Amarendra Nath Chakraborty vs Commissioner Of Income-Tax-17/03/1969

(a) that the assessee was a preacher of the Satsang cult; (b) the gift of land may have been made to the assessee voluntarily but it was made in consideration of certain spiritual benefits that the donor had received from the assessee in his capacity as a preacher of the Satsang cult. From these points of view it cannot be urged, in our opinion, that the value of the land was not the assessee’s income.

ACTS: Section 66(1) of the Indian Income-tax Act, 1922

CALCUTTA HIGH COURT

Amarendra Nath Chakraborty vs Commissioner Of Income-Tax on

DATE: 17 March, 1969

Bench: S P Mitra, S Mukharji

JUDGMENT

Sankas Prasad Mitra, J.

1. The assessment year is 1958-59, corresponding to the accounting year 1957-58. The assessee is the eldest son of Sri Sri Thakur Annkul Chandra, the founder of the Satsang movement. The assessee is what is called a ritweek of the Satsang and for his work as a ritweek he receives a salary from the institution. In his capacity as a ritweek he initiates disciples into the Satsang cult and receives offerings from such disciples.

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M/s. Indian and Eastern Newspapers Society, New Delhi Vs The Commissioner of Income-tax, New Delhi-31/08/1979

The word “information” means instruction or knowledge concerning facts or particulars, there is little difficulty. By its inherent nature, a fact has concrete existence. It influences the determination of an issue by the mere circumstance of its relevance. It requires no further authority to make it significant. Its quintessential value lies in its definitive vitality.

(SUPREME COURT OF INDIA)

M/s. Indian and Eastern Newspapers Society, New Delhi

Appellant

Versus

The Commissioner of Income-tax, New Delhi
Respondent

(Before : P. N. Bhagwati, V. D. Tulzapurkar And R. S. Pathak, JJ.)

Tax Reference Cases Nos. 1 to 4 of 1973, Decided on : 31-08-1979.

Income Tax Act, 1961—Section 147(b)— “information”—Meaning of—When Section 147 (b) of the Income-tax, Act is read as referring to “information” as to law, what is contemplated is information as to the law created by a formal source. It is law, we must remember, which because it issues from a competent legislature or a competent judicial or quasijudicial authority, influences the course of the assessment any decides and one or more of those matters which determine the assessee’s tax liability.

Counsel for the Parties:

Mr. V. S. Desai Sr. Advocate (Mrs. A. K. Verma, M/s. A. N. Haskar and J. B. Dadachanji Advocates with him), for Appellant;

Mr. T. A. Ramachandran and Miss As. Subhashini Advocates, for Respondent

Dr. Devi Pal Sr. Advocate (M/s. Ravinder Narain and J. B. Dadachanji Advocates with him), for Intervenes.

Judgement

Pathak, J—Can the view expressed by an internal audit party of the Income Tax Department on a point of law be regarded as “information” for the purpose of initiating proceedings under S. 147 (b) of the Income Tax Act, 1961? Opinion on the question has been divided among the High courts and accordingly the present cases have been referred by the Income-tax Appellate Tribunal under S. 257 of the Act.

2. The assessee, Messrs. Indian and Eastern Newspaper Society, is a society registered under the Indian Companies Act. It is a professional association of Newspapers established with the principal object of promoting the welfare and interest of all Newspapers. The assessee owns a building in which a conference hall and rooms are lesst out on rent to its members as well as to outsiders. Certain other services are also provided to the members. The income from that source was assessed to tax all along as income from business. It was so assessed for the years 1960-61, 1961-62, 1962-63 and 1963-64 also.

3. The Income-tax Department includes an internal audit organisation whose function it is to examine income-tax records and check mistakes made therein with a view ultimately to improve the quality of assessments. In the course of auditing the income-tax records pertaining to the assessee for the assessment years 1960-61 to 1963-64, the internal audit party expressed the view that the money realised by the assessee on account of the occupation of its conference hall and rooms should not have been assessed as income from business. It said that an assessment should have been made under the head “Income from property.” The Income-tax Officer treated the contents of the report as “information” in his possession for the purpose of S. 147 (b) of the Income Tax Act, 1961, and reassessed the income on that basis. The Appellate Assistant Commissioner allowed the appeals filed by the assessee holding, inter alia, that in law it could not be said that the Income-tax Officer had any “information” in his possession enabling him to take action under S. 147 (b). On appeal by the Revenue, the Income-tax Appellate Tribunal, Delhi Bench noticed a conflict of judicial opinion on the question whether the internal audit report could be treated as “information” for the purpose of S. 147 (b). The Gujarat High Court in Kasturbhai Lalbhai v. R. K. Malhotra, (1971) 80 ITR 188 (Guj) had held that an internal audit report could not be regarded as “information,” while the Delhi High Court in Commr. of Income-tax v. H. H. Smt. Chand Kanwarji Alwar (1972) 84 ITR 584 had expressed a contrary view. Following the view adopted by the Delhi High Court, the Tribunal held that the Income-tax Officer had jurisdiction to proceed under S. 147 (b). The assessee applied for a reference, and having regard to the difference between the High Courts on the point, the Tribunal has considered it expedient to refer the following question of law directly to this Court:-

“Whether, on the facts and in the circumstances of the case, the Income-tax Officer was legally justified in reopening the assessments under S. 147 (b) for the years 1960-61, 1961-62, 1962-63 and 1963-64 on the basis of the view expressed by the Internal Audit party and received by him subsequent to the original assessment?”

4. Since then, the judgment of the Gujarat High Court in Kasturbhai Lalbhai’s case (supra) has, on appeal, been reversed by this Court in R. K. Malhotra v. Kasturbhai Lalbhai (1977) 109 ITR 537. It has been strenuously contended that the view taken by this Court calls for further consideration. Having regard to the dimensions of the controversy and the importance of the question, we have been persuaded to take a fresh look at the point.

5. An assessment proceeding is a quasi-judicial proceeding. It acquires finality on the assessment order being made. And the finality of such an order can be disturbed only in proceedings, and within the confines, provided by law. An appeal, revision and rectification are proceedings in which the finality may be questioned. The assessment may also be reopened under S. 147 of the Act. It is a proceeding for assessing income which has “escaped assessment.” S. 147 reads:-

“147. 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 under S. 139 for any assessment year to the Income-tax Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, 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 chargeable to tax has escaped assessment for any assessment year.

He may, subject to the provisions of Ss. 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned.”

6. In cases falling under S. 147 (b), the expression “information” prescribes one of the conditions upon which a concluded assessment may be reopened under that provision. It is an indispensable ingredient which must exist before the section can be availed of. What does “information” in S. 147 (b) connote? In Kamal Singh v. Commr. of Income-tax (1959) 35 ITR 1 (SC) this Court, construing the corresponding S. 34 (1) (b) of the Indian Income Tax Act, 1922 held the word “information” to mean not only facts or factual material but to include also information as to the true and correct state of the law and, therefore, information as to relevant judicial decisions. Thereafter, in Commr. of Income-tax v. Raman and Co., (1968) 67 ITR 11 (SC) the Court defined the expression “information” in S. 147 (b) of the Income-tax Act 1961 as “instruction or knowledge derived from an external source concerning facts or particulars, or as to law, relating to a matter bearing on the assessment.” That definition has been reaffirmed in subsequent cases, and with it as the point of departure we shall now proceed.

7. In so far as the word “information” means instruction or knowledge concerning facts or particulars, there is little difficulty. By its inherent nature, a fact has concrete existence. It influences the determination of an issue by the mere circumstance of its relevance. It requires no further authority to make it significant. Its quintessential value lies in its definitive vitality.

8. But when “information” is regarded as meaning instruction or knowledge as to law the position is more complex. When we speak of “law,” we ordinarily speak of norms or guiding principles having legal effect and legal consequences. To possess legal significance for that purpose, it must be enacted or declared by competent authority. The legal sanction vivifying it imparts to it its force and validity and binding nature. Law may be statutory law or, what is popularly described as, judge-made law. In the former case, it proceeds from enactment having its source in competent legislative authority. Judge-made law emanates from a declaration or exposition of the content of a legal principle or the interpretation of a statute, and may in particular cases extend to a definition of the status of a party or the legal relationship between parties, the declaration being rendered by a competent judicial or quasi-judicial authority empowered to decide questions of law between contending parties. The declaration or exposition is ordinarily set forth in the judgment of a court or the order of a tribunal. Such declaration or exposition in itself bears the character of law. In every case, therefore, to be law it must be a creation by a formal source, either legislative or judicial authority. A statement by a person or body not competent to create or define the law cannot be regarded as law. The suggested interpretation of enacted legislation and the elaboration of legal principles in text books and journals do not enjoy the status of law. They are merely opinions and, at best, evidence in regard to the state of the law and in themselves possess no binding effect as law. The forensic sub-missions of professional lawyers and the seminal activities of legal academics enjoy no higher status. Perhaps the only exception is provided by the writing of publicists in international law, for in the law of nations the distinction between formal and material sources is difficult to maintain.

9. In that view, therefore, when Section 147 (b) of the Income-tax, Act is read as referring to “information” as to law, what is contemplated is information as to the law created by a formal source. It is law, we must remember, which because it issues from a competent legislature or a competent judicial or quasijudicial authority, influences the course of the assessment any decides and one or more of those matters which determine the assessee’s tax liability.

10. In determining the status of an internal audit report, it is necessary to consider the nature and scope of the functions of an internal audit party. The internal audit organisation of the Income-tax Department was set up primarily for imposing a check over the arithmetical accuracy of the computation of income and the determination of tax, and now, because of the audit of income-tax receipts being entrusted to the Comptroller and Auditor-General of India from 1960, it is intended as an exercise in removing mistakes and errors in income-tax records before they are submitted to the scrutiny of the Comptroller and Auditor-General. Consequently, the nature of its work and the scope of audit have assumed a dimension co-extensive with that of Receipt Audit. [1]The nature and scope of Receipt Audit are defined by Section 16 of the Comptroller and Auditor General’s (Duties, Powers and Conditions of Services) Act, 1971. [2]

It shall be the duty of the Comptroller and Auditor-General to audit all receipts which are payable into the Consolidated Fund of India and of each State and of each Union Territory having a Legislative Assembly and to satisfy himself that the rules and procedures in that behalf are designed to secure an effective check on the assessment, collection and proper allocation of revenue and are being duly observed and to make for this purpose such examination of the accounts as he thinks fit and report thereon.’

11. Under that section, the audit by the Comptroller and Auditor General is principally intended for the purposes of satisfying him with regard to the sufficiency of the rules and procedures prescribed for the purpose of securing an effective check on the assessment, collection and proper allocation of revenue. He is entitled to examine the accounts in order to ascertain whether the rules and procedures are being duly observed, and he is required, upon such examination, to submit a report. His powers in respect of the audit of income-tax receipts and refunds are outlined in the Board’s Circular No. 14/19/56-II dated July 28, 1960. [3] Paragraph 2 of the Circular repeats the provisions of Section 16 of the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971. And paragraph 3 warns that “the audit department should not in any way substitute itself for the revenue authorities in the performance of their statutory duties.” Paragraph 4 declares:

“4. Audit does not consider it any part of its duty to pass in review the judgment exercised or the decision taken in individual cases by officers entrusted with those duties, but it must be recognised that an examination of such cases may be an important factor in judging the effectiveness of assessment procedure…….. It is however, to forming a general judgment rather than to, the detection of individual errors of assessment, etc. that the audit enquiries should be directed. The detection of individual errors is an incident rather than the object of audit.”

Other provisions stress that the primary function of audit in relation to assessments and refunds is the consideration whether the internal procedures are adequate and sufficient. It is not intended that the purpose of audit should go any further. Our attention has been invited to certain provisions of the Internal Audit Manual more specifically defining the functions of internal audit in the Income-tax Department. While they speak of the need to check all assessments and refunds in the light of the relevant tax laws, the orders of the Commissioners of Income-tax and the instructions of the Central Board of Direct Taxes, nothing contained therein can be construed as conferring on the contents of an internal audit report the status of a declaration of law binding on the Income-tax Officer. Whether it is the internal audit party of the Income-tax Department or an audit party of the Comptroller and Auditor-General, they perform essentially administrative or executive functions and cannot be attributed the powers of judicial supervision over the quasi-judicial acts of income-tax authorities. The Income-tax Act does not contemplate such power in any internal audit organisation of the Income-tax Department; it recognises it in those authorities only which are specifically authorised to exercise adjudicator functions. Nor does Section 16 of the Comptroller and Auditor-General’s (Duties, Powers and Conditions of Service) Act, 1971 envisage such a power for the attainment of the objectives incorporated therein. Neither, statute supports the conclusion that an audit party can pronounce on the law, and that such pronouncement amounts to ‘information’ within the meaning of Section 147 (b) of the Income Tax Act, 1961.

12. But although an audit party does not possess the power to so pronounce on the law, it nevertheless may draw the attention of the Income-tax Officer to it. Law is one thing, and its communication another. If the distinction between the source of the law and the communicator of the law is carefully maintained, the confusion which often results in applying Section 147 (b) may be avoided. While the law may be enacted or laid down only by a person or body with authority in that behalf, the knowledge or awareness of the law may be communicated by anyone. No authority is required for the purpose.

13. In the present case, an internal audit party of the Income-tax Department expressed the view that the receipts from the occupation of the conference hall and rooms did not attract Section 10 of the Act and that the assessment should have been made under Section 9. While Sections 9 and 10 can be described as law, the opinion of the audit party in regard to their application is not law. It is not a declaration by a body authorised to declare the law. That part alone of the note of an audit party which mentions the law which escaped the notice of the Income-tax Officer constitutes “information” within the meaning of Section 147 (b); the part which embodies the opinion of the audit party in regard to the application or interpretation of the law cannot be taken into account by the Income-tax Officer. In every case, the Income-tax Officer must determine for himself what is the effect and consequence of the law mentioned in the audit note and whether in consequence of the law which has now come to his notice he can reasonably believe that income-tax has escaped assessment. The basis of his belief must be the law of which he has now become aware. The opinion rendered by the audit party in regard to the law cannot, for the purpose of such belief, add to or colour the significance of such law. In short, the true evaluation of the law in its bearing on the assessment must be made directly and solely by the Income-tax Officer.

14. Now, in the case before us, the Income-tax Officer had, when he made the original assessment, considered the provisions of Sections 9 and 10. Any different view taken by him afterwards on application of those provisions would amount to a change of opinion on material already considered by him. The Revenue contends that it is open to him to do so, and on that basis to reopen the assessment under Section 147 (b). Reliance is placed on Kalyanji Mavji and Co. v. Commr. of Income-tax, (1976) 102 ITR 287 (SC), where a Bench of two learned Judges of this Court observed that a case where income had escaped assessment due to the “oversight, inadvertence or mistake” of the Income-tax Officer must fall within Section 34 (1) (b) of the Indian Income Tax Act, 1922. It appears to us, with respect, that the proposition is stated too widely and travels farther than the statute warrants insofar as it can be said to lay down that if, on reappraising the material considered by him during the original assessment, the Income-tax Officer discovers that he has committed an error in consequence of which income has escaped assessment it is open to him to reopen the assessment. In our opinion, an error discovered on a reconsideration of the same material (and no more) does not give him that power. That was the view taken by this Court in Kamal Singh v. Commr. of Income-tax (supra), Commr. of Income-tax v. Raman and Co. (supra) and Bankipur Club Ltd. v. Commr. of Income-tax, (1971) 82 ITR 831 (SC), and we do not believe that the law has since taken a different course. Any observations in Kalyanji Mavji and Co. v. Commr. of Income-tax (supra) suggesting the contrary do not, we say with respect, lay down the correct law.

15. A further submission raised by the Revenue on Section 147 (b) of the Act may be considered at this stage. It is urged that the expression “information” in Section 147 (b) refers to the realisation by the Income-tax Officer that he has committed an error when making the original assessment. It is said that, when upon receipt of the audit note the Income-tax Officer discovers or realizes that a mistake has been committed in the original assessment, the discovery of the mistake would be ‘information’ within the meaning of Section 147 (b). The submission appears to us inconsistent with the terms of Section 147 (b). Plainly, the statutory provisions envisages that the Income-tax Officer must first have information in his possession, and then in consequence of such information he must have reason to believe that income has escaped assessment. The realisation that income has escaped assessment is covered by the words ‘reason to believe’, and it follows from the ‘information’ received by the Income-tax Officer. The information is not the realisation, the information gives birth to the realisation.

16. The recent decision of this Court in R. K. Malhotra v. Kasturbhai Lalbhai (supra) may be examined now. While making an assessment on a Hindu undivided family, the Income-tax Officer allowed a deduction of municipal taxes in determining the annual value of two house properties occupied by the assessee. Subsequently, the Income-tax Officer reopened the assessment on receipt of a report from the office of the Comptroller and Auditor-General of India that on a true interpretation of S. 23 (2) of the Income Tax Act, 1961, the deduction of municipal taxes was not admissible in the computation of the annual value of self-occupied house properties. The assessee contended that the report did not constitute ‘information’ within the meaning of Section 147 (b) of the Act, and the Gujarat High Court accepted the plea in the view that information as to law would consist of a statement by a person, body or authority competent and authorised to pronounce upon the law and invested with the authority to do so, and that the Audit Department was not such competent or authorised authority. On appeal by the Revenue, a Bench of two learned Judges of this Court, although endorsing the principle enunciated by the High Court, said that the audit department was the proper machinery to scrutinise assessment made by the Income-tax Officer and to point out errors of law contained therein, and the High Court had erred in taking the strict view which it did. The Court rested its decision of Asst. Controller of Estate Duty v. Mir. Osman Ali Khan Bahadur, (1969) 72 ITR 376 (SC), Commr. of Income-tax v. Smt. Chand Kanwarji (supra), Commr. of Income-tax v. Kelukutty, (1972) 85 ITR 102 (Ker) and Vashist Bhargava v. Income-tax Officer, (1975) 99 ITR 148 (Delhi).

