sub-sections (1) and (2).

57. Substituted by the A.O. 1950 for British India .

58. Substituted by the A.O. 1950 for British India .

59. Substituted by the A.O. 1950 for British India .

60. Substituted by the A.O. 1950 for British India .

61. Substituted by the A.O. 1950 for British India .

62. Substituted by the A.O. 1950 for British India .

63. Substituted by the A.O. 1950 for British India .

64. Third proviso omitted by Act 12 of 1959, Section 3 (w.e.f. 1-4-1959).

65. Inserted by Act 25 of 1953, Section 3.

66. Substituted by Act 15 of 1955, Section 4, for clauses (i) to (iii) (w.e.f. 1-4-1955).

67. Substituted by the A.O. 1950 for British India .

68. Substituted by the A.O. 1950 for British India .

69. Substituted by the A.O. 1950 for British India .

70. Substituted by the A.O. 1950 for British India .

71. Certain words omitted by Act 48 of 1948, Section 3 (w.e.f. 30-3-1948).

72. Substituted by the A.O. 1950 for British India .

73. Substituted by the A.O. 1950 for British India .

74. Inserted by Act 25 of 1953, Section 3.

75. Inserted by Act 12 of 1959, Section 3 (w.e.f. 1-4-1959).

76. Inserted by Act 20 of 1948, Section 8.

77. Substituted by the A.O. 1950 for British India .

78. Substituted by the A.O. 1950 for British India .

79. Substituted by the A.O. 1950 for British India .

80. Inserted by Act 67 of 1949, Section 9.

81. Substituted by the A.O. 1950, for merged States .

82. Inserted by Act 25 of 1950, Section 3 (w.e.f. 1-4-1950).

83. The words other than the State of Jammu and Kashmir omitted by Act 41 of 1954, Section 2 and Schedule.

84. Substituted by the A.O. 1950 for British India .

85. Substituted by the A.O. 1950 for British India .

86. Substituted by the A.O. 1950, for merged State .

87. Inserted by Act 25 of 1950, Section 3 (w.e.f. 1-4-1950).

88. Substituted by the A.O. 1950 for British India .

89. Substituted by the A.O. 1950 for British India .

90. Substituted by the A.O. 1950 for British India .

91. Substituted by Act 7 of 1939, Section 4, for This Act shall not apply to the following classes of income .

92. Substituted by Act 25 of 1953, Section 3, for clauses (i) and (i-a).

93. Substituted by Act 15 of 1955, Section 4, for paragraph (a).

94. Inserted by Act 14 of 1961, Section 3 (w.e.f. 1-4-1961).

95. Added by Act 7 of 1939, Section 4.

96. Substituted by Act 7 of 1939, Section 4, for 1897 .

97. Inserted by Act 22 of 1947, Section 3

98. Certain words omitted by Act 11 of 1924, Section 4.

99. Clause (v) omitted by Act 7 of 1939, Section 4.

100. Substituted by Act 15 of 1955, Section 4, for clause (vi).

101. Substituted by Act 11 of 1958, Section 3, for clause (vi-a).

102. Inserted by Act 22 of 1947, Section 3.

103. Inserted by Act 12 of 1929, Section 2.

104. Substituted by Act 12 of 1959, Section 3 (w.e.f. 1-4-1959).

105. Inserted by the A.O. 1956.

106. Substituted by the A.O. 1950, for British India .

107. Substituted by the A.O. 1950, for British India .

108. Inserted by the A.O. 1956.

109. Inserted by Act 11 of 1958, Section 3.

110. Inserted by Act 8 of 1946, Section 2.

111. Substituted by Act 17 of 1954, Section 3, for 1954 (w.e.f. 1-4-1954).

112. Inserted by Act 67 of 1949, Section 9.

113. Inserted by Act 25 of 1953, Section 3 (with retrospective effect).

114. Substituted by Act 18 of 1956, Section 4, for the existing clause (xiv-a), inserted by Act 15 of 1955, Section 4 (w.e.f. 1-4-1955).

115. Substituted for the second proviso by Act 14 of 1961, Section 3 (w.e.f. 1-4-1961).

116. Substituted by Act 11 of 1958, Section 3, for the former explanation.

117. Inserted by Act 28 of 1960, Section 2 (w.e.f. 1-4-1960).

118. Inserted by Act 14 of 1961, Section 3 (w.e.f. 1-4-1961).

119. Inserted by Act 14 of 1961, Section 3 (w.e.f. 1-4-1961).

120. Substituted by Act 28 of 1960, Section 2 (w.e.f. 1-4-1960).

121. Inserted by Act 26 of 1957, Section 3.

122. Clause (xx) inserted by Act 17 of 1954, Section 3 (w.e.f 1-4-1954).

123. Clauses (xxi) and (xxii) inserted by Act 15 of 1955, Section 4.

124. Inserted by Act 11 of 1958, Section 3 (with retrospective effect).

125. Inserted by Act 7 of 1939, Section 4.

126. The words clause (i-a) omitted by Act 25 of 1953, Section 3.

127. Substituted by Act 25 of 1953, Section 3, for income of a private religious trust (with retrospective effect).

128. Sections 4-A and 4-B inserted by Act 7 of 1939, Section 5.

129. Substituted by the A.O. 1950 for British India .

130. Substituted by the A.O. 1950 for British India .

131. Substituted by the A.O. 1950 for British India .

132. Substituted by the A.O. 1950 for British India .

133. Substituted by the A.O. 1950 for British India .

134. Substituted by the A.O. 1950 for British India .

135. Inserted by Act 23 of 1941, Section 4.

136. Inserted by Act 23 of 1941, Section 4.

137. Substituted by the A.O. 1950 for British India .

138. Substituted by the A.O. 1950 for British India .

139. Substituted by the A.O. 1950 for British India .

140. Substituted by the A.O. 1950 for British India .

141. Substituted by the A.O. 1950 for British India .

142. Substituted by Act 11 of 1958, Section 4, for clause (c).

143. Substituted by the A.O. 1950 for British India .

144. Substituted by the A.O. 1950 for British India .

145. Substituted by the A.O. 1950 for British India .

146. Substituted by the A.O. 1950 for British India .

147. Substituted by the A.O. 1950 for British India .

148. Substituted by the A.O. 1950 for British India .

149. Substituted by the A.O. 1950 for British India .

150. Substituted by Act 7 of 1939, Section 6, for the former section.

151. Inserted by Act 25 of 1953, Section 4.

152. Inserted by Act 25 of 1953, Section 4.

153. Inserted by Act 25 of 1953, Section 4.

154. Substituted by Act 25 of 1953, Section 4, for the former sub-sections.

155. Substituted by Act 40 of 1940, Section 3, for and of such incomes or of classes of income and (w.e.f. 1-4-1939).

156. Substituted by Act 40 of 1940, Section 3, for and, where two or more Appellate Assistant Commissioners have been appointed for the same area (w.e.f. 1-4-1939).

157. Substituted by Act 40 of 1940, Section 3, for and of such incomes or of classes of income and (w.e.f. 1-4-1939).

158. Substituted by Act 40 of 1940, Section 3, for and, where two or more Inspecting Assistant Commissioners of Income-tax or Income-tax Officers have been appointed for the same area .

159. The words with the previous approval of the Central Board of Revenue omitted by Act 25 of 1953, Section 4.

160. Inserted by Act 25 of 1953, Section 4.

161. Substituted by Act 40 of 1940, Section 3, for and for such area (w.e.f. 1-4-1939).

162. The words within the specified area omitted by Act 40 of 1940, Section 3 (w.e.f 1-4-1939).

163. Inserted by Act 40 of 1940, Section 3 (w.e.f. 1-4-1939).

164. Substituted by Act 25 of 1953, Section 4, for the original section.

165. Inserted by Act 40 of 1940, Section 3.

166. Inserted by Act 26 of 1956, Section 2 (with retrospective effect).

167. Omitted by Act 28 of 1960, Section 3 (w.e.f. 1-4-1960).

168. Inserted by Act 25 of 1953, Section 4.

169. Inserted by Act 28 of 1960, Section 3 (with retrospective effect).

170. Inserted by Act 40 of 1940, Section 4.

171. Inserted by Act 7 of 1939, Section 85.

172. Substituted by Act 67 of 1949, Section 10, for not more than ten persons .

173. The words of an equal number omitted by Act 67 of 1949, Section 10.

174. Proviso, inserted by Act 23 of 1941, Section 5, omitted by Act 25 of 1953, Section 5.

175. Substituted by Act 25 of 1953, Section 5, for certain words.

176. Inserted by Act 25 of 1953, Section 5.

177. Substituted by Act 67 of 1949, Section 10, for the former sub-section.

178. Substituted by Act 40 of 1940, Section 4, for place .

179. Substituted by Act 7 of 1939, Section 7, for the original clauses (iii), (iv), (v) and (vi).

180. Inserted by Act 22 of 1947, Section 5.

181. Substituted by Act 15 of 1955, Section 5, for the former section (w.e.f. 1-4-1955 for deductions and from 1-4-1956 for other purposes).

