 ————— arrangement of clauses ————— chapter i preliminary clauses1   short title, extent and commencement  parta income-tax chapter ii basis of charge2  liability to pay, and charge of, income-tax 3  scope of total income 4  residence in india 5  income deemed to accrue in india 6  income deemed to be received in the financial year 7  dividend income 8  total income to include income of any other person 9  income of individual to include income of spouse, minor child and others 10  income not included in the total income 11  persons, entity or funds not liable to income-tax   chapter iii computation of total income i—general12  computation of total income 13  classification of sources of income 14  computation of income from ordinary sources 15  computation of income from special sources 16  apportionment of income between spouses governed by portuguese civil code 17  avoidance of double taxation 18  expenditure not to be allowed as deduction 19  amount not deductible where tax is not deducted at source   ii—heads of  income a—income from employment20  income from employment 21  computation of income from employment 22  scope of gross salary 23  deductions from gross salary b—income from house property 24  income from house property 25  computation of income from house property 26  scope of gross rent 27  deductions from gross rent  clauses28  provision for advance rent received 29  provision for arrears of rent received  c—income from business30  income from business 31  business when treated distinct and separate 32  computation of income from business 33  gross earnings 34  determination of business expenditure 35  determination of operating expenditure 36  determination of finance charges 37  determination of capital allowances 38  determination of depreciation 39  determination of initial depreciation 40  deduction for terminal allowance 41  deduction for scientific research and development allowance 42  computation of profit on transfer of a business capital asset 43  special provisions relating to business reorganisation 44  meaning of actual cost 45  meaning of written down value and adjusted value of assets  d—capital gains46  capital gains 47  income from certain transfers not to be treated as capital gains 48  financial year of taxability 49  computation of income from transfer of any investment asset 50  full value of consideration 51  deduction for cost of acquisition 52  indexed cost of acquisition or improvement 53  cost of acquisition of an investment asset 54  cost of improvement of an investment asset 55  relief for rollover of investment asset  e—income from residuary sources56  income from residuary sources 57  computation of income from residuary sources 58  gross residuary income 59  deductions from gross residuary income   iii—aggregation of  income60  aggregation of income under a head of income 61  aggregation of income from ordinary sources 62  aggregation of income from special sources 63  determination of total income  (iii) clauses 64  special provisions relating to business reorganisation or conversion of a company into a limited liability partnership 65  aggregation of losses in case of change in constitution of unincorporated body 66  aggregation of losses in the case of certain companies 67  aggregation of loss not to be allowed in the case of filing of return after due date   iv—tax incentives68  deductions from gross total income from ordinary sources 69  deduction for savings 70  deduction for life insurance 71  deduction for health insurance 72  deduction for education of children 73  limit on deductions under sections 70, 71 and 72 74  deduction of interest on loan taken for house property 75  deduction of interest on loan taken for higher education 76  deduction for medical treatment 77  deduction to a person with disability 78  deduction for medical treatment and maintenance of a dependant person with disability 79  deduction of contribution or donations to certain funds or non-profit organisations 80  deduction for rent paid 81  deduction for political contributions 82  deduction of income of investor protection fund 83  deduction of royalty income of authors 84  deduction of royalty on patents 85  deduction of income of co-operative society from banking activities 86  deduction of income of primary co-operative societies   v—maintenance of accounts and other  related matters87  maintenance of accounts 88  audit of accounts and reporting of international transaction 89  method of accounting   chapter iv special provisions relating to the computation  of total income of non-profit  organisations90  applicability of this chapter 91  total income of a non-profit organisation 92  computation of total income of a non-profit organisation 93  gross receipts of a non-profit organisation 94  outgoings of a non-profit organisation 95  modes of investment 96  deemed income of a non-profit organisation 97  use or application of funds or assets for the benefit of interested person clauses  98  registration of a non-profit organisation 99  maintenance of accounts and tax audit 100  anonymous donations 101  consequences of conversion of a non-profit organisation 102  provisions of this chapter not to apply in certain cases 103   interpretations in this chapter   chapter v computation of book profit104  computation of book profit 105  preparation of profit and loss account for computing book profit 106  tax credit for tax paid on book profit 107  application of other provisions of this code   chapter vi provisions reating to tax on  income received from venture capital company and  venture capital fund108  tax on income received from venture capital company and venture capital fund   part b dividend distributuion tax chapter vii special provisions relating to tax on distributed profits  of domestice companies109  tax on distributed profits of domestic companies   part c tax on distributed income chapter viii special provisions relating to tax on  distributed income110  tax on income distributed by mutual fund or life insurer   part d branch profits tax chapter ix charge of branch profits tax part e wealth-tax chapter x charge of wealth  tax111   tax on branch profits 112  tax on net wealth 113  computation of net wealth 114 net wealth to include certain assets  part f prevention of abuse of the code chapter xi special provisions relating to avoidance of tax  clauses 115  disallowance of expenditure having regard to fair market value 116  determination of income from international transaction having regard to arm's length price 117  determination of arm's length price 118  advance pricing agreement 119  avoidance of income-tax by transactions resulting in transfer of income to nonresidents 120  avoidance of tax by sale and buy-back transaction in security 121  avoidance of tax by buy and sale-back transaction in security 122  broken period income accruing from a debt instrument 123  general anti-avoidance rule 124  interpretations in this chapter 125  presumption of purpose   part g tax management chapter xii tax administration and  procedure a—tax  administration126  income-tax authorities 127  appointment and control of income-tax authorities 128  power of higher authorities 129  powers of board to issue instructions 130  jurisdiction of income-tax authorities 131  jurisdiction of assessing officers 132  power to transfer cases 133  change of incumbent 134  powers regarding discovery and production of evidence 135  search and seizure 136  power to requisition material taken into custody 137  retention and release of books of account or documents seized or requisitioned 138  delivery of material belonging to other persons 139  retention and application of seized or requisitioned assets 140  power to call for information 141  power of survey 142  power to disclose information in respect of assessee 143  proceedings before income-tax authorities to be judicial proceedings  clauses144  self-reporting of tax bases 145  tax return preparer 146  issue of notice to furnish return 147  self-assessment tax 148  acknowledgment of return 149  processing of return 150  notice for inquiry before assessment 151  special audit 152  determination of value of assets 153  determination of arm's length price 154  determination of an impermissible avoidance agreement and consequences thereof 155  assessment 156  best judgment assessment 157  directions by joint commissioner for assessment 158  direction by dispute resolution panel for assessment 159  reopening of assessment 160  approval for search assessment 161  rectification of mistake 162  notice of demand 163  time limits for completion of assessment or re-assessments  c—procedure for assessment  in  special cases164  representative assessee 165  rights and obligations of a representative assessee 166  direct assessment or recovery not barred 167  remedy against property in case of representative assessee 168  assessment upon business reorgainsation 169  assessment after partition of a hindu undivided family 170  assessment of non-resident in respect of occasional shipping business 171  assessment of persons leaving india 172  assessment of an unincorporated body formed for a particular event or purpose 173  assessment of persons likely to transfer property to avoid tax 174  discontinued business 175  assessment of unincorporated body in case of change in its constitution 176  assessment on retirement or death of participant 177  assessment of a deductor or collector  d— appeals and  revision178  appeal to commissioner (appeals) 179  form of appeal and limitation 180  procedure in appeal 181  powers of commissioner (appeals) clauses  182  appellate tribunal 183  appeals to appellate tribunal 184  stay of demand by appellate tribunal 185  orders of appellate tribunal 186  constitution of benches and procedure of appellate tribunal 187  appeal to high court 188  case before high court to be heard by not less than two judges 189  appeal to supreme court 190  hearing before supreme court 191  revision of orders prejudicial to revenue 192  revision of other orders   chapter xiii collection  and recovery of tax a— deduction of tax at  source193  deduction or collection of tax at source and advance payment 194  direct payment 195  liability to deduct tax at source 196  payment of income and deduction of tax 197  certificate for lower or no deduction of tax 198  obligation of deductor 199  reporting of payments without deduction of tax 200  no deduction of tax in certain cases 201  credit for tax deducted  b—collection of tax at  source202  tax collection at source 203  credit for tax collected 204  interpretations under sub-chapters a and b  c—advance tax205  liability to pay advance tax  d— tax relief in respect of arrears  or advance receipts206  tax relief for arrears or advance receipts  e—foreign tax  credit f—payment of  wealth-tax207  foreign tax credit 208  payment of wealth-tax g—interest payable to the central government 209  interest for default in furnishing return of tax bases 210  interest for default in payment of advance income-tax 211  interest for deferment of advance income-tax 212  interest on excess refund  clauses213  interest payable on demand raised 214  interest for failure to deduct or collect or pay tax  h—refunds215  refunds 216  interest on refund 217  person entitled to claim refund in certain special cases  i—recovery218  recovery by assessing officer 219  recovery by tax recovery officer 220  modes of recovery 221  tax recovery officer by whom recovery is to be effected 222  recovery of tax arrear in respect of non-resident from his assets 223  recovery in case of a company in liquidation 224  liability of manager of a company 225  joint and several liability of participants 226  recovery through state government 227  recovery of tax in pursuance of agreements with foreign countries or specified territory 228  tax clearance certificate in certain cases 229  recovery by suit or under other law not affected   chapter xiv penalties230  penalty for underreporting of tax bases 231  penalty where search has been initiated 232  penalty for other defaults 233  procedure 234  bar of limitation for imposing penalty   chapter xv prosecution235  chapter not in derogation of any other law 236  contravention of any restraint order 237  failure to comply with the provisions of clause (d) of sub-section (2) of section 135 238  removal, concealment, transfer or delivery of property to thwart tax recovery 239  failure to comply with provisions of sub-sections (1) and (3) of section 223 240  failure to pay tax deducted or collected at source or to pay dividend or income distribution tax 241  wilful attempt to evade tax 242  failure to furnish returns of tax bases 243  failure to furnish statements and reports 244  failure to comply with direction under this code clauses 245  false statement in verification 246  falsification of books of account or documents 247  abetment of false return 248  offences by companies, etc 249  proof of entries in records or documents 250  presumption as to assets and books of account in certain cases 251  presumption as to culpable mental state 252  prosecution to be instance of chief commissioner or commissioner 253  punishment for second and subsequent offences 254  offences to be non-cognizable 255  disclosure of information by public servants   chapter xvi advance rulings and dispute  resoultion256  scope of ruling and dispute resolution 257  authority for advance rulings and dispute resolution 258  procedure for advance ruling 259  income-tax authority or appellate tribunal not to proceed in certain cases 260  applicability of advance ruling 261  advance ruling to be void in certain circumstances 262  procedure for dispute resolution 263  stay of demand by the authority 264  power to rectify a mistake 265  powers of authority 266  procedure of authority 267  interpretations in this chapter   chapter xvii settlement of cases268  income-tax settlement commission 269  jurisdiction and powers of settlement commission 270  vice-chairperson to act as chairperson 271  power of chairperson to transfer cases from one bench to another 272  decision to be by majority 273  application for settlement of cases 274  additional amount of income-tax 275  admission of application 276   further inquiry into the case 277   order of settlement 278  payment of tax on settlement 279  power of settlement commission to order provisional attachment to protect revenue 280  revival of proceedings before assessing officer clauses  281  powers of settlement commission after admission 282  inspection and furnishing of reports  283  power of settlement commission to grant immunity  284  abatement of proceedings before settlement commission  285  credit for tax paid in case of abatement of proceedings  286  recovery of sums due under order of settlement  287  order of settlement to be conclusive  288  bar on subsequent application  289  proceedings to be judicial proceedings  290  interpretations in this chapter   part h general chapter xviii general provisions291  agreement with foreign countries or specified territory  292  permanent account number  293  tax account number  294  mode of acceptance or repayment of certain loans or deposits  295  obligation to furnish annual information return  296  certain transfers to be void  297  provisional attachment to protect revenue in certain cases  298  service of notice generally  299  authentications of notices and other documents  300  notice deemed to be valid in certain circumstances  301  service of notice when family is disrupted or unincorporated body is dissolved  302  publication of information respecting assessees in certain cases  303  appearance by registered valuer in certain matters  304  appearance by authorised representative  305  rounding off of tax bases and tax  306  indemnity  307  power to tender immunity from prosecution  308  cognizance of offences  309  section 360 of the code of criminal procedure, 1973, and the probation of offenders act, 1958, not to apply  310  return of tax bases not to be invalid on certain grounds  311  presumption as to material found  312  bar of suits in civil courts  313  power to resind  part i interpretations and miscellaneous provisions chapter xix interpretations and constructionsclauses  314  interpretations in this code chapter xx  miscellaneous315  construction 316  power to make rules 317  laying of rules, schemes and notifications before parliament 318  repeal and savings 319  power to remove difficulties the first schedule the second schedule the third schedule the fourth schedule the fifth schedule the sixth schedule the seventh schedule the eighth schedule the ninth schedule the tenth schedule the eleventh schedule the twelfth schedule the thirteenth schedule the fourteenth schedule the fifteenth schedule the sixteenth schedule the seventeenth schedule the eighteenth schedule the nineteenth schedule the twentieth schedule the twenty-first schedule the twenty-second schedule  bill no 110 of 2010 the direct taxes code, 2010 a billto consolidate and amend the law relating to direct taxes  be it enacted by parliament in the sixty-first year of the republic of india as follows:—   chapter i preliminary1   (1) this act may be called the direct taxes code, 2010  5 (2) it extends to the whole of india  (3) save as otherwise provided in this code, it shall come into force on the 1st day of april, 2012   parta income-tax 10 chapter ii basis of  charge2 (1) in accordance with the provisions of this code, every person shall be liable to pay income-tax in respect of his total income of the financial year short title, extent and commencement liability  to pay,  and charge  of, income-tax (2) subject to the provisions of this code, income-tax, including additional income-tax, shall be charged in respect of the total income of a financial year of every person  (3)  where the income-tax referred to in sub-section (2) is to be charged in respect of the income of a period other than the financial year, the income-tax for such period shall be charged accordingly 5 (4) the income-tax referred to in sub-section (2) shall be charged at the rate specified in the first schedule in the manner provided therein  (5) in respect of the income chargeable under sub-section (2), income tax shall be deducted or collected at source or paid in advance, in accordance with the provisions of this code 10  (6) the chargeability of income-tax on the income of a financial year under the foregoing provisions shall be determined in accordance with the provisions of this code as they stand on the 1st day of april of that financial year  3 (1) subject to the provisions of this code, the total income of any financial year of a person, who is a resident, shall include all income from whatever source derived which— 15 (a) accrues, or is deemed to accrue, to him in india during the year; (b)  accrues to him outside india during the year;  (c)  is received, or is deemed to be received, by him, or on his behalf, in india during the year; or (d) is received by him, or on his behalf, outside india during the year 20 (2)  subject to the provisions of this code, the total income of any financial year of a person, who is a non-resident, shall include all income from whatever source derived which— (a) accrues, or is deemed to accrue, to him in india during the year; or (b)  is received, or is deemed to be received, by him, or on his behalf, in india during the year 25  (3) any income which accrues to a resident outside india   during the year, or is received outside india during the year by, or on behalf of, such resident, shall be included in the total income of the resident, whether or not such income has been charged to tax outside india scope of  total income  4   (1) an individual shall be resident in india in any financial year, if he is in india— 30 residence in india (a) for a period, or periods, amounting in all to one hundred and eighty-two days or more in that year; or  (b) for a period, or periods, amounting in all to— (i) sixty days or more in that year; and (ii) three hundred and sixty-five days or more within the four years 35 immediately preceding that year  (2) the provisions of clause (b) of sub-section (1) shall not apply in respect of an individual who is—  (a) a citizen of india and who leaves india in that year as a member of the crew of an indian ship; or 40  (b) a citizen of india and who leaves india in that year for the purposes of employment outside india  (3) a company shall be resident in india in any financial year, if— (a) it is an indian company; or (b) its place of effective management, at any time in the year, is in india  (4)  every other person shall be resident in india in any financial year, if the place of control and management of its affairs, at any time in the year, is situated wholly, or partly, in india  5  5 (1) the income shall be deemed to accrue in india, if it accrues, whether directly or indirectly, through or from:  income deemed  to accrue   in india (a) any business connection in india; (b)  any property in india; (c) any asset or source of income in india; or  10 (d) the transfer of a capital asset situated in india  (2) without prejudice to the generality of the provisions of sub-section (1), the following income shall be deemed to accrue in india, namely:—  (a) income from employment, if it is for– (i) service rendered in india; 15  (ii) service rendered outside india by a citizen of india and the income is receivable from the government; or  (iii) the rest period, or leave period, which precedes, or succeeds, the period of service rendered in  india and forms part of the service contract of employment;  20 (b) any dividend paid by a domestic company outside india;  (c) any  insurance premium including re-insurance premium accrued from or payable by any  resident or non-resident in respect of insurance  covering any risk in india;  (d) interest accrued from or payable by any resident or the government;  25  (e) interest accrued from or payable by any non-resident, if the interest is in respect of any debt incurred  and used for the purposes of—  (i) a business carried on by the non-resident in india; or  (ii) earning any income from any source in india;  (f) royalty accrued from or payable by any resident or the government;  30  (g) royalty accrued from or payable by a non-resident, if the royalty is for the purposes of—  (i) a business carried on by the non-resident in india; or  (ii) earning any income from any source in india;  (h) fees for technical services accrued from or payable by  any resident or the 35 government;  (i) fees for technical services accrued from or payable by any non-resident, in respect of services utilised for the purposes of—  (i) a business carried on by the non-resident in india; or  (ii) earning any income from any source in india;  40 (j)   transportation charges accrued from or payable by   any resident or the government; (k) transportation charges accrued from or payable by any non-resident, if the transportation charges are in respect of the carriage to, or from, a place in india  (3) for the purposes of clause (a) of sub-section (1), in the case of a business of which all the operations are not carried out in india, the income of the business deemed to accrue in india shall be only such part of the income as is reasonably attributable to the 5 operations carried out in india  (4) the income deemed to accrue in india under sub-section (1) shall, in the case of a non-resident, not include the following, namely:—  (a) any income accruing through, or from, operations which are confined to the purchase of goods in india for the purposes of export out of india; 10 (b) interest accrued from or payable by a resident, in respect of any debt incurred and used for the purposes of—  (i) a business carried on by the resident outside india; or  (ii) earning any income from any source outside india;  (c)  royalty accrued from or payable by a resident for the purposes of— 15 (i) a business carried on by the resident outside india; or (ii) earning any income from any source outside india;  (d) royalty consisting of lump sum consideration accrued from or payment made by a resident for the transfer of any rights (including the granting of a licence) in respect of computer software supplied by the non-resident manufacturer, along with a 20 computer or computer-based equipment, under any scheme approved under the policy on computer software export, software development and training, 1986 issued by the government of india;  (e) fees for technical services accrued from or payable by a resident, in respect of services utilised for the purposes of— 25  (i) a business carried on by the resident outside india; or  (ii) earning any income from any source outside india;  (f)  transportation charges for the carriage by aircraft or ship accrued from or payable by any resident, if the transportation charges are in respect of the carriage from a place outside india to another place outside india, except where the airport or 30 port of origin of departure of such carriage is in india;  (g) income from transfer, outside india, of any share or interest in a foreign company unless at any time in twelve months preceeding the transfer, the fair market value of the assets in india, owned, directly or indirectly, by the company,  represent at least fifty per cent of the fair market value of all assets owned by the company; 35  (h) interest accrued from or payable by a non-resident as referred to in subclause (ii) of clause (e) of sub-section (2), if such interest has not been claimed by the non-resident as a deduction from his tax bases chargeable in india  (5) the provisions of clauses (c) to (k) of sub-section (2) shall be applicable, whether or not,—  40 (a) the payment is made in india; (b) the services are rendered in india;  (c) the non-resident has a residence or place of business or any business connection in india; or  (d) the income has accrued in india 45 (6) where the income of a non-resident, in respect of transfer, outside india, of any share or interest in a foreign company, is deemed to accrue in india under clause (d) of subsection (1), it shall be computed in accordance with the following formula—  | a x b                                                      |     ||------------------------------------------------------------|-----|| 5                                                          |     || c                                                          |     ||                                                            |     || where a                                                    | =   || provisions of this code as if the transfer was effected in |     || india;                                                     |     || b                                                          | =   || 10                                                         |     || or indirectly, by the company;                             |     || c                                                          | =   |6 the following income shall be deemed to be received in the financial year, namely:— (a) any contribution made by an employer, in the financial year, to the account of an employee under a pension fund;  15  (b) any contribution made by an employer, in the financial year, to the account of an employee in any other fund;  (c) the annual accretion, in the financial year, to the balance at the credit of any employee in a fund referred to in clause (b) to the extent it exceeds the limit as may be prescribed  20 7  for the purposes of inclusion in the total income of an assessee—  (a) any dividend declared, distributed or paid by a company within the meaning of item (a) or item (b) or item (c) or item (d) or item (e) of  sub-clause (i) of clause (81) of section 314 shall be deemed to be the income of the financial year in which it is so declared, distributed or paid, as the case may be;  25  (b) any interim dividend shall be deemed to be the income of the financial year in which the amount of such dividend is unconditionally made available by the company to the member who is entitled to it  8 (1) the total income of any person, being a transferor, shall include the following, namely:—   income deemed to  be received  in the financial  year  dividend income  total  income to  include income of  any other  person 30  (a) any income accruing to any other person, by virtue of a transfer, whether revocable or not, without transfer of the asset from which the income accrues; or  (b) any income accruing to any other person, by virtue of a revocable transfer of an asset  (2) the provisions of clause (b) of sub-section (1) shall not apply in a case where—  35  (a) any income accrues from an asset transferred to any trust, if the transfer is not revocable during the life time of the beneficiary of the trust; or  (b) any income accrues from an asset transferred to any other person, not being a trust, if the transfer is not revocable during the lifetime of such other person  (3) in this section,—  40 (a) a transfer shall be deemed to be revocable if— (i) it contains any provision for the re-transfer, 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 re-assume power, directly or indirectly, over the whole or any part of the income or assets;  45  (b) a transfer shall include any settlement, trust, covenant, agreement or arrangement 9   (1) the total income of any individual shall include— (a) all income which accrues, directly or indirectly,— income of individual  to include  income of spouse,  minor child  and others (i) to the spouse, by way of salary, commission, fees or any other form of remuneration, whether in cash or in kind, from a concern in which the individual has a substantial interest; 5  (ii) from assets transferred, directly or indirectly, to the spouse by the individual, otherwise than for adequate consideration, or in connection with an agreement to live apart;  (iii) from assets transferred, directly or indirectly, to the son's wife by the individual, otherwise than for adequate consideration; or 10  (iv) from assets transferred, directly or indirectly, to any other person by the individual otherwise than for adequate consideration, to the extent to which the income from such assets is for the immediate or deferred benefit of the spouse or son's wife;  (b) all income which accrues to a minor child (other than a minor child being a   15 person with disability or person with severe disability) of the individual, other than income which accrues to the child on account of any—  (i) manual work done by the child; or  (ii) activity involving application of the skill, talent or specialised knowledge and experience of the child; 20 (c) all income derived from any converted property or part thereof; (d) all income derived from any converted property which is received by the spouse or minor child upon partition of the hindu undivided family of which the individual is a member  (2) the provisions of sub-clause (i) of clause (a) of sub-section (1) shall not apply in   25 relation to any income accruing to the spouse where the spouse possesses technical or professional qualifications and the income is solely attributable to the application of the technical or professional knowledge and experience of the spouse  (3)  the income referred to in sub-clause (i) of clause (a) of sub-section (1) shall, notwithstanding  anything contained therein, be included in the total income of the spouse   30 whose total income (excluding the income referred to in that sub-clause) is higher  (4) the board may prescribe the method for determining the income referred to in subclause (ii) and sub-clause (iii) of clause (a) of sub-section (1)  (5) the income referred to in clause (b) of sub-section (1) shall be included in the total income of— 35  (a) the parent who is the guardian of the minor child; or  (b) the parent whose total income (excluding the income referred to in that clause) is higher, if both the parents are guardians of the child  (6) where any income referred to in clause (b) of sub-section (1) is once included in the total income of a parent, any such income arising in the succeeding year shall not be   40 included in the total income of the other parent, unless the assessing officer considers it necessary to do so after giving an opportunity of being heard to the other parent  (7) in this section, "property" includes any interest in property whether movable or immovable, the sale proceeds of such property, in whichever form and where the property, is converted into any other form of property by any method, such other property 45 10 subject to the provisions of this code, the total income of a financial year of a person shall not include  the income enumerated in the sixth schedule  11  the persons, entity or funds enumerated in the seventh schedule shall not be liable to income-tax under this code for any financial year, subject to the fulfillment of 5 conditions specified in the said schedule  chapter iii computation total income i— general 12 (1) the total income of a person shall be computed in accordance with the provisions 10   of this chapter  (2)   unless otherwise provided in this code, reference to any accrual, receipt, expenditure, withdrawal, asset or liability shall be construed to be in relation to  the financial year in respect of which,  and  the person in respect of whom, the income is computed  13 for the purposes of computation of total income of any person for any financial 15   year, income from all sources shall be classified as follows: a— income from ordinary sources b— income from special sources  income not included in  the total  income persons, entity or  funds not  liable to income-tax computation of total income classification of sources  of income  14  the income from any source, other than a special source, shall be computed under the class "income from ordinary sources" and such income shall be  classified under the 20   following heads of income, namely:—  a— income from employment b— income from house property c— income from business d— capital gains  25 e— income from residuary sources  15 (1) every income listed in column (3) of the table in part iii of the first schedule shall be the income from a special source of the person specified in column (2) of the said table  (2) the income from any special source shall be computed under the class "income 30   from special sources" in accordance with the provisions of the ninth schedule  (3) notwithstanding anything in sub-section (1), the income referred to therein shall not be considered as income from a special source, if such income is attributable to the permanent establishment of a non-resident in india  16 (1) the income of the husband and wife, governed by the communiao dos bens, 35   from ordinary sources under each head of income (other than the head "income from employment") and from special sources shall be apportioned equally between the spouses  (2) the income so apportioned under sub-section (1) shall be included separately in the total income of the spouses  (3) the income under the head "income from employment" shall be included in the computation of income from ordinary sources computation of income from  special sources  apportionment of income between spouses governed by portuguese civil code 40   total income of the spouse who has actually earned it  (4) in this section, communiao dos bens refers to the system of community of property under the portuguese civil code of 1860 as in force in the state of goa and in the union territories of dadra and nagar haveli and daman and diu   17 subject to the provisions of this code,— (i) any income which is included in the total income of a person for any financial year shall not be so included again in the total income of such person for the same or any other financial year avoidance of double  taxation (ii) any income which is includible in the total income of any person shall not be 5 included in the total income of any other person,  except where for the purposes of protecting the interests of revenue, it is necessary to do so  18 (1) in computing the total income of a person for any financial year, the following shall not be allowed as a deduction, namely:—  (a) any expenditure, attributable to income which is not included in the total   10 income under the sixth schedule, determined in accordance with such method as may be prescribed;  (b) any expenditure attributable to any income from special sources;  (c) any expenditure which has been allowed as a deduction in any other financial year; 15  (d) any expenditure incurred for an activity which is an offence or which is not permissible by law;  (e) any provision made for any liability, if it remains unascertained by the end of the financial year; and  (f) any unexplained expenditure referred to in clause (q) of sub-section (2) of 20 section 58  (2) any amount allowed as a deduction under any provision of this code shall not be allowed as a deduction under any other provision of this code  expenditure  not to be allowed as deduction (3)  the provisions of this section shall apply notwithstanding anything in any other provisions of this chapter 25  19 (1) any amount on which tax is deductible at source under chapter xiii during the financial year shall not be allowed as a deduction in computing the total income if,—  (a) the tax has not been deducted during the financial year; or  (b) the tax, after such deduction, has not been paid on or before the due date specified in sub-section (1) of section 144 30  (2) a deduction shall be allowed in respect of the amount referred to in sub-section (1) in any subsequent financial year, if—  (a) tax has been deducted during the financial year, but paid in such subsequent year after the due date specified in sub-section (1) of section 144; or  (b) tax has been deducted and paid in such subsequent financial year 35   ii heads of income a - income from employmentamount not deductible  where tax is  not deducted  at source 20 the income of a person from employment shall be computed under the head "income from employment"   income  from employment   21 the income computed under the head "income from employment" shall be the 40 gross salary as reduced by the aggregate amount of the deductions referred to in section 23 computation  of income  from employment 22 the gross salary shall be the amount of salary due, paid, or allowed, whichever is earlier, to a person in the financial year by or on behalf of his employer or former employer  23 (1) the deductions from the gross salary for computation of income from employment, to the extent included in the gross salary, shall be the following, namely:—  5  (a) any sum paid by the employee on account of a tax on employment within the meaning of clause (2) of article 276 of the constitution;  (b) any allowance or benefit granted by an employer for journey by an employee between his residence and office or any other place of work, to such extent as may be prescribed;  10 (c) any allowance or benefit granted by an employer to an employee—  (i) to meet expenses wholly, necessarily and exclusively in the performance of the duties of an office or employment of profit, as may be prescribed, to the extent  such expenses are actually incurred for that purpose;  (ii) to meet personal expenses, considering the place of posting or nature 15 of duties or place of residence, subject to such conditions and limits as may be prescribed;  (d) any amount of contribution made by an employer, in the financial year, to the account of an employee under an approved pension fund  notified by the central government, to the extent it does not exceed ten per cent of the salary of the employee;  20  (e) any amount of contribution made by an employer, in the financial year, to the account of an employee in an approved superannuation fund;  (f)  any amount of contribution by an employer, in the financial year, to an account of an employee in an approved provident  fund, to the extent it does not exceed twelve per cent of the salary of the employee;  25  (g)  any amount of interest credited, in the financial year, on the balance to the credit of an employee in an approved fund to the extent it does not exceed the amount of interest payable at the rate notified by the central government;  (h)  any allowance provided by an employer to meet the expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the 30 employee, to such extent as may be prescribed  (2)  for the purposes of clauses (d), (f) and (h) of sub-section (1), salary means basic salary and includes dearness allowance, if the terms of employment so provide   b—income from house property24 (1) the income from letting of any house property owned by any person shall be 35   computed under the head "income from house property"  scope of  gross salary  deductions from  gross salary  income  from house property (2) the income from any house property shall be computed under this head notwithstanding that the letting, if any, of the property is in the nature of trade, commerce or business  (3) the income from any house property owned by two or more persons having 40   definite and ascertainable shares shall be computed separately for each such person in respect of his share  (4) in a case where the shares of the owners of the house property referred to in subsection (3) are not definite and ascertainable, such persons shall be assessed as an association of persons in respect of such property  45 (5) the provisions of this section shall not apply,-  (a) to the house property, or any portion of the house  property, which— (i) is used by the person as a hospital, hotel, convention centre or cold storage; and  (ii) forms part of special economic zone,  the income from which is computed under the head "income from business";  (b) to a house  property which is not ready for use during the financial year 5 25 the income from house property shall be the gross rent as reduced by the aggregate amount of the deductions referred to in section 27  computation   of income  from house  property  26  the gross rent in respect of a house property or any part of the property shall be the amount of rent received or receivable, directly or indirectly, for the financial year or part thereof, for which such property is let out 10 scope of  gross rent    27 (1) the deductions for the purposes of computation of income from house property shall be the following, namely:—  (a) the amount of taxes levied by a local authority in respect of such property, to the extent the amount is actually paid by him during the financial year;  (b) a sum equal to twenty per cent of the gross rent determined under section 26,   15 towards repair and maintenance of such property;  (c) the amount of any interest,—  (i) on  loan taken for the purposes of  acquisition, construction, repair or renovation of the property; or  (ii) on loan taken for the purpose of repayment of the loan referred to in 20 sub-clause (i);  (2) the interest referred to in clause (c) of sub-section (1) which pertains to the period prior to the financial year in which the house property has been acquired or constructed shall be allowed as deduction in five equal instalments beginning from such financial year  (3) the interest deductible under sub-section (2) shall be reduced by any part thereof   25 which has been allowed as deduction under any other provision of this code  deductions  from gross  rent  28 the amount of rent received in advance shall be included in the gross rent of the financial year to which the rent relates  provision  for advance  rent received  29 (1) the amount of rent received in arrears shall be deemed to be the income from house property of the financial year in which such rent is received 30  (2) the arrears of rent referred to in sub-section (1) shall be included in the total income of the person under the head income from house property, whether the person is the owner of the property in that year or not  (3) a sum equal to twenty per cent of the arrears of rent referred to in sub-section (1) shall be allowed as deduction towards repair and maintenance of the property 35   c—income from businessprovision  for arrears  of rent received income  from business 30 (1) the income from any business carried on by the assessee at any time during a financial year shall be computed under the head "income from business"  (2) the income of distinct and separate business referred to in section 31 shall be computed separately for the purposes of sub-section (1) 40  (3) any income from a business after its discontinuance shall be deemed to be the income of the recipient in the year of receipt and shall, accordingly, be computed under the head "income from business" 31 (1) a business shall be distinct and separate from another business if there is no interlacing or inter-dependence between  the  businesses (2) a business shall be deemed to be distinct and separate from another business, if— (a) the unit of the business is processing, producing, manufacturing or trading the same goods as in the other business and such unit is located physically apart from 5 the other unit; (b) the unit of the business is processing, producing or manufacturing the same goods as in the other business and utilises raw material or manufacturing process, which is different from the raw material or the manufacturing process of the other unit; (c) separate books of account are maintained or capable of being maintained, for 10 the business; or (d) it is a business in respect of which profits are determined under sub-section (2) of section 32 (3) a speculative business shall be deemed to be distinct and separate from any other business including other speculative business  15  32 (1) the income computed under the head "income from business" shall be the profits from the business business when treated distinct and  separate computation of income from  business (2) the profits from the business of the nature specified in column (2) of the table given below shall be computed in accordance with the provisions contained in the schedule specified in the corresponding entry in column (3) of the said table  20 table  sl nature of business schedule no  (1) (2) (3)  1 business of insurance eighth schedule 25   2 business of operating a qualifying ship tenth schedule 3 business of mineral oil or natural gas eleventh  schedule 4 business specified in paragraph 1 of the twelfth schedule twelfth schedule  5 business specified in paragraph 1 of the thirteenth schedule   thirteenth  schedule 30   6 business listed in column (2) of the table in the fourteenth schedule fourteenth schedule where income is determined on presumptive basis  (3) the profits from any business not referred to in sub-section (2) shall be the gross earnings from the business as reduced by the amount of business expenditure incurred by 35   the assessee  gross  earnings 33 (1) the gross earnings referred to in sub-section (3) of section 32 shall be the aggregate of the following, namely:— (i) the amount of any accrual or receipt from, or in connection with, the business; (ii) the value of any benefit or perquisite, whether convertible into money or not, 40 accrued or received from, or in connection with, the business;  (iii) the value of the inventory of the business, as on the close of the financial year; and  (iv) any amount received from a business after its discontinuance (2) the accruals or receipts referred to in sub-section (1) shall, without prejudice to the generality of the provisions of that sub-section, include the following, namely:— (i) the amount of any compensation or other payment, accrued or received, for— (a) termination or modification of terms and conditions relating to management of business, any business agreement or any agency; or  (b) vesting of the management of any property or business in another person or the government;  (ii) any consideration, accrued or received under a non-compete agreement;  (iii) any amount or value of any benefit, whether convertible into money or not, accrued to, or received by a person, being a trade, professional or similar association, in respect of specific services performed for its members;  (iv) any consideration on sale of a licence, not being business capital assets, obtained in connection with the business;  (v) any consideration on transfer of a right or benefit (by whatever name called) accrued or received under any scheme framed by the government, local authority or a corporation established under any law for the time being in force;  (vi) the amount of cash assistance, subsidy or grant (by whatever name called), received from any person or the government for, or in connection with, the business other than to meet any portion of the cost of any business capital asset;  (vii) the amount of any remission, drawback or refund of any tax, duty or cess (not being a tax under this code), received or receivable;  (viii) the amount of remuneration (including salary, bonus and commission) or any interest accrued to, or received by, a participant of a unincorporated body from such body;  (ix)  any sum received under a keyman insurance policy including the sum allocated by way of bonus on such policy;  (x) the amount of profit on transfer, demolition, destroyal or discardment of any business capital asset (other than a business capital asset used for scientific research and development) computed in accordance with the provisions of section 42;  (xi) any consideration accrued or received on transfer of carbon credits;  (xii) the amount of any benefit accrued to, or received by, the person, or as the case may be, the successor in business, if—  (a) it is by way of remission or cessation of any trading liability or statutory liability or it is in respect of any loss or expenditure, including a unilateral act by way of writing off such liability in his accounts; and  (b) the trading liability or statutory liability or loss or expenditure has been allowed as deduction in any financial year;  (xiii) the amount of  remission or cessation of any liability by way of loan, deposit, advance or credit;  (xiv) the amount recovered from a trade debtor in respect of a bad debt or part of debt which has been allowed as deduction in any financial year under clause (c) or clause (d) or clause (e) of sub-section (3) of section 35; 5 10 15 20 25   30   35 40  43 0f  1961 45 (xv) the amount withdrawn from any special reserve created and maintained under any provision of this code or the income-tax act, 1961, as its stood before the commencement of this code  for which deduction has been allowed, if the amount is not utilised for the purpose and within the period specified therein; (xvi) the amount accrued to, or received by, the person from his employees as their contribution to any fund for their welfare; (xvii) the amount accrued or received on sale of any business capital asset used for scientific research and development; 5  (xviii) any consideration accrued or received in respect of transfer of any capital asset self-generated in the course of the business; (xix) any amount accrued or received on account of the cessation, termination or forfeiture in respect of agreement entered in the course of the business; (xx) any amount accrued or received, whether as an advance, security deposit or 10 otherwise, from the long term leasing, or transfer of— (a) whole or part of any business asset; or (b) any interest in a  business asset; (xxi) any amount  received as reimbursement of any expenditure incurred; (xxii) any interest accrued to, or received by, a person being a financial institution 15  (xxiii) any payment or aggregate of payments made to a person in a day, in respect of an expenditure incurred during the financial year or in respect of a liability incurred and allowed as a deduction in any preceding financial year,— (a) which has been made otherwise than by an account payee cheque drawn on a bank or by an account payee bank draft; 20 (b) which exceeds— (i) a sum of thirty five thousand rupees if the payment is made to transporter for carriage of goods by road; or (ii) a sum of twenty thousand rupees in any other case; and (c) which has not been made in such cases and in such circumstances as 25 may be prescribed (xxiv) any amount standing to the credit of the fund referred to in section 82,   (a) income-tax has not been paid on such amount in any financial year preceding the relevant financial year; and if—  30 (b) the amount is shared during the relevant financial year, either wholly or in part, with a recognised stock exchange or recognised commodity exchange (3) the gross earnings from business shall not include the following, namely:— (a) any dividend; (b) any interest other than interest accrued to, or received by, a person being a 35 financial institution; (c) any income from letting of house property which is included under the head income from house property; (d) any income from the transfer of an investment assets  34  (1) the amount of business expenditure referred to in  sub-section (3) of section  determination of business expenditure 40   32 shall be the aggregate of the following amounts, namely:—  (a) the operating expenditure referred to in section 35, incurred by the person for the purposes of the business carried on during the financial year;  (b) finance charges referred to in section 36, incurred by the person for the purposes of the business carried on during the financial year;  45  (c) capital allowances referred to in section 37, in respect of the business carried on by the person during the financial year (2)  the provisions for deduction of capital allowances referred to in sub-section (1) shall apply, whether or not the person has claimed the deduction in computing the total income  (3) the assessing officer may restrict the amount of deduction under this section to such amount as he considers appropriate having regard to the use of a business asset if such 5 asset is not exclusively used for the purposes of the business  35 (1) the amount of operating expenditure referred to in clause (a) of sub-section (1) determination of  operating expenditure of section 34 shall be the aggregate of—  (a) the amount of expenditure specified in sub-section (2), if—  (i) the expenditure is laid out or expended, wholly and exclusively, for the   10 purposes of the business; and  (ii) it fulfills other conditions, if any, specified therein; and  (b) the amount of deductions specified in sub-section (3) subject to the fulfillment of the conditions, if any, specified therein  (2) the amount of expenditure referred to in clause (a) of sub-section (1) shall be the    15 amount of expenditure on, or on account of,—  (i) purchase of raw material, stores, spares and consumables, or stock-in-trade; (ii) rent paid for any premises if it is occupied and used by the person; (iii) current repairs to buildings if it is occupied and used by the person;  (iv) land revenue, local rates or municipal taxes in respect of premises occupied   20 and used by the person is actually paid;  (v) current repair of machinery, plant or furniture used by the person; (vi) current maintenance or repairs of computer software or hardware; (vii) salary or wages of employees; (viii) remuneration to any working participant which is in accordance with the   25 agreement of the unincorporated body and relates to the period falling after the date of such agreement limited to the extent as may be preseribed;  (ix) any premium paid to effect, or to keep in force, an insurance in respect of,— (a) any premise occupied and used by the person; (b) any machinery, plant or furniture used by the person; 30 (c) stocks or stores belonging to the person; (d) the health of any employee of the person; and  (e) any other asset owned and used by the person;  (x) any premium paid by the person, being a federal milk co-operative society, to effect, or to keep in force, an insurance on the life of the cattle owned by a member of   35 a co-operative society, being a primary society engaged in supplying milk, raised by its members to such federal milk co-operative society (xi) welfare of workmen and staff; (xii) power and fuel; (xiii) freight, clearing and forwarding charge; (xiv) selling expense in the nature of commission, brokerage, discount, or warranty charge; (xv) sales promotion including advertisement and publicity; (xvi) training of employees; 5 (xvii) conference; (xviii) use of hotel or boarding and lodging facilities; (xix) conveyance, tour or travel; (xx) running or maintenance of motor car or aircraft; (xxi) postage and telecommunications; 10 (xxii) audit and such other professional fees; (xxiii) legal services; (xxiv) entertainment and provision of hospitality; (xxv) maintenance of guest-house; (xxvi) subscription, including entrance fee, to a club or a trade association or the 15 use of their facilities; (xxvii) scientific research and development related to the business; (xxviii) salary to an employee engaged in, or  the purchase of material used in, scientific research and development, within a period of three years immediately preceding the commencement of the business; 20  (xxix) contribution by the person, being an employer, to an approved fund subject to such limits and conditions, as may be prescribed and to the extent the amount is actually paid; (xxx) contribution to any fund, referred to in clause (xvi) of sub-section (2) of section 33, to the extent,— 25  (a) the amount has been received from his employees as their contribution to the fund; and (b) it is actually paid; (xxxi) any head office expenditure by a non-resident, as is attributable to his business in india, not exceeding an amount equal to one-half per cent of the total 30 sales, turnover or gross receipts of business in india; (xxxii) cost of acquisition of the asset as in the case of the predecessor and cost of any improvement made thereto and expenditure incurred wholly and exclusively in connection with the transfer of the asset, by the predecessor, if - (a) the person is the successor in the business reorganisation;  35  (b) the asset becomes the property of the person under a scheme of business reorganisation; and (c) the asset is sold by the person as a business trading asset; (xxxiii) cost of acquisition of the asset as in the case of the transferor or the donor, and cost of any improvement made thereto and expenditure incurred wholly 40 and exclusively in connection with the transfer of the asset (including the payment of gift tax, if any), by the transferor or the donor, if - (a) the person is the transferee or the donee; (b) the asset becomes the property of the person on the total or partial partition of a hindu undivided family or under a gift or will or an irrevocable 45 trust; and (c) the asset is sold by the person as a business trading asset; (xxxiv) protecting or safeguarding the goodwill of person, which has necessarily to be preserved for the purpose of his business; (xxxv) tax (not being a tax under this code), duty, cess, royalty or fee, by whatever name called, under any law for the time being in force, if the amount is actually paid; (xxxvi) bonus or commission to employees for services rendered if— 5 (a) the amount would not have been payable to employees as profits or dividends had it not been paid as bonus or commission; and (b) the amount is actually paid; (xxxvii) encashment of leave to the credit of employees, to the extent the amount is actually paid; 10 (xxxviii) gratuity to employees on their retirement or on termination of their employment, to the extent the amount is actually paid; (xxxix) the purposes of a body corporate constituted or established under a central, state or provincial act, if— (a) such purposes are authorised by the said act; 15 (b) such body corporate is notified by the central government for the purposes of this clause; (xl) the amount paid by a public financial institution by way of contribution to a credit guarantee fund trust for small industries which is notified by the central government for the purposes of this clause; 20 (xli) the actual cost of the licence referred to in clause (iv) of sub-section (2) of section 33, in the year in which the consideration on account of sale forms part of gross earnings; (xlii) the actual cost of the right or benefit referred to in clause (v) of sub-section (2) of section 33, in the year in which the consideration for transfer forms part of   gross 25 earnings; (xliii) the repayment of any advance or security deposit in respect of the longterm leasing referred to in clause (xx) of sub-section (2) of section 33, in the year in which such repayment is made;  (xliv) any other operating expenditure not covered under clause (i) to clause   30 (xliii) (3) the amount of deductions referred to in clause (b) of sub-section (1) shall be the following, namely:— (a) the value of inventory of the business, as at the beginning of the financial year; 35 (b) loss of inventory, or money, on account of theft, robbery, fraud or embezzlement, occurring in the course of the business, if the inventory, or the money, is written off in the books of account; (c) any amount credited to the provision for bad and doubtful debts account, not exceeding one per cent of the aggregate average advances computed in the   40 prescribed manner if,— (i) the person is a financial institution, or a non-banking finance company as may be notified; (ii) the amount is charged to the profit and loss account for the financial year in accordance with the prudential norms of the reserve bank of india in this   45 regard; and (iii) the amount of trade debt or part thereof written off as irrecoverable in the books of the person is debited to the provision for bad and doubtful debts account; (d) the debit balance, if any, on the last day of the financial year, in the provision for bad and doubtful debts account made under clause (c), if the balance has been transferred to the profit and loss account of the financial year; (e) trade debt or part thereof, if,— (i) the person is other than a person referred to in sub-clause (i) of clause (c); and (ii) the amount is written off as irrecoverable in the books of the person; (f) payment during the financial year in discharge of any remitted or ceased 5  liability which has been included in the gross earnings of any preceding financial year under clause (xii) or clause (xiii) of sub-section (2) of section 33 (4) notwithstanding anything in sub-section (2) or sub-section (3) the amount of operating expenditure shall not include the amount of expenditure, being in the nature of, or on account of, - (a) personal expenses of the person; 10  (b) capital expenditure including expenditure in respect of which capital allowance is allowable under section 37; (c) finance charges; (d) any unascertained liability of the person; (e) remuneration payable to any participant other than a working participant; 15 (f) any expenditure incurred by a person on advertisement in any souvenir, brochure, tract, pamphlet or the like published by a political party; (g) any amount of contribution by an employer during the finanical year to an approved superannuation fund on account of an employee to the extent it exceeds one lak rupees; 20 (h) any tax, interest or penalty payable under this code or the income-tax act, 25 1961 or the welath tax act, 1957 as they stood before the commencement of this code; (i) any amount paid which is eligible for relief of tax under section 207; and (j) any dividend declared or distributed or paid 43 of  1961 27 of  1957 (5) any amount of expenditure or deduction referred to in sub-section (1) or subsection (2) or under section 36 or under section 37, if it is in excess of the amount or in breach of the condition specified therein, shall not be allowed as deduction under clause (xliv) of sub-section (2) on the ground that it is laid out or expended, wholly and exclusively, for the purposes of business 30  (6) the deduction in respect of the amount referred to in clauses (iv), (xxx) and clauses (xxxv) to (xxxviii) of sub-section (2) shall, notwithstanding anything contained in subsection (1), be allowed in the financial year in which the liability has arisen, if it is paid in the financial year or by the due date of filing return of tax bases of that financial year (7) if any deduction is not allowed on account of the provisions of sub-section (6), it shall be allowed in the financial year in which the amount is actually paid 35  36 (1) the amount of finance charges referred to in clause (b) of sub-section (1) of section 34 shall be—  determination of finance charges (a) the amount of interest paid on any capital borrowed or debt incurred; (b) the amount of interest paid to trade creditors; 40  45 (c) the amount of interest paid to any participant, which is in accordance with the agreement of formation of unincorporated body and relates to the period falling after the date of such agreement, limited to the extent as may be prescribed; (d) the amount of any incidental financial charges; (e) the proportionate amount of discount or premium payable on any bond or debenture issued by the person, calculated in the manner as may be prescribed (2) the amount of finance charges referred to in sub-section (1) shall not include— (a) any amount paid in respect of capital borrowed or debt incurred for acquisition of a capital asset (whether capitalised in the books of account or not) for any period— 5 (i) in the case of a new business, prior to the date of commencement of such business; and use; (b) any amount of incidental financial charges for issue of convertible debentures or bonds or share capital; and (c) any amount of interest referred to in section 23 of micro, small and medium enterprises development act, 2006 (3) the amount of interest on any capital borrowed or debt incurred, which is payable to any financial institution, shall be allowed as a deduction, notwithstanding anything in sub-section (1), in the financial year in which the amount is actually paid or in the financial year in which the liability has accrued, whichever is later (4) any interest referred to in sub-section (3) which has been converted into a loan or borrowing shall not be deemed to have been actually paid for the purposes of that subsection (5) in this section, "capital borrowed" shall include recurring subscriptions received periodically from shareholders, or subscribers, in a mutual benefit finance company, which fulfils such conditions as may be prescribed  (ii) in any other case, prior to the date on which such asset was first put to37 (1) the amount of capital allowances referred to in clause (c) of sub-section (1) of section 34 shall be the aggregate of the amount in respect of,— (a) depreciation of business capital assets; (b) initial depreciation of business capital assets; (c) terminal allowance; (d) scientific research and development allowance; (e) deferred revenue expenditure allowance (f) deduction of an amount in accordance with such deposit scheme in respect of the person carrying on business of growing and manufacturing tea or coffee or rubber in india, as may be prescribed; (2) the depreciation, initial depreciation or terminal allowance, referred to in subsection (1), shall be allowed in respect of any business capital asset if the asset is,— (a) owned, wholly or partly, by the person; and (b) used for the purposes of the business of the person (3) the condition referred to in clause (a) of sub-section (2) shall not apply in the case of a business capital asset being a capital expenditure on any building which is held by the person under a lease or other right of occupancy (4) a business capital asset shall be deemed to be owned by the person if he is a lessee in terms of a financial lease (5) the amount of deferred revenue expenditure allowance referred to in clause (e) of sub-section (1) shall be such amount as computed in accordance with the twenty-second schedule determination of capital allowances  determination of  depreciation 38 (1) the amount of depreciation of business capital assets referred to in section 37 shall be the aggregate of the following, namely:— (a) such percentage of the adjusted value of any block of assets as specified in the fifteenth schedule, in respect of all the business capital assets forming part of the relevant block of assets specified therein; and  27 of  2006  (b) "nil", in respect of any other business capital asset not forming part of any block of assets specified in the fifteenth schedule  (2) the depreciation allowance on assets referred to in section 37 shall, notwithstanding the fact that all business capital assets in any block of assets have ceased to exist by reason 5      of being demolished, destroyed, discarded or transferred, be allowed to the person in respect of the block of assets, if the adjusted value of the block of assets is greater than zero  (3) the deduction under this section in respect of an asset shall be restricted to fifty per cent of the sum referred to in sub-section (1) if -  (a) the asset is acquired by the person during the financial year; and  10  (b) is used for the purposes of business for a period of less than one hundred and eighty days in the relevant financial year  (4) the depreciation in respect of any business capital asset, notwithstanding anything contained in any other provision of this code, shall not be allowed if,—  (a) the asset does not form part of any block of assets specified in the fifteenth schedule; or  15  (b) the expenditure incurred for acquiring the asset has been allowed as a deduction under any provision of this code   determination of initial depreciation 39 (1) a person shall be allowed, in addition to depreciation, an initial depreciation of business capital assets if,—  (a) the person is engaged in the business of manufacture or production of any 20 article or thing;  (b) the asset is a new asset forming part of the class of assets "machinery and plant" specified in the fifteenth schedule;  (c) the asset was not used either within or outside india by any other person before its installation by the person;  25  (d) the asset is not installed in any office premises or any residential accommodation, including accommodation in the nature of a guest-house;  (e) the asset is not in the nature of any office appliances; and  (f) the whole of the actual cost of the asset is not allowed as a deduction (whether by way of depreciation or otherwise) in computing the income under the head "income 30 from business" of any financial year  (2) the initial depreciation referred to in sub-section (1),—  (a) shall be an amount equal to twenty per cent of the actual cost of the asset; and   (b) shall be allowed in the financial year in which the asset is used for the first 35 time for the purposes of the business of the person  (3) the deduction under this section in respect of such asset shall be restricted to fifty per cent of the sum referred to in sub-section (2), if the asset is used for the purposes of business for a period of less than one hundred and eighty days in the relevant financial year  40 (1) a person shall be allowed a terminal allowance in respect of a block of assets, 40   if,—  deduction  for terminal allowance (a) the block of assets has ceased to exist by reason of being demolished, destroyed, discarded or transferred during the financial year; and (b) the percentage specified in the fifteenth schedule for computing depreciation in respect of the block of assets is zero (2) the terminal allowance referred to in sub-section (1) shall be computed in accordance with the formula—  a + b - c where a = the written down value of the block of asset at the beginning of the financial 5 financial year; and  c = the amount accrued or received in respect of the assets which are demolished, destroyed, discarded or transferred during the financial year together 10 with the value of the carcass or the scrap, if any  (3) the terminal allowance referred to in sub-section (1) shall be treated as "nil", if the net result of the computation, thereunder, is negative  year;   b = the actual cost of any asset falling within that block, acquired during the  41 (1) a company shall be allowed a deduction equal to two hundred per cent of the expenditure (not being expenditure in the nature of cost of any land or building) incurred 15 on,—  (a) creating and maintaining an in-house facility for scientific research and development; and  (b) carrying out scientific research and development in the in-house facility  (2) the deduction under sub-section (1) shall be allowed if,— 20  (a) the company creates and maintains an in-house facility for carrying out scientific research and development;  (b) the research facility is approved by the central government on the basis of recommendation of the prescribed authority; and  (c) the company enters into an agreement with the prescribed authority for 25 cooperation in the research and development facility and for audit of the accounts maintained for such facility  (3) the approval granted to a predecessor shall be deemed to have been granted to the  successor if the approval is transferred to the successor as a result of a business reorganisation 30   (4) the deduction under this section shall not be allowed to a company in respect of the expenditure referred to in sub-section (1), if the expenditure is incurred in the course of its business in the nature of scientific research and development  (5) the board may for the purposes of this section, prescribe the nature of business, conditions and manner as may be considered necessary for grant of approval 35   deduction  for s c i e n t i f i c research   and development allowance42 (1) the amount of profit, where a business capital asset, which forms part of a block of assets specified in the fifteenth schedule, is transferred discarded, destroyed or destructed shall be computed in accordancewith the formula- computation of proft  on transfer  of a business capital  asset a-(b+c) where a = the amount accrued or received in respect of such asset, 40 which  is  transferred,  discarded,  destroyed  or destructed during the financial year together with the amount of scrap value, if any; b = the amount of written down value of such block of assets at the beginning of the financial year; 45  | c =                                         | the actual cost of any asset falling within that block of    ||---------------------------------------------|--------------------------------------------------------------|| assets, acquired during the financial year; |                                                              |(2) the profit referred to in sub-section (1) shall be treated as 'nil', if the net result