17. In Asst. Controller of Estate Duty v. Mir. Osman Ali Khan Bahadur (supra), this Court held the opinion of the Central Board of Revenue as regards the correct valuation of securities for the purpose of estate duty to be ‘information’ within the meaning of Section 59 of the Estate Duty Act, 1953 on the basis of the which the Controller of Estate Duty was held entitled to entertain a reasonable belief that property assessed to estate duty had been under-valued. The circumstance that the opinion of the Board was rendered in an appeal filed before it under the Estate Duty Act against the assessment made by the Assistant Controller of Estate Duty was apparently not brought to the notice of this Court when it heard R. K. Malhotra v. Kasturbhai Lalbhai (supra). The opinion of the Board represented its view as a quasijudicial authority possessing jurisdiction to lay down the law. Although the Board did not enhance the valuation of the securities in the appellate proceedings because of the argument advanced by the appellant, nonetheless its observations amounted to information as to the law. It was not a case where the Board was functioning as an extra-judicial authority, performing administrative or executive functions, and not competent or authorised to pronounce upon the law. The Delhi High Court in Commr. of Income-tax v. Smt. Chand Kanwarji (supra) held that the scrutiny note of Revenue Audit constituted ‘information’ within the meaning of Section 147 (b) of the Income-tax Act because the Comptroller and Auditor-General of India was empowered by statute to scrutinise the proceedings of the Income-tax Department and to point out defects and mistakes which adversely affected the Revenue. The High Court considered that the view that information as to law could be gathered only from the decisions of judicial or quachi-judicial authorities was unduly restrictive. In Commr. of Income-tax v. Kelukutty (supra), the Kerala High Court also regarded the note put up by Audit as ‘information’ within the meaning of Section 147 (b) of the Act, but it appears to have assumed, without anything more, that an audit note would fall within that expression. As regards Vashist Bhargava v. Income-tax Officer (supra) the ‘information’ consisted in a note of the Revenue Audit and the Ministry of Law that the payment of interest by the assessee was in fact made to his own account in the Provident Fund and, therefore, in law the money paid did not vest in the Government and, consequently, the original assessment was erroneous insofar as it allowed the deduction of the interest as expenditure made by the assessee. The Delhi High Court upheld the reassessment of the finding that the note of the Revenue Audit and the Ministry of Law had to be taken into account by the Income-tax Officer, because in his executive capacity he had to be guided by the advice rendered by the Ministry of Law and he had to pay due regard to the note of the Revenue Audit because the officers of the Audit Department were experts empowered to examine and check upon the work of the Income-tax Officers. It seems to us that the considerations on which the Delhi High Court rested its judgment are not correct. But the decision of the case can be supported on the ground that the basic information warranting the re-opening of the assessment was the fact that the payment of interest was made to the Provident Fund account of the assessee himself. That the money so paid did not vest in the Government was a conclusion which followed automatically upon that fact, and no controversy in law could possibly arise on that point.

18. On the considerations prevailing with us, we are of opinion that the view taken by the Delhi High Court and the Kerala High Court in the aforementioned cases is wrong and we must, with great respect, hold that this Court was in error in the conclusion reached by it in R. K. Malhotra v. Kasturbhai Lalbhai (supra).

Our attention has been drawn to the further decision of the Kerala High Court in Muthukrishna Reddier v. Commissioner of Income-tax, Kerala, (1973) 90 ITR 503 and the decisions of the Allahabad High Court in Raj Kumar Shrawan Kumar v. Central Board of Direct Taxes, (1977) 107 ITR 570 and Elgin Mills Co. Ltd. v. Income-tax Officer, Companies Circle, ‘A’ Ward, Kanpur, (1978) 111 ITR 287. The Kerala High Court merely followed its earlier judgment in Commissioner of Income-tax v. Kelukutty (supra) and the Allahabad High Court was impressed by the same reasons sub-stantially which persuaded the Delhi High Court and the Kerala High Court in the cases referred to above.

19. Therefore, whether considered on the basis that the nature and scope of the functions of the internal audit organisation of the Income-tax Department are co-extensive with that of Receipt Audit or on the basis of the provisions specifically detailing its functions in the Internal Audit Manual, we hold that the opinion of an internal audit party of the Income-tax Department on a point of law cannot be regarded as ‘information’ within the meaning of Section 147 (b) of the Income Tax Act, 1961.

20. The question referred by the Income-tax Appellate Tribunal is answered in the negative, in favour of the assessee and against the Revenue. The assessee is entitled to one set of costs in these appeals.

——————————————————————————–

[1]. Interal Audit Manual, Vol. II p. 1.

[2]. “16. Audit of receipts of Union of or States.

[3]. Internal Audit Manual, Volume II page 39.


AIR 1979 SC 1960 : (1980) 1 SCR 442 : (1979) 4 SCC 248

Orders passed by the ITAT are final, an appeal lies to the High Court if a substantial question of law involved

ITAT is a quasi-judicial institution set up in January 1941 and specializes in dealing with appeals under the Direct Taxes Acts. The orders passed by the ITAT are final, an appeal lies to the High Court only if a substantial question of law arises for determination.

Benches of The Income Tax Appellate Tribunal

Bench Name Mumbai
Address Income Tax Appellate Tribunal, Mumbai Benches, Mumbai
Pratishtha Bhavan, 3rd & 4th Floors, 101, M. K. Road
Mumbai – 400020, Maharashtra
Tel Phone 022-22033848
Fax Nos. 022-22014369
E-Mail ID mumbai[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Maharashtra Mumbai City, Mumbai Suburban, Thane
Bench Name Delhi
Address Income Tax Appellate Tribunal, New Delhi Benches, New Delhi
10th & 11th Floor, Loknayak Bhawan, Khan Market
New Delhi – 110003, Delhi
Tel Phone 011-24641558
Fax Nos. 011-24641558
E-Mail ID delhi[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Delhi New Delhi, North Delhi , North West Delhi, West Delhi, South West Delhi, South Delhi, South East Delhi, Central Delhi, North East Delhi, Shahdara, East Delhi
Bench Name Agra
Address Income Tax Appellate Tribunal, Agra Bench, Agra
63/4 Kendralaya, C.G.O.Complex, C.P.W.D. Building, Sanjay Place
Agra – 282002, Uttar Pradesh
Tel Phone 0562-2523166
Fax Nos. 0562-2522145
E-Mail ID agra[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Uttar Pradesh Agra, Aligarh, Etah, Farukkhabad, Shikohabad, Firozabad, Jalaun
Bench Name Ahmedabad
Address Income Tax Appellate Tribunal, Ahmedabad Benches, Ahmedabad
3rd & 4th Floor, Abhinav Arcade, Near Bank of Baroda, Opp: Municipal School, Ellis Bridge
Ahmedabad – 380006, Gujarat
Tel Phone 079-26581546
Fax Nos. 079-26581546
E-Mail ID ahmedabad[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Gujarat Ahmedabad, Vadodara, Banaskantha, Mahisagar, Chhotaudepur, Arvalli, Kheda, Sabarkantha, Gandhinagar, Panchmahal, Patan, Mehsana, Anand, Dahod, Nadiad, Bhavnagar
Bench Name Allahabad
Address Income Tax Appellate Tribunal, Allahabad Bench, Allahabad
Aaykar Bhawan Annexe, ‘R’- Block, 1st & 2nd Floor, 38 M. G. Marg
Allahabad – 211001, Uttar Pradesh
Tel Phone 0532-2407772
Fax Nos. 0532-2400671
E-Mail ID allahabad[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Uttar Pradesh Allahabad, Ambedkar Nagar, Amethi, Amroha, Bagpat, Balrampur, Banda, Chitrakoot, Fatehpur, Hamirpur, Kannauj, Kansiram Nagar, Kaushambi, Mahoba, Maharajganj, Mirzapur, Panchsheel Nagar, Pratapgarh, Sant Kavir Nagar, Sant Ravidas, Shamli, Sharavasti, Siddharth Nagar, Sultanpur
Bench Name Amritsar
Address Income Tax Appellate Tribunal, Amritsar Bench, Amritsar
Central Revenue Building, 1st Floor, Maqbool Road, C-Block
Amritsar – 143001, Punjab
Tel Phone 0183-2506429
Fax Nos. 0183-2506370
E-Mail ID amritsar[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
N/A N/A
Bench Name Bangalore
Address Income Tax Appellate Tribunal, Bangalore Benches, Bangalore
No. 51, Behind Jal Bhawan, 1st Cross, 4th T BLock, Tilak Nagar, Jayanagar
Bengaluru – 560041, Karnataka
Tel Phone 080-22047444
Fax Nos. 080-22047444
E-Mail ID bangalore[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Karnataka Bangalore, Bagalkot, Bellary, Bidar, Chikkballapura, Chikkamagalur, Chamarajnagar, Chitradurga, Dakshina Kannada, Davangere, Dharwad, Gadag, Hassan, Haveri, Hubli, Kolar, Kodagu, Koppal, Mysore, Mandya, Ramanagara, Raichur, Shimoga, Tumkur, Uttara Kannada (except Karwar), Udupi, Kalaburgi, Yadgiri
Bench Name Chandigarh
Address Income Tax Appellate Tribunal, Chandigarh Benches, Chandigarh
Kendriya Sadan, Sector 9-A
Chandigarh – 160009, Chandigarh
Tel Phone 0172-2741987
Fax Nos. 0172-2741987
E-Mail ID chandi[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Haryana Ambala, Fatehabad, Jind, Kaithal, Kurukshetra, Panchkula, Sirsa, Yamunanagar
Himachal Pradesh Bilaspur, Chamba, Hamirpur, Kangra, Kinnaur, Kullu, Lahaul & Spiti, Mandi, Shimla, Sirmaur, Solan, Una
Punjab Fatehgarh Sahib, Ludhiana, Patiala , Rupnagar , Sangrur , Barnala, Mohali
Chandigarh Chandigarh
Bench Name Chennai
Address Income Tax Appellate Tribunal, Chennai Benches, Chennai
A-3, II Floor, Rajaji Bhavan, Besant Nagar
– 600090, Tamil Nadu
Tel Phone 044-24469661
Fax Nos. 044-24462653
E-Mail ID chennai[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Puducherry Karaikal, Puducherry
Tamil Nadu Ariyalur, Chengalpattu, Chennai, Covai, Cuddalore, Dharmapuri, Dindigul, Erode, Kallakurichi, Kancheepuram, Kanyakumari, Karur, Krishnagiri, Madurai, Nagapattinam, Namakkal, Nilgiris, Perambalur, Pudukkottai, Ramanathapuram, Ranipettai, Salem, Sivagangai, Tenkasi, Thanjavur, Theni, Thoothukudi, Tiruchirappalli, Tirunelveli, Tirupathur , Tirupur, Tiruvallur, Tiruvannamalai , Tiruvarur, Vellore, Villuppuram, Virudhunagar
Bench Name Cochin
Address Income Tax Appellate Tribunal, Cochin Bench, Cochin
1st Floor, Block C-I & C-II, Kendriya Bhavan, Kakkanad
Cochin – 682037, Kerala
Tel Phone 0484-2424897
Fax Nos. 0484-2424896
E-Mail ID cochin[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Kerala Alappuzha, Ernakulam, Idukki, Kannur, Kasaragod, Kollam, Kottayam, Kozhikode, Malappuram, Palakkad, Pathanamthitta, Thiruvananthapuram, Thrissur, Wayanad
Lakshadweep Lakshadweep
Bench Name Cuttack
Address Income Tax Appellate Tribunal, Cuttack Bench, Cuttack
Plot No. 6B/925/9, Sector-9, C.D.A.
Cuttack – 753014, Odisha
Tel Phone 0671-2504118
Fax Nos. 0671-2506540
E-Mail ID cuttack[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Odisha Angul, Balangir, Balasore, Bargarh, Bhadrak, Boudh, Cuttack, Deogarh, Dhenkanal, Gajapati, Ganjam, Jagatsinghpur, Jajpur, Jharsuguda, Kalahandi, Kandhamal, Kendrapara, Keonjhar, Khordha, Koraput, Malkangiri, Mayurbhanj, Nabarangpur, Nayagarh, Nuapada, Puri, Rayagada, Sambalpur, Subarnapur (Sonepur), Sundargarh
Bench Name Guwahati
Address Income Tax Appellate Tribunal, Guwahati Bench, Guwahati
Oriental Building, 1st Floor, Fancy Bazaar
– 781001, Assam
Tel Phone 0361-2544637
Fax Nos. 0361-2514405
E-Mail ID guwahati[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
N/A N/A
Bench Name Hyderabad
Address Income Tax Appellate Tribunal, Hyderabad Benches, Hyderabad
Room No. 502 & 505, Vth Floor, CGO Towers, Kavadiguda
Secunderabad – 500080, Telangana
Tel Phone 040-27536887
Fax Nos. 040-27536891
E-Mail ID hyderabad[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Telangana Hyderabad, Adilabad, Bhadradri Kothagudem, Jagital, Jangaon, Jayashankar Bhupalpally, Jogulamba Gadwal, Kamareddy, Karimnagar, Khammam, Kumuram Bheem, Mahabubabad, Mahabubnagar, Mancherial, Medak, Medchal, Nagarkurnool, Nalgonda, Nirmal, Nizamabad, Peddapalli, Rajanna Sircilla, Rangareddy, Sangareddy
Andhra Pradesh Cuddapah
Bench Name Indore
Address Income Tax Appellate Tribunal, Indore Bench, Indore
C.G.O.Complex, 1st Floor, Shivaji Chouraha, A.B.Road
– 452001, Madhya Pradesh
Tel Phone 0731-2493839
Fax Nos. 0731-2499025
E-Mail ID indore[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Madhya Pradesh Bhopal, Rajgarh, Sehore, Vidisha, Alirajpur, Barwani, Harda, Agar, Dewas, Dhar, Indore, Jhabua, Khandwa, Khargone, Mandsaur, Raisen, Ralam, Shajapur, Ujjain, Hosangabad, Betul, Burhanpur, Neemuch
Bench Name Jabalpur
Address Income Tax Appellate Tribunal, Jabalpur Bench, Jabalpur
Flora House, 46, Napier Town, Near Krishna Hotel
Jabalpur – 482001, Madhya Pradesh
Tel Phone 0761-2450543
Fax Nos. 0761-2450751
E-Mail ID jabalpur[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Madhya Pradesh Balaghat, Betul, Chhatarpur, Chhindwara, Damoh , Dindori , Harda, Hosangabad, Jabalpur, katni, Mandla, Narsinghpur, Panna, Rewa, Sagar, Satna, Seoni, Singrauli , Shahdol , Sidhi , Tikamgarh, Umaria , Niwari , Anuppur
Bench Name Jaipur
Address Income Tax Appellate Tribunal, Jaipur Benches, Jaipur
G-4, Raj Mahal Residential Area, Near 22 Godam INOX, C-Scheme
Jaipur – 302006, Rajasthan
Tel Phone 0141-2983056
Fax Nos. 0141-2229929
E-Mail ID jaipur[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Rajasthan Jaipur, Ajmer, Tonk Bharatpur, Dholpur, Karauli, Sawaimadhopur, Alwar, Jhunjhunu, Sikar, Dausa, Kota, Bundi, Jhalawar, Baran, Pratapgarh
Bench Name Jodhpur
Address Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur
27-A, Hanuwant Vihar, Rai Ka Bag
– 342001, Rajasthan
Tel Phone 0291-2544591
Fax Nos. 0291-2544617
E-Mail ID jodhpur[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Rajasthan Banswara, Barmer, Bhilwara, Bikaner, Chittorgarh, Churu, Dungarpur, Jaisalmer, Jalore, Jodhpur, Nagaur, Pali, Rajsamand, Sirohi, Sriganganagar, Hanumangarh, Udaipur
Bench Name Kolkata
Address Income Tax Appellate Tribunal, Kolkata Benches, Kolkata
225C, A.J.C. Bose Road, 6th & 7th Floors
Kolkata – 700020, West Bengal
Tel Phone 033-22901222
Fax Nos. 033-22901228
E-Mail ID kolkata[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Sikkim East Sikkim, North Sikkim, South Sikkim, West Sikkim
Andaman and Nicobar Islands Nicobar, North and Middle Andaman, South Andaman
West Bengal Malda, Uttar Dinajpur, Dakshin Dinajpur, Murshidabad, Birbhum, Hooghly, Paschim Bardhaman, Purba Bardhaman, Alipurduar, Cooch Behar, Darjeeling, Jalpaiguri, Kalimpong, Howrah, Kolkata, Nadia, North 24 Parganas, South 24 Parganas, Bankura, Jhargram, Purulia, East Medinipur, West Medinipur
Bench Name Lucknow
Address Income Tax Appellate Tribunal, Lucknow Benches, Lucknow
5th Floor, PICUP Bhawan, Gomti Nagar
Lucknow – 226010, Uttar Pradesh
Tel Phone 0522-2720864
Fax Nos. 0522-2720864
E-Mail ID lucknow[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Uttar Pradesh Barabanki, Bareilly, Basti, Bahraich, Faizabad, Gonda, Hardoi, Kanpur (Rural), Kanpur (City), Lucknow, Lakhimpur Kheri, Pilibhit, Raibareilly, Shahjahanpur, Sitapur, Unnao
Bench Name Nagpur
Address Income Tax Appellate Tribunal, Nagpur Bench, Nagpur
2nd Floor, ‘C’ Block, C.G.O Complex, Seminery Hills
Nagpur – 440006, Maharashtra
Tel Phone 0712-2512593
Fax Nos. 0712-2510931
E-Mail ID nagpur[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Maharashtra Akola, Amaravati, Bhandara, Buldhana, Chandrapur, Gadchiroli, Akola, Amravati, Bhandara, Buldhana, Chandrapur, Gadchiroli, Gondia, Hingoli, Nagpur, Wardha, Washim, Yavatmal
Bench Name Panaji
Address Income Tax Appellate Tribunal, Panaji Bench, Panaji
Pundalik Nivas, 1st floor, Near Patto Foot Bridge
– 403001, Goa
Tel Phone 0832-2426226
Fax Nos. 0832-2426238
E-Mail ID panaji[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Goa North Goa, South Goa
Bench Name Patna
Address Income Tax Appellate Tribunal, Patna Bench, Patna
5th Floor, C.R. Building (Annexe), Birchand Patel Path
Patna – 800001, Bihar
Tel Phone 0612-2504997
Fax Nos. 0612-2504085
E-Mail ID patna[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Bihar Araria, Arwal, Aurangabad, Banka, Begusarai, Bhagalpur, Bhojpur, Buxar, Darbhanga, East Champaran, Gaya, Gopalganj, Jamui, Jehanabad, Khagaria, Kishanganj, Kaimur, Katihar, Lakhisarai, Madhubani, Munger, Madhepura, Muzaffarpur, Nalanda, Nawada, Patna, Purnia, Rohtas, Saharsa, Samastipur, Sheohar, Sheikhpura, Saran, Sitamarhi, Supaul, Siwan, Vaishali, West Champaran
Bench Name Pune
Address Income Tax Appellate Tribunal, Pune Benches, Pune
2nd Floor, Maharashtra Jeevan Pradhikaran Bldg., Near St Mary High School, 463, Stavely Road
Pune – 411001, Maharashtra
Tel Phone 020-26342532
Fax Nos. 020-26342532
E-Mail ID pune[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Maharashtra Nashik, Pune, Ahmednagar, Aurangabad, Beed, Dhule, Jalgaon, Jalna, Kolhapur, Latur, Nanded, Nandurbar, Osmanabad, Parbhani, Raigad, Ratnagiri, Sangli, Satara, Sindhudurg, Solapur
Bench Name Raipur
Address Income Tax Appellate Tribunal, Raipur Bench, Raipur
Chattisgarh Chamber of Commerce and Industries, 2nd Floor, Chaudhury Devilal Bhawan, Behind Bombay Market
Raipur – 429001, Chhattisgarh
Tel Phone 07712-223110
Fax Nos. 07712-223110
E-Mail ID raipur[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Chhattisgarh Balod, Baloda Bazar, Balrampur, Bastar, Bemetara, Bijapur, Bilaspur, Dantewada, Dhamtari, Durg, Gariaband, Gaurela-Pendra-Marwahi, Janjgir-Champa, Jashpur, Kabirdham, Kanker, Kondagaon, Korba, Koriya, Mahasamund, Mungeli, Narayanpur, Raigarh, Raipur, Rajnandgaon, Sukma, Surajpur, Surguja
Bench Name Rajkot
Address Income Tax Appellate Tribunal, Rajkot Bench, Rajkot
5th Floor, Amruta Estate, M.G. Road, Beside Girnar Cinema
Rajkot – 360001, Gujarat
Tel Phone 0281-2970721
Fax Nos. 0281-2970723
E-Mail ID rajkot[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Daman and Diu Diu
Gujarat Rajkot, Jamngar, Junagadh, Amreli, Porbandar, Morbi, Kutchh, Surendrangar
Bench Name Ranchi
Address Income Tax Appellate Tribunal, Ranchi Bench, Ranchi
1st Floor, Block-A, Shah Deo Towers (West Entrance), Peppe Compound
Ranchi – 834001, Jharkhand
Tel Phone 0651-2332445
Fax Nos. 0651-2332445
E-Mail ID ranchi[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
N/A N/A
Bench Name Visakhapatnam
Address Income Tax Appellate Tribunal, Visakhapatnam Bench, Visakhapatnam
5th Floor, LIC Building, Jeevitha Bima Road
Visakhapatnam – 530004, Andhra Pradesh
Tel Phone 0891-2795058
Fax Nos. 0891-2795058
E-Mail ID vizag[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Andhra Pradesh Srikakulam, Vizianagaram, Visakhapatnam, East Godavari, West Godavari, Krishna, Guntur
Bench Name Surat
Address Income Tax Appellate Tribunal, Surat Bench, Surat
Titaanium Business Hub, 2nd Floor, Sarsana, Near VIP Crossing, Surat Khajod Road, Bhimrad
Surat – 395007, Gujarat
Tel Phone 0261-2878102
Fax Nos. 0261-2878102
E-Mail ID surat[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
Daman and Diu Daman
Dadra and Nagar Haveli Dadra and Nagar Haveli
Gujarat Bharuch, Dang, Narmada, Tapi, Valsad
Bench Name Varanasi
Address Income Tax Appellate Tribunal, Varanasi Bench, Varanasi
R.No. 102, Ground Floor, Ayakar Bhawan, Maqbool Alam Road
Varanasi – 221007, Uttar Pradesh
Tel Phone 0-
Fax Nos. 0-0
E-Mail ID allahabad[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
N/A N/A
Bench Name Dehradun
Address Income Tax Appellate Tribunal, Dehradun Bench, Dehradun
Uttarakhand Co-operative Sugar Mills Federation Ltd., Jogiwala, Near Railway Crossing, Badripur
Dehradun – 248005, Uttarakhand
Tel Phone
Fax Nos. 0
E-Mail ID delhi[dot]bench[at]itat[dot]nic[dot]in
Jurisdiction State Districts
N/A N/A