182. Substituted by Act 18 of 1956, Section 5, for one-sixth (w.e.f. 1-4-1956).

183. Substituted by Act 11 of 1958, Section 5, for State Government (with retrospective effect).

184. Inserted by Act 14 of 1961, Section 4 (with retrospective effect).

185. Substituted by Act 11 of 1958, Section 5, for clause (ii).

186. Inserted by Act 18 of 1956, Section 5 (w.e.f. 1-4-1956).

187. Inserted by Act 18 of 1933, Section 3.

188. Substituted by Act 18 of 1956, Section 6, for certain words which were substituted by Act 15 of 1955, Section 6 (w.e.f. 1-4-1956).

189. Inserted by Act 7 of 1939, Section 9.

190. Substituted by the A.O. 1950, for British India .

191. Substituted by the A.O. 1950, for British India .

192. Inserted by Act 18 of 1933, Section 3.

193. Inserted by Act 18 of 1956, Section 6 (w.e.f. 1-4-1956).

194. Substituted by Act 7 of 1939, Section 10, for under the head Property .

195. Substituted by Act 7 of 1939, Section 10, for his business .

196. Inserted by Act 25 of 1953, Section 7 (w.e.f. 1-4-1951).

197. Substituted by Act 7 of 1939, Section 10, for the former clause.

198. Substituted by the A.O. 1950, for British India .

199. Substituted by the A.O. 1950, for British India .

200. Substituted by Act 7 of 1939, Section 10, for the former clause.

201. Substituted by Act 40 of 1940, Section 5, for the net annual value, after deducting the foregoing allowances .

202. Substituted by Act 40 of 1940, Section 5, for the net annual value, after deducting the foregoing allowances .

203. Proviso omitted by Act 7 of 1939, Section 10.

204. Inserted by Act 71 of 1950, Section 2 (with retrospective effect) subject to savings as regarding certain cases decided by the Supreme Court.

205. Substituted by Act 71 of 1950, Section 5, for the former section (w.e.f. 1-4-1951).

206. Substituted by Act 15 of 1955, Section 7, for the former proviso.

207. Inserted by Act 14 of 1953, Section 3 (w.e.f. 1-4-1953).

208. Substituted by Act 13 of 1960, Section 4 (w.r.e.f. 1-4-1960).

209. Inserted by Act 14 of 1961, Section 5 (w.e.f. 1-4-1961).

210. Added by Act 7 of 1939, Section 10.

211. Substituted by Act 15 of 1955, Section 7, for sub-section (4) inserted by Act 48 of 1948, Section 4 (w.e.f. 1-4-1955).

212. Inserted by Act 11 of 1958, Section 6 (with retrospective effect).

213. Substituted by Act 7 of 1939, Section 11 for business .

214. Substituted by Act 7 of 1939, Section 11 for business .

215. Substituted by Act 7 of 1939, Section 11 for business .

216. Substituted by Act 7 of 1939, Section 11, for proportional part .

217. Substituted by Act 7 of 1939, Section 11 for business .

218. The words where the payment of interest thereon is not in any way dependent on the earning of profits omitted by Act 7 of 1939, Section 11.

219. Added by Act 7 of 1939, Section 11.

220. Substituted by the A.O. 1950, for British India .

221. Substituted by the A.O. 1950, for British India .

222. Substituted by Act 7 of 1939, Section 11, for business .

223. Inserted by Act 7 of 1939, Section 11, as amended by Act 12 of 1940, Section 2.

224. Added by Act 7 of 1939, Section 11.

225. Inserted by Act 8 of 1946, Section 3.

226. Substituted by Act 15 of 1955, Section, for or the machinery or plant being new has been installed (w.e.f. 1-4-1955).

227. Inserted by Act 18 of 1956, Section 7 (w.e.f. 1-4-1956).

228. Substituted by Act 17 of 1954, Section 3, for 1954 (w.e.f. 1-4-1954).

229. Inserted by Act 14 of 1961, Section 6 (w.e.f. 1-4-1961).

230. Substituted by Act 25 of 1953, Section 8, for where full .

231. Inserted by Act 7 of 1939, Section 11.

232. Inserted by Act 23 of 1941, Section 6.

233. Substituted by Act 2 of 1948, Section 4 for clause (a) of .

234. Substituted by Act 15 of 1955, Section 8, for the aggregate of all such allowances made under this Act or any Act repealed hereby (w.e.f 1-4-1955).

235. Inserted by Act 67 of 1949, Section 11.

236. Substituted by Act 25 of 1953, Section 8, for certain words.

237. Proviso to clause (vi-a) omitted by Act 15 of 1955, Section 8 (w.e.f. 1-4-1955).

238. Substituted by Act 11 of 1958, Section 7, for clause (vi-b).

239. Substituted by Act 14 of 1961, Section 6 (w.e.f. 1-4-1961).

240. Inserted by Act 14 of 1961, Section 6 (w.e.f. 1-4-1961).

241. Inserted by Act 28 of 1960, Section 4 (w.e.f. 1-4-1960).

242. Inserted by Act 14 of 1961, Section 6 (w.e.f. 1-4-1961).

243. Substituted by Act 8 of 1946, Section 3, for former clause (vii).

244. Substituted by Act 67 of 1949, Section 11, for is sold .

245. Inserted by Act 3 of 1928, Section 2, as clause (vii-a).

246. Clauses (vii-a), (viii) and (viii-a) renumbered as clauses (viii), (ix) and (x) respectively by Act 7 of 1939, Section 11.

247. Substituted by Act 7 of 1939, Section 11, for business .

248. Clauses (vii-a), (viii) and (viii-a) renumbered as clauses (viii), (ix) and (x) respectively by Act 7 of 1939, Section 11.

249. Substituted by Act 7 of 1939, Section 11, for business .

250. Inserted by Act 23 of 1930, Section 2, as clause (viii-a).

251. Clauses (vii-a), (viii) and (viii-a) renumbered as clauses (viii), (ix) and (x) respectively by Act 7 of 1939, Section 11.

252. Substituted by Act 7 of 1939, Section 11, for business .

253. Substituted by Act 7 of 1939, Section 11, for business .

254. Inserted by Act 7 of 1939, Section 11.

255. Inserted by Act 8 of 1946, Section 3.

256. Substituted by Act 13 of 1960, Section 5 (w.r.e.f. 1-4-1960).

257. Inserted by Act 14 of 1961, Section 6 (w.e.f. 1-4-1961).

258. Former clause (xii) renumbered as clause (xv) by Act 8 of 1946, Section 3. Original clause (ix) renumbered as clause (xii) by Act 7 of 1939, Section 11.

259. Substituted by Act 7 of 1939, Section 11, for certain original words.

260. Substituted by Act 25 of 1953, Section 8, for (not being in the nature of capital expenditure of personal expenses of the assessee) .

261. Inserted by Act 14 of 1961, Section 6 (w.e.f. 1-4-1961).

262. Proviso omitted by Act 7 of 1939, Section 11.

263. Sub-section (2-A) inserted by Act 15 of 1955, Section 8 (w.e.f. 1-4-1955).

264. Inserted by Act 12 of 1959, Section 4 (w.e.f. 1-4-1959).

265. Omitted by Act 12 of 1959, Section 4 (w.e.f. 1-4-1959).

266. Omitted by Act 12 of 1959, Section 4 (w.e.f. 1-4-1959).

267. Substituted by Act 7 of 1939, Section 11, for original sub-section (3).

268. Substituted by Act 2 of 1948, Section 4, for clause (xii) .

269. Substituted by Act 2 of 1948, Section 4, for clause (xii) .

270. Substituted by the A.O. 1950 for British India .

271. Inserted by Act 18 of 1956, Section 7 (w.e.f. 1-4-1956).

272. Inserted by Act 11 of 1958, Section 7 (with retrospective effect).

273. Added by Act 67 of 1949, Section 11.

274. Inserted by Act 15 of 1955, Section 8.

275. Substituted by Act 23 of 1941, Section 6, for clauses (b) and (c) .

276. Inserted by Act 8 of 1946, Section 3.

277. Inserted by Act 8 of 1946, Section 3.

278. Substituted by Act 23 of 1941, Section 6, for clauses (a), (b) and (c) .

279. Second proviso omitted by Act 23 of 1941, Section 6.

280. Inserted by Act 25 of 1953, Section 8.

281. Inserted by Act 25 of 1953, Section 8.

282. Inserted by Act 15 of 1955, Section 8.

283. Substituted by Act 7 of 1939, Section 13, for other sources .

284. Substituted by Act 7 of 1939, Section 13, for and from every source to which this Act applies .

285. Substituted by Act 12 of 1959, Section 5 (w.e.f. 1-4-1960).

286. Inserted by Act 15 of 1955, Section 9 (w.e.f. 1-4-1955).

287. Substituted by Act 7 of 1939, Section 13, for provided that no allowance shall be made on account of any personal expenses of the assessee .