of the computation, thereunder, is negative 5  (3) the amount of profit, where a business capital asset other than that referred to in sub-section (1) is transferred, discarded, destroyed or destructed, shall be computed in accordance with the formula- |                                                          |                               | a-b                                                |     ||----------------------------------------------------------|-------------------------------|----------------------------------------------------|-----|| where                                                    | a =                           | amount accrued or received in respect of the asset |     || 10                                                       |                               |                                                    |     || which is transferred, discarded, destroyed or destructed |                               |                                                    |     || during the financial year together with the amount of    |                               |                                                    |     || scrap value, if any;                                     |                               |                                                    |     || b =                                                      | the actual cost of the asset |                                                    |     ||                                                          |                               |                                                    |     |43 (1) the deduction for any capital allowance referred to in section 37 shall, in a case 15   where business reorganisation has taken place during the financial year, be allowed  in accordance with the provisions of this section (2) the amount of deduction allowable to the predecessor shall be determined in accordance with the formula-  a x b 20 c where a = the amount of deduction allowable as if the business reorganisation had not taken place; b = the number of days comprised in the period beginning 25 with the first day of the financial year and ending on the day immediately preceding the date of business reorganisation; c =  the total number of days in the financial year in which the business reorganisation has taken place  30  (3) the amount of deduction to the successor shall be determined in accordance with the formula -  a x b c where 35 a = the amount of deduction allowable as if the business reorganisation had not taken place; b= the number of days comprised in the period beginning with the date of business reorganisation and ending on the last day of the financial year; and 40 c = the total number of days in the financial year in which the business reorganisation has taken place   special  provisions  relating to business reorganisation  meaning of actual cost 44 (_i_) the actual cost of a business capital asset to the person shall be computed in accordance with the formula-a-[b+(c x $\frac{\delta\mathrm{i}}{\mathrm{d}}$)]where | a =                                                          | cost of the business capital asset to the person including    ||--------------------------------------------------------------|---------------------------------------------------------------|| the interest paid on the capital borrowed for acquiring      |                                                               || 50                                                           |                                                               || the asset if such interest is relatable to the period before |                                                               || the asset is put to use;                                     |                                                               || b =                                                       | the amount of additional duty leviable under section 3    ||-----------------------------------------------------------|-----------------------------------------------------------|| of the customs tariff act, 1975 or the amount of duty     |                                                           || of excise, in respect of which a claim of credit has been |                                                           || made and allowed under the central excise rules, 1944;    |                                                           ||                                                           |                                                           || c =                                                       | the amount of subsidy, grant or reimbursement (by         || 5                                                         |                                                           ||                                                           |                                                           || whatever name called) received by the assessee, directly  |                                                           || or indirectly, from the central government, a state       |                                                           || government, any authority established under any law       |                                                           || for the time being in force or by any other person in     |                                                           || respect of, or with reference to, any assets including    |                                                           || 10                                                        |                                                           ||                                                           |                                                           || the relevant asset;                                       |                                                           ||                                                           |                                                           || d =                                                       | cost of all the assets in respect of or with reference to || which the amount 'c' is so received                      |                                                           ||                                                           |                                                           |(2) the assessing officer may, notwithstanding anything contained in sub-section (1), determine, with the prior approval of the joint commissioner, the actual cost if - 15   (a) the assets were business assets at any time before the date of acquisition by the person; and  (b) the assessing officer is satisfied that the main purpose of the transfer of the assets, directly or indirectly to the person, was the reduction of a liability to incometax (by claiming depreciation with reference to an enhanced cost) 20   (3) the actual cost of the business capital asset to the person shall be the deemed written down value, if -  (a) the asset is acquired by the person by way of gift or inheritance; or  (b) the asset is converted by the person into a business capital asset in any financial year; or 25   (c) the person is transferee holding company or a transferee subsidiary company in respect of transfer of the asset by subsidiary comapny or the holding company respectively  (4) the actual cost of a business capital asset to the person shall, in a case of sale and buy back transaction of the asset, be the lower of the following, namely:— 30   (a) the actual price for which the asset is re-acquired by him; or  (b) the deemed written down value  (5) where a business capital asset is acquired by the person and subsequently it is transferred back to the transferor by way of lease, hire or otherwise, the actual cost of the asset in the hands of the person shall be the written down value of the asset in the hands 35  of the transferor at the beginning of the financial year in which the acquisition of the asset by the person has taken place  (6) where the person is a non-resident and a business capital asset,having been acquired by him outside india, is brought by him to india, the actual cost of the asset for the person shall be the cost of acquisition of the asset by him, as reduced by an amount equal 40 to the amount of depreciation which would have been allowable, had the asset been used in india for the purpose of the business of the person since the date of such acquisition (7) the actual cost of an asset shall be treated as "nil", if— (a) deduction in respect of the cost of the asset has been allowed or is allowable to  the  person  under  the  eleventh  schedule  or  the  twelfth  schedule  or  the 45  thirteenth schedule; or (b) deduction in respect of the cost of the asset has been allowed or is allowable under any of the aforesaid schedules to any other person and the person has acquired or received the asset by any of the "special modes of acquisition"  (8) the board may, for the purposes of determining the actual cost of a business 5      capital asset, prescribe—  (a) any other cost which may be included in determining the actual cost; and  (b) the method of determining the actual cost in the circumstances which are not provided for in this section  (9) in this section, deemed written down value of a business asset shall be the actual 10   cost to the person or the previous owner, as the case may be, when he first acquired the asset as reduced by the aggregate amount of depreciation that would have been allowable to the person or the previous owner, as the case may be, for the preceding financial year as if the asset was the only asset in the relevant block of assets  45 (1) the written down value of any block of assets at the beginning of the financial 15   year shall be the written down value of the block of assets at the close of the immediately preceding financial year   meaning of written   down value  and adjusted value  of assets (2) the written down value of the block of assets at the close of the immediately preceding financial year shall be the adjusted value of the block of assets in the immediately preceding financial year as reduced by,—  20  (a) the amount of capital allowance, if any, allowed under section 37 during that year; and  (b) any expenditure incurred for acquiring the asset to the extent allowed as a deduction in the financial year under any provision of this code  (3) the adjusted value of any block of assets for any financial year shall be computed 25   in accordance with the formula— $$(\mathrm{a+b})\cdot(\mathrm{c+d+e})$$where a= the written down value of the block of assets at the beginning of the financial year;  30  year; b = actual cost of any asset falling within the block, acquired during the financial c = moneys receivable in respect of any asset falling within the block, which is sold or discarded or destroyed or destructed during the financial year;  d = amount of the scrap value, if any;  35  e = the aggregate of the deemed written down value of the assets transferred by any of the modes referred to in sub-section (3) of section 44  (4) the adjusted value of any block of assets under sub-section (3) shall be "nil" if the amount (c+d+e) exceeds the amount (a+b)  (5) the adjusted value of the block of assets, acquired by a successor in a business 40   reorganisation, for the financial year in which the business reorganisation has taken place shall be the amount which would have been taken as the adjusted value of the block of assets as if the business reorganisation had not taken place (6) the written down value of the block of assets, acquired by a successor in a business reorganization, on the last day of the financial year in which the business reorganisation has taken place shall be determined in accordance with the formula—  | a - (b + c)                                           |     ||-------------------------------------------------------|-----||                                                       |     || where                                                 |     || 5                                                     |     ||                                                       |     || a = the adjusted value determined under sub-section ( |     || 5                                                     |     || );                                                    |     ||                                                       |     |b = the amount of deduction allowed to the predecessor under sub-section (2) of section 43 in respect of the block of assets;  c = the amount of deduction allowed to the successor under sub-section (3) of section 43 in respect of the block of assets 10   (7) where a block of assets comprises of any asset acquired in any financial year from a country outside india for the purposes of business and there is variation in liability in respect of acquisition of the asset after the date of such acquisition, the adjusted value of the block of assets shall be computed in accordance with the formula—  a+(b-c)-d 15   where  a = the adjusted value of such block of assets determined in accordance with sub-section (3);  b = the amount of liability of the person, expressed in indian rupees at the time of making actual payment towards— 20   (a)  the whole or a part of the cost of the asset; or  (b) repayment of the whole or a part of the moneys borrowed by him from any person in any foreign currency specifically for the purpose of acquiring the asset;  c = the amount of such liability existing at the time of acquisition of  the asset; 25   d = the whole or any part of the liability met, directly or indirectly, by any other person or  authority  (8) the amount of liability of the person, expressed in indian rupees at the time of making payment as referred to in sub-section (7), shall, in a case where the person has entered into a forward contract, be computed with reference to the rate of exchange specified 30 in such forward contract  (9) the board may prescribe  (a) the method of determining the allocation of the written down value or the adjusted written down value of the assets between the different businesses carried on by the person; and 35   (b) the method of determining the written down value or the adjusted written down value of the block of assets in the circumstances which are not provided for in this section  (10) in this section, the deemed written down value shall have the meaning assigned to it in sub-section (10) of section 44 40   d - capital gains capital  gains 46 (1) the income from the transfer of any investment asset shall be computed under the head "capital gains" (2) the income under the head "capital gains" shall, without prejudice to the generality of the foregoing provisions, include the following, namely:—  (a) income from the transfer referred to in clause (d) or clause (e) of sub-section (1) of section 47, if before the expiry of a period of eight years from the date of transfer 5 of the investment asset,—  (i) the parent company, or its nominee, ceases to hold the whole of the share capital of the subsidiary company; or  (ii) the investment asset is converted by the transferee into, or treated by it as, its business trading asset;  10  (b) the income from the transfer referred to in clause (f) of sub-section (1) of section 47, if any of the conditions laid down in clause (16) or clause (74) of section 314, as the case may be, is not complied with;  (c) the income from the transfer referred to in clause (j) or clause (n) of sub-section (1) of section 47, as the case may be, if any of the conditions laid down in 15 the said clauses is not complied with;  (d) the amount of withdrawal referred to in sub-section (4) of section 55 to the extent deduction has been allowed under sub-section (2) thereof, if the condition laid down in the said  sub-section (4) is not complied with;  (e) the amount of deposit referred to in sub-section (5) of section 55 to the extent 20 deduction has been allowed under sub-section (2) thereof, if the condition laid down in the said  sub-section (5) is not complied with  (f) the amount of deduction allowed under sub-section (1) of section 55, if any of the conditions specified in sub-section (6) of the said section is not complied with  47 (1) the income from the following transfers shall not be included in the computation 25   of income under the head "capital gains" , namely:—  (a) distribution of any investment asset on the total or partial partition of a   income    from certain   transfers  not to be treated as  capital  gains hindu undivided family;  (b) gift, or transfer under an irrevocable trust, of any investment asset, other than sweat equity share;  30 (c ) transfer of any investment asset under a will;  (d) transfer of any investment asset by a company to its subsidiary company, if-  (i) the parent company or its nominees hold the whole of the share capital of the subsidiary company,  (ii) the subsidiary company is an indian company; and  35 (iii) the subsidiary company treats the asset as an investment asset;  (e) transfer of any investment asset by a subsidiary company to the holding company, if—  (i) the whole of the share capital of the subsidiary company is held by the holding company or its nominees,  40 (ii) the holding company is an indian company, and  (iii) the holding company treats the asset as an investment asset;  (f) transfer of any investment asset by a predecessor to a successor in a scheme under a business reorganisation if the successor is an indian company; (g) transfer of any investment asset, being shares held in an indian company, by an amalgamating foreign company to the amalgamated foreign company, if—  (i) the transfer is effected under a scheme of amalgamation;  (ii) the shareholders holding not less than three-fourths in value of the shares of the amalgamating foreign company continue to remain shareholders 5 of the amalgamated foreign company; and  (iii)  the transfer does not attract tax on capital gains in the country, in which such amalgamating company is incorporated;  (h) transfer of any investment asset being shares held in an indian company, by 10  a   demerged   foreign   company   to   the   resulting   foreign   company, if—  (i) the transfer is effected under a scheme of demerger;  (ii)  the shareholders holding  not less than three-fourths in value of the shares of the demerged foreign company continue to remain shareholders of the resulting foreign company;  (iii) the transfer does not attract tax on capital gains in the country, in which such demerged company is incorporated;  (i)   transfer of any investment asset, by a banking company to a banking institution, if the transfer is effected under a scheme of amalgamation, sanctioned and brought into force by the central government under sub-section (7) of section 45 of the banking regulation act, 1949;  (j)   transfer of any investment asset by a private company or unlisted public company to a limited liability partnership or any transfer of a share held in the company by a shareholder as a result of conversion of the company into a limited liability partnership in accordance with the provisions of section 56 or section 57 of the limited liability partnership act, 2008, if—  (i)   all the assets and liabilities of the company immediately before the conversion become the assets and liabilities of the limited liability partnership;  (ii)  all the shareholders of the company immediately before the conversion become the partners of the limited liability partnership and their capital contribution and profit sharing ratio in the limited liability partnership are in the same proportion as their shareholding in the company on the date of conversion;  (iii) the shareholders of the company do not receive any consideration or benefit, directly or indirectly, in any form or manner, other than by way of share in profit and capital contribution in the limited liability partnership;  (iv) the aggregate of capital contribution by the shareholders of the company in the limited liability partnership shall not be less than fifty per cent of the total capital of the limited liability partnership at any time during the period of five years from the date of conversion;  (v)  the total sales, turnover or gross receipts in business of the company in any of the three financial years preceding the financial year in which the conversion takes place do not exceed sixty lakh rupees;  15 20    10 of  1949 25   6  of 2009  30 35 40 45  (vi)  no amount is paid, either directly or indirectly, to any partner out of the accumulated profits of the company on the date of conversion, for a period of three years from the said date; (k) transfer of shares of an amalgamating company by a shareholder under a scheme of business re-organisation, if—  (i) the transfer is made in consideration of the allotment to the shareholder of shares in the successor amalgamated company; and  5 (ii) the successor is neither a non-resident nor a foreign company;  (l) transfer of shares of a predecessor co-operative bank by a shareholder under a scheme of business reorganisation, if the transfer is made in consideration of the allotment to the shareholder of shares in the successor co-operative bank;  (m)  transfer of shares by the resulting company, in a scheme of demerger, to the 10 shareholders of the demerged company, if the transfer is made in consideration of demerger of the undertaking;  (n) transfer of any investment asset by a sole proprietary concern to a company,   if -   (i) the sole proprietary concern is succeeded by the company in the business carried on by it;  (ii) all the assets and liabilities of the said concern relating to the business immediately before the succession become the assets and liabilities of the company;  15  20  (iii) the shareholding of the sole proprietor in the company is  not less than fifty per cent of the total voting power in the company and continues to remain the same for a period of five years from the date of succession;  (iv) the sole proprietor does not receive any consideration or benefit,  directly or indirectly, other than by way of allotment of shares in the company; (o) transfer of any bond or global depository receipt by a non-resident to another 25 non-resident, if the transfer is made outside india;  (p) transfer of any work of art, archaeological, scientific or art collection, book, manuscript, drawing, painting, photograph or print, to the government or a university or any public museum or institution of national importance or of renown throughout any state or states and notified by the central government;  30  (q) transfer by way of conversion of any bonds or debentures, debenture-stock or deposit certificates in any form, of a company into shares or debentures of that company;  (r)   transfer by way of conversion of foreign exchange convertible bond of a company into shares or debentures of that company;  35 (s) transfer of any securities, if—  (i) the transfer is effected under a scheme for lending of any securities; and   (ii) the scheme is framed in accordance with the guidelines issued by the securities and exchange board of india or the reserve bank of india;  40 (t)   transfer of any investment asset, if— (i) the transferor is a company; and (ii) the asset of the company is distributed to its shareholders on its liquidation;  (u) transfer of an investment asset being land of a sick industrial company made 45 under a scheme sanctioned under section 18 of the sick industrial companies (special provisions) act, 1985 where such company is being managed by its worker co-operative;  (v) transfer of any investment asset in a transaction of reverse mortgage under a scheme notified by the central government;  (w) transfer of any beneficial interest in a security by a depository  1  of  1986   5   (2) the reference to the provisions of sections 391 to 394 (both inclusive) of the companies act, 1956 in cluase (74) of section 314 shall not apply in case of demergers referred to in clause (h) of sub-section (1)  1  of  1956 10   (3) the provisions of clause (u) of sub-section (1) shall be applicable in a case where the transfer is made during the period commencing from the financial year in which the said company has become a sick industrial company under sub-section (1) of section 17 of the sick industrial companies (special provisions) act, 1985 and ending with the financial year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses  1  of  1986  15   10 of  2009  (4) in clause (i) of sub-section (1), the expressions—"banking company" and "banking institution" shall have the meaning respectively assigned to them in clause (c) of section 5 and sub-section (15) of section 45 of the banking regulation act, 1949;  (5) in clause (j) of sub-section (1), the expressions  "private company" and "public unlisted company" shall have the meaning respectively assigned to them in the limited liability partnership act, 2008  10 of  1949  20   6 of  2009  (6) in clause (w) of sub-section (1), the expressions "depository" and "security" shall have the meaning respectively assigned to them in clauses (e) and (l) of sub-section (1) of section 2 of the depositories act, 1996  financial  year of  taxability 22 of  1986   25  48 (1) the income from the transfer of an investment asset specified in column (2) of the table given below shall be the income of the transferor in the financial year specified in column (3) of the said table:  financial year of taxability| serial                                   | nature of transfer                         | financial year   |     ||------------------------------------------|--------------------------------------------|------------------|-----|| number                                   |                                            |                  |     || 30                                       |                                            |                  |     ||                                          |                                            |                  |     ||                                          |                                            |                  |     || (1)                                      | (2)                                        | (3)              |     ||                                          |                                            |                  |     ||                                          |                                            |                  |     || 1                                       | transfer referred to in clause             |                  | (   || a                                        |                                            |                  |     || ) in a case where the investment         |                                            |                  |     || (                                        |                                            |                  |     || d                                        |                                            |                  |     || ) or clause (                            |                                            |                  |     || e                                        |                                            |                  |     || ) of sub-section (                       |                                            |                  |     || 1                                        |                                            |                  |     || )                                        | asset is converted by the transferee into, |                  |     || of section 47                            | or is treated by it as, business trading   |                  |     || asset, the financial year in which the   |                                            |                  |     || 35                                       |                                            |                  |     || investment asset is converted or treated |                                            |                  |     || as a business trading asset;             |                                            |                  |     ||                                          |                                            |                  |     |(b) in  a case where the the parent company, or its nominees, cease to hold the whole of the share capital of the subsid-   40  iary company, the financial year in which the parent company or its nominees so cease to hold the whole of the share capital of the subsidiary company | (1)                                        | (2)                                        | (3)                                      ||--------------------------------------------|--------------------------------------------|------------------------------------------||                                            |                                            |                                          ||                                            |                                            |                                          || 2                                         | transfer referred to in clause             | the financial year in which any of the   || (                                          |                                            |                                          || f                                          |                                            |                                          || ) of sub-section (                         |                                            |                                          || 1                                          |                                            |                                          || ) of section 47                            | conditions referred to in clause (         |                                          || 16                                         |                                            |                                          || ) or                                       |                                            |                                          || clause (                                   |                                            |                                          || 74                                         |                                            |                                          || ), as the case may be, of sec             |                                            |                                          || 5                                          |                                            |                                          || tion 314 is not complied with             |                                            |                                          ||                                            |                                            |                                          || 3                                         | transfer referred to in clause             | the financial year in which any of the   || (                                          |                                            |                                          || j                                          |                                            |                                          || ) or clause (                              |                                            |                                          || n                                          |                                            |                                          || ) of sub-section                           | conditions specified in the said clauses   |                                          || (                                          |                                            |                                          || 1                                          |                                            |                                          || ) of section 47                            | is not complied with                      |                                          ||                                            |                                            |                                          || 4                                         | transfer—                                  | the financial year in which the compen-  || 10                                         |                                            |                                          || (                                          |                                            |                                          || i                                          |                                            |                                          || )   by way of compulsory                   | sation, or consideration, as the case may  |                                          || acquisition under any law for the          | be, or such compensation or considera-     |                                          || time being in force, or                    |                                            |                                          || (                                          |                                            |                                          || ii                                         |                                            |                                          || )  the consideration for which             | tion enhanced or further enhanced by       |                                          || was determined or approved by              | any court, tribunal or other authority, is |                                          || 15                                         |                                            |                                          || the central government or the              | received                                  |                                          || reserve bank of india                      |                                            |                                          ||                                            |                                            |                                          || 5                                         | transfer by way of conversion of           | the financial year in which such asset,  || an investment asset into, or its treatment | so converted or treated, is sold  or       |                                          || as business trading asset                  | otherwise transferred                     |                                          ||                                            |                                            |                                          ||                                            |                                            |                                          || 20                                         |                                            |                                          || 6                                         | transfer by way of—                        | the financial year in which the asset is || (                                          |                                            |                                          || i                                          |                                            |                                          || )   contribution of the asset, whether     | transferred or distributed                |                                          || by way of capital or otherwise, to an      |                                            |                                          || unincorporated body, in which the          |                                            |                                          || transferor is, or becomes, a partici-      |                                            |                                          || 25                                         |                                            |                                          || pant; or                                   |                                            |                                          ||                                            |                                            |                                          || (                                          |                                            |                                          || ii                                         |                                            |                                          || )  the distribution of the asset           |                                            |                                          || on account of dissolution of an            |                                            |                                          || unincorporated body                       |                                            |                                          ||                                            |                                            |                                          || 7                                         | transfer by way of distribution            | the financial year in which the money    || 30                                         |                                            |                                          || of money or asset to a participant in      | or the asset is distributed               |                                          || an unincorporated body on account of       |                                            |                                          || his retirement from the body               |                                            |                                          ||                                            |                                            |                                          || 8                                         | transfer by way of part performance        | the financial year in which the posses-  || of a contract, referred to in sub-clause ( |                                            |                                          || i                                          |                                            |                                          || )                                          | sion of the immovable property is allowed  |                                          || 35                                         |                                            |                                          || of clause (                                |                                            |                                          || 267                                        |                                            |                                          || ) of section 314                           | to be taken or retained                   |                                          ||                                            |                                            |                                          || 9                                         | transfer by way of any                     | the financial year in which the enjoy-   || transaction   enabling the enjoyment       | ment of the property is enabled           |                                          || of any immovable property referred         |                                            |                                          || to in sub-clause (                         |                                            |                                          || j                                          |                                            |                                          || ) of clause (                              |                                            |                                          || 267                                        |                                            |                                          || )                                          |                                            |                                          || 40                                         |                                            |                                          || of section 314                             |                                            |                                          ||                                            |                                            |                                          ||                                            |                                            |                                          || 10   transfer by way of slump sale,       | the financial year in which the trans-     |                                          || referred to in sub-clause (                |                                            |                                          || l                                          |                                            |                                          || ) of clause                                | fer took place                            |                                          || (                                          |                                            |                                          || 267                                        |                                            |                                          || ) of section 314                           |                                            |                                          ||                                            |                                            |                                          || 11   transfer by any mode other than      | the financial year in which the trans-     |                                          || 45                                         |                                            |                                          || the modes referred to in serial            | fer took place                            |                                          || numbers 1 to 10                           |                                            |                                          |(2) notwithstanding anything  in sub-section (1),—  (a)  any money or asset received under an insurance from an insurer on account of damage or destruction of an insured asset referred to in sub-clause (m) of clause (267) of section 314 shall be deemed to be the income of the recipient of the financial year in which the money or asset is received;  (b) any money or asset received by the participant on account of his retirement from an  unincorporated body referred to in sub-clause (o) of clause (267) of section 314 shall be deemed to be the income of the recipient of the financial year in which the money or asset is received;  (c )  any money or asset received by the shareholder on account of liquidation or dissolution of a company referred to in sub-clause (h) of clause (267) of section 314 as reduced by the amount assessed as dividend within the meaning of sub-clause (c) of clause (81) of section 314, shall be deemed to be the income of the recipient of the financial year in which the money or asset is received;  (d)  any consideration from transfer made by the depository or participant of any beneficial interest in a security shall be deemed to be the income of the beneficial owner of the financial year in which such transfer took place;  (e) the amount referred to in clause (d) of sub-section (2) of section 46 shall be the income of the financial year in which such amount is withdrawn;  (f) the amount referred to in clause (e) of sub-section (2) of section 46 shall be the income of the third financial year immediately following the financial year in which the transfer of the original asset is effected  (g) the amount referred to in clause (f) of sub-section (2) of section 46 shall be the income of the financial year in which any condition referred to in sub-section (6) of section 55 is not complied with 5  10 15  20  25  (3) in clause (d) of sub-section (2), "beneficial owner" shall have the same meaning as assigned to it in clause (a) of sub-section (1) of section 2 of the depositories act, 1996   49 (1) the income from the transfer of any investment asset during the financial year shall be the full value of the consideration accrued or received as a result of the transfer, as reduced by the aggregate amount of the deductions referred to in section 51  (2)  for the purpose of computation of income from the transfer of an investment asset, being any beneficial interest in respect of  securities referred to in clause (d) of subsection (2) of section 48, the cost of acquisition and the period of holding of such securities shall be determined on the basis of first-in-first-out method  computation of income from   transfer of  any investment asset full value  of consideration 50 (1) the full value of the consideration shall be the amount received by, or accruing to, the transferor, or a person referred to in sub-section (2) of section 48, as the case may be, directly or indirectly, as a result of the transfer of the investment asset  (2) notwithstanding anything in sub-section (1), the full value of the consideration, in the following circumstances, shall be—-  | 22 of  1996   |     ||----------------|-----||                |     ||                |     ||                |     || 30             |     ||                |     ||                |     ||                |     ||                |     ||                |     ||                |     || 35             |     ||                |     ||                |     ||                |     ||                |     ||                |     ||                |     || 40             |     ||                |     ||                |     ||                |     ||                |     ||                |     || 45             |     |(a) the amount of compensation awarded in the first instance or the consideration determined or approved in the first instance by the central government or the reserve bank of india or the amount by which such compensation or consideration is enhanced or further enhanced by any court, tribunal or other authority, as the case may be, if the transfer of the investment asset is by the mode specified in sub-clause (c) of clause (267) of section 314;  (b) the fair market value of the asset as on the date of the transfer, if the transfer is by the mode specified in sub-clause (d) of clause (267) of section 314;  (c) the amount recorded in the books of account of the company or   an unincorporated body as the value of the investment asset, if the transfer of the investment asset is by the mode specified in sub-clause (f) of clause (267) of section 314;  (d) the fair market value of the asset as on the date of the transfer, if such transfer is by the mode specified in sub-clause (g) of clause (267) of section 314; 5  (e) the amount of money, or the fair market value of the asset as on the date of distribution of such asset, received by a shareholder from a company under liquidation or dissolution, as reduced by the amount of dividend within the meaning of sub-clause (c) of clause (81) of section 314, if the transfer is by the mode specified in sub-clause (h) of clause (267) of section 314; 10  (f) the amount of money, or the fair market value of the asset as on the date of distribution of such asset, received by the participant, if the transfer is by the mode specified in sub-clause (o) of clause (267) of section 314;  (g) the amount of money, or the fair market value of the asset as on the date of the receipt of such asset, received under an insurance from an insurer, if the transfer is by 15 the mode specified in sub-clause (m) of clause (267) of section 314; (h) the stamp duty value of the asset, being land or building (3) where the amount of compensation or consideration referred to in clause (a) of sub-section (2) is subsequently reduced by any court, tribunal or other authority, the compensation or consideration as so reduced shall be taken to be the full value of 20   consideration  (4) where the enhanced compensation or consideration referred to in clause (a) of sub-section (2) is received by any person other than the transferor, the said amount shall be deemed to be the income of such other person and the provisions of sections 46 to 55 (both inclusive) shall accordingly apply   deduction  for cost of acquisitionetc 25  51   (1) the deductions for the purposes of computation of income from the transfer of an investment asset shall be the following, namely:—  (i) the cost of acquisition, if any, of the asset;  (ii) the cost of improvement, if any, of the asset; and  (iii) the amount of expenditure, if any, incurred wholly and exclusively in 30 connection with the transfer of the asset  (2) in the case of transfer of an investment asset, being an equity share in a company or a unit of an equity oriented fund and such transfer is chargeable to securities transaction tax under chapter vii of the finance (no2) act, 2004,—  (a) where the asset is held for a period of more than one year, 35  (i) if the income computed after giving effect to sub-section (1) is a positive income, a deduction amounting to hundred per cent of the income so arrived at shall be allowed;  (ii) if the income computed after giving effect to sub-section (1) is a negative income, hundred per cent of the income so arrived at shall be reduced from such 40 income  (b) where the asset is held for a period of one year or less,  (i) if the income computed after giving effect to sub-section (1) is a positive income, a deduction amounting to fifty per cent of the income so arrived at shall be allowed; (ii) if the income computed after giving effect to sub-section (1) is a negative income, fifty per cent of the income so arrived at shall be reduced from such income  (3) if an investment asset, other than that referred to in sub-section (2) of the section or sub-section (5) of section 53, is transferred at any time after one year from the end of the 5 (i) the indexed cost of acquisition, if any, of the asset;  (ii) the indexed cost of improvement, if any, of the asset;  (iii)  the  amount  of  expenditure,  if  any,  incurred  wholly  and  exclusively  in 10  connection with the transfer of the asset; and  (iv) the amount of relief for rollover of the asset, as determined under section 55  financial year in which the asset is acquired by the person, the deductions for the purposes of computation of income from the transfer of such asset shall be the following, namely:— 52: _(1)_ the indexed cost of acquisition of an investment asset referred to in clause _(i)_ of sub-section _(3)_ of section 51 shall be the amount determined in accordance with the formula--$$\begin{array}{ccc}\mbox{a}&\mbox{x}&\frac{\mbox{b}}{\mbox{c}}\\ \end{array}$$where  a  =  the cost of acquisition of the asset;  b = the cost inflation index for the financial year in which the asset is transferred; 20   c = the cost inflation index for the financial year in which the asset was acquired by the person or for the financial year beginning on the 1st day of april 2000, whichever is later  (2) the indexed cost of improvement of an investment asset referred to in clause (ii) of sub-section (3) of section 51 shall be the amount determined in accordance with the 25  formula—  $$\mathrm{\boldmath~a~}\mathrm{\boldmath~x~}\frac{\mathrm{\boldmath~b~}}{\mathrm{\boldmath~c~}}$$where  a = the cost of improvement of the asset; 30  b = the cost inflation index for the financial year in which the asset is transferred; c= the cost inflation index for the financial year in which the improvement to | the asset took place or for the financial year beginning on the 1st day of april 2000,   |     ||------------------------------------------------------------------------------------------|-----|| whichever is later                                                                      |     ||                                                                                          |     || 53                                                                                      |     || (                                                                                        |     || 1                                                                                        |     || ) unless otherwise provided, the cost of acquisition of an investment asset,             |     || 35                                                                                       |     | indexed costof acquisition or improvementshall be-  (a) the purchase price of the asset; or  cost of acquisition  of an  investment asset (b) at the option of the person, the fair market value of the asset on the 1st day of april, 2000, if the asset was acquired by the person before such date  (2) the cost of acquisition of an investment asset specified in column (2) of the 40  seventeenth schedule, acquired by the mode specified in column (3) of the said schedule, shall be the cost specified in column (4) thereof (3)the cost of acquisition of an investment asset acquired by  a person by any of the special modes of acquisition, shall be—  (a) the cost at which the asset was acquired by the previous owner; or  (b) at the option of the person, the fair market value of the asset on the 1st day 5 of april, 2000, if the asset was acquired by the previous owner or the person before such date  (4) the cost of acquisition of an investment asset referred to in clause (h) or clause (i) or clause (j) of sub-section (2) of section 58 shall be the fair market value or the stamp duty values as the case may be, which has been taken into account for the purposes of the said 10   clauses  (5) the cost of acquisition of an investment asset being an undertaking or division of a business transferred by way of a slump sale referred to in sub-clause (l) of clause (267) of section 314 shall be the net worth of such undertaking or division  (6) the cost of acquisition of an investment asset forming part of a bundle of investment assets acquired by any participant, on distribution of the asset to him on account of his retirement from any uncoordinated body, shall be the amount determined in accordance with the formula--a - (b + c)where,  20  a= the amount payable to the participant as appearing in the books of account of the  unincorporated body on the date of distribution;  b= any amount attributable to the change in the value of the bundle of investment asset on account of revaluation of the bundle, if any, up to the date of distribution; and  c= the cost of acquisition of any other asset, forming part of the bundle acquired 25 by the participant, on distribution of the asset to him on account of his retirement from any unincorporated body if the cost of acquisition has been allowed as a deduction under section 51 in any earlier financial year  (7) the cost of acquisition of an investment asset shall be "nil ", in relation to— (a) an investment asset which is self-generated; 30  (b) the asset which is acquired by way of compulsory acquisition and the compensation or consideration for such acquisition is enhanced or further enhanced by any court, tribunal or other authority; or  (c) the asset where the cost of acquisition to the person or the previous owner, if any, cannot be determined or ascertained, for any reason  35  (8) in sub-section (3), "previous owner" in relation to any investment asset owned by a person means the last previous owner of the investment asset, who acquired it by a mode of acquisition other than those referred to in clause (237) of section 314  54 (1) the cost of improvement of an investment asset shall be any expenditure of a capital nature incurred in making any additions or alterations to the asset,—  40 (a) by the person; or  cost of improvement of an  investment asset (b) by the previous owner, if the asset is acquired by any special mode of acquisition  (2) the cost of improvement of the investment asset, notwithstanding anything in sub-section (1), where the asset became the property of the person or the previous owner 45 before the 1st day of april, 2000, shall be any capital expenditure incurred for any addition or alteration to such asset on or after the 1st day of april, 2000 (3) the cost of improvement of an investment asset shall, notwithstanding anything in sub-section (1), be "nil " in relation to—  (a) an investment asset which is self generated;  (b) an investment asset being an undertaking or division transferred by way of a slump sale referred to in sub-clause (l) of clause (267) of section 314; or 5  (c) any investment asset if the cost of improvement cannot be determined or ascertained, for any reason  (4)  any expenditure deductible in computing the income under any other head of income shall not be taken into account while computing the cost of improvement  55 (1) an individual or a hindu undivided family shall be allowed a deduction, in 10  relief for rollover of i n v e s t m e n t asset respect of rollover of any original investment asset referred to in sub-section (3) of section 51, from the capital gain arising from the transfer of the asset in accordance with the provisions of this section  (2) the deduction referred to in sub-section (1) shall be computed in accordance with the formula— 15   (b+c+d)  a  x  ————  e   where  a = the amount of capital gains arising from the transfer of the original investment 20  asset;  b = the amount invested for purchase or construction of the new asset referred to in sub-section (6) within a period of one year before the date of transfer of original investment asset;  c = the amount invested for purchase or construction of the new asset referred to in sub-section (6)   by the end of the financial year in which the transfer of the 25  original investment asset is effected or six months from the date of transfer, whichever is later;  d = the amount deposited in an account in any bank by the end of the financial year in which the transfer of original investment asset is effected or six months from the date of transfer, whichever is later in accordance with the capital gains deposit 30  scheme framed by the central government in this behalf;  e = the net consideration received as a result of the transfer of the original investment asset  (3) the deduction computed under sub-section (2) shall not exceed the amount of capital gains arising from the transfer of the investment assets 35   (4) any amount withdrawn from an account under the capital gains deposit scheme shall be utilised within a period of one month from the end of the month in which the amount is withdrawn, for the purposes of purchase or construction of the new asset  (5) the amount deposited in the account under the capital gains deposit scheme shall be utilised for the purposes of purchase or construction of the new asset within a 40  period of three years from the end of the financial year in which the transfer of the original asset is effected  (6) the deduction under this section in respect of capital gain arising from the transfer of an investment asset, specified in column (2) of the table given below, shall be allowed with reference to the corresponding new investment asset referred to in column (3) of the 45  said table, subject to the fulfilment of conditions specified in column (4) thereof:  rollover relief| serial                         | description of the original   description of the new    | conditions            ||--------------------------------|---------------------------------------------------------|-----------------------|| number  investment asset       | investment asset                                        |                       || 5                              |                                                         |                       || (1)                            | (2)                                                     | (3)                   ||                                |                                                         |                       || 1                             | agricultural land                                       | one or more pieces of || 1                              |                                                         |                       || ) the original investment      |                                                         |                       || agricultural land             | asset was—                                              |                       ||                                |                                                         |                       || (                              |                                                         |                       || i                              |                                                         |                       || ) an agricultural land         |                                                         |                       || during                         | two                                                     | years                 || 10                             |                                                         |                       || immediately preceding the      |                                                         |                       || financial year in which the    |                                                         |                       || asset is transferred; and      |                                                         |                       ||                                |                                                         |                       || (                              |                                                         |                       || ii                             |                                                         |                       || ) acquired at least one        |                                                         |                       || year before the beginning      |                                                         |                       || 15                             |                                                         |                       || of the financial year in       |                                                         |                       || which the transfer of the      |                                                         |                       || asset took place              |                                                         |                       ||                                |                                                         |                       || 2                             | any investment asset                                    | residential house     || 2                              |                                                         |                       || ) the new asset shall not      |                                                         |                       || be transferred within one year |                                                         |                       || 20                             |                                                         |                       || from the end of the financial  |                                                         |                       || year in which the new asset is |                                                         |                       || acquired                      |                                                         |                       ||                                |                                                         |                       || (                              |                                                         |                       || i                              |                                                         |                       || ) the assessee does            |                                                         |                       || not own   more than one        |                                                         |                       || 25                             |                                                         |                       || residential house, other       |                                                         |                       || than the new investment        |                                                         |                       || asset, on the date of          |                                                         |                       || transfer of the original       |                                                         |                       || 30                             |                                                         |                       || investment asset; and          |                                                         |                       ||                                |                                                         |                       || (                              |                                                         |                       || ii                             |                                                         |                       || )                              | the                                                     | original              || investment asset  was          |                                                         |                       || acquired at least one year     |                                                         |                       || before the beginning of        |                                                         |                       || 35                             |                                                         |                       || the financial year in which    |                                                         |                       || the transfer of the asset      |                                                         |                       || took place                    |                                                         |                       ||                                |                                                         |                       || (                              |                                                         |                       || iii                            |                                                         |                       || ) the new asset shall          |                                                         |                       || not be transferred within      |                                                         |                       || 40                             |                                                         |                       || one year from the end of       |                                                         |                       || the financial year in which    |                                                         |                       || the new asset is acquired      |                                                         |                       || or constructed                |                                                         |                       ||                                |                                                         |                       |(7) in this section, "net consideration" means the full value of consideration received 45 or accruing as a result of the transfer of an investment asset as reduced by any expenditure incurred wholly or exclusively in connection with such transfer   e — income from residuary sources income  from residuary sources 56 the income of every kind falling under the class 'income from ordinary sources', shall be computed under the head "income from residuary sources", if it is not required to be included in computing the income under any of the heads of income specified in items a to d of section 14  57 the income computed under the head "income from residuary sources" shall be the  gross residuary income as reduced by the amount of deductions referred to in section 59 5  computation of income from  residuary sources  gross residuary income 58 (1) the gross residuary income shall include all accruals, or receipts, in the nature of income, which do not form part of -  (a) income from special sources; and  (b) income under any of the heads of income specified in items a to d of section 14 10   (2) the gross residuary income shall, in particular and without prejudice to the generality of the provisions of sub-section (1), include the following, namely:—  (a) dividends, other than dividends in respect of which dividend distribution tax has been paid under section 109;  (b) interest, other than interest accrued to, or received by,  financial institutions; 15   (c) interest received on compensation or on enhanced compensation;  (d) income from the activity of owning and maintaining horses for the purpose of horse race;  (e) any amount received from employees as contributions to any fund set up for their welfare, if the income is not included under the head "income from business"; 20   (f) income from machinery, plant or furniture belonging to the person and let on hire, if the income is not included under the head "income from business";  (g) any amount received under a keyman insurance policy including the sum allocated by way of bonus on such policy, if such income is not included under the heads "income from employment" or "income from business"; 25   (h) the aggregate of any moneys and the value of any specified property, not being an immovable property, received for inadequate consideration or without consideration, by an individual or a hindu undivided family;  (i) the value of any specified property, being an immovable property received without consideration by an individual or a hindu undivided family; 30   (j) the value of any property being shares of a closely-held company received for inadequate consideration or without consideration, by a firm or a  company;  (k) the amount of voluntary contribution received by a person, other than an individual or a hindu undivided family or a non-profit organisation, from any other person; 35   (l) any amount received, or retained, on account of settlement or breach of any contract, if not included under the head "income from business";  (m) any payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, if— 40   (i) the payment or aggregate of payments is in respect of any expenditure referred to in clause (a) of sub-section (1) of section 59;  (ii) the expenditure has been allowed as a deduction in any earlier financial year on the basis of the liability incurred thereon; (iii) the payment or aggregate of payments exceeds a sum of twenty thousand rupees; and  (iv) it has not been incurred in such cases and under such circumstances, as may be prescribed;  5  (n) any amount found credited in the books of  the person maintained for the financial year, if - (i) the person offers no explanation about the nature and source thereof; (ii) the person offers an explanation but fails to substantiate the explanation; or  10 (iii) the explanation offered by him is, in the opinion of the assessing officer, not satisfactory;  (o) the value of any investment made by the person in the financial year to the extent for which -  (i) the person offers no explanation about the nature and source of the 15 investments;  (ii) the person offers an explanation but fails to substantiate the explanation; or  (iii) the explanation offered by him is, in the opinion of the assessing officer, not satisfactory;  20  (p) the value of any money, bullion, jewellery or other valuable article owned by the person to the extent for which -  (i) the person offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article;  (ii) the person offers an explanation but fails to substantiate the (iii) the explanation offered by him is, in the opinion of the assessing 25 explanation; or officer, not satisfactory;  (q)  the amount of any expenditure incurred by the person in the financial year, if -  (i) the person offers no explanation about the source of such expenditure or part thereof;  (ii) the person offers an explanation but fails to substantiate the explanation; or  30  35  (iii) the explanation, if any, offered by him is, in the opinion of the assessing officer, not satisfactory;  (r) any amount deemed to be the income under sub-section (5) of section 78;  (s)  any consideration accrued, or received, in respect of transfer of any business asset, which is self-generated, if the consideration is not included under the head 40 ''income from business'';  (t) any amount accrued, or received, on account of the cessation, termination or forfeiture in respect of any agreement entered into by the person, if the amount is not included under the head 'income from business'; (u) any amount of attributable income of a controlled foreign company to a resident in accordance with the twentieth schedule  (v) any amount received, as advance, security deposit or otherwise, from the long term leasing, or transfer of whole or part of, or any interest in, any investment asset; 5  (w) amount of any benefit accrued to, or received by, the person, if the amount is not included under the head "income from business" and if—  (i) it is by way of remission or cessation of any liability including statutory liability or in respect of any loss or expenditure; and 10   (ii) such liability or loss or expenditure has been allowed as a deduction in any financial year;  (x) any sum received as family pension;  (y) any  amount including bonus, if any, received or receivable under a life insurance policy from an insurer on maturity or otherwise 15   (3) the amount referred to in clause (h) or clause (i) of sub-section (2) shall not include any amount received—  (a) from any relative;  (b) on the occasion of the marriage of the individual;  (c) under a will or by way of inheritance; 20   (d) in contemplation of death of the payer; (e) from any local authority; or (f) from any non-profit organisation (4) in this section,— (a) ''relative" shall not include any person referred to in sub-clause (g) of 25  clause (214) of section 314;  (b) ''specified property"means—  (i) immovable property being land or building or both; (ii) shares