Finance Act, 2019

The financial year 2019-2020

(Act No. 7 of 2019)

Dated 21.2.2019.

An Act to continue the existing rates of income-tax for the financial year 2019-2020 and to provide for certain relief to taxpayers and to make amendments in certain enactments.

Be it enacted by Parliament in the Seventieth Year of the Republic of India as follows: –

CHAPTER I

Preliminary

1. Short title and commencement. – (1) This Act may be called the Finance Act, 2019.
(2) Save as otherwise provided in this Act, sections 2 to 10 shall come into force on the 1st day of April, 2019.

CHAPTER II

Rates of Income-Tax

2. Income-tax. – The provisions of section 2 of, and the First Schedule to, the Finance Act, 2018, shall apply in relation to income-tax for the assessment year or, as the case may be, the financial year commencing on the 1st day of April, 2019, as they apply in relation to income-tax for the assessment year, or as the case may be, the financial year commencing on the 1st day of April, 2018, with the following modifications, namely: –
(a) in section 2, –

(i) in sub-section (1), for the figures “2018”, the figures “2019” shall be substituted;

(ii) in sub-section (3), for the first proviso, the following proviso shall be substituted, namely: –

“Provided that the amount of income-tax computed in accordance with the provisions of section 111A or section 112 or section 112A of the Income-tax Act shall be increased by a surcharge, for the purposes of the Union, as provided in Paragraph A, B, C, D or E, as the case may be, of Part I of the First Schedule:”;

(iii) for sub-section (11) and sub-section (12), the following sub-section shall be substituted, namely: –

‘(11) The amount of income-tax as specified in sub-sections (1) to (3) and as increased by the applicable surcharge, for the purposes of the Union, calculated in the manner provided therein, shall be further increased by an additional surcharge, for the purposes of the Union, to be called the “Health and Education Cess on income-tax”, calculated at the rate of four per cent. of such income-tax and surcharge so as to fulfil the commitment of the Government to provide and finance quality health services and universalised quality basic education and secondary and higher education.’;

(iv) sub-section (13) and sub-section (14) shall be renumbered as sub-section (12) and sub-section (13), respectively;

(v) in sub-section (13) as so renumbered, in clause (a), for the figures “2018”, the figures “2019” shall be substituted;

(b) in the First Schedule, –

(i) for Part I, the following Part I shall be substituted, namely: –

“Part I

Income-Tax

Paragraph A

(I) In the case of every individual other than the individual referred to in items (ii) and (iii) of this Paragraph or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, not being a case to which any other Paragraph of this Part applies, –

Rates of income-tax

(1) where the total income does not
exceed Rs. 2,50,000

Nil;

(2) where the total income exceeds
Rs. 2,50,000 but does not exceed
Rs. 5,00,000

5 per cent. of the amount by which the total
income exceeds Rs. 2,50,000;

(3) where the total income exceeds
Rs. 5,00,000 but does not exceed
Rs. 10,00,000

Rs. 12,500 plus 20 per cent. of the amount
by which the total income exceeds
Rs. 5,00,000;

(4) where the total income exceeds
Rs. 10,00,000

Rs. 1,12,500 plus 30 per cent. of the amount
by which the total income exceeds
Rs. 10,00,000.

(II) In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the previous year, –

Rates of income-tax

(1) where the total income does not
exceed Rs. 3,00,000

Nil;

(2) where the total income exceeds
Rs. 3,00,000 but does not exceed
Rs. 5,00,000

5 per cent. of the amount by which the total
income exceeds
Rs. 3,00,000;

(3) where the total income exceeds
Rs. 5,00,000 but does not exceed Rs. 10,00,000

Rs. 10,000 plus 20 per cent. of the amount
by which the total income exceeds Rs. 5,00,000;

(4) where the total income exceeds
Rs. 10,00,000

Rs. 1,10,000 plus 30 per cent. of the amount
by which the total income exceeds Rs. 10,00,000.

(III) In the case of every individual, being a resident in India, who is of the age of eighty years or more at any time during the previous year, –

Rates of income-tax

(1) where the total income does not
exceed Rs. 5,00,000

Nil;

(2) where the total income exceeds
Rs. 5,00,000 but does not exceed
Rs. 10,00,000

20 per cent. of the amount by which the
total income exceeds Rs. 5,00,000;

(3) where the total income exceeds
Rs. 10,00,000

Rs. 1,00,000 plus 30 per cent. of the amount
by which the total income exceeds
Rs. 10,00,000.

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 or section 112A of the Income-tax Act, shall be increased by a surcharge for the purposes of the Union, calculated, in the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, –
(a) having a total income exceeding fifty lakh rupees but not exceeding one crore rupees, at the rate of ten per cent. of such income-tax; and

(b) having a total income exceeding one crore rupees, at the rate of fifteen per cent. of such income-tax:

Provided that in the case of persons mentioned above having total income exceeding, –

(a) fifty lakh rupees but not exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of fifty lakh rupees by more than the amount of income that exceeds fifty lakh rupees;

(b) one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

Paragraph B

In the case of every co-operative society, –

Rates of income-tax

(1) where the total income does not
exceed Rs. 10,000

10 per cent. of the total income;

(2) where the total income exceeds
Rs. 10,000 but does not exceed
Rs. 20,000

Rs. 1,000 plus 20 per cent. of the amount by
which the total income exceeds Rs. 10,000;

(3) where the total income exceeds
Rs. 20,000

Rs. 3,000 plus 30 per cent. of the amount by
which the total income exceeds Rs. 20,000.

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 or section 112A of the Income-tax Act, shall, in the case of every co-operative society, having a total income exceeding one crore rupees, be increased by a surcharge for the purposes of the Union calculated at the rate of twelve per cent. of such income-tax:Provided that in the case of every co-operative society mentioned above having total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

Paragraph C

In the case of every firm, –

Rate of income-tax

On the whole of the total income          30 per cent.

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 or section 112A of the Income-tax Act, shall, in the case of every firm, having a total income exceeding one crore rupees, be increased by a surcharge for the purposes of the Union calculated at the rate of twelve per cent. of such income-tax:Provided that in the case of every firm mentioned above having total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

Paragraph D

In the case of every local authority, –

Rate of income-tax

On the whole of the total income          30 per cent.

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 or section 112A of the Income-tax Act, shall, in the case of every local authority, having a total income exceeding one crore rupees, be increased by a surcharge for the purposes of the Union calculated at the rate of twelve per cent. of such income-tax:Provided that in the case of every local authority mentioned above having total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

Paragraph E

In the case of a company, –

Rates of income-tax

I. In the case of a domestic company, –

(i) where its total turnover or the
gross receipt in the previous
year 2016-2017 does not exceed
two hundred and fifty crore rupees

25 per cent. of the total income;

(ii) other than that referred to in
item (i)

30 per cent. of the total income.

II. In the case of a company other than a domestic company, –

(i) on so much of the total income as consists of, –

(a) royalties received from
Government or an Indian concern in
pursuance of an agreement made by it
with the Government or the Indian
concern after the 31st day of March,
1961 but before the 1st day of April,
1976; or

(b) fees for rendering technical
services received from Government or
an Indian concern in pursuance of an
agreement made by it with the
Government or the Indian concern after
the 29th day of February, 1964 but
before the 1st day of April, 1976,

and where such agreement has, in either case, been approved
by the Central Government

50 per cent.;

(ii) on the balance, if any, of the total income

40 per cent.

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 or section 112A of the Income-tax Act, shall be increased by a surcharge for the purposes of the Union calculated, –
(i) in the case of every domestic company, –

(a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of seven per cent. of such income-tax; and

(b) having a total income exceeding ten crore rupees, at the rate of twelve per cent. of such Income-tax;

(ii) in the case of every company other than a domestic company, –

(a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of two per cent. of such income-tax; and

(b) having a total income exceeding ten crore rupees, at the rate of five per cent. of such income-tax:

Provided that in the case of every company having a total income exceeding one crore rupees but not exceeding ten crore rupees, the total amount payable as income tax and surcharge on such income shall not exceed the total amount payable as income tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees:
Provided further that in the case of every company having a total income exceeding ten crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.”;
(ii) in Part III, in Paragraph E, in sub-paragraph 1, in clause (i), for the words and figures “previous year 2016-2017”, the words and figures “previous year 2017-2018” shall be substituted;

(iii) in Part IV, in Rule 8, –

(A) for sub-rules (1) and (2), the following sub-rules shall be substituted, namely: –

“(1) Where the assessee has, in the previous year relevant to the assessment year commencing on the 1st day of April, 2019, any agricultural income and the net result of the computation of the agricultural income of the assessee for any one or more of the previous years relevant to the assessment years commencing on the 1st day of April, 2011 or the 1st day of April, 2012 or the 1st day of April, 2013 or the 1st day of April, 2014 or the 1st day of April, 2015 or the 1st day of April, 2016 or the 1st day of April, 2017 or the 1st day of April, 2018, is a loss, then, for the purposes of sub-section (2) of section 2 of this Act, –

(i) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2011, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2012 or the 1st day of April, 2013 or the 1st day of April, 2014 or the 1st day of April, 2015 or the 1st day of April, 2016 or the 1st day of April, 2017 or the 1st day of April, 2018,

(ii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2012, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2013 or the 1st day of April, 2014 or the 1st day of April, 2015 or the 1st day of April, 2016 or the 1st day of April, 2017 or the 1st day of April, 2018,

(iii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2013, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2014 or the 1st day of April, 2015 or the 1st day of April, 2016 or the 1st day of April, 2017 or the 1st day of April, 2018,

(iv) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2014, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2015 or the 1st day of April, 2016 or the 1st day of April, 2017 or the 1st day of April, 2018,

(v) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2015, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2016 or the 1st day of April, 2017 or the 1st day of April, 2018,

(vi) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2016, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2017 or the 1st day of April, 2018,

(vii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2017, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2018,

(viii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2018, shall be set off against the agricultural income of the assessee for the previous year relevant to the assessment year commencing on the 1st day of April, 2019.

(2) Where the assessee has, in the previous year relevant to the assessment year commencing on the 1st day of April, 2020, or, if by virtue of any provision of the Income-tax Act, income-tax is to be charged in respect of the income of a period other than the previous year, in such other period, any agricultural income and the net result of the computation of the agricultural income of the assessee for any one or more of the previous years relevant to the assessment years commencing on the 1st day of April, 2012 or the 1st day of April, 2013 or the 1st day of April, 2014 or the 1st day of April, 2015 or the 1st day of April, 2016 or the 1st day of April, 2017 or the 1st day of April, 2018 or the 1st day of April, 2019, is a loss, then, for the purposes of sub-section (10) of section 2 of this Act, –

(i) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2012, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2013 or the 1st day of April, 2014 or the 1st day of April, 2015 or the 1st day of April, 2016 or the 1st day of April, 2017 or the 1st day of April, 2018 or the 1st day of April, 2019,

(ii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2013, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2014 or the 1st day of April, 2015 or the 1st day of April, 2016 or the 1st day of April, 2017 or the 1st day of April, 2018 or the 1st day of April, 2019,

(iii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2014, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2015 or the 1st day of April, 2016 or the 1st day of April, 2017 or the 1st day of April, 2018 or the 1st day of April, 2019,

(iv) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2015, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2016 or the 1st day of April, 2017 or the 1st day of April, 2018 or the 1st day of April, 2019,

(v) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2016, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2017 or the 1st day of April, 2018 or the 1st day of April, 2019,

(vi) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2017, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2018 or the 1st day of April, 2019,

(vii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2018, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2019,

(viii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2019,

shall be set off against the agricultural income of the assessee for the previous year relevant to the assessment year commencing on the 1st day of April, 2020.”;
(B) for sub-rule (4), the following sub-rule shall be substituted, namely: –

“(4) Notwithstanding anything contained in this rule, no loss which has not been determined by the assessing officer under the provisions of these rules or the rules contained in the First Schedule to the Finance Act, 2011 (8 of 2011) or the First Schedule to the Finance Act, 2012 (23 of 2012) or the First Schedule to the Finance Act, 2013 (17 of 2013) or the First Schedule to the Finance (No. 2) Act, 2014 (25 of 2014) or the First Schedule to the Finance Act, 2015 (20 of 2015) or the First Schedule to the Finance Act, 2016 (28 of 2016) or the First Schedule to the Finance Act, 2017 (7 of 2017) or the First Schedule to the Finance Act, 2018 (13 of 2018) shall be set off under sub-rule (1) or, as the case may be, sub-rule (2).”.