288. Substituted by the A.O. 1950 for British India .

289. Substituted by the A.O. 1950 for British India .

290. Added by Act 7 of 1939, Section 13.

291. Added by Act 23 of 1941, Section 7.

292. Substituted by Act 8 of 1946, Section 4, for (v) and (vi) .

293. Inserted by Act 15 of 1955, Section 9 (w.e.f. 1-4-1955).

294. Substituted by Act 18 of 1956, Section 8 for sub-section (2-A) (w.e.f. 1-4-1956).

295. Inserted by Act 7 of 1939, Section 14.

296. Inserted by Act 14 of 1953, Section 3 (w.e.f. 1-4-1953).

297. Section 12-B inserted by Act 22 of 1947, Section 6, substituted by Act 77 of 1956, Section 4 (w.e.f. 1-4-1957).

298. The figures 11 omitted by Act 7 of 1939, Section 15.

299. Added by Act 11 of 1944, Section 3.

300. Added by Act 48 of 1948, Section 6 (w.e.f. 30-3-1948).

301. Substituted by Act 7 of 1939, Section 16 for the original sub-section.

302. Inserted by Act 18 of 1956, Section 9 (w.e.f. 1-4-1956).

303. The word or added by Act 23 of 1941, Section 8, omitted by Act 41 of 1954, Section 2 and Schedule.

304. Clause (c) added by Act 23 of 1941, Section 8, omitted by Act 23 of 1941, Section 2.

305. Substituted by Act 13 of 1960, Section 6 (w.r.e.f. 1-4-1960).

306. Substituted by Act 7 of 1939, Section 17 for certain words.

307. Substituted by Act 7 of 1939, Section 17, for 1897 .

308. Certain words omitted by Act 11 of 1924, Section 5.

309. Inserted by Act 11 of 1944, Section 4.

310. Substituted by Act 18 of 1956, Section 10, for second proviso which had been substituted by Act 7 of 1939, Section 17 for proviso (w.e.f. 1-4-1956).

311. Inserted by Act 12 of 1929, Section 3 (w.e.f. 15-3-1930).

312. Substituted by Act 26 of 1957, Section 5, for sub-section (1) of Section 58-F .

313. Substituted by Act 15 of 1955, Section 11, for certain words (w.e.f. 1-4-1955).

314. Substituted by Act 26 of 1957, Section 5, for one-fifth .

315. Substituted by Act 26 of 1957, Section 5, for one-fifth .

316. Inserted by Ordinance 9 of 1945, Section 3 (for indefinite period from 28-4-1945).

317. Substituted by the A.O. 1950 for Act of the Central Legislature .

318. Inserted by Act 20 of 1948, Section 8.

319. Substituted by Act 14 of 1953, Section 3, for sub-sections (1) and (2) (w.e.f. 1-4-1953).

320. Inserted by Act 28 of 1960, Section 5 (w.e.f. 1-4-1960).

321. Substituted for one twentieth of the assessee's total income by Act 13 of 1960, Section 7 (w.r.e.f. 1-4-1960).

322. Substituted for one hundred thousand rupees by Act 13 of 1960, Section 7 (w.r.e.f. 1-4-1960).

323. See now the Indian Companies Act, 1956 (1 of 1956).

324. Inserted by Act 67 of 1949, Section 13 (w.e.f. 31-3-1949).

325. Inserted by Act 14 of 1961, Section 7 (w.e.f. 1-4-1961).

326. Inserted by Act 14 of 1961, Section 7 (w.e.f. 1-4-1961).

327. Substituted by Act 12 of 1959, Section 6 and shall be deemed always to have been substituted.

328. Substituted by the A.O. 1950 for any Province in India .

329. Substituted for thirteen by Act 13 of 1960, Section 8 (w.r.e.f. 1-4-1960).

330. Substituted by Act 25 of 1953, Section 10, for clauses (iii) and (iv) .

331. Inserted by Act 14 of 1961, Section 7 (w.e.f. 1-4-1961).

332. Inserted by Act 14 of 1961, Section 7 (w.e.f. 1-4-1961).

333. Inserted by Act 14 of 1961, Section 7 (w.e.f. 1-4-1961).

334. Inserted by Act 14 of 1961, Section 7 (w.e.f. 1-4-1961).

335. Inserted by Act 14 of 1961, Section 7 (w.e.f. 1-4-1961).

336. Certain words omitted by Act 15 of 1955, Section 12 (w.e.f. 1-4-1955).

337. Substituted by Act 25 of 1953, Section 10 for the former sub-section.

338. Inserted by Act 14 of 1961, Section 7 (w.e.f. 1-4-1961).

339. Inserted by Act 13 of 1960, Section 8 (w.r.e.f. 1-4-1960).

340. Inserted by Act 14 of 1961, Section 7 (w.e.f. 1-4-1961).

341. Substituted by Act 7 of 1939, Section 18, for sub-sections (1) and (2).

342. Substituted by Act 15 of 1955, Section 13 for certain words, figures and brackets (w.e.f. 1-4-1955).

343. Substituted by Act 67 of 1949, Section 14, for Section 15 and Section 15-B .

344. Substituted for Section 15-B and Section 15-C by Act 28 of 1960, Section 6 (w.r.e.f. 1-4-1957, for the purposes of sub-sections (2) and (2-B) of Section 18 of the Income-tax Act, and w.r.e.f. 1-4-1958 for other purposes).

345. Added by Ordinance 9 of 1945, Section 4 (for indefinite period from 28-4-1945).

346. Sub-section (2) omitted by Act 12 of 1959, Section 7 (w.e.f. 1-4-1959).

347. Inserted by Act 4 of 1937, Section 2.

348. Inserted by Act 7 of 1939, Section 18.

349. Substituted by Act 7 of 1939, Section 18, for association of individuals .

350. The words consisting of such individual and his wife omitted by Act 7 of 1939, Section 18.

351. Substituted by Act 7 of 1939, Section 18, for to the association .

352. Added by Act 7 of 1939, Section 18.

353. Substituted by Act 7 of 1939, Section 19, for the original section.

354. Substituted by Act 23 of 1951, Section 3, for the former sub-section (1) (w.e.f. 1-4-1951).

355. Substituted by Act 18 of 1956, Section 13, for at the rate applicable in the case of an individual to the slab next to the slab exempt from super-tax (w.e.f. 1-4-1956).

356. Substituted by Act 26 of 1957, Section 6, for three annas in the rupee .

357. Inserted by Act 25 of 1953, Section 11.

358. Inserted by Act 12 of 1959, Section 8 (w.e.f. 1-4-1959).

359. Added by Act 23 of 1941, Section 10.

360. Inserted by Act 18 of 1956, Section 13 (w.e.f. 1-4-1956).

361. Inserted by Act 20 of 1948, Section 8.

362. Inserted by Act 67 of 1949, Section 15.

363. Substituted by the A.O. 1950 for British India .

364. Substituted by the A.O. 1950 for British India .

365. Substituted by the A.O. 1950 for British India .

366. Substituted by the A.O. 1950 for British India .

367. Inserted by Ordinance 9 of 1945, Section 5 (for indefinite period from 28-4-1945).

368. Inserted by Act 22 of 1947, Section 8.

369. Substituted by Act 77 of 1956, Section 5, for the former clause (w.e.f. 1-4-1957).

370. Substituted by Act 12 of 1959, Section 8 (w.e.f. 1-4-1960).

371. Sub-section (1) omitted by Act 18 of 1933, Section 7.

372. Substituted by Act 7 of 1939, Section 20, for but not super-tax .

373. Substituted by Act 11 of 1958, Section 3 (with retrospective effect) for at a rate representing the average of the rates applicable to the estimated total income of the assessee under this head .

374. Inserted by Act 16 of 1925, Section 2.

375. Inserted by Act 7 of 1939, Section 20.

376. Substituted by Act 12 of 1959, Section 9 (w.e.f. 1-4-1959).

377. Substituted by Act 25 of 1953, Section 12, for at the rate or rates applicable to the estimated income of the assessee under this head .

378. Substituted by Act 12 of 1959, Section 9 (w.e.f. 1-4-1959).

379. Substituted by Act 12 of 1959, Section 9 (w.e.f. 1-4-1959).

380. Substituted for sub-section (3-D) by Act 12 of 1959, Section 9 (w.e.f. 1-4-1959).

381. Inserted by Act 13 of 1960, Section 9 (w.r.e.f. 1-4-1960).

382. Omitted by Act 13 of 1960, Section 9 (w.r.e.f. 1-4-1960).

383. Inserted by Act 25 of 1953, Section 12.

384. Omitted by Act 12 of 1959, Section 9 (w.e.f. 1-4-1959).

385. Inserted by Act 18 of 1933, Section 7.

386. Inserted by Act 7 of 1939, Section 20.

387. Inserted by Act 25 of 1953, Section 12.

388. Omitted by Act 12 of 1959, Section 9 (w.e.f. 1-4-1959).

389. Added by Act 4 of 1937, Section 3.

390. Substituted by Act 7 of 1939, Section 20, for sub-section (3) of Section 16 .

391. Substituted by Act 7 of 1939, Section 20, for that person .

392. Inserted by Act 25 of 1953, Section 12.

393. Omitted by Act 12 of 1959, Section 9 (w.e.f. 1-4-1959).

394. Substituted by Act 4 of 1924, Section 4, and ch., for the Board of Inland Revenue .

395. Substituted by Act 12 of 1959, Section 9 (w.e.f. 1-4-1959).

396. Substituted by Act 7 of 1939, Section 20, for he .

397. Substituted by Act 18 of 1933, Section 7, for personally .

398. Added by Act 18 of 1933, Section 7.

399. Added by Act 18 of 1933, Section 7.

400. Substituted by Act 18 of 1933, Section 7, for sub-section (3) .

401. The brackets, figure and letter (3-A) , omitted by Act 12 of 1959, Section 9 (w.e.f. 1-4-1959).

402. Substituted by Act 25 of 1953, Section 12, for (3-C), (3-D) or (3-E) .

403. Substituted by Act 7 of 1939, Section 20, for at the time of payment of interest or dividends . The words in italics was inserted by Act 12 of 1935, Section 2 and Schedule I.