and securities; (iii) jewellery; 30   (iv) bullion;  (v) archaeological collections; (vi) drawings; (vii) paintings;  (viii) sculptures; or 40   (ix) any work of art;  (c) value of any property referred to in clause (h) or clause (i) or clause (j) of subsection (2), as the case may be, shall be— (i) the stamp duty value in the case of an immovable property as reduced by the amount of consideration, if any, paid by the person; and  (ii) the fair market value in the case of any other property as reduced by the amount of consideration, if any, paid by the person  5  (5) the provisions of clause (j) of sub-section (2) shall not apply to any property received by way of a transaction not regarded as a transfer under clause (f) or clause (g) or clause (h) or clause (l) or clause (m) of sub-section (1) of section 47  59 (1) the deductions for the purposes of computation of income from residuary sources shall be the aggregate of—   deductions from  gross residuary income 10 (a) the amount of expenditure specified in sub-section (2), if—  (i) the expenditure (not being in the nature of capital expenditure) is laid out or expended, wholly and exclusively, for the purposes of making or earning the gross residuary income; and  (ii) it fulfills all other conditions, if any, specified therein; and  15  (b) the amount of deductions specified in sub-section (3) subject to the fulfilment of the conditions, if any, specified therein; and  (c) any amount received during the financial year as dividend from a controlled foreign company as referred to in clause (u) of sub-section (2) of section 58, to the extent such amount has been included in the total income of the assessee in any 20 preceding financial year in accordance with the provisions of the said clause  (2) the amount of expenditure referred to in clause (a) of sub-section (1) shall be the following, namely:—  (a) any reasonable sum paid by way of remuneration or commission for the purpose of realising the income referred to in clause (a) or clause (b) of sub-section (2) of section 58;  25  (b) the amount determined, so far as may be, in accordance with the provisions of  clause (v) of sub-section (2) of section 35 in respect of the income of the nature referred to in clause (f) of sub-section (2) of section 58 ;  (c) the amount determined, so far as may be, in accordance with the provisions of clause (xxx) of sub-section (2) of section  35 in respect of income of the nature 30 referred to in clause (e) of sub-section (2) of section 58;  (d) the amount determined, so far as may be, in accordance with the provisions of section 37 and subject to the provisions of sub-section (3) of section  34 in respect of income of the nature referred to in clause (f) of sub-section (2) of section 58  (3) the amount of deduction referred to in clause (b) of sub-section (1) shall be the 35 following, namely:—  (a) the amount equal to thirty-three and one-third per cent of income or fifteen thousand rupees, whichever is less, in respect of family pension;  (b) the aggregate amount referred to in clause (h) or clause (i) or clause (j) of subsection (2) of section 58 to the extent the aggregate does not exceed fifty thousand 40 rupees; and  (c) the repayment of advance or security deposit from long-term leasing in the financial year in which such advance or security deposit is re-paid  (d) the amount included in income under clause (y) of sub-section (2) of section 58 in respect of an insurance policy where— (i) the premium paid or payable for any of the years during the term of the policy does not exceed five per cent of the capital sum assured; and  (ii) the amount is received only upon completion of original period of contract of the insurance;  (e) the amount included in income under clause (y) of sub-section (2) of section  5 58, if tax on distributed income in respect of the insurance policy has been paid by the insurer under section 110;  (f) the amount of premium paid upto the date of receipts or accruals referred to in clause (y) of sub-section (2) of section 58 in respect of an insurance policy, other than a policy referred to in clause (d) and clause (e) of this sub-section, as reduced by 10 the amount of premium which has already been allowed as a deduction under this clause in any previous financial year, to the extent such amount has been included as receipts or accruals under clause (y) of sub-section (2) of section 56  (4) in the case of the income referred to in clause (c) of sub-section (2) of section 58, the amount of deduction shall be a sum equal to fifty per cent of such income and no 15  deduction shall be allowed under any other clause of this section (5) the following amounts shall not be allowed as a deduction, namely:— (a) any amount relating to personal expenses of the person; 43 of  1961 27 of  1957 (b) any amount of tax, interest or penalty paid under this code or the income-tax act, 1961 or the wealth tax act, 1957 as they stood before the commencement of this 20 code; or  (c) any payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, if—  (i) the payment or aggregate of payments is in respect of any expenditure referred to in clause (a) of sub-section (1) of section 59; 25   (ii) the payment or aggregate of payments exceeds a sum of twenty thousand rupees; and  (iii) it has not been incurred in such cases and under such circumstances, as may be prescribed;   (i) the value of any premium agreed to be returned; or  (ii) any benefit, by way of bonus or otherwise, over and above the sum assured, which is to be received or may be received by any person under the policy 35    iii —aggregation of  income(6)  in this chapter "capital sum assured" in relation to a life insurance policy means 30 the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy not taking into account— 60 (1) subject to other provisions of this section, the income from each source falling under a head of income for a financial year shall be aggregated and the income so aggregated shall be the income from that head for the financial year 40   aggregation of income under a head of  income (2) the income from the transfer of each investment asset during the financial year, as computed under section 49, shall be aggregated and the net result of such aggregation shall be the income from the capital gains, for the financial year  (3) the income from capital gains shall be aggregated with the unabsorbed preceding year capital loss, if any, and the net result of such aggregation shall be the current income under the head "capital gains"  (4) the income under the head "capital gains" shall be treated as ''nil'' if the net result of aggregation under sub-section (3) is negative and the absolute value of the 5      net result shall be the amount of ''unabsorbed current capital loss'', for the financial year  (5) the income from each business other than speculative business referred to in sub-section (3) of section 31 shall be aggregated and the income so aggregated shall be the income from the non-speculative business  10  (6) the income from each speculative business shall be aggregated and the income so aggregated shall be the gross income from the speculative business  (7) the gross income from the speculative business shall be aggregated with unabsorbed preceding year speculative loss, if any, and the  net result of such aggregation shall be the income from the speculative business  15  (8) the aggregate of from the speculative business shall be treated as nil, if the ''nil'' result of aggregation in sub-section (7) is negative and the absolute value of the net result of aggregation shall be the amount of unabsorbed current speculative loss for the financial year  (9)  the aggregate of income from the speculative business and income from the non- 20 speculative business shall be the income under the head "income from business"  (10) the income from the activity of owning and maintaining horses for the purpose of horse race shall be aggregated with unabsorbed preceding year horse race loss, and the net result of such aggregation shall be the income from activity of owning and maintaining horse 25   race and it shall be taken to be ''nil'', if the net result of such aggregation is negative and the absolute value of net result shall be the amount of unabsorbed current horse race loss for the financial year  (11) the income of every kind referred to in section 58, other than income from the activity of owning and maintaining horses for the purpose of  horse race, shall be 30 aggregated with income from the activity of owning and maintaining horse race and the income so aggregated shall be the income under the head " income from residuary sources"  61 (1)  the current income from ordinary sources shall be the aggregate of— (a) income under the head ''income from employment'';  aggregation of  income from ordinary sources 35 (b) income under the head ''income from house property''; (c) income under the head ''income from bussiness''; (d) income under the head ''capital gains'', and;  (e) income under the head ''income from residuary sources''  (2) the current income from ordinary sources shall be aggregated with the unab- 40   sorbed preceding year loss from the ordinary sources, if any; and the net result of  the aggregation shall be the gross total income from ordinary sources, for the financial year  (3) the gross total income from ordinary sources, for the financial year, shall be treated as ''nil'' if the net result of the aggregation under sub-section (2) is negative; and the absolute value of the net result shall be the amount of unabsorbed current loss from ordinary 45   sources, for the financial year 62 (1) the income from a special source referred to in part iii of the first schedule shall be the current income from the special source for the financial year  (2) the current income from the special source referred to in sub-section (1) shall be aggregated with the unabsorbed preceding year loss from the special source, if any; and the income so aggregated shall be the gross total income from the special source, for the finan- 5 cial year  (3) where the gross total income from the special source referred to in sub-section (2) is negative, such income shall be treated as ''nil''and the absolute value of the net result shall be the amount of unabsorbed current loss from the special sourcefor the financial year  (4) the gross total income from special source in respect of each special source 10 computed under sub-sections (2) and (3) shall be aggregated and the net result of the aggregation shall be the total income from special sources for the financial year aggregation of income from special sources  aggregation of income from  special sources  63the total income of a person for any financial year shall be computed in accordance with the formula— 15   (a - b) + c where a = the gross total income from ordinary sources for the financial  year;  b  = the aggregate amount of deductions allowed  under sub-chapter iv; and  c =  the total income from special sources for the financial year 20   determination of total income  64 (1) in a business reorganisation, or on conversion of a company into a limited liability partnership as referred to in clause (j) of sub-section (1) of section 47—  (a)   the unabsorbed current loss from ordinary sources of the predecessor in respect of the financial year in which business reorganisation or such conversion has taken place shall be deemed to be the unabsorbed preceding year loss from ordinary 25  special provisions relating  to business reorganisation or  conversion of a  company into a  limited liability partnership sources of the successor in respect of the financial year and the provisions of section 61 shall apply accordingly; and  (b) the unabsorbed current loss from special source of the predecessor  in respect of the financial year in which business reorganisation or such conversion has taken place, shall be deemed to be the unabsorbed preceding year loss from that 30 special source of the successor in respect of the financial year, and the provisions of section 62 shall apply accordingly  (2)   the provisions of sub-section (1) shall not apply   in case of a business reorganisation if the successor in a business reorganisation does not satisfy the test of continuity of business, and— 35   ( a) where the predecessor is a sole  proprietary concern or unincorporated body , and  (b) the shareholding of the sole proprietor or the participant, as the case may be, ceases to be less than fifty per cent of the total value of the shares of the successor company at any time during the period of five years immediately succeeding the 40 financial year in which the business reorganisation takes place  (3) in case of the conversion, the provisions of sub-section (1) shall not apply if any of the conditions, specified in clause (j) of sub-section (1) of section 47 are not fulfilled  (4)  the total income of the financial year in which, the business reorganisation or the conversion referred to in sub-section (1) took place, and of all the subsequent financial years shall, notwithstanding anything in this code, be rectified as if the provisions of this section had never been given effect to in those financial years, if conditions specified in sub-section (2) of this section or clause (j) of sub-section (1) of section 47 are not fulfilled at any time 5 during five financial years immediately succeeding the financial year in which re-organisation or conversion took place  65 (1) the amount of unabsorbed current loss from ordinary sources calculated under sub-section (3) of section 61, for the financial year ending on the date of the retirement, or death, of a participant, shall be reduced by the amount in proportion of the share of the 10 retired, or deceased, participant  (2) the amount so reduced under sub-section (1) shall be the unabsorbed preceding year loss from ordinary sources, for the financial year beginning on the date immediately following the date of retirement, or death, of a participant for the purposes of sub-section (2) of section 61  15  (3) the amount of unabsorbed current loss from the special source calculated under sub-section (3) of section 62, for the financial year ending on the date of the retirement, or death, of a participant, shall be reduced by the amount in proportion of the share of the retired, or deceased, participant  (4) the amount so reduced under sub-section (3) shall be the ''unabsorbed preceding 20 year loss from the special source'', for the financial year beginning on the date immediately following the date of retirement, or death, of a participant for the purposes of sub-section (2) of section 62  (5) the provisions of this section shall apply notwithstanding anything in any other provision of this code  25  (6) in this code, any reference to the unabsorbed preceding year loss from ordinary sources and unabsorbed preceding year loss from the special source in respect of an unincorporated body where a change has occurred in its constitution due to death, or retirement, of its participant, shall be construed as a reference to the amount so reduced under subsection (1) and sub-section (3) respectively  aggregation of losses  in case of change in constitution of  unincorpo-  rated body   aggregation of losses  in the  case  of certain companies 30  66 (1) notwithstanding anything in this chapter a closely-held company shall not be allowed to aggregate any unabsorbed preceding year loss from ordinary sources or unabsorbed preceding year loss from the special source with the income of the financial year unless it satisfies the test of continuity of ownership  (2) the closely held company shall satisfy the test of continuity of ownership referred 35 to in sub-section (1), if the shares of the company beneficially held by persons, carrying not less than fifty-one per cent of the voting power on the last day of the financial year immediately preceding the relevant financial year, are held by the same persons on the last day of the relevant financial year (3) for the purposes of calculating the percentage of voting power under sub-section   40 (2),—  (a)  any change in the voting power in the relevant financial year due to the death of a shareholder or on account of transfer of shares by way of gift to any relative of the donor shareholder shall be ignored;  (b)   any change in the shareholding of an indian company, which is a subsidiary of a foreign company, as a result of amalgamation or demerger of a foreign company, shall be ignored, if fifty-one per cent shareholders of the amalgamating or demerged foreign company continue to be the shareholders of the amalgamated or the resulting foreign company   67 notwithstanding anything in this code, if the return of tax bases for a financial year is not furnished by the due date and if the amount of unabsorbed current loss from ordinary sources, unabsorbed current capital loss, unabsorbed current speculative loss, unabsorbed current horse race loss and unabsorbed current loss from special source of the said financial year exceeds the corresponding amount of the immediately preceding financial year then, such respective excess in that year shall not be taken into account for any of the purposes of this code for any subsequent financial years   iv - tax  incentivesaggregation  of loss not  to be allowed in  the case of filing of return after due date  68 (1) a person shall be allowed the deductions specified in this sub-chapter from his ''gross total income from ordinary sources'', for the financial year  (2) the aggregate amount of the deductions under this sub-chapter shall not exceed the 'gross total income from ordinary sources', for the financial year  (3) any sum, which qualifies for a deduction under this sub-chapter in any financial year, shall not qualify for deduction—  (a) under any other provision of this code for the same or any other financial year; or  (b) in the case of any other person  (4) the provisions of sub-section (3) shall apply whether full deduction of the sum referred to therein has been allowed or not  deductions from  gross total  income from  ordinary sources 69 (1) a person, being an individual, shall be allowed a deduction for savings in respect of the aggregate of the sum referred to in sub-section (2)  to the extent of  one lakh rupees  (2) the sum referred to in sub-section (1) shall be the amount paid or deposited by the person in a financial year as his contribution of any approved fund to an account of the individual, spouse or any child of such individual—  deduction  for savings  70 (1) a person, being an individual or a hindu undivided family, shall be allowed a deduction in respect of any sum paid or deposited to effect or keep in force an insurance on the life of persons specified in sub-section (3)  (2) the insurance referred to in sub-section (1) shall be an insurance where the premium payable for any of the years during the term of the policy shall not exceed five per cent of the capital sum assured  (3) the person referred to in sub-section (1) shall be—  (a) the individual,spouse or any child of such individual; and  (b) in case of a hindu undivided family, any member of such family  deduction for  life insurance   5 10  15 20 19 of  1925 25 30 35 40  71 (1) a person, being an individual or a hindu undivided family, shall be allowed a deduction in respect of any sum paid during the financial year to effect, deduction forhealth insur- ance or to keep in force, an insurance on the health of persons specified in sub-section (2) and in addition, in the case of an individual, any contribution made to the central government health scheme  (2) the person referred to in sub-section (1)  shall be—  5  (a) the individual, spouse, or any dependant child or parents of such individual; and  (b) in case of a hindu undivided family, any member of such family  (3) the insurance  under this section refers to a health insurance scheme framed by any insurer which is approved by the insurance regulatory and development authority  10  72 (1) a person, being an individual or a hindu undivided family, shall be allowed a deduction in respect of any sum paid during the financial year, if the sum is paid—  (a) as tuition fee to any school, college, university or other educational institution situated within india; and  (b) for the purpose of full time education of any two children of such individual 15 or hindu undivided family (2) in this section— (a) tuition fee shall not include any payment towards any development fee or donation or any payment of similar nature;  (b) full time education shall include education in play school or pre-school  20  73 the aggregate amount of deductions under sections 70, 71 and 72 shall not exceed fifty thousand rupees 74 (1) a person, being an individual or a hindu undivided family, shall be allowed a deduction, in respect of any amount paid or payable by way of interest on loan taken for the purpose of acquisition, construction, repair or renovation of a house property in the finan-  deductions for education   of children  limit  on  deductions under sections    70, 71 and  72  deduction ofinterest  on loan  taken for  house property 25    cial year in which such property is acquired or constructed or any subsequent financial year, subject to the conditions specified in sub-section (2)  (2) the deduction referred to in sub-section (1) shall be allowed if—  (a) the house property is owned by the person and not let out during  the financial year; 30  (b) the acquisition or construction of the house property is completed within a period of three years from the end of the financial year in which the loan was taken; and  (c) the person obtains a certificate from the financial institution to whom the interest is paid or payable on the loan  35  (3) the interest referred to in sub-section (1) which pertains to the period  prior to the financial year in which the house property has been   acquired or constructed shall be allowed as deduction in five equal instalments beginning from such financial year  (4) the interest referred to in sub-section (3) shall be reduced by any part thereof which has been allowed as deduction under any other provision of this code 40  (5) the amount of deduction under this section shall not exceed one lakh and fifty thousand rupees 75 (1) a person, being an individual, shall be allowed a deduction in respect of any amount paid by him in the financial year by way of interest on loan taken by him from any financial institution for the purpose of—  (a) pursuing his higher education; or  (b) higher education of his relatives 5  (2) the deduction specified in sub-section (1) shall be allowed in the initial financial year and seven financial years immediately succeeding the initial financial year or until the interest referred to in sub-section (1) is paid by the person in full, whichever is earlier  (3) in this section-  (a) "financial institution" means a banking company or any other financial insti- 10  tution which the central government may, by notification, specify in this behalf;  (b) "higher education" means any course of study pursued after passing the senior secondary examination, or its equivalent, conducted by any board, or university, recognised by the central or state government or any authority authorised by the government so to do; 15   (c) "initial financial year" means the financial year in which the person begins to pay the interest on the loan;  (d) "relative" means-  (i) spouse of the individual;  (ii) child of the individual; or 20   (iii) a student for whom the individual is the legal guardian  deduction of interest on loan taken  for higher education  deduction  for medical treatment, etc 76 (1) a person, being resident individual or  hindu undivided family, shall be allowed a deduction in respect of any amount paid during the financial year for medical treatment of the prescribed disease or ailment of any specified person  (2) the amount of deduction under sub-section (1) shall not exceed— 25   (a) sixty thousand rupees, if the amount is paid in respect of any specified person, who is a senior citizen; and  (b) forty thousand rupees, in any other case  (3) the deduction under this section shall be reduced by the amount received, if any, under an insurance from an insurer, or reimbursed by an employer, for the medical treatment 30  of the specified person  (4) the deduction under this section shall not be allowed unless the person obtains a certificate in such form as may be prescribed from a specialist working in a government hospital  (5) in this section,— 35   (a) "specified person" means— (i) the individual; (ii)   spouse of the individual;  (iii) any dependant child of the individual;  (iv) dependant parents of the individual; and 40   (v) any member of the hindu undivided family; (b) "government hospital" includes—  (i) a dispensary established and run by a department of the government for the medical treatment of government employees and members of their family;  (ii)   a hospital maintained by a local authority; and  5  (iii)  any other hospital with which an agreement has been entered into by the government for the treatment of its employees  77 (1) a person, being resident individual, shall be allowed a deduction of an amount specified in sub-section (2), subject to the conditions specified in sub-section (3)  (2) the amount of deduction under sub-section (1) shall not exceed—  10 (a) one lakh rupees, if he is a person with severe disability; (b) fifty thousand rupees, if he is a person with disability (3) the deduction under sub-section (1) shall be allowed if the person obtains a certificate from a medical authority in such form and manner as may be prescribed and the certificate remains valid during the relevant financial year or part thereof  15  78 (1) a person, being resident individual or hindu undivided family, shall be allowed a deduction in respect of -  (a) any expenditure incurred during the financial year for the medical treatment, nursing or training and rehabilitation of a dependant person with disability; or  (b) any amount paid or deposited during the financial year under a scheme  deduction toa  person  with disability deduction  for medical treatment and  maintenance of  a dependant person  with disability 20 framed by any insurer and approved by the board in this behalf, for the maintenance of a dependant person with disability  (2) the amount of deduction under sub-section (1) shall not exceed-  (a) one lakh rupees, if the dependant is a person with severe disability; or  (b) fifty thousand rupees, if the dependant is a person with disability  25  (3) the deduction in respect of the amount referred to in clause (b) of sub-section (1) shall be allowed, if the scheme referred to therein provides for payment of annuity or lump sum amount for the benefit of a dependant person with disability, in the event of the death of the individual or the member of the hindu undivided family in whose name subscription to the scheme has been made  30  (4) the deduction under this section shall be allowed if the person, claiming a deduction under this section, obtains a certificate from a medical authority in such form and manner as may be prescribed and the certificate remains valid during the relevant financial year or part thereof  (5) the amount received by the person under the scheme referred to in clause (b) of 35    sub-section (1), upon the dependant person with disability, predeceasing him, shall  be deemed to be the income of the person for the financial year in which the amount is received by him  (6) in this section, "dependant" means spouse, any child or parents of the individual, or any member of the hindu undivided family, if—  40  (i) he is mainly dependant on such individual, or hindu undivided family, for his support and maintenance; and  (ii) his income in the financial year is less than twenty-four thousand rupees 79 (1) a person shall be allowed a deduction of—  (a) one hundred and seventy-five per cent of the amount of money paid by him in the financial year as contribution or donation to any person specified in part i of the sixteenth schedule;  (b) one hundred and twenty-five per cent of the amount of money paid by him in the financial year as contribution or donation to any person specified in part ii of the sixteenth schedule;  (c) one hundred per cent of the amount of money paid by him in the financial year as donation to any person specified in part iii of the sixteenth schedule;  (d) fifty per cent of the aggregate of the amount of money actually paid by him in the financial year as donation to any person specified in part iv of the sixteenth schedule  (2) the aggregate of the amount of money referred to in clause (d) of sub-section (1) shall be limited to ten per cent of the gross total income from ordinary sources, if the aggregate exceeds ten per cent of the gross total income from ordinary sources  (3) the deduction under this section shall not be allowed in respect of any amount of money paid to any person referred to in sub-section (1), if—  (a) the amount is laid out or expended during the financial year for any religious activity; or  (b) any activity of the donee is intended for, or actually benefits, any particular caste, not being  the scheduled castes or the scheduled tribes  (4) the donation to any person specified in part iv of the sixteenth schedule shall be eligible for deduction under sub-section (1), if the donee obtains the approval of the prescribed authority in accordance with the procedure and subject to such conditions, as may be prescribed  (5) the deduction under sub-section (1) shall not be denied to a donor merely on the consideration that, subsequent to the donation, the donee, being a non-profit organisation, has ceased to be so  deduction   of contribution  or donations     to certain funds or n o n - p r o f i t   organisations 80 (1) a person, being an individual and not in receipt of any house rent allowance, shall be allowed a deduction of any expenditure incurred by him in excess of ten per cent of his gross total income from ordinary sources towards payment of rent in respect of any furnished or unfurnished accommodation occupied by him for his own residence  (2) the deduction referred to in sub-section (1) shall be allowed up to a maximum of two thousand rupees per month and shall be subject to such other conditions as may be prescribed having regard to the area or place in which the accommodation is situated  (3) the provisions of this section shall not apply to a person if any residential accommodation is owned by him or by his spouse or minor child in the place where he ordinarily resides or performs duties of his office or employment or carries on his business  deduction  for rent  paid 81 (1) a person shall be allowed a deduction in respect of any contribution made by him in the financial year to a political party or electoral trust  deduction forpolitical contributions (2) the deduction under sub-section (1) shall not exceed five per cent of-  (a) the average of the net profit determined in accordance with the provisions of section 349 and section 350 of the companies act, 1956 during the three immediately (b) the "gross total income from ordinary sources", in any other case  preceding financial years, in the case of a company; and  (3) in this section, the word "contribution", with its grammatical variation, shall have the same meaning as assigned to it under section 293a of the companies act, 1956   5  82 (1) a person shall be allowed in the financial year a deduction of the amount specified in sub-section (2), if such amount is included in the gross total income from ordinary sources  (2) the amount referred to in sub-section (1) shall be the contribution received from any recognised stock exchange, or recognised commodity exchange, and the members thereof  10 (3) the deduction under sub-section (1) shall be allowed if—  (a) the person is an investor protection fund set up, either jointly or separately, by recognised stock exchanges or recognised commodity exchanges; and  (b) such investor protection fund is notified by the central government  83 (1) a person, being resident individual, shall be allowed a deduction of an amount 15 specified in sub-section (4) in respect of any income referred to in sub-section (3), if such income is included in his gross total income from ordinary sources  (2) the deduction under sub-section (1) shall be allowed to a person, if he is an author of any book which is a work of literary, artistic or scientific nature  (3) the income referred to in sub-section (1) shall be any income derived by the author 20 by way of—  (a) lumpsum consideration for the assignment or grant of any of his interest in the copyright of the book referred to in sub-section (2); or  (b) royalty or copyright fees (whether receivable in lumpsum or otherwise) in respect of the book referred to in sub-section (2) 25  (4) the amount of deduction under sub-section (1) shall be the amount of income referred to in sub-section (3) to the extent it does not exceed three lakh rupees  (5) in this section, ''books" shall not include brochures, commentaries, diaries, guides, journals, magazines, newspapers, pamphlets, tracts and other publications of similar nature by whatever name called  30  84 (1) a person, being resident individual and a patentee, shall be allowed a deduction of an amount specified in sub-section (3) in respect of any income referred to in sub-section (2), if such income is included in his 'gross total income from ordinary sources'  (2) the income referred to in sub-section (1) shall be any income received by the person by way of royalty in respect of a patent registered on or after the 1st day of april, 2003  1  of 1956 35 under the patents act, 1970   39 of  1970 39 of  1970 (3) the amount of deduction under sub-section (1) shall be the amount of income referred to in sub-section (2) to the extent it does not exceed the amount of royalty allowable under the terms and conditions of a licence settled by the controller under the patents act, 1970, if a compulsory licence is granted in respect of any patent under that actor three 40 lakh rupees, whichever is lower  (4) in of this section,— (a) "patent" means a patent (including a patent of addition) granted under the patents act, 1970;  (b) "patentee" means the person, being the true and first inventor of the invention, whose name is entered on the patent register as the patentee, in accordance with the patents act, 1970, and includes every such person, being the true and first inven-  5 tor of the invention, where more than one person is registered as patentee under that act in respect of that patent;  (c) "patent of addition" shall have the same meaning as assigned to it in clause (q) of sub-section (1) of section 2 of the patents act, 1970;  (d) "patented article" and "patented process" shall have the meanings respec- 10  tively assigned to them in clause (o) of sub-section (1) of section 2 of the patents act, 1970;  (e) "royalty", in respect of a patent, means consideration (including any lump sum consideration but excluding any consideration which would be the income of the recipient chargeable under the head "capital gains" or consideration for sale of prod- 15 uct manufactured with the use of patented process or of the patented article for commercial use) for—  (i) the transfer of all or any rights (including the granting of a licence) in respect of a patent; or  (ii) the imparting of any information concerning the working of, or the use  20  of, a patent; or  (iii) the use of any patent;  (f) "true and first inventor" shall have the same meaning as assigned to it in clause (y) of sub-section (1) of section 2 of the patents act, 1970 deduction of royalty on  patents 25  39 of  1970  39 of  1970  39 of  1970  39 of  1970  39 of  1970 85 (1) a person, being a primary co-operative society, shall be allowed a deduction to the extent of profits derived from the business of providing banking, or credit, facility to its members  (2) in this section "primary co-operative society" means—  (a) a "primary agricultural credit society" within the meaning of part v of the  30  10 of  1949 banking regulation act, 1949; or  (b) a "primary co-operative agricultural and rural development bank", which- (i) has its area of operation confined to a taluk; and (ii) is mainly engaged in providing long-term credit for agricultural and rural development activities 35   deduction   of income  ofcooperative  society  from  banking  activities 86 (1) a person, being a primary co-operative society, shall be allowed a deduction in respect of the aggregate of the amounts referred to in sub-section (2)  (2) the amount referred to in sub-section (1) shall be—  deduction   of income  of  primary    co-operative  societies (a) the amount of profits derived from agriculture or agriculture-related activities; and 40   (b) the amount of income derived from any other activity, to the extent it does not exceed one lakh rupees  (3) in this section,—  (a) "agriculture-related activities" means the following activities, namely:—  (i)  purchase  of  agricultural  implements,  seeds,  livestock  or  other  articles 45  intended for agriculture for the purpose of supplying them to its members; (ii) the collective disposal of— (a) agricultural produce grown by its members; or  (b) dairy or poultry produce produced by its members; and  5  (iii) fishing or allied activities, that is to say, the catching, curing, processing, preserving, storing or marketing of fish or the purchase of material and equipment in connection therewith for the purpose of supplying them to its members;  (b) "primary co-operative society" means a co-operative society whose rules 10 and bye-laws restrict the voting rights to individuals engaged in agriculture or agriculture-related activities   v - maintenance of accounts and other  related matters maintenance of  accounts 87 (1) every person shall keep and maintain such books of account and other documents as may enable the assessing officer to compute his total income in accordance with 15 the provisions of this code  (2) every person who has entered into an international transaction shall keep and maintain such information and document in respect thereof, as may be prescribed  (3) the person referred to in sub-section (1) shall be the following, namely:—  (a) any person carrying on legal, medical, engineering, architectural profession 20 or profession of accountancy, technical consultancy, interior decoration or any other profession as is notified by the board;  (b) any other person carrying on business, if—  (i) his income from the business exceeds two lakh rupees;  (ii) his total turnover or gross receipts, as the case may be, in the business 25 exceeds ten lakh rupees in any one of the three financial years immediately preceding the relevant financial year; or  (iii) the business is newly set-up in any financial year, his income from the business is likely to exceed two lakh rupees or his total turnover or gross receipts, as the case may be, in the business is likely to exceed ten lakh rupees, 30 during such financial year (4) the books of account referred to in sub-section (1) shall be the following, namely:—   (a) a cash book;  (b) a journal, if the accounts are maintained according to the mercantile system of accounting;  35 (c) a ledger;  (d) register of daily inventory of business trading asset;  (e) copies of serially numbered bills issued by the person, if the value of the bill exceeds  two hundred rupees;  (f)  copies or counterfoils of serially numbered receipts issued by the person, if 40 the value of the bill exceeds two hundred rupees;  (g) original bills or receipts issued to the person in respect of expenditure incurred by him, if the amount of the expenditure exceeds two hundred rupees;  (h) payment vouchers prepared and signed by the person in respect of expendi- ture not exceeding two hundred rupees, if there are no bills or receipts for such expenditure  (5) the bills or receipts issued to any person shall contain the name, address and such other particulars as may be prescribed  (6) the board may, having regard to the nature of the business carried on by any 5 class of persons, prescribe—  (a) any other books of account and documents to be kept and maintained;  (b) the particulars to be contained in the books of account and documents; and  (c) the form and the manner in, and the place at, which the books of account and other documents shall be kept and maintained 10   (7) the board may prescribe the period for which the books of account and other documents required to be kept and maintained under this section shall be retained  (8) the expression "international transaction" referred to in sub-section (2) shall have the meaning assigned ot it in clause (17) of section 124 15   88 (1) every person, who is required to keep and maintain books of account under section 87 shall get his accounts for the financial year audited—  (a)  where the person is carrying on any profession, the gross receipts of the profession exceed twenty-five  lakh rupees in the financial year;  (b)  where the person is carrying on any business, the total turnover or gross   20  receipts, as the case may be, of the business exceed one crore rupees in the financial year  (2) the audit of the accounts referred to in sub-section (1) shall be carried out by an accountant and the report of audit obtained before the due date  (3) the report of audit referred to in sub-section (2) shall be obtained in the prescribed    25  form duly signed and verified by such accountant and setting forth such particulars as may be prescribed  (4) the provisions of sub-section (1) shall not apply to the business where the income therefrom is determined under paragraph 1 of the fourteenth schedule  (5) a person shall be deemed to have complied with the provisions of sub-section (1),    30  if the person—  (a) gets the accounts of his business audited as required by, or under, any other law for the time being in force, before the due date; and  (b) obtains by the due date the report of the audit as required under such other law and a further report by an accountant in the form prescribed under sub-section (3) 35   (6) a person referred to in sub-section (2) of section 87 shall furnish a report of the international transaction entered into during the financial year to the transfer pricing officer on or before the due date specified in sub-clause (c) of clause (86) of section 314  (7) the report referred in sub-section (6) shall be obtained from an accountant in such form, duly signed and verified in such manner as may be prescribed 40   audit of accounts    and reporting of international transaction method of accounting 89 (1) the income chargeable under the head "income from business" or "income from residuary sources" shall, except as otherwise provided in this section, be computed in accordance with either cash or mercantile system of accounting regularly employed by the person  (2) the central government may from time to time notify accounting standards to be 45  followed by any class of persons or in respect of any class of income (3) the valuation of purchase of goods and inventory for the purposes of determining the income chargeable under the head "income from business" shall be—  (a) in accordance with the method of accounting regularly employed by the person; and  5  (b) further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the  person to bring the goods to the place of its location and condition as on the date of its valuation  (4) the value of sale of goods for the purposes of determining the income chargeable under the head "income from business" shall be determined—  10  (a) in accordance with the method of accounting regularly employed by the person; and  (b) further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) leviable on the sale of the goods  (5) the interest on bad or doubtful debts of any financial institution shall be included 15 in the total income of the financial year in which the interest is credited to the profit and loss account of, or is actually received by, the financial institution, whichever is earlier  (6) the interest received by a person on compensation or an enhanced compensation shall be included in the total income of the financial year in which it is received  (7) in this section,—  20  (a) any tax, duty, cess or fee (by whatever name called) under any law for the time being in force, shall include all such payment notwithstanding any right arising as a consequence to such payment;  (b) "bad or doubtful debts" shall be  such debts as may be prescribed, having regard to the guidelines issued by the reserve bank of india or the national housing 25 bank, as the case may be, in relation to such debts   chapter iv special provisions relating to the computation of  total  income of non- profit organisations 90 (1) the provisions of this chapter shall be applicable to a non-profit organisation, 30 other than any organisation of public importance, specified in the seventh schedule  (2) the central government may, subject to such conditions as may be considered necessary, notify a person as a non-profit organisation of public importance for the purpose of the seventh schedule  (3) the provision of this chapter other than section 95, section 97, section 98, section 35 99, section 101, section 102 and section 103, shall not apply to a non-profit organization, being a public religious trust or institution  91 the total income of a non-profit organisation shall be computed in accordance with the provisions of this chapter 92 (1) subject to the provisions of section 8, the total income of any non-profit  applicability of this  chapter total  income of  a  nonprofit organisation  computation of total income of  a non-proft  organisation 40 organisation in relation to any charitable activity, during the financial year, shall be the gross receipts as reduced by the amount of outgoings, computed in accordance with the cash system of accounting  (2) notwithstanding anything in sub-section (1), the total income of a non-profit organisation, being a company registered under section 25 of the companies act, 1956 in relation to any charitable activity, during the financial year, shall be the gross receipts as reduced by the amount of outgoings, computed in accordance with the mercantile system of accounting   93 (1) the gross receipts from any charitable activity shall be the aggregate of the 5 following, namely:—  (a) the amount of voluntary contributions received;  (b) any rent received in respect of a property held by the non-profit organisation consisting of any buildings or lands appurtenant thereto;  (c) the amount of income derived from any business carried on by the non-profit 10  organisation, if the business is incidental to any charitable activity so carried on;  (d) income from transfer of any capital asset computed in accordance with the provisions of sections 46 to 54 (both inclusive) where the asset is not used for the purposes of any charitable activity or any business incidental to such charitable activity; 15   (e) full value of consideration on transfer of any capital asset other than the asset referred to in clause (d);  (f)  the amount of  income received from  investment of its funds or assets;  (g) the amount of any incoming, realisation, proceeds, or subscription received from any source; and 20   (h) any amount, which was received in the last month of the immediately preceding financial year and was deposited in a specified deposit account as referred to in clause (e) of section 94  (2) the gross receipts referred to in sub-section (1) shall not include—  (a) any loan taken  during the financial year; and 25   (b) voluntary contributions  received with a specific direction that they shall form part of the corpus of the non-profit organisation  gross  receipts of  a non-profit organisation outgoings of  a non-profit organisation 94 the amount of outgoings during the financial year for the purpose of computation of the total income shall be the aggregate of—  (a) the amount paid for any expenditure, not being capital expenditure, incurred    30  wholly and exclusively for earning or obtaining any receipts referred to in section 93;  (b) the amount paid for any expenditure, incurred for the purposes of carrying out any charitable activity;  (c) the amount paid for any capital expenditure for the  purposes of any business, if the business is incidental to any charitable activity carried on by   the non-    35  profit organisation;  (d) any amount applied outside india, if—  (i) the amount is applied for an activity which tends to promote international welfare in which india is interested; and  (ii) the non-profit organisation is notified by the central government in    40  this behalf;  (e) any amount which is received during the last month of the financial year and has been deposited on or before the last day of the financial year in a specified deposit account under such deposit account scheme as may be prescribed; and (f) any amount accumulated or set apart for carrying on any charitable activity—  (i) to the extent of fifteen per cent of the total income (before giving effect to the provisions of this clause) or ten per cent of the gross receipts, whichever is higher; and  (ii) invested or deposited in the modes specified in section 95, for a period 5 not exceeding three years from the end of the financial year  95 (1) the modes of investing or depositing the money referred to in clause (f) of section 94 shall be the following, namely:—  (i) deposit in any account with the post office savings bank;  10 (ii) deposit in any account with a scheduled bank; (iii) investment in any security issued by the central government or a state government;  (iv) investment in debentures issued by any company or corporation, guaranteed by the central government or by a state government;  15 (v) investment or deposit in any public sector company; (vi) investment in immovable property; or (vii) any other mode of investment or deposit as may be prescribed  (2) the funds or the assets of the non-profit organisation (other than any assets forming part of its corpus as on the 1st day of june, 1973) shall be invested or held, at any 20 time during the financial year, in any of the modes referred to in sub-section (1) 96 (1) any amount referred to in clause (f) of section 94 shall be deemed to be the income of the non-profit organisation, if the amount—  (a) is not utilised for the purpose for which it was accumulated or set apart during the period specified therein; or  25  (b) ceases to remain invested or deposited in any of the modes  specified in section 95 (2) in this section, the amount shall be deemed to be the income of the financial year– (a) immediately following the expiry of the specified period in a case falling under clause (a) of sub-section (1); or  30  (b) in which the amount ceases to remain so invested or deposited in a case falling under clause (b) of sub-section (1)  97 (1) the funds or the assets of the non-profit organisation shall not be used or applied, directly or indirectly, for the benefit of an interested person  (2) without prejudice to sub-section (1), the funds or the assets of the non-profit  modes of  investment  deemed     income     of     a n o n - p r o f i t organisation  use or  application of funds or assets for  the benefit of   interested person 35 organisation shall be deemed to have been used or applied for the benefit of an interested person, if—  (a) the funds or the assets of the non-profit organisation are, or continue to be, lent to any interested person, for any period during the financial year, without either adequate security or adequate interest or both;  40  (b) the land, building or other asset of the non-profit organisation is, or continues to be, made available for the use of any interested person, for any period during the financial year, without charging adequate rent or other compensation;  (c) any amount is paid by way of salary, allowance or otherwise during the financial year to any interested person, out of the resources of the non-profit organisation for services rendered by that person to such organisation and the amount so paid is in excess of what may be reasonably paid for such services;  (d) the services of the non-profit organisation are made available to any interested person, during the financial year, without adequate remuneration or other compensation;  (e) any share, security or other property is purchased by or on behalf of the non-profit organisation from any interested person, during the financial year, for consideration which is more than adequate;  (f) any share, security or other property is sold by or on behalf of the non-profit organisation to any interested person, during the financial year, for consideration which is less than adequate;  (g) any fund or asset of the non-profit organisation is diverted during the financial year in favour of any interested person where the fund or the value of the asset, as the case may be, or the aggregate of the funds and the value of the assets so diverted exceeds one thousand rupees; or  (h) any funds of the non-profit organisation are, or continue to remain, invested for any period during the financial year (not being a period before the 1st day of january, 1971), in any concern in which any interested person has a substantial interest and such investment exceeds five per cent of the capital of that concern  98 (1) a non-profit organisation shall make an application for its registration in the prescribed form and manner to the commissioner  registration of a nonprofit organisation (2) the provisions of sub-section (1) shall not apply to any non-profit organization which has been granted approval or registration under the income tax act, 1961, as it stood before the commencement of this code, if the organisation fulfils such conditions as may be prescribed  (3)the commissioner, on receipt of the application for registration of a non-profit organisation made under sub-section (1), shall call for such documents or information as he considers necessary in order to satisfy himself about the objects and genuineness of its activities and may make such further inquiries as may be required  (4) the commissioner shall, within a period of six months from the end of the month in which the application under sub-section (1) was received, pass an order in writing—  (a)   registering the non-profit organisation if he is satisfied about its objects and the  genuineness of its activities; or  (b) refusing to register the non-profit organisation if he is not so satisfied, after giving the organisation an opportunity of being heard  (5)  the registration granted under sub-section  (4) shall be valid from the financial year in which the application under sub-section (1) was made  (6) where the commissioner is satisfied that   the activities of the non-profit organisation are—  (i) not genuine; or  (ii) not being carried out in accordance with its objects; or  5 10   15 20  43 of  1961  25  30 35 40  43 of  1961 (iii) not being carried out in accordance with any other law which is applicable to it or under which it is registered or approved,  he shall pass an order in writing cancelling the registration or withdrawing the approval, as the case may be, granted under this section or the income tax act, 1961, as it stood before the commencement of this code, after giving the organisation an opportunity of being heard  99 (1) the non-profit organisation shall keep and maintain such books of accounts, in the manner as may be prescribed  5  (2) the non-profit organisation shall maintain separate books of account in respect of business incidental to charitable activity  (3)  the non-profit organisation shall obtain a report of audit in such form as may be prescribed, from an accountant before the due date of filing of the return of tax bases, if the gross receipts referred to in section 93 in any financial year exceed five lakh rupees  10  100 (1) where the total income of a non-profit organisation includes any anonymous donation, the income-tax payable shall be the aggregate of—  (a)  the amount of income-tax calculated at the rate of thirty per cent on the aggregate of anonymous donations received in excess of the higher of the following, namely:— 15  (i) five per cent of the total donations received by the non-profit organization; or  (ii) one lakh rupees; and  (b) the amount of income-tax with which the non-profit organisation would have been chargeable had its total income been reduced by the amount of anonymous 20 donations referred to in clause (a)  (2) the provisions of sub-section (1) shall apply notwithstanding that the anonymous donation has been made with a specific direction that it shall form part of the corpus of the non-profit organisation  (3) no  outgoings shall be allowed in respect of any anonymous donation received  25  (4) in this section, "anonymous donation" means any voluntary contribution, where a person receiving such contribution does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed  101 (1) a non-profit organisation shall be liable to income-tax at the rate of thirty per 30 cent in respect of its net worth if—    maintenance of     accounts and tax  audit  anonymous donations consequences of  conversion of a nonprofit organisation (a) it converts into any form of organisation which does not qualify as a nonprofit organisation;  (b) it merges with any form of organisation which does not qualify as a nonprofit organisation; 35  (c) it fails to transfer upon  dissolution all its assets to any other non-profit organisation, within a period of three months from the end of the month in which the dissolution takes place  (2) in this section—  (a) net worth  of the non-profit organisation shall be computed as on—  40  (i) the date of conversion or merger, as the case may be, in a case falling under clause (a) or clause (b) of sub-section (1);  and  (ii) the date of dissolution in a case falling under clause (c) of sub-section (1); (b) "net worth" of the non-profit organisation means the aggregate value of the total assets of the non-profit organisation as reduced by the liabilities of such organisation computed in accordance with such rules of valuation as may be prescribed  102 (1) the provisions of this chapter shall not apply to any person who— 5  (a) holds any business under trust, notwithstanding any specific direction that— (i) the business shall form part of the corpus of such person; or (ii) the income from the business shall be applied only for charitable activity;  (b) fails to comply with the conditions specified in section 97; 10   (c) ceases to be a non-profit organisation at any time during the financial year, irrespective of registration granted under sub-section (4) of section 98; (d) carries on any business if it is not a business incidental to charitable activity (2) without prejudice to sub-section (1), the non-profit organisation which ceases to be so due to conversion, merger or dissolution as referred to in sub-section (1) of section 15  101 shall be liable to income-tax in respect of its net worth in accordance with that section  (3) the total income of any person falling under clauses (a), (b), (c) or clause (d) of sub-section (1)  shall be computed in accordance with the other provisions of  this code  provisions  of this  chapter not to  apply in  certain cases  103 in this chapter, unless the context otherwise requires,—  (a) "business incidental to charitable activity" means a business carried on in 20  interpretations in this chapter the course of the actual carrying out of any charitable activity;  (b) "charitable activity" means the following activities carried out in india, namely:—  life);   (i) relief of the poor; (ii) advancement of education; 25   (iii) medical relief;  (iv) preservation of environment (including watersheds, forests and wild-   (v) preservation of monuments or places or objects of artistic or historic interest; or 30   (vi) advancement of any other object of general public utility, not involving the carrying on of any activity in the nature of trade, commerce or business or any activity of rendering any service in relation thereto, for a cess, fee or any other consideration (irrespective of nature of use, application or retention of the income from such activity) and where the gross receipts during the financial 35  year from such activity exceed ten lakh rupees;  (c) "general public" means the body of people at large sufficiently defined by some common quality of public or impersonal nature;  (d) "interested person" in relation to a non-profit organisation means—  (i) the founder of the organisation or the  settlor of the trust; 40   (ii) any person whose total contribution to the organisation during the financial year exceeds fifty thousand rupees;  (iii) a member of the hindu undivided family if the settlor or founder or person is a hindu undivided family; (iv) any manager, by whatever name called, of the organisation or trustee of the trust;  (v) any relative of the settlor, founder, member, trustee or manager; or  (vi) any concern in which any of the persons referred to in clauses (i) to (v) 5 has a substantial interest;  (e) "trust" includes legal obligation   chapter v computation of book profit104 (1) notwithstanding anything in this code, where the normal income-tax payable 10    for a financial year by a company is less than the tax on book profit, the book profit shall be deemed to be the total income of the company for such financial year and it shall be liable to income-tax on such total income at the rate specified in paragraph a of the second schedule  (2) subject to the provisions of this chapter, the book profit referred to in sub-section (1) shall be computed in accordance with the formula—  15 a+b-(c+d) where  a= the net profit, as shown in the profit and loss account for the financial year prepared in  accordance with  the provisions of section 105; b = the aggregate of the following amounts, if debited to the profit and loss 20 account: (a) the amount of  any tax paid or payable under this code, and the provision therefor; (b) the amount carried to any reserves, by whatever name called; (c) the amount set aside as provision for meeting unascertained liabilities; 25 (d) the amount by way of provision for  losses of subsidiary companies; (e) the amount of dividends paid or proposed; (f) the amount of depreciation; (g) the amount of deferred tax and the provision therefor; (h) the amount set aside as provision for diminution in the value of any 30 asset; (i) the amount of any expenditure referred to in clause (a) of sub-section (1) of section 18; c = the aggregate of the following amounts: (a) the amount of depreciation debited to the profit and loss account 35 (excluding the depreciation on account of revaluation of assets); (b) the amount withdrawn from the revaluation reserve and credited to the profit and loss account, to the extent it does not exceed the amount of depreciation on account of revaluation of  assets referred to in clause (a); (c) the amount withdrawn from any reserve or provision if any such amount 40 is credited to the profit and loss account and such amount has been taken into account for computation of the book profit of any preceding financial year; (d) the amount of profits of a sick industrial company for any financial year comprised in the period commencing from the financial year in which the said  computation of book profit 45 company has become a sick industrial company under sub-section (1) of section 17 of the sick industrial companies (special provisions) act, 1985 and ending 1  of 1986 with the financial year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses;  (e) the amount of any income referred to in section 10 read with the sixth schedule, if credited to the profit and loss account;  (f) the amount of deferred tax, if any such amount is credited to the profit  5 and loss account;  d = the amount of loss brought forward  (3) in sub-section (2), the loss brought forward shall be—  (i) nil, if such loss brought forward (excluding depreciation) or unabsorbed depreciation as per books of account, as the case may be is nil;  or 10   (ii) the amount of loss brought forward (excluding depreciation) or unabsorbed depreciation as per books of account, whichever is less, in any other case  (4) in sub-section (2), the amount of tax shall include—  (a) any interest charged or chargeable  under this code;  (b) any tax on distributed profits under section 109 ; 15   (c ) any tax on distributed income under section 110;  (d) any tax paid on branch profits under section 111; and  (e) any tax on wealth under section 112  (5) every company to which this section applies shall obtain a report in such form as may be prescribed from an accountant certifying that the book profit has been computed in 20  accordance with the provisions of this section (6) in this chapter— (a) "normal income-tax" means the income-tax payable for a financial year by a company on its total income in accordance with the provisions other than the provisions of this chapter; 25   (b) "tax on book profit" means the amount of tax computed on book profit at a rate specified in paragraph a of the  second schedule   1  of  1956 105 (1) every company shall, for the purposes of section 104, prepare its profit and loss account for the relevant financial year in accordance with the provisions of parts ii and iii of schedule vi to the companies act, 1956 30   preparation of profit  and loss  account for computing book  profit (2) in this section, the accounting policies, the accounting standards adopted for preparing such accounts including profit and loss account and the method and rates adopted for calculating the depreciation shall, in the case of a company, be the same as have been adopted for the purpose of preparing such accounts including profit and loss account laid by the company at its annual general meeting in accordance with the provisions of section 35  210 of the companies act, 1956  (3) where the company has adopted or adopts the financial year under the companies  1  of 1956 1  of 1956 act, 1956, which is different from the financial year under this code— (i) the accounting policies; (ii) the accounting standards adopted for preparing such accounts including  40  profit and loss account;  (iii) the method and rates adopted for calculating the depreciation,  shall  correspond  to  the  accounting  policies,  accounting  standards  and  the method and rates for calculating the depreciation which have been adopted for preparing such accounts including profit and loss account for such financial year or part of such financial year falling within the relevant financial year   106 (1) the credit for tax paid by a company under section 104 shall be allowed to it in accordance with the provisions of this section  (2) the tax credit of a financial year to be allowed under sub-section (1) shall be the excess of tax on book profit over the normal income-tax  (3) no interest shall be payable on tax credit allowed under sub-section (1)  5 (4) the amount of tax credit determined under sub-section (2) shall be carried forward and allowed in accordance with the provisions of sub-sections (5) and (6) but such carry forward shall not be allowed beyond the fifteenth financial year immediately succeeding the financial year for which tax credit becomes allowable under sub-section (1)  10 (5) the tax credit shall be allowed for a financial year in which the normal income-tax exceeds the tax on book profit and the credit shall be allowed to the extent of the excess of the normal income-tax over the tax on book profit, balance of the tax credit, if any, shall be carried forward  (6) if the amount of normal income-tax or the tax on book profit is reduced or increased as a result of any order passed under this code, the amount of tax credit allowed under this section shall also be varied accordingly  15  20  (7) in the case of conversion of a private company or unlisted public company into a limited liability partnership under the limited liability partnership act, 2008, the provisions of this section shall not apply to the successor limited liability partnership  6  of 2009  (8)   in this section, the expressions "private company" and "unlisted public company" shall have the meaning respectively assigned to them in the limited liability partnership act, 2008  107 save as otherwise provided in this chapter, all other provisions of this code shall apply to a company referred to in this chapter   chapter vi provisions relating to tax on income received from venture  capital company6  of 2009  25   and venture capital  fund108 (1) notwithstanding anything in this code, any income received by a person out of investments made in a venture capital company or venture capital fund shall be chargeable to income-tax in the same manner as if it were the income received by such person had he made investments directly in the venture capital undertaking  30  tax  credit for  tax paid on book profit  application of other provisions  of this  code  tax on income received  from venture capital company  and venture capital  fund 35  (2) the venture capital company, the venture capital fund or the  person responsible for making payment of the income on behalf of such company or fund shall furnish, within such time as may be prescribed, to the person receiving such income and to the prescribed income-tax authority, a statement in the prescribed form and  manner, giving details of the nature of the income paid during the financial year and such other relevant details as may be prescribed  (3) the income paid by the venture capital company and the venture capital fund shall be deemed to be of the same nature and in the same proportion in the hands of the person receiving such income as it had been received by, or had accrued to, the venture capital company or the venture capital fund, as the case may be, during the financial year  40  45  (4) the provisions of part b or part c of this code shall not apply to the income paid by a venture capital company or venture capital fund under this section  part b dividend distribution tax chapter vii special provisions relating to tax on distributed profits  of domestic companies 109 (1) every domestic company shall be liable to pay tax on any amount of dividend 5 declared, distributed or paid (whether interim or otherwise) to its shareholders, whether out of current or accumulated profits  tax on distributed profits  of domestic companies (2) the tax on the dividend shall be charged at the rate specified in paragraph b of the second schedule, on the amount referred to in sub-section (1)  (3) the amount referred to in sub-section (1) shall be reduced by the amount of   10  dividend, if any, received by the domestic company during the financial year, if -  (i) such dividend is received from its subsidiary; and  (ii) the subsidiary has paid tax under this section on such dividend  (4) the domestic company or the principal officer of such company responsible for making payment of the dividend, as the case may be, shall be liable to pay the tax on  15 dividend to the credit of the central government within a period of fourteen days from the date of declaration, distribution or payment of such dividend, whichever is earliest  (5) no deduction under any other provision of this code shall be allowed to the domestic company or a shareholder in respect of the dividend charged to tax or the tax thereon 20   (6) the tax on dividend so paid by the domestic company shall be treated as the final payment of tax in respect of the dividend declared, distributed or paid and no further credit shall be claimed by the domestic company or by any other person in respect of the tax so paid  (7)  if the domestic company or, as the case may be, the principal officer of such   25  company responsible for making payment of the dividend does not pay the tax in accordance with the provisions of this section, then, it or he shall be deemed to be an assessee in default in respect of the tax payable by it or him and  the provisions of this code relating to the collection and recovery of tax shall apply  (8)   if the domestic company or, as the case may be, the principal officer of such   30  company fails to pay the whole or any part of the tax on dividend referred to in sub-section (2), within the time allowed under sub-section (4), then, it or he shall be liable to pay simple interest at the rate of one per cent for every month on the amount of such tax for the period beginning on the date immediately after the last date on which such tax was payable and ending with the date on which the tax is actually paid 35   (9) notwithstanding that no income-tax is payable by a domestic company on its total income computed in accordance with the provisions of part a of this code, the tax on dividend declared, distributed or paid under sub-section (1) shall be payable by such company  (10) in this section, - 40   (a) a company shall be a subsidiary of another company if such other company holds more than fifty  per cent  of nominal value of the equity share capital of the company;  (b)  "dividend" shall not include any payment referred to in  item (e)  of subclause (i) of clause (81) of section 314 45   part c tax on distributed income chapter viii special provisions relating to tax on distributed income5  110 (1) every mutual fund shall be liable to pay tax on any amount of income distributed or paid to the unit holders of  equity oriented fund   tax on income distributed   by mutual  fund or life  insurer (2) every life insurer shall be liable to pay tax on any amount of income, computed in the manner prescribed, distributed or paid to the policy holders of an approved equity oriented life insurance scheme  10 (3) the tax on the distributed income shall be charged at the rate specified in paragraph c of the second schedule, on the amount referred to in sub-sections (1) and (2)  (4) the mutual fund or the life insurer or the person responsible for making payment of the distributed income on its behalf, as the case may be, shall be liable to pay tax to the credit of the central government within a period of fourteen days from the date of distribution 15 or payment of such income, whichever is earlier  (5) no deduction under any other provision of this code shall be allowed to the mutual fund or, as the case may be, the life insurer in respect of the distributed income charged to tax or the tax thereon  (6) the tax on distributed income so paid by the mutual