CHAPTER III

Direct Taxes

Income-tax

3. Amendment of section 16. – In section 16 of the Income-tax Act, 1961,(43 of 1961.) (hereafter in this Chapter referred to as the Income-tax Act), in clause (ia) [as inserted by section 7 of the Finance Act, 2018,(13 of 2018)], for the words “forty thousand”, the words “fifty thousand” shall be substituted with effect from the 1st day of April, 2020.

4. Amendment of section 23. – In section 23 of the Income-tax Act, with effect from the 1st day of April, 2020, –

(a) in sub-section (4), –

(i) in the opening portion, for the words “one house”, the words “two houses” shall be substituted;

(ii) in clause (a), for the word “one”, the word “two” shall be substituted;

(iii) in clause (b), for the words “other than the house”, the words “other than the house or houses” shall be substituted;

(b) in sub-section (5), for the words “one year”, the words “two years” shall be substituted.

5. Amendment of section 24. – In section 24 of the Income-tax Act, with effect from the 1st day of April, 2020, –

(a) in the first proviso, after the words “the amounts of deduction”, the words “or, as the case may be, the aggregate of the amount of deduction” shall be inserted;

(b) in the second proviso, after the words “the amount of deduction”, the words “or, as the case may be, the aggregate of the amounts of deduction” shall be inserted;

(c) after the Explanation to the third proviso, the following proviso shall be inserted, namely: –

“Provided also that the aggregate of the amounts of deduction under the first and second provisos shall not exceed two lakh rupees.”.

6. Amendment of section 54. – In section 54 of the Income-tax Act, in sub-section (1), after clause (ii), the following provisos shall be inserted with effect from the 1st day of April, 2020, namely: –
‘Provided that where the amount of the capital gain does not exceed two crore rupees, the assessee may, at his option, purchase or construct two residential houses in India, and where such option has been exercised, –

(a) the provisions of this sub-section shall have effect as if for the words “one residential house in India”, the words “two residential houses in India” had been substituted;

(b) any reference in this sub-section and sub-section (2) to “new asset” shall be construed as a reference to the two residential houses in India:

Provided further that where during any assessment year, the assessee has exercised the option referred to in the first proviso, he shall not be subsequently entitled to exercise the option for the same or any other assessment year.’.

7. Amendment of section 80-IBA. – In section 80-IBA of the Income-tax Act, in sub-section (2), in clause (a), for the figures “2019”, the figures “2020” shall be substituted with effect from the 1st day of April, 2020.

8. Amendment of section 87A. – In section 87A of the Income-tax Act, with effect from the 1st day of April, 2020, –
(a) for the words “three hundred fifty thousand”, the words “five hundred thousand” shall be substituted;

(b) for the words, “two thousand and five hundred”, the words “twelve thousand and five hundred” shall be substituted.

9. Amendment of section 194A. – In section 194A of the Income-tax Act, in sub-section (3), in clause (i), for the words “ten thousand” wherever they occur, the words “forty thousand” shall be substituted.
10. Amendment of section 194-I. – In section 194-I of the Income-tax Act, in the first proviso, for the words “one hundred and eighty thousand rupees”, the words “two hundred and forty thousand rupees” shall be substituted.

CHAPTER IV

Miscellaneous

Part I

Amendments to the Indian Stamp Act, 1899

11. Commencement of this Part. – The provisions of this Part shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

12. Amendment of section 2. – In section 2 of the Indian Stamp Act, 1899,(2 of 1899) (hereafter in this Part referred to as the principal Act), –
(a) for clause (1), the following clauses shall be substituted, namely: –

‘(1) “allotment list” means a list containing details of allotment of the securities intimated by the issuer to the depository under sub-section (2) of section 8 of the Depositories, Act, 1996,(22 of 1996);

(1A) “banker” includes a bank and any person acting as a banker;’;

(b) in clause (5), the following long line shall be added at the end, namely: –

“but does not include a debenture;”;

(c) after clause (7), the following clauses shall be inserted, namely: –

‘(7A) “clearance list” means a list of transactions of sale and purchase relating to contracts traded on the stock exchanges submitted to a clearing corporation in accordance with the law for the time being in force in this behalf;

(7B) “clearing corporation” means an entity established to undertake the activity of clearing and settlement of transactions in securities or other instruments and includes a clearing house of a recognised stock exchange;’;

(d) after clause (10), the following clauses shall be inserted, namely: –

‘(10A) “debenture” includes –

(i) debenture stock, bonds or any other instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not;

(ii) bonds in the nature of debenture issued by any incorporated company or body corporate;

(iii) certificate of deposit, commercial usance bill, commercial paper and such other debt instrument of original or initial maturity upto one year as the Reserve Bank of India may specify from time to time;

(iv) securitised debt instruments; and

(v) any other debt instuments specified by the Securities and

Exchange Board of India from time to time;

(10B) “depository” includes –

(a) a depository as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996,(22 of 1996.); and

(b) any other entity declared by the Central Government, by notification in the Official Gazette, to be a depository for the purposes of this Act;’;

(e) in clause (12), the words and figures “and includes attribution of electronic record within the meaning of section 11 of the Information Technology Act, 2000,(21 of 2000.)” shall be inserted at the end.

(f) for clause (14), the following clause shall be substituted, namely: –

‘(14) “instrument” includes –

(a) every document, by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded;

(b) a document, electronic or otherwise, created for a transaction in a stock exchange or depository by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded; and

(c) any other document mentioned in Schedule I,

but does not include such instruments as may be specified by the Government, by notification in the Official Gazette;’;
(g) after clause (15), the following clause shall be inserted, namely: –

‘(15A) “issuer” means any person making an issue of securities;’;

(h) for clause (16A), the following clauses shall be substituted, namely: –

‘(16A) “marketable security” means a security capable of being traded in any stock exchange in India;

(16B) “market value”, in relation to an instrument through which –

(a) any security is traded in a stock exchange, means the price at which it is so traded;

(b) any security which is transferred through a depository but not traded in the stock exchange, means the price or the consideration mentioned in such instrument;

(c) any security is dealt otherwise than in the stock exchange or depository, means the price or consideration mentioned in such instrument;’;

(i) after clause (23), the following clause shall be inserted, namely: –

‘(23A) “securities” includes –

(i) securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956,(42 of 1956);

(ii) a “derivative” as defined in clause (a) of section 45U of the Reserve Bank of India Act, 1934,(2 of 1934);

(iii) a certificate of deposit, commercial usance bill, commercial paper, repo on corporate bonds and such other debt instrument of original or initial maturity upto one year as the Reserve Bank of India may specify from time to time; and

(iv) any other instrument declared by the Central Government, by notification in the Official Gazette, to be securities for the purposes of this Act;’;

(j) after clause (26), the following clause shall be inserted, namely: –

‘(27) “stock exchange” includes –

(i) a recognised stock exchange as defined in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956,(42 of 1956); and

(ii) such other platform for trading or reporting a deal in securities, as may be specified by the Central Government, by notification in the Official Gazette, for the purposes of this Act.’.

13. Amendment of section 4. – In section 4 of the principal Act, after sub-section (2), the following sub-section shall be inserted, namely: –
“(3) Notwithstanding anything contained in sub-sections (1) and (2), in the case of any issue, sale or transfer of securities, the instrument on which stamp-duty is chargeable under section 9A shall be the principal instrument for the purpose of this section and no stamp-duty shall be charged on any other instruments relating to any such transaction.”.
14. Substitution of new section for section 8A. – For section 8A of the principal Act, the following section shall be substituted, namely: –
‘8A. Securities dealt in depository not liable to stamp-duty. – Notwithstanding anything contained in this Act or any other law for the time being in force, –

(a) an issuer, by the issue of securities to one or more depositories, shall, in respect of such issue, be chargeable with duty on the total amount of securities issued by it and such securities need not be stamped;

(b) the transfer of registered ownership of securities from a person to a depository or from a depository to a beneficial owner shall not be liable to duty.

Explanation. – For the purposes of this section, the expression “beneficial ownership” shall have the same meaning as assigned to it in clause (a) of sub-section (1) of section 2 of the Depositories Act, 1996,(22 of 1996).

15. Insertion of new Part AA. – In Chapter II of the principal Act, after Part A relating to ‘Of the liability of instruments to duty’, the following Part shall be inserted, namely: –
‘AA. – Of the liability of instruments of transaction in stock exchanges and depositories to duty

9A. Instruments chargeable with duty for transactions in stock exchanges and depositories. – (1) Notwithstanding anything contained in this Act, –

(a) when the sale of any securities, whether delivery based or otherwise, is made through a stock exchange, the stamp-duty on each such sale in the clearance list shall be collected on behalf of the State Government by the stock exchange or a clearing corporation authorised by it, from its buyer on the market value of such securities at the time of settlement of transactions in securities of such buyer, in such manner as the Central Government may, by rules, provide;

(b) when any transfer of securities for a consideration, whether delivery based or otherwise, is made by a depository otherwise than on the basis of any transaction referred to in clause (a), the stamp-duty on such transfer shall be collected on behalf of the State Government by the depository from the transferor of such securities on the consideration amount specified therein, in such manner as the Central Government may, by rules, provide;

(c) when pursuant to issue of securities, any creation or change in the records of a depository is made, the stamp-duty on the allotment list shall be collected on behalf of the State Government by the depository from the issuer of securities on the total market value of the securities as contained in such list, in such manner as the Central Government may, by rules, provide.

(2) Notwithstanding anything contained in this Act, the instruments referred to in sub-section (1) shall be chargeable with duty as provided therein at the rate specified in Schedule I and such instruments need not be stamped.

(3) From the date of commencement of this Part, no stamp-duty shall be charged or collected by the State Government on any note or memorandum or any other document, electronic or otherwise, associated with the transactions mentioned in sub-section (1).

(4) The stock exchange or a clearing corporation authorised by it or the depository, as the case may be, shall, within three weeks of the end of each month and in accordance with the rules made in this behalf by the Central Government, in consultation with the State Government, transfer the stamp-duty collected under this section to the State Government where the residence of the buyer is located and in case the buyer is located outside India, to the State Government having the registered office of the trading member or broker of such buyer and in case where there is no such trading member of the buyer, to the State Government having the registered office of the participant:

Provided that before such transfer, the stock exchange or the clearing corporation authorised by it or the depository shall be entitled to deduct such percentage of stamp-duty towards facilitation charges as may be specified in such rules.

Explanation. – The term “participant” shall have the same meaning as assigned to it in clause (g) of section 2 of the Depositories Act, 1996,(22 of 1996).

(5) Every stock exchange or the clearing corporation authorised by it and depository shall submit to the Government details of the transactions referred to in sub-section (1) in such manner as the Central Government may, by rules, provide.

9B. Instruments chargeable with duty for transactions otherwise than through stock exchanges and depositories. – Notwithstanding anything contained in this Act, –

(a) when any issue of securities is made by an issuer otherwise than through a stock exchange or depository, the stamp-duty on each such issue shall be payable by the issuer, at the place where its registered office is located, on the total market value of the securities so issued at the rate specified in Schedule I;

(b) when any sale or transfer or reissue of securities for consideration is made otherwise than through a stock exchange or depository, the stamp duty on each such sale or transfer or reissue shall be payable by the seller or transferor or issuer, as the case may be, on the consideration amount specified in such instrument at the rate specified in Schedule I.’.

16. Amendment of section 21. – In section 21 of the principal Act, –

(a) for the words “the value of such stock or security according to the average price or the value thereof on the day of the date of the instrument.”, the words “the market value of such stock or security:” shall be substituted;

(b) the following proviso shall be inserted, namely: –

“Provided that the market value for calculating the stamp-duty shall be, in the case of –

(i) options in any securities, the premium paid by the buyer;

(ii) repo on corporate bonds, interest paid by the borrower; and

(iii) swap, only the first leg of the cash flow.”.

17. Amendment of section 29. – In section 29 of the principal Act, –

(i) in clause (a), –

(a) the words, figures and brackets “No. 27 (Debenture)” shall be omitted;

(b) the words, figures, brackets and letter “No. 62 (a) (Transfer of shares in an incorporated Company or other body corporate)” shall be omitted;

(c) the words, figures, brackets and letter “No. 62 (b) (Transfer of debentures, being marketable securities, whether the debenture is liable to duty or not, except debentures provided for by section 8)” shall be omitted;

(ii) in clause (e), after the word “exchange”, the words “including swap” shall be inserted;

(iii) in clause (f), the word “and” shall be omitted;

(iv) after clause (g), the following clauses shall be inserted, namely: –

“(h) in the case of sale of security through stock exchange, by the buyer of such security;

(i) in the case of sale of security otherwise than through a stock exchange, by the seller of such security;

(j) in the case of transfer of security through a depository, by the transferor of such security;

(k) in the case of transfer of security otherwise than through a stock exchange or depositiory, by the transferor of such security;

(l) in the case of issue of security, whether through a stock exchange or a depository or otherwise, by the issuer of such security; and

(m) in the case of any other instrument not specified herein, by the person making, drawing or executing such instrument.”.

18. Insertion of new section 62A. – After section 62 of the principal Act, the following section shall be inserted, namely: –
“62A. Penalty for failure to comply with provisions of section 9A. – (1) Any person who, –

(a) being required under sub-section (1) of section 9A to collect duty, fails to collect the same; or

(b) being required under sub-section (4) of section 9A to transfer the duty to the State Government within fifteen days of the expiry of the time specified therein, fails to transfer within such time,

shall be punishable with fine which shall not be less than one lakh rupees, but which may extend upto one per cent. of the collection or transfer so defaulted.

(2) Any person who, –

(a) being required under sub-section (5) of section 9A to submit details of transactions to the Government, fails to submit the same; or

(b) submits a document or makes a declaration which is false or which such person knows or believes to be false,

shall be punishable with fine of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less.”.

19. Insertion of new section 73A. – After section 73 of the principal Act, the following section shall be inserted, namely: –
“73A. Power of Central Government to make rules. – (1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the provisions of Part AA of Chapter II.

(2) Without prejudice to the generality of the provisions of sub-section (1), the Central Government may make rules for all or any of the following matters, namely: –

(a) the manner of collection of stamp-duty on behalf of the State Government by the stock exchange or the clearing corporation authorised by it, from its buyer under clause (a) of sub-section (1) of section 9A;

(b) the manner of collection of stamp-duty on behalf of the State Government by the depository from the transferor under clause (b) of sub-section (1) of section 9A;

(c) the manner of collection of stamp-duty on behalf of the State Government by the depository from the issuer under clause (c) of sub-section (1) of section 9A;

(d) the manner of transfer of stamp-duty to the State Government under sub-section (4) of section 9A;

(e) any other matter which has to be, or may be, provided by rules.”.

20. Amendment of section 76. – In section 76 of the principal Act, after sub-section (2), the following sub-section shall be inserted, namely: –

“(2A) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.”.

21. Amendment of Schedule I. – In Schedule I of the principal Act, –
(i) in Article 19, in column (1), –

(a) after the words “Certificate or other Document”, the brackets, words, figures and letter “(except the certificate or other document covered under Articles 27 and 56A)” shall be inserted;

(b) the words, brackets and figures “See also Letter of Allotment of Shares (No. 36)” shall be omitted;

(ii) for Article 27 and the entries relating thereto, the following Article and entries shall be subsitituted, namely: –

(1)

(2)

“27. Debenture – [as defined by section 2 (10A)]
(see sections 9A and 9B)

(a) in case of issue of debenture;

0.005%

(b) in case of transfer and re-issue of debenture.

0.0001%”;

(iii) in Article 28, for the entry in column (1), after the words “Delivery order in Respect of Goods,”, the brackets and words “(excluding delivery order in respect of settlement of transactions in securities in stock exchange)” shall be inserted;

(iv) in Article 36, for the entry in column (1), the following entry shall be substituted, namely: –

“36. Letter Of Allotment in respect of any loan to be raised by any company or proposed company.”;

(v) after Article 56 and the entry relating thereto, the following Article and entries shall be inserted, namely: –

(1)

(2)

“56A. Security Other Than Debentures
(see sections 9A and 9B) –

(a) issue of security other than debenture;

0.005%

(b) transfer of security other than debenture on delivery basis;

0.015%

(c) transfer of security other than debenture on non-delivery basis;

0.003%

(d) derivatives –

(i) futures (equity and commodity)

0.002%

(ii) options (equity and commodity)

0.003%

(iii) currency and interest rate derivatives

0.0001%

(iv) other derivatives

0.002%

(e) Government securities

0%

(f) repo on corporate bonds

0.00001%”;

(vi) in Article 62, items (a) and (b) and the entries relating thereto shall be omitted.

Part II

Amendment to the Prevention of Money-Laundering Act, 2002

22. Amendment of section 8 of Act 15 of 2003. – In section 8 of the Prevention of Money-laundering Act, 2002, in sub-section (3), with effect from such date as the Central Government may, by notification in the Official Gazette, appoint, –

(i) in clause (a), for the words “ninety days”, the words “three hundred and sixty-five days” shall be substituted;

(ii) after clause (b), the following Explanation shall be inserted, namely: –

Explanation. – For the purposes of computing the period of three hundred and sixty-five days under clause (a), the period during which the investigation is stayed by any court under any law for the time being in force shall be excluded.”.

Commissioner of Income Tax vs. Laxman Das Khandelwal – 13/08/2019

SUPREME COURT OF INDIA JUDGMENTS

Income Tax Act – According to Section 292BB of the Act, if the assessee had participated in the proceedings, by way of legal fiction, notice would be deemed to be valid even if there be infractions as detailed in said Section. The scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee. It is, however, to be noted that the Section does not save complete absence of notice. For Section 292BB to apply, the notice must have emanated from the department. It is only the infirmities in the manner of service of notice that the Section seeks to cure. The Section is not intended to cure complete absence of notice itself.