404. Substituted by Act 12 of 1959, Section 9 (w.e.f. 1-4-1959).

405. Inserted by Act 18 of 1933, Section 7.

406. Inserted by Act 12 of 1959, Section 9 (w.e.f. 1-4-1959).

407. Inserted by Act 25 of 1953, Section 12.

408. Inserted by Act 11 of 1944, Section 5.

409. Substituted by Act 13 of 1960, Section 10 (w.r.e.f. 1-4-1960).

410. Substituted by Act 25 of 1953, Section 13, for if that total income exceeded six thousand rupees .

411. Inserted by Act 13 of 1960, Section 10 (w.r.e.f. 1-4-1960).

412. Substituted by Act 25 of 1953, Section 13, for is likely to exceed six thousand rupees .

413. Substituted by Act 13 of 1960, Section 10 (w.r.e.f. 1-4-1960).

414. Substituted by Act 15 of 1955, Section 14, for certain words (w.e.f. 1-4-1955).

415. Inserted by Act 67 of 1949, Section 16.

416. Added by Act 25 of 1953, Section 13.

417. Substituted by Act 13 of 1960, Section 10 (w.r.e.f. 1-4-1960).

418. Inserted by Act 25 of 1953, Section 13.

419. Inserted by Act 67 of 1949, Section 16.

420. Inserted by Act 25 of 1953, Section 13.

421. Substituted by Act 13 of 1960, Section 10 (w.r.e.f. 1-4-1960).

422. Inserted by Act 67 of 1949, Section 16.

423. Inserted by Act 25 of 1953, Section 13.

424. Added by Act 22 of 1947, Section 9.

425. Substituted by Act 7 of 1939, Section 21, for the original section.

426. Inserted by Act 24 of 1926, Section 2.

427. Inserted by Act 20 of 1948, Section 8.

428. Sub-Section by the A.O. 1950 for British India .

429. Omitted by Act 12 of 1959, Section 10 (w.e.f. 1-4-1959).

430. Inserted by Act 18 of 1933, Section 9.

431. Substituted by Act 7 of 1939, Section 22, for one thousand .

432. Inserted by Act 7 of 1939, Section 23.

433. Inserted by Act 7 of 1939, Section 23.

434. Inserted by Act 7 of 1939, Section 23,

435. Added by Act 7 of 1939, Section 23.

436. Inserted by Act 7 of 1939, Section 23,

437. Substituted by Act 7 of 1939, Section 24, for the original sub-section.

438. The words other than a company omitted by Act 7 of 1939, Section 24.

439. Substituted by Act 7 of 1939, Section 24, for shall serve .

440. Inserted by Act 7 of 1939, Section 24.

441. Added by Act 7 of 1939, Section 24.

442. Inserted by Act 25 of 1953, Section 14.

443. The words , and any return so made shall be deemed to be a return made in due time under this section omitted by Act 7 of 1939, Section 24.

444. The words on the principal officer of any company or omitted by Act 7 of 1939, Section 24.

445. Inserted by Act 7 of 1939, Section 24.

446. Inserted by Act 25 of 1953, Section 14.

447. Added by Act 7 of 1939, Section 24.

448. Inserted by Act 7 of 1939, Section 25.

449. Substituted by Act 7 of 1939, Section 25, for has reason to believe that a return made under Section 22 is incorrect or incomplete, he shall serve on the person who made the return .

450. Substituted by Act 7 of 1939, Section 25, for If the principal officer of any company or any other person fails to make a return under sub-section (1) or sub-section (2) of Section 22, as the case may be .

451. Inserted by Act 7 of 1939, Section 25.

452. Added by Act 21 of 1930, Section 3.

453. Substituted by Act 7 of 1939, Section 25, for in the case of a registered firm, may cancel its registration .

454. Added by Act 21 of 1930, Section 3.

455. Added by Act 7 of 1939, Section 25.

456. Substituted by Act 18 of 1956, Section 14, for certain words (w.e.f. 1-4-1956).

457. Substituted by the A.O. 1950, for British India .

458. Substituted by the G.G.O. 31, dt. 10-12-1947, for and at the end of the second proviso to clause (a) (w.e.f. 15-8-1947). See Gazette of India, Extraordinary, 1947, p. 1330.

459. Substituted by Act 18 of 1956, Section 14 for the original clause (w.e.f. 1-4-1956).

460. Added by Act 23 of 1941, Section 12.

461. Substituted by Act 15 of 1955, Section 15, for Section 23-A originally inserted by Act 21 of 1930, Section 4.

462. Substituted by Act 26 of 1957, Section 7, for sub-sections (1) and (2).

463. Substituted by Act 11 of 1958, Section 9, for certain words.

464. Inserted by Act 14 of 1961, Section 8 (w.e.f. 1-4-1961).

465. Inserted by Act 14 of 1961, Section 8 (w.e.f. 1-4-1960).

466. Substituted for ninety per cent. by Act 13 of 1960, Section 11 (w.r.e.f. 1-4-1960).

467. Sub-sections (3) to (7) omitted by Act 26 of 1957, Section 7.

468. Certain words omitted by Act 26 of 1957, Section 7.

469. Renumbered as Explanation 1 by Act 26 of 1957, Section 7.

470. See now the Companies Act, 1956 (1 of 1956).

471. Substituted by Act 26 of 1957, Section 7, for held by the public .

472. Substituted by Act 18 of 1956, Section 15, for sub-section (w.e.f. 1-4-1956).

473. Substituted by Act 26 of 1957, Section 7, for sub-section (4) .

474. Substituted by Act 26 of 1957, Section 7, for certain words.

475. Substituted by Act 26 of 1957, Section 7, for sub-section (4) .

476. Inserted by Act 26 of 1957, Section 7.

477. Substituted for 100% by Act 13 of 1960, Section 11 (w.r.e.f. 1-4-1960).

478. Substituted for 45% by Act 12 of 1959, Section 11 (w.e.f. 1-4-1960).

479. Substituted for 45% by Act 12 of 1959, Section 11 (w.e.f. 1-4-1960).

480. Substituted for 60% by Act 12 of 1959, Section 11 (w.e.f. 1-4-1960).

481. Substituted for 60% by Act 12 of 1959, Section 11 (w.e.f. 1-4-1960).

482. Inserted by Act 67 of 1949, Section 17.

483. The words or deemed to have been paid omitted by Act 12 of 1959, Section 12 (w.e.f. 1-4-1960).

484. First proviso inserted by Act 11 of 1944, Section 6, and substituted by Act 25 of 1953, Section 15 omitted by Act 41 of 1954, Section 2 and Schedule.

485. Inserted by Act 14 of 1953, Section 3.

486. The word further omitted by Act 41 of 1954, Section 2 and Schedule.

487. Added by Act 7 of 1939, Section 27.

488. Inserted by Act 11 of 1944, Section 6.

489. The words in the manner applicable to a registered firm omitted by Act 18 of 1956, Section 16 (w.e.f. 1-4-1956).

490. Inserted by Act 14 of 1953, Section 3.

491. Substituted by Act 7 of 1939, Section 27, for sub-section (2).

492. Substituted by Act 15 of 1955, Section 16, for certain words (w.e.f. 1-4-1955).

493. Inserted by Act 26 of 1957, Section 8.

494. Inserted by Act 23 of 1941, Section 13.

495. Clause (a) of the proviso inserted by Act 11 of 1944 and substituted by Act 25 of 1953, Section 15, omitted by Act 41 of 1954, Section 2 and Schedule.

496. Clauses (a), (b), (c) and (d) renumbered as clauses (b), (c), (d) and (e) by Act 11 of 1944, Section 6.

497. Clauses (a), (b), (c) and (d) renumbered as clauses (b), (c), (d) and (e) by Act 11 of 1944, Section 6.

498. Substituted by Act 23 of 1941, Section 13, for Provided that .

499. The words in the manner applicable to a registered firm omitted by Act 18 of 1956, Section 16 (w.e.f. 1-4-1956).

500. Clauses (a), (b), (c) and (d) renumbered as clauses (b), (c), (d) and (e) by Act 11 of 1944, Section 6.

501. Substituted by Act 23 of 1941, Section 13, for Provided further that .

502. The words as a registered firm omitted by Act 18 of 1956, Section 16.

503. Substituted by Act 23 of 1941, Section 13, for the third proviso.

504. Clauses (a), (b), (c) and (d) renumbered as clauses (b), (c), (d) and (e) by Act 11 of 1944, Section 6.

505. Inserted by Act 15 of 1955, Section 16 (w.e.f. 1-4-1955).

506. Inserted by Act 22 of 1947, Section 10.

507. Inserted by Act 26 of 1957, Section 8.

508. The words so however that no such loss shall be so carried forward for more than six years omitted by Act 77 of 1956, Section 7 (.w.e.f. 1-4-1957).