fund or, as the case may be, the 20 life insurer shall be treated as the final payment of tax in respect of income distributed or paid and no further credit shall be claimed by the mutual fund or the life insurer or by any other person in respect of the tax so paid  (7) if the mutual fund or the life insurer or the person responsible for making payment of the distributed income on its behalf, as the case may be, does not pay the tax in accordance 25 with the provisions of this section, then, it or he shall be deemed to be an assessee in default in respect of the tax payable by it or him and  the provisions of this code  relating to the collection and recovery of tax shall apply  (8) if the mutual fund or the life insurer or the person responsible for making payment of distributed income on its behalf, as the case may be, fails to pay the whole or any part of 30 the tax on distributed income referred to in sub-section (3), within the time allowed under sub-section (4), then it or he shall be liable to pay simple interest at the rate of one per cent for every month on the amount of such tax for the period beginning on the date immediately after the last date on which such tax was payable and ending with the date on which the tax is actually paid  35 (9) in this section,—  (a) "equity oriented fund" means a fund where more than sixty-five per cent of total proceeds of such fund are invested by way of equity shares in domestic companies;  (b) "approved equity oriented life insurance scheme" means—  40  (i) a life insurance scheme where more than sixty-five per cent of the total premia received under such scheme are invested by way of equity shares in domestic companies; and  (ii) such scheme is approved by the board in accordance with such guidelines as may be prescribed; 45  (c) the percentage of equity share holding of the mutual fund or the life insurance scheme, as the case may be, shall be computed with reference to the annual average of the monthly averages of the opening and closing figures  partd branch profits tax chapter ix charge of branch profits tax 111 (1) subject to the provisions of this code, every foreign company shall, in addition 5 tax  on branch profits to income-tax payable, be liable to branch profits tax in respect of branch profits of a financial year  (2) the branch profits tax shall be charged in respect of the branch profits of a financial year of every foreign company at the rate specified in paragraph d of the second schedule  (3) the branch profits referred to in sub-section (1) shall be the  income attributable, 10  directly or indirectly, to the permanent establishment or an immovable property situated in india, included in the total income of the foreign company for the financial year, as reduced by the amount of income-tax payable on such attributable income (4) the liability to branch profits tax shall be discharged by payment of pre-paid taxes in accordance with the provisions of this code as if the branch profits tax was income-tax 15    part e wealth-tax chapter x 20 charge of wealth-tax(5) the branch profits tax charged under this section shall be collected after allowing credit for pre-paid taxes, if any, in accordance with the provisions of this code  112 (1) subject to the provisions of this code, every person, other than a non-profit organisation, shall be liable to pay wealth-tax on the net wealth on the valuation date of a financial year (2) the wealth-tax shall be charged in respect of the net wealth  referred to in sub- 25  section (1), on the valuation date  of a financial year at the rate specified in paragraph e of the second schedule in the manner provided therein  (3) the liability to wealth-tax shall be discharged by payment of pre-paid taxes in accordance with the provisions of this code (4) the wealth-tax charged under this section shall be collected after allowing credit 30  for pre-paid taxes, if any, in accordance with the provisions of this code  tax on  net wealth 113 (1) the net wealth of a person referred to in sub-sections (1) and (2) of section computation of net  wealth 112 shall be the amount computed in accordance with the formula— | a-b   ||-------|| where || 35    ||       |a = the aggregate of the value on the valuation date, of all the specified assets, wherever located, belonging to the person referred to in this section, computed in accordance with the provisions of sub-section (5); b  = the aggregate of the value on the valuation date, of all the debts, owed by the person, which have been incurred in relation to the specified assets 40  (2) the specified assets referred to in sub-section (1) shall be the following, namely:— (a) any building or land appurtenant thereto (hereinafter referred to as "house"), used for any purpose;  (b) any farm house situated within twenty-five kilometers from local limits of any municipality or municipal corporation (by whatever name called) or a cantonment board; 45   (c) any urban land; (d) motor car, yacht, boat, helicopter and aircraft other than those used by the assessee in the business of running them on hire or as stock-in-trade;  (e) jewellery, bullion, furniture, utensils or any other article made wholly or partly of gold, silver, platinum or any other precious metal or any alloy containing one or 5 more of such precious metals, other than those used by the assessee as stock-intrade;   of art;  (f) archaeological collections, drawings, paintings, sculptures or any other work (g) watch having  value in excess of fifty thousand rupees;  (h) cash in hand, in excess of two lakh rupees, of individuals and hindu undi- 10  vided families;  (i) deposit in a bank located outside india, in case of individuals and hindu undivided families, and in the case of other persons any such deposit not recorded in the books of account;  15  (j) any interest in a foreign trust or any other body located outside india (whether incorporated or not) other than a foreign company; and  (k) any equity or preference shares held by a resident in a controlled foreign company, as referred to in the twentieth schedule  (3) the specified assets referred to in sub-section (2) shall not include the following,  20    namely:— (a ) any one building in the occupation of a ruler, being a building which immediately before the commencement of the constitution (twenty-sixth amendment) act, 1971, was his official residence by virtue of a declaration by the central government under paragraph 13 of the merged states (taxation concessions) order, 1949, or paragraph 15 of the part b states (taxation concessions) order, 1950;  (b ) jewellery in the possession of any ruler, not being his personal property, which has been recognised as his heirloom-—  (i) by the central government before the commencement of the wealth-tax 25  27 of 1957  act, 1957, as it stood before the commencement of this code; or  30  (ii) by the board at the time of his first assessment to wealth-tax under the 27 of 1957 and wealth-tax act, 1957, as it stood before the commencement of this code;  (c ) the value of the assets located outside india, if the person is a non resident;   (d ) any one  house or part of a house or one vacant plot of land not exceeding 35 five hundred square metres of area belonging to an individual or a hindu undivided family  (4) the house referred to in clause (a) of sub-section (2) shall not include the following, namely:—  (a) a house meant exclusively for residential purposes allotted by a company to 40 an employee;  (b) any house for residential or commercial purposes which forms part of stockin-trade;  (c) any house which the assessee may occupy for the purposes of business carried on by him;  45  (d) any house that has been let-out for a minimum period of three hundred days in the financial year; (e) any house in the nature of commercial establishments or complexes  (5) the value of any specified asset, other than cash, referred to in sub-section (2), shall be determined in such manner as may be  prescribed  (6) in this chapter, "valuation date" means the 31st day of march in the financial year net wealth  to include certain  assets 114 (1) the specified assets referred to in sub-section (2)  of section  113 shall be deemed to be belonging to the person, being an individual, and included in computing his net wealth  if such assets, as on the valuation date, are held (whether in the form they were transferred or otherwise),—  (a) by the spouse of such individual to whom such asset has been transferred by him, directly or indirectly, otherwise than for adequate consideration or in connection with an agreement to live apart;  (b) by a minor child, not being a person with disability or person with severe disability, of such individual;  (c) by a person to whom such asset has been transferred by the individual, directly or indirectly, otherwise than for adequate consideration for the immediate or deferred benefit  of the individual or his spouse;   5 10  15  (d) by a trust to whom such asset has been transferred by the individual, if the transfer is revocable during the life time of the beneficiary of the trust;  (e) by a person, not being a trust, to whom such asset has been transferred by the individual, if the transfer is revocable during the life time of the person; and  (f) by a hindu undivided family by way of any converted property  (2) the provisions of sub-section (1) shall not apply in respect of such specified asset as has been acquired by the minor child out of his income referred to in clause (b) of subsection (1) of section 9 and which are held by him on the valuation date  (3) in this section,—  (a) the asset referred to in clause (b) of  sub-section (1) shall be included in the net wealth of—  (i) the parent who is the guardian of the minor child; or  (ii) the parent whose net wealth (excluding the assets referred to in that clause) is higher, if both the parents are guardians of the child;  (b) a transfer shall be deemed to be revocable if—  (i) it contains any provision for the re-transfer, directly or indirectly, of the whole or any part of the income or asset to the transferor; or  (ii) it, in any way, gives the transferor a right to re-assume power, directly or indirectly, over the whole or any part of the income or asset;  (c) the person shall, notwithstanding anything in this code or in any other law for the time being in force, be deemed to be the owner of a building or part thereof, if he is a member of a co-operative society, company or other association of persons and the building or part thereof is allotted or leased to him under a house building scheme of the society, company or association, as the case may be;  (d) the holder of an impartible estate shall be deemed to be the individual owner of all the properties comprised in the estate; and  (e) the value of any assets transferred under an irrevocable transfer shall be liable to be included in computing the net wealth of the transferor in the year in which the power to revoke vests in him 27 of  1957  20   27 of  1957  25  30 35  40 45   part f prevention of abuse of the code chapter xi special provisions relating to avoidance of tax5  115 (1) a person shall not be allowed a deduction under this code in respect of so much of the expenditure, whether capital or revenue in nature, as is considered by the assessing officer to be excessive or unreasonable if—  (a) the payment in respect of the expenditure has been, or is to be, made to any associated person; and  10 (b) the expenditure is excessive, or unreasonable, having regard to—  (i) the fair market value of the goods, services or facilities for which the payment is made; (ii) the legitimate needs of the business of the person; or  (iii) the benefit derived by, or accruing to, the person therefrom 15  116 (1) the amount of any income, or expense, arising from an international transaction shall be determined having regard to the arm's length price  (2) the allocation or apportionment of, or any contribution to, any cost or expense incurred or to be incurred in connection with a benefit, service or facility provided or to be provided to any associated enterprise shall be determined having regard to the arm's length 20 price of such benefit, service or facility, as the case may be, if—  (a) two or more associated enterprises have entered into a mutual agreement or arrangement for the allocation or apportionment of, or any contribution to, such cost or expense; and (b) the benefit, service or facility provided to any one or more associated enter- 25 prises involves an international transaction  (3) the provisions of this section shall not apply in a case, if the determination under sub-section (1), or sub-section (2), has the effect of reducing the income chargeable to tax, or increasing the loss computed, on the basis of entries made in the books of account in respect of the financial year in which the international  transaction was entered    disallowance of expenditure having  regard to  fair market value  determination of income from international transaction having  regard to  arm's length  price determination of arm's length  price 30  117 (1)the arm's length price in relation to an international transaction shall be determined in accordance with  any of the methods as may be prescribed,  being the most appropriate method  (2) the most appropriate method referred to in sub-section (1) shall be determined having regard to the nature of transaction, class of transaction, class of associated enterprise 35 or functions performed by such enterprises or such other relevant factors as may be prescribed  (3) the most appropriate method determined under sub-section (2) shall be applied for determination of arm's length price in such manner as may be prescribed   (4) the arm's length price shall be—  40  (a) the price determined by the most appropriate method, if only one price is determined by the method; or  (b) the arithmetical mean of the prices determined by the most appropriate method, if more than one price is determined by the method  (5) the price at which the international transaction has actually been undertaken shall 45 be deemed to be the arm's length price if the variation between the arm's length price determined under sub-section (4) and the price at which the international transaction has actually been undertaken does not exceed five per cent of the latter  (6) the income of an associated enterprise shall not be recomputed by reason of determination of arm's length price in the case of the other associated enterprise  (7) no deduction under sub-chapter-iv of chapter iii shall be allowed in respect of 5 the amount of income by which the total income of the assessee is enhanced after computation of income under this section  (8) the determination of arm's length price shall be subject to safe harbour rules, as may be prescribed in this behalf 118(1) the board, with the approval of the central government, may enter into an 10  advance pricing agreement with any person, specifying the manner in which  arm's length price is to be determined in relation to an international transaction, to be entered into by that person  (2) the manner of determination of arm's length price referred to in sub-section (1) may be any method including one of the prescribed methods, as referred to in sub-section 15  (1) of section 117, with such adjustments or variations, as may be necessary or expedient so to do  (3 ) the arm's length price of any international transaction, in respect of which the advance pricing agreement has been entered into, notwithstanding anything in this chapter, shall be determined in accordance with the advance pricing agreement so entered 20   (4 ) the agreement referred to in sub-section (1) shall be valid for such financial years as specified in the agreement which in no case shall exceed five consecutive financial years  (5) the advance pricing agreement entered into shall be binding—  (a) only on the person in whose case the agreement has been entered into;  (b) only in respect of the transaction in relation to which the agreement has 25  been entered into; and  (c) on the commissioner, and the income-tax authorities subordinate to him, only in respect of the said person and the said transaction  (6 ) the agreement referred to in sub-section (1) shall not be binding, if there is any amendment to the code having bearing on  the agreement so  entered 30   (7 ) the board may, by order, declare an agreement to be void ab initio, if it finds that the agreement has been obtained by the person by fraud or misrepresentation of facts  (8) upon declaring the agreement void ab initio,  the provisions of this code shall, after excluding the period beginning with the date of such agreement and ending with the date of order under sub-section (7 ), apply to the person as if such agreement had never 35  been entered into  (9) for the purposes of this section, the board may, by notification, frame a scheme for advance pricing agreement in respect of an international transaction  advance pricing agreement 119 (1) the total income of a person shall include all income accruing to any nonresident, if— 40   (a) the income accrues by virtue of a transfer of any asset by the person, either alone or in conjunction with associated operations, directly or indirectly, to the nonresident;  avoidance  of income-tax by transactions resulting  in transfer  of income  to non-residents (b) the person -  (i) acquires any rights by virtue of which he has power to enjoy, whether 45  forthwith or in the future, such income; or (ii) is entitled to receive, or has received, any capital sum, the payment whereof is in any way connected with the transfer or any associated operations; and 5   (c) the income would have been included in the total income of the person, had the transfer not taken place  (2) a person shall be deemed to have the power to enjoy the income of a non-resident,   if—  (a) the income is in fact so dealt with by the person so as to be calculated at some point of time and, whether in the form of income or not, to enure for the benefit of the person;  (b) the accrual or receipt of the income operates to increase the value to the person of any assets held by him or for his benefit;  10  (c) the person receives, or is entitled to receive, at any time any benefit provided, or to be provided, out of that income, or out of moneys, which are or shall be available for the purpose by reason of the effect, or successive effects, of the associated operations on that income and assets which represent that income;  (d) such person has power by means of the exercise of any power of appointment or power of revocation or otherwise to obtain for himself, whether with or without the consent of any other person, the beneficial enjoyment of the income; or  15  20  (e) the person is able, in any manner whatsoever and whether directly or indirectly, to control the application of the income  (3) for determining whether a person has power to enjoy the income, regard shall be had to—   (a) the substantial result and effect of the transfer and any associated opera- 25 tions; and  (b) all benefits which may at any time accrue to such person as a result of the transfer and any associated operations, irrespective of the nature or form of the benefits  (4) the provisions of this section shall not apply if the person referred to in sub- 30 section (1) shows to the satisfaction of the assessing officer that the transfer and all associated operations were bona fide commercial transactions and were not designed for the purpose of avoiding liability to taxation  120 the total income of any person shall include any interest accruing from any 35 security owned by any other person if—  (a) the person undertakes a transaction relating to sale and buy-back of the security;  (b) the interest accrues to the other person as a result of such transaction; and  (c) the income would have been included in the total income of the person, had 40 the transfer not taken place   avoidance  of tax by  sale and  buy-back transaction in  security avoidance  of tax by  buy and sale back transaction in  security 121 (1) the transaction relating to buy and sale back of  security under section  120 shall, in the case of the other person referred to therein, be ignored and no account shall be taken of the transaction in computing the income if the interest accruing to the other person is not included in his total income by virtue of the provisions of that section  45  (2) the loss, if any, arising to a person on account of any buy and sale back transaction in any security undertaken by him, shall be ignored for the purposes of computing his total income, if any other income accruing to the person on such security is not included in his total income (3) the loss, referred to in sub-section (2), shall be ignored to the extent such loss does not exceed the amount of any other income referred to therein  122 the income accruing from a debt instrument, transferred by a person at any time during the financial year, shall not be less than the amount of broken-period income from the instrument 5   broken-period income accruing  from a debt instrument  123 (1) any arrangement entered into by a person may be declared as an impermissible avoidance arrangement and the consequences, under this code, of the arrangement may be determined by—  (a) disregarding, combining or recharacterising any step in, or a part or whole of, the impermissible avoidance arrangement; 10   (b) treating the impermissible avoidance arrangement—  (i) as if it had not been entered into or carried out; or  (ii) in such other manner as in the circumstances of the case, the commissioner deems appropriate for the prevention or diminution of the relevant tax benefit; 15   (c) disregarding any accommodating party or treating any accommodating party and any other party as one and the same person;  (d ) deeming persons who are connected persons in relation to each other to be one and the same person;  (e) reallocating, amongst the parties to the arrangement— 20   (i) any accrual, or receipt, of a capital or revenue nature; or  (ii) any expenditure, deduction, relief or rebate; or  (f ) recharacterising—  (i) any equity into debt or vice versa;  (ii) any accrual, or receipt, of a capital or revenue nature; or 25   (iii) any expenditure, deduction, relief or rebate   (2) the provisions of  sub-section (1) may be applied in the alternative for, or in addition to, any other basis for determination of tax liability in accordance with such guidelines as may be prescribed  (3)  the provisions of this section shall apply subject to such conditions and in the   30  manner as may be prescribed  general  antiavoidance rule 124 in this chapter,—  interpretations in this chapter (1) "accommodating party" means a party to an arrangement who, as a direct or indirect result of his participation, derives any amount in connection with the arrangement, which  shall— 35   (a) be included in his total income which would have otherwise been included in the total income of another party;  (b) not be included in his total income which would have otherwise been included in the total income of another party;  (c) be treated as a deductible expenditure, or allowable loss, by the party  40 which would have otherwise constituted a non-deductible expenditure, or nonallowable loss, in the hands of another party; or  (d) result in pre-payment by any other party; (2) "arm's length price" means a price which is applied, or proposed to be applied, in a transaction between persons, enterprises or undertakings, other than associated enterprises, in uncontrolled, unrelated or independent conditions; (3) "arrangement" means any step in, or a part or whole of, any transaction, 5 operation, scheme, agreement or understanding, whether enforceable or not, and includes any of the above  involving the alienation of property; (4) "asset" includes property, or right, of any kind; (5) "associated enterprise" in relation to another enterprise, means an enterprise— (a) which participates, directly or indirectly, or through one or more inter- 10 mediaries, in the management or control or capital of the other enterprise; or (b) in respect of which one or more persons who participate, directly or indirectly, or through one or more intermediaries, in its management or control or capital, are the same persons who participate, directly or indirectly, or through one or more intermediaries, in the management or control or capital of the other 15 enterprise, and for the purposes of sub-clauses (a) and (b) above, two enterprises, shall be deemed to be associated enterprises at any time during the financial year, if they are associated with each other by virtue of— (i ) one enterprise holding, directly or indirectly, shares carrying twenty- 20 six per cent or more of the voting power in the other enterprise; (ii ) any person or enterprise holding, directly or indirectly, shares carrying twenty-six per cent or more of the voting power in each of such enterprises; (iii ) a loan advanced by one enterprise to the other enterprise and the loan constitutes fifty-one per cent or more of the book value of the total assets 25 of the other enterprise; (iv ) one enterprise guarantees ten per cent or more of the total borrowings of the other enterprise; (v) more than one-half of the board of directors, or members, of the governing board, or one or more executive directors, or executive members, of the 30 governing board of one enterprise, being appointed by the other enterprise; (vi ) more than one-half of the directors, or members, of the governing board, or one or more of the executive directors, or executive members, of the governing board, of each of the two enterprises, being appointed by the same person or persons; 35  (vii ) the manufacture, or processing, of any goods or articles of, or carrying on the business by, one enterprise being wholly dependent on the use of know-how, patents, copyrights, trade marks, brands, licences, franchises, or any other business or commercial rights of similar nature, or any data, documentation, drawing or specification relating to any patent, invention, model, design, 40 secret formula or process, of which the other enterprise is the owner or in respect of which the other enterprise has exclusive rights; (viii) ninety per cent  or more of the raw materials and consumables required for the manufacture, or processing, of goods or articles carried out by one enterprise, being supplied by the other enterprise, or by persons specified 45 by the other enterprise, and the prices and other conditions relating to the supply are influenced by such other enterprise; (ix) the goods or articles manufactured, or processed, by one enterprise, being sold to the other enterprise or to persons specified by the other enterprise, and the prices and other conditions relating thereto are influenced by such other 50 enterprise; (x)   the services provided, directly or indirectly, by one enterprise to another enterprise or to persons specified by the other enterprise, and the amount payable and the other conditions relating thereto are influenced by such other enterprise; (xi) one enterprise being controlled by an individual, and the other enter- 5 prise being also controlled by such individual or his relative, or jointly by such individual and his relative; (xii ) one enterprise being controlled by a hindu undivided family, and the other enterprise being also controlled by a member of such hindu undivided family or by a relative of a member of such hindu undivided family or jointly by 10 such member and his relative; (xiii) one enterprise holding ten per cent, or more, interest in another enterprise being an unincorporated body; (xiv) any specific or distinct location of either of the enterprises as may be prescribed; or 15  (xv) any other relationship of mutual interest, existing between the two enterprises, as may be prescribed; (6) "associated operation" in relation to any transfer means an operation of any kind effected by the transferor in relation to— (a) any asset transferred; 20  (b) any asset representing, directly or indirectly, any asset so transferred; (c) the income accruing from any asset so transferred; or (d) any asset representing, directly or indirectly, the accumulation of income accruing from any asset so transferred; (7) "associated person" in relation to a person, means— 25  (a) any relative of the person, if the person is an individual; (b) any director of the company or any relative of such director, if the person is a company; (c) any participant in an unincorporated body or any relative of such participant, if the person is an unincorporated body; 30  (d) any member of the hindu undivided family or any relative of such member, if the person is a hindu undivided family; (e) any individual who has a substantial interest in the business of the person or any relative of such individual; (f) a company, unincorporated body or hindu undivided family having a   35 substantial interest in the business of the person or any director, participant, or member of the company, body or family, or any relative of such director, participant or member; (g) a company, unincorporated body or hindu undivided family, whose director, participant, or member have a substantial interest in the business of the   40 person; or family or any relative of such director, participant or member; (h) any other person who carries on a business, if— (i) the person being an individual, or any relative of such person, has a substantial interest in the business of that other person; or (ii) the person being a company, unincorporated body or hindu  45 undivided family, or any director, participant or member of such company, body or family, or any relative of such director, participant or member, has a substantial interest in the business of that other person; (8) "benefit" includes a payment of any kind; (9) "broken period income" shall be calculated as if the income from such  50 securities had accrued from day to day and been apportioned accordingly for the broken period; (10) "bona fide purpose" shall not include any purpose which— (a) has created rights or obligations that would not normally be created between persons dealing at arm's length; or (b) would result, directly or indirectly, in the misuse, or abuse, of the 5 provisions of this code; (11) "capital sum" means— (a) any sum paid by way of a loan or repayment of a loan; or (b) any other sum paid otherwise than as income, being a sum which is not paid for full consideration in money or money's worth; 10 (12) "connected persons" includes associated persons; (13) "enterprise" in relation to an international transaction includes— (a) a person who is, or has been, or is likely to be, engaged in any business, industrial, commercial, financial, construction, mining, research, investment or any other similar activity, whether such activity is carried on directly or through one, or 15 more, of its units, divisions or subsidiaries, wherever located; and (b) the permanent establishment of the person referred to in sub-clause (a); (14) "funds" includes— (a) any cash; (b) cash equivalents; and 20 (c) any right, or obligation, to receive, or pay, the cash or cash equivalent; (15) "impermissible avoidance arrangement" means a step in, or a part or whole of, an arrangement, whose main purpose is to obtain a tax benefit and it— (a) creates rights, or obligations, which would not normally be created between persons dealing at arm's length; 25  (b) results, directly or indirectly, in the misuse, or abuse, of the provisions of this code; (c) lacks commercial substance, in whole or in part; or (d) is entered into, or carried out, by means, or in a manner, which would not normally be employed for bona fide purposes; 30  (16)  "intangible property" includes know-how, patents, goodwill, copyrights, trade-marks, brand name, licences, franchises, any business or commercial rights, leasehold interest, exploration and exploitation rights, easement rights, air rights, water rights, or any other thing that derives its value from its intellectual content instead of its physical attributes; 35 (17) "international transaction" means— (a) a transaction between two or more associated enterprises, either or all of whom is a non-resident, in the nature of— (i) purchase, sale or lease, of tangible or intangible property; (ii) supply of service; 40 (iii) lending, or borrowing, money; (iv) any other transaction, which has a bearing on the income, loss or asset of any one or more of the enterprises; or (v) a mutual agreement or arrangement between two or more associated enterprises for the allocation or apportionment of, or any contribu- 45 tion to, any cost or expense incurred, or to be incurred, in connection with a benefit, service or facility provided, or to be provided, to any one or more of the enterprises; (b) a transaction entered into by two or more persons, not being associated enterprises, if— (i) the transaction is of the nature referred to in sub-clause (a); (ii) there exists a prior agreement in relation to the relevant transaction between such other person and the associated enterprise or the terms of the relevant transaction are determined in substance between such other person and the associated enterprise; and 5 (iii) either, or both, of the associated enterprises is a non-resident; (18) "interest" includes dividend; (19) "lacks commercial substance"-a step in, or a part or whole of, an arrangement shall be deemed to be lacking commercial substance, if— (a)   it does not have a significant effect upon the business risks, or net 10  cash flows, of any party to the arrangement apart from any effect attributable to the tax benefit that would be obtained but for the provisions of section 123; (b) the legal substance, or effect, of the arrangement as a whole is inconsistent with, or differs significantly from, the legal form of its individual steps; or (c) it includes, or involves— 15  (i) round trip financing without regard to,— (a) whether or not the round tripped amounts can be traced to funds transferred to, or received by, any party in connection with the  arrangement; (b) the time, or sequence, in which round tripped amounts are    20  transferred or received; or (c) the means by, or manner in, which round tripped amounts are transferred or received; (ii) an accommodating or tax indifferent party; (iii) any element that have the effect of offsetting or cancelling   25  each other; or (iv) a transaction which is conducted through one or more persons and disguises the nature, location, source, ownership, or control, of the fund; (20) "party" means party to the arrangement; (21) "round trip financing" includes financing in which— 30  (a) funds are transferred among the parties to the arrangement;  and (b) the transfer of the funds would— (i) result, directly or indirectly, in a tax benefit but for the provisions of section 123; or (ii)  significantly  reduce,  offset  or  eliminate  any  business  risk   35  incurred by any party to the arrangement; (22)  "safe harbour", in relation to computation of arm's length price, means circumstances in which the income-tax authorities shall accept the transfer price declared by the assessee; (23) "similar security" means security which entitles its holder to the same   40 rights against the same person as to capital and interest and the same remedies for the enforcement of those rights, irrespective of any difference in the— (a) total nominal amounts of the respective security; (b) form in which it is held; or (c) manner in which it can be transferred; 45  (24) "substantial interest in the business" a person shall be deemed to have a substantial interest in the business, if— (a) in case where the business is carried on by a company, such person is, at any time during the financial year, the beneficial owner of equity shares carrying twenty per cent or more, of the voting power; or 50  (b) in any other case, such person is, at any time during the financial year, beneficially entitled to twenty per cent or more, of the profits of such business (25) "tax benefit" means—   (a) a reduction, avoidance or deferral of tax or other amount payable under this code; (b) an increase in a refund of tax or other amount under this code; (c) a reduction, avoidance or deferral of tax or other amount that would be payable under this code but for a tax treaty; 5 (d) an increase in a refund of tax or other amount under this code as a result of a tax treaty; or (e) a reduction in tax bases including increase in loss, in the relevant financial year or any other financial year (26) "transaction" in relation to an international transaction shall include an arrangement, understanding or action in concert— 10 (a) whether or not such arrangement, understanding or action is formal or in writing; or 15  (b) whether or not such arrangement, understanding or action is intended to be enforceable by legal proceeding; (27) "transaction relating to buy and sale back of security" means a transaction where a person buys a security, and sells or transfers the same, or similar, security; (28) "transaction relating to sale and buy back of security" means a transaction where a person, being the owner of any security, sells or transfers the security, and buys back or re-acquires the same, or similar, security; (29) "transfer" in relation to any right includes the creation of  a right 20 125 (1) an arrangement shall be presumed to have been entered into, or carried out, for the main purpose of obtaining a tax benefit unless the person obtaining the tax benefit proves that obtaining the tax benefit was not the main purpose of the arrangement 25  (2) an arrangement shall be presumed to have been entered into, or carried out, for the main purpose of obtaining a tax benefit, if the main purpose of a step in, or part of, the arrangement is to obtain a tax benefit, notwithstanding the fact that the main purpose of the whole arrangement is not to obtain a tax benefit   part g tax management chapter xii30  tax administration and  procedure a - tax administration presumption of  purpose income-tax authorities 126 there shall be the following classes of income-tax authorities for the purposes of this code, namely:— (a) the central board of direct taxes constituted under the central boards of 35 revenue act, 1963, (b) chief commissioners of income-tax or director-generals of income-tax, (c) commissioners of income-tax or directors of income-tax or commissioners of income-tax (appeals), 54 of 1963  40 45 (d) additional commissioners of income-tax or additional directors of income-tax, (e) joint commissioners of income-tax or joint directors of income-tax, (f) deputy commissioners of income-tax or deputy directors of income-tax, (g) assistant commissioners of income-tax or assistant directors of income-tax, (h) income-tax officers, (i) tax recovery officers, (j) inspectors of income-tax 50  127 (1) the central government may appoint such persons as it thinks fit to be income-tax authorities   (2) without prejudice to the provisions of sub-section (1), and subject to the rules and orders of the central government regulating the conditions of service of persons in public services and posts, the central government may authorise the board, or a director- 5 general, a chief commissioner or a director or a commissioner to appoint income-tax authorities below the rank of an assistant commissioner  (3) subject to the rules and orders of the central government regulating the conditions of service of persons in public services and posts, an income-tax authority authorised in this behalf by the board may appoint such executive or ministerial staff as may be necessary to 10 assist it in the execution of its functions  (4) the board may, by notification, direct that any income-tax authority or authorities specified in the notification shall be subordinate to such other income-tax  authority or authorities as may be specified in such notification  appointment and control  of income-tax authorities  128  any income-tax authority, above the rank of assessing officer, shall have all the 15  powers that an assessing officer has under this code in relation to the making of inquiries  power  of higher authorities  powers of  the board  to issue instructions 129 (1) the board may, from time to time, issue such orders, instructions, directions or circulars to other income-tax authorities as it may consider expedient or necessary for the proper administration of this code  (2) the board shall not exercise its powers under sub-section (1) so as to— 20   (a) require any income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner;  (b) require the commissioner of income-tax (appeals) to dispose off any matter before it in a particular manner  (3) the board may, without prejudice to the generality of the provisions of sub-section    25  (1), if it considers expedient or necessary so to do, issue general or special orders in respect of -  (a) any class of tax bases or class of cases, explaining the principles, specifying the guidelines or procedures, whether by way of relaxation of  any provision of this code or otherwise, to be followed by other income-tax authorities in the work relating 30  to assessment or collection of revenue including charging of interest or the initiation of proceedings for the imposition of penalties;  (b) any case or class of cases, for avoiding genuine hardship, authorising any income-tax authority [other than commissioner of income-tax (appeals)] to admit any application or claim for any exemption, deduction, refund or any other relief under this    35  code after the expiry of the period specified by or under this code for making the application or claim and deal with the same on merits in accordance with law;  (c) any case or class of cases, relaxing any requirement or conditions contained in this code in relation to grant of any relief , on fulfilment of the following conditions, namely:— 40   (i) such relaxation is for avoiding genuine hardship; (ii) the reasons for exercise of power have been specified in the order; (iii) the default in complying with such requirement or condition was due to circumstances beyond the control of the assessee;  (iv) the assessee has complied with such requirement or condition before 45    the completion of assessment of the financial year for which the relief is claimed; and (v) every order issued under this clause is laid before each house of parliament (4) the orders, instructions, directions and circulars issued by the board under this 5 section shall be binding on all other income-tax authorities and other persons employed in the execution of this code  130 (1) the income-tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, as the case may be, assigned to such authorities by or under this code in accordance with such directions as the board may issue for the 10   exercise of the powers and performance of the functions by all or any of those authorities  (2) the directions of the board under sub-section (1) may authorise any other incometax authority to issue orders in writing for the exercise of the powers and performance of the functions by all or any of the other income-tax authorities who are subordinate to it  (3) in issuing the directions or orders referred to in sub-sections (1) and (2), the board 15    or other income-tax authority authorised by it may have regard to any one or more of the following criteria, namely :—  (a) territorial area;  (b) persons or classes of persons;  (c) incomes or classes of income; and  20 (d) cases or classes of cases  (4) any income-tax authority, being an authority higher in rank, may, if so directed by the board, exercise the powers and perform the functions of the income-tax authority lower in rank and any such direction issued by the board shall be deemed to be a direction issued under sub-section (1)  25  (5) the board may, by order , authorise any director general or director to perform such functions of any other income-tax authority as may be assigned to him by the board  (6) the chief commissioner, if authorised by the board, may direct two or more assessing officers (whether of same rank or not) to exercise and perform the powers and functions conferred on or assigned to them concurrently and the assessing officer lower in 30 rank shall follow the directions of the assessing officer who is higher in rank    jurisdiction of  incometax  authori-  ties jurisdiction  of assessing officers 131 (1) the assessing officer who has been vested with jurisdiction over any area, by virtue of any direction or order issued under section 130, shall, within the limits of such area, have jurisdiction in respect of -  (a) any person carrying on a business,—  35  (i) in a case where the business is carried on in more places than one, the principal place of his business is situate within the area; or  (ii) in any other case, the place at which he carries on his business is situate within the area; and  (b) any other person residing within the area  40  (2) any dispute relating to jurisdiction of an  assessing officer shall be decided by the chief commissioner under whom the assessing officer is functioning (3) any dispute relating to jurisdiction of the assessing officer where it relates to areas within the jurisdiction of different chief commissioners shall be decided by consensus between the chief commissioners and if they are not in agreement, by the board, or by such chief commissioner as the board may direct  (4) no person shall be entitled to question the jurisdiction of an assessing officer— 5  (a) after the expiry of one month from the date on which he was served with the notice under sub-section (2) of section 150, if the person has furnished a return under sub-section (1) of section 144 or after the completion of assessment, whichever is earlier;  (b) after the expiry of the time allowed by the notice under sub-section (1) of 10  section 146 or under sub-section (2) of section 159, if no return has been filed  (5) subject to the provisions of sub-section (4), where an assessee calls in question the jurisdiction of an assessing officer, then the assessing officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (2) before the assessment is made 15   (6) every assessing officer shall have all the powers conferred by, or under, this code on an assessing officer in respect of the tax bases accruing or received within the area over which he has been vested with jurisdiction under section 129, notwithstanding anything  in this section or in any direction or order issued under section 129  132 (1) the chief commissioner or, as the case may be, the commissioner may by an   20 order transfer a case from any assessing officer to any other assessing officer who are subordinate to him  (2) the chief commissioner may by an order transfer a case from any assessing officer subordinate to him to any  assessing officer subordinate to any other chief commissioner, if both the chief commissioners are in agreement with such transfer 25   (3) the board, or the chief commissioner as may be authorised by the board, may by an order transfer a case from any assessing officer subordinate to a chief commissioner to any assessing officer subordinate to any other chief commissioner, if the chief commissioners are not in agreement with such transfer  (4) any order under this section shall be passed after giving the person, whose case is  30 being transferred, as far as possible an opportunity of being heard in the matter and after recording the reasons for such transfer  (5) the provisions of sub-section (4) shall not apply if the case is being transferred from an assessing officer to another assessing officer located in the same city  (6) the transfer of a case under this section may be made at any stage of the proceedings,  35 and it shall not be necessary to reissue any notice already issued by the transferor assessing officer  (7) in this chapter, the expression "case" in relation to any person whose name is specified in any order or direction issued under relevant provisions, means all proceedings under this code in respect of any year which - 40   (i) may be pending on the date of such order or direction; (ii) may have been completed on or before such date; or (iii) may be commenced after such date power  to transfer cases change of incumbent 133 (1) the income-tax authority who succeeds another authority as a result of change in jurisdiction or for any other reason, shall continue the proceeding from the stage  45 at which it was left by his predecessor (2) the assessee in such a case may be given, an opportunity of being heard if so 134 (1) the  prescribed income-tax authorities and the dispute resolution panel shall, for the purposes of this code, have the same powers as are vested in a court under the requested, before passing any order in his case  5  of  1908 5   code of civil procedure, 1908, while trying a suit in respect of the following matters, powers regarding discovery and production of  evidence namely:— (a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath;  (c) compelling the production of books of account and other documents; and  10 (d) issuing commissions  (2)  for the purposes of making any inquiry or investigation, the prescribed incometax authority shall be vested with the powers referred to in sub-section (1), whether or not any proceedings is pending before  it  (3) any income-tax authority prescribed for the purposes of sub-section (1) or sub- 15  section (2) may, subject to the rules made in this behalf, impound any books of account  or other documents produced before it and retain them in its custody for such period as it thinks fit  (4) any income-tax authority below the rank of joint commissioner shall not,—  (a) impound any books of account or other documents without recording his 20 reasons for so doing; or  (b) retain in his custody any such books or documents for a period exceeding thirty days without obtaining the approval of the chief commissioner or the commissioner  135 (1) the competent investigating authority may authorise any authorised officer  search    and seizure 30  to carry out search and seizure, if he has, in consequence of information in his possession, reason to believe that - (a) any person to whom a summons or a notice under sub-section (1) of section  43 of 1961  27 of 1957  131 or sub-section (1) of section 142 of the income-tax act, 1961 or under section 37 or sub-section (4) of section 16 of the wealth-tax act, 1957, as they stood before the commencement of this code, or under sub-section (1) of section 134 or section 146 or section 150 of this code,  was issued, has omitted or failed to furnish the material as required by such summon or notice;  35 (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any material which will be useful for, or relevant to, any proceeding under the income-tax act, 1961or the wealth-tax act, 1957, as they stood before the commencement of this code, or under this code; or  43 of 1961  40  27 of 1957 (c) any person is in possession of any material which represents either wholly or partly the tax bases or property which has not been, or would not be, disclosed for the purposes of the income-tax act, 1961,  43 of 1961  45  or the wealth-tax act, 1957, as they stood before the commencement of this code, or this code (hereinafter in this section referred to as the undisclosed tax bases or property)   27 of  1957 (2) the authorised officer shall, in pursuance to an authorisation issued under sub-section (1), carry out the search and seizure and, for this purpose, have all the powers to—  (a) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that any material, referred to in sub-section (1), are kept;  | 5   ||-----||     ||     ||     ||     ||     ||     ||     |(b) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (a) where the keys thereof are not available;  (c) search any person who has got out of, or is about to get into, or is in, the building, place, vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such person has concealed on  his person any material;  | 10    ||-------||       ||       ||       ||       ||       ||       ||       | 15   (d) require any person who is found to be in possession or control of any type of material, being books of account or other document, maintained in the form of electronic record as defined in clause (t) of sub-section (1) of section 2 of the information technology act, 2000, to afford the authorised officer the necessary facility to inspect such material;  (e) seize any such material, not being stock-in-trade, found as a result of such search;  (f) place marks of identification on any material, being books of account or other documents, or make or cause to be made extracts or copies therefrom; (g) make a note or an inventory of any such material including stock-in-trade (3) a competent investigating authority may exercise the powers of search and seizure conferred under sub-section (1), if he exercises jurisdiction over the person referred to in sub-section (1)  (4) the competent investigating authority may also exercise the powers of search and seizure conferred under sub-section (1), if -   21 of  2000  20 25 (a) the building, place, vessel, vehicle or aircraft, referred to in sub-section (2), is located within the area of his jurisdiction irrespective of the fact that he does not have jurisdiction over the person referred to in sub-section (1); and  (b) he has reason to believe that any delay in getting the authorisation from the competent investigating authority having jurisdiction over such person may be prejudicial to the interests of the revenue  30 35  40  (5) the competent investigating authority may issue a consequential authorisation to any authorised officer to exercise the powers under sub-section (2) in respect of any building, place, vessel, vehicle or aircraft, if he, in consequence of information in his possession, has reason to suspect that any material in respect of which an authorisation under sub-section (1) has been issued by the same or any other competent investigating authority are, or is, kept in any such building, place, vessel, vehicle or aircraft  (6) the authorised officer may requisition the services of any police officer or of any officer of the central government, or of both, to assist him for all or any of the purposes specified in sub-section (2) and it shall be the duty of every such officer to comply with such requisition (7) the authorised officer may serve an order on the owner or the person, who is in immediate possession or control of any material, that he shall not remove, part with or otherwise deal with it except with his prior permission, where in the opinion of the authorised officer—   (a) it is not possible or practicable to take physical possession of such material, not being stock-in-trade, to a safe place due to its volume, weight or other physical characteristics (including its dangerous nature) and such action of the authorised officer shall be deemed to be seizure under clause (e) of sub-section (2); or  5  (b) it is not practicable to seize such material [for reasons other than those mentioned in clause (a)] and such action of the authorised officer shall not be deemed to be seizure under clause (e) of sub-section (2)  10  (8) the order under clause (b) of sub-section (7) shall remain in force for a period not exceeding two months from the end of the month in which the order was served and the authorised officer may take such steps as may be necessary for ensuring compliance with the order  15 43 of 1961 (9) the authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any material and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the income-tax act, 1961or the wealth-tax act, 1957, as they stood before the commencement of this code, or under this code  27 of 19572 0   (10) the provisions of the code of criminal procedure, 1973, relating to search and seizure shall apply, so far as may be, to search and seizure under this section  (11) for the purposes of this section the board may prescribe—  (a) the procedure to be followed by the authorised officer—  2  of 1974 (i) for obtaining ingress into any building, place, vessel, vehicle or aircraft to be searched where free ingress thereto is not available; and  (ii) for ensuring safe custody of any material seized; and  (b) any other matter in relation to search and seizure under this section  25 power to r e q u i s i t i o n material  taken into  custody 136 (1) the competent investigating authority may authorise any income-tax authority (hereinafter referred to as the "requisitioning officer") to require any officer or authority to deliver the material, which have been taken into custody by such officer or authority under any other law for the time being in force, to the requisitioning officer  30  (2) the authorisation for requisition under sub-section (1) shall be issued by the competent investigating authority if he has, in consequence of information in his possession, reasons to believe that -  (a) any person to whom a summons or a notice under sub-section (1) of section 35    43 of 1961  27 of 1957  40  131 or sub-section (1) of section 142 of the income-tax act, 1961or under section 37 or sub-section (4) of section 16 of the wealth-tax act, 1957, as they stood before the commencement of this code, or under sub-section (1) of section 134 or section 146 or section 150 of this code was issued, has omitted or failed to produce, or cause to be produced, such material; or  (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, such material which 43 of  1961 will be useful for, or relevant to, any proceeding under the income-tax act, 1961 or the wealth-tax act, 1957, as they stood before the commencement of this code, or under this code; or  27 of  1957  543 of  1961 (c) such material represents either wholly or partly tax base or property which has not been, or would not be, disclosed for the purposes of the income-tax act, 1961, or the wealth-tax act, 1957, as they stood before the commencement of this code, or under this code   27 of  1957 (3)  the officer or authority referred to in sub-section (1) shall deliver the material to the requisitioning officer either forthwith or when such officer or authority is of the opinion that it is no longer necessary to retain the same in his or its custody  (4) the provisions of sub-sections (1) to (11) of section 135 shall apply to this section  137 (1) the authorised officer shall hand over the books of account or documents seized under section 135, within a period of sixty days from the date on which the last of the authorisations for search was executed, to the assessing officer, if the authorised officer has no jurisdiction over the person from whom the books of account or documents were seized  (2) the requisitioning officer shall hand over the books of account or documents delivered under section 136, within a period of sixty days from the date on which books of account or documents were received, to the assessing officer, if the requisitioning officer has no jurisdiction over the person from whom the books of account or documents were taken into custody under any other law for the time being in force  (3) the officers, referred to in sub-sections (1) and (2), shall, on an application made by the assessee, allow him to make copies of, or take extracts from, the books of account or documents seized or requisitioned  (4) the assessing officers may retain the books of account or documents, seized or requisitioned, up to a period of thirty days from the date of limitation for completion of assessment, specified in section 163  (5) the assessing officer may retain the books of account or documents seized beyond the period specified in sub-section (4) after obtaining the approval of the chief commissioner or the commissioner  (6) the chief commissioner, or the commissioner, shall not allow the retention of the books of account or documents  seized, beyond a period of thirty days from the date on which the proceedings under this code, for which such books of account or documents are relevant, are completed  (7) the officers, referred to in sub-sections (1) and (2), may, with the approval of the chief commissioner or the commissioner, return any books of account or documents before completion of assessment or any other relevant proceedings, after retaining a copy or extract of such books of account or documents, if he is satisfied that the return of such books of account or documents shall not adversely affect the interest of revenue  retention  and release of books   of   account  or documents seized or requisitioned 138 the assessing officer, having jurisdiction over the person in whose case search and seizure was carried out under section 135, or requisition was made under section 136, shall hand over any material to the assessing officer having jurisdiction over another person, if he is satisfied that the material seized, or requisitioned, belongs to the other person  delivery ofmaterial belonging  to  other  persons   10 15   20 25  30 35  40 45  139 (1) the assessing officer may recover the amount of any liability, referred to in sub-section (2),—  (a) out of the material, other than books of account or documents, (hereinafter retention  and application  of seized or requisitioned  assets referred to as "assets") seized under section 135 or requisitioned under section 136; or  (b) by any other mode laid down under this code  (2) the amount of any liability shall be the aggregate of -  (a) the amount of any liability existing under this code, the income-tax act, 43 of 1961 5  27 of 1957  1961, or  the wealth-tax act, 1957, as they stood before the commencement of this code, the gift-tax act, 1958, the interest-tax act, 1974 and the expenditure-tax act, 1987, till the date of search under section 135 or requisition under section 136;  18 of 1958  45 of 1974  (b) the amount of any liability under this code, or under any of the acts referred to in clause (a), determined after the date of the search, or requisition, and till the date of completion of the assessment in consequence to the search or the requisition;  (c) the amount of any liability determined on completion of the assessment in consequence to the search or the requisition; and  35 of 1987 10  (d) the amount of any liability under this code, or under any of the acts referred to in clause (a), determined after the completion of the assessment in consequence to the search, or the requisition, and till the date of release of the assets  15 20  (3) the assessing officer may recover the existing liability referred to in clause (a) of sub-section (2) and release the remaining portion of the asset, if any, within a period of one hundred and twenty days from the date on which the last of the authorisations for search under section 135 was executed, to the person from whose custody the assets were seized, if -  (a) an application is made by the person within a period of thirty days from the end of the month in which the assets were seized;  (b) the nature and source of the assets is explained by the person to the satisfaction of the assessing officer; and 25  (c) the prior approval of the chief commissioner or the commissioner is obtained (4) the assets, other than money, shall be deemed to be under distraint as if such distraint was effected by the assessing officer or, as the case may be, the tax recovery officer and the recovery of any liability out of such assets shall be effected in the manner laid down in the fifth schedule  30  (5) the assessing officer shall release, within the time and subject to such conditions, as may be prescribed, to the person from whose custody the assets were seized, any asset or proceeds thereof, which remains after the liabilities referred to in sub-section (2) are discharged  (6) the assessing officer may with the prior approval of the commissioner  release 35 any seized or requisitioned asset (other than cash) before making assessment in consequence of search or requisition, if the concerned person deposits with the assessing officer an amount of money equal to the value of such asset on the date of the release and the amount so deposited shall be deemed to be cash seized or requisitioned for the purposes of this code  40  (7) if the assets consist solely of money, or partly of money and partly of other assets, the assessing officer may apply such money in the discharge of the liabilities referred to in sub-section (2) and the assessee shall be discharged of such liability to the extent of the money so applied  140 (1) for the purposes of this code, the board may, notwithstanding anything in 45 any other law for the time being in force, require—   power to  call for  information (a) any prescribed person to furnish such information within such time  and in such form and manner as may be prescribed; and (b) any prescribed income-tax authority to call for such information in such form and manner as may be prescribed  (2) any income-tax authority, not below the rank of an income-tax officer, may require any person to furnish any information as may be useful for, or relevant to any inquiry or proceeding, pending before him under this code, in such form, manner and within such time 5 as may be specified by him  (3) in this section, the expression ''person'' shall include a banking company or any officer thereof   power of 141 (1) the prescribed income-tax authority may enter, or authorise any other income- survey tax authority to enter, any place at which a business is carried out by a person, if - 10  (a) he has reason to suspect that the person has not complied with the provisions of this code; and  (b) the place is—  (i) within the limits of the area assigned to him; or  (ii) occupied by any person in respect of whom he exercises jurisdiction    15   (2) the income-tax authority, referred to in sub-section (1), shall enter any place of business referred to therein only after sunrise and before sunset, or during the hours at which such place is open for the conduct of business  (3) on entering the place, the income-tax authority may require any person, who may be attending in any manner to the business at the place, to - 20   (a) afford him to inspect the books of account or documents available at the place;  (b) afford him to check or verify the cash, stock or other valuable article or thing found there; and  (c) furnish any information relevant, or useful, for the proceedings under this 25  code, in respect of the person or any other person  (4) for the purposes of this section, any place at which a business is carried out includes a place—  (a) which is not the principal place of such business;  (b) where any business or activity is being carried out and the tax bases relating 30 to such business or activity is not to be included in the total tax bases under any provision of this code;  (c) where any of the books of account, documents, cash, stock-in-trade or valuables, relating to the business of the person or the business or activity referred to in clause (b), are kept; or 35   (d) where any of the books of account, documents or other record containing the particulars regarding deduction of tax at source, or collection of tax at source, made, or required to be made, under this code, are kept  (5) on entering the place, the income-tax authority may -  (a) place marks of identification on the books of account, documents or record  40  inspected by him and take extracts, or copies, therefrom;  (b) impound any books of account, documents or record inspected by him, after recording the reasons for doing so;  (c) make an inventory of cash, stock or valuables; or (d) examine on oath any person if his statement would be useful for, or relevant to, any proceeding under this code  (6) the prescribed income-tax authority, for the purpose of verifying the expenditure made by the person in connection with any function, ceremony or event, after such function, 5 ceremony or event, may— (a) require the person by whom such expenditure has been incurred or any other person who is likely to possess the information regarding such expenditure, to furnish such information which may be useful for, or relevant to, any proceeding under this code; and  10 (b) record the statements of any other person in this behalf  (7) the statement made by any person under clause (d) of sub-section (5) and clause (b) of sub-section (6) may be used in evidence in any proceeding under this code  (8) the income-tax authority acting under this section shall, on no account, remove or cause to be removed from the place wherein he has entered any cash, stock or other valuable 15    article or thing  (9) the income-tax authority shall not retain any books of account, documents or records impounded by him under this section beyond a period of one month without the approval of the commissioner  (10) the income-tax authority, other than an inspector, shall have all the powers under 20 sub-section (1) of section 134 for enforcing compliance, if a person refuses, or evades, to—  (a) afford the facility to the income-tax authority to inspect books of account or other documents;  (b) allow such authority to check or verify any cash, stock or other  valuable article or thing;  25 (c) furnish any information; or  (d) have his statement recorded  (11)  in this section, the expression "proceeding", as on the date on which powers under this section are exercised, shall mean all proceedings under this code in respect of any year which -  30 (i) may have been completed on or before such date; (ii) may be pending as on such date; or (iii) may be commenced after such date  142 (1) no information in respect of any assessee, except as provided in sub-section (2), shall be provided to any person by,—  35 (a) the board;    power  to disclose information  in respect  of assessee (b) any income-tax authority or officer or ministerial staff; or  (c) any person, agency or authority engaged in any manner in the administration of this code  (2) the board, or any person specified by it by an order in this behalf, may furnish, or 40 cause to be furnished, any information in respect of an assessee to any other person performing any functions under—  (a) any law relating to the imposition of any tax, duty or cess, or to dealings in foreign currency; or  (b) any other law as the central government may, if in its opinion it is necessary so to do in the public interest, specify by notification in this behalf  (3) the information referred to in sub-section (2) shall be only such information which fulfils the following conditions, namely:—  (a) the information is received or obtained by the board, or any person specified by it by an order under that sub-section, in the performance of its or his functions 5 under this code; and  (b) the information is, in the opinion of the person furnishing the information, necessary for the purpose of enabling the other person receiving the information to perform the functions under the laws referred to in that sub-section  (4) the chief commissioner or the commissioner may furnish, or cause to be furnished, 10  to any person any information relating to any assessee received or obtained by any incometax authority in the performance of his functions under this code, if—  (a) the person makes an application to the chief commissioner or the commissioner in the prescribed form; and  (b) the chief commissioner or the commissioner is satisfied that it is in the 15  public interest so to do  (5) the decision of the chief commissioner or the commissioner under sub-section (4) shall not be called in question in any court of law  (6) the central government may, notwithstanding anything in this section or under any other law for the time being in force, direct, by a notified order, that no information shall    20  be furnished under sub-section (2) or sub-section (4) in respect of such matters relating to such class of assessees, or to such authorities, as may be specified in the order  143 (1) any proceeding under this code before an income-tax authority shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 and for the purposes of section 196 of the indian penal code 25  45 of  1860   (2) every income-tax authority shall be deemed to be a civil court for the purposes of section 195, but not for the purposes of chapter xxvi of the code of criminal procedure, 1973  b - assessment procedureproceedings before income-tax  authorities to  be judicial   proceedings self-reporting of tax  bases 144 (1) every person shall furnish a return of tax bases on or before the due date to the assessing officer or such other authority  or agency as may be prescribed  (2) the person referred to in sub-section (1) shall-—  (a) in relation to income, be the following, namely:—  2  of  1974  30 35  (i) an individual or hindu undivided family or an artificial juridical person, if the gross total income from ordinary sources exceeds the threshold limit;  (ii) a company;  (iii) an unincorporated body; (iv) a non-profit organisation; (v) a co-operative society; (vi) a society other than a co-operative society; (vii) a local authority; (viii) a political party;  (ix) any person who intends to carry forward the loss or any part thereof 5 in accordance with the provisions of this code;  (x) any person who derives any income from special sources and such income is chargeable to tax;  (xi) any other person liable to pay tax under this code, and  (xii) any class or classes of persons as may be prescribed;  10 (b) in relation to dividend or income distributed, be the following, namely:— (i) a company resident in india which distributes the dividend; (ii) a mutual fund which distributes the income to the unit holders of equity oriented fund;  (iii) a life insurer who distributes the income to the policy holders of an 15 approved equity oriented life insurance scheme;  (c) in relation to net wealth, be any person, other than a non-profit organisation, if the net wealth exceeds the maximum amount which is not chargeable to wealth-tax  (3)  the return of tax bases referred to in sub-section (1) shall be a return in respect of the tax bases of the person referred to in sub-section (2) or the tax bases of any other person 20    in respect of which such person is assessable for the relevant financial year  (4)  the return of tax bases shall be furnished in such form, verified in such manner and setting forth such other particulars, as may be prescribed  (5) a person may, if he discovers any omission or any wrong statement in the return of tax bases furnished by him under sub-section (1) or under section 146, revise such return 25    at any time before the expiry