SLP(C)No.Diary No. 7708 of 2019

Acts: Income Tax Act

From: High Court of Madhya Pradesh at Gwalior

Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos.6261-6262 OF 2019
(Arising out of Special Leave Petition (Civil) Nos.19320-19321 of 2019)
(Arising out of Special Leave Petition (Civil)D.No.7708 of 2019)

COMMISSIONER OF INCOME TAX …Appellant

VERSUS

LAXMAN DAS KHANDELWAL …Respondent

JUDGMENT

Uday Umesh Lalit, J.

1. Delay condoned. Leave granted.

2. These Appeals are directed against the judgment and final order dated 27.04.2018 passed by the High Court [High Court of Madhya Pradesh at Gwalior] in Income Tax Appeal No.97 of 2018 and against the order dated 14.09.2018 in Review Petition No.1289 of 2018 arising from said Income Tax Appeal No.97 of 2018.

3. The relevant facts leading to the filing of aforementioned Income Tax Appeal No.97 of 2018 before the High Court, as culled out from the judgment and order dated 27.04.2018 presently under appeal are as under:-

“The assessee is an individual carrying a business of brokerage. Search and seizure operation was conducted under Section 132 of the Act of 1961 on 11.03.2010 at his residential premises. The assessee submitted return of income on 24.08.2011, declaring total income of Rs.9,35,130/-. The assessment was completed under Section 143(3) read with Section 153(D) of 1961 Act. Rupees 9,09,110/- was added on account of unexplained cash under Section 69 of 1961 Act. Rs.15,09,672/- was added on account of unexplained jewellery. Rupees 45,00,000/- was added on account of unexplained hundies and Rs.29,53,631/-was added on account of unexplained cash receipts.

Aggrieved, the assessee filed an appeal before the Commissioner Income Tax (Appeal). The Commissioner of Income Tax (Appeal) deleted an amount of Rs.7,48,463/- holding that jewellery found in locker weighing 686.4 gms stood explained in view of circular No.1916 and further deleted the addition of Rs.29,23,98,117/- out of Rs.29,53,52,631/- holding that the correct approach would be to apply the peak formula to determine in such transaction which comes to Rs.29,54,514/- as on 05.03.2010.

Aggrieved, Revenue filed an appeal. The Assessee filed cross objection on the ground of jurisdiction of Assessment Officer regarding non issue of notice under Section 143(2) of the Act of 1961. The Tribunal vide impugned order upheld the cross objection and quashed the entire reassessment proceedings on the finding that the same stood vitiated as the assessment Officer lacked jurisdiction in absence of notice under Section 143(2) of the act of 1961.

The Tribunal observed:

“17. In conclusion, we find that there was no notice issued u/s 143(2) prior to the completion of assessment under section 143 (3) of the Act by the AO; that the year under consideration was beyond the scope of the provisions of Section 143A of the Act, it being the search year and not covered in the six year to the year of search as per the assessment scheme/procedure defined u/s 153A; that the AO has passed regular assessment u/s 143(3) of the Act; although the Id. CIT has mentioned the section as 143 r.w.s. 153A and that the department had not controverted these facts at the stage of hearing. It is noted that issue of notice u/s 143(2) for completion of regular assessment in the case of the assessee was a statutory requirement as per the provisions of the Act and non issuance thereof is not a curable defect. Even in case of block assessment u/s 158BC, it has been so held by the apex Court in the case of ‘ACIT v. Hotel Blue Moon’ (2010) 321 ITR 362 (Supra).”

4. In said appeal arising from the decision of the Income Tax Appellate Tribunal (‘the Tribunal’, for short), the issue that arose before the High Court was the effect of absence of notice under Section 143(2) of the Income Tax Act, 1961 (‘the Act’, for short). The Respondent-Assessee relied upon the decision of this Court in Assistant Commissioner of Income Tax and Another vs. Hotel Blue Moon2. On the other hand, reliance was placed by the Appellant on the provisions of Section 292BB of the Act to submit that the Respondent having participated in the proceedings, the defect, if any, stood completely cured.

5. At the outset, it must be stated that out of two questions of law that arose for consideration in Hotel Blue Moon’s case2 the first question was whether notice under Section 143(2) would be mandatory for the purpose of making the assessment under Section 143(3) of the Act. It was observed:-

“3. The Appellate Tribunal held, while affirming the decision of CIT (A) that non-issue of notice under Section 143(2) is only a procedural irregularity and the same is curable. In the appeal filed by the assessee before the Gauhati High Court, the following two questions of law were raised for consideration and decision of the High Court, they were:

“(1) Whether on the facts and in circumstances of the case the issuance of notice under Section 143(3) of the Income Tax Act, 1961 within the prescribed time-limit for the purpose of making the assessment under Section 143(3) of the Income Tax Act, 1961 is mandatory? And

(2) Whether, on the facts and in the circumstances of the case and in view of the undisputed findings arrived at by the Commissioner of Income Tax (Appeals), the additions made under Section 68 of the Income Tax Act, 1961 should be deleted or set aside?”

4. The High Court, disagreeing with the Tribunal, held, that the provisions of Section 142 and sub-sections (2) and (3) of Section 143 will have mandatory application in a case where the assessing officer in repudiation of return filed in response to a notice issued under Section 158-BC(a) proceeds to make an inquiry. Accordingly, the High Court answered the question of law framed in affirmative and in favour of the appellant and against the Revenue. The Revenue thereafter applied to this Court for special leave under Article 136, and the same was granted, and hence this appeal.

… … …

13. The only question that arises for our consideration in this batch of appeals is: whether service of notice on the assessee under Section 143(2) within the prescribed period of time is a prerequisite for framing the block assessment under Chapter XIV-B of the Income Tax Act, 1961?

… ……

27. The case of the Revenue is that the expression “so far as may be, apply” indicates that it is not expected to follow the provisions of Section 142, sub-sections (2) and (3) of Section 143 strictly for the purpose of block assessments. We do not agree with the submissions of the learned counsel for the Revenue, since we do not see any reason to restrict the scope and meaning of the expression “so far as may be, apply”. In our view, where the assessing officer in repudiation of the return filed under Section 158-BC(a) proceeds to make an enquiry, he has necessarily to follow the provisions of Section 142, sub-sections (2) and (3) of Section 143.”

6. The question, however, remains whether Section 292BB which came into effect on and from 01.04.2008 has effected any change. Said Section 292BB is to the following effect:-

“292BB. Notice deemed to be valid in certain circumstances. – Where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was –

(a) Not served upon him; or
(b) Not served upon him in time; or

(c) Served upon him in an improper manner:

Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.”

7. A closer look at Section 292BB shows that if the assessee has participated in the proceedings it shall be deemed that any notice which is required to be served upon was duly served and the assessee would be precluded from taking any objections that the notice was (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner. According to Mr. Mahabir Singh, learned Senior Advocate, since the Respondent had participated in the proceedings, the provisions of Section 292BB would be a complete answer.

On the other hand, Mr. Ankit Vijaywargia, learned Advocate, appearing for the Respondent submitted that the notice under Section 143(2) of the Act was never issued which was evident from the orders passed on record as well as the stand taken by the Appellant in the memo of appeal. It was further submitted that issuance of notice under Section 143(2) of the Act being prerequisite, in the absence of such notice, the entire proceedings would be invalid.

8. The law on the point as regards applicability of the requirement of notice under Section 143(2) of the Act is quite clear from the decision in Blue Moon’s case[(2010) 3 SCC 259]. The issue that however needs to be considered is the impact of Section 292BB of the Act.

9. According to Section 292BB of the Act, if the assessee had participated in the proceedings, by way of legal fiction, notice would be deemed to be valid even if there be infractions as detailed in said Section. The scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee. It is, however, to be noted that the Section does not save complete absence of notice. For Section 292BB to apply, the notice must have emanated from the department. It is only the infirmities in the manner of service of notice that the Section seeks to cure. The Section is not intended to cure complete absence of notice itself.

by the High Court and the Tribunal and the conclusion arrived at were correct. We, therefore, see no reason to take a different view in the matter.

11. These Appeals are, therefore, dismissed. No costs.

J. Uday Umesh Lalit]

J.Vineet Saran

New Delhi;
August 13, 2019.

INCOME-TAX ACT, 1961

INDEX

Income-tax Act, 1961-2017

INCOME-TAX ACT, 1961
[43 OF 1961]
[AS AMENDED BY FINANCE ACT, 2018]
An Act to consolidate and amend the law relating to income-tax and super-tax
BE it enacted by Parliament in the Twelfth Year of the Republic of India as follows:—
As amended by Finance Act 2018


CHAPTER I – Preliminary
CHAPTER II – Basis of charge
CHAPTER III – Incomes which do not form part of total income
CHAPTER IV – Computation of total income
CHAPTER V – Income of other persons included in assessee’s total income
CHAPTER VI – Aggregation of income and set off or carry forward of loss
CHAPTER VIA – Deductions to be made in computing total income
CHAPTER VII – Incomes forming part of total income on which no income-tax is payable
CHAPTER VIII – Rebates and reliefs
CHAPTER IX – Double Taxation Relief
CHAPTER X – Special provisions relating to avoidance of tax
CHAPTER XA – GENERAL ANTI-AVOIDANCE RULE
CHAPTER XI – Additional income-tax on undistributed profits
CHAPTER XII – Determination of tax in certain special cases
CHAPTER XIIA – Special provisions relating to certain incomes of non-residents
CHAPTER XIIB – Special provisions relating to certain companies
CHAPTER XIIBA – Special provisions relating to certain limited liability partnerships
CHAPTER XIIBB – Special provisions relating to conversion of Indian branch of a foreign bank into a subsidiary company
CHAPTER XIIBC – SPECIAL PROVISIONS RELATING TO FOREIGN COMPANY SAID TO BE RESIDENT IN INDIA
CHAPTER XIIC – Special provisions relating to retail trade etc.
CHAPTER XIID – Special provisions relating to tax on distributed profits of domestic companies
CHAPTER XIIDA – SPECIAL PROVISIONS RELATING TO TAX ON DISTRIBUTED INCOME OF DOMESTIC COMPANY FOR BUY-BACK OF SHARES
CHAPTER XIIE – Special provisions relating to tax on distributed income
CHAPTER XIIEA – SPECIAL PROVISIONS RELATING TO TAX ON DISTRIBUTED INCOME BY SECURITISATION TRUSTS
CHAPTER XIIEB – SPECIAL PROVISIONS RELATING TO TAX ON ACCRETED INCOME OF CERTAIN TRUSTS AND INSTITUTIONS
CHAPTER XIIF – Special provisions relating to tax on income received from venture capital companies and venture capital funds
CHAPTER XIIFA – SPECIAL PROVISIONS RELATING TO BUSINESS TRUSTS
CHAPTER XIIFB – SPECIAL PROVISIONS RELATING TO TAX ON INCOME OF INVESTMENT FUNDS AND INCOME RECEIVED FROM SUCH FUNDS
CHAPTER XIIG – Special provisions relating to income of shipping companies
CHAPTER XIIH – Income-tax on fringe benefits
CHAPTER XIII – Income-tax Authorities
CHAPTER XIV – Procedure for assessment
CHAPTER XIVA – Special provision for avoiding repetitive appeals
CHAPTER XIVB – Special procedure for assessment of search cases
CHAPTER XV – Liability in special cases
CHAPTER XVI – Special provisions applicable to firms
CHAPTER XVII – Collection and recovery of tax
CHAPTER XVIII – Relief respecting tax on dividends in certain cases
CHAPTER XIX – Refunds
CHAPTER XIXA – Settlement of cases
CHAPTER XIXB – Advance rulings
CHAPTER XX – Appeals and revision
CHAPTER XXA – Acquisition of immovable properties in certain cases of transfer to counteract evasion of tax
CHAPTER XXB – Requirement as to mode of acceptance payment or repayment in certain cases to counteract evasion of tax
CHAPTER XXC – Purchase by central government of immovable properties in certain cases of transfer
CHAPTER XXI – Penalties imposable
CHAPTER XXII – Offences and prosecutions
CHAPTER XXIIB – Tax credit certificates
CHAPTER XXIII – Miscellaneous

First Schedule
INSURANCE BUSINESS

Second Schedule
PROCEDURE FOR RECOVERY OF TAX

Third Schedule
PROCEDURE FOR DISTRAINT BY [ASSESSING OFFICER] [OR TAX RECOVERY OFFICER

Fourth Schedule
RECOGNISED PROVIDENT FUNDS

Fifth Schedule
LIST OF ARTICLES AND THINGS

Sixth Schedule

Seventh Schedule
MINERALS

Eighth Schedule
LIST OF INDUSTRIALLY BACKWARD STATES AND UNION TERRITORIES

Ninth Schedule
Omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 1-4-1988

Tenth Schedule
Omitted by the Finance Act, 1999, w.e.f. 1-4-2000

Eleventh Schedule
LIST OF ARTICLES OR THINGS

Twelfth Schedule
PROCESSED MINERALS AND ORES

Thirteenth Schedule
LIST OF ARTICLES OR THINGS

Fourteenth Schedule
LIST OF ARTICLES OR THINGS OR OPERATIONS

APPENDIX
TEXT OF REMAINING PROVISIONS OF ALLIED ACTS REFERRED TO INCOME-TAX ACT


CHAPTER I – Preliminary

Section – 1 : Short title, extent and commencement.
Section – 2 : Definitions
Section – 3 : “Previous year” defined

CHAPTER II – Basis of charge

Section – 4 : Charge of income-tax
Section – 5 : Scope of total income
Section – 5A : Apportionment of income between spouses governed by Portuguese Civil Code
Section – 6 : Residence in India
Section – 7 : Income deemed to be received
Section – 8 : Dividend income
Section – 9 : Income deemed to accrue or arise in India
Section – 9A : Certain activities not to constitute business connection in India

CHAPTER III – Incomes which do not form part of total income

Section – 10 : Incomes not included in total income

Section – 10A : Special provision in respect of newly established undertakings in free trade zone, etc.

Section – 10AA : Special provisions in respect of newly established Units in Special Economic Zones.

Section – 10B : Special provisions in respect of newly established hundred per cent export-oriented undertakings

Section – 10BA : Special provisions in respect of export of certain articles or things.

Section – 10BB : Meaning of computer programmes in certain cases.

Section – 10C : Special provision in respect of certain industrial undertakings in North- Eastern Region.

Section – 11 : Income13 from property held for charitable or religious purposes.

Section – 12 : Income of trusts or institutions from contributions.

Section – 12A : Conditions for applicability of sections 11 and 12.

Section – 12AA : Procedure for registration.

Section – 13 : Section 11 not to apply in certain cases.

Section – 13A : Special provision relating to incomes of political parties.

Section – 13B : Special provisions relating to voluntary contributions received by electoral trust.