509. Substituted by Act 77 of 1956, Section 7, for the former proviso (w.e.f. 1-4-1957).

510. Inserted by Act 18 of 1933, Section 11.

511. Substituted by the A.O. 1950 for British India .

512. Substituted by Act 7 of 1939, Section 28, for certain words.

513. Substituted by the A.O. 1950 for British India .

514. Substituted by the A.O. 1950 for British India .

515. Substituted by Act 7 of 1939, Section 28, for or have been assessed at too low a rate .

516. Substituted by Act 7 of 1939, Section 28, for comprised in the period first referred to in .

517. Substituted by Act 7 of 1939, Section 29, for the former sub-section (2).

518. The words, brackets and figures of sub-section (2) omitted by Act 7 of 1939, Section 29.

519. Inserted by Act 7 of 1939, Section 29.

520. Substituted by Act 11 of 1944, Section 7, for on which income-tax was not at any time charged under the provisions of the Indian Income-tax Act, 1918 .

521. The words which was in existence at the commencement of this Act, and omitted by Act 11 of 1944, Section 6.

522. Inserted by Act 7 of 1939, Section 30.

523. Inserted by Act 7 of 1939, Section 30.

524. Added by Act 23 of 1941, Section 14.

525. Original sub-section (4) renumbered as sub-section (6) by Act 7 of 1939, Section 30.

526. Substituted by Act 7 of 1939, Section 30, for sub-section (1) or sub-section (3) .

527. Inserted by Act 3 of 1928, Section 4 (w.e.f. 1-4-1928).

528. Inserted by Act 22 of 1930, Section 3.

529. The words that a separation of the members of the family has taken place and omitted by Act 7 of 1939, Section 31.

530. The words before the end of the previous year omitted by Act 22 of 1930, Section 3.

531. Inserted by Act 7 of 1939, Section 31.

532. The words separation or omitted by Act 7 of 1939, Section 31.

533. Substituted by Act 7 of 1939, Section 31, for separated members and groups of members .

534. Added by Act 22 of 1930, Section 3.

535. Substituted by Act 3 of 1928, Section 5, for the original section (w.e.f. 1-4-1928).

536. Substituted by Act 7 of 1939, Section 32, for certain words.

537. Added by Act 7 of 1939, Section 32.

538. Substituted by Act 7 of 1939, Section 32, for the original sub-section.

539. Inserted by Act 21 of 1930, Section 5.

540. The words or in the case of a company, the principal officer thereof omitted by Act 7 of 1939, Section 33.

541. Substituted by Act 21 of 1930, Section 6, for the former section.

542. Substituted by Act 7 of 1939, Section 34, for the original sub-section.

543. Substituted by Act 7 of 1939, Section 86, for or the Commissioner .

544. Substituted by Act 7 of 1939, Section 86, for he may direct .

545. Substituted by the A.O. 1950 for British India .

546. Added by Act 40 of 1940, Section 8.

547. Substituted by Act 18 of 1956, Section 17, for certain former words (w.e.f. 1-4-1956).

548. Substituted by Act 7 of 1939, Section 34, for Assistant Commissioner .

549. Substituted by Act 7 of 1939, Section 86, for or the Commissioner .

550. Substituted by Act 7 of 1939, Section 86, for he may direct .

551. Substituted by Act 7 of 1939, Section 34, for in addition to the income-tax payable by him .

552. Substituted by Act 7 of 1939, Section 34, for not exceeding the amount of income-tax .

553. Substituted by Act 7 of 1939, Section 34, for Assistant Commissioner .

554. Substituted by Act 7 of 1939, Section 86, for or a Commissioner, who has made .

555. Added by Act 7 of 1939, Section 34.

556. Substituted by Act 7 of 1939, Section 35, for the original section.

557. Substituted by Act 11 of 1944, Section 8, for tax or penalty .

558. Substituted by Act 11 of 1944, Section 8, for tax or penalty .

559. Substituted by Act 7 of 1939, Section 36, for or rate at which he is assessed under Section 23 or Section 27 .

560. Substituted by Act 11 of 1944, Section 9, for or objecting to a refusal of an Income-tax Officer to register a firm under Section 26-A . The words in italics were inserted by Act 18 of 1933, Section 12.

561. Inserted by Act 18 of 1933, Section 12.

562. Inserted by Act 7 of 1939, Section 36.

563. The words against him omitted by Act 7 of 1939, Section 36.

564. Inserted by Act 22 of 1930, Section 4.

565. Inserted by Act 7 of 1939, Section 36.

566. Inserted by Act 7 of 1939, Section 36.

567. Inserted by Act 7 of 1939, Section 36.

568. Substituted by Act 7 of 1939, Section 36, for Assistant Commissioner .

569. Substituted by Act 7 of 1939, Section 36, for the original proviso.

570. Inserted by Act 11 of 1944, Section 9.

571. The brackets, figure and letter (3-A) omitted by Act 25 of 1953, Section 16.

572. The word, brackets, figure and letter or (3-C) omitted by Act 25 of 1953, Section 16.

573. Inserted by Act 11 of 1944, Section 9.

574. Inserted by Act 23 of 1941, Section 15.

575. Inserted by Act 18 of 1933, Section 12.

576. Inserted by Act 20 of 1937, Section 2 and Schedule I.

577. Inserted by Act 7 of 1939, Section 36.

578. Substituted by Act 7 of 1939, Section 36, for Assistant Commissioner .

579. Substituted by Act 7 of 1939, Section 37, for Assistant Commissioner .

580. Substituted by Act 7 of 1939, Section 37, for Assistant Commissioner .

581. Inserted by Act 7 of 1939, Section 37.

582. Substituted by Act 7 of 1939, Section 37, for Assistant Commissioner .

583. Certain words inserted by Act 7 of 1939, Section 37, omitted by Act 23 of 1941, Section 16.

584. Substituted by Act 7 of 1939, Section 37, for Assistant Commissioner .

585. Inserted by Act 7 of 1939, Section 37.

586. Inserted by Act 22 of 1930, Section 5.

587. Substituted by Act 11 of 1944, Section 10, for or, in the case of an order refusing to register a firm under Section 26-A ; the words in italics were inserted by Act 18 of 1933, Section 13.

588. Inserted by Act 18 of 1933, Section 13.

589. Substituted by Act 18 of 1933, Section 13, for to make a fresh assessment .

590. Substituted by Act 7 of 1939, Section 37, for Section 25 or Section 28 .

591. Relettered by Act 22 of 1930, Section 5.

592. Inserted by Act 7 of 1939, Section 37.

593. Inserted by Act 11 of 1944, Section 10.

594. Substituted by Act 7 of 1939, Section 37, for Assistant Commissioner .

595. Inserted by Act 7 of 1939, Section 37.

596. Inserted by Act 7 of 1939, Section 37.

597. Added by Act 23 of 1941, Section 16.

598. Substituted by Act 7 of 1939, Section 88, for the original section.

599. Substituted by Act 23 of 1941, Section 17, for on which he is served with notice of such order .

600. Substituted by Act 23 of 1941, Section 17, for at any time before the expiry of sixty days from the date of the order .

601. Inserted by Section 17, Act 23 of 1941.

602. Inserted by Act 11 of 1944, Section 11.

603. Renumbered by Act 11 of 1944, Section 11.

604. Inserted by Act 23 of 1941, Section 18. Section 33-A formerly inserted by Act 21 of 1930 Section 7, omitted by Act 7 of 1939, Section 40.

605. Inserted by Act 25 of 1953, Section 17.

606. Inserted by Act 25 of 1953, Section 17.

607. Inserted by Act 48 of 1948, Section 7 (w.e.f. 30-3-1948).

608. Substituted by Section 8, Act 48 of 1948, for the original section (w.e.f. 30-3-1948).

609. The words within eight years omitted by Act 18 of 1956, Section 18 (w.e.f. 1-4-1956).

610. Substituted by Act 18 of 1956, Section 18, for the former proviso (w.e.f. 1-4-1956).

611. Inserted by Act 33 of 1954, Section 2 (w.e.f. 17-7-1954).

612. Substituted by Act 18 of 1956, Section 18, for to whom a notice has been issued under sub-section (1-A) (w.e.f. 1-4-1956).

613. The words of the High Court or of the Privy Council omitted by Act 25 of 1953, Section 18.

614. Substituted by Act 25 of 1953, Section 18, for 66 and .

615. Substituted by Act 18 of 1956, Section 18, for certain former words (w.e.f. 1-4-1956).

616. Substituted by Act 25 of 1953, Section 18, for sub-section .

617. Substituted by Act 25 of 1953, Section 18, for in pursuance of .

618. Inserted by Act 1 of 1959, Section 2. 4. Saving of notices, assessments, etc., in certain cases. No notice issued under clause (a) of sub-section (1) of Section 34 of the principal Act at any time before the commencement of this Act and no assessment, re-assessment or settlement made or other proceeding taken in consequence of such notice shall be called in question in any court, tribunal or other authority merely on the ground that at the time the notice was issued or at the time the assessment or re-assessment was made, the time within which such notice should have been issued or the assessment or re-assessment should have been made under that section as in force before its amendment by clause (a) of Section 18 of the Finance Act, 1956 (18 of 1956), had expired. [Vide Act 1 of 1959, Section 4.]