of one year from the end of the financial year in which the return was due or before the completion of the assessment, whichever is earlier  (6) a person may furnish the return for any financial year at any time before the expiry of one year from the end of the financial year in which the return was due or before the completion of the assessment, whichever is earlier, if—  30 (a) such person has not furnished a return by the due date; and  (b) no notice under sub-section (1) of  section 146 has been served on him  (7)  the assessing officer may, if he finds that the return has not been furnished by any person in the prescribed form and manner or does not contain the particulars as required under sub-section (4), intimate to such person the deficiency and allow him an opportunity 35 to remove the deficiency within a period of thirty days from the service of the intimation  (8) the assessing officer shall treat the return filed by a person as invalid, if the deficiency referred to in sub-section (7) is not removed within the time allowed and the provisions of the code shall apply as if the person had failed to furnish the return  (9) the return of tax bases of a person specified in column (2) of the table given below 40 shall be signed and verified by a person specified in column (3) of the said table:  table|                                                      | serial                              | person furnishing the return          | person required to sign and    ||------------------------------------------------------|-------------------------------------|---------------------------------------|--------------------------------|| number                                               | or tax bases                        | verify the return of tax bases        |                                ||                                                      |                                     |                                       |                                || (                                                    |                                     |                                       |                                || 1                                                    |                                     |                                       |                                || )                                                    | (                                   |                                       |                                || 2                                                    |                                     |                                       |                                || )                                                    | (                                   |                                       |                                || 3                                                    |                                     |                                       |                                || )                                                    |                                     |                                       |                                ||                                                      |                                     |                                       |                                ||                                                      |                                     |                                       |                                || 1                                                   | individual being mentally           | (a ) guardian of the individual; or   |                                || 5                                                    |                                     |                                       |                                ||                                                      |                                     |                                       |                                || incapacitated from attending                         | (                                   |                                       |                                || b                                                    |                                     |                                       |                                || ) any other person duly                              |                                     |                                       |                                || to his affairs                                       | competent to act on his behalf     |                                       |                                ||                                                      |                                     |                                       |                                || 2                                                   | any other individual                | (                                     |                                || a                                                    |                                     |                                       |                                || ) individual himself; or                             |                                     |                                       |                                ||                                                      |                                     |                                       |                                || (                                                    |                                     |                                       |                                || b                                                    |                                     |                                       |                                || ) any person duly authorised by a valid              |                                     |                                       |                                || power of attorney by the individual in this          |                                     |                                       |                                || 10                                                   |                                     |                                       |                                || regard, if the individual is not in india or         |                                     |                                       |                                || for some other reason it is not possible             |                                     |                                       |                                || for him to sign the return                          |                                     |                                       |                                ||                                                      |                                     |                                       |                                || 3                                                   | hindu undivided family              | (                                     |                                || a                                                    |                                     |                                       |                                || ) karta of the family; or                            |                                     |                                       |                                ||                                                      |                                     |                                       |                                || (                                                    |                                     |                                       |                                || b                                                    |                                     |                                       |                                || ) any other adult member of the family               |                                     |                                       |                                || 15                                                   |                                     |                                       |                                || if the karta is not in india or is mentally          |                                     |                                       |                                || incapacitated from attending to his affairs         |                                     |                                       |                                ||                                                      |                                     |                                       |                                || 4                                                   | company not being resident          | any person who holds a valid power of |                                || in india                                             | attorney from the company to do so |                                       |                                ||                                                      |                                     |                                       |                                || 5                                                   | (                                   |                                       |                                || a                                                    |                                     |                                       |                                || ) company which is being                             | liquidator referred to in clause (  |                                       |                                || g                                                    |                                     |                                       |                                || )                                                    |                                     |                                       |                                || 20                                                   |                                     |                                       |                                ||                                                      |                                     |                                       |                                || wound up by court or otherwise; or  of sub-section ( |                                     |                                       |                                || 1                                                    |                                     |                                       |                                || ) of section 164                                    |                                     |                                       |                                ||                                                      |                                     |                                       |                                || (                                                    |                                     |                                       |                                || b                                                    |                                     |                                       |                                || ) company where any person has                       |                                     |                                       |                                || been appointed as the receiver of                    |                                     |                                       |                                || any assets of the company                            |                                     |                                       |                                ||                                                      |                                     |                                       |                                || 6                                                   | company whose management has        | principal officer of the company     |                                || 25                                                   |                                     |                                       |                                ||                                                      |                                     |                                       |                                || been taken over by the central                       |                                     |                                       |                                || government or any state                              |                                     |                                       |                                || government under any law                             |                                     |                                       |                                ||                                                      |                                     |                                       |                                || 7                                                   | any other company                   | (                                     |                                || a                                                    |                                     |                                       |                                || ) managing director of the company;                  |                                     |                                       |                                || or (                                                 |                                     |                                       |                                || b                                                    |                                     |                                       |                                || ) any director of the company if there               |                                     |                                       |                                || 30                                                   |                                     |                                       |                                || is no managing director or the managing              |                                     |                                       |                                || director, for any unavoidable reason, is             |                                     |                                       |                                || not able to sign and verify the return              |                                     |                                       |                                ||                                                      |                                     |                                       |                                || 8                                                   | firm                                | (                                     |                                || a                                                    |                                     |                                       |                                || )  managing partner of the firm; or                  |                                     |                                       |                                ||                                                      |                                     |                                       |                                || (                                                    |                                     |                                       |                                || b                                                    |                                     |                                       |                                || ) any partner (not being a minor) of the             |                                     |                                       |                                || 35                                                   |                                     |                                       |                                || firm if there is no managing partner or the          |                                     |                                       |                                || managing partner, for any unavoidable                |                                     |                                       |                                || reason, is not able to sign and verify the           |                                     |                                       |                                || return                                              |                                     |                                       |                                ||                                                      |                                     |                                       |                                || 9                                                   | limited liability partnership       | (                                     |                                || a                                                    |                                     |                                       |                                || )  designated  partner  of  the  limited             |                                     |                                       |                                || 40                                                   |                                     |                                       |                                ||                                                      |                                     |                                       |                                || liability partnership; or                            |                                     |                                       |                                ||                                                      |                                     |                                       |                                || (                                                    |                                     |                                       |                                || b                                                    |                                     |                                       |                                || ) any partner (not being a minor) of the             |                                     |                                       |                                || limited liability partnership if there is no         |                                     |                                       |                                |designated partner or the designated partner, for any unavoidable reason, is not able to sign and verify the return  10 local authority principal officer of the local authority  5 11 political party chief executive officer ( whether such chief executive officer is known as secretary or by any other designation) of the party  12 any other association of persons any member or the principal officer of the 10 association  13 any other person (a) person himself; or (b) any person competent to act on his behalf  (10) any person who is otherwise not required to furnish a return of tax bases under 15 sub-section (1) may furnish such return before the expiry of one year from the end of the financial year to which it pertains and all the provisions of this code shall, as far as may be, apply as if it is a return furnished under that sub-section  145(1) the board may, without prejudice to the provisions of section 144, frame a tax return preparer scheme so as to allow a tax return preparer to prepare and furnish the return 20 of tax bases of any specified class of persons, in accordance with the scheme (2) every tax return preparer shall affix his signature on the return so prepared by him (3) the scheme framed by the board under this section may provide for the following, namely:—  (a) the eligibility criteria for a person to qualify as a tax return preparer;  25 (b) the code of conduct for the tax return preparer;  (c) the duties and obligations of the tax return preparer;  (d) the period for which the tax return preparer shall be authorised;  (e) the circumstances under which the authorisation given to a tax return preparer may be withdrawn; and  30  (f) any other matter which may be specified by the scheme for  the purposes of this section  (4) in this section—  (a) "tax return preparer" means any individual who has been authorised to act as a tax return preparer under the scheme framed under this section;  35  (b) "tax return preparer scheme" means a scheme framed and notified by the board and providing for preparing and furnishing of the return of tax bases through a tax return preparer; and  (c) "specified class of persons" means  a class of persons who  are required to furnish a return of tax bases under this code, other than a company or a person whose 40 accounts are required to be audited under section 88    tax return preparer issue of  notice to  furnish return 146 (1) the assessing officer may serve on a person in whose case the time allowed under sub-section (1) of section  144 has expired, a notice, within a period of twenty-one months from the end of the financial year in which the return was due, requiring such person to furnish a return of tax bases for the relevant financial year (2) the person in receipt of notice issued under sub-section (1) shall furnish the return within a period of fourteen days from the date of receipt of the notice and the return shall be furnished in such form, verified in the manner and setting forth such other particulars, as may be prescribed 147 (1) the assessee shall be liable to pay before furnishing the return of tax bases, 5 the aggregate of the following amounts as self-assessment tax, namely:—  (a) the amount of tax payable on the basis of the return required to be furnished under this code for any financial year as reduced by—  (i) the amount of tax, if any, already paid under this code;  (ii) any tax deducted or collected at source; 10   (iii) any relief of tax claimed under section 207; and  (iv) any tax credit under section 106; and  (b) the amount of interest payable under any provision of this code for such financial year  (2) the amount paid as self-assessment tax for any financial year shall first be adjusted 15  towards the interest payable under any provision of this code and the balance, if any, shall be adjusted towards the tax payable, if the amount of the self-assessment tax paid falls short of the self-assessment tax payable under sub-section (1)  (3) after an assessment under section 155 or section 156 has been made, any amount paid under sub-section (1) shall be deemed to have been paid towards such assessment 20   (4) if any assessee fails to pay the whole or any part of such tax or interest or both in accordance with the provisions of sub-section (1), he shall, without prejudice to any other consequences that he may incur, be deemed to be an assessee in default in respect of the tax or interest or both remaining unpaid and all the provisions of this code shall apply accordingly  self-assessment  tax 148 on receipt of any return of tax bases for any financial year, the assessing officer,   25  or any other person authorised by the board in this behalf, shall issue an acknowledgement for receipt of the return  acknowledgment of return  processing  of return 149 (1) the assessing officer, or any other person authorised by the board in this behalf (hereinafter referred to as the processing authority) shall process the return received under section  144 or section  146 in the following manner, namely:— 30  (a) the tax bases shall be computed after making the following adjustments, namely:—  (i) any arithmetical error in the return; or  (ii) an incorrect claim, if such incorrect claim is apparent from the existence of any information in the return; 35   (b) the tax and interest, if any, shall be computed on the basis of the tax base computed under clause (a); and  (c) the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax and interest, if any, computed under clause (b) by any tax deducted at source, any tax collected at source, any advance tax paid, any   40  relief allowable under section 207, any self-assessment tax paid and any other amount paid otherwise than by way of tax or interest (2) the processing authority shall send an intimation to the assessee specifying the sum determined to be payable by, or refundable to, him and such other particulars as may be prescribed  (3) the processing authority shall also send an intimation to the asssessee in a case 5 where the loss declared in the return by the assessee is adjusted but no tax or interest is payable by, or refundable to, him  (4) the processing authority shall not send any intimation in respect of any sum payable on account of any adjustment made under sub-section (1), if the return is processed after the expiry of a period of twelve months from the end of the financial year in which the 10 return is furnished  (5) the acknowledgement of the return shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the assessee under clause (c) of sub-section (1), and where no adjustment has been made under clause (a) of sub-section (1)  (6) the board may, for the purposes of sub-section (1), make a scheme for centralised 15    processing of returns for expeditious determination of the tax payable by, or the refund due to, the assessee  (7) for the purposes of this section, "an incorrect claim apparent from the existence of any information in the return" shall mean a claim, on the basis of an entry, in the return—  (i) of an item, which is inconsistent with another entry of the same, or some other 20 item, in such return;  (ii) in respect of which information required to be supplied to substantiate such entry has not been so furnished; or  (iii) in respect of a deduction, where such deduction exceeds the specified statutory limit which may have been expressed as monetary amount, percentage, ratio 25 or fraction   notice for inquiry  before assessment 150 (1) an assessing officer may make an assessment on receipt of return under section  144 or section 146, if he considers it necessary or expedient to ensure that the assessee has not understated his tax bases or computed excessive loss or allowance or underpaid the tax in any manner  30  (2) for the purposes of making an assessment, the assessing officer shall serve on any assessee a notice requiring him, on a date to be specified therein—  (a) to attend his office or to produce, or cause to be produced, evidence, if any, on which the assessee may rely in support of the return;  (b) to produce, or cause to be produced, such accounts or documents (not 35 relating to a period more than  six years prior to the relevant financial year) as the assessing officer may require; or  (c) to furnish in writing, and verified in the prescribed manner, information in such form and on such matters (including a statement of all assets and liabilities of the assessee, whether included in the accounts or not) as the assessing officer may require  40  (3) the assessing officer shall obtain the  prior approval of the joint commissioner before requiring the assessee to furnish the statement of all his assets and liabilities not included in the accounts for the relevant financial year  (4) the assessing officer may make such inquiry, as he considers necessary, for the purpose of obtaining full information in respect of tax bases of any person for the relevant 45 financial year  (5) no notice under sub-section (2) shall be served on the assessee after the expiry of a period of six months from the end of the financial year in which the return is furnished 151 (1)the assessing officer may direct the assessee to get his accounts audited by an accountant, if, at any stage of the proceeding, he is of the opinion that, having regard to the nature and complexity of the accounts of the assessee and the interests of revenue, it is necessary to do so  (2)the assessing officer shall not issue any direction under sub-section (1) unless 5 the assessee has been given an opportunity of being heard and prior approval of the chief commissioner or commissioner has been obtained  (3) the provisions of sub-section (1) shall have effect irrespective of the fact that the accounts of the assessee have been audited under any other law for the time being in force or otherwise 10   (4) the accountant shall, for the purposes of sub-section (1), be nominated by the chief commissioner or the commissioner  (5) the accountant shall furnish a report of the audit referred to in sub-section (1) in such form, duly signed and verified by him, and setting forth such particulars as may be prescribed and such other particulars as the assessing officer may require 15   (6) the accountant shall furnish the report referred to in sub-section (5) within the time allowed by the assessing officer  (7)the assessing officer may extend the time allowed under sub-section (6) by such further period or periods as he thinks fit, for reasons to be recorded in writing  (8) the aggregate of the period allowed under sub-section (6) and the further period 20  or periods allowed under sub-section (7) shall not exceed one hundred and eighty days from the date on which the direction under sub-section (1) is received by the assessee  (9) the accountant shall furnish the report referred to in sub-section (5) to the assessing officer and a copy of the same to the assessee  (10) the remuneration of the accountant and other expenses of any audit under sub- 25 section (1) shall be determined and paid by the chief commissioner or the commissioner in accordance with such rules  as may be prescribed  special audit  152 (1) the assessing officer may, for the purposes of assessment, require a valuation determination of value of assets officer to make and report to him an estimate of the value, including fair market value, of any asset, property, investment or expenditure 30   (2)  on a reference made under sub-section (1), the valuation officer shall, for the purpose of estimating the value of the asset, property, investment or expenditure, and subject to the rules in this behalf, have all the powers to—  (a) enter any land, building or other place belonging to, or occupied by, the person in  connection with whose assessment the reference has been made; 35   (b) require any person in charge of, or in occupation or possession of, the land, building or other place to afford him the necessary facility to survey or inspect the land, building or other place;  (c) inspect any asset or property in respect of which the reference has been made; 40   (d) inspect any books of account, documents or record which may be relevant for the purpose of making the estimate of the value of the asset, property, investment or expenditure, in respect of which the reference has been made;  (e) gather any other information relating to the asset, property investment or expenditure, which may be relevant for the purposes of estimating the value 45  (3) the valuation officer shall, by order in writing, estimate the value of the asset, property, investment or expenditure after taking into account—  (a) such evidence as the assessee may produce; and  (b) the material in his possession gathered after giving an opportunity of being 5 heard to the assessee  (4)the valuation officer may estimate the value of the asset, property, investment or expenditure to the best of his judgment, if the assessee does not co-operate or comply with his direction  (5)the valuation officer shall furnish a copy of his estimate under sub-section (3) or 10  sub-section (4), as the case may be, to the assessing officer and the assessee within a period of six months from the end of the month in which a reference is made under subsection (1)  (6) the assessing officer may, on receipt of the report of the valuation officer, proceed to compute the tax bases of the assessee after taking into account the value estimated by the 15   valuation officer   determination of arm's length  price 153 (1) the assessing officer may, with the prior approval of the commissioner, refer to the transfer pricing officer, the computation of arm's length price under section 117 in relation to any international transaction entered into by the assessee in any financial year, if he considers it necessary or expedient to do so  20 (2) the transfer pricing officer may, upon reference made to him under sub-section (1), serve on the assessee a notice requiring him, on a date to be specified therein-—  (a) to attend his office or to produce, or cause to be produced, evidence, if any, on which the assessee may rely in support of the computation made by him of the arm's length price in relation to the international transaction; or  25 (b) to produce, or cause to be produced, such accounts or documents as the transfer pricing officer may require  (3) the transfer pricing officer shall determine the arm's length price in relation to the international transaction in accordance with the provisions of section 117 after taking into account—  (a) such evidence as the assessee may produce; and  30  (b) the material in his possession gathered after giving an opportunity of being heard  to the assessee  (4) the transfer pricing officer may determine the arm's length price in relation to the international transaction to the best of his judgment, if the assessee does not co-operate or comply with his direction  35  (5) the transfer pricing officer shall send a report of his determination under subsection (3) or sub-section (4), as the case may be, to the assessing officer and the assessee  (6) no determination under sub-section (3) or sub-section (4) shall be made, or report of such determination sent as required by sub-section (5), after a period of forty-two months from the end of the financial year in which the international transaction is entered into  40  (7) the transfer pricing officer may, for the purposes of determining the arm's length price under this section, exercise all, or any, of the powers specified in section 134 or section 140 154 (1) the commissioner shall, for the purposes of section 123, serve on the assessee a notice requiring him, on a date to be specified therein to produce, or cause to be produced, any evidence or particulars on which the assessee may rely in support of his claim that the provisions of section 123 are not applicable to him  (2) after hearing the evidence and after taking into account such particulars as the 5 assessee may produce, the commissioner shall pass an order declaring an arrangement as being an impermissible avoidance agreement or otherwise for the purposes of section 123  (3) upon declaring an arrangement as an impermissible avoidance agreement, the commissioner shall—  (a) issue directions to the assessing officer to make such adjustment to the 10  total income, or the tax liability, of the assessee; and  (b) forward or cause to be forwarded a copy of such order— (i) to the assessee; and (ii) to the jurisdictional commissioner of the other party to the arrange- ment, who shall then proceed under this section against such other party and 15  the provisions of this section shall apply accordingly  (4) no order under sub-section (2) shall be issued after a period of twelve months from the end of the month in which the notice under sub-section (1) is issued  determination of an impermissible avoidance agreement and consequences thereof assessment  155 (1) the assessing officer shall, consequent to a notice issued under sub-section (2) of section   150, by an order in writing, make an assessment of the tax bases of the 20  assessee after taking into account—  (a) the evidence furnished by the assessee;  (b) the report of audit under section 151, if any; (c) the report of the valuation officer, if any; (d) the order of the transfer pricing officer, if any; 25   (e) the direction of the commissioner under section 154, if any;  (f) the direction of the joint commissioner under section 157, if any; and  (g) the material in his possession, in respect of which an opportunity of being heard has been provided to the assessee  (2) the assessing officer shall, on the basis of the assessment, determine the sum   30 payable by, or refundable to, the assessee after adjusting the sum paid by, or refunded to, the assessee in pursuance to the intimation issued under sub-section (2) of section 149  (3) where an assessment has been made under this section—  (a) any tax or interest paid by the assessee under sub-section (1) of section 149 shall be deemed to have been paid towards such assessment; 35   (b) if no refund is due on assessment or the amount refundable under subsection (1) of section 149 exceeds the amount refundable on assessment, the whole of the excess amount so refunded shall be deemed to be tax payable by the assessee and the provisions of this code shall apply accordingly  (4) the assessing officer shall, notwithstanding anything in this code, in the first   40 instance, forward a draft of the proposed order of assessment (hereinafter in this section referred to as the draft order) to the eligible assessee if he proposes to make any variation in the income or loss returned which is prejudicial to the interests of such assessee (5) on receipt of the draft order, the eligible assessee  may, within a period of thirty days of the receipt by him of the draft order,—  (a) file his acceptance of the variations to the assessing officer; or  (b) file his objections, if any, to such variations to—  5 (i) the dispute resolution panel; and (ii) the assessing officer  (6) the assessing officer shall complete the assessment on the basis of the draft order, if—  (a)  the eligible assessee intimates to the assessing officer the acceptance of 10 the variations; or (b)  no objections are received within the period specified in sub-section (5) (7) the assessing officer shall, notwithstanding anything in section  163, pass the assessment order within a period of one month from the end of the month in which- (a) the acceptance is received; or 15 (b) the period of filing of objections under sub-section (5) expires  (8) upon receipt of the directions issued under sub-section  (2) of section  158, the assessing officer shall, in conformity with the directions, complete the assessment within a period of one month from the end of the month in which the direction is received notwithstanding anything in section   163, without providing any further hearing in the 20 matter  (9) in this section, "eligible assessee" means—  (a) any person in whose case the variation arises as a consequence of the order of the transfer pricing officer passed under sub-section (3) or sub-section (4) of section 153;  25 (b)  any foreign company;  (c) any person in whose case the variation arises as a consequence of the directions of the commissioner under sub-section (3) of section  154; or  (d) any class or classes of persons as may be prescribed  156 (1)the assessing officer shall make the assessment of the tax bases to the best   best judgment assessment 30 of his judgment, if—  (a) the assessee fails to—  (i) furnish the return required under sub-section (1) of section  144 or section 146 or has not furnished a return or under sub-section (6) of section 144;  (ii) comply with all the terms of a notice issued under sub-section (2) of 35 section 150;  (iii) comply with a direction issued under section 151; or  (iv) furnish the return in response to notice under section  159; or  (b) the assessee fails to regularly follow the method of accounting provided in sub-section (1) of section  89, or the accounting standards notified under sub-section 40 (2) of  the that section; or  (c) he is not satisfied about the correctness or completeness of the accounts of the  assessee  (2)the assessing officer shall, in making the assessment under sub-section (1), take into account all relevant material which he has gathered or is available on record (3)the assessing officer shall, before making the assessment under sub-section (1), provide the assessee an opportunity of being heard by serving a notice calling upon the assessee to show cause, on a date and time to be specified in the notice, as to why the assessment should not be completed to the best of his judgment  (4) it shall not be necessary to give an opportunity under sub-section (3) before the 5 making of an assessment under this section, in a case where a notice under section 146 has been issued  157 (1) a joint commissioner may, on a reference being made to him by the assessing officer or on an application of an assessee or on his own motion, call for and examine the record of any proceeding in which an assessment is pending and if he considers it necessary   10 or expedient so to do,  he may issue such directions as he thinks fit for the guidance of the assessing officer so as to enable him to complete the assessment  (2) the joint commissioner shall not issue any direction which  is prejudicial to the assessee unless an opportunity of being heard is given to him  (3) any direction issued under this section shall be binding on the assessing officer    15   directions  by joint commissioner for assessment  (4) for the purposes of this section, any direction as to the lines on which an investigation connected with the assessment should be made, shall not be considered as a direction prejudicial to the assessee  158 (1) the dispute resolution panel may, in a case where any objection is received under sub-section (5) of section  155— 20   (a) call for and examine the record of any proceeding relating to the draft order; direction  by dispute resolution panel for assessment (b) make such further inquiry, as it thinks fit; or (c) cause any further inquiry to be made by any income-tax authority and report the result of the same to it  (2) the dispute resolution panel shall, in the case referred to in sub-section (1), issue  25 such directions, as it thinks fit, for the guidance of the assessing officer to enable him to complete the assessment  (3) the dispute resolution panel shall issue the direction referred to in sub-section (2), after considering—  (a) the draft order; 30   (b) the objections filed by the eligible assessee;  (c) the evidence furnished by the eligible assessee;  (d) the report, if any, of the assessing officer, valuation officer or transfer pricing officer or any other authority;  (e) the records relating to the draft order; 35   (f) the evidence collected by, or caused to be collected by, it; and  (g) the result of any inquiry made by, or caused to be made by, it  (4) the dispute resolution panel may confirm, reduce or enhance the variations proposed in the draft order  (5) the dispute resolution panel shall not set aside any proposed variation or issue  40 any direction under sub-section (2) for further inquiry before passing of the assessment order (6) if the members of the dispute resolution panel differ in opinion on any issue, then it shall be decided according to the opinion of the majority  (7)  the direction issued by the dispute resolution panel shall be binding on the assessing officer  (8)  no direction under sub-section (2) shall be issued unless an opportunity of being 5 heard is given to the eligible assessee or the assessing officer on such directions which are prejudicial to the interest of the assessee or the revenue, as the case may be  (9) no direction under sub-section (2) shall be issued after a period of nine months from the end of the month in which the draft order is forwarded to the eligible assessee  (10) the board may make rules for the efficient functioning of the dispute resolution   10  panel and for the expeditious disposal of the objections filed under clause (b) of sub-section (5) of section  155 by the assessee  (11) in this section, "eligible assessee" shall have the meaning as assigned to it in section 155 43 of  1961 re-opening of assessment 159 (1)the assessing officer shall, for reasons to be recorded in writing, reopen a   15 case for reassessment, if he has reason to believe that any tax base chargeable to tax has escaped assessment for the relevant financial year  (2) the assessing officer shall, for reopening a case, serve on the assessee a notice requiring him to furnish, within a period of thirty days, a return of tax bases for any financial year, in  such form, verified in the manner and setting forth such other particulars as may be   20  prescribed  (3) the tax bases chargeable to tax shall be deemed to have escaped assessment in the following cases, namely:—  (a) where the tax base for the relevant financial year exceeds the maximum amount not liable to tax but- 25   (i) the return of tax bases has not been furnished;  (ii) no notice has been issued under section  146; and  (iii) the time limitation for issuing such notice has expired;  (b) where a return of tax bases has been furnished by the assessee, but- (i) no assessment has been made; and 30   (ii) the assessee has understated the tax bases, or has claimed excessive loss, deduction, allowance or relief in the return;  (c) where an assessment has been made under section 155 or section 156, but— (i) the tax bases liable to tax has been under-assessed; (ii) the tax bases have been assessed at too low a rate; 35   (iii) the tax bases have been made the subject of relief to which the assessee is not  entitled to under this code;  (iv) excessive loss or capital allowance or any other allowance under this code has been computed;  (v) the computation or assessment has not been made in accordance with  40  any order, direction, instruction or circular issued by the board;  (vi) the computation or assessment has not been made by the assessing officer in accordance with any order, direction, instruction or circular issued, before making of the assessment, by an authority to whom the assessing officer is subordinate; or  (vii) any objection has been raised by the comptroller and auditor general of india to the effect that  the assessment has not been made in accordance  43 of  1961 27 of  1957 5 with the provisions of the income-tax act, 1961 or the wealth-tax act, 1957 as they stood before the commencement of this code or this code and such objection forms part of the report of the comptroller and auditor general of india laid before each house of parliament;  (d) where search and seizure has been carried out under section 135, or material 10 has been obtained in pursuance of a requisition under section 136, in the case of the person;  (e) where any material which has been seized, or obtained in pursuance  of a requisition, has a bearing on the determination of the tax bases of a person other than the person referred to in clause (d)  15 (4) the notice under sub-section (2) shall be issued—  (a) for the seven financial years immediately preceding the financial year in which the search and seizure has been carried out or the material has been obtained; and  (b) within a period of seven financial years from the end of the relevant financial 20 year in any other case  (5) notwithstanding anything in sub-section (4), the notice under sub-section (2) for any financial year may be issued at any time, if—  (a) the reassessment is to be made in consequence of, or to give effect to, any finding, or direction, contained in an order passed—  25  (i) by any authority or court in any proceeding under this code by way of appeal, reference or revision; or  (ii) by a court in any proceeding under any other law for the time being in force; and  (b) the period referred to in sub-section (4) for issue of such notice had not 30 expired at the time the order, which was the subject-matter of appeal, reference or revision was made  (6)   no notice under sub-section (2) shall be issued—  (a) in a case where an assessment has been made under section 155 or section 156 or under this section, by an assessing officer below the rank of joint commis- 35 sioner—  (i) within a period of four years from the end of the relevant financial year, unless the joint commissioner is satisfied on the reasons recorded by such assessing officer that it is a fit case for issue of such notice;  (ii) after the expiry of a period of four years from the end of the relevant 40 financial year, unless the commissioner is so satisfied;  (b) in any other case, by an assessing officer below the rank of joint commissioner after the expiry of a period of four years from the end of the relevant financial year, unless the joint commissioner is satisfied on the reasons recorded by such assessing officer that it is a fit case for issue of such notice  45  (7)  the commissioner or the joint commissioner, being satisfied on the reasons recorded by the assessing officer regarding fitness of a case for the issue of notice under this section, is not required to issue such notice himself (8) any assessment proceeding relating to any financial year falling within the period of seven financial years referred to in sub-section (4) shall abate if it is pending on the date of the initiation of the search, or on the date of obtaining the material, as the case may be  (9) the provisions of this section shall also apply in the case of any other person, 5 referred to in clause (e) of sub-section (3), as if a search and seizure has been carried out under section 135 in his case, if any material which has a bearing on the determination of the tax bases of such other person, has been—  (a) seized in the course of search and seizure under section 135 in the case of the person referred to in clause (d) of sub-section (3); or  10  (b) obtained in pursuance of the requisition under section 136 in the case of the person referred to in clause (d) of sub-section (3)  (10) on receipt of a return in pursuance of a notice under sub-section (2), or after the expiry of time prescribed for furnishing the return in pursuance of such notice, the assessing officer shall, by an order in writing, make the reassessment of the total income and the 15 provisions of sections  150 to  158 both inclusive shall apply accordingly  (11) in any reassessment made under this section, the tax shall be chargeable at the rate or rates at which it would have been charged had the tax bases not escaped assessment  (12) the proceedings under this section, excluding the proceedings initiated in consequence of the condition specified in clauses (d) and (e) of sub-section (3) shall be 20 dropped, if—  (a) the assessee has not impugned any part of the original assessment order for the relevant financial year under sections 178 and 192;  (b) he establishes that he had been assessed on an amount not lower than what he would be rightly liable for, even if the tax base alleged to have escaped assessment 25 had been taken into account; and  (c) the original assessment order has not been revised under section 161 or section 191  (13) for the purposes of this section,—  (a) date of initiation of search, or the date of obtaining the material under sub- 30 sections (8)  and  (9) shall be construed as a reference to the date of receiving the material by the assessing officer having jurisdiction over such other person;  (b) reassessment shall include any other part of the tax bases chargeable to tax which has escaped assessment and which comes to the notice of the assessing officer subsequently in the course of reassessment proceedings, notwithstanding 35 that the reasons recorded for reopening under sub-section (1) do not refer to such part of tax bases; and  (c) reopening a case for reassessment shall include opening a case for assessment where return for a tax bases has not been furnished before the issue of notice under sub-section (2)   approval  for search assessment 40  160 no order of assessment or reassessment shall be passed by an assessing officer without the approval of the joint commissioner in a case where—  (a) search and seizure has been carried out under section 135, or  material has been obtained in pursuance of a requisition under section 136, in the case of the person;  45  (b) any material which has been seized, or obtained in pursuance  of a requisition, has a bearing on the determination of the tax bases of a person other than the person referred to in clause (a) 161 (1) an income-tax authority may amend any order passed, or intimation issued by it under this code so as to rectify any mistake apparent on the face of the record  (2) no amendment under this section shall be made after a period of four years from the end of the financial year in which the order sought to be amended was passed  (3) the income-tax authority shall not make any amendment, which has the effect of 5 enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, unless the authority concerned has given to the assessee an opportunity of being heard  (4) the income-tax authority concerned may make an amendment—  (a) on its own motion; or 10   (b) on the application made to it by the assessee or, as the case may be, by the assessing officer  (5) any application received by an authority for amendment of an order shall be decided within a period of six months from the end of the month in which such application is received by it 15   (6) in a case where the order has been decided in an appeal or revision, the power of the authority to amend the order, or intimation, shall be restricted to matters other than those decided in appeal or revision  rectification of  mistake 162 (1) any sum payable in consequence of any order made, or intimation issued, under this code shall be demanded by an income-tax authority by serving upon the assessee   20 a notice of demand in such form and manner as may be prescribed  (2) the intimation issued under sub-section (2) of section 149 shall be deemed to be the notice of demand for the purposes of this section  notice  of demand  163 (1) the assessing officer shall not make,—  (a) any order of assessment under section  155 or section  156 after the expiry of   25  time  limits for  completion  of assessment  or reassessments a period of twenty-one months from the end of the financial year in which the return was due;  (b) any order of reassessment under section 159 after the expiry of a period of twenty-one months from the end of the financial year—  (i) in which the last of the authorisations was executed in the case of a    30  person where search and seizure was carried out under section 135 or the material was obtained in pursuance to a requisition under section 136;  (ii) in which any material belonging to the person referred to in section 138 is handed over to the assessing officer having jurisdiction over such person; 35  (iii) in which the notice under section  159 is served, in any other case; (c) any order of assessment in pursuance of an order under section 185 or section 187 or section 190 or section 262, setting aside or cancelling an assessment, as the case may be, after the expiry of a period of one year from the end of the financial year in which the order is received by the commissioner; 40   (d) any order of assessment in pursuance of an order under section 191 or section 192, after the expiry of a period of one year from the end of the financial year in which the order is passed under that section;  (e) any order of assessment, reassessment or recomputation in pursuance of the revival of any proceeding under this code, after the expiry of a period of one year from  45 the end of the financial year in which the order of revival of the proceedings is received by the commissioner (2) order of assessment or reassessment for such financial year after the expiry of a period of thirty-three months from the end of the financial year in which the return was due, or notice 5 under section 159 is served, whichever is later  (3) the provisions of sub-sections (1) and (2) shall not apply in respect of assessment, re-assessment or recomputation to be made in consequence of, or to give effect to, any finding or direction contained in any order—  (a) under section, 180, 185, 187, 190, 191, 192 or 262; or  10  (b) of any court in a proceeding otherwise than by way of appeal or reference under this code  (4) in computing the period of limitation for the purposes of sub-sections (1) and (2), the following period or time shall not be included, namely:—  (a) the period commencing from the date on which the application for advance 15 pricing agreement is filed by the assessee and ending with—  (i) the date on which the order rejecting the application is received by the commissioner; or  (ii) the date on which the copy of the advance  pricing agreement, entered under section 118, is received by the commissioner;  20  (b) the time taken in reopening the whole or any part of the proceeding or in giving an opportunity to the assessee to be reheard under section 133;  (c) the period during which the assessment proceeding is stayed by an order or injunction of any court;  (d) the period commencing from the date on which the assessing officer directs 25 the assessee to get his accounts audited under section  151 and ending with the last date on which the report of such audit is required to be furnished under that section;  (e) the period commencing from the first day of the month in which the notice under section 154 is served on the assessee and ending with the last day of the month in which the order under that section is passed;  30  (f) the period commencing from the date on which an application is made before the authority for advance rulings under sub-section (1) of section 258 and ending with the date on which the order rejecting the application, or the date on which the advance ruling pronounced by it, is received by the commissioner under sub-section (9) or, as the case may be, sub-section (13) of that section;  35  (g) the period commencing from the date on which an application is made before the income tax settlement commission under sub-section (1) of section 273 and ending with the date on which the order rejecting the application by it under sub-section (1) of section 275 is received by the commissioner  (5) the period of limitation available to the assessing officer for making an order of 40 assessment, reassessment or recomputation, shall  be extended to sixty days, if the period immediately after the exclusion of the time or period specified in sub-section (4) is less than sixty days   c - procedure for assessment in  special cases164 (1) for the purposes of this code, "representative assessee" in respect of an representative assessee 45 assessee means— (a) the agent of a non-resident, if the assessee is a non-resident; (b) the guardian, or manager, of a minor, lunatic or idiot, if the assessee is a minor, lunatic or idiot;  (c) the court of wards, the administrator-general, the official trustee, any receiver or manager (including any person, whatever be his designation, who manages property on behalf of the assessee) appointed by, or under, any order of a court, if such 5 person receives, or is entitled to receive, income on behalf, or for the benefit, of the assessee;  (d) a trustee appointed under an oral trust, or a trust declared by a duly executed instrument in writing whether testamentary or otherwise and who receives or is entitled to receive, income on behalf, or for the benefit, of any person, if the assessee is 10  a trust;  (e) the legal representative, or the executor, if the assessee dies;  (f) a participant, or the legal representative of the deceased participant, in the case of dissolution of an unincorporated body; and  (g) the liquidator appointed under section 448, or section 490, of the companies act, 1956 in the case of a company 15   (2) the "agent" in relation to a non-resident includes— (a) any person in india— (i) who is employed by, or on behalf of, the non-resident;  (ii) who has any business connection with the non-resident;  (iii) from, or through, whom the non-resident is in receipt of any income, 20  whether directly or indirectly; or  (iv) who is the trustee of the non-resident; and  (b) any other person who has acquired, by means of transfer, a capital asset in india from the non-resident  (3) a broker in india who, in respect of any transaction, does not deal directly with, or 25  on behalf of, a non-resident principal but deals with, or through, a non-resident broker shall not be deemed to be an agent under this section in respect of such transaction, if the following conditions are fulfilled, namely:—  (a) the transactions are carried on in the ordinary course of business through the first mentioned broker; and 30   (b) the non-resident broker is carrying on such transactions in the ordinary course of his business and not as a principal  (4) the "executor" in relation to the estate of a deceased person means— (i) an individual, if such individual is the only executor; or (ii) an association of persons comprising all the executors, if there are 35  more than one executor,  and includes an administrator or other person administering such estate  (5) no person shall be treated as an  agent of a non-resident unless he has had an opportunity of being heard by the assessing officer as to his liability to be treated as such  165 (1) every representative assessee shall, in his representative capacity, be liable to 40  assessment only in respect of the tax bases of the person represented by him (hereinafter in this sub-chapter referred to as the principal)  rights and obligations  of a representative assessee (2) subject to sub-section (3), every representative assessee shall be subject to the same duties, responsibilities and liabilities as if the tax bases accrued to, or received or owned by, him 45  (3) the tax on tax bases of the representative assessee shall be levied upon, and recovered from, him in the manner, and to the extent, as it would have been leviable upon, and recoverable from, the principal  (4) any representative assessee, or any person who apprehends that he may be 5 assessed as a representative assessee, may retain a sum equal to his estimated liability under this sub-chapter out of the money payable by him to the principal  on whose behalf he is liable to pay tax  (5) the representative assessee, or the person referred to in sub-section (4), in the event of disagreement between him and the principal as to the amount to be so retained, may 10    apply to the assessing officer for a certificate stating the amount to be so retained pending final settlement of the liability  (6) upon receipt of the application under sub-section (5), the assessing officer shall issue, within a period of one month from the date of receipt of the application, the certificate stating the amount to be retained by the representative assessee or 15   the person  (7) the certificate issued under sub-section (6) shall be the warrant for retaining the amount specified therein by the representative assessee or the person  (8) the amount recoverable from the representative assessee, or the person referred to in sub-section (4), at the time of final settlement shall not exceed the amount specified in 20    such certificate, except to the extent to which the representative assessee, or the person, may have additional assets of the principal at that time  (9) every representative assessee who, as such, pays any sum under this code, shall be entitled to—  (a) recover the sum so paid from the principal; or  25  (b) retain an amount equal to the sum so paid out of any moneys that may be in his possession, or may come to him, in his representative capacity  (10) in the case of a representative assessee referred to in clause (e),  (f) or clause (g) of sub-section (1) of section  164—  (a) any proceeding taken against the principal before his death or its disso- 30 lution or the appointment of the liquidator, shall be deemed to have been taken against the representative assessee and may be continued against him from the stage at which it stood on the date of the death or dissolution or the appointment; and  (b) any proceeding which could have been taken against the principal if the 35 principal had survived or existed or the liquidator had not been appointed, may be taken against the representative assessee  166 nothing in this sub-chapter shall prevent - (a) the direct assessment of the principal; or (b) the recovery of any sum payable under this code from the principal  40  167 the assessing officer shall have the same remedy against all property of any kind vested in, or under the control or management of, any representative assessee as he would have against the property of the principal, in as full and ample a manner, whether the demand is raised against the representative assessee or against the principal direct  direct assessment  or recovery  not barred   remedy against property  in case of representative assessee 168 (1) the assessment of the predecessor and the successor in a business reorganisation shall, in respect of the financial year in which the business reorganisation is undertaken, be made in the manner provided in this section  (2) the predecessor shall be assessed in respect of the income for the period beginning with the first day of the financial year and ending on the day immediately preceding the date 5 of business reorganisation  (3) the successor shall be assessed in respect of the income for the period beginning with the date of business reorganisation and ending on the last day of the financial year  (4) any proceeding under this code taken against the predecessor shall be deemed to have been taken against the successor and may be continued against the successor from the 10  stage at which it stood on the date of the business reorganisation, if the predecessor does not exist or cannot be found  (5) any proceeding under this code may be taken against the successor, which could have been taken against the predecessor if he existed or was found  assessment upon  business reorganisation 169 (1) a hindu undivided family, hitherto assessed as undivided, shall be deemed, 15  assessment after  partition of a hindu undivided family for the purposes of this code, to continue to be a hindu undivided family, except where, and in so far as, a finding of partition has been given under this section in respect of the hindu undivided family  (2) the assessing officer shall—  (a) make an inquiry into the claim of partition made by, or on behalf of, any   20 member of a hindu undivided family, hitherto assessed as undivided, at the time of making the assessment;  (b) give notice of the inquiry to all members of the family; and  (c) record a finding as to whether there has been a total, or partial, partition of the joint family property and, if there has been such a partition, the date on which it has   25  taken place  (3) the tax bases of the hindu undivided family, hitherto assessed as undivided, shall, for the financial year in which the partition took place, be the tax bases in respect of the period up to the date of partition, as if no partition had taken place  (4) each member, or group of members, of the hindu undivided family, hitherto   30 assessed as undivided, shall be jointly and severally liable for tax on the tax bases of any financial year or period, up to the date of partition, and such tax shall be recovered from him, or them, accordingly  (5) for the purposes of this section, the several liability of any member, or group of members, shall be computed according to the portion of the joint family property allotted to   35 him, or to them, upon the partition  (6) the provisions of this section shall, so far as may be, apply in relation to the levy and collection of any penalty, interest, fine or other sum in respect of any period upto the date of the partition, whether total or partial, of a hindu undivided family as they apply in relation to the levy and collection of tax in respect of any such period 40   (7) for the purposes of this code, no claim of partial partition of a hindu undivided family shall be inquired into, or recognised as such  (8) in case of a partial partition of a hindu undivided family— (a) the hindu undivided family shall continue to be assessed under this code as if no partial partition had taken place; and  (b) the liability of that hindu undivided family or its members under this code, before or after the partial partition, shall remain the same  5 (9) in this section—  (a) "partition" means—  (i) where the property admits of a physical division, such division of the property, but a physical division of the income without a physical division of a property producing the income shall not be deemed to be a partition; or  10  (ii) where the property does not admit of a physical division, then such division as the property admits of, but a mere severance of status shall not be deemed to be a partition;  (b) "partial partition" means a partition which is partial as regards the persons constituting the hindu undivided family, or the properties belonging to the hindu 15 undivided family, or both  170 (1) notwithstanding anything in this code, the assessment of the income of a non-resident from the business of operation of ships (including an arrangement such as slot charter, space charter or joint charter) shall be made in accordance with the provisions of this section  assessment of nonresident  in respect  of occasional shipping business 20  (2) the master of a ship belonging to, or chartered by, a non-resident shall, before the departure of the ship, furnish to the assessing officer a return of the full amount of transportation charges accrued to, or received by, the owner or charterer, since the last arrival of the ship in that port  (3) the requirement of furnishing the return shall be deemed to have been complied with, if—  (a) the assessing officer is satisfied that—  (i) it is not possible for the master of the ship to furnish the return before 25 the departure of the ship from the port; and (ii) the master of the ship has made satisfactory arrangements for furnishing the return and payment of tax; and  (b) the return is furnished within a period of thirty days of the departure of the ship by any person authorised by the master of the ship  30 (4) on receipt of the return, the assessing officer shall—  (a) assess the income referred to in sub-section (1) in accordance with serial number 7 of the table under paragraph 1 of the fourteenth schedule, after calling for such documents as he deems fit; and  (b) determine the sum payable as tax thereon at the rates applicable to the total 35 income of a foreign company  (5) the sum determined under sub-section (4) shall be payable by the master of the ship or any other person authorised by him  (6) a port clearance shall not be granted to the ship until the commissioner of customs, or other officer duly authorised to grant it, is satisfied that the tax assessable 40 under this section has been duly paid or that satisfactory arrangements have been made for the payment  (8) any payment of tax made under this section shall be treated as advance tax, in case an assessment is made as envisaged in sub-section (7) 5  (7) nothing in this section shall prevent the assessment of the income, referred to in sub-section (1), for the relevant financial year of the owner, or charterer, of the ship in accordance with the other provisions of this code, at his option  171 (1) the tax bases of an individual for part of a financial year may be chargeable to tax in that financial year, if—  (a) it appears to the assessing officer that the individual may leave india during the financial year or shortly after its expiry; and  (b) has no intention of returning to india 10   (2) the part of a financial year, referred to in sub-section (1) shall be the period beginning with the first day of the financial year and ending with the probable date of his departure from india  (3) the assessing officer may estimate the tax bases of the individual for part of a financial year if it cannot be readily determined in accordance with  this code 15   (4) for the purposes of making an assessment under sub-section (1), the assessing officer may require the individual to furnish the return of tax bases within the time specified therein, which shall not be less than seven days  (5) notwithstanding anything in this code, the assessing officer  may, require the individual to furnish the return of tax bases, within the time specified therein, which shall not   20 be less than seven days—  (a) for the financial year for which the due date for filing of return has not expired; and  (b) for such other financial years for which no return of tax bases has been filed which was otherwise required to be filed 25   (6) the assessing officer shall, upon receipt of the return, or after the expiry of the time allowed for furnishing the return under sub-section (4) or sub-section  (5), proceed to make the assessment in accordance with the provisions of this code in so far as they apply  (7) the tax payable on the tax bases computed under this section shall be in addition to the tax, if any, payable under any other provision of this code 30   assessment of persons leaving  india 172 (1) notwithstanding anything in this code,  where it appears to the assessing officer  that an unincorporated body formed for a particular event or purpose in a financial year is likely to be dissolved in  the financial year or shortly thereafter,  then the assessing officer may charge to tax in that financial year the tax bases of the unincorporated body for the period beginning from the first day of the financial year to the likely date of its dissolution   35 (2) the provisions of section 171 shall apply to any proceeding under this section as they apply in the case of a person leaving india  assessment of an unincorporated body   formed for  a particular event  or  purpose 173 (1) notwithstanding anything in this code, where it appears to the assessing assessment  of persons  likely to transfer property  to avoid  tax officer that any person is likely to charge, sell, transfer, dispose of or otherwise part with any of his assets, in any financial year, with a view to avoiding payment of any liability under this  40  code, then the assessing officer may charge to tax in that financial year the tax bases of such person for the period beginning from the first day of the financial year to the date when