CHAPTER IV – Computation of total income

Section – 14 : Heads of income
Section – 14A : Expenditure incurred in relation to income not includible in total income
Section – 15 : Salaries
Section – 16 : Deductions from salaries
Section – 17 : “Salary”, “perquisite” and “profits in lieu of salary” defined
Section – 18 : [Omitted by the Finance Act, 1988, w.e.f. 1-4-1989]
Section – 22 : Income from house property
Section – 23 : Annual value how determined
Section – 24 : Deductions from income from house property
Section – 25 : Amounts not deductible from income from house property
Section – 25A : Special provision for arrears of rent and unrealised rent received subsequently
Section – 26 : Property owned by co-owners
Section – 27 : “Owner of house property”, “annual charge”, etc., defined
Section – 28 : Profits and gains of business or profession
Section – 29 : Income from profits and gains of business or profession, how computed
Section – 30 : Rent, rates, taxes, repairs and insurance for buildings
Section – 31 : Repairs and insurance of machinery, plant and furniture
Section – 32 : Depreciation
Section – 32A : Investment allowance
Section – 32AB : Investment deposit account
Section – 32AC : Investment in new plant or machinery
Section – 32AD : Investment in new plant or machinery in notified backward areas in certain States
Section – 33 : Development rebate
Section – 33A : Development allowance
Section – 33AB : Tea development account, coffee development account and rubber development account
Section – 33ABA : Site Restoration Fund.
Section – 33AC : Reserves for shipping business.
Section – 33B : Rehabilitation allowance.
Section – 34 : Conditions for depreciation allowance and development rebate.
Section – 34A : Restriction on unabsorbed depreciation and unabsorbed investment allowance for limited period in case of certain domestic companies.
Section – 35 : Expenditure on scientific research
Section – 35A : Expenditure on acquisition of patent rights or copyrights.
Section – 35AB : Expenditure on know-how.
Section – 35ABA : Expenditure for obtaining right to use spectrum for telecommunication services.
Section – 35ABB : Expenditure for obtaining licence to operate telecommunication services.
Section – 35AC : Expenditure on eligible projects or schemes.
Section – 35AD : Deduction in respect of expenditure on specified business.
Section – 35B : Export markets development allowance.
Section – 35C : Agricultural development allowance.
Section – 35CC : Rural development allowance.
Section – 35CCA : Expenditure by way of payment to associations and institutions for carrying out rural development programmes.
Section – 35CCB : Expenditure by way of payment to associations and institutions for carrying out programmes of conservation of natural resources.
Section – 35CCC : Expenditure on agricultural extension project.
Section – 35CCD : Expenditure on skill development project.
Section – 35D : Amortisation of certain preliminary expenses.
Section – 35DD : Amortisation of expenditure in case of amalgamation or demerger.
Section – 35DDA : Amortisation of expenditure incurred under voluntary retirement scheme.
Section – 35E : Deduction for expenditure on prospecting, etc., for certain minerals.
Section – 36 : Other deductions.
Section – 37 : General.
Section – 38 : Building, etc., partly used for business, etc., or not exclusively so used.
Section – 39 : Managing agency commission.
Section – 40 : Amounts not deductible.
Section – 40A : Expenses or payments not deductible in certain circumstances.
Section – 41 : Profits chargeable to tax
Section – 42 : Special provision for deductions in the case of business for prospecting, etc., for mineral oil
Section – 43 : Definitions of certain terms relevant to income from profits and gains of business or profession
Section – 43A : Special provisions consequential to changes in rate of exchange of currency
Section – 43B : Certain deductions to be only on actual payment
Section – 43C : Special provision for computation of cost of acquisition of certain assets
Section – 43CA : Special provision for full value of consideration for transfer of assets other than capital assets in certain cases
Section – 43D : Special provision in case of income of public financial institutions, public companies, etc
Section – 44 : Insurance business
Section – 44A : Special provision for deduction in the case of trade, professional or similar association
Section – 44AA : Maintenance of accounts by certain persons carrying on profession or business
Section – 44AB : Audit of accounts of certain persons carrying on business or profession
Section – 44AC : Special provision for computing profits and gains from the business of trading in certain goods
Section – 44AD : Special provision for computing profits and gains of business on presumptive basis
Section – 44ADA : Special provision for computing profits and gains of profession on presumptive basis
Section – 44AE : Special provision for computing profits and gains of business of plying, hiring or leasing goods carriages
Section – 44AF : Special provisions for computing profits and gains of retail business
Section – 44B : Special provision for computing profits and gains of shipping business in the case of non-residents
Section – 44BB : Special provision for computing profits and gains in connection with the business of exploration, etc., of mineral oils
Section – 44BBA : Special provision for computing profits and gains of the business of operation of aircraft in the case of non-residents
Section – 44BBB : Special provision for computing profits and gains of foreign companies engaged in the business of civil construction, etc., in certain turnkey power projects.
Section – 44C : Deduction of head office expenditure in the case of non-residents.
Section – 44D : Special provisions for computing income by way of royalties, etc., in the case of foreign companies
Section – 44DA : Special provision for computing income by way of royalties, etc., in case of non-residents
Section – 44DB : Special provision for computing deductions in the case of business reorganization of co-operative banks
Section – 45 : Capital gains
Section – 46 : Capital gains on distribution of assets by companies in liquidation.
Section – 46A : Capital gains on purchase by company of its own shares or other specified securities
Section – 47 : Transactions not regarded as transfer
Section – 47A : Withdrawal of exemption in certain cases
Section – 48 : Mode of computation
Section – 49 : Cost with reference to certain modes of acquisition
Section – 50 : Special provision for computation of capital gains in case of depreciable assets
Section – 50A : Special provision for cost of acquisition in case of depreciable asset.
Section – 50B : Special provision for computation of capital gains in case of slump sale.
Section – 50C : Special provision for full value of consideration in certain cases.
Section – 50CA : Special provision for full value of consideration for transfer of share other than quoted share
Section – 50D : Fair market value deemed to be full value of consideration in certain cases
Section – 51 : Advance money received.
Section – 52 : Consideration for transfer in cases of understatement.
Section – 53 : Exemption of capital gains from a residential house
Section – 54 : Profit on sale of property used for residence
Section – 54A : Relief of tax on capital gains in certain cases.
Section – 54C : Capital gain on transfer of jewellery held for personal use not to be charged in certain cases
Section – 54D : Capital gain on compulsory acquisition of lands and buildings not to be charged in certain cases
Section – 54E : Capital gain on transfer of capital assets not to be charged in certain cases
Section – 54EA : Capital gain on transfer of long-term capital assets not to be charged in the case of investment in 55[specified securities]
Section – 54EB : Capital gain on transfer of long-term capital assets not to be charged in certain cases
Section – 54EC : Capital gain not to be charged on investment in certain bonds
Section – 54ED : Capital gain on transfer of certain listed securities or unit not to be charged in certain cases
Section – 54EE : Capital gain not to be charged on investment in units of a specified fund
Section – 54F : Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house
Section – 54G : Exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area
Section – 54GB : Capital gain on transfer of residential property not to be charged in certain cases
Section – 54H : Extension of time for acquiring new asset or depositing or investing amount of capital gain
Section – 55 : Meaning of “adjusted”, “cost of improvement” and “cost of acquisition”
Section – 55A : Reference to Valuation Officer
Section – 56 : Income from other sources
Section – 57 : Deductions
Section – 58 : Amounts not deductible
Section – 59 : Profits chargeable to tax

CHAPTER V – Income of other persons included in assessee’s total income
Section – 60 : Transfer of income where there is no transfer of assets

Section – 61 : Revocable transfer of assets

Section – 62 : Transfer irrevocable for a specified period

Section – 63 : “Transfer” and “revocable transfer” defined

Section – 64 : Income of individual to include income of spouse, minor child, etc

Section – 65 : Liability of person in respect of income included in the income of another person
CHAPTER VI – Aggregation of income and set off or carry forward of loss
Section – 66 : Total income

Section – 67 : Method of computing a partner’s share in the income of the firm

Section – 67A : Method of computing a member’s share in income of association of persons or body of individuals.

Section – 68 : Cash credits

Section – 69 : Unexplained investments

Section – 69A : Unexplained money, etc

Section – 69B : Amount of investments, etc., not fully disclosed in books of account

Section – 69C : Unexplained expenditure, etc

Section – 69D : Amount borrowed or repaid on hundi

Section – 70 : Set off of loss from one source against income from another source under the same head of income

Section – 71 : Set off of loss from one head against income from another

Section – 71A : Transitional provisions for set off of loss under the head “Income from house property”

Section – 71B : Carry forward and set off of loss from house property

Section – 72 : Carry forward and set off of business losses

Section – 72A : Provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in amalgamation or demerger, etc.

Section – 72AA : Provisions relating to carry forward and set-off of accumulated loss and unabsorbed depreciation allowance in scheme of amalgamation of banking company in certain cases

Section – 72AB : Provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in business reorganisation of co-operative banks

Section – 73 : Losses in speculation business

Section – 73A : Carry forward and set off of losses by specified business

Section – 74 : Losses under the head “Capital gains”

Section – 74A : Losses from certain specified sources falling under the head “Income from other sources”

Section – 75 : Losses of firms

Section – 78 : Carry forward and set off of losses in case of change in constitution of firm or on succession

Section – 79 : Carry forward and set off of losses in the case of certain companies

Section – 80 : Submission of return for losses
CHAPTER VIA – Deductions to be made in computing total income
Section – 80A : Deductions to be made in computing total income
Section – 80AA : Computation of deduction under section 80M
Section – 80AB : Deductions to be made with reference to the income included in the gross total income
Section – 80AC : Deduction not to be allowed unless return furnished
Section – 80B : Definitions
Section – 80C : Deduction in respect of life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc.
Section – 80CC : Deduction in respect of investment in certain new shares
Section – 80CCA : Deduction in respect of deposits under National Savings Scheme or payment to a deferred annuity plan
Section – 80CCB : Deduction in respect of investment made under Equity Linked Savings Scheme
Section – 80CCC : Deduction in respect of contribution to certain pension funds
Section – 80CCD : Deduction in respect of contribution to pension scheme of Central Government
Section – 80CCE : Limit on deductions under sections 80C, 80CCC and 80CCD
Section – 80CCF : Deduction in respect of subscription to long-term infrastructure bonds
Section – 80CCG : Deduction in respect of investment made under an equity savings scheme
Section – 80D : Deduction in respect of health insurance premia
Section – 80DD : Deduction in respect of maintenance including medical treatment of a dependant who is a person with disability
Section – 80DDB : Deduction in respect of medical treatment, etc.
Section – 80E : Deduction in respect of interest on loan taken for higher education
Section – 80EE : Deduction in respect of interest on loan taken for residential house property
Section – 80F : Deduction in respect of educational expenses in certain cases
Section – 80FF : Deduction in respect of expenses on higher education in certain cases
Section – 80G : Deduction in respect of donations to certain funds, charitable institutions, etc.
Section – 80GG : Deductions in respect of rents paid
Section – 80GGA : Deduction in respect of certain donations for scientific research or rural development
Section – 80GGB : Deduction in respect of contributions given by companies to political parties
Section – 80GGC : Deduction in respect of contributions given by any person to political parties
Section – 80H : Deduction in case of new industrial undertakings employing displaced persons, etc.
Section – 80HH : Deduction in respect of profits and gains from newly established industrial undertakings or hotel business in backward areas
Section – 80HHA : Deduction in respect of profits and gains from newly established small-scale industrial undertakings in certain areas
Section – 80HHB : Deduction in respect of profits and gains from projects outside India
Section – 80HHBA : Deduction in respect of profits and gains from housing projects in certain cases
Section – 80HHC : Deduction in respect of profits retained for export business
Section – 80HHD : Deduction in respect of earnings in convertible foreign exchange
Section – 80HHE : Deduction in respect of profits from export of computer software, etc.
Section – 80HHF : Deduction in respect of profits and gains from export or transfer of film software, etc.
Section – 80-I : Deduction in respect of profits and gains from industrial undertakings after a certain date, etc.
Section – 80-IA : Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc.
Section – 80-IAB : Deductions in respect of profits and gains by an undertaking or enterprise engaged in development of Special Economic Zone
Section – 80-IAC : Special provision in respect of specified business
Section – 80-IB : Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings
Section – 80-IBA : Deductions in respect of profits and gains from housing projects
Section – 80-IC : Special provisions in respect of certain undertakings or enterprises in certain special category States
Section – 80-ID : Deduction in respect of profits and gains from business of hotels and convention centres in specified area
Section – 80-IE : Special provisions in respect of certain undertakings in North-Eastern States
Section – 80J : Deduction in respect of profits and gains from newly established industrial undertakings or ships or hotel business in certain cases
Section – 80JJ : Deduction in respect of profits and gains from business of poultry farming
Section – 80JJA : Deduction in respect of profits and gains from business of collecting and processing of bio-degradable waste
Section – 80JJAA : Deduction in respect of employment of new employees
Section – 80K : Deduction in respect of dividends attributable to profits and gains from new industrial undertakings or ships or hotel business
Section – 80L : Deductions in respect of interest on certain securities, dividends, etc
Section – 80LA : Deductions in respect of certain incomes of Offshore Banking Units and International Financial Services Centre
Section – 80M : Deduction in respect of certain inter-corporate dividends
Section – 80MM : Deduction in the case of an Indian company in respect of royalties, etc., received from any concern in India
Section – 80N : Deduction in respect of dividends received from certain foreign companies
Section – 80-O : Deduction in respect of royalties, etc., from certain foreign enterprises
Section – 80P : Deduction in respect of income of co-operative societies
Section – 80Q : Deduction in respect of profits and gains from the business of publication of books
Section – 80QQ : Deduction in respect of profits and gains from the business of publication of books
Section – 80QQA : Deduction in respect of professional income of authors of text books in Indian languages
Section – 80QQB : Deduction in respect of royalty income, etc., of authors of certain books other than text-books
Section – 80R : Deduction in respect of remuneration from certain foreign sources in the case of professors, teachers, etc
Section – 80RR : Deduction in respect of professional income from foreign sources in certain cases
Section – 80RRA : Deduction in respect of remuneration received for services rendered outside India
Section – 80RRB : Deduction in respect of royalty on patents
Section – 80S : Deduction in respect of compensation for termination of managing agency, etc., in the case of assessees other than companies
Section – 80T : Deduction in respect of long-term capital gains in the case of assessees other than companies
Section – 80TT : Deduction in respect of winnings from lottery
Section – 80TTA : Deduction in respect of interest on deposits in savings account
Section – 80U : Deduction in case of a person with disability
Section – 80V : Deduction from gross total income of the parent in certain cases
Section – 80VV : Deduction in respect of expenses incurred in connection with certain proceedings under the Act

CHAPTER VII – Incomes forming part of total income on which no income-tax is payable
Section – 81 to 85C : Omitted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968
Section – 86 : Share of member of an association of persons or body of individuals in the income of the association or body
Section – 86A : Deduction from tax on certain securities

CHAPTER VIII – Rebates and reliefs
Section – 87 : Rebate to be allowed in computing income-tax

Section – 87A : Rebate of income-tax in case of certain individuals

Section – 88 : Rebate on life insurance premia, contribution to provident fund, etc

Section – 88A : Rebate in respect of investment in certain new shares or units

Section – 88B : Rebate of income-tax in case of individuals of sixty-five years or above

Section – 88C : Rebate of income-tax in case of women below sixty-five years

Section – 88D : Rebate of income-tax in case of certain individuals

Section – 88E : Rebate in respect of securities transaction tax

Section – 89 : Relief when salary, etc., is paid in arrears or in advance

Section – 89A : Tax relief in relation to export turnover
CHAPTER IX – Double Taxation Relief
Section – 90 : Agreement with foreign countries or specified territories

Section – 90A : Adoption by Central Government of agreement between specified associations for double taxation relief

Section – 91 : Countries with which no agreement exists
CHAPTER X – Special provisions relating to avoidance of tax
Section – 92 : Computation of income from international transaction having regard to arm’s length price

Section – 92A : Meaning of associated enterprise

Section – 92B : Meaning of international transaction

Section – 92BA : Meaning of specified domestic transaction

Section – 92C : Computation of arm’s length price

Section – 92CA : Reference to Transfer Pricing Officer

Section – 92CB : Power of Board to make safe harbour rules

Section – 92CC : Advance pricing agreement

Section – 92CD : Effect to advance pricing agreement

Section – 92CE : Secondary adjustment in certain cases

Section – 92D : Maintenance and keeping of information and document by persons entering into an international transaction 55[or specified domestic transaction].

Section – 92E : Report from an accountant to be furnished by persons entering into international transaction 61a[or specified domestic transaction].

Section – 92F : Definitions of certain terms relevant to computation of arm’s length price, etc

Section – 93 : Avoidance of income-tax by transactions resulting in transfer of income to non-residents

Section – 94 : Avoidance of tax by certain transactions in securities

Section – 94A : Special measures in respect of transactions with persons located in notified jurisdictional area

Section – 94B : Limitation on interest deduction in certain cases
CHAPTER XA – GENERAL ANTI-AVOIDANCE RULE
Section – 95 : Applicability of General Anti-Avoidance Rule

Section – 96 : Impermissible avoidance arrangement

Section – 97 : Arrangement to lack commercial substance

Section – 98 : Consequences of impermissible avoidance arrangement

Section – 99 : Treatment of connected person and accommodating party

Section – 100 : Application of this Chapter

Section – 101 : Framing of guidelines

Section – 102 : Definitions
CHAPTER XI – Additional income-tax on undistributed profits
Section – 104 : Income-tax on undistributed income of certain companies

Section – 105 : Special provisions for certain companies

Section – 106 : Period of limitation for making orders under section 104

Section – 107 : Approval of Inspecting Assistant Commissioner for orders under section 104

Section – 107A : Reduction of minimum distribution in certain cases

Section – 108 : Savings for company in which public are substantially interested

Section – 109 : “Distributable income”, “investment company” and “statutory percentage” defined
CHAPTER XII – Determination of tax in certain special cases
Section – 110 : Determination of tax where total income includes income on which no tax is payable
Section – 111 : Tax on accumulated balance of recognised provident fund
Section – 111A : Tax on short-term capital gains in certain cases
Section – 112 : Tax on long-term capital gains
Section – 112A : Tax on interest on National Savings Certificates (First Issue)
Section – 113 : Tax in the case of block assessment of search cases
Section – 114 : Tax on capital gains in cases of assessees other than companies
Section – 115 : Tax on capital gains in case of companies
Section – 115A : Tax on dividends, royalty and technical service fees in the case of foreign companies
Section – 115AB : Tax on income from units purchased in foreign currency or capital gains arising from their transfer
Section – 115AC : Tax on income from bonds or Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer.
Section – 115ACA : Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer
Section – 115AD : Tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer
Section – 115B : Tax on profits and gains of life insurance business
Section – 115BA : Tax on income of certain domestic companies
Section – 115BB : Tax on winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or gambling or betting of any form or nature whatsoever
Section – 115BBA : Tax on non-resident sportsmen or sports associations
Section – 115BBB : Tax on income from units of an open-ended equity oriented fund of the Unit Trust of India or of Mutual Funds
Section – 115BBC : Anonymous donations to be taxed in certain cases
Section – 115BBD : Tax on certain dividends received from foreign companies
Section – 115BBDA : Tax on certain dividends received from domestic companies
Section – 115BBE : Tax on income referred to in section 68 or section 69 or section 69A or section 69B or section 69C or section 69D
Section – 115BBF : Tax on income from patent

CHAPTER XIIA – Special provisions relating to certain incomes of non-residents
Section – 115C : Definitions

Section – 115D : Special provision for computation of total income of non-residents

Section – 115E : Tax on investment income20 and long-term capital gains.

Section – 115F : Capital gains on transfer of foreign exchange assets not to be charged in certain cases

Section – 115G : Return of income not to be filed in certain cases

Section – 115H : Benefit under Chapter to be available in certain cases even after the assessee becomes resident

Section – 115-I : Chapter not to apply if the assessee so chooses
CHAPTER XIIB – Special provisions relating to certain companies
Section – 115J : Special provisions relating to certain companies.