619. Inserted by Act 3 of 1928, Section 6.

620. Substituted by Act 7 of 1939, Section 42, for Assistant Commissioner .

621. Substituted by Act 7 of 1939, Section 42, for within one year .

622. Substituted by Act 23 of 1941, Section 20, for Section 33 .

623. Substituted by Act 7 of 1939, Section 42, for within one year .

624. Substituted by Act 7 of 1939, Section 42, for demand made upon an assessee .

625. Inserted by Act 12 of 1940, Section 3.

626. Substituted by Act 3 of 1928, Section 6, for of the assessment (w.e.f. 1-4-1928).

627. Substituted by Act 12 of 1940, Section 3, for or assessment .

628. Substituted by Act 7 of 1939, Section 42, for brought to his notice by the assessee .

629. Inserted by Act 12 of 1940, Section 3.

630. Substituted by Act 3 of 1928, Section 6, for the Income-tax Officer .

631. Substituted by Act 7 of 1939, Section 42, for Assistant Commissioner .

632. Added by Act 7 of 1939, Section 42.

633. Inserted by Act 7 of 1939, Section 89.

634. Sub-sections (2) and (3) renumbered as sub-sections (3) and (4) respectively by Act 7 of 1939, Section 89.

635. Sub-sections (2) and (3) renumbered as sub-sections (3) and (4) respectively by Act 7 of 1939, Section 89.

636. Inserted by Act 12 of 1940, Section 3.

637. Inserted by Act 25 of 1953, Section 19.

638. Substituted by Act 18 of 1956, Section 19 (w.e.f. 1-4-1956), for the former sub-section (8), inserted by Act 33 of 1954, Section 3.

639. Added by Act 12 of 1959, Section 13 (w.e.f. 1-4-1960).

640. Sub-section (10) omitted by Act 12 of 1959, Section 13 (w.e.f. 1-4-1960).

641. Inserted by Act 11 of 1958, Section 10.

642. Inserted by Act 14 of 1961, Section 9 (w.e.f. 1-4-1961).

643. Inserted by Act 14 of 1961, Section 9 (w.e.f. 1-4-1961).

644. Substituted by Act 18 of 1956, Section 20, for the original section (w.e.f. 1-4-1956).

645. Substituted by Act 7 of 1939, Section 44, for the former clause added by Act 18 of 1933, Section 15.

646. Added by Act 22 of 1947, Section 11.

647. Inserted by Act 18 of 1956, Section 21 (w.e.f. 1-4-1956).

648. Substituted by Act 23 of 1941, Section 21, for the original sections.

649. Substituted by the A.O. 1950 for British India .

650. Original Section 41 renumbered as sub-section (1) by Act 7 of 1939, Section 46.

651. The words are received by omitted by Act 7 of 1939, Section 46.

652. The word by omitted by Act 7 of 1939, Section 46.

653. Inserted by Act 7 of 1939, Section 46.

654. Substituted by Act 23 of 1941, Section 22, for appointed under a duly executed trust deed .

655. Inserted by Act 7 of 1939, Section 46.

656. Substituted by Act 7 of 1939, Section 46, for any person on whose behalf such income, profits or gains are received .

657. Inserted by Act 7 of 1939, Section 46.

658. Added by Act 8 of 1946, Section 5.

659. Substituted by Act 22 of 1947, Section 12, for the former marginal heading.

660. Substituted by Act 7 of 1939, Section 47, for In the case of any person residing out of British India, all profits or gains accruing or arising to such person .

661. Substituted by Act 7 of 1939, Section 47, for or property in British India .

662. Substituted by the A.O. 1950 for British India .

663. Substituted by the A.O. 1950 for British India .

664. Substituted by the A.O. 1950 for British India .

665. Substituted by the A.O. 1950 for British India .

666. Inserted by Act 22 of 1947, Section 12.

667. Substituted by the A.O. 1950 for British India .

668. Substituted by the A.O. 1950 for British India .

669. Substituted by Act 7 of 1939, Section 47, for shall be chargeable to Income-tax in the name of the agent of any such person, and .

670. Substituted by the A.O. 1950 for British India .

671. Substituted by Act 7 of 1939, Section 47, for Provided that .

672. Substituted by the A.O. 1950 for British India .

673. Substituted by the A.O. 1950 for British India .

674. Inserted by Act 7 of 1939, Section 47.

675. Inserted by Act 7 of 1939, Section 47.

676. Substituted by the A.O. 1950 for British India .

677. The words and not being a British subject or a firm or company constituted within His Majesty's Dominions or a branch thereof omitted by Act 7 of 1939, Section 47.

678. Substituted by the A.O. 1950 for British India .

679. The words or the Assistant Commissioner, as the case may be omitted by Act 7 of 1939, Section 47.

680. Substituted by Act 7 of 1939, Section 47, for certain words.

681. Substituted by Act 7 of 1939, Section 47, for the original sub-sections.

682. Substituted by the A.O. 1950 for British India .

683. Substituted by the A.O. 1950 for British India .

684. Substituted by the A.O. 1950 for British India .

685. Substituted by the A.O. 1950 for British India .

686. Inserted by Act 7 of 1939, Section 48.

687. Substituted by the A.O. 1950 for British India .

688. Inserted by Act 7 of 1939, Section 48.

689. Inserted by Act 22 of 1947, Section 13.

690. Substituted by the A.O. 1950 for British India .

691. Substituted by the A.O. 1950 for British India .

692. Substituted by the A.O. 1950 for British India .

693. Substituted by the A.O. 1950 for British India .

694. Substituted by Act 11 of 1958, Section 11, for the former section.

695. Inserted by Act 27 of 1923, Section 3.

696. Substituted by the A.O. 1950 for British India .

697. Substituted by the A.O. 1950 for British India .

698. Substituted by the A.O. 1950 for British India .

699. Substituted by Act 25 of 1950, Section 3, for one twentieth .

700. Substituted by Act 7 of 1939, Section 50, for in any year .

701. Inserted by Act 7 of 1939, Section 51.

702. Substituted by the A.O. 1950 for British India .

703. Substituted by the A.O. 1950 for British India .

704. Substituted by the A.O. 1950 for British India .

705. Substituted by the A.O. 1950 for British India .

706. Substituted by the A.O. 1950 for British India .

707. Substituted by the A.O. 1950 for British India .

708. Inserted by Act 21 of 1930, Section 8.

709. Substituted by Act 7 of 1939, Section 52, for under sub-section (4) .

710. The words and figures or Section 32 omitted by Act 23 of 1941, Section 23.

711. The words, figures and letter or under Section 33-A inserted by Act 21 of 1930, Section 8, omitted by Act 7 of 1939, Section 52.

712. Added by Act 7 of 1939, Section 52.

713. Substituted by the A.O. 1950 for British India .

714. Substituted by the A.O. 1950 for British India .

715. Substituted by the A.O. 1950 for British India .

716. Substituted by the A.O. 1950 for British India .

717. Substituted by the A.O. 1950 for British India .

718. Substituted by the A.O. 1950 for British India .

719. Inserted by Act 3 of 1928, Section 8.

720. Substituted by Act 28 of 1960, Section 7 (with retrospective effect).

721. Substituted by Act 4 of 1924, Section 4 and Schedule, for the Board of Inland Revenue .

722. Inserted by Act 48 of 1948, Section 9 (w.e.f. 30-3-1948).

723. Substituted by the A.O. 1937 for the original sub-section.

724. Substituted by the A.O. 1950 for Section 124(1) of the Government of India Act, 1935 .

725. Inserted by Act 7 of 1939, Section 53.

726. Substituted by Act 7 of 1939, Section 53, for the year .

727. Substituted by Act 25 of 1953, Section 21, for the proviso.

728. Substituted for existing sub-section (8) by Act 28 of 1960, Section 7 (with retrospective effect).

729. Substituted by the A.O. 1950 for British India ,

730. Substituted by the A.O. 1950 for British India ,

731. Substituted by the A.O. 1950 for British India ,

732. Inserted by Act 25 of 1953, Section 22.

733. Inserted by Act 7 of 1939, Section 54.

734. Inserted by Act 11 of 1944, Section 12.

735. Substituted by Act 7 of 1939, Section 55, for the original section.

736. Substituted by Act 7 of 1939, Section 91, for certain words.

737. Inserted by Act 18 of 1933, Section 18.

738. Substituted by Act 14 of 1953, Section 3, for Sections 49-A and 49-AA, inserted by Act 7 of 1939, Section 58 and G.G.O. 31, dated 10-12-1947, respectively.

739. The words with the Government of the State of Jammu and Kashmir or omitted by Act 41 of 1954, Section 2 and Schedule.

740. Substituted by Act 41 of 1954, Section 2 and Schedule, for in that State or in that country, as the case may be .

741. For such provisions see the Income-tax (Double Taxation Relief) (Dominions) Rules, 1956, vide Gazette of India, 1956, Part II, Section 3, p. 1177-1181.

742. Substituted by Act 12 of 1959, Section 14 (w.e.f. 1-4-1960).

743. Inserted by Act 13 of 1960, Section 12 (w.r.e.f. 1-4-1960).

744. Inserted by Act 7 of 1939, Section 58.

745. Omitted by Act 12 of 1959, Section 15 (w.e.f. 1-4-1960).

746. Substituted by Act 25 of 1953, Section 24, for Section 49-D, originally inserted by Act 7 of 1939, Section 58.

747. Inserted by Act 18 of 1956, Section 23 (w.e.f. 1-4-1956).

748. Section 49-E, originally inserted as Section 49-A by Act 18 of 1933, Section 19, was renumbered by Act 7 of 1939, Section 59.