the assessing officer commences proceedings under this section (2) the provisions of section 171 shall apply to any proceeding under this section as they apply in the case of a person leaving india  174 (1) notwithstanding anything in this code, where any business is discontinued in any financial year, the assessing officer may, in his discretion, charge to tax in that 5 financial year the tax bases of such business for the period beginning from the  first day of the financial year to the date  on which the business has been discontinued  (2) any person discontinuing any business shall give to the assessing officer notice of such discontinuance within a period of fifteen days thereof  (3) any sum received after the discontinuance of business shall be deemed to be the 10    income of the recipient and charged to tax accordingly in the year of receipt, if such sum would have been included in the tax bases of the person who carried on the business had such sum been received before such discontinuance  (4) the assessing officer may require the person whose business has been discontinued to furnish the return of tax bases, within the time specified therein, which shall 15    not be less than a period of seven days  (5) the notice for furnishing the return shall be served by the assessing officer, in the case of discontinuance of the business of—  (a) the individual, on him;  (b) the unincorporated body, on the participant who was member of the unincor- 20 porated body at the time of discontinuance; and  (c) the company, on the principal officer thereof  (6) the assessing officer shall, upon receipt of the return, or after the expiry of the time allowed for furnishing the return under sub-section (4) proceed to make the assessment in accordance with the provisions of this code in so far as they apply  (7) the tax payable on the tax bases computed under this section shall be in addition 25    to the tax, if any, payable under any other provision of this code  175 (1) the assessing officer shall, in a case where a change has occurred in the constitution of an unincorporated body, make a single  assessment in respect of the entire financial year in which the change has occurred  (2) in this section, a change in the constitution of an unincorporated body is said to discontinued business assessment of unincorporated body in  case of change  in its constitution 30 have taken place, if—  (a) one, or more, of the participants cease to be participants; (b) one, or more, new participants are admitted; or (c) all the participants continue with a change in their respective shares or in the shares of some of them  35  (3) the provisions of this section shall not apply, if the change in constitution is on account of the death of a participant or the retirement of all the participants 176 (1) the assessing officer shall make separate assessments on any two unincorporated bodies, if—  (a) one unincorporated body succeeds another unincorporated body; and   (b) the succession is by virtue of retirement of all participants in the unincorporated body or death of any of the participants 5   (2) the separate assessments shall be made in accordance with the provisions of section 168 as if—  (a) the unincorporated body, succeeding the other unincorporated body, is the successor; and   (b) the unincorporated body being succeeded is the predecessor 10    assessment on retirement  or death of participant  177 (1) the assessing officer shall assess every return filed under section 198, section 199 or section 202, as if it were a return of tax bases referred to in section 144, and all the other provisions of this code shall, as far as may be, apply accordingly  (2) the assessing officer shall, in a case where a person has failed to file the return under section 198 or section 199 or section 202, issue a notice to the person requiring him to 15 furnish the return within the time specified therein and all the other provisions of this code shall, as far as may be, apply as if it were a return of tax bases referred to in section 144   d—appeals  and  revisionassessment of a  deductor or  collector  178 (1) an assessee may prefer an appeal to the commissioner (appeals) where he is aggrieved by an intimation issued or an order passed by any income-tax authority below   20 the rank of the commissioner as specified in the twenty-first schedule  (2) without prejudice to sub-section (1), the assessee may prefer an appeal—   (i) where an application filed by him under section 161 has not been disposed of by the assessing officer within a period of six months from the date of filing of the application; or 25   (ii) where he is required to bear the liability in respect of the tax deductible under section 195 on the income payable  to a non-resident under any agreement or other arrangement and—   (a) he claims that no tax was deductible by him on such income payable by him to the non-resident; and 30    (b) has paid the tax on such income to the credit of the central government   appeal to commissioner (appeals) 179 (1) every appeal under section  178 shall be in such form and verified in such manner and accompanied by a fee as may be prescribed form of appeal  and limitation (2) the appeal by an assessee under section 178 shall be preferred within a period of thirty days from—  (a) the date of service of the notice of demand, if the appeal relates to any order or intimation in pursuance of which such notice of demand is issued;  5  (b) the date on which the period of six months for disposing of the application expired, if the appeal relates to not disposing of the application for rectification under section 161;  (c) the date of payment of the tax to the central government, if the appeal is filed under clause (ii) of sub-section (2) of section  178; and  10  (d) the date on which the order sought to be appealed against is served, if the appeal relates to any other matter  (3) the commissioner (appeals) may admit an appeal after the expiry of the period specified in sub-section (2), if—  (a) he is satisfied that the appellant had sufficient cause for not preferring it 15 within that time; and  (b) the delay in preferring the appeal does not exceed a period of one year (4) no appeal under this section shall be admitted unless— (a) the assessee has paid the tax due in accordance with the return of tax bases furnished;  20  (b) the assessee has paid an amount equal to the amount of advance-tax which was payable by him, if no return of tax bases has been filed by the assessee  (5) the commissioner (appeals) may, on an application made by the assessee, exempt him from the operation of the provisions of clause (b) of sub-section (4) for any good and sufficient reason to be recorded in writing procedure  in appeal 25  180 (1) the commissioner (appeals) shall fix a day and place for the hearing of the appeal, and shall give notice of the same to the appellant and the assessing officer against whose order the appeal is preferred  (2) the following shall have the right to be heard at the hearing of the appeal, namely:— (a) the appellant, either in person or by an authorised representative; 30 (b) the assessing officer, either in person or by a representative  (3) the commissioner (appeals) may adjourn the hearing of the appeal whenever he considers it necessary or expedient to do so  (4) the commissioner (appeals) may, before disposing of any appeal, make such further inquiry as he thinks fit  35  (5) the commissioner (appeals) may, during the proceedings before him, direct the assessing officer to make inquiry and report the result of the same to him on the points arising out of any new question of fact or law  (6) the commissioner (appeals) may, at the hearing of an appeal, allow the appellant to go into any ground of appeal not specified in the grounds of appeal, if the commissioner 40    (appeals) is satisfied that the omission was not wilful or unreasonable  (7) the order of the commissioner (appeals), disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons therefor (8) every appeal preferred under section 178 shall be heard and disposed of  by the commissioner (appeals) as expeditiously as possible and endeavour shall be made to dispose of such appeal within a period of one year from the end of the financial year in which the appeal is preferred  (9) on the disposal of the appeal, the commissioner (appeals) shall communicate the order passed by him to the assessee and to the chief commissioner or the commissioner   181(1) in disposing of an appeal, the commissioner (appeals), shall have the following powers, namely:—  (a) in an appeal against an order of assessment he may confirm, reduce, enhance or annul the assessment;  (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as to enhance or reduce the penalty;  (c) in any other case, he may determine the issues arising in the appeal and pass such orders thereon, as he thinks fit  (2) the commissioner (appeals) may consider and decide any matter which was not considered by the assessing officer  (3) the commissioner (appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had an opportunity of showing cause against such enhancement or reduction  (4) in disposing of an appeal, the commissioner (appeals), may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before  him by the appellant  powers of commissioner  (appeals) appellate tribunal 182 (1)the central government shall constitute an appellate tribunal consisting of a president and as many judicial and accountant members, as it thinks fit, to exercise the powers and discharge the functions conferred on the appellate tribunal by this code  (2) a judicial member shall be a person—  (i) who has for at least ten years held a judicial office in the territory of india;  (ii) who has been a member of the indian legal service and has held a post in grade i of that service, or any equivalent or higher post, for at least three years; or  (iii) who has for at least ten years been an advocate of a high court or of two or more such courts in succession  (3) an accountant member shall be a person—  (a) who has for at least fifteen years been in the practice of accountancy as a chartered accountant under the chartered accountants act, 1949; or  (b) who has been a member of the indian revenue service and has held the post of additional commissioner of income-tax or any equivalent or higher post for at least three years  (4) the central government may appoint one or more judicial or accountant members of the appellate tribunal to be vice-president or, as the case may be, vice-presidents thereof  (5) the central government may appoint one of the vice-presidents of the appellate tribunal to be the senior vice-president thereof  (6) the central government may appoint a person who is, or has been, a chief justice of a high court to be the president of the appellate tribunal  (7) the senior vice-president or a vice-president shall exercise such of the powers and 5 10  15  20  25  30  35   38 of  1949 40  45  perform such of the functions of the president as may be delegated to him by the president by a general or special order in writing  (8) for the purpose of sub-section (2),—  (a) in computing the period during which a person has held judicial office in the 5 territory of india, there shall be included any period, after he has held any judicial office, during which the person has been an advocate of a high court or has held the office of a member of a tribunal or any post, under the union or a state, requiring special knowledge of law;  (b) in computing the period during which a person has been an advocate of a 10 high court, there shall be included any period during which the person has held judicial office or the office of a member of a tribunal or any post, under the union or a state, requiring special knowledge of law after he became an advocate  (9) in this sub-chapter, "judicial member" means a judicial member referred to in subsection (2) and includes the president  appeals  to appellate tribunal 15  183 (1) an assessee may prefer an appeal to the appellate tribunal, where he is aggrieved by an order passed by–  (a) a commissioner (appeals) under section 180;  (b) a commissioner under section 98 and section 191;  (c) a commissioner or commissioner  (appeals) in respect of levy of penalty 20 under chapter xiv relating to penalties;  (d) an assessing officer in consequence of an order of the commissioner under section 191;  (e) an assessing officer in pursuance of the directions of the dispute resolution panel; and  25  (f) the income-tax authorities referred to in clauses (a) to (e) above, under section 161, in respect of the orders mentioned in the said clauses  (2) the commissioner may, if he is not satisfied with the order passed by the commissioner (appeals), direct the assessing officer to prefer an appeal to the appellate tribunal against such  order  30  (3) notwithstanding anything in sub-sections (1) and (2), no appeal shall lie to the appellate tribunal against the order of the commissioner (appeals) or the commissioner, as the case may be, in the case of a public sector company, irrespective of the fact whether the order is prejudicial to the company or the revenue, but shall lie to the authority as referred to in section 257  35  (4) every appeal under sub-section (1), or sub-section (2), shall be preferred within a period of sixty days  from the date on which the order sought to be appealed against is communicated to the assessee or to the commissioner, as the case may be  (5) the assessing officer or the assessee may, on receipt of notice that an appeal against the order of the commissioner (appeals) has been preferred under sub-section (1) 35    or sub-section (2) by the other party, file a memorandum of cross-objection against any part of the order of the commissioner (appeals) within a period of thirty days of the receipt of the notice  (6) the memorandum of cross-objection shall be disposed of by the appellate tribunal as if it were an appeal preferred within the time specified in sub-section (4) (7) the appellate tribunal may admit an appeal, or a memorandum of cross-objection, after the expiry of the period specified in sub-section (4) or sub-section (5), if—  (a) it is satisfied that the appellant had sufficient cause for not preferring it within that time; and  (b) the delay in filing the appeal does not exceed a period of one year 5  (8) an appeal, or the memorandum of cross-objection, to the appellate tribunal shall be in such form and be verified in such manner as may be prescribed  (9) the appeal by an assessee shall be accompanied by such fees as may be prescribed    184 (1) an assessee may make an application to the appellate tribunal for stay of demand relating to the appeal preferred by him under section 183 and such application shall 10 be accompanied by  such fees  as may be prescribed  (2) the appellate tribunal may, after giving both the parties to the appeal an opportunity of being heard and having considered the merits of the case, pass such orders on the stay application as it deems fit  (3)  the appellate tribunal may grant stay under sub-section (2) for a period not 15  exceeding  one hundred and eighty days from the date of passing of the order for stay and the appellate tribunal shall dispose of the appeal within the said period of stay specified in that order  (4) the appellate tribunal may, on an application made by the assessee seeking extension of the period of stay, extend the period of stay allowed under sub-section (2), if it 20 is satisfied that the delay in disposing of the appeal is not attributable to the assessee  (5) the aggregate of the period originally allowed under sub-section (2) and the period or periods extended under sub-section (4) shall not, in any case, exceed three hundred and sixty-five days from the date of passing the order of stay under sub-section (2)  (6)  the appellate tribunal  shall  dispose  of  the  appeal  during  the  period  of  stay 25  allowed under sub-section (2) or the period or periods extended under sub-section (4),  and where it fails to do so, the stay order shall stand vacated notwithstanding that the delay in disposing of the appeal is not attributable to the assessee  stay of demand  by appellate tribunal orders  of appellate tribunal 185 (1)the appellate tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit 30   (2) the appellate tribunal may, either suo motu or the mistake on being brought to its notice by the assessee or the assessing officer at any time within a period of four years from the date of the order, with a view to rectifying any mistake apparent on the face of  the record, amend any order passed by it under sub-section (1)  (3) the appellate tribunal shall not make an amendment which has the effect of 35 enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee under sub-section (2)  without giving the assessee an  opportunity of being heard  (4) every appeal preferred under section 183 shall be heard and disposed of by the appellate tribunal as expeditiously as possible and endeavour shall be made to dispose of such appeal within a period of two years from the end of the financial year in which the 40  appeal is preferred  (5) the appellate tribunal shall send a copy of any order passed under this section to the assessee and to the commissioner  (6) subject to the provisions of section 187, the orders passed by the appellate tribu- nal shall be final 45  186  (1) the powers and functions of the appellate tribunal may be exercised and discharged by its benches constituted by the president of the appellate tribunal from among the members thereof  (2) subject to sub-section (3), a bench shall consist of one judicial member and one accountant member  5 (3) the vice-president or any other member of the appellate tribunal authorised in this behalf by the central government may, sitting alone, dispose of any case allotted to the bench of which he is a member and which pertains to an assessee, not being a company or a non-resident, whose tax bases as computed by the assessing officer does not exceed five lakh rupees  (4) the president may, in the interest of justice and for the disposal of any particular case, constitute a special bench consisting of three or more members, one of whom shall necessarily be a judicial member and one an accountant member  10  (5) the president shall, on a reference received from the board for the disposal of any particular case, constitute a special bench consisting of five members or more, two of whom shall necessarily be judicial members and two accountant members  (6) where on any point the members of a bench differ in opinion, it shall be decided according to the opinion of the majority  15  (7) if the members of a bench are equally divided in opinion on any point or points, they shall state the point or points on which they differ and make a reference to the president of the appellate tribunal who shall either hear himself or refer  for hearing on such point or points by one or more of the other members of the appellate tribunal and such point or points shall be decided according to the opinion of the majority of the members of the appellate tribunal who have heard the case, including those who first heard it  20 (8) subject to the provisions of this code, the appellate tribunal shall have powers to regulate its own procedure and the procedure of benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the place at which the benches shall hold their sittings  25 (9) the appellate tribunal shall, for the purpose of discharging its functions, have all the powers which are vested in the income-tax authorities under section 134  30 (10) any proceeding before the appellate tribunal shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 and for the purpose of section 196 of the indian penal code   45 of 1860 (11)the appellate tribunal shall be deemed to be a civil court for all the purposes of section 195 and chapter xxvi of the code of criminal procedure, 1973  constitution of   benches and procedure  of appellate tribunal  appeal to high court 187 (1) an appeal shall lie to the high court from every order passed in appeal by the appellate tribunal, if the high court is satisfied that the case involves a substantial question of law   2  of 1974   35 40  (2) the chief commissioner or the commissioner or an assessee, may file an appeal to the high court on being aggrieved by any order passed by the appellate tribunal and such appeal shall be— (a) filed within a period of one hundred and twenty days from the date on which the order appealed against is received by the chief commissioner or the commissioner or the assessee;  (b) in the form of a memorandum of appeal precisely stating therein the substan- (3) the high court may admit an appeal after the expiry of the period of one hundred and twenty days referred to in sub-section (2), if it is satisfied that there was sufficient cause for not filing the appeal within that period  (4) if the high court is satisfied that a substantial question of law is involved in any case, it shall formulate that question  (5) the appeal shall be heard only on the question so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question  (6) notwithstanding anything in sub-sections (4) and (5), the high court may exercise its power to hear the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question of law  ( 7) the high court shall decide the question of law so formulated and deliver such judgment thereon containing the grounds on which such decision is founded and may award such cost as it deems fit  ( 8) the high court may determine any issue which—  (a) has not been determined by the appellate tribunal; or  (b) has been wrongly determined by the appellate tribunal, by reason of a decision on the question of law referred to in sub-section (1)  ( 9) the provisions of the code of civil procedure, 1908, relating to appeals to the high court shall, so far as may be, apply in the case of appeals under this section  (10) when the high court delivers a judgment in an appeal filed before it under subsection (7), effect shall be given to the order passed on the appeal by the assessing officer on the basis of a certified copy of judgment  tial question of law involved  188 (1) an appeal filed before the high court shall be heard by a bench of not less than two judges of the high court and shall be decided in accordance with the opinion of such judges or of the majority, if any, of such judges  (2) where there is no such majority, the judges shall state the point of law upon which they differ and the case shall then be heard upon that point only by one or more of the other judges of the high court and such point shall be decided according to the opinion of the majority of the judges who have heard the case including those who first heard it  case before high court  to be heard by not less  than two judges 189 an appeal shall lie to the supreme court from any judgment of the high court delivered under section 187 which the high court certifies to be a fit case for appeal to the supreme court  appeal to supreme court  10 15  20  5  of  1908 25 30   35 5  of  1908  40  hearing before supreme court 190 (1) the provisions of the code of civil procedure, 1908, relating to appeals to the supreme court shall, so far as may be, apply in the case of appeals under section 189 as they apply in the case of appeals from decrees of a high court (2) the costs of the appeal shall be in the discretion of the supreme court  (3) where the judgment of the high court is varied or reversed in the appeal, effect shall be given to the order of the supreme court in the manner provided in sub-section (10) of section 187  5  191 (1) the commissioner may, for the purposes of revising any order passed in any proceeding under this code before any income-tax authority subordinate to him, call for, and examine, all available records relating thereto  revision of orders prejudicial  to revenue  (2) the commissioner may, after giving the assessee an opportunity of being heard, pass an order (hereinafter referred to as the revision order) as the circumstances of the case 10    justify, if he is satisfied that the order sought to be revised is erroneous in so far as it is prejudicial to the interests of the revenue  (3) the commissioner may make, or cause to be made, such inquiry as he considers necessary for the purposes of passing an order under sub-section (2)  (4) the revision order passed by the commissioner under sub-section (2) may have 15    the effect of enhancing or modifying the assessment  but shall not be an order   cancelling the assessment and directing a fresh assessment  (5) the power of the commissioner under sub-section (2) for revising an order shall not extend to such order,—  (a) against which an appeal is pending before the commissioner (appeals);  20 (b) as has been considered and decided in any appeal; or  (c) as has been considered by, and passed in pursuance of the directions of, the dispute resolution panel  (6) no order under sub-section (2) shall be made after the expiry of a period of two years from the end of the financial year in which the order sought to be revised was passed  25  (7) in computing the period of limitation under sub-section (6), the following shall not be included, namely:—  (a) the time taken in giving an opportunity to the assessee to be reheard under section 133; or  (b) any period during which any proceeding under this section is stayed by an 30 order, or injunction, of any court  (8) without prejudice to the generality of the foregoing provisions, an order passed by an income-tax authority shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if—  (a) the order is passed without making inquiries or verification which, in the 35 opinion of the commissioner, should have been made;  (b) the order is passed allowing any relief without probing into the claim;  (c) the order has not been made in accordance with any order, direction or instruction issued by the board under section 129;  (d) the order has not been passed in accordance with any decision, prejudicial 40 to the assessee, rendered by— (i) the appellate tribunal, high court or supreme court in the case of the assessee or any other person under this code, the income-tax act, 1961, or the wealth-tax act, 1957 as stood before the commencement of this code; or  (ii) a court under any other law; or  (e) the order has been made following the order of a jurisdictional high court but a special leave petition has been granted by the supreme court against the said decision of the high court   subsequent to the passing of the order  (9) an order passed by an income-tax authority shall not be considered to be erroneous in so far as it is prejudicial to the interests of the revenue, if—  (a) the order has been made by holding a view sustainable in law; and (b) the commissioner is not in agreement due to the existence of another view sustainable in law  (10) in this section, "record" shall include all records relating to any proceeding under this code available at the time of examination by the commissioner 43 of  1961 27 of  1957 5  10 192  (1) the commissioner may,  suo motu or on an application made  by the assessee,    15  revision of other  orders for the purposes of revising any order passed by an authority subordinate to him, other than an order to which section  191 applies, call for and examine all available records relating thereto  (2) the commissioner may pass an order, as he considers necessary, which is not prejudicial to the assessee 20  (3) the power of the commissioner under sub-section (2) for revising an order shall not extend to such order—  (a) against which an appeal has not been filed but the time for filing an appeal before the commissioner (appeals) has not expired;  (b) against which an appeal is pending before the commissioner (appeals); 25   (c)  as has been considered and decided in any appeal; or  (d) as has been considered by, and passed in pursuance of the directions of, the dispute resolution panel  (4)  the assessee shall  make the  application for revision of any order referred to in sub-section (1),  within a period of one year from the date on which the order sought to be 30 revised was communicated to him, or the date on which he otherwise came to know of it, whichever is earlier  (5) every application by an assessee for revision under this section shall be accompanied by  such fees as may be prescribed  (6) no order under sub-section (2) shall be made after the expiry of— 35   (a) a period of one year from the end of the financial year in which an application is made by the assessee  under sub-section (4); or  (b)  a period of one year from the date of the order sought to be revised, if the order is revised by the commissioner suo motu  chapter xiii collection and recovery of tax a—deduction of tax at source193 (1) the tax on any income shall be payable by deduction or collection at source 5     or by advance payment, as the case may be, in accordance with the provisions of this chapter, notwithstanding that the regular assessment in respect of such income is to be made in a later financial year  (2) nothing in this section shall prejudice the charge of tax on such income under the provisions of sub-section (2) of section 2  10 194 (1) the tax on income shall be payable by the assessee direct if,—  (a) there is no provision under this chapter for deduction or collection of income-tax at the time of payment; or  (b) income-tax has not been deducted or collected in accordance with the provisions of this chapter  15  (2) any person who is required to deduct or collect any sum in accordance with the provisions of this code does not deduct or collect, or after so deducting or collecting fails to pay, or does not pay, the whole or any part of the tax, as required by or under this code, and where the assessee has also failed to pay such tax directly, then, such person shall, without prejudice to any other consequences which he may incur, be deemed to be an 20    assessee in default within the meaning of section  218 in respect of such tax  195  (1) any person responsible for making a specified payment shall, at the time of payment, deduct income-tax therefrom at the appropriate rate  (2) the specified payment referred to in sub-section (1), if the deductee is a resident, shall be the payment of the nature specified in column (2)  of the third schedule and the 25    appropriate rate, in respect of such specified payment, shall be the rate specified in the corresponding entry in column (3) of the said schedule  (3) the specified payment referred to in sub-section (1), if the deductee is a nonresident, shall be the payment of the nature specified in column (2) of the fourth schedule and the appropriate rate, in respect of such specified payment, shall be the rate specified in 30    the corresponding entry in column (3) of the said schedule  (4) without prejudice to sub-section (3), where a rate in respect of such specified payment has been provided in the relevant agreement entered into, or adopted by, the central government under section 291, then appropriate rate referred to in sub-section (1) shall be the rate specified in the corresponding entry in column (3) of the fourth schedule or 35    the rate provided in such agreement whichever is lower  (5) notwithstanding anything in this code, the appropriate rate referred to in subsection (1) shall, in a case where the deductee has failed to furnish his permanent account number to the deductor (except where the deductee is not required to obtain permanent account number under section 292), be the higher of following rates, namely:—  40 (a) twenty per cent; and  (b) the rate specified in sub-sections (2), (3) or sub-section (4), as the case may be  196  (1) for the purposes of section 195, the specified payment shall be deemed to 40    have been made, if the payment has been made— (a) in cash;  deduction  or collection  of tax   at  source and  advance  payment direct  payment liability to deduct tax  at source payment ofincome and deduction  of tax  (b) by issue of a cheque or draft; (c) by credit to any account, whether called suspense account or by any other name; or  (d) by any other mode as may be prescribed, whichever is earlier (2) if the payment is wholly or partly in kind, the deductor shall ensure that the tax 5 deductible in respect of such payment has been paid before making the payment  (3) the deductor may, at the time of making any deduction of tax from the payment liable to be taxed under the head "income from employment" or from the payment in the nature of interest, increase or reduce the amount to be deducted from any payment to be made to a deductee for the purposes of adjusting any deficiency, or excess, arising out of any 10  previous deduction or non-deduction during the financial year in respect of such deductee  (4) for the purposes of making any deduction of tax from the payment liable to be taxed under the head "income from employment", the deductor shall take into account the following particulars, if any, furnished by the deductee in such form and manner as may be prescribed, namely:— 15   (i) details of payment liable to be taxed under the head "income from employment" due to or received by the deductee from any other employer during the year and any tax deducted therefrom;  (ii) tax relief for arrears or advance receipts under section 206  (5) if the tax payable on any payment is to be borne by the deductor in pursuance of an 20 agreement or arrangement, then, for the purposes of deduction of tax, the payment shall be grossed up to such amount as would, after deduction of tax thereon at the rate referred to in sub-section (1) of section 195, be equal to the net amount payable under such agreement or arrangement  197  (1) the deductee may make an application, in such form and manner as may be 25  prescribed, to the assessing officer seeking a certificate for deduction of income-tax at a lower rate or, as the case may be, no deduction of income-tax from payments to be received by him  (2) the deductor may make an application, in such form and manner as may be prescribed, to the assessing officer seeking a certificate for deduction of income-tax at a lower 30 rate or, as the case may be, no deduction of income-tax from payments to be made by him to a non-resident deductee  (3) where the assessing officer is satisfied that the total income of the deductee justifies deduction of income-tax at a lower rate or no deduction of income-tax, he shall give to the deductee or the deductor, as the case may be, such certificate as may be appropriate 35   (4) the deductor shall deduct income-tax at the rates specified in the certificate issued under sub-section (3), until—  (a)  such certificate is cancelled by the assessing officer; or  (b) the expiry of the validity of the certificate,  whichever is earlier 40   (5) the board may prescribe the circumstances and the cases in which an application may be made for the grant of the certificate and the conditions subject to which such certificate may be granted and provide for all other matters connected therewith  certificate for lower  or no  deduction of tax obligation  of deductor 198 (1) every deductor shall pay the sum deducted to the credit of the central government within such time and manner as may be  prescribed 45  (2) every deductor shall furnish to the deductee a certificate to the effect that tax has been deducted within such time and containing such particulars as may be prescribed  (3) every deductor shall deliver, or cause to be delivered, a return of tax deduction in such manner as is provided under sub-section (4) of section 199 5  199  (1) every deductor shall deliver, or cause to be delivered, a return in respect of payment of interest to residents without deduction of tax  (2) the deductor referred to in sub-section (1) shall be— (a) any financial institution; or (b) any co-operative society  10  (3) the central government may, by notification , require any deductor to deliver, or cause to be delivered, a return in respect of any payment without deduction of tax  (4) the board shall, in respect of the return of tax deduction under section 198 and the return under this section, prescribe the following, namely:—  (a) the period in respect of which the return is to be furnished;  15 (b) the form of the return and the particulars therein; (c) the manner of verification of the return; (d) the time by, and the medium in, which the return is to be delivered;  (e) the income-tax authority, or any other person, authorised to receive the return; and  20 (f) any other matter connected therewith 200 notwithstanding anything in section 195, no tax shall be deducted at source,— reporting  of payments without deduction  of  tax no  deduction of tax in certain  cases (a) where the payee is a resident, from the following, namely:— (a) any payment, other than salary, made by an individual or a hindu undivided family, if the individual or the hindu undivided family is not liable to 25 get the accounts audited under section 88 for the financial year immediately preceding the financial year in which the payment is made;  (b) any interest payable on any security,—  (i) of the central government or a state government; or  (ii) issued by a company, if such security is in dematerialised form 30 and is listed on a recognised stock exchange in india;  (c) any interest on debenture payable to an individual, if -  (i) the debentures are issued by a widely held company;  (ii) the debentures are listed in a recognised stock exchange in india; and  | 35                                                                      |     ||-------------------------------------------------------------------------|-----|| (                                                                       |     || iii                                                                     |     || ) the aggregate amount payable during the financial year does           |     || not exceed five thousand rupees;                                        |     ||                                                                         |     || (                                                                       |     || d                                                                       |     || ) any interest on time deposits (being deposits repayable on the expiry |     || of fixed periods, excluding recurring deposits) payable, if—            |     ||                                                                         |     || (                                                                       |     || i                                                                       |     || ) the time deposits are made with a banking company or a co-            |     || 40                                                                      |     || operative bank or a housing-finance public company; and                 |     |(ii) the aggregate amount payable by the payer, being a branch of the bank or company during the financial year, does not exceed ten thousand rupees;  (e) any other interest payable if the aggregate amount of the payments during the financial year does not exceed five thousand rupees; 5  (f) any interest payable to,—  (i) any banking company; (ii) any co-operative bank; (iii) any financial corporation established by or under a central or state or provincial act; 10   (iv) any insurer;  (v) any mutual fund; or  (vi) any institution, association or body, or class of institutions, associations or bodies, which the central government may, for reasons to be recorded in writing, notify in this behalf; 15   (g) any interest payable by a firm to a partner of the firm;  (h) any interest payable in respect of deposits under any scheme framed by the central government and notified by it in this behalf;  (i) any interest payable in respect of deposits (other than time deposits) with a banking company or a co-operative bank; 20   (j) any interest payable by the central government under any provision of 43 of  1961 this code or the income-tax act, 1961, or the wealth-tax act, 1957, as they stood 27  of  1957 before the commencement of this code;  (k) any interest payable on the amount of compensation awarded by the motor accidents claims tribunal, if the aggregate of the amounts of such inter- 25  est paid, or credited, during the financial year does not exceed one lakh rupees; (l) any amount payable on maturity, or redemption, of a zero coupon bond; (m) any payment for carriage of goods by road transport if the payee furnishes his permanent  account number to the payer;  (n)  any  payment  to  a  contractor  in  respect  of  works  contract,  service 30  contract, advertising, broadcasting and telecasting, supply of labour for carrying out any works, or service, contract or carriage of goods or passengers by any mode of transport, other than by railways, if -  (i) the amount of any payment during the financial year does not exceed thirty thousand rupees; and 35   (ii) the aggregate amount of the payments during the financial year does not exceed seventy-five thousand rupees;  (o) any payment of commission or brokerage, if the aggregate amount of the payments during the financial year does not exceed five thousand rupees;  (p) any payment of rent, if the aggregate amount of the payments during 40  the financial year does not exceed one lakh eighty thousand rupees;  (q) any payment of compensation on compulsory acquisition of immovable property, if the aggregate amount of the payments during the financial year does not exceed two lakh rupees; (r) any amount payable by way of distribution of income by a  mutual fund in respect of a fund, not being an equity oriented fund, to any unitholder, if,—  (i) such unitholder is not a company; and  5  (ii) the aggregate amount of the payment to the unitholder during the financial year does not exceed ten thousand rupees;  (s) any amount payable, by a life insurer to any policy-holder, if,— (i) such policy-holder is not a company; (ii) the policy is other than a policy referred to in clause (d) or 10 clause (e) of sub-section (3) of section 59; and  (iii) the aggregate amount of the payment to the policy-holder during the financial year does not exceed ten thousand rupees;  (b) where the payee is a non-resident, being a foreign institutional investor, on any payment made to it as a consideration for sale of securities listed on a recognised 15 stock exchange 201 (1) all sums deducted in accordance with the provisions of this chapter shall, for the purposes of computing total income of a deductee be deemed to be the income received  (2) any deduction made in accordance with the provisions of this chapter and paid to the credit of the central government shall be treated as a payment of tax on behalf of the 20 person in respect of whom the deduction was made (3) for the purposes of giving credit in respect of tax deducted, the board may prescribe— (a) the procedure for giving credit to the deductee, or any other person; (b) the financial year for which such credit may be given; and 25 (c) any other matter connected therewith  b—collection of  tax at source  credit for  tax deducted tax  collection at  source 202(1) any person, being a seller, lessor or licensor, who is responsible for collecting any amount on account of any transaction specified in column (2) of the table given below, shall collect from the buyer, lessee or licensee, as the case may be, a sum by way of income- 30 tax, equal to the percentage, as specified in the corresponding entry in column (3) of the said table, of such amount:  table  serial nature of transaction percentage number (1) (2) (3)  35 1 sale of alcoholic liquor for human consumption three per cent 2 sale of tendu leaves three per cent 3 sale of timber obtained under a forest lease or otherwise three per cent 4 sale of any other forest produce not being timber or tendu leaves  three per cent 5 sale of scrap three per cent 40 6 grant of lease or licence or contract or transfer of any right or interest, either in whole or in part, for a parking lot three per cent 7 grant of lease or licence or contract or transfer of any right or interest, either in whole or in part, for a toll plaza three per cent 8 grant of lease or licence or contract or transfer of any right or 45 interest, either in whole or in part, for mining or quarrying three per cent (2) for the purposes of sub-section (1), the collection of an amount shall be deemed to have been made, if the amount has been received—  (a) in cash;  (b) by way of a cheque or a draft;  (c) by debit to any account, whether called "suspense account" or by any other 5 name; or  (d) by any other mode as may be prescribed, whichever is earlier (3) any person collecting any amount under sub-section (1) shall pay the sum so collected to the credit of the central government within such time and manner as may be 10 prescribed  (4) every person responsible for collecting any amount under sub-section (1) shall furnish to the buyer, lessee or licensee referred to in sub-section (1), a certificate of tax collection within such time as may be prescribed   (5) every person responsible for collecting any amount under sub-section (1) shall 15 deliver, or cause to be delivered, a return of tax collection in the manner provided under subsection (6)   (a) the period in respect of which the return is to be furnished; 20   (b) the form of the return and the particulars therein; (c) the manner of verification of the return; (d) the time by, and the medium in, which the return is to be delivered;  (e) the income-tax authority, or any other person, authorised to receive the return; and 25   (f) any other matter connected therewith  (6) the board shall in respect of the return of tax collection, prescribe the following namely:— 203 (1) all sums collected in accordance with the provisions of this sub-chapter and paid to the credit of the central government shall be deemed to be a payment of tax on behalf of the person from whom such amount has been collected (in this section referred to as collectee) 30   (2) for the purpose of giving credit in respect of tax collected, the board may prescribe— (a) the procedure for giving credit to the collectee, or any other person; (b) the financial year for which such credit may be given; and  (c) any other matter connected therewith  credit for  tax  collected 204  (1) in sub-chapter a— 35   interpretations under subchapters a and b (a) ''broadcasting and telecasting'' includes production of programmes for broadcasting or telecasting;  (b) ''contract'' and ''contractor'' include ''sub-contract'' and ''sub-contractor'' respectively;  (c) ''professional or technical services'' means services rendered by a person in 40 the course of carrying on legal, medical, engineering, architectural or accountancy profession, technical consultancy, interior decoration or any other profession as notified by the board; (d) ''service contract'' includes a contract for job work;  (e) ''work'' includes manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer and not from any other person  5 (2) in sub-chapter b—  (a) "buyer" means a person who obtains in any sale, by way of auction, tender, or any other mode, goods of the nature specified in the table given in sub-section (1) of  section 202 or the right to receive any such goods but does not include,—  (i) a public sector company, the central government, a state government, 10 an embassy, a high commission, legation, commission, consulate and trade representation of a foreign state, and a club; or  (ii) a buyer in the retail sale of such goods, purchased by him for personal consumption;  (b) "lessee or licensee" means a person other than a public sector company who 15 is granted a lease or licence or is awarded a contract or is transferred, wholly or partly, any right or interest by a lessor or licensor;  (c) "lessor or licensor" means a person who grants a lease or licence or enters into a contract or otherwise transfers, wholly or partly, any right or interest to a lessee or licensee;  20  (d) "scrap" means waste from the manufacture or mechanical working of materials which is unusable because of breakage, wear and tear and other reasons;  (e) "seller" means,— (i) the central government, a state government or any local authority; (ii) a corporation or authority established by or under a central, state or 25 provincial act;  (iii) any company,  firm or co-operative society; and  (iv) an individual or a hindu undivided family, if the total sales, gross receipts or turnover from the business carried on by him exceed the monetary limits specified in sub-section (1) of section 88 during the financial year immedi- 30 ately preceding the financial year in which the goods of the nature specified in column (2) of the table given in sub-section (1) of section 202 against serial numbers 1 to 5 are sold   c—advance tax205 (1) every assessee shall be liable to pay advance income-tax during any financial   liability to pay  advance tax  35 year in respect of his total income of the financial year, if the amount of advance income-tax payable exceeds ten thousand rupees  (2) the amount of advance income-tax payable by an assessee in the financial year shall be computed in the following manner, namely:—  (a) the assessee shall first estimate his total income and calculate income-tax 40 thereon at the rates in force in the financial year;  (b) the income-tax so calculated shall be reduced by -  (i) the amount of income-tax which would be deductible or collectible at source during the financial year from any income which is taken into account in estimating the total income; (ii) the amount of credit under section 207, allowed to be set-off in the financial year; and (c) the balance amount of income-tax shall be the advance income-tax payable (3) the advance income-tax, in case of any person other than a company, shall be payable in three instalments during the financial year on or before the dates specified in   5 column (2) of  the table given below and shall be equal to the amount specified in corresponding entry in column (3) of the said table: | serial                             | date of instalment               | amount payable                    |     ||------------------------------------|----------------------------------|-----------------------------------|-----|| number   in the financial year     |                                  |                                   |     || 10                                 |                                  |                                   |     ||                                    |                                  |                                   |     || (1)                                | (2)                              | (3)                               |     ||                                    |                                  |                                   |     ||                                    |                                  |                                   |     || 1                                 | on or before the 15th september | not less than thirty per cent of |     || the advance income-tax            |                                  |                                   |     ||                                    |                                  |                                   |     || 2                                 | on or before the 15th december  | not less than sixty per cent  of |     || the    advance    income-tax,   as |                                  |                                   |     || 15                                 |                                  |                                   |     ||                                    |                                  |                                   |     || reduced by the amount,  if  any,   |                                  |                                   |     || paid in the earlier instalment    |                                  |                                   |     ||                                    |                                  |                                   |     || 3                                 | on or before the 15th march     | the whole amount of the           |     || advance income-tax as  reduced     |                                  |                                   |     || by the amount or amounts, if any,  |                                  |                                   |     || 20                                 |                                  |                                   |     ||                                    |                                  |                                   |     || paid in the earlier instalment or  |                                  |                                   |     || instalments                       |                                  |                                   |     ||                                    |                                  |                                   |     |(4) the advance income-tax, in the case of a company, shall be payable in four instalments during the financial year on or before the dates specified in column (2) of  the table given below and shall be equal to the amount specified in corresponding entry in   25 column (3) of the said table:   | serial                                          | date of instalment               | amount payable                                ||-------------------------------------------------|----------------------------------|-----------------------------------------------|| number  in the financial year                   |                                  |                                               ||                                                 |                                  |                                               ||                                                 |                                  |                                               || (1)                                             | (2)                              | (3)                                           || 30                                              |                                  |                                               ||                                                 |                                  |                                               || 1                                              | on or before the 15th june      | not less than fifteen per cent of the ad-    || vance income-tax                               |                                  |                                               ||                                                 |                                  |                                               || 2                                              | on or before the 15th september | not less than forty-five per cent of the ad- || vance income-tax, as reduced by the             |                                  |                                               || amount, if any, paid in the earlier instalment |                                  |                                               || 35                                              |                                  |                                               ||                                                 |                                  |                                               || 3                                              | on or before the 15th december  | not less than seventy-five per cent of the   || advance income-tax as reduced by the            |                                  |                                               || amount or amounts, if any, paid in the ear-     |                                  |                                               || lier instalment or instalments                 |                                  |                                               ||                                                 |                                  |                                               || 4                                              | on or before the 15th march     | the whole amount of the advance income-       || 40                                              |                                  |                                               ||                                                 |                                  |                                               || tax as reduced by the amount or amounts, if     |                                  |                                               || any, paid in the earlier instalment or          |                                  |                                               || instalments                                    |                                  |                                               |(5) any amount of advance income-tax paid after the 15th march but before the expiry of the financial year shall be treated as advance income-tax paid during the financial year (6) every person who is liable to pay advance income-tax shall, of his own volition, pay the appropriate percentage of the advance income-tax on or before the due dates 5  (7) the assessee may increase or reduce the payment of remaining instalments of the advance income-tax in accordance with his estimation of the total income (8) where in the opinion of the assessing officer, any person is liable to pay advance income-tax, he may by an order in writing— (a) require such person to pay advance income-tax calculated in such  manner 10 as may be prescribed; and (b)  issue to such person a notice of demand under section 162 specifying the instalments in which such tax is to be paid (9) the person who has been served with an order under sub-section (8)— (a) may file an estimation, in such form as may be prescribed, to the assessing 15 officer, if in his estimation, the advance income-tax payable by him is lower than the amount specified in the said order; and (b) pay the advance income-tax in accordance with his estimation on or before the due dates specified in this section (10) no order under sub-section (8) shall be passed after the last day of february of 20    the financial year  d—tax relief in respect of arrears or advance receipts206 (1) the assessing officer shall, on an application made to him by any person, grant such relief as may be prescribed, if the person is in receipt in any financial year of any arrears, or advance, of salary or family pension relating to any other financial year 25  (2) the relief referred to in sub-section (1) shall not be allowed in respect of any compensation received towards retrenchment, voluntary retirement or termination of service  e—foreign tax credit207 (1) an assessee, being a resident in india in any financial year, shall be allowed  tax relief  for arrears  or advance  receipts foreign  tax credit 30    a credit in respect of income-tax paid by deduction or otherwise, in any country or other specified territory under the law in force in that  country or territory, in accordance with the provisions of this section (2) an assessee, referred to in sub-section (1), shall be allowed a credit against the indian income-tax payable by him in respect of his income of the financial year,— 35  (a) which has been taxed in any country or other specified territory with which india has an agreement under section 291, in accordance with the agreement entered into with such country or specified territory; or (b)  which has accrued outside india (but not deemed to be received in india) and taxed in a country with which india does not have an agreement under section 40 291, of the amount determined in the following manner, namely:— (i) at the indian rate of tax or the rate of tax of the other country, whichever is lower; (ii) at the indian rate of tax, if both the rates are equal (3) notwithstanding anything in sub-section (2), the amount of credit of foreign tax 45 referred to therein shall not, in any case, exceed—  (a) the indian income-tax payable in respect of income which is taxed outside india; and (b) the indian income-tax payable on total income of the assessee (4) the central government may, for the relief or avoidance of double taxation, prescribe— (a) the method for computing the amount of credit; (b) the manner of claiming credit; and (c) such other particulars as may be considered necessary f—payment of wealth-tax 5 208 the wealth-tax referred to in section 112 shall be payable by the due date of filing of the return of tax bases  g—interest payable to the central governmentpayment  of wealth-tax  209 (1) where an assessee defaults in furnishing the return of tax-bases, he shall be liable to pay simple interest at the rate of one per cent per month, in circumstances specified 10  in sub-section (2) for the period mentioned in sub-section (3) on the amount computed under sub-section (4) interest for default in furnishing retrun of  tax bases (2) the circumstances referred to in sub-section (1) shall be - (a) where the return of tax-bases for any financial year under sub-section (1) or sub-section (6) of section 144 or sub-section (1) of section 146  is furnished after the 15  due date, or is not furnished; (b) where the return of tax-bases for any financial year is required by a notice under section 159 and no return of tax-bases has been furnished for such year before the issue of such notice; or (c) where the return of tax bases for any financial year is required by a notice 20  under section 159 and— (i) such notice has been issued after the determination of income under sub-section (1) of section 149 or after the completion of an assessment under section 155 or section 156 or section 159; and (ii) such return has been furnished after the expiry of time allowed under 25  such notice or is not furnished (3) the period referred to in sub-section (1) shall— (a) in a case referred to in clause (a) or clause (b) of sub-section (2), shall commence on the date immediately following the due date and— (i) end on the date of furnishing of the return; or 30  (ii) end on the date of completion of assessment under section 156 or section 159, where no return has been furnished; (b) in a case referred to in clause (c) of sub-section (2), shall commence on the date immediately following the last date of the time allowed under the notice referred in said clause (c), and— 35  (i) end on the date of furnishing of the return where the return is furnished after expiry of the time allowed; or (ii) end on the date of completion of assessment under section 159 where no return has been furnished (4) the amount referred to in sub-section (1),— 40   (a) in a case referred to in clause (a) or clause (b) of sub-section (2), shall be computed in accordance with the following formula -   a - b wherea = the amount of the tax on the total income determined under sub-section (1) 45  of section 149 or on assessment made under sub-section (1) of section 155 or sub-section (1) of section 156 or under section 159, as the case may be; b = the aggregate of -  (i) advance tax paid, if any;  (ii) any tax deducted or collected at source;  (iii) any relief of tax allowed under section 291 on account of tax paid in a 5 country or specified territory outside india;  (iv) any deduction, from the indian income-tax payable, allowed under section 207, on account of the tax paid in a country outside india; and  (v) any tax credit available for set-off under section 106;  (b) in a case referred to in clause (c) of sub-section (2), shall be the amount by 10 which tax determined on reassessment exceeds the tax on the total income determined under sub-section (1) of section 149 or on the basis of the earlier assessment, as the case may be  (5) the interest payable under sub-section (1) shall be reduced by the interest, if any, paid under section 147 towards the interest chargeable under this section  15  (6) the interest payable under this section shall be increased or reduced, in accordance with the variation in the amount of tax on which interest was payable under this section, as a result of modification in the assessed income on account of any rectification, revision or appellate order under this code  (7) the assessing officer shall serve on the assessee a notice of demand, in such 20 form as may be prescribed, specifying the sum payable on account of increase in the interest referred under sub-section (6) and such notice shall be deemed to be a notice under section 162 and the provisions of this code shall apply accordingly  (8) the excess interest paid, if any, shall be refunded in a case where the interest is reduced under sub-section (6)   interest  for default  in payment  of advance income-tax 25  210 (1) where an assessee defaults in payment of advance income-tax, he shall be liable to pay simple interest at the rate of one per cent per month in the circumstances specified in sub-section (2) for the period mentioned in sub-section (3) on the amount computed under sub-section (4)  (2) the circumstances referred to in sub-section (1) shall be the following, 30 namely:—  (a) where the assessee is liable to pay advance income-tax under section 205 and has failed to pay such tax; or  (b) where the advance income-tax paid by such assessee is less than ninety per cent of the assessed tax  35 (3) the period referred to in sub-section (1) shall in a case referred to in sub-section (2) commence on the 1st day of april next following the financial year and—  (a) end on the date of determination of total income under sub-section (1) of section 149; or  (b) end on the date of assessment, where an assessment has been made under 40 section 155 or section 156 or an assessment under section 159 made for the first time  (4) the amount referred to in sub-section (1) shall be,— (a) the assessed tax less the advance tax; and (b) in a case where the assessee has paid self-assessment tax under section 147 before the date of determination of total income or the date of an assessment referred to in clause (b) of sub-section (3), as the case may be,—  (i) the assessed tax less the advance tax, for the period up to the date on which the self assessment tax is paid; and 5  (ii) the assessed tax less the advance tax and such self-assessment tax, for the period commencing immediately after the date on which such selfassessment tax is paid  (5) the assessed tax referred to in sub-section (4) shall be calculated in accordance with the following formula— 10   a - b where a = the amount of the tax on the total income determined under sub-section (1) of section 149, and where an assessment referred to in clause (b) of sub-section (3) has been made, the amount of tax on the total income determined on such   15  assessment;  b = the aggregate of -  (i) any tax deducted or collected at source;  (ii) any relief of tax claimed under section 207; and  (iii) any tax credit available for set-off under section 106 20   (6) where tax is paid under section 147 or otherwise before the determination of total income under sub-section (1) of section 149 or completion of an assessment referred to in clause (b) of sub-section (3), interest shall be calculated—  (i) in accordance with sub-sections (1) to (5), up to the date on which the tax is so paid and reduced by the interest, if any, paid under section 147 towards the interest 25  chargeable under this section; and  (ii) thereafter, at the rate specified in sub-section (1) on the amount by which the tax so paid together with the advance tax paid falls short of the assessed tax  (7) in a case where as a result of reassessment under section 159 (not being an assessment made for the first time), the amount of tax on total income, as referred to in 30 sub-section (5) is increased then, in addition to the interest under sub-section (1), the assessee shall be liable to pay simple interest at the rate of one per cent per month for the period mentioned in sub-section (8) on the amount computed under sub-section (9)  (8) the period referred to sub-section (7) shall commence on the day immediately following the end of the period, as applicable, mentioned in sub-section (3) and end on the 35 date of  reassessment under section 159  (9) the amount referred to in sub-section (7) shall be the amount by which the tax on the total income determined on the basis of reassessment under section 159 exceeds the relevant amount determined in variable a in the formula contained in sub-section (5)  (10) the interest payable under this section shall be increased or reduced, in accordance 40 with the variation in the amount on which interest was payable under this section, on account of any rectification, revision  or appellate order  under this code  (11) the assessing officer shall serve on the assessee a notice of demand in such form as may be prescribed specifying the sum payable on account of increase in the interest referred to in sub-section (10) and such notice shall be deemed to be a notice under section 45  162 and the provisions of this code shall apply accordingly (12) the excess interest paid, if any, shall be refunded in a case where the interest is reduced under sub-section (10)  211 (1) where a person other than a company, who is liable to pay advance incometax under section 205 has—    interest  for deferment of  advance income-tax 5 (a) failed to pay such tax; or  (b) paid the tax on or before the dates specified in column (2) of the table given below which is less than the percentage of the advance income-tax payable specified in column (3) of the said table,  he shall be liable to pay simple interest at the rate of one per cent per month for the period 10 specified in column (4) of the said table on the amount of shortfall from the percentages of advance income-tax payable as specified in column (5) and the interest payable by such person under this section shall be the aggregate of all such amounts   table15  serial number due date percentage for purposes of period percentage for purposes of ascertaining liability  computing interest (1) (2) (3) (4) (5)  1 15th september thirty per cent three months thirty per cent  20 2 15th december sixty per cent three  months   sixty per cent 3  15th march one hundred per cent   one month one hundred per cent (2) where a  company, which is liable to pay advance income-tax under section 205 has,—  (a) failed to pay such tax; or  25  (b) paid the tax on or before the dates specified in column (2) of the table given below which is less than the percentage of the advance income-tax payable specified in column (3) of the said table,  it shall be liable to pay simple interest at the rate of one per cent per month for the period specified in column (4) of the said table on the amount of shortfall from the percentages of 30 advance income-tax payable as specified in column (5) and the interest payable by such company under this section shall be the aggregate of all such amounts:   | serial       | due             | percentage for                    | period                | percentage for       ||--------------|-----------------|-----------------------------------|-----------------------|----------------------|| number  date | purposes of     |                                   | purposes of           |                      || 35           |                 |                                   |                       |                      || ascertaining | computing       |                                   |                       |                      || liability    | interest        |                                   |                       |                      || (1)          | (2)             | (3)                               | (4)                   | (5)                  ||              |                 |                                   |                       |                      || 1           | 15th june      | twelve per cent                  | three  months         | fifteen per cent    || 2           | 15th september | thirty-six per cent              | three  months         | forty-five per cent || 40           |                 |                                   |                       |                      || 3           | 15th december  | seventy-five                      | three  months         | seventy-five         || per cent    |                 | per cent                         |                       |                      ||              |                 |                                   |                       |                      || 4           | 15th march     | one hundred per cent   one month | one hundred per cent |                      |(3) the assessee shall not be liable to pay interest under sub-section (1) or subsection (2), as the case may be, on any shortfall in the advance income-tax payable where such shortfall is on account of under estimation or failure to estimate,—  (a) the amount of capital gains; or  (b) income of nature listed at serial number 4 in the table in part iii of the first 5 schedule  (4) the provisions of sub-section (3) shall apply in a case where the assessee has paid the whole of the amount of tax payable, in respect of the income of nature referred to in that sub-section, in the remaining instalments of advance tax or where no such instalments are due, by the 31st day of march of the financial year 10 212 (1) an assessee shall be liable to pay simple interest at the rate of one-half per cent per month on the excess amount of refund granted to him in circumstances specified in sub-section (2) for the period mentioned in sub-section (3)  (2) the circumstances referred to in sub-section (1) shall be where any refund is granted to the assessee under sub-section (1) of section 149, and— 15   (a) no refund is due on assesment made under section 155 or section 156 or section 159; or  (b) the amount refunded under sub-section (1) of section 149 exceeds the amount refundable on assessment made under section 155 or section 156 or section 159 20   (3) the period referred to in sub-section (1) shall commence from the date of grant of refund and end on the date of regular assessment  (4) the interest chargeable, if any, under sub-section (1) shall be varied in accordance with any rectification, revision or appellate order under this code  213 (1) any amount, otherwise than by way of advance tax, specified as payable in a 25  interest on excess  refund notice of demand under section 162 shall be paid within a period of thirty days of the service of the notice  (2) the period