Section – 115JA : Deemed income relating to certain companies

Section – 115JAA : Tax credit in respect of tax paid on deemed income relating to certain companies

Section – 115JB : Special provision for payment of tax by certain companies
CHAPTER XIIBA – Special provisions relating to certain limited liability partnerships
Section – 115JC : Special provisions for payment of tax by certain persons other than a company

Section – 115JD : Tax credit for alternate minimum tax

Section – 115JE : Application of other provisions of this Act

Section – 115JEE : Application of this Chapter to certain persons

Section – 115JF : Interpretation in this Chapter
CHAPTER XIIBB – Special provisions relating to conversion of Indian branch of a foreign bank into a subsidiary company
Section – 115JG : Conversion of an Indian branch of foreign company into subsidiary Indian company
CHAPTER XIIBC – SPECIAL PROVISIONS RELATING TO FOREIGN COMPANY SAID TO BE RESIDENT IN INDIA
Section – 115JH : Foreign company said to be resident in India
CHAPTER XIIC – Special provisions relating to retail trade etc.
Section – 115K : Special provision for computation of income in certain cases

Section – 115L : Return of income not to be filed in certain cases

Section – 115M : Special provision for disallowance of deductions and rebate of income-tax

Section – 115N : Bar of proceedings in certain cases

CHAPTER XIID – Special provisions relating to tax on distributed profits of domestic companies
Section – 115-O : Tax on distributed profits of domestic companies

Section – 115P : Interest payable for non-payment of tax by domestic companies

Section – 115Q : When company is deemed to be in default
CHAPTER XIIDA – SPECIAL PROVISIONS RELATING TO TAX ON DISTRIBUTED INCOME OF DOMESTIC COMPANY FOR BUY-BACK OF SHARES
Section – 115QA : Tax on distributed income to shareholders

Section – 115QB : Interest payable for non-payment of tax by company

Section – 115QC : When company is deemed to be assessee in default
CHAPTER XIIE – Special provisions relating to tax on distributed income
Section – 115R : Tax on distributed income to unit holders

Section – 115S : Interest payable for non-payment of tax

Section – 115T : Unit Trust of India or Mutual Fund to be an assessee in default
CHAPTER XIIEA – SPECIAL PROVISIONS RELATING TO TAX ON DISTRIBUTED INCOME BY SECURITISATION TRUSTS
Section – 115TA : Tax on distributed income to investors

Section – 115TB : Interest payable for non-payment of tax

Section – 115TC : Securitisation trust to be assessee in default

Section – 115TCA : Tax on income from securitisation trusts
CHAPTER XIIEB – SPECIAL PROVISIONS RELATING TO TAX ON ACCRETED INCOMEOF CERTAIN TRUSTS AND INSTITUTIONS
Section – 115TD : Tax on accreted income

Section – 115TE : Interest payable for non-payment of tax by trust or institution

Section – 115TF : When trust or institution is deemed to be assessee in default
CHAPTER XIIF – Special provisions relating to tax on income received from venture capital companies and venture capital funds
Section – 115U : Tax on income in certain cases
CHAPTER XIIFA – SPECIAL PROVISIONS RELATING TO BUSINESS TRUSTS
Section – 115UA : Tax on income of unit holder and business trust
CHAPTER XIIFB – SPECIAL PROVISIONS RELATING TO TAX ON INCOME OF INVESTMENT FUNDS AND INCOME RECEIVED FROM SUCH FUNDS
Section – 115UB : Tax on income of investment fund and its unit holders
CHAPTER XIIG – Special provisions relating to income of shipping companies
Section – 115V : Definitions

Section – 115VA : Computation of profits and gains from the business of operating qualifying ships

Section – 115VB : Operating ships

Section – 115VC : Qualifying company

Section – 115VD : Qualifying ship

Section – 115VE : Manner of computation of income under tonnage tax scheme

Section – 115VF : Tonnage income

Section – 115VG : Computation of tonnage income

Section – 115VH : Calculation in case of joint operation, etc.

Section – 115VI : Relevant shipping income

Section – 115VJ : Treatment of common costs

Section – 115VK : Depreciation

Section – 115VL : General exclusion of deduction and set off, etc.

Section – 115VM : Exclusion of loss

Section – 115VN : Chargeable gains from transfer of tonnage tax assets

Section – 115V-O : Exclusion from provisions of section 115JB

Section – 115VP : Method and time of opting for tonnage tax scheme

Section – 115VQ : Period for which tonnage tax option to remain in force

Section – 115VR : Renewal of tonnage tax scheme

Section – 115VS : Prohibition to opt for tonnage tax scheme in certain cases

Section – 115VT : Transfer of profits to Tonnage Tax Reserve Account

Section – 115VU : Minimum training requirement for tonnage tax company

Section – 115VV : Limit for charter in of tonnage

Section – 115VW : Maintenance and audit of accounts

Section – 115VX : Determination of tonnage

Section – 115VY : Amalgamation

Section – 115VZ : Demerger

Section – 115VZA : Effect of temporarily ceasing to operate qualifying ships

Section – 115VZB : Avoidance of tax

Section – 115VZC : Exclusion from tonnage tax scheme
CHAPTER XIIH – Income-tax on fringe benefits
Section – 115W : Definitions

Section – 115WA : Charge of fringe benefit tax

Section – 115WB : Fringe benefits

Section – 115WC : Value of fringe benefits

Section – 115WD : Return of fringe benefits

Section – 115WE : Assessment

Section – 115WF : Best judgment assessment

Section – 115WG : Fringe benefits escaping assessment

Section – 115WH : Issue of notice where fringe benefits have escaped assessment

Section – 115WI : Payment of fringe benefit tax

Section – 115WJ : Advance tax in respect of fringe benefits

Section – 115WK : Interest for default in furnishing return of fringe benefits

Section – 115WKA : Recovery of fringe benefit tax by the employer from the employee

Section – 115WKB : Deemed payment of tax by employee

Section – 115WL : Application of other provisions of this Act

Section – 115WM : Chapter XII-H not to apply after a certain date

CHAPTER XIII – Income-tax Authorities

CHAPTER XIV – Procedure for assessment

CHAPTER XIVA – Special provision for avoiding repetitive appeals

Section – 158A : Procedure when assessee claims identical question of law is pending before High Court or Supreme Court

Section – 158AA : Procedure when in an appeal by revenue an identical question of law is pending before Supreme Court
CHAPTER XIVB – Special procedure for assessment of search cases
Section – 158B : Definitions

Section – 158BA : Assessment of undisclosed income as a result of search

Section – 158BB : Computation of undisclosed income of the block period

Section – 158BC : Procedure for block assessment

Section – 158BD : Undisclosed income of any other person

Section – 158BE : Time limit for completion of block assessment

Section – 158BF : Certain interests and penalties not to be levied or imposed

Section – 158BFA : Levy of interest and penalty in certain cases

Section – 158BG : Authority competent to make the block assessment

Section – 158BH : Application of other provisions of this Act

Section – 158BI : Chapter not to apply after certain date
CHAPTER XV – Liability in special cases
Section – 159 : Legal representatives

Section – 160 : Representative assessee

Section – 161 : Liability of representative assessee

Section – 162 : Right of representative assessee to recover tax paid

Section – 163 : Who may be regarded as agent

Section – 164 : Charge69 of tax where share of beneficiaries unknown.

Section – 164A : Charge of tax in case of oral trust

Section – 165 : Case where part of trust income is chargeable

Section – 166 : Direct assessment or recovery not barred

Section – 167 : Remedies against property in cases of representative assessees

Section – 167A : Charge of tax in the case of a firm

Section – 167B : Charge of tax where shares of members in association of persons or body of individuals unknown, etc.

Section – 167C : Liability of partners of limited liability partnership in liquidation

Section – 168 : Executors

Section – 169 : Right of executor to recover tax paid

Section – 170 : Succession to business otherwise than on death

Section – 171 : Assessment after partition of a Hindu undivided family

Section – 172 : Shipping business of non-residents

Section – 173 : Recovery of tax in respect of non-resident from his assets

Section – 174 : Assessment of persons leaving India

Section – 174A : Assessment of association of persons or body of individuals or artificial juridical person formed for a particular event or purpose

Section – 175 : Assessment of persons likely to transfer property to avoid tax

Section – 176 : Discontinued business

Section – 177 : Association dissolved or business discontinued

Section – 178 : Company in liquidation

Section – 179 : Liability of directors of private company in liquidation

Section – 180 : Royalties or copyright fees for literary or artistic work

Section – 180A : Consideration for know-how

Section – 181 : Omitted by the Finance Act, 1988, w.e.f. 1-4-1989
CHAPTER XVI – Special provisions applicable to firms
Section – 182 : Assessment of registered firms

Section – 183 : Assessment of unregistered firms

Section – 184 : Assessment as a firm

Section – 185 : Assessment when section 184 not complied with

Section – 187 : Change in constitution of a firm

Section – 188 : Succession of one firm by another firm

Section – 188A : Joint and several liability of partners for tax payable by firm

Section – 189 : Firm dissolved or business discontinued

Section – 189A : Provisions applicable to past assessments of firms
CHAPTER XVII – Collection and recovery of tax [Click]

CHAPTER XVIII – Relief respecting tax on dividends in certain cases
Section – 235 : Relief to shareholders in respect of agricultural income-tax attributable to dividends

Section – 236 : Relief to company in respect of dividend paid out of past taxed profits

Section – 236A : Relief to certain charitable institutions or funds in respect of certain dividends
CHAPTER XIX – Refunds
Section – 237 : Refunds

Section – 238 : Person entitled to claim refund in certain special cases

Section – 239 : Form of claim for refund and limitation

Section – 240 : Refund on appeal, etc

Section – 241 : Power to withhold refund in certain cases

Section – 241A : [Withholding of refund in certain cases

Section – 242 : Correctness of assessment not to be questioned

Section – 243 : Interest on delayed refunds

Section – 244 : Interest on refund where no claim is needed

Section – 244A : Interest on refunds

Section – 245 : Set off of refunds against tax remaining payable
CHAPTER XIXA – Settlement of cases
Section – 245A : Definitions

Section – 245B : Income-tax Settlement Commission

Section – 245BA : Jurisdiction and powers of Settlement Commission

Section – 245BB : Vice-Chairman to act as Chairman or to discharge his functions in certain circumstances

Section – 245BC : Power of Chairman to transfer cases from one Bench to another

Section – 245BD : Decision to be by majority

Section – 245C : Application for settlement of cases

Section – 245D : Procedure on receipt of an application under section 245C

Section – 245DD : Power of Settlement Commission to order provisional attachment to protect revenue

Section – 245E : Power of Settlement Commission to reopen completed proceedings

Section – 245F : Powers and procedure of Settlement Commission

Section – 245G : Inspection, etc., of reports

Section – 245H : Power of Settlement Commission to grant immunity from prosecution and penalty

Section – 245HA : Abatement of proceeding before Settlement Commission

Section – 245HAA : Credit for tax paid in case of abatement of proceedings

Section – 245I : Order of settlement to be conclusive

Section – 245J : Recovery of sums due under order of settlement

Section – 245K : Bar on subsequent application for settlement

Section – 245L : Proceedings before Settlement Commission to be judicial proceedings

Section – 245M : Certain persons who have filed appeals to the Appellate Tribunal entitled to make applications to the Settlement Commission

CHAPTER XIXB – Advance rulings
Section – 245N : Definitions
Section – 245O : Authority for Advance Rulings
Section – 245P : Vacancies, etc., not to invalidate proceedings
Section – 245Q : Application for advance ruling
Section – 245R : Procedure on receipt of application
Section – 245RR : Appellate authority not to proceed in certain cases
Section – 245S : Applicability of advance ruling
Section – 245T : Advance ruling to be void in certain circumstances
Section – 245U : Powers of the Authority
Section – 245V : Procedure of Authority
CHAPTER XX – Appeals and revision [Click]

CHAPTER XXA – Acquisition of immovable properties in certain cases of transfer to counteract evasion of tax
Section – 269A : Definitions
Section – 269AB : Registration of certain transactions
Section – 269B : Competent authority
Section – 269C : Immovable property in respect of which proceedings for acquisition may be taken
Section – 269D : Preliminary notice
Section – 269E : Objections
Section – 269F : Hearing of objections
Section – 269G : Appeal against order for acquisition
Section – 269H : Appeal to High Court
Section – 269I : Vesting of property in Central Government
Section – 269J : Compensation
Section – 269K : Payment or deposit of compensation
Section – 269L : Assistance by Valuation Officers
Section – 269M : Powers of competent authority
Section – 269N : Rectification of mistakes
Section – 269O : Appearance by authorised representative or registered valuer
Section – 269P : Statement to be furnished in respect of transfers of immovable property
Section – 269Q : Chapter not to apply to transfers to relatives
Section – 269R : Properties liable for acquisition under this Chapter not to be acquired under other laws
Section – 269RR : Chapter not to apply where transfer of immovable property made after a certain date
Section – 269S : Chapter not to extend to State of Jammu and Kashmir

CHAPTER XXB – Requirement as to mode of acceptance payment or repayment in certain cases to counteract evasion of tax
Section – 269SS : Mode of taking or accepting certain loans, deposits and specified sum.
Section – 269ST : Mode of undertaking transactions
Section – 269T : Mode of repayment of certain loans or deposits
Section – 269TT : Mode of repayment of Special Bearer Bonds, 1991

CHAPTER XXC – Purchase by central government of immovable properties in certain cases of transfer
Section – 269U : Commencement of Chapter
Section – 269UA : Definitions
Section – 269UB : Appropriate authority
Section – 269UC : Restrictions on transfer of immovable property
Section – 269UD : Order by appropriate authority for purchase by Central Government of immovable property
Section – 269UE : Vesting of property in Central Government
Section – 269UF : Consideration for purchase of immovable property by Central Government
Section – 269UG : Payment or deposit of consideration
Section – 269UH : Re-vesting of property in the transferor on failure of payment or deposit of consideration
Section – 269UI : Powers of the appropriate authority
Section – 269UJ : Rectification of mistakes
Section – 269UK : Restrictions on revocation or alteration of certain agreements for the transfer of immovable property or on transfer of certain immovable property
Section – 269UL : Restrictions on registration, etc., of documents in respect of transfer of immovable property
Section – 269UM : Immunity to transferor against claims of transferee for transfer
Section – 269UN : Order of appropriate authority to be final and conclusive
Section – 269UO : Chapter not to apply to certain transfers
Section – 269UP : Chapter not to apply where transfer of immovable property effected after certain date

CHAPTER XXI – Penalties imposable
Section – 270 : Failure to furnish information regarding securities, etc.
Section – 270A : Penalty for under-reporting and misreporting of income
Section – 270AA : Immunity from imposition of penalty, etc.
Section – 271 : Failure to furnish returns, comply with notices, concealment of income, etc.
Section – 271A : Failure to keep, maintain or retain books of account, documents, etc.
Section – 271AA : Penalty for failure to keep and maintain information and document, etc., in respect of certain transactions
Section – 271AAA : Penalty where search has been initiated
Section – 271AAB : Penalty where search has been initiated
Section – 271B : Failure to get accounts audited
Section – 271BA : Penalty for failure to furnish report under section 92E
Section – 271BB : Failure to subscribe to the eligible issue of capital
Section – 271C : Penalty for failure to deduct tax at source
Section – 271CA : Penalty for failure to collect tax at source
Section – 271D : Penalty for failure to comply with the provisions of section 269SS
Section – 271DA : Penalty for failure to comply with provisions of section 269ST
Section – 271E : Penalty for failure to comply with the provisions of section 269T
Section – 271F : Penalty for failure to furnish return of income
Section – 271FA : Penalty for failure to furnish 90[statement of financial transaction or reportable account].
Section – 271FAA : Penalty for furnishing inaccurate statement of financial transaction or reportable account
Section – 271FAB : Penalty for failure to furnish statement or information or document by an eligible investment fund
Section – 271FB : Penalty for failure to furnish return of fringe benefits
Section – 271G : Penalty for failure to furnish information or document under section 92D
Section – 271GA : Penalty for failure to furnish information or document under section 285A
Section – 271GB : Penalty for failure to furnish report or for furnishing inaccurate report under section 286
Section – 271H : Penalty for failure to furnish statements, etc.
Section – 271-I : Penalty for failure to furnish information or furnishing inaccurate information under section 195
Section – 272 : Failure to give notice of discontinuance
Section – 272A : Penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc.
Section – 272AA : Penalty for failure to comply with the provisions of section 133B
Section – 272B : Penalty for failure to comply with the provisions of section 139A.
Section – 272BB : Penalty for failure to comply with the provisions of section 203A
Section – 272BBB : Penalty for failure to comply with the provisions of section 206CA
Section – 273 : False estimate of, or failure to pay, advance tax46.
Section – 273A : Power to reduce or waive penalty, etc., in certain cases
Section – 273AA : Power of 7[Principal Commissioner or] Commissioner to grant immunity from penalty.
Section – 273B : Penalty not to be imposed in certain cases
Section – 274 : Procedure
Section – 275 : Bar of limitation for imposing penalties

CHAPTER XXII – Offences and prosecutions

CHAPTER XXIIB – Tax credit certificates
Section – 280Y : Definitions

Section – 280ZA : Tax credit certificates for shifting of industrial undertaking from urban area

Section – 280ZC : Tax credit certificate in relation to exports

Section – 280ZD : Tax credit certificates in relation to increased production of certain goods

Section – 280ZE : Tax credit certificate scheme
CHAPTER XXIII – Miscellaneous
Section – 281 : Certain transfers to be void

Section – 281A : Effect of failure to furnish information in respect of properties held benami

Section – 281B : Provisional attachment to protect revenue in certain cases

Section – 282 : Service of notice generally

Section – 282A : Authentication of notices and other documents

Section – 282B : Allotment of Document Identification Number

Section – 283 : Service of notice when family is disrupted or firm, etc., is dissolved

Section – 284 : Service of notice in the case of discontinued business

Section – 285 : Submission of statement by a non-resident having liaison office

Section – 285A : Furnishing of information or documents by an Indian concern in certain cases