749. Substituted by Act 7 of 1939, Section 59, for Assistant Commissioner .

750. Substituted by Act 25 of 1953, Section 25, for against the tax .

751. Inserted by Act 1 of 1959, Section 3.

752. Section 49-F, originally inserted as Section 49-B by Act 18 of 1933, Section 19, was renumbered by Act 7 of 1939, Section 60.

753. The word, figures and letter or 48-A , omitted by Act 7 of 1939, Section 60.

754. Inserted by Act 7 of 1939, Section 61.

755. Substituted by Act 7 of 1939, Section 61, for certain words.

756. Substituted by the A.O. 1950 for British India .

757. Added by Act 22 of 1930, Section 8.

758. Inserted by Act 7 of 1939, Section 61.

759. Inserted by Act 7 of 1939, Section 61.

760. Inserted by Act 18 of 1933, Section 20.

761. The words and figures or by Section 20 omitted by Act 12 of 1959, Section 16 (w.e.f. 1-4-1959).

762. Inserted by Act 24 of 1926, Section 3.

763. Inserted by Act 18 of 1933, Section 21.

764. Inserted by Act 7 of 1939, Section 63.

765. Inserted by Act 24 of 1926, Section 4.

766. Inserted by Act 18 of 1933, Section 22.

767. Inserted by Act 7 of 1939, Section 64.

768. Inserted by Act 21 of 1930, Section 9.

769. Substituted by Act 23 of 1941, Section 28, for or sub-section (2) of Section 32 .

770. Inserted by Act 12 of 1959, Section 17 (w.e.f. 1-4-1959).

771. The words, brackets, figures and letters or sub-section (2) of Section 33-A or sub-section (3) of Section 50-A omitted by Act 7 of 1939, Section 64. The words in italics were inserted by Act 21 of 1930, Section 9 and the rest by Act 18 of 1933, Section 22.

772. Substituted by Act 18 of 1933, Section 64, for be deemed to have committed the offence described in Section 177 of the Indian Penal Code .

773. Substituted by Act 18 of 1933, Section 65, for Assistant Commissioner .

774. Substituted by Act 18 of 1933, Section 65, for the original sub-section.

775. The words Provided that omitted and proviso numbered as sub-section (3) by Act 7 of 1939, Section 66.

776. The words Provided that omitted and proviso numbered as sub-section (3) by Act 7 of 1939, Section 66.

777. The words and figures Section 193 of omitted by Act 22 of 1930, Section 9.

778. Substituted by Act 25 of 1953, Section 26, for clause (b).

779. Inserted by Act 7 of 1939, Section 66.

780. Inserted by Act 67 of 1949, Section 18.

781. Inserted by Act 25 of 1953, Section 26.

782. Inserted by Act 25 of 1953, Section 26.

783. Substituted by the A.O. 1950, for the original clause.

784. Substituted by the A.O. 1950, for Auditor-General of India .

785. Substituted by the A.O. 1950, for the Government of India Act, 1935 .

786. Inserted by Act 12 of 1940, Section 4.

787. Substituted by Act 25 of 1953, Section 26, for registered accountant .

788. Inserted by Act 25 of 1942, Section 3 and Schedule II.

789. Original clause (cc), inserted by Act 18 of 1933, Section 23, was relettered as (h) by Act 7 of 1939, Section 66.

790. Clauses (i) to (m) substituted by Act 7 of 1939, Section 66, for original clause (d).

791. The words, or of any Indian State omitted by the A.O. 1950.

792. Substituted by the A.O. 1950, for British India .

793. Inserted by G.G.O. 31, dated 10-12-1947, see Gazette of India, 1947, Extraordinary, p. 1330.

794. The words on agricultural income omitted by Act 67 of 1949, Section 18.

795. Substituted by the A.O. 1950, for Act of the Central Legislature .

796. Substituted by Act 23 of 1941, Section 29, for to a Returning Officer .

797. Inserted by Act 12 of 1940, Section 4.

798. Inserted by Act 55 of 1948, Section 3.

799. Inserted by Act 55 of 1948, Section 3.

800. Inserted by Act 31 of 1950, Section 57 (as long as Act 31 of 1950 remains in force).

801. From the original proviso, inserted by Act 21 of 1930, Section 10, the words Provided further that were omitted and the proviso numbered as sub-section (4) by Act 7 of 1939, Section 66.

802. From the original proviso, inserted by Act 21 of 1930, Section 10, the words Provided further that were omitted and the proviso numbered as sub-section (4) by Act 7 of 1939, Section 66.

803. From the original proviso, inserted by Act 21 of 1930, Section 10, the words Provided further that were omitted and the proviso numbered as sub-section (4) by Act 7 of 1939, Section 66.

804. Inserted by Act 7 of 1939, Section 66.

805. The words Provided further that omitted and the proviso renumbered as sub-section (5) by Act 7 of 1939, Section 66.

806. The words Provided further that omitted and the proviso renumbered as sub-section (5) by Act 7 of 1939, Section 66.

807. Substituted by Act 11 of 1924, Section 7, for individual, unregistered firm, Hindu undivided family or company (w.e.f. 1-4-1923).

808. Substituted by Act 7 of 1939, Section 67, for company, unregistered firm or other association of individuals .

809. Inserted by Act 7 of 1939, Section 67.

810. Substituted by the A.O. 1950 for Act of the Central Legislature .

811. Inserted by Act 7 of 1939, Section 67.

812. Inserted by Act 7 of 1939, Section 67.

813. Inserted by Act 7 of 1939, Section 67.

814. Substituted by Act 7 of 1939, Section 67, for an individual having a share in the firm .

815. Inserted by Act 11 of 1944, Section 13.

816. Inserted by Ordinance 9 of 1945, Section 6 (for indefinite period from 28-4-1945).

817. Substituted by Act 11 of 1924, Section 8, for individual, unregistered firm, Hindu undivided family or company .

818. Inserted by Act 7 of 1939, Section 68.

819. Substituted by Act 7 of 1939, Section 68, for association of individuals .

820. Proviso inserted by Act 5 of 1925, Section 2, omitted by Act 3 of 1928, Section 10.

821. Inserted by Act 14 of 1953, Section 3 (w.e.f. 1-4-1953).

822. Substituted by Act 28 of 1960, Section 8 (w.e.f. 1-4-1960).

823. Substituted by Act 28 of 1960, Section 8 (w.e.f. 1-4-1960).

824. Substituted by Act 28 of 1960, Section 8 (w.e.f. 1-4-1960).

825. Inserted by Act 15 of 1955, Section 17 (w.e.f. 1-4-1955).

826. Inserted by Act 14 of 1961, Section 10 (w.e.f. 1-4-1961).

827. Substituted by Act 18 of 1933, Section 25, for except .

828. Substituted by Act 18 of 1956, Section 24, for the second proviso which had been substituted by Act 7 of 1939, Section 70, for the proviso (w.e.f. 1-4-1956).

829. Substituted by Act 18 of 1933, Section 25, for the provisos to Section 8 .

830. Substituted by Act 23 of 1941, Section 30, for sub-section (2) of Section 14 .

831. Inserted by Ordinance 9 of 1945, Section 7 (for indefinite period from 28-4-1945).

832. Figures 17 omitted by Act 7 of 1939, Section 70.

833. Figures 18 omitted by Act 18 of 1933, Section 25.

834. Substituted by Act 7 of 1939, Section 70, for 20 .

835. The word and figures and 20 omitted by Act 12 of 1959, Section 18 (w.e.f. 1-4-1959).

836. Figures 21 omitted by Act 7 of 1939, Section 70.

837. Substituted by Act 18 of 1933, Section 25, for and 48 .

838. Figures 48 omitted by Act 7 of 1939, Section 70.

839. Substituted by Act 7 of 1939, Section 70, for sub-sections (2) and (3) .

840. Proviso inserted by Act 24 of 1926, Section 6 omitted by Act 18 of 1933, Section 25.

841. Inserted by Act 18 of 1933, Section 25.

842. Substituted by Act 7 of 1939, Section 70, for sub-sections (3-A), (3-B), (3-C) and (3-D) .

843. Substituted by Act 18 of 1956, Section 24, for (3-B), (3-C), (3-D) and (3-E) (w.e.f. 1-4-1956).

844. Substituted for (3-A) by Act 12 of 1959, Section 18 (w.e.f. 1-4-1959).

845. The word and figures Section 57 omitted by Act 7 of 1939, Section 70.

846. Inserted by Act 12 of 1929, Section 4.

847. Chapter IX-A inserted by Act 12 of 1929, Section 5.

848. The words individuals or omitted by Act 7 of 1939, Section 71.

849. The words and figures or Section 11 omitted by Act 7 of 1939, Section 71.

850. Sub-section (2) omitted and sub-section (3) renumbered as (2) by Act 7 of 1939, Section 72.

851. Sub-section (2) omitted and sub-section (3) renumbered as (2) by Act 7 of 1939, Section 72.

852. Sub-sections (4) and (5) renumbered as (3) and (4) respectively by Act 7 of 1939, Section 72.

853. Inserted by Act 40 of 1940, Section 9.

854. Sub-sections (4) and (5) renumbered as (3) and (4) respectively by Act 7 of 1939, Section 72.

855. Inserted by Act 7 of 1939, Section 72.

856. Substituted by the A.O. 1950 for British India .

857. Added by Act 40 of 1940, Section 10.

858. Substituted by the A.O. 1950 for British India .

859. Added by Act 40 of 1940, Section 10(w.e.f. 3-9-1939).

860. Substituted by the A.O. 1950 for His Majesty's Forces .

861. Substituted by the A.O. 1950 for His Majesty's Forces .

862. Substituted by the A.O. 1950 for His Majesty's Forces .

863. Substituted by the A.O. 1950 for His Majesty's Forces .

864. Inserted by Act 40 of 1940, Section 10.

865. Substituted by Act 23 of 1941, Section 31, for from the trustees .

866. Substituted by Act 40 of 1940, Section 10, for contributions and accumulations .

867. Inserted by Act 22 of 1947, Section 14 (w.e.f. 31-3-1947).

868. Added by Act 25 of 1953, Section 27.

869. Inserted by Act 4 of 1931, Section 2.

870. Inserted by Act 25 of 1953, Section 27.

871. Substituted by Act 26 of 1957, Section 9, for the former section.

872. Substituted by Act 26 of 1957, Section 10, for the former section.

873. Inserted by Act 18 of 1933, Section 26.

874. Original sub-section (1) renumbered as sub-section (2), by Act 18 of 1933, Section 26.

875. The words and super-tax omitted by Act 18 of 1933, Section 26.

876. Original sub-section (2) renumbered as sub-section (3) by Act 18 of 1933, Section 26.

877. Substituted by Act 18 of 1933, Section 26, for sub-section (1) .

878. Substituted by Act 7 of 1939, Section 74, for certain words.

879. Substituted by Act 24 of 1934, Section 2 and Schedule I, for sub-section (2) .

880. Inserted by Act 7 of 1939, Section 75.

881. Substituted by Act 18 of 1956, Section 26, for clause (xii) which had been substituted by Act 7 of 1939, Section 75, for clause (ix) (w.e.f. 1-4-1956).

882. Chapter IX-B inserted by Act 7 of 1939, Section 76.

883. Substituted by the A.O. 1950 for British India .

884. Substituted by the A.O. 1950 for British India .

885. Inserted by Act 22 of 1947, Section 15 (w.e.f. 31-3-1947).

886. The words and super-tax omitted by Act 12 of 1940, Section 5.

887. The words and super-tax omitted by Act 12 of 1940, Section 5.

888. Substituted by Act 4 of 1924, Section 4 and Schedule, for The Board of Inland Revenue .

889. Substituted by the A.O. 1950 for British India .

890. Sub-clause (ii) omitted and sub-clause (iii) renumbered as sub-clause (ii), by Act 7 of 1939, Section 77.

891. Sub-clause (ii) omitted and sub-clause (iii) renumbered as sub-clause (ii), by Act 7 of 1939, Section 77.

892. Substituted by the A.O. 1950 for British India .

893. Inserted by Act 11 of 1958, Section 12.

894. Substituted by Act 25 of 1953, Section 28, for clauses (c) and (d).

895. Substituted by Act 18 of 1956, Section 27, for for the avoidance of double taxation on income which may be entered into by the Central Government under Section 49-AA (w.e.f. 1-4-1956).

896. Inserted by Act 28 of 1927, Section 2.

897. Sub-sections (3) and (4) renumbered as (4) and (5) respectively by Act 28 of 1927, Section 2.

898. Sub-sections (3) and (4) renumbered as (4) and (5) respectively by Act 28 of 1927, Section 2.

899. Inserted by Act 28 of 1960, Section 9 (w.e.f. 1-4-1960).

900. Inserted by Act 28 of 1960, Section 9 (w.e.f. 1-4-1960).

901. Section 60, renumbered as sub-section (1) by Act 22 of 1930, Section 10.

902. Added by Act 22 of 1930, Section 10.

903. Inserted by Act 18 of 1933, Section 27.

904. Inserted by Act 7 of 1939, Section 78.

905. Substituted by Act 7 of 1939, Section 78, for such relief as it may think fit .

906. Inserted by Act 7 of 1939, Section 78.

907. Inserted by Act 67 of 1949, Section 19.

908. Substituted by the A.O. 1950 for merged States .

909. Substituted by Act 15 of 1955, Section 18, for or to any Part B State (w.e.f. 1-4-1955).

910. Substituted by the Adaptation of Laws (No. 3) Order, 1956, for to any Part B State .

911. Substituted by Act 41 of 1954, Section 21(2) and Schedule, for after the 31st day of March, 1955 .

912. Substituted by the Adaptation of Laws (No. 3) Order, 1956, for Part B States .

913. Substituted by Act 15 of 1955, Section 18, for and in the case of the State of Jammu and Kashmir (w.e.f. 1-4-1955).

914. Inserted by Act 28 of 1960, Section 10 (with retrospective effect).

915. Substituted by Act 7 of 1939, Section 79, for the original section.

916. Inserted by Act 40 of 1940, Section 11.

917. Substituted by the A.O. 1950 for British India .

918. Now see Chartered Accountants Act, 1949 (38 of 1949).

919. Inserted by Act 67 of 1949, Section 20.

920. Substituted by the A.O. 1950 for British India .

921. Substituted by the A.O. 1950 for merged States .

922. Inserted by Act 25 of 1950, Section 3 (w.e.f. 1-4-1950).

923. Inserted by Act 41 of 1954, Section 2 and Schedule.

924. Substituted by Act 7 of 1924, Section 2 and Schedule I, for on the .

925. Added by Act 11 of 1924, Section 9.

926. Substituted by Act 7 of 1939, Section 80, for association of individuals .

927. Substituted by Act 7 of 1939, Section 81, for business .

928. Substituted by Act 7 of 1939, Section 81, for business .

929. Substituted by Act 7 of 1939, Section 81, for his principal place of business .

930. Substituted by Act 4 of 1924, Section 4 and Schedule, for the Board of Inland Revenue .

931. Added by Act 7 of 1939, Section 81.

932. Added by Act 12 of 1940, Section 6.

933. Inserted by Act 40 of 1940, Section 12.

934. Inserted by Act 40 of 1940, Section 12.

935. The words by him omitted by Act 67 of 1949, Section 21 (with retrospective effect).

936. Substituted by Act 7 of 1939, Section 92, for sub-sections (1), (2), (3), (3-A), (4) and (5).

937. The words on the application of an assessee omitted by Act 7 of 1939, Section 92.

938. Added by Act 7 of 1939, Section 82.

939. Substituted by the A.O. 1950, for His Majesty in Council .

940. Substituted by the A.O. 1950, for His Majesty in Council .

941. Inserted by Act 18 of 1933, Section 28.

942. Substituted by Act 7 of 1939, Section 92, for under sub-section (3) or sub-section (3-A) .

943. Substituted by the Adaptation of Laws (No. 3) Order, 1956, for the former sub-section (8).

944. Inserted by Act 24 of 1926, Section 8.

945. Substituted by Act 25 of 1953, Section 29, for certain former words.

946. Proviso, inserted by Act 7 of 1939, Section 83, omitted by G.G.O. 31, dated 10-12-1947, see Gazette of India, 1947, Extraordinary, p. 1330.

947. Substituted by the A.O. 1950 for His Majesty in Council .

948. Substituted by the A.O. 1950 for His Majesty in Council .

949. Substituted by the A.O. 1950 for His Majesty in Council .

950. Substituted by the A.O. 1950 for His Majesty in Council .

951. Substituted by the A.O. 1950 for His Majesty in Council .

952. Sub-section (5) omitted by the A.O. 1950.

953. Substituted by the A.O. 1937, for Government Officer .

954. Inserted by Act 22 of 1930, Section 12.

955. Inserted by Act 12 of 1940, Section 7.

956. Substituted by the A.O. 1950, for an Act of the Indian Legislature .

957. Substituted by the A.O. 1950, for the Legislature .

958. Added by Act 7 of 1939, Section 84. The Original Schedule, repealed by Act 12 of 1927, Section 2 and Schedule.

959. Inserted by Act 12 of 1940, Section 8.

960. Substituted by Act 25 of 1953, Section 30, for actuarial valuation made for the last inter-valuation period (w.e.f. 1-4-1951).

961. The words after adjusting such surplus omitted by Act 12 of 1940, Section 8.

962. Substituted by Act 11 of 1944, Section 14, for received .

963. Substituted by Act 11 of 1944, Section 14, for clause (c).

964. Clause (d), added by Act 11 of 1944, Section 14, substituted by Act 25 of 1953, Section 30 (w.e.f. 1-4-1951).

965. Substituted by Act 25 of 1953, Section 30 for one-half (w.e.f. 1-4-1951).

966. Substituted by Act 25 of 1953, Section 30, for one-half of such amount .

967. Substituted by Act 25 of 1953, Section 29, for Superintendent of Insurance (w.e.f. 1-4-1951).

968. Substituted by Act 11 of 1944, Section 14, for the original clause.

969. Added by Act 11 of 1944, Section 14.

970. Added by Act 11 of 1944, Section 14.

971. Substituted by Act 25 of 1953, Section 30, for Superintendent of Insurance (w.e.f. 1-4-1951).

972. Substituted by the A.O. 1950 for British Indian premium income of the previous year .

973. Substituted by Act 25 of 1953, Section 30, for the original rule (w.e.f. 1-4-1951).

974. Substituted by Act 40 of 1940, Section 13, for by a mutual insurance company .

975. Added by Act 15 of 1955, Section 19 (w.e.f. 1-4-1955).