mentioned in sub-section (1) may be reduced with the prior approval of the joint commissioner, if the assessing officer has any reason to believe that it will be detrimental to revenue if the  period of thirty days is allowed 30   (3) if the amount specified in any notice of demand under section 162 is not paid within the period specified therein, then the assessee shall be liable to pay simple interest at the rate of one per cent per month for  the period commencing from the day immediately following the end of the period specified in such notice and ending with the day on which the amount is paid 35   (4) the interest payable under this section shall be increased or reduced, in accordance with the variation in the amount on which interest was payable under this section, on account of any rectification, revision or appellate order  under this code  214 (1) where any person who is required to deduct or collect any tax in accordance interest payable on demand  raised  with the provisions of this code, does not deduction  or collection the whole or any part of the tax,  40  or after deduction fails to pay the tax, he shall be liable to pay simple interest -  interest for failure to deduct or collect or  pay tax  (a) at the rate of one per cent per month  on the amount of such tax for the period from the date on which such tax was deductible or collectible to the date on which such tax is deducted or collected, as the case may be; and  (b)  at the rate of one and one-half per cent per month on the amount of such tax 45  for the period from the date on which such tax was deducted or collected, as the case may be, to the date on which such tax is paid  h—refunds215 (1) an assessee shall be entitled to a refund of the excess of any amount paid by him or on his behalf, or treated as paid by him or on his behalf, for any financial year over the amount with which he is liable under this code  5  (2) every claim for refund shall be made within such time and such form and manner, as may be prescribed  (3) an assessee shall, in a case where an assessment is set aside or cancelled or an order of fresh assessment is directed to be made in an appeal, or any other proceeding under this  code, be entitled to the refund only on the making of the fresh assessment  10  (4) the amount of refund determined under this sub-chapter shall be reduced by the amount, if any, remaining payable under this code by the assessee to whom the refund is due, and the balance amount of refund, if any, shall be issued along with an intimation to this effect to the assessee  (5) in a claim under this sub-chapter, it shall not be open to the assessee to question 15    the correctness of any assessment or other matter which has become final and conclusive or ask for a review of the same, and accordingly the assessee shall not be entitled to any relief on such claim except refund of tax paid in excess    refunds  interest  on refund 216 (1) an assessee shall be entitled to receive simple interest at the rate of one-half per cent per month on any amount refundable to him under section 215 in respect of any 20 financial year for the period mentioned in sub-section (2) (2) the period referred to in sub-section (1) shall, - (a) in a case where refund is out of any tax paid by way of advance tax or treated as so paid under section 201 or collected at source under section 203, commence on the 1st day of april next following the financial year and end on the date on which the 25 refund is granted; and  (b) in any other case, commence from the date on which such amount was paid and end on the date on which the refund is granted  (3) notwithstanding anything  in sub-section (2), in a case where the return is furnished after the due date, the period referred to in sub-section (1) shall commence on the date on 30 which the return is furnished and end on the date on which the refund is granted  (4) no interest shall be payable under clause (a) of sub-section (2) if the amount of refund is less than ten per cent of the tax as determined under sub-section (1) of section 149 or on regular assessment  (5) if the proceedings resulting in the refund are delayed for reasons attributable to 35 the assessee, whether wholly or in part, the period of the delay so attributable to him shall be excluded from the period for which interest is payable, and where any question arises as to the period to be excluded, it shall be decided by the chief commissioner or the commissioner  (6) the interest under this section shall be increased or reduced in accordance with the variation in the amount on which the interest was payable as a result of any rectification, 40 revision or appellate order under this code  (7) the assessing officer shall serve on the assessee a notice of demand in such form as may be prescribed specifying the amount of excess interest paid to him where interest is reduced under sub-section (6) and such notice shall be deemed to be a notice under section 162 and the provisions of this code shall apply accordingly  45  (8) an assessee shall be entitled to receive simple interest at the rate of one-half per cent per month on the amount of interest receivable by him under this section for the period from the date of grant of refund  to the date of actual payment of such interest, if such interest is not paid to him along with the refund  217 (1) if the income of a person is included in the total income of any other person under the provisions of this code, then such other person shall be entitled to a refund in respect of such income 5  (2) the legal representative or the trustee or guardian or receiver, as the case may be, of a person shall be entitled to claim or receive refund for the benefit of such person or his estate if such person is unable to claim or receive any refund due to him on account of death, incapacity, insolvency, liquidation or any other similar cause  i—recovery 10   person entitled to claim  refund in  certain special  cases 218 (1) any amount specified as payable in a notice of demand, otherwise than by way of advance tax, shall be paid within thirty days of the service of the notice, to the credit of the central government in such manner of may be prescribed  (2)  where the assessing officer has any reason to believe that it will be detrimental to the interests of revenue, if the period of thirty days referred to in sub-section (1) is    15  allowed, he may, with the previous approval of the joint commissioner reduce such period, as he deems fit  (3) the assessing officer may, on an application made by the assessee, before the expiry of a period of thirty days or the period reduced under sub-section (2) or during the pendency of appeal with the commissioner (appeals), extend the time for payment, or allow   20 payment by instalments, subject to such conditions as he may think fit to impose in the circumstances of the case  (4) an assessee shall be deemed to be an assessee in default, if the tax arrear is not paid within the time allowed under sub-section (1) or the period reduced under sub-section (2) or extended under sub-section (3), as the case may be 25   (5) where an assessee defaults in paying anyone of the instalments within the time fixed under sub-section (3), he shall be deemed to be an assessee in default in respect of the whole of the amount then outstanding  (6) the assessing officer may, in a case where no certificate has been drawn up under section 219 by the tax recovery officer, recover the amount in respect of which the assessee   30 is in default, or is deemed to be in default, by anyone or more of the modes provided in section 220  (7) the tax recovery officer shall be vested with the powers to recover the tax arrear on drawing up of a statement of tax arrear under section 219 recovery  by assessing officer recovery by tax  recovery officer 219 (1) the tax recovery officer may draw up under his signature a statement of tax   35 arrears of an assessee referred to in sub-section (4) or sub-section (5) of section 218, in such form, as may be prescribed such statement being hereafter in this chapter and in the fifth schedule referred to as "certificate") (2) the certificate under sub-section (1) shall stand amended from time to time consequent to any proceeding under this code and the tax recovery officer shall recover   40 the amount so modified (3) the tax recovery officer may rectify any mistake apparent on the face of the record (4) the tax recovery officer shall have the power to extend the time for payment, or allow payment by instalments, subject to such conditions as he may think fit to impose in   45 the circumstances of the case (5) the tax recovery officer shall proceed to recover from the assessee the amount specified in the certificate by one or more of the modes referred to in section 220 or in the fifth schedule (6) it shall not be open to the assessee to dispute the correctness of any certificate drawn up by the tax recovery officer on any ground whatsoever, but it shall be lawful for the tax recovery officer to cancel the certificate if, for any reason, he thinks it necessary so to do modes  of recovery 220 (1) the assessing officer or the tax recovery officer may require the employer of the assessee to deduct from any payment to the assessee such amount as is sufficient to meet the tax arrear from the assessee  5 (2) upon requisition under sub-section (1), the employer shall comply with the requisition and shall pay the sum so deducted to the credit of the central government in such manner as may be prescribed  10  (3) any part of the salary exempt from attachment in execution of a decree of a civil court under section 60 of the code of civil procedure, 1908, shall be exempt from any requisition made under sub-section (1)  5  of 1908 (4) the assessing officer or the tax recovery officer may, by notice in writing, require any debtor of the assessee to pay such amount, not exceeding the amount of debt, as is sufficient to meet the tax arrear of the assessee  15 (5) upon receipt of the notice under sub-section (4), the debtor shall comply with the requisition and shall pay the sum to the credit of the central government in such manner as may be prescribed within the time (not being before the debt becomes due to the assessee) specified in the notice  20  (6) a copy of the notice issued under sub-section (4) shall be forwarded to the assessee at his last address known to the assessing officer or the tax recovery officer and in the case of a joint account to all the joint holders at their last addresses known to the assessing officer or the tax recovery officer  25 (7) it shall not be necessary for any pass book, deposit receipt, policy or any other document to be produced for the purpose of any entry, endorsement or the like being made before payment is made, notwithstanding any rule, practice or requirement to the contrary if the notice under sub-section (4) is issued to a post office, banking company, insurer or any other person  (8) any claim in respect of any property, in relation to which a notice under subsection (4) has been issued, arising after the date of the notice, shall be void as against any demand contained in the notice  30  (9) a person to whom a notice under sub-section (4) has been issued, shall not be required to pay the amount of tax arrear specified therein, or part thereof, if he objects to it by a statement on oath that the sum demanded, or any part thereof, is not due to the assessee or that he does not hold any money for, or on account of, the assessee  35 (10) the person referred to in sub-section (9) shall be personally liable to the assessing officer or the tax recovery officer, as the case may be, to the extent of his own liability to the assessee on the date of the notice, or to the extent of the liability of the assessee for any sum due under this code, whichever is less, if it is discovered that the statement made by him was false in any respect  40 45  (11) the assessing officer or the tax recovery officer may amend or revoke any notice issued under sub-section (4) or extend the time for making any payment in pursuance of such notice  (12) the assessing officer or the tax recovery officer shall grant a receipt for any amount paid in compliance with a notice issued under sub-section (4), and the person so paying shall be fully discharged from his liability to the assessee to the extent of the amount so paid (13)  any person discharging any liability to the assessee after receipt of a notice under sub-section (4) shall be personally liable to the assessing officer or the tax recovery officer to the extent of his own liability to the assessee so discharged or to the extent of the liability of the assessee for any sum due under this code, whichever is less  (14) the debtor to whom a notice under sub-section (4) is sent shall be deemed to be 5 an assessee in default, if he fails to make such payment and further proceedings may be initiated against him for the realisation of the amount in the manner provided in this section and the fifth schedule  (15) the assessing officer or the tax recovery officer may apply to the court, in whose custody there is money belonging to the assessee, for payment to him of the entire 10 amount of such money or if it is more than the tax due, an amount sufficient to discharge the tax liability  (16) the assessing officer or the tax recovery officer shall effect the recovery of any tax arrear in the same manner as attachment, distraint and sale of any movable property under  the  fifth  schedule,  if  he  is  so  authorised  by  the  chief  commissioner,  or  the 15  commissioner, by general or special order  (17)  in this section,—  (a) ''debtor'' in relation to an assessee,  means,—  (i) any person from whom money is due, or may become due, to the 20  assessee; or  (ii) any person who holds, or may subsequently hold, money for, or on account of, the assessee; or  (iii) any person who holds, or may subsequently hold, any money for, or on account of, the assessee jointly with any other person;  (b) shares of the joint holders in the account shall be presumed, until the con- 25  trary is proved, to be equal   221 (1) the tax recovery officer competent to take action under section 219 shall be the tax recovery officer -  (a) within whose jurisdiction -  tax  recovery officer by whom recovery is  to be  effected (i) the assessee carries on his business; 30   (ii) the principal place of  business of the assessee is situate; (iii) the assessee resides; or (iv) any movable or immovable property of the assessee is situate; or  (b) who has been assigned jurisdiction under section 130  (2) the tax recovery officer, referred to in sub-section (1), may send a certificate, in 35 such manner as may be prescribed, specifying the tax arrear to be recovered, to another tax recovery officer within whose jurisdiction the assessee resides or has property, if the firstmentioned tax recovery officer -  (a) is not able to recover the entire amount by sale of the property, movable or immovable, within his jurisdiction; or 40  (b) is of the opinion that, for the purpose of expediting, or securing, the recovery of the whole, or any part, of the amount under this chapter, it is necessary so to do  (3) the second-mentioned tax recovery officer shall, on receipt of the certificate, assume jurisdiction for recovery of the amount of tax arrear specified therein and proceed to recover the amount in accordance with the provisions of this chapter 45  222 the amount of tax arrears due from a non-resident may be recovered from— (a) any asset of the non-resident, wherever located; or (b) any amount payable by any person to the non-resident   223 (1) the liquidator shall inform the assessing officer, who has jurisdiction to assess the income of the company, of his appointment within a period of thirty days of his becoming the liquidator  5 43 of 1961 10   (2) the assessing officer shall, within a period of three months from the date on which he receives the information, intimate to the liquidator the amount which, in his opinion, would be sufficient to provide for any tax arrears or any amount which is likely to become payable thereafter, by the company under this code or under the income tax act, 1961 or the wealth-tax act, 1957 as they stood before the commencement of this code  (3) the liquidator—  27 of 1957 (a) shall not part with any of the assets of the company, or the properties, in his custody until he has been intimated by the assessing officer under sub-section (2); and  (b) on being so intimated, shall set aside an amount equal to the amount intimated  15  (4) upon receipt of the intimation from the assessing officer under sub-section (2), the amount so intimated shall, notwithstanding anything in any other law for the time being in force, be the first charge on the assets of the company remaining after payment of the following dues, namely:—  (a) workmen's dues; and  20 1  of 1956 (b) debts due to secured creditors to the extent such debts rank under clause (iii) of the proviso to sub-section (1) of section 529 of the companies act, 1956 pari passu with such dues  (5) the liquidator shall be personally liable for the payment of the amount payable by the company, if he—  (a) fails to inform in accordance with sub-section (1); or  (b) fails to set aside the amount as required by sub-section (3)  25 (6) the obligations and liabilities attached to the liquidator under this section shall attach to all the liquidators jointly and severally in a case where there are more than one liquidator  (7) the provisions of this section shall prevail over anything to the contrary contained in any other law for the time being in force  30  (8) in this section,—  (a) "liquidator" in relation to a company shall include a receiver of the assets of the company;  35 (b) "workmen's" and "workmen's dues" shall have the meaning respectively assigned to them in section 529 of the companies act, 1956  1  of 1956  recovery oftax  arrear in respect  of non-resident from his assets recovery  in case of  a company  in liquidation  liability of manager  of  a company 224 (1) every person being a manager at any time during the financial year shall be jointly and severally liable for the payment of any amount due under this code in respect of the company for the financial year, if the amount cannot be recovered from the company  40 45  (2) the provisions of sub-section (1) shall not apply, if the manager proves that nonrecovery cannot be attributed to any neglect, misfeasance or breach of duty on his part in relation to the affairs of the company (3) the provisions of this section shall prevail over anything to the contrary contained in the companies act, 1956  (4) in this section, "manager" shall include a managing director and both shall have the meaning respectively assigned to them in clause (24) and clause (26) of section 2 of the companies act, 1956 5 225 (1) every person, being a participant in an unincorporated body at any time during the financial year, or the representative assessee of the deceased participant, shall be jointly and severally liable, along with the unincorporated body, for payment of any amount payable by the unincorporated body under this code and all the provisions of this code shall apply accordingly 10   (2) in case of a limited liability partnership, the provisions of sub-section (1) shall not apply, if the partner proves that non-recovery cannot be attributed to any neglect, misfeasance or breach of duty on his part in relation to the affairs of partnership  (3) the provisions of this section shall prevail over anything to the contrary contained 6  of  2009 in the limited liability partnership act, 2008 15   joint and several liability  of participants 226  if the recovery of tax in any area has been entrusted to a state government under clause (1) of article 258 of the constitution, the state government may direct, with respect to that area or any part thereof, that tax shall be recovered therein with, and as an addition to, any municipal tax or local rate, by the same person and in the same manner as the municipal tax or local rate is recovered 20   recovery through  state government 227 (1) the board may forward a certificate to any tax recovery officer for recovery of any amount under the corresponding law in force in any country or specified territory outside india from a person having property in india, if such country or territory or any authority under the government of that territory or country, has entered into an agreement with india under sub-sections (1) and (2) or sub-section (4) of section 291, as the case may  25 be, for the purposes specified in clause (d) of sub-section (1) of section 291  (2) on receipt of the certificate under sub-section (1) from the board, the tax recovery officer shall -  (a) proceed to recover the amount specified in the certificate in the manner in which he would proceed to recover the amount specified in a certificate under  30 section 219; and  (b) remit any sum so recovered by him to the board after deducting his expenses in connection with the recovery proceedings  (3) the tax recovery officer may, in a case where an assessee has property in a country or a specified territory  outside india, forward a certificate to the board for            35 recovery of the tax  arrears from the assessee, if the central government or any specified association in india has entered into an agreement with that country or territory  under subsections (1), (2) or sub- section (4) of section 291, as the case may be, for the purposes specified in clause (d) of sub- section (1) of section 291  (4) on receipt of the certificate under sub-section (3) from the tax recovery officer,  40 the board may take such action thereon as it may deem appropriate having regard to the terms of the agreement with such country or a specified territory  recovery  of tax in pursuance  of agreements with   foreign countries specified territory  tax  clearance certificate  in certain  cases 228 (1) no person shall leave the territory of india unless he furnishes to such authority as may be notified an undertaking to the effect that he has made satisfactory arrangement for discharging his tax liability, if any, in respect of any income or wealth liable  45 to tax in india  (2) the person referred to in sub-section (1) shall be  a person— (a) who is not domiciled in india; (b) who has come to india in connection with a business or employment; and  (c) who has income derived from any source in india  (3) every person, who is domiciled in india at the time of his departure from india, shall—  5 (a) furnish to the notified authority such particulars as may be prescribed; and (b) obtain a certificate from the notified authority that he has no liability, if in the opinion of the assessing officer it is necessary for such person to obtain such certificate  (4) the central government may notify the class of persons to whom the provisions of 10    sub-section (1) or sub-section (3) shall not apply  (5) the notified authority shall, on receipt of the undertaking or particulars referred to in sub-section (1) or sub-section (3), immediately issue to the person a no objection certificate for leaving india  (6) the owner, or charterer, of any ship, or aircraft, shall be personally liable to pay the 15    whole, or any part, of the amount payable under this code by any person required to obtain a no objection certificate in accordance with the foregoing sub-sections if the person leaves india, without the possession of the certificate, in the ship, or aircraft, of the owner or the charterer  (7) the owner, or charterer, of any ship, or aircraft, shall be deemed to be an assessee 20 in default in respect of the liability created under sub-section (6) and such amount shall be recoverable from him in the manner provided in this chapter as if it were tax arrears  (8) the board may, having regard to the interests of revenue, prescribe:— (a) the circumstances; (b) the form and the manner, in which the undertaking is to be furnished; and  25 (c) any other matter connected therewith  (9) in this section, the expressions "owner" and "charterer" include any representative, agent or employee authorised by the owner, or charterer, to allow persons to travel by the ship or aircraft  229 (1) the several modes of recovery specified in this chapter shall not affect in any 30 way—  (a) any other law for the time being in force relating to the recovery of debts due to the government; or  (b) the right of the government to institute a suit for the recovery of the tax arrears from the assessee  35  (2) it shall be lawful for the assessing officer, or the government, to have recourse to any such law or suit, notwithstanding that the tax arrears are being recovered from the assessee by any mode specified in this sub-chapter   chapter - xiv penalties40  230 (1) a person shall be liable to a penalty if he has under reported the tax bases for any financial year    recovery by suit or  under other  law not affected penalty  for under reporting  of tax  bases (2) the penalty referred to in sub-section (1) shall be a sum which shall not be less than, but which shall not exceed two times, the amount of tax payable in respect of the amount of tax bases under reported for the financial year (3) a person shall be considered to have under reported the tax bases, if—  (a) the tax bases assessed or reassessed, for the first time, is greater than the maximum amount not chargeable to tax, if any, where no return of tax bases has been filed;  (b) the tax bases assessed is greater than the tax bases disclosed in the return of 5 tax bases; or  (c) the tax bases reassessed is greater than the tax bases assessed immediately before the re-assessment  (4) the amount of tax bases under reported shall be the aggregate amount of the addition  or  disallowance  made  by  the assessing  officer,  the  commissioner  or  the 10  commissioner (appeals), as the case may be  (5) the aggregate amount of the addition or disallowance made by the assessing officer in assessment or re-assessment shall, in a case—  (a) where no return of tax bases has been filed as required by any provision of this code, be the assessed tax bases as reduced by the maximum amount not charge- 15  able to tax, if any;  (b)  where the return of tax bases has been filed as required by section 144 or section 146, be the amount of tax bases assessed as reduced by the tax bases disclosed in the return so filed;  (c)  where no return of tax bases has been filed under section 144 or in response 20  to a notice under section 146 and whether or not the return of tax bases has been filed in response to a notice under section 159, be the tax bases reassessed as reduced by the maximum amount not chargeable to tax, if any; and  (d)  where a return of tax bases has been filed as required by section 144 or in response to a notice under section 146 and whether or not the return of the tax bases 25 has also been filed as required by section 159, be the amount of the tax bases reassessed as reduced by the tax bases assessed immediately before the reassessment  (6)  the aggregate amount of the addition or disallowance made by the commissioner in revision shall be tax bases assessed consequent to revision as reduced by the tax bases assessed in the order so revised 30  (7) the aggregate amount of the addition or disallowance made by the commissioner (appeals) in appeal shall be the aggregate of all enhancements made by the commissioner (appeals) in the order under appeal  (8) subject to the provisions of sub-section (10), the aggregate amount of the addition or disallowance referred to in sub-sections (5) to (7) shall include— 35   (a) the amount of any money or the value of bullion, jewellery or other valuable article or thing, (hereinafter referred to as "assets"), found in the possession of the assessee, or under his control, in the course of search under section 135,   if the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income for any financial year which has ended before the date of search, 40  and—  (i) the due date for filing the return of tax bases for the financial year has expired, but the assessee has not filed such return before such due date; or (ii) the return of tax bases for such financial year has been furnished before the date of search, but such income has not been declared therein; 45  (b) the amount, or value, of assets belonging to the assessee and delivered to the requisitioning officer under sub-section (3) of section 136 or handed over to the assessing officer under section 138, if the assessee claims that such assets have been acquired by him by utilising (wholly or partly) his income for any financial year which has ended before the date of requisition or the date of search, as the case may be, during the course of which the assets were seized, and—  (i) the due date for filing the return of tax bases for the financial year has 5 expired, but the assessee has not filed such return; or (ii) the return of tax bases for such financial year has been furnished before the date of requisition or the date of search, as the case may be, but such income has not been declared therein;  (c) any tax bases based on any entry in any books of account or other docu- 10 ments or transactions, if the assessee claims that such entry in the books of account or other documents or transactions represents his tax bases, wholly or in part, for any financial year which has ended before the date of search during the course of which the assets were seized, and—  (i) the due date for filing the return of tax bases for the financial year has 15 expired, but the assessee has not filed such return; or  (ii) the return of tax bases for such financial year has been furnished before the date of search, but such tax bases has not been declared therein;  (d) in a case where the source of any receipt, deposit or investment in any financial year is claimed to have been added or deducted, as the case may be, in any 20 year prior to the financial year in which such receipt, deposit or investment appears (hereinafter referred to as "preceding year") and no penalty was levied for such preceding year, then such amount as is sufficient to cover such receipt, deposit or investment  (9)  for the purposes of clause (d) of sub-section (8), the amount referred to in said 25 clause shall be deemed to be amount of tax bases under reported for the preceding year in the following order—  (a) the preceding year immediately before the year in which the receipt, deposit or investment appears, being the first preceding year, and  (b) where the amount added or deducted in the first preceding year is not suffi- 30 cient to cover the receipt, deposit or investment, the year immediately preceding the first preceding year and so on  (10) the aggregate amount of the addition or disallowance referred to in sub-sections (5) to (7) shall not include the following, namely:—  (a) the amount relating to addition or disallowance in respect of which the 35 assessee offers an explanation and the assessing officer is satisfied that— (i) the explanation is bona fide; (ii) the assessee has disclosed all the facts material to the addition or disallowance; and  (iii) the assessee has disclosed all the facts relating to the explanation  40  (b) the amount relating to addition or disallowance determined on the basis of an estimate by the assessing officer, if the accounts are correct and complete to the satisfaction of the assessing officer, but the method employed is such that, in the opinion of the assessing officer, the income cannot properly be deduced therefrom;  (c) the amount relating to addition or disallowance pertaining to any issue, 45 determined on the basis of an estimate by the assessing officer, if the assessee—  (i) has, on his own, estimated a lower amount of addition or disallowance on the same issue; (ii) has included such amount in the computation of his tax bases; and  (iii) has disclosed all the facts material to the addition or disallowance;   and  (d) the amount of undisclosed tax bases referred to in section  231  (11) the tax payable in respect of the aggregate amount of the addition or disallowance 5 shall be the amount of tax calculated on the aggregate amount of the addition or disallowance made by the assessing officer, the commissioner or the comissioner (appeals), as the case may be,—  (a) at the applicable rate in the case to which paragraph a or paragraph b of part i of the first schedule applies; and 10   (b) at the rate specified in part i of the first schedule or the second schedule, as the case may be,  in all other cases   (a) such addition or disallowance has formed the basis of imposition of penalty   15  in the case of the person for the same or any other financial year; or  (b) the amount relates to any addition or disallowance made pursuant to the adjustment under section 149  (13) the penalty referred to in sub-section (1) shall be imposed, by an order in writing,  by— 20   (a)  the assessing officer, if the amount of tax bases under reported is determined in assessment or re-assessment;  (b) the commissioner, if the amount of tax bases under reported is determined in revision of the tax bases by the commissioner; or  (c) the commissioner (appeals), if the amount of tax bases under reported is   25  (12) no addition or disallowance of an amount shall form the basis for imposition of penalty, if— penalty determined in appeal against an assessment or re-assessment order  231 (1) a person shall be liable to a penalty in respect of the undisclosed tax bases for where  search has  been initiated the specified financial year, if a search and seizure has been conducted under section 135 in his case  (2)  the  person referred to in sub-section (1) shall be liable to a penalty— 30   (a) at the rate of ten per cent of the undisclosed tax bases for the specified financial year, if such person—  (i) in a statement under sub-section (9) of section 135 in the course of the search, admits the undisclosed tax bases;  (ii)  substantiates  the  manner  in  which  the  undisclosed  tax  bases  was   35  derived; and  (iii) pays the tax, together with interest, if any, in respect of the undisclosed tax bases  (b) at the rate of twenty per cent of the undisclosed tax bases for the specified financial year, if in a statement under sub-section (9) of section 135 in the course of the   40 search, such person does not admit the undisclosed tax bases, but declares such tax bases in the return of tax bases for such financial year and pays the tax, together with interest, if any, in respect of such tax bases; or  (c) of the sum specified in sub-section (2) of section 230, if in a statement under sub-section (9) of section 135 in the course of the search, such person does not admit   45  the undisclosed tax bases and also fails to declare such tax bases in the return of tax bases for such financial year  (3) the penalty referred to in sub-section (1) shall be imposed, by an order in writing, by the assessing officer  5 (4)  in this section—  (a) "undisclosed tax bases" means—  (i) any tax bases of the specified financial year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or 10 any entry in the books of account or other document or any transaction, found in the course of a search under section 135, which has—  (a) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to the specified financial year; or  15 (b) otherwise not been disclosed to the chief commissioner or the commissioner before the date of the search; or  (ii) any tax bases of the specified financial year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified 20 financial year which is found to be false and would not have been found to be so, had the search not been conducted;  (b) "specified financial year" means the financial year-—  (i) which has ended before the date of search, but the due date for filing the return of tax bases for such year has not expired before the date of search 25 and the assessee has not furnished the return of tax bases for the financial year before the said date; or  (ii) in which search was conducted penalty  for other defaults 232 (1) a person shall be liable to a penalty if he has, without reasonable cause, failed to—  30  (a) keep and maintain any  books of account and other documents as required by section 87 for any financial year or to retain such books of account and other documents in accordance with the rules made thereunder;  (b) get his accounts audited in respect of any financial year or obtain and furnish a report of such audit as required by section 88;  35  (c) deduct the whole, or any part, of the tax as required by the provisions of subchapter a of chapter xii i;  (d) collect the whole, or any part, of the tax as required by the provisions of subchapter b of chapter xiii;  (e) pay the whole, or any part, of the tax as required by section 198 or section 40 202; (f) pay any sum as required by notice under section 162;  (g) furnish the return of tax bases under section 144 by the end of the financial year in which such return is due;  (h) comply with the provisions of section 294;  45 (i) furnish the information as required under section 140; (j) answer any question put to him by an income-tax authority in the exercise of its powers under this code;  (k) sign any statement made by him in the course of any proceedings under this code which an income-tax authority may legally require him to sign;  (l) attend or produce books of account or documents at the place or time, if he 5 is required to attend or to give evidence or produce books of account or other documents, at certain place and time in response to summons issued under sub-section (1) of section 134;  (m) furnish in time the return of tax deduction as required under section 198;  (n) furnish in time the return of tax collection as required under section 202; 10   (o) furnish a certificate to the deductee as required by section 198;  (p) furnish a certificate to the buyer, lessee or licensee as required by section required by sub-section (1) of section 199;  (s) deliver, or cause to be delivered, a return in respect of payment as required by sub-section (3) of section 199;  (t) comply with the provisions of section 292;  (u) comply with the provisions of section 293; 20   (v) comply with a notice issued under section 146 or section 150 or directions under section 151; or  (w) furnish the annual information return as required by section 295 (2) the  penalty referred to in sub-section (1) shall be any sum— (a) which shall not be less than fifty thousand rupees but which shall not 25 exceed two lakh rupees, in the cases referred to in clause (a) or clause (b) of subsection (1);  (b) which shall not be less than twenty-five per cent but which shall not exceed the amount, of tax deductible or collectible or payable, as the case may be, in the cases referred to in clauses (c) to (f) of sub-section (1); 30  (c) equal to five thousand rupees, in the case referred to in clause (g) of subsection (1);  (d) equal to the amount of loan or deposit taken or accepted, or repaid, as the case may be, in the case referred to in clause (h) of sub-section (1);  (e) which shall not be less than five thousand rupees but which shall not exceed 35  one lakh rupees, in any other case referred to in sub-section (1)  202; (q) deduct and pay tax as required by sub-section (2) of section 220;  (r) deliver, or cause to be delivered, a return in respect of payment of interest as 15 procedure 233 (1) the income-tax authority shall, for the purposes of imposing any penalty under this chapter, issue a notice to any assessee requiring him to show cause why the penalty should not be imposed on him  (2) the income-tax authority for the purposes of sub-section (1) shall be— 40   (a) the income-tax authority referred to in sub-section (13) of section 230, if the penalty is imposable under the said section;  (b) the assessing officer, if the penalty is imposable under section 231; and (c) the income-tax authority before whom the default has been committed, if the penalty is imposable under section 232  (3) the notice referred to in sub-section (1) shall be issued—  (a) during the pendency of any proceedings under this code for the relevant 5 financial year, in respect of penalties referred to in section 230 or section 231;  (b) within a period of three years from the end of the financial year in which the default is committed, in respect of penalties referred to in section 232  (4) no order imposing a penalty under this chapter shall be made unless the assessee has been given an opportunity of being heard  10  (5)  an order imposing a penalty under this chapter shall be made with the approval of the joint commissioner, if—  (a) the penalty exceeds one lakh rupees and the income-tax authority levying the penalty is in the rank of income-tax officer; or  (b) the penalty exceeds five lakh rupees and the income-tax authority levying the 15 penalty is in the rank of assistant commissioner or deputy commissioner  (6) every order of penalty issued under this chapter shall be accompanied by a notice of demand in respect of the amount of penalty imposed and such notice of demand shall be deemed to be a notice under section 162  234 (1) no order imposing a penalty under this chapter shall be passed after the 20 expiry of a period of one year from the end of the financial year in which the notice for imposition of penalty is issued under section 233  (2) an order imposing, or dropping the proceedings for imposition of, penalty under this chapter may be revised, or revived, as the case may be, on the basis of assessment of the tax bases as revised after giving effect to the order of the commissioner (appeals), the 25 appellate tribunal, the high court or the supreme court or order of revision under section 191 or section 192  (3) an order revising the penalty under sub-section (2) shall not be passed after the expiry of a period of six months from the end of the month in which order of the commissioner (appeals), the appellate tribunal, the authority for advance ruling and dispute resolution, 30 the high court or the supreme court is received by the chief commissioner or the commissioner or the order of revision under section 191 or section 192 is passed  (4) in computing the period of limitation for the purposes of this section, the following time or period shall not be included—  (a) the time taken in giving an opportunity to the assessee to be reheard  35 under section 133;  (b) any period during which the immunity granted under section 283 remained in force; and  (c) any period during which a proceeding under this chapter for the levy of penalty is stayed by an order, or injunction, of any court  40 chapter xv  prosecution235 the provisions of this chapter shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force,  relating to prosecution for offences thereunder   bar of limitation  for imposing penalty  chapter not in  derogation of any  other law 236 whoever contravenes any order referred to in  sub-section (7) of section 135 shall be punishable with rigorous imprisonment which may extend to two years and with fine, which shall not be less than fifty thousand rupees but which may extend to five lakh rupees  contravention of any restraint  order  237 if a person who is required to afford the authorised officer the necessary facility to inspect the books of account or other documents, as required under clause (d) of sub-section 5 (2) of section 135, fails to afford such facility to the authorised officer, he shall be punishable with rigorous imprisonment for a term which may extend to two years and  with fine, which shall not be less than fifty thousand rupees but which may extend to five lakh rupees  failure to comply  with the  provisions of clause  (d) of  sub-section (2) of  section 135   238 whoever fraudulently removes, conceals, transfers or delivers to any person, any property or any interest therein, intending thereby to prevent that property or interest 10 therein from being taken in execution of a certificate under the provisions of the fifth schedule shall be punishable with rigorous imprisonment for a term which may extend to two years and with fine, which shall not be less than fifty thousand rupees but which may extend to five lakh rupees  | removal,     |     ||--------------|-----|| concealment, |     || transfer or  |     || delivery of  |     || property  to |     || thwart  tax  |     || recovery    |     ||              |     ||              |     |239 (1) if a person - 15  (a) fails to give the information as required by sub-section (1) of section 223; (b) fails to set aside the amount as required by sub-section (3) of that section; or  (c) parts with any of the assets of the company, or the properties, in his custody in contravention of the provisions of the said sub-section (3), he shall be punishable 20 with rigorous imprisonment for a term which shall not be less than six months but which may extend to two years and with fine, which shall not be less than fifty thousand rupees, but which may extend to five lakh rupees  (2) no person shall be punishable for any failure referred to in sub-section (1), if he proves that there was reasonable cause for such failure 25   failure to comply  with the  provisions of  sub-sections (1) and (3)  of section 223  240 (1) if a person fails to pay to the credit of the central government,—  (a) the tax deducted, or collected, at source by him as required by, or under, the provisions of sub-chapter a or sub-chapter b of chapter xiii;  (b) the dividend distribution tax under section 109; or  (c) the tax on distributed income under section 110, 30   he shall be punishable—  (i) with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years; and  (ii) with fine to be determined at the rate of three per cent of the tax for each month of default, for the period commencing from the date on which the amount was 35 required to be paid to the credit of the central government and ending with the date of payment or the date of conviction, whichever is earlier  (2) no person shall be punishable for any failure referred to in clause (a) of subsection (1), if he proves that there was reasonable cause for such failure  failure to  pay tax  deducted or collected  at source or  to pay  dividend or  income distribution tax  241 (1) if a person wilfully attempts in any manner whatsoever to evade any   tax, 40  | wilful      |     ||-------------|-----|| attempt  to |     || evade  tax |     |penalty or interest chargeable or imposable under this code, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this  code, be punishable,—  (i) in a case where the amount sought to be evaded exceeds one lakh rupees, with rigorous imprisonment for a term which shall not be less than six months but 45  which may extend to seven years and with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees;  (ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine which shall 5 not be less than twenty-five thousand rupees but which may extend to three lakh rupees  (2)  if a person wilfully attempts in any manner whatsoever to evade the payment of any tax, penalty or interest under this  code, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this  code, be punishable with 10 rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and shall, in the discretion of the court, also be liable to  fine  (3) for the purposes of this section, a wilful attempt to evade any tax, penalty or interest chargeable or imposable under this code or the payment thereof shall include a case where any person—  15  (a) has in his possession, or control, any books of account or other documents, relevant to any proceeding under this code, containing a false entry or statement;  (b) makes, or causes to be made, any false entry, or statement, in such books of account or other documents;  (c) wilfully omits, or causes to be omitted, any relevant entry, or statement, in 20 such books of account or other documents; or  (d) causes any other circumstance to exist which will have the effect of enabling such person to evade any  tax, penalty or interest chargeable or imposable under this code, or the payment thereof  242 (1) if a person wilfully fails to furnish in due time the return of tax bases—   failure  to furnish returns  of tax  bases 25  (a) under sub-section (1) of section 144, or in response to a notice given under section 146; or  (b) in response to a notice given under section 159, he shall be punishable— (i) in a case where the amount of tax which would have been evaded, if the failure 30 had not been discovered, exceeds one lakh rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine which shall not be less than one hundred rupees but which may extend to five hundred rupees, for every day during which the default continues;  (ii) in any other case, with imprisonment for a term which shall not be less than 35 three months but which may extend to three years and with fine which shall not be less than fifty rupees but which may extend to three hundred rupees, for every day during which the default continues  (2) a person shall not be proceeded against under this section for failure to furnish in due time the return of tax bases—  40  (a) under sub-section (1) of section 144, or in response to a notice given under section 146, if the return is furnished before the expiry of the financial year in which such return is due;  (b)  in response to a notice given under section 159, if the return is filed before the expiry of the period specified in the said notice; or  45  (c) the tax payable by the person on the tax bases determined on assessment or re-assessment as reduced by advance tax, or tax collected or deducted at source, does not exceed twenty-five thousand rupees  243 if a person wilfully fails to produce, or cause to be produced, on or before the date specified in any notice served on him under sub-section (2) of section 150, such accounts and documents as are referred to in the notice, he shall be punishable with rigorous imprisonment for a term which may extend to one year or with fine equal to a sum calculated at a rate which shall not be less than fifty rupees or more than one hundred rupees for every 5 day during which the default continues, or with both  failure  to furnish statements, reports  etc  244 if a person wilfully fails to comply with a direction issued to him under subsection (1) of section 151, he shall be punishable with rigorous imprisonment for a term which may extend to one year or with fine equal to a sum calculated at a rate which shall not be less than fifty rupees or more than one hundred rupees for every day during which the 10  default continues, or with both  failure to comply  with direction under this code 245 (1)  if a person makes a statement in any verification under this code or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable,—  (i) in a case where the amount of tax which would have been evaded if the 15  statement or account had been accepted as true exceeds one lakh rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees;  (ii) in any other case, with rigorous imprisonment for a term which shall not be 20  less than three months but which may extend to three years and with fine which shall not be less than twenty-five thousand rupees but which may extend to three lakh rupees  false statement  in verification  246 (1) if any person (herein referred to as the first person) wilfully and with intent to enable any other person (herein referred to as the second person) to evade any tax or 25 interest or penalty chargeable and imposable under this code, makes or causes to be made any entry or statement which is false and which the first person either knows to be false or does not believe to be true, in any books of account or other document relevant to or useful in any proceedings against the first person or the second person, under this code, the first person shall be punishable with rigorous imprisonment for a term which shall not be less 30  than  three months, but which may extend to  three years and with fine which shall not be less than twenty-five thousand rupees but which may extend to three lakh rupees  (2) for the purposes of establishing the charge under this section, it shall not be necessary to prove that the second person has actually evaded any tax, penalty or interest chargeable or imposable under this code 35  falsification of books  of account  or documents abetment  of false  return 247 (1) if a person abets or induces in any manner another person to make and deliver an account or a statement or declaration relating to any tax bases chargeable to tax which is false and which he either knows to be false or does not believe to be true or to commit an offence under sub-section (1) of section 241, he shall be punishable,—  (i) in a case where the amount of tax, penalty or interest which would have been 40  evaded, if the declaration, account or statement had been accepted as true, or which is wilfully attempted to be evaded exceeds one lakh rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees; 45   (ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine which shall not be less than twenty-five thousand rupees but which may extend to three lakh rupees 248 (1) where an offence under this code has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly  5  (2) nothing in sub-section (1) shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence  (3) notwithstanding anything in sub-section (1), where an offence under this code has been committed by a company and it is proved that the offence has been committed with 10    the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly  (4) where an offence under this code has been committed by a person, being a 15    company, and the punishment for such offence is imprisonment and fine, then, without prejudice to sub-section (1) or sub-section (3), such company shall be punished with fine and every person, referred to in sub-section (1), or the director, manager, secretary or other officer of the company referred to in sub-section (3), shall be liable to be proceeded against and punished in accordance with the provisions of this code  20 (5)  in this section—  (a) "company" means a body corporate, and includes - (i) an unincorporated body; (ii) a hindu undivided family; (b) "director", in relation to - 25 (i) an unincorporated body, means a participant in the body;  (ii) a hindu undivided family, means an adult member of the family; and  (iii) a company, means a whole-time director, or where there is no such director, any other director or manager or officer, who is in charge of the affairs of the company  30  249 (1) the entries in the records, or other documents, in the custody of an incometax authority shall be admitted in evidence in any proceeding for the prosecution of any person for an offence under this chapter (2) the entries referred to in sub-section (1) may be proved by the production of— (a) the records or other documents (containing such entries) in the custody of 35 the income-tax authority; or  (b) a copy of the entries certified by that authority under its signature, as true copy of the original entries contained in the records or other documents in its custody  250 (1) where during the course of any search made under section 135, any material has been found in the possession or control of any person and such material is tendered by offences  by companies,  etc  proof of entries in records  or documents  presumption as to  assets, and  books of account,  in certain  cases 40 the prosecution in evidence against such person or against such person and the person referred to in section 247 for an offence under this code, the provisions of section 311 shall, so far as may be, apply in relation to such material  (2) where any  material taken into custody, from the possession or control of any person,  is delivered to the requisitioning officer under section 136 and such  material  is 45 tendered by the prosecution in evidence against such person or against such person and the person referred to in section  247 for an offence under this code, the provisions of section 311 shall, so far as may be, apply in relation to such material 251 (1) in any prosecution for any offence under this code which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution  (2)  in this section—  (a) "culpable mental state" includes intention, motive or knowledge of a fact or belief in, or reason to believe, a fact;  (b) a fact is said to be proved only when the court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability  presumption as to  culpable mental  state 252 (1) a person shall not be proceeded against for an offence under sections  236 to  247 (both inclusive) except with the previous sanction of the commissioner or the commissioner (appeals), as the case may be  (2) the chief commissioner may issue such instructions, or directions, to the incometax authorities referred to in sub-section (1) as he may think fit for the institution of proceedings under this section  (3) the chief commissioner may compound, either before or after the institution of proceedings (with permission of the court), any offence under this chapter, under the circumstances and for the amount, as may be prescribed  (4) the power of the board to issue orders, instructions or directions under this code shall include the power to issue orders, instructions or directions (including instructions or directions to obtain its previous approval) to other income-tax authorities for the proper composition of offences (including an authorisation to file and pursue complaints by one or more inspectors of income-tax) under this section  (5) an offence in relation to which a punishment has been awarded by a court shall not be compounded  (6)  where any proceeding has been taken against any person under sub-section (1), any statement made or account or other document produced by such person before any income-tax authority, other than an inspector, shall not be inadmissible as evidence for the purpose of such proceedings merely on the ground that such statement was made or such account or other document was produced in the belief that the offence in respect of which such proceeding was taken would be compounded  prosecution  to be at  instance of  chief commissioner or  commissioner  253  if any person convicted of an offence under sections 240, 241, 242, 243, 245, 246 and section  247 is again convicted of an offence under any of the aforesaid provisions, he shall be punishable for the second and every subsequent offence with rigorous imprisonment for a term which shall not be less than six months, but which may extend to seven years and with fine  5  10 15  20 25  30 35  punishment for second  and subsequent offences 254 notwithstanding anything in the code of criminal procedure, 1973, any offence punishable under this chapter shall be deemed to be non-cognizable within the meaning of that code  offences to  be non-cognizable  40   2 of  1974  45  disclosure  of information by public servants 255 (1) if a public servant furnishes any information or produces any document in contravention of the provisions of section 142, he shall be punishable with imprisonment for a term which may extend to six months, and with fine  (2) no prosecution shall be instituted under this section except with the previous sanction of the central government, which may be accorded only after giving such public servant an opportunity of being heard  chapter xvi advance rulings and dispute  resolution256 an applicant or appellant, specified in column (2) of the table given below, may seek a ruling or, as the case may be, a resolution of dispute on  matters  specified in the   scope of ruling  and dispute resolution 5 corresponding entry of column (3) of the said table:   table serial applicant/appellant scope of ruling and dispute number  resolution (1) (2) (3)  10 1 non-resident  a determination in relation to a transaction which has been undertaken, or is proposed to be undertaken, by the applicant, and such determination shall include the determination of any question of law, or of fact, specified in the 15 application  2 resident  a determination in relation to the tax liability of a non-resident arising out of a transaction which has been undertaken, or is proposed to be undertaken, by the applicant with such non- 20 resident, and such determination shall include the determination of any question of law, or of fact, specified in the application  3 any class of  a determination in respect of an issue relating residents, as notified by to computation of tax bases which is pending 25  the central government before any income-tax authority, or the appellate in this behalf  tribunal, and such determination shall include the determination of any question of law or of fact relating to such computation of tax bases specified in the application  30 4   public sector company or a resolution of any dispute relating to company commissioner  computation of tax bases or any other issue arising from—  (i)  an appellate, penalty or rectification order of the commissioner (appeals);  35 (ii)  a revision, penalty or rectification order of the commissioner, in the case of a public sector company  5 public sector company  a  resolution  of  any  dispute  relating  to computation of tax bases or any other issue arising 40 from the order of an assessing officer passed in pursuance of the direction of the dispute resolution panel,  or any rectification order in relation to such order  257 (1) the central government shall constitute an authority for advance rulings 45 and dispute resolution (hereinafter referred to as the authority) for the purposes of pronouncing an advance ruling and resolution of disputes authority for advance rulings and dispute resolution (2) the authority shall consist of a chairperson and such number of vice-chairpersons, legal members and revenue members as the central government may appoint  (3) a person shall not be qualified for appointment as—  (a) the chairperson unless he has been a judge of the supreme court;  (b) the vice-chairperson unless he has been a judge of a high court; 5  (c) a revenue member unless he is an officer of the indian revenue service and is a chief commissioner;  (d) a legal member unless he is an officer of the indian legal service and is an additional secretary to the government of india  (4) the salaries and allowances payable to, and the terms and conditions of service of,   10  the members shall be such as may be prescribed  (5) the central government shall provide to the authority such officers and staff, as may be necessary, for the efficient exercise of the powers of the authority under this code  (6) the powers and functions of the authority may be discharged by its benches constituted by the chairperson of the authority from amongst the members thereof 15  (7) a bench shall consist of the chairperson or the vice-chairperson and one legal member and one revenue member  (8) the principal bench of the authority shall be located in national capital territory of delhi and other benches of the authority shall be located at such places as is deemed fit by the central government 20   (9) no proceeding before, or pronouncement of advance ruling or order or direction on appeal for resolution of dispute by, the authority shall be questioned, or shall be invalid, on the ground merely of the existence of any vacancy, or defect, in the constitution of the authority   258 (1) an applicant may make an application for seeking advance ruling, under this   25  chapter, stating the question on which the advance ruling is sought  procedure  for advance ruling (2) the application shall be made in such form and manner  and be accompanied by such fees as may be prescribed  (3) an applicant may withdraw an application within a period of thirty days from the date of filing of the application 30   (4) on receipt of an application, the authority shall cause a copy thereof to be forwarded to the commissioner and, if necessary, call upon him to furnish the relevant records  (5) the authority may, after examining the application and the records called for, by an order in writing, either allow or reject the application  (6) no application shall be rejected under sub-section (5) unless an opportunity of   35  being heard has been given to the applicant and reasons for such rejection shall be given in the order  (7) the authority shall not allow the application where the question raised in the application—  (a) is already pending before any income-tax authority, appellate tribunal or   40  any court;  (b) involves determination of fair market value of any property;  (c) relates to a transaction or issue which is designed prima facie for the avoidance of income-tax (8) notwithstanding anything  in sub-section (7), in the case of any person falling within the class of persons notified under section 256, the authority may allow the application even if the question raised therein is pending before any income-tax authority or appellate tribunal  5  (9) a copy of every order made under sub-section (5) shall be sent to the applicant and to the commissioner  (10) the authority shall, in a case where an application is allowed under sub-section (5), pronounce its advance ruling on the question specified in the application, after examining such further material as may be placed before it by the applicant or the commissioner or 10 obtained by the authority  (11) the authority shall, before pronouncing its advance ruling, provide an opportunity of being heard to the applicant or to the commissioner  (12) the authority shall pronounce its advance ruling in writing within a period of six months of the receipt of the application  15  (13) a copy of the advance ruling pronounced by the authority, duly signed by the members and certified in such manner as may be prescribed, shall be sent to the applicant and to the commissioner, as soon as may be, after such pronouncement  259 no income-tax authority, or the appellate tribunal, shall proceed to decide any issue in respect of which an application has been made by a person falling within the class of income-tax authority  or appellate tribunal  not to  proceed in certain  cases 20 persons notified under section  256 260 (1) the advance ruling pronounced by the authority under section 258 shall be binding only— (a) on the applicant in whose case the advance ruling has been pronounced; (b) in respect of the transaction in relation to which the advance ruling has been 25 pronounced; and  (c) on the commissioner, and the income-tax authorities subordinate to him, in respect of the applicant and the said transaction  (2) the advance ruling referred to in sub-section (1) shall not be binding, if there is a change in law, or fact, on the basis of which the advance ruling has been pronounced  30  261 (1) the authority may, by order, declare an advance ruling to be void ab initio if it finds that the ruling has been obtained by the applicant by fraud or misrepresentation of facts  (2) upon declaring the ruling to be void ab initio, all the provisions of this code shall apply (after excluding the period beginning with the date of such advance ruling and ending 35 with the date of order under this sub-section) to the applicant as if such advance ruling had never been made  (3) a copy of the order made under sub-section (1) shall be sent to the applicant and the commissioner  262 (1) an appellant may prefer an appeal against the orders  referred to in serial 40 numbers 4 and 5 of the table given in section 256 for seeking resolution of a dispute  applicability of  advance ruling advance ruling to  be void  in certain circumstances procedure for  dispute resolution (2) every appeal under sub-section (1) shall be preferred within a period of sixty days from the date on which the order sought to be appealed against is communicated to the appellant  (3) the respondent, on receipt of notice that an appeal against the order of the 45 commissioner (appeals) has been preferred under sub-section (1) by the other party,  may file a memorandum of cross objections against any part of the order of the commissioner (appeals) within a period of thirty days of the receipt of the notice  (4) the memorandum of cross objections shall be disposed of by the authority as if it were an appeal preferred within the time specified in sub-section (2)  (5) the authority may admit an appeal, or a memorandum of cross objections, after 5 the expiry of the period specified in sub-section (2) or sub-section (3), if—  (a) it is satisfied that the appellant had sufficient cause for not preferring it within that time; and  (b) the delay in filing the appeal does not exceed a period of one year  (6) the appeal, or the memorandum of cross objections, shall be in such form and 10  manner and be verified in such manner as may be prescribed  (7) the appeal by the public sector company shall be accompanied by such fees as may be prescribed  (8) the authority may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit 15  (9) a copy of the order passed by the authority  shall be sent to both the parties (10) every appeal preferred under this section shall be heard and disposed of by the authority as expeditiously as possible and endeavour shall be made to dispose of such appeal within a period of two years from the end of the financial year in which the appeal is preferred 20  (11) the order or direction of the authority in the matter of an appeal shall be final and binding on both the parties  263 (1) a public sector company may make an application to the authority for stay of demand relating to the appeal preferred by it under section 363 and such application shall be accompanied by  such fees  as may be prescribed 25   (2) the authority may, after giving both the parties to the appeal an opportunity of being heard and having considered the merits of the case, pass such orders on the stay application as it deems fit  (3) the authority may pass an order of stay under sub-section (2) for a period not exceeding  one hundred and eighty days from the date of passing of the order for stay and 30 the authority shall dispose of the appeal within the said period of stay specified in that order  (4) the authority may, on an application made by the public sector company seeking extension of the period of stay, extend the period of stay allowed under sub-section (2), if it is satisfied that the delay in disposing of the appeal is not attributable to the  company 35  (5) the aggregate of the period originally allowed under sub-section (2) and the period or periods extended under sub-section (4) shall not, in any case, exceed three hundred and sixty-five days from the date of passing the order of stay under sub-section (2)  (6) the authority shall dispose of the appeal during the period of stay allowed under  sub-section  (2)  or  the  period  or  periods  extended  under  sub-section  (4), 40  notwithstanding that the delay in disposing of the appeal is not attributable to the company and where  the authority fails to do so, the stay order shall stand vacated  stay of demand by  the authority 264 (1) the authority may, either suo motu or the mistake on being brought to its notice by the public sector company or the commissioner or the assessing officer, with a view to rectifying any mistake apparent on the face of record, amend any order passed by it 45  power  to rectify  a mistake under section 258 or section 262 (2) no  order under sub-section (1)  shall be passed  after a period of four years from the date on which order sought to be amended was made   (3) the authority shall not make an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the public sector company without giving the said company an  opportunity of being heard  5   5  of 1908 265 (1) the authority shall, for the purpose of exercising its powers, have all the powers of a civil court under the code of civil procedure, 1908 as are referred to in section 134 of this code  2  of 1974   (2) the authority shall be deemed to be a civil court for the purposes of section 195 of the code of criminal procedure, 1973, but not for the purposes of chapter xxvi of the said code  10  (3) every proceeding before the authority shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the indian penal code, and for the purpose of section 196 of the said code  45 of 1860  15   powers of  authority procedure   of authority 266 the authority shall, subject to the provisions of this chapter, have power to regulate its own procedure in all matters arising out of the exercise of its powers under this code  267 in this chapter, unless the context otherwise requires,—  (a) "advance ruling" means a ruling by the authority on a question raised by the 20 applicant under section  258 within the scope as specified under section  256;  (b) "appellant" means a public sector company or the commissioner who prefers an appeal under sub-section (1) of section 262;  (c) "applicant" means any person who makes an application under sub-section (1) of section 258;  25 (d) "application" means an application made to the authority under sub-section (1) of section 258;  (e) "authority" means the authority for advance rulings and dispute resolution constituted under section  257;  (f) "chairperson" means the chairperson of the authority;  30  (g) "member" means a member of the authority and includes the chairperson and vice-chairperson;  (h) "vice-chairperson" means the vice-chairperson of the authority   chapter xvii settlement of cases35  268 (1) the central government shall constitute a commission to be called the incometax settlement commission for the settlement of cases under this chapter  (2) the settlement commission shall consist of a chairperson and as many vice- chairpersons and other members as the central government deems fit and shall function within the department of the central government dealing with direct taxes  40  (3) the chairperson, vice-chairperson and other members of the settlement commission shall be appointed by the central government from amongst the officers of the indian revenue service who have served for at least twenty-eight years in the service, including at least five years in the rank of commissioner or above  269(1) the jurisdiction, powers and authority of the settlement commission may be 45 exercised by benches thereof  inter pretations  in this  chapter  income-tax settlement commission jurisdiction and powers  of settlement commission (2) a bench shall be presided over by the chairperson or a vice-chairperson, as the case may be, and shall consist of two other members  (3) a bench may function with only two members if—  (a) the third member is unable to discharge his functions owing to absence, illness or any other cause; or 5  (b) any vacancy occurs either in the office of the presiding officer or in the office of any member of the bench  (4) the bench, referred to in sub-section (3), shall be presided over by the senior among the two members if none of such members is the chairperson or vice-chairperson  (5) the presiding officer of the bench, referred to in sub-section (3), may refer a case 10  or matter to the chairperson for transfer to such bench as the chairperson may deem fit if at any stage of the hearing of any such case or matter it appears to the presiding officer that the case or matter is of such a nature that it ought to be heard of by a bench consisting of three members  (6) the bench for which the chairperson is the presiding officer shall be the principal 15  bench and the other benches shall be known as additional benches  (7) the chairperson may authorise the vice-chairperson or other member appointed to one bench to also discharge the functions of the vice-chairperson or, as the case may be, other member of another bench  (8) the chairperson may, for the disposal of any particular case, constitute a special 20  bench consisting of more than three members  (9) the principal bench and the additional benches shall ordinarily sit at such places as the central government may, by notification, specify  (10) the special bench shall sit at a place to be fixed by the chairperson  270 the vice-chairperson or, as the case may be, such one of the vice-chairpersons 25 as the central government may, by notification, authorise in this behalf, shall act as the chairperson -  (a) till the date on which a new chairperson, appointed in accordance with the provisions of this chapter, enters upon his office, in case there occurs any vacancy in the office of the chairperson by reason of his death, resignation or otherwise; or 30   (b) till the date on which the chairperson resumes his duties, in case the chairperson is unable to discharge his functions owing to absence, illness or any other cause  vice- chairperson to act as chairperson 271 (1) the chairperson may, on the application of the assessee or the chief commissioner or the commissioner or on his own motion, transfer any case pending before 35 one bench for disposal to another bench  (2) the case under sub-section (1) shall be transferred by the chairperson after recording the reasons for doing so  power of chairperson to transfer cases from one bench  to another  decision to be by  majority 272 (1) if the members of a bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority 40   (2) if the members of a bench differ in opinion on any point and they are equally divided, they shall state the point on which they differ and make a reference to the chairperson  (3) the chairperson, on receipt of the reference under sub-section (2), shall— (a) either hear the point himself, or (b) refer the case for hearing on the point by one or more of the other 45  members (4) the point, referred to in sub-section (2), shall be decided according to the opinion of the majority of the members who have heard the case, including those who first heard it  273 (1) an assessee may, at any stage of a case relating to him, make an application to the settlement commission in such form and manner as may be prescribed, to have the 5      case settled  (2) the application made under sub-section (1) by an assessee shall contain -  (a) a full and true disclosure of his income or wealth which has not been disclosed before the assessing officer;  (b) the manner in which such income or wealth has been derived;  10  (c) the details of additional amount of income-tax or wealth-tax payable on such income or wealth along with the proof of payment of such tax; and  (d) such other particulars as may be prescribed  (3) the application under sub-section (1) shall not be made unless -  (a) the assessee has furnished the return of tax bases which he is or was required 15 to furnish under any of the provisions of this code; and  (b) the additional amount of income-tax payable on the income disclosed in the application exceeds,—  (i) fifty lakh rupees in a case where proceedings for assessment or reassessment for any financial year have been initiated in consequence of an action under section 135 or section 136, as the case may be; 21 (ii) ten lakh rupees in any other case; and (c) the additional amount of income-tax or wealth-tax payable together with interest has been paid on or before the date of making the application and proof of such payment is submitted with the application  25  (4) every application made under sub-section (1) shall be accompanied by such fees as may be prescribed  (5) the assessee shall not be allowed to withdraw an application made by him under sub-section (1)  (6) the assessee shall, on the date on which he makes an application under sub- 30 section (1) to the settlement commission, also intimate the assessing officer in such manner as may be prescribed, of having made such application to the settlement commission   application  for settlement    of cases  additional amount  of income-tax 274 the additional amount of tax payable in respect of the income or wealth disclosed in the application referred to in clause (c) of sub-section (2) of section 273 shall be calculated in the following manner, namely: -  35  (a) in the case where the income or wealth disclosed in the application relates to only one financial year and -  (i) the applicant has furnished a return of tax bases of that year—  (a) the amounts of the total income returned and the income disclosed in the application shall be aggregated;  40  (b) the tax shall be calculated on the aggregate income so arrived at as if such aggregate income were the total income;  (c) the amount of tax so calculated shall be reduced by the amount of tax calculated on the total income returned for that financial year;  (d) the balance amount of tax so determined shall be the additional amount of tax payable in respect of the income disclosed in the application; (ii) if the applicant has not furnished a return in respect of the total income of that financial year, tax shall be calculated on the income disclosed in the application; (b) in the case where the income disclosed in the application relates to more 5 than one financial year,— (i) the additional amount of income-tax payable in respect of the income disclosed for each of the financial years shall first be calculated in the manner provided under clause (a); (ii) the additional amount of income-tax so calculated for each of the 10  financial years shall be aggregated; (iii) the aggregate amount of the additional income-tax so computed shall be the additional amount of tax payable in respect of the income disclosed in the application; (c ) in a case where the wealth disclosed in the application relates to,— 15  (i) one financial year the additional amount of tax payable shall be calculated in the manner provided in clause (a); and (ii)  more than one financial year, the additional amount of tax payable shall be calculated in the manner provided in clause (b) 275 (1) the settlement commission shall, within a period of ten days from the date of 20  admission  of application the receipt of an application under section 273, issue a notice to the applicant requiring him to explain as to why the application made by him may be allowed to be proceeded with (2)  the settlement commission shall, on hearing the applicant, within a period of twenty days from the date of receipt of the application, by an order in writing, reject or allow the application to be proceeded with 25  (3) the application received under section 273 shall be deemed to have been allowed to be proceeded with, if no order has been passed within the period specified in sub-section (2) (5) the commissioner shall furnish the report within a period of forty-five days of the receipt of communication from the settlement commission under sub-section (4) (6) the settlement commission may, on the basis of the report of the commissioner, 35  and within a period of fifteen days of the receipt of the report by an order in writing, declare the application in question as invalid (7) the settlement commission, before passing the order under sub-section (6), shall– (a) consider the report of the commissioner, if it is furnished within the time specified in sub-section (5); 40  (b) take into account the nature and circumstances of the case or the complexity of the investigation involved therein; and (c) provide an opportunity of being heard to the applicant and to the commissioner (8) the settlement commission shall send a copy of order under sub-sections (2) and 45  (6) to the applicant and to the commissioner  (4) the settlement commission shall in respect of an application which has been allowed to be proceeded with under sub-section (1) or sub-section (2), call for a report from 30 the commissioner within a periof of forty-five days from the date on which the application is made276 (1) the settlement commission may, if the application has not been declared as invalid under sub-section (6) of section 275, call for the records from the commissioner further inquiry  into the  case (2) if the settlement commission , on examination of the records made available by the commissioner or on an application made by him, is of the opinion that any further inquiry or 50  investigation in the matter is necessary, it may direct the commissioner to - (a) make or cause to be made such further inquiry or investigation; and (b)  furnish a report on the matters covered by the application and any other matter relating to the case 5  (3) the commissioner shall furnish the report required under clause (b) of sub-section (2) within a period of one hundred and twenty days from the date of receipt of communication from the settlement commission (4) if the commissioner does not furnish his report within the time specified in subsection (3), the settlement commission may proceed to pass an order without such report  order of settlement 10  277 (1) the settlement commission shall, after the application has not been declared as invalid under sub-section (6) of section 275, pass such order in writing as it thinks fit, in accordance with the provisions of this code, on the matters covered by the application and any other matters relating to the case not covered by the application but referred to in the report of the commissioner under sub-section (5) of section 275 or sub-section (3) of section 15    276 (2) the order passed by the settlement commission under sub-section (1) shall provide - (a) for the terms of settlement including any demand by way of tax, penalty or interest, the manner in which any sum due under the settlement shall be paid and all 20 other matters to make the settlement effective; and (b) that the settlement shall be void if it is subsequently found by the settlement commission that it has been obtained by fraud or misrepresentation of facts (3) the settlement commission, before passing any order under sub-section (1), shall - 25 (a) examine the records called for from the commissioner; (b) examine all the issues arising from the report of the commissioner received under sub-section (5) of section 275 or sub-section (3) of section 276; (c) provide an opportunity to the applicant and to the commissioner to be heard, either in person or through a representative duly authorised in this behalf; and 30  (d) examine such further evidence as may be placed before it or obtained by it (4) the settlement commission shall pass the order under sub-section (1) within a period of eighteen months from the end of the month in which the application was made 278 (1) the assessee shall pay any sum payable in pursuance of an order under subsection (1) of section 277 within a period of thirty days of the receipt of a copy of the order 35  (2) the settlement commission may, on an application by the assessee, extend the time for payment of additional amount of income-tax or wealth-tax or allow the payment by instalments if the assessee furnishes adequate security for such payment (3) the assessee shall, if the tax is not paid within the time specified in sub-section (1), be liable to pay simple interest at the rate of fifteen per cent per annum on the amount 40 remaining unpaid from the date of expiry of the period specified under sub-section (1) to the date on which the amount is paid irrespective of the fact that the settlement commission has extended the time for payment of such tax or has allowed payment thereof by instalment (4) the assessing officer may, in accordance with the provisions  of chapter xiii,- (a) recover the amount of any sum specified in the order under sub-section (1) of 45 section 277, together with any interest payable thereon under sub-section (3); and (b) impose and recover any penalty for default in making payment of such sum 279 (1)the settlement commission may, during the pendency of any proceeding before it, by order, attach provisionally any property belonging to the applicant in the manner provided in the fifth schedule if it is of the opinion that it is necessary to do so for 50 the purpose of protecting the interests of the revenue (2) every provisional attachment made by the settlement commission under   payment of  tax on  settlement power of settlement commission to order provisional attachment  to protect  revenue sub-section (1) shall cease to have effect after the expiry of a period of six months from the date of the order made under sub-section (1) (3) the settlement commission may, for reasons to be recorded in writing, extend the period specified under sub-section (2) by such further period or periods as it thinks fit, provided that the total period of extension shall not in any case exceed two years 5 (4) if a provisional attachment made under section 297 is pending immediately before an application is made under section 273, then such order shall continue to have effect under this section  up to the period to which the order made under section 297 would have continued if such application had not been made  280 (1) the order passed by the settlement commission under sub-section (1) of 10  section 277 shall be void if it is subsequently found by the settlement commission that it has been obtained by fraud or misrepresentation of facts (2) if the order becomes void,— (a) the proceedings before the assessing officer with respect to the matters covered by the settlement shall be deemed to have been revived from the stage at 15 which the application was admitted by the settlement commission; and revival of proceedings before assessing officer  (b) the assessing officer may complete such proceedings at any time before the expiry of twenty-one months from the end of the financial year in which the order becomes void 281 (1) the settlement commission shall have all the powers which are vested in an 20  income-tax authority under this code (2) the settlement commission shall, after an application has been made under section 273— (a) and until a report under sub-section (3) of section 276 is made by the commissioner or the time allowed for submission of the report under said section has expired, 25 whichever is later, have concurrent jurisdiction with the assessing officer; and (b) thereafter until an order of settlement is passed under sub-section (1) of section 277, have exclusive jurisdiction to exercise the powers and perform the functions of any income-tax authority under this code in relation to the case (3) notwithstanding anything in sub-section (2) and in the absence of any express 30  direction to the contrary by the settlement commission, nothing contained in this section shall affect the operation of any other provision of this code requiring the applicant to pay tax on the basis of self-assessment in relation to the matters before the settlement commission (4) in the absence of any express direction by the settlement commission to the contrary, nothing in this chapter shall affect the operation of the provisions of this code in 35 so far as they relate to any matters other than those before the settlement commission (5) the settlement commission shall, subject to the provisions of this chapter, have powers to regulate its own procedure and the procedure of the benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the benches shall hold their sittings 40  powers of settlement commission after admission 282 (1) no person shall be entitled to inspect, or obtain copies of, any reports made by any income-tax authority to the settlement commission; but the settlement commission may, in its discretion, furnish copies thereof to any such person on an application made to it in this behalf and on payment of such fees as may be prescribed (2)  for the purpose of enabling any person whose case is under consideration to 45 rebut any evidence brought on record against him in any such report, the settlement commission shall, on an application made in this behalf, and on the payment of such fees as may be prescribed, furnish such person with a certified copy of any such report or part thereof relevant for the purpose inspection and  furnishing of reports  283 (1) the settlement commission may, subject to such conditions as it may think 50 fit to impose, grant to a person who made application under section 273, immunity, with respect to the case covered by the settlement, from— | power of   |     ||------------|-----|| settlement |     || commission |     || to grant   |     || immunity  |     |43 of 1961 (a) imposition of any penalty under this code or under the income-tax act, 1961 or the wealth-tax act, 1957 as they stood immediately before the commencement of this code; or  (b) prosecution for any offence under this code or under the income-tax act, 27 of 1957  1961 or the wealth-tax act, 1957 as they stood immediately before the commencement of this code, instituted after the date of receipt of application under section 273 by the settlement commission  (2) the settlement commission shall grant immunity under sub-section (1) only if it is satisfied that the person has—  43 of 1961   5 27 of 1957  (a) co-operated with the settlement commission in the proceedings before it; 10  and  (b) made a full and true disclosure of his income, and the manner in which such income has been derived, in the application for settlement  (3) an immunity granted to a person under sub-section (1) shall stand withdrawn, if 15    such person—  (a) fails to pay any sum specified in the order passed under sub-section (1) of section 277 within the time allowed by the settlement commission;  (b) fails to comply with any other condition subject to which the immunity was granted; or  20  (c) had, in the course of the settlement proceedings, concealed any particular material to the settlement or given false evidence  (4) the person, in whose case the immunity is withdrawn under sub-section (4),— (a) may be tried— (i) for the offence with respect to which the immunity was granted;  25  (ii) for any other offence of which he appears to be guilty in connection with the settlement;  (b) shall become liable to the imposition of any penalty under this code to which he would have been liable, had the immunity not been granted  284  (1) the proceedings before the settlement commission shall abate on the  date 30    specified in sub-section (2), if— proceeding before settlement commission (a)  an application made under section 273,—  (i)  has not been allowed to be proceeded with or has been rejected under sub-section (2) of section 275; or  (ii) has been declared as invalid under sub-section (6) of section 275; or  35  (b) an order under sub-section (1) of section 277 has not been passed within the time period specified under sub-section (4) of section 277  (2) the  date  referred to in sub-section (1) shall be -  (a) in respect of  sub-clause (i) of clause (a) of the said sub-section, the day on which the application was rejected;  40  (b) in respect of sub-clause (ii) of clause (a) of the said sub-section , the last day of the month in which the application was declared invalid; and  (c) in respect of clause (b), on the date on which the time period specified in subsection (4) of section 277 expires (3) if a proceeding before the settlement commission abates, the assessing officer, or, as the case may be, any other income-tax authority before whom the proceeding at the time of making the application was pending, shall dispose of the case in accordance with the provisions of this code  as if no application under section 273 had been made  (4) for the purposes of sub-section (3), the assessing officer or, as the case may be, 5 other income-tax authority, shall be entitled to use all the material and other information produced by the assessee before the settlement commission or the results of the inquiry held or evidence recorded by the settlement commission  in the course of the proceedings before it, as if such material, information, inquiry and evidence had been produced before the assessing officer or other income-tax authority or held or recorded by him in the course 10  of the proceedings before him  (5) in a case referred to in sub-section (3), the period commencing from the date of application to the settlement commission under section 273 and ending with the date referred to in sub-section (2) shall be excluded from the time limits specified in sections 161 and 163, for the purposes of making a rectification or an assessment or reassessment, and under 15  section 216 for the purposes of payment of interest  285 in a case where the proceedings before the settlement commission abate under sub-section (1) of section 284, the assessing officer shall allow the credit for the tax and interest paid,—  (a) on or before the date of making the application under section 273; or 20   (b) during the pendency of the case before the settlement commission  credit for  tax paid in case of abatement  of proceedings  286 any sum specified in an order of settlement passed under sub-section (1) of section 277 may, subject to such conditions, if any, as may be specified therein, be recovered, and any penalty for default in making payment of such sum may be imposed and recovered in accordance with the provisions of chapter xiii, by the assessing officer having jurisdiction 25  over the person who made the application for settlement under section 273  recovery  of sums due under  order of   settlement  287 every order of settlement passed under sub-section (1) of section 277 shall be conclusive as to the matters stated therein and no matter covered by such order shall be reopened in any proceedings under this code or under any other law for the time being in force 30   order of settlement to be conclusive  bar on subsequent application 288 (1) a person shall not be entitled to make an application under section 273  in relation to any other matter if—  (a) an order passed under sub-section (1) of section 277 provides for the imposition of a penalty on that person under section 230; or  case  (2) subject to the provisions of sub-section (1), a person shall be entitled to make application under section 273 only once in the following circumstances, namely:—  (a) where search and seizure has been carried out under section 135, or material has been obtained in pursuance to a requisition under section 136, in the case of the person; or  (b) where any material, seized or obtained in pursuance of a requisition in the case of another person, has a bearing  on the determination of the tax bases of the person making application under section 273  (b) such person is convicted of any offence under this code in relation to that 35  proceedings to be  judicial proceedings  40  45   45 of  1860 289 any proceeding under this chapter before the settlement commission shall be a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196 of the indian penal code 290 (1)  in this chapter, unless the context otherwise requires,— (a) "bench" means a bench of the settlement commission; (b) "case" means any proceeding under this code for the assessment or reassessment of any person in respect of any financial year or  years which may be 5 pending before the assessing officer on the date on which an application under sub-section (1) of section 273 is made but does not include,—  (i) a proceeding for making fresh assessment in pursuance of an order under section 192;  (ii) an assessment or reassessment  proceeding during which prosecution 10 proceedings under chapter-xv have been initiated;  (c) "chairperson" means the chairperson of the settlement commission;  (d) "member" means a member of the settlement commission, and includes the chairperson and a vice-chairperson;  (e) "settlement commission" means the income-tax settlement commission 15 constituted under section 268;  (f) "vice-chairperson" means a vice-chairperson of the settlement commission (2) for the purpose of clause (b) of sub-section (1), a proceeding for,— (a) prosecution shall be deemed to have been initiated from the date on which a 20 show cause notice for institution of prosecution  is issued to any person;  (b) making fresh assessment in pursuance of an order under section 192 shall be deemed to have commenced from the date on  which the order under section 192, setting aside or cancelling an assessment was passed   part h 25 general chapter xviii general provisions291 (1) the central government may enter into an agreement with the government of any other country—  interpretations in this chapter  agreement with  foreign countries  or specified territory (a) for the granting of relief in respect of -  30  (i) income or wealth on which income-tax or wealth-tax, as the case may be, has been paid both under this code and under the corresponding law in force in that country; or  (ii) income-tax or wealth-tax chargeable under this code and under the corresponding law in force in that country to promote mutual economic relations, 35 trade and investment;  (b) for the avoidance of double taxation of income or wealth under this code and under the corresponding law in force in that country;  (c) for exchange of information for the prevention of evasion or avoidance of income-tax or wealth-tax chargeable under this code or under the corresponding law in 40 force in that country, or investigation of cases of such evasion or avoidance;  (d) for recovery of income-tax or wealth-tax under this code and under the corresponding law in force in that country; or  (e) for carrying out any other purpose of this code not expressly covered under 45 clauses (a) to (d) above or the corresponding law in force in that country (2) the central government may enter into an agreement with the government of any specified territory outside india for the purposes specified in sub-section (1)  (3) the central government may, by notification, make such provisions as may be necessary for implementing the agreements referred to in sub-sections (1) and (2)  (4) any specified association in india may enter into an agreement with any specified 5 association in the specified territory outside india for the purposes of sub-section (1) and the central government may by notification make such provisions as may be necessary for adopting and implementing such agreement  (5) a person shall not be entitled to claim relief under the provisions of the agreement unless a certificate of his being a resident in the other country or specified territory is 10 obtained by him from the tax authority of that country or specified territory, in such form as may be prescribed  (6) the provisions of this code shall not be regarded as discriminatory against the foreign company merely on the consideration that the liability of the foreign company to pay tax is calculated at a rate higher than the rate at which the liability of a domestic company is 15  calculated  (7) any term used but not defined in this code or in the agreement referred to in subsections (1), (2) or  sub-section (4) shall, unless the context otherwise requires, and is not inconsistent with the provisions of this code or the agreement, have the meaning assigned to it in the notification issued by the central government 20   (8) where the central government has entered into an agreement under sub-section (1) or sub-section (2), or has adopted an agreement entered into by the specified association under sub-section (4), as the case may be, then the provisions of this code shall apply in relation to the assessee to whom such agreement applies, to the extent they are more beneficial to him 25   (9) notwithstanding anything in sub-section (8), the provisions of this code relating to— (a) general anti-avoidance rule under section 123; (b) levy of branch profit tax under section 111; or  shall apply to the assessee referred to in sub-section (8), whether or not such provisions are beneficial to him  (c) control foreign company referred to in the twentieth schedule, 30 permanent account number 292 (1) every person who fulfils such conditions and requirements as may be prescribed shall make an application for the allotment of a permanent account number and such person shall be allotted a permanent account number 35   (2) any person not required to make an application under sub-section (1), may make an application for the allotment of permanent account number and he shall be allotted a permanent account number  (3) a permanent account number may, having regard to the nature of transactions as may be prescribed, be allotted to any other person, whether or not an application is made by 40  him  (4) any person who has been allotted a permanent account number shall quote the number in such transactions or documents as may be prescribed  (5) in respect of the permanent account number, the board shall prescribe—  (a) the form and the manner in which an application may be made for the allot- 45 ment of a permanent account number and the particulars which the  application shall contain; (b) the income-tax authority, or any other person who shall be  authorised to receive the application or allot the permanent account number;  (c) the categories of transactions in relation to which permanent account number shall be quoted by every person in the documents pertaining to those transac- 5 tions;  (d) the categories of documents in which the permanent account number shall be quoted by every person;  (e) class, or classes, of persons to whom the provisions of this section shall not apply;  10  (f) the form and the manner in which the person who has not been allotted a permanent account number shall make his declaration in relation to categories of transactions and documents;  (g) the manner in which the permanent account number shall be quoted in respect of the categories of transactions referred to in clause (c); and  15 (h) any other matter connected therewith  293 (1) every person liable to deduct tax at source, or collect tax at source, shall make an application for the allotment of a tax account number and such person shall be allotted a tax account number  (2) any person who has been allotted a tax account number shall quote the number in 20    such transactions or documents as may be prescribed  294 (1) no person shall accept from, or repay to, any other person any loan or deposit otherwise than by an account payee cheque or bank draft, if the aggregate amount of such loan or deposit in a financial year exceeds fifty thousand rupees tax     account number  mode of acceptance  or repayment  of certain  loans or  deposits (2) the provisions of this section shall not apply to any loan or deposit taken or 25    accepted from, or by -  (a) the government;  (b) any banking company, post office savings bank or co-operative bank; (c) any corporation established by a central, state or provincial act; (d) any government company as defined in section 617 of the companies act, 1  of 1956  30  1956;   (e) such other institution, association or body, or class of institutions, associa- tions or bodies which the central government may, for reasons to be recorded in writing, notify;  (f) any person having only agricultural income  35 (3) in this section,—  (a) "loan or deposit" means a loan or deposit of money; (b) "loan or deposit" in relation to repayment, means— (i) any loan or deposit of money repayable after a period or notice; and  (ii) in case of a person other than a company, includes a loan or deposit of 40 any nature; (c) "aggregate amount of loan or deposit", in the case of repayment, means any loan or deposit together with interest repaid during a financial year obligation  to furnish  annual i n f o r ma t i o n return 295 (1) every person responsible for registering or maintaining books of account or other documents containing a record of any specified financial transaction, under any law for the time being in force, shall furnish an annual information return, in respect of such specified financial transaction  (2) the person referred to in sub-section (1) shall be— 5  (a) an assessee;  (b) a designated person in the case of an office of the government; (c) a local authority or other public body or association; (d) the registrar or sub-registrar appointed under section 6 of the registration  act, 1908; 10   (e) the registering authority empowered to register motor vehicles under chapter iv of the motor vehicles act, 1988;  (f) the post master general as referred to in clause (j) of section 2 of the indian 1  of  1908   59 of  1988 post office act, 1898; 6  of  1898  (g) the collector referred to in clause (c) of section 3 of the land acquisition  15  act, 1894;  (h) the recognised stock exchange referred to in clause (f) of section 2 of the 1  of  1894   securities contracts (regulation) act, 1956;  (i) an officer of the reserve bank of india, constituted under section 3of the reserve bank of india act, 1934; or  (j) a depository referred to in clause (e) of sub-section (1) of section 2 of the 42 of  1956   20   2 of  1934   depositories act, 1996  (3) the annual information return referred to in sub-section (1) shall be furnished to such  income-tax authority or any other authority or agency, in such form and manner (including on a floppy, diskette, magnetic cartridge tape, cd-rom or any computer readable media) and within such time as may be prescribed  (4) in this section, "specified financial transaction" means—  (a) a transaction of purchase, sale or exchange of goods or property or right or interest in a property;  (b) a transaction by way of an investment made or an expenditure incurred; (c) a transaction for taking or accepting any loan or deposit; or (d) any other transaction as may be prescribed  (5) the person referred to in sub-section (2) shall furnish the annual information return in respect of the financial transactions referred to in sub-section (4) if the aggregate value of each such transaction in any financial year exceeds the amount as may be prescribed  (6) the income-tax authority referred to in sub-section (3) may, if he considers that the annual information return furnished under sub-section (1) is defective, intimate the defect to the person who has furnished such return and give him an opportunity of rectifying the defect within a period of one month from the service of such intimation  (7) the income-tax authority referred to in sub-section (3) shall treat the annual information return as invalid if the defect referred to in sub-section (6) is not removed within the time allowed, and the provisions of this code shall apply as if such person had failed to furnish the annual information return  | 22 of  1996   |     ||----------------|-----||                |     ||                |     ||                |     || 25             |     ||                |     ||                |     ||                |     ||                |     ||                |     ||                |     ||                |     || 30             |     ||                |     ||                |     ||                |     ||                |     ||                |     ||                |     ||                |     ||                |     || 35             |     ||                |     ||                |     ||                |     ||                |     ||                |     ||                |     || 40             |     ||                |     ||                |     ||                |     ||                |     ||                |     || 45             |     |(8)  if  a person who is required to furnish an annual information return under subsection (1) has not furnished the same within the specified time, then, the income-tax authority referred to in sub-section (3) may serve upon such person a notice requiring him to furnish the return within a period not exceeding sixty days from the date of service of the notice and such person shall furnish the annual information return within the time specified in the notice   296 (1) if a person creates a charge on, or tranfers, any of his assets in favour of any other person during the pendency of any proceeding under this code or after the completion thereof, then, such charge on, or transfer of, any asset by him in favour of the other person, shall be void as against any claim in respect of any sum payable by him under this code  5 (2) the charge, or transfer, referred to in sub-section (1) by a person shall not be void, if it is made—  (a) for adequate consideration and without knowledge of the pendency of such proceeding or of any such sum payable by the person;  (b) with the previous permission of the assessing officer  10 (3) this section applies to cases where the amount of tax or other sum payable, or likely to be payable, under this code exceeds five thousand rupees and the assets charged or transferred exceeds ten thousand rupees in value  (4) in this section, "asset" shall not include any business trading asset  15  297(1) where during the pendency of any proceeding for the assessment of any tax bases, the assessing officer is of the opinion that for the purpose of protecting the interests of revenue, it is necessary so to do, he may, with the previous approval of the chief commissioner or the commissioner, by order in writing, attach provisionally any property belonging to the assessee in the manner provided in the fifth schedule  (2) every such order shall cease to have effect after the expiry of a period of six months from the date of the order made under sub-section (1)  20  (3) the chief commissioner or the commissioner may, for reasons to be recorded in writing, extend the period referred to in sub-section (2) by such further period or periods as he thinks fit, provided that the total period of extension shall in no case exceed two years  25  298(1) the service of any notice, summons, requisition, order or any other communication under this code (hereinafter in this section referred to as communication) may be made by delivering or transmitting a copy thereof, to the person named  therein,—  (a) by post or by such courier service as may be approved by the board;  (b) in such manner as provided for the service of summons in the code of civil 30 procedure, 1908;  5  of 1908  35  (c) in the form of any electronic record as provided in chapter iv of the information technology act, 2000; or  (d) by any other means of transmission of documents , including fax message or electronic mail message, as may be prescribed  21 of 2000  (2)  the board may make rules providing for the addresses including the address for electronic mail or electronic mail message to which the communication referred to in subsection (1) may be delivered or transmitted to the person named therein  40 (3) in this section, the expressions "electronic mail" and "electronic mail message" shall have the same meaning as assigned to them in the explanation to section 66a of the information technology act, 2000  21 of 20004 0   45  299 (1) a notice or any other document required to be issued, served or given for the purposes of this code by any income-tax authority shall be authenticated in manuscript by that authority  certain transfers to  be  void provisional attachment  to protect revenue in certain  cases service  of notice generally  authentication of notices  and other documents (2) every notice or other document to be issued, served or given for the purposes of this code by any income-tax authority shall be deemed to be authenticated, if the name and office of a designated income-tax authority is printed, stamped or otherwise written thereon  (3) in this section, a designated income-tax authority shall mean any income-tax authority authorised by the board to issue, serve or give such notice or other document 5 after authentication in the manner as provided in sub-section (2) 300 (1) a notice which is required to be served upon a person for the purposes of assessment under this code shall be deemed to have been duly served upon him in accordance with the provisions of this code, if the person has appeared in any proceeding or cooperated in any inquiry relating to an assessment 10   (2) the person, referred to in sub-section (1), shall be precluded from taking any objection in any proceeding or inquiry under this code that the notice was—  (a) not served upon him;  (b) not served upon him in time; or  (c) served upon him in an improper manner 15   (3) the provisions of this section shall not apply, if the person has raised the objection before the completion of the assessment  notice deemed to  be valid in certain circumstances 301 (1) any notice under this code in respect of the tax bases of a hindu undivided family shall, in a case where a finding of total partition has been recorded by the assessing officer under section 169 in respect of any hindu undivided family, be served on the person 20 who was the last manager of such family  (2) if the last manager of the hindu undivided family is dead, then the notice shall be served on all adults who were members of such family immediately before the partition  (3) the notice under this code, in respect of the tax bases of an unincorporated body, shall, where the unincorporated body is dissolved, may be served on any person who was 25  a participant (not being a minor) immediately before its dissolution  service of notice  when family is disrupted  or unincorporated body is dissolved 302 (1) the central government may, if it is of the opinion that it is necessary or expedient in the public interest, cause to be published in any manner the name and any other particulars relating to any proceeding, or prosecution, under this code in respect of—  (a)  any assessee; 30   (b) any participant of an unincorporated body; or  (c) any director, managing agent, secretary, treasurer, or manager of the company  (2) no publication under this section shall be made in relation to any penalty imposed under this code until the time for preferring an appeal to the commissioner (appeals) has 35  expired without an appeal having been preferred or the appeal, if preferred, has been disposed of  publication of information respecting assessees in certain  cases  303 (1) any assessee who is entitled or required to attend before any income-tax authority or the appellate tribunal, in connection with any matter relating to the valuation of any asset, may attend through a registered valuer 40   (2) the provisions of sub-section (1) shall not apply in a case where the assessee is required to attend personally for examination on oath or affirmation under section 134  appearance by  registered valuer in certain  matters  appearance by  authorised representative 304 (1) any assessee who is entitled or required to attend before any income-tax authority or the appellate tribunal, in connection with any proceeding under this code, may attend through an authorised representative 45  (2) the provisions of sub-section (1) shall not apply in a case where the assessee is required to attend personally for examination on oath or affirmation under section 134  (3) in this section, "authorised representative" means a person authorised by the assessee in writing to appear on his behalf, being -   (a) a person related to the assessee in any manner, or a person regularly employed by the assessee;  (b) any officer of a scheduled bank with which the assessee maintains a current account or has other regular dealings;  (c) any legal practitioner who is entitled to practice in any civil court in india; 5 (d) an accountant; (e) any person who has passed any accountancy examination recognised in this behalf by the board; or  (f) any person who has acquired such educational qualifications as may be prescribed  10 (4) the following persons shall not be qualified to represent an assessee under subsection (1):—  (a) a person who has been dismissed or removed from government service;  15  (b) a legal practitioner, or an accountant, who is found guilty of misconduct in his professional capacity by any authority entitled to institute disciplinary proceedings against him;  (c) a person, not being a legal practitioner or an accountant, who is found guilty of misconduct in connection with any income-tax proceedings by such  authority, as may be prescribed  20  (5) the chief commissioner may, by an order in writing, specify the period upto which the disqualification under sub-section (4) shall continue, having regard to the nature of misconduct and such disqualification shall not exceed a period of six years  (6) a person shall not be allowed to appear as an authorised representative, if he has committed any fraud or misrepresented the facts which resulted in loss to the revenue and that person has been declared as such by an order of the chief commissioner  25  305 (1) the amount of tax bases computed in accordance with this code shall be rounded off to the nearest multiple of hundred rupees  (2) any amount payable or receivable by the assessee under this code shall be rounded off to the nearest multiple of ten rupees  30  (3) the method of rounding off under sub-section (1) or sub-section (2), shall be such as may be prescribed  306 every person deducting, retaining, or paying any tax in pursuance of this code in respect of income belonging to another person is hereby indemnified for the deduction, retention, or payment thereof  307 (1) the central government may tender immunity to any person from—  35 (a) prosecution for any offence under this code, the indian penal code, or any other central act for the time being in force; and    rounding  off of tax  bases and  tax  indemnity  power  to tender immunity from prosecution (b) the imposition of any penalty under this code (2) the immunity under sub-section (1) shall be granted by the central government, if— (a) the person makes a full and true disclosure of the whole circumstances  45 of 1860 40 40  relating to the concealment of income or evasion of payment of tax on income; (b) it is of the opinion that it is necessary or expedient so to do; and  (c) the reasons for the opinion are recorded in writing  (3) a tender of immunity made to and accepted by the person concerned, shall, to the extent to which the immunity extends, render him immune from—  (a) prosecution for any offence in respect of which the tender was made; or  (b) the imposition of any penalty under this code  (4) the immunity granted under this section shall be deemed to have been withdrawn, if the central government records a finding to the effect that the person to whom the immunity has been tendered has— (a) wilfully concealed any particular which has the effect of altering the opinion formed under sub-section (2);  (b) given any false evidence; or  (c) not complied with any condition on which the tender was made  (5) the person, whose immunity has been withdrawn under sub-section (4), may be tried for the offence in respect of which the tender of immunity was made or for any other offence of which he appears to have been guilty in connection with the same matter and shall become liable to the imposition of any penalty under this code to which he would otherwise have been liable 308 no court inferior to that of a metropolitan magistrate or a magistrate of the first class shall try any offence under this code  cognizance  of offences  5  10 15  20   2  of 1974 309 nothing contained in section 360 of the code of criminal procedure, 1973, or in the probation of offenders act, 1958, shall apply to a person convicted of an offence under this code, unless the person is under eighteen years of age section  360 of  thecode of  criminal procedure, 1973,  and the probation  of offenders act, 1958, not to  apply  310  no return of tax-bases, assessment, notice, summons or other proceedings, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this code shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of tax-bases, assessment, notice, summons or other proceeding if such return of taxbases, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this code  return of  tax bases  not to be  invalid on certain grounds  presumption as to  material found 311 (1) where any material found in the possession, or control, of any person in the course of a search under section 135 or survey under section 141, may, in any proceeding under this code be presumed that—  (a) the material belongs to such person;  (b) the contents of the material, being books of account and other documents, are true;  (c) the signature and every other part of the books of account and other documents which purport to be in the handwriting of any particular person, or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting; and  (d) a document which is stamped, executed or attested, was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested 20 of  1958  25   30  35 40 (2) the presumption under sub-section (1) shall also apply to a case, where any material has been delivered to the requisitioning officer in accordance with the provisions of section 136 as if they had been found in the possession or control of the person referred to in section 136  5  312 (1) no suit shall be brought in any civil court to set aside or modify any proceeding taken or order made under this code  (2) no prosecution, suit or other proceeding shall lie against the government, or any officer of the government, for anything in good faith done, or intended to be done, under this code   bar of suits in civil  courts  power  to rescind 10  313 where the central government or the board or an income-tax authority who has been conferred upon the power under any provision of this code to issue any notification or order, or grant any approval or registration in respect of an assessee, shall, for reasons to be recorded in writing, have all the powers to rescind such notification, order, approval or registration provided that the assessee has been given an opportunity of showing cause 15    against the proposed rescindment   part i interpretations and miscellaneous provisions chapter xix interpretations and constructions 314 in this code, unless the context otherwise requires -   interpretations in this  code (1) "absolute value" means the numerical value without regard to its sign;  20 (2) "accountant" means a chartered accountant within the meaning of the chartered accountants act, 1949 and includes any person who is entitled to act as an auditor of companies under sub-section (2) of section 226 of the companies act, 1956;  38 of 1949 1  of 1956  (3) "accrual" in relation to income, expenditure or liability, with its grammatical variations, shall include income, expenditure or liability which has arisen;  (4) "accumulated profits" in relation to dividend means—  25  (a) all profits of the company of three consecutive financial years immediately preceding the financial year in which its undertaking is compulsorily acquired in the case where the company is in liquidation consequent to such compulsory acquisition by—  (i) the government; or  (ii) a corporation owned or controlled by the government under any law for the time being in force; and  30 (b) all profits of the company up to the date of distribution or payment of dividend or upto the date of liquidation, as the case may be, in any other case;  (5) "actual cost" in relation to a business capital asset shall be the cost computed under section 44;  35 (6)"advance tax" means the advance tax payable in accordance with the provisions of section 205;  (7) "advance ruling" shall have the meaning assigned to it in section 267;  (8) "agreement" includes any arrangement or understanding or action in concert, whether or not such arrangement, understanding or action, is—  (a) in writing; 40  (b) formal; or 45  (c) intended to be enforceable by legal proceedings; (9) "agreement of association" means— (a) a partnership deed in relation to a firm; or  (b) an oral, or written, agreement between the participants of any other unincorporated body; 5  (10) "agreement for non-compete" means an agreement for—  (a) not carrying out any activity in relation to any business; or  (b) not sharing any—  (i) know-how, patent, copyright, trade mark, licence, franchise or any other business or commercial right of similar nature; or 10   (ii) information or technique likely to assist in the trading or manufacture or processing of goods or provision for services;  (11) "agricultural income" means the following income, namely:—  (a) any profits and gains derived from cultivation of agricultural land;  (b) any rent derived from any agricultural land; 15  (c) any rent derived from any farm house; and (d) any income derived from saplings or seedlings grown in a nursery; (12) "agricultural land" means any land situated in india which is used for agricultural purposes and—  (a) is assessed to land revenue in india; or 20   (b) is subject to a local rate assessed and collected by officers of the government as such;  (13) "amalgamated company" means—  (a) a company with which amalgamating company or companies merge; or 25   (b) a company formed as a result of merger of two or more amalgamating companies;  (14) "amalgamating company" means—  (a) a company which merges with another company; or  (b) a company which merges with another company to form a new  com- 30  pany;  (15) "amalgamating co-operative" means—  (a) a co-operative which merges with another co-operative; or  (b) every co-operative merging to form a new co-operative;  (16) "amalgamation" in relation to— 35   (a) a company means the merger of an amalgamating company or companies with an amalgamated company, if -  (i) all the assets and liabilities of the amalgamating company immediately before the merger (other than the assets transferred, by sale or distribution on winding up, to the amalgamated company) become the 40  assets and liabilities  of the amalgamated company; (ii) shareholders holding seventy-five per cent or more, in value of the shares in the amalgamating company (other than shares already held by the amalgamated company or its nominee or its subsidiary, immediately before the merger), become shareholders of the amalgamated company;  5 and   (iii) the scheme of amalgamation is in accordance with the provisions of the companies act, 1956; and  (b) a co-operative means the merger of an amalgamating co-operative with an amalgamated co-operative, if—  1  of 1956 (i) all the assets and liabilities of the amalgamating co-operative immediately before the merger (other than the assets transferred, by sale or distribution on winding up, to the amalgamated co-operative) become the assets and liabilities of the amalgamated co-operative;  10 (ii) the members holding seventy-five per cent or more voting rights in the amalgamating co-operative become members of the amalgamated co-operative; and  15 (iii) the shareholders holding seventy-five per cent or more in value of the shares in the amalgamating co-operative (other than the shares held by the amalgamated co-operative or its nominee or its subsidiary, immediately before the merger) become shareholders of the amalgamated cooperative; or  (c) an unincorporated body or a proprietory concern means the succession of an amalgamating unincorporated body or proprietory concern with an amalgamated company if—  20  (i) all the assets and liabilities of such body or concern relating to the business immediately before the succession become the assets and liabilities of the amalgamated company;  25 (ii) the participants of the body or the proprietor of the concern do not receive any consideration or benefit, directly or indirectly, in any form or manner, other than by way of allotment of shares in the amalgamated company;  30  (iii) the aggregate of the shareholding in the amalgamated company of the participants of the body or the proprietor of the concern, upon succession, is not less than fifty per cent of the total value of the shares in the company; and  (iv) in the case of an amalgamating unincorporated body, all the participants immediately before the succession become the shareholders of the company in the same proportion in which their capital accounts stood in the books of such body on the date of the succession;  35 (17) "appellate tribunal" means the appellate tribunal constituted under section 182;  (18) "approved fund" means—  (a) a provident fund, superannuation fund or gratuity fund approved in accordance with the provisions of the nineteenth schedule;  40 45  (b) a pension fund, which has been approved by the board in accordance with the scheme framed and prescribed by the central  government in this behalf;  (c) any other fund which has been approved by the board in accordance with the scheme framed and prescribed by the central government in this behalf (19) "arm's length price" shall have the meaning assigned to it in section 124; (20) "assessee" means every person— (a) who is required to file a return of his tax bases or the tax bases of any other person in respect of which such person is assessable for the relevant financial year; 5  (b) who files a return of his tax bases, notwithstanding the fact that he is otherwise not required to do so;  (c) who is required to furnish any information or document under this code;  (d) in respect of whom any proceeding under this code has been initi- 10  ated;   (e) by whom any tax, or any other sum of money, is payable under this code;  (f) to whom, or to any other person in respect of which such person is assessable, any amount of refund is payable under this code; 15   (g) who is deemed to be an assessee under any provision of this code; or  (h) who is deemed to be an assessee in default under any provision of this code;  (21) "assessee in default" means—  (a) an assessee who has failed to fulfill his obligation under this code and 20 has consequently failed to make payment of any amount due from him to the central government; or  (b) an assessee who is deemed to be assessee in default under any provision of this code;  (22) "assessing officer" means the income tax officer, assistant commis- 25  sioner, assistant director, deputy commissioner, deputy director, joint commissioner, joint director, additional commissioner or additional director, who is vested with the relevant jurisdiction by virtue of direction or order issued under section 130 or any other provision of this code;  (23)  "assessment" includes— 30   (a) reassessment;  (b) any order giving effect to the directions of an appellate authority; (c) any order under section 191 or section 192; and (d) any order under section 161 rectifying any mistake apparent on the face  of  the  record  with  reference  to  sub-clause  (a)  or  sub-clause  (b)  or 35  sub-clause (c);  (24) "asset" means—  (a) a business asset; or  (b) an investment asset;  (26) "assistant director" means a person appointed to be an assistant director of income-tax under section 127;  (27) "associated concern" shall have the meaning assigned to "associated enterprise" in section 124; (28) "associated enterprise" shall have the meaning assigned to it in section 124; (29) "associated operation" shall have the meaning assigned to it in section 124; (30) "associated person" shall have the meaning assigned to it in section 124; (31)  "backward classes" means such classes of citizens, other than the sched- 5 uled castes and the scheduled tribes, as may be notified, from time to time, by the central government or any state government;  (32) "banking company" means a company to which the banking regulation 10    act, 1949, applies;   10 of 1949 (33) "block of assets" means a group of business capital assets falling within a class of business capital assets, for which the same percentage of depreciation is specified;  15    (34) "board" means the central board of direct taxes constituted under the central boards of revenue act, 1963 and notified by the central government for the purposes of this code;  54 of 1963  (35) "books" or "books of account" includes ledgers, day-books, cash books, account-books, stock register and other books, kept—  (a) in the written form;  (b) as data stored in a disc, floppy, tape or any other form of electromagnetic data storage device; or  20 (c) as print outs of the data stored in any of the form referred to in subclause (b);  (36) "broken-period income" means the income for the period commencing from the date on which the debt instrument is acquired by the person or the beginning of the financial year, whichever is later, and ending on the date on which the security is sold, and calculated in such manner as may be prescribed;  25  (37) "business" includes -  (a) any trade, commerce or manufacture; or any adventure or concern of that nature;  (b) any profession or vocation; (38) "business asset" means— 30 (a) business trading asset; or  (b) business capital asset;  (39) "business capital asset" means—  (a) any capital asset self-generated in the course of business; (b) any intangible capital asset in the nature of— 35  40  (i) goodwill of a business,  (ii) a trade mark or brand name associated with the business, (iii) a right to manufacture or produce any article or thing, (iv) right to carry on any business, (v) tenancy right in respect of premises occupied by the assessee and used by him for the purposes of his business, or  (vi) licence, right or permit (by whatever name called) acquired in connection with, or in the course of, any business;  (c) any tangible capital asset in the nature of a building, machinery, plant or furniture; or  (d) any other capital asset not being land connected with or used for the purposes of any business of the assessee;  (40) "business connection" in relation to a non-resident shall include a permanent establishment;  (41) "business reorganisation" means reorganisation of business of two or more residents, involving—  (a) an amalgamation;  (b) a merger under a scheme sanctioned and brought into force by the central government under the banking regulation act, 1949; or  (c) a demerger;  (42) "business trading asset" means stock-in-trade, consumable stores or raw materials held for the purposes of business;  (43) "capital asset" means property of any kind held by an assessee other than business trading asset;  (44) "capital employed in the business" in relation to actual cost means the aggregate of the paid-up share capital, debentures and long-term borrowings—  (a) in a case where the prescribed expenditure referred to in serial number 7 of the table of the twenty-second schedule is incurred before the commencement of the business, as on the last day of the financial year in which the business of the company commences;  (b) in any other case as on the last day of the financial year in which the extension of the business is completed, or the new business commences production or operation, in so far as such capital, debentures and long-term borrowings have been issued or obtained in connection with the extension of the business or the setting up of the new business of the company;  (45) "capital gains" means the income as computed under section 46;  (46) "carbon credit" for trading purposes in respect of its one unit shall mean reduction of one ton of carbon dioxide emissions or emissions of its equivalent gases which can be traded in market at its prevailing market price, which is validated by the united nations framework on climate change  (47) "card game and other game of any sort" includes any game show, an entertainment programme on television or electronic mode, in which people compete to win prizes or any other similar game;  (48) "chief commissioner" means a person appointed to be a chief commissioner of income-tax or director-general of income-tax under section 127;  (49) "child" in relation to an individual, includes a step-child and an adopted child of that individual;  (50) "closely-held company" means a company which is not a widely held company; (51) "cold chain facility" means a chain of facilities for storage or transportation of agricultural and forest produce, meat and meat products, poultry, marine and dairy products, products of horticulture, floriculture and apiculture and  processed  food items under scientifically controlled conditions including refrigeration and other facili- ties necessary for the preservation of such produce;  (52) "commissioner (appeals)" means a person appointed to be a commissioner of income-tax (appeals) under section 127;  (53) "commissioner" means a person appointed to be a commissioner of income-tax or a director of income-tax under section 127;  5 (54) "company" means—  (a) any indian company,  (b) any body corporate incorporated by or under the laws of a country outside india, or  10 (c) any person who is or was assessable or was assessed as a company under the indian income-tax act, 1922, or the income-tax act, 1961;  (55) "competent investigating authority" means any income-tax authority not below the rank of joint commissioner prescribed as such;  (56) "comptroller and auditor-general of india" means the comptroller and auditor general of india appointed under article 148 of the constitution; 11 of 1922    1 5  43 of 1961  (57) "computer software" means— (a) any computer programme recorded on any disc, tape, perforated media or other information storage device; or  (b) any customised electronic data or any product or service of similar nature, as may be notified by the board;  20 25  (58) "controller of insurance" shall have the same meaning assigned to it in clause (5b) of section 2 of the insurance act, 1938;  (59) "converted property" means—  4  of 1938  (a) any property having been the separate property of an individual has been converted by the individual into property as belonging to the hindu undivided family through the act of impressing such separate property with the character of property belonging to the family or throwing it into the common stock of the family; or  (b) any property which has been transferred by the individual, directly or indirectly, to such  family otherwise than for adequate consideration;  30  35  (60) "co-operative bank" shall have the same meaning as assigned to it in part v of the banking regulation act, 1949;  (61) "co-operative sector company" means a company in which not less than fifty-one per cent of the paid up equity share capital is beneficially held by, one or more co-operative societies throughout the financial year;  10 of 1949  40  (62) "co-operative society" means a co-operative society registered under the co-operative societies act, 1912 or under any state or provincial act for the time being in force for the registration of co-operative societies;  2  of 1912  45  (63) "cost inflation index" in relation to a financial year means such index as the central government may specify by notification, having regard to seventy-five per cent of the average rise in the consumer price index for non-urban manual employees for the immediately preceding financial year; (64) "cost of the project" in relation to actual cost means the actual cost of the fixed assets, being land, buildings (including expenditure on development of land and buildings), leaseholds, plant, machinery, furniture, fittings and railway sidings, which are shown in the books of the assessee—  (a) in a case where the prescribed expenditure referred to in serial number 7 of the table of the twenty-second schedule is incurred before the commencement of the business, as on the last day of the financial year in which the business of the assessee commences;  (b) in any other case, as on the last day of the financial year in which the extension of the business is completed, or the new business commences production or operation, in so far as such fixed assets have been acquired or developed in connection with the extension of the business or the setting up of the new business of the assessee;  (65) "cultivation" includes any process ordinarily employed by a cultivator or receiver-of-rent in kind to render the produce raised or received by him fit to be taken to market;  (66) "current income from ordinary sources" means the net result of the aggregation under sub-section (1) of section 61;  (67) "current income from the special source" means the income referred to in sub-section (2) of section 62;  (68) "date of setting up of a business" means—  (a) in the case of business of manufacturing, production or processing of goods, the date on which the manufacture, production or processing of the goods begins after successful trial run of the plant; or  (b) in any other case, the date on which it is ready to commence its commercial operations;  (69) "debt" includes a loan or borrowing;  (70) "debt instrument" means a paper or electronic obligation that enables the borrower to raise funds by promising to repay the lender, or investor, in accordance with the terms of a contract and includes note, bond, certificate, mortgage, lease, loan, borrowing or other agreement between the borrower and the lender;  (71) "deduction of tax at source" or "collection of tax at source" with all their grammatical variations, mean deduction or collection of tax under chapter xiii;  (72) "deductor" means a person responsible for making any payment in respect of which he is liable to deduct tax at source under sub-chapter a of chapter-xiii;  (73) "demerged company" means—  (a) the company whose undertaking is transferred, pursuant to a demerger, to a resulting company; or  (b) the authority or the body constituted or established under a central, state or provincial act, or a local authority or a public sector company, which is split up or reconstructed, to form a resulting company;  (74)"demerger" means—   5  10 15  20 25  30   35 40 1  of  1956 45  (a) the transfer, pursuant to a scheme of arrangement under sections 391 to 394 of the companies act, 1956, by a demerged company of one or more of its undertakings to any resulting company, if—  (i) all the assets and liabilities of the undertaking or undertakings immediately before the transfer become the assets and liabilities of the resulting company;  (ii) the assets and the liabilities are transferred at values (other than change in the value of assets consequent to their revaluation) appearing in its books of account immediately before the transfer;  (iii) the resulting company issues, in consideration of the transfer, its equity shares to the shareholders of the demerged company on a proportionate basis;  5 (iv) the shareholders holding seventy-five per cent or more, in value of the shares in the demerged company (other than shares already held by the resulting company or its nominee or its subsidiary, immediately before the transfer), become shareholders of the resulting company or companies, otherwise than as a result of the acquisition of the assets of the demerged company or any undertaking thereof by the resulting company;  10 (v) the transfer of the undertaking is on a going concern basis; and  (vi) the transfer is in accordance with such other conditions as may be notified by the central government having regard to the necessity to ensure that the transfer is for genuine business purposes; or 15 (b) the splitting up, or the reconstruction, of any authority or a body constituted or established under a central, state or provincial act, or a local authority or a public sector company to form a resulting company, in accordance with the conditions as may be notified by the central government;  (75) "deputy commissioner" means a person appointed to be a deputy commissioner of income-tax under section 127;  20 (76) "deputy director" means a person appointed to be a deputy director of income-tax under section 127;  (77) "director" means a person appointed to be a director of income-tax under section 127;  (78) "director general" means a person appointed to be a director general of 25  income-tax under section 127;  30    (79) "director", "manager" and "managing agent", in relation to a company, have the meanings respectively assigned to them in the companies act, 1956;  (80) "dispute resolution panel" means a collegium comprising of three commissioners of income-tax constituted by the board for this purpose;  1  of 1956 (81) "dividend" distributed or paid by a company  (i) includes—  (a) any distribution by a company of accumulated profits, whether capitalised or not, if such distribution entails the release by the company to its shareholders of all or any part of the assets of the company;  35 (b) any distribution to its shareholders by a company of debentures, debenture-stock, or deposit certificates in any form, whether with or without interest, and any distribution to shareholders of its preference shares by way of bonus, to the extent to which the company possesses accumulated profits, whether capitalised or not; 40 45  (c) any distribution made to the shareholders (other than shareholders not entitled in the event of liquidation to participate in the surplus assets) of a company on its liquidation, to the extent to which the distribution is attributable to the accumulated profits of the company immediately before its liquidation, whether capitalised or not;  (d) any distribution to its shareholders (other than shareholders not entitled in the event of liquidation to participate in the surplus assets) by a company on the reduction of its capital, to the extent to which the company 5 possesses accumulated profits, whether such accumulated profits have been capitalised or not; and  (e) any payment by a closely-held company, to the extent of its accumulated profits, if such payment is—  (i) by way of advance or loan to a shareholder being the beneficial 10 owner of equity shares holding not less than ten per cent of the voting power; or  (ii) by way of advance or loan to any hindu undivided family, or a firm, or an association of persons, or a