Section – 285B : Submission of statements by producers of cinematograph films

Section – 285BA : Obligation to furnish statement of financial transaction or reportable account

Section – 286 : Furnishing of report in respect of international group

Section – 287 : Publication of information respecting assessees in certain cases

Section – 287A : Appearance by registered valuer in certain matters

Section – 288 : Appearance by authorised representative

Section – 288A : Rounding off of income

Section – 288B : Rounding off amount payable and refund due

Section – 289 : Receipt to be given

Section – 290 : Indemnity

Section – 291 : Power to tender immunity from prosecution

Section – 292 : Cognizance of offences

Section – 292A : Section 360 of the Code of Criminal Procedure, 1973, and the Probation of Offenders Act, 1958, not to apply

Section – 292B : Return of income, etc., not to be invalid on certain grounds

Section – 292BB : Notice deemed to be valid in certain circumstances

Section – 292C : Presumption as to assets, books of account, etc

Section – 292CC : Authorisation and assessment in case of search or requisition

Section – 293 : Bar of suits in civil courts

Section – 293A : Power to make exemption, etc., in relation to participation in the business of prospecting for, extraction, etc., of mineral oils

Section – 293B : Power of Central Government or Board to condone delays in obtaining approval

Section – 293C : Power to withdraw approval

Section – 294 : Act to have effect pending legislative provision for charge of tax

Section – 294A : Power to make exemption, etc., in relation to certain Union territories

Section – 295 : Power to make rules

Section – 296 : Rules and certain notifications to be placed before Parliament

Section – 297 : Repeals and savings

Section – 298 : Power to remove difficulties

First Schedule
INSURANCE BUSINESS

Second Schedule
PROCEDURE FOR RECOVERY OF TAX

Third Schedule
PROCEDURE FOR DISTRAINT BY 32[ASSESSING OFFICER] 33[OR TAX RECOVERY OFFICER

Fourth Schedule
RECOGNISED PROVIDENT FUNDS

Fifth Schedule
LIST OF ARTICLES AND THINGS

Sixth Schedule
Sixth Schedule

Seventh Schedule
MINERALS

Eighth Schedule
LIST OF INDUSTRIALLY BACKWARD STATES AND UNION TERRITORIES

Ninth Schedule
Omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 1-4-1988

Tenth Schedule
Omitted by the Finance Act, 1999, w.e.f. 1-4-2000

Eleventh Schedule
LIST OF ARTICLES OR THINGS

Twelfth Schedule
PROCESSED MINERALS AND ORES

Thirteenth Schedule
LIST OF ARTICLES OR THINGS

Fourteenth Schedule
LIST OF ARTICLES OR THINGS OR OPERATIONS

APPENDIX
TEXT OF REMAINING PROVISIONS OF ALLIED ACTS REFERRED TO INCOME-TAX ACT

Speculative transaction – Meaning of

Is a contract for purchase or sale of any commodity settled when no actual delivery or transfer of the commodity is effected, and instead compensation is awarded under an arbitration award as damages for breach of the contract?

(1983) AIR(SC) 952 : (1983) 2 CompLJ 305 : (1983) 35 CurTR 395 : (1983) 144 ITR 57 : (1983) KLT(SN) 57 : (1983) 2 SCALE 37 : (1983) 3 SCC 561 : (1983) SCC(Tax) 237 : (1983) 3 SCR 470 : (1983) TaxLR 1190

SUPREME COURT OF INDIA

FULL BENCH

( Before : R. S. Pathak, J; E. S. Venkataramiah, J; A. N. Sen, J )

COMMISSIONER OF INCOME TAX, BOMBAY CITY-III Vs. SHANTILAL P. LTD.

Tax. Reference Case No. 4 of 1978

Decided on : 21-07-1983

Income Tax Act, 1961 – Section 43(5)

Cases Referred

COMMISSIONER OF Income Tax, WEST BENGAL Vs. PIONEER TRADING COMPANY PRIVATE LTD., (1968) 70 ITR 347
P.L.KN. Meenakshi Achi Vs. Commissioner of Income Tax, Madras., (1974) 96 ITR 375
A. Muthukumara Pillai Vs. Commissioner of Income Tax, (1974) 96 ITR 557
R. Chinnaswami Chettiar Vs. Commissioner of Income Tax, (1974) 96 ITR 353
Davenport and Co. Pvt. Ltd. Vs. Commissioner of Income Tax, West Bengal-II, AIR 1975 SC 1996 : (1975) 100 ITR 715 : (1975) 2 SCC 399 : (1976) 1 SCR 180 : (1975) 7 UJ 621
Daulatram Rawatmull Vs. Commissioner of Income Tax (Central), (1970) 78 ITR 503
Bhandari Rajmal Kushalraj Vs. Commissioner of Income Tax, Mysore, (1974) 96 ITR 401 : (1973) 2 MysLJ 276

Counsel for Appearing Parties

D.V. Patel, T.A. Ramachandran and Subhashini, for the Appellant;

JUDGMENT

1. In this tax reference made u/s 257 of the Income Tax Act, 1961, we are called upon to express our opinion on the following question of law:

Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the order of the Appellate Assistant Commissioner that the loss suffered by the assessee was not a loss incurred in a speculative transaction within the meaning of Section 43(5) of the Income Tax Act, 1961?

2. The assessee, M/s. Shantilal Pvt. Ltd., Bombay, is a private limited company. In the assessment proceedings for the assessment year 1971-72 it claimed a sum of Rs. 1, 50,000/- paid by it as damages to M/s. Medical Service center as a business loss. During the previous year relevant to the said assessment year the assessee had contracted to sell 200 Kilograms of Folic acid USP at the rate of Rs. 440/- per Kilogram to M/s. Medical Service center and the delivery was to be effected on or before November 1, 1969, within about three months of the date of entering into the contract. The case of the assessee is that as the price of the commodity rose very sharply to as high as Rs. 2,000 per Kilogram during the period when the delivery was to be effected, the assessee was unable to fulfill the contract, giving rise to a dispute in regard to the payment of compensation between the parties. The dispute was referred to arbitration and by an award dated August 25, 1970 the arbitrator directed the assessee to pay Rs. 1,50,000/-as compensation to M/s. Medical Service center. A consent decree in terms of the award was made by the High Court.

3. In the assessment proceedings, the income tax Officer rejected the claim of the assessee that the payment of compensation was a business loss. He found that the transaction was a speculative transaction as defined by Sub-section (5) of Section 43, Income Tax Act, 1961. The Appellate Assistant Commissioner allowed the assessee’s appeal on the view that the payment made by it represented a settlement of damages on breach of the contract, which was distinct from a settlement of the contract. Accordingly, he found that the loss must be regarded as a business loss and not as a speculation loss. The Income Tax Officer’s appeal was dismissed by the income tax Appellate Tribunal by its order dated February 18, 1976. The Commissioner of Income Tax applied in reference for a decision on the question of law set out earlier, and in view of an apparent conflict between different High Courts on the point the Tribunal has made this reference.

4. There is no doubt that the arbitration award granting compensation to M/s. Medical Service center proceeds on the footing that there was a breach of contract. The Tribunal took the view that the award of damages for breach of a contract did not bring the transaction within the definition of “speculative transaction” set forth in Sub-section (5) of Section 43, Income Tax Act, 1961. In this, the Tribunal found support in the view expressed by the Calcutta High Court in COMMISSIONER OF Income Tax, WEST BENGAL Vs. PIONEER TRADING COMPANY PRIVATE LTD., ., Daulatram Rawatmull Vs. Commissioner of Income Tax (Central), and by the Mysore High Court in Bhandari Rajmal Kushalraj Vs. Commissioner of Income Tax, Mysore, , which they preferred to the view expressed by the Madras High Court in R. Chinnaswami Chettiar Vs. Commissioner of Income Tax, P. L. KN, P.L.KN. Meenakshi Achi Vs. Commissioner of Income Tax, Madras., and A. Muthukumara Pillai Vs. Commissioner of Income Tax,. On careful consideration of the matter we are of opinion that the Tribunal is right. Sub-section (5) of Section 43 defines “speculative transaction” to mean:

a transaction in which a contract for the purchase or 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.

Is a contract for purchase or sale of any commodity settled when no actual delivery or transfer of the commodity is effected, and instead compensation is awarded under an arbitration award as damages for breach of the contract? A contract can be said to be settled if instead of effecting the delivery or transfer of the commodity envisaged by the contract the promisee, in terms of Section 63 of the Contract Act, accepts instead of it any satisfaction which he thinks fit. It is quite another matter where instead of such acceptance the parties raise a dispute and no agreement can be reached for a discharge of the contract. There is a breach of the contract and by virtue of Section 73 of the Contract Act the party suffering by such breach becomes entitled to receive from the party who broke the contract compensation for any loss or damage caused to him thereby. There is no reason why the sense conveyed by the law relating to contracts should not be imported into the definition of “speculative transaction.” The award of damages for breach of a contract is not the same thing as a party to the contract accepting satisfaction of the contract otherwise than in accordance with the original terms thereof. It may be that in a general sense (he layman would understand that the contract must be regarded as settled when damages are paid by way of compensation for its breach. What is really settled by the award of such damages and their acceptance by the aggrieved party is the dispute between the parties. The law, however, speaks of a settlement of the contract, and a contract is settled when it is either performed or the promisee dispenses with or remits, wholly or in part, the performance of the promise made to him or accepts instead of it any satisfaction which he thinks fit. We are concerned with the sense of the law, and it is that sense which must prevail in Sub-section (5) of Section 43. Accordingly, we hold that a transaction cannot be described as a “speculative transaction” within the meaning of Sub-section (5) of Section 43, Income Tax Act, 1961 where there is a breach of the contract and on a dispute between the parties damages are awarded as compensation by an arbitration award. We are unable to endorse the view to the contrary taken by the Madras High Court in R. Chinnaswami Chettiar (supra) and approve of the view taken by the Calcutta High Court in Pioneer Trading Company Private Ltd. (supra) and by the Mysore High Court in Bhandari Rajmal Kushalraj (supra). The decisions of the Madras High Court in P. L. KN. Meenakshi Achi (supra) and A. Muthukumara Pillai (supra) are not apposite and are not concerned with the point before us. Our attention was invited by learned Counsel for the Revenue to the decision of this Court in Davenport and Co. Pvt. Ltd. Vs. Commissioner of Income Tax, West Bengal-II, but this point did not arise there either.

5. Accordingly, we answer the question referred in the affirmative, in favour of the assessee and against the Revenue. There is no order as to costs.

Revocable transfer

Section 63 in The Income- Tax Act, 1995

  1. ” Transfer” and” revocable transfer” defined For the purposes of sections 60, 61 and 62 and of this section,-

(a) a transfer shall be deemed to be revocable if-

(i) it contains any provision for the retransfer directly or indirectly of the whole or any part of the income or assets to the transferor, or
(ii) it, in any way, gives the transferor a right to reassume power directly or indirectly over the whole or any part of the income or assets;

(b) ” transfer” includes any settlement, trust, covenant, agreement or arrangement.

  1. All income arising to any person by virtue of a revocable transfer of assets shall be chargeable to income-tax as the income of the transferor and shall be included in his total income.

A trust can be revoked under this law

Assess and Assessment

In the The Bombay Life Assurance Society Ltd. Vs. The Council, Corporation of Madras, , a Division Bench of this Court, had occasion to consider the words “assess” and “assessment” under the Madras City Municipal Act IV of 1919. The following passage in the judgment is worth reproduction, as it is instructivc:–

  1. In my opinion, it will be most unsafe to draw any inference from the mere use of the words ‘assess’ or ‘assessment’. These words do not have one and an only meaning and connotation. In taxation statutes, the word ‘to asses’ is sometimes used as meaning ‘to fix the amount of tax’; sometimes in the sense ‘to impose the tax’ and sometimes to mean ‘to value or calculate for taxation.’ The word ‘assessment’ in the Indian Income Tax Act does not have the same meaning throughout the Act. Lord Romer in (1938) 6 ITR 414 (Privy Council) observed:

One of the peculiarities of most Income Tax Acts is that the word “assessment” is used as meaning sometimes the computation of income, sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the taxpayer.

In ‘income tax Comrs. v. Gibbs’, 1942 AC 402, Viscount Simon L.C. said:

The word “assessment” is used in our Income Tax Code in more than one sense. Sometimes, by “assessment” is meant the fixing of the sum taken to represent the actual profit for the purpose of charging tax upon it. In another context the “assessment” may mean the actual sum in tax which the tax payer is liable to pay on his profits. These two things are of course not the same It is remarkable that these two separate meanings of the word “assessment” may occasionally be found within the bounds of a single section.

Lord Macmillan in the same case makes the following caustic comment,

verbal consistency is the last virtue than can be attributed to a Code which uses so vital a term as “assessment” in not less than eight differing senses.

If this be so where qualified persons draft the enactment in their own language, it is idle to expect draftsmen using a foreign language to be consistent in the use of the word ‘assessment’. We respectfully follow the dictum of Lord Wrenbury that,

No reliance can be placed upon an assumption of accuracy in the use of language in these Acts (Kensignton Income Tax Comr. v. Aramayo, (1916) 1 AC 215 : 84 LJKB 2169.

That the words ‘assessed’ and ‘assessment’ have been used in the City Municipal Act indiscriminately to import different processes in taxation can be demonstrated by a few references.

Rigby L.J. in dealing with the word ‘assessed’ with reference to water rate remarked:

The word “assessed” means “reckoned on the value.” It is not accurate to say “assessed on the premises”; but it is not very far from accurate to say that a water rate is a rate assessed upon the lessees in respect of the house (Re: Fleyd v. Lyons & Co. (1897) 1 Ch. 633 : 66 L J Ch 350.

In Kalawati Devi Harlalka Vs. Commissioner of Income Tax, West Bengal and Others, , it was observed by the Supreme Court that the word “assessment” could bear a very comprehensive meaning and it could comprehend the whole procedure for ascertaining and imposing liability upon the tax payer. The Court was proceeding to consider some of the provisions of the Income tax Act, 1961. A similar view was expressed by another Bench of the same court in S. Sankappa and Others Vs. The Income Tax Officer, Central Circle II, Bangalore, . It was pointed out that in some sections, the word “assessment” was used only with reference to computation of income, and in other sections it had the more comprehensive meaning.

In a case under Travancore Cochin General Sales Tax Rules, the Supreme Court observed that “assessment” is a comprehensive word and could denote the entirety of proceedings which are taken with regard to it and did not mean a final order of assessment alone unless there was something in the context of a particular provision which compelled such a meaning being attributed to it. (Vide The Sales Tax Officer, Ernakulam v. Sudarsanam Iyengar and Sons AIR 1970 SC 911.

Income- tax Act 1922 [ Indian]

The Act now repealed

Section 5 of the Act, on the true construction of which depends the decision of the appeal is in these terms:

“This Act shall apply to every business of which any part of the profits made during the chargeable accounting period is chargeable to income-tax by virtue of its provisions of sub-cl. (i) or sub-cl. (ii) of Sub-cl (b)of sub- cl. (1) of S. 4, Income- tax Act 1922, or of cl. (c) of that sub-section.”

In other words, the Act brings within its ambit all income in the case of a person resident in British India which accrues or arises or which is deemed to accrue or arise to him in British India during the accounting year, as also all income which accrues or arises to him without British India during each year ; and if such person is not resident in British India during that year, then all income which accrues or arises or is deemed to accrue or arise in British India during such year. If S. 5 of the Act stopped short at that stage, it is undoubted that in the case of the respondent who is a resident in British India all his income, no matter where it arose, within British India or without British India, would be chargeable to excess profits tax just in the same way as it is chargeable to income tax under the Indian Income-tax Act. The whole of his income arising in Raichur has legitimately been taxed under that Act.

 Section 5, however, has three provisos which limit its scope and take certain incomes outside its ambit. The first proviso is to the following effect:

“Provided that this Act shall not apply to any business the whole of the profits of which accrue or arise without British India where such business is carried on by or on behalf of a person who is resident but not ordinarily resident in British India unless the business is controlled in British India.”

This exception has no bearing to the facts of the present case. The second proviso is in these terms:

“Provided further that where the profits of a part only of a business carried on by a person who is not resident in British India or not ordinarily so resident accrue or arise in British India or are deemed under the Indian Income-tax Act, 1922, so to accrue or arise, then, except where the business being the business of a person who is resident but not ordinarily resident in British India is controlled in India, this Act shall apply only to such part of the business, and such part shall for all the purposes of this Act be deemed to be a separate business.”

30. This proviso also concerns a person not resident in British India and does not touch the present case. It, however, furnishes a clue to the meaning of the following proviso inasmuch as it attracts the application of S.42, Income-tax Act, to the case of a non-resident and contemplates the apportionment of income between part of a business controlled in British India and a part not so controlled. Sub-section (3) of S.42, Income-tax Act, enacts this:

“ In the case at a business of which all the operations are not carried out in British India, the profits and gains at the business deemed under this section to accrue or arise in British India shall be only such profits and gains as are reasonably attributable to that part of the operations carried out in British India.”

 Under the second proviso by reason of the application of S. 42 (3), Income-tax Act, if the manufacturing business of the assessee was in British India and all his sales took place in Raichur, then excess profits tax could only be chargeable on such profits as world really be attributable to his manufacturing operations in British India and the manufacturing operations would be treated as part of the business of the assessee under the proviso. It is proviso 3 to which the controversy in the cases to limited and this proviso is in these terms

“ provided further that this Act shall not apply to any business the whole at the profits of which accrue or arise in an Indian State, and where the profits of part of business accrue or arise in an Indian State, such part shall, for the purposes of this provision, be deemed to be a separate business the whole of the profits at which accure or arise in an Indian State, and the other part of the business shall, for all the purposes of this Act, be deemed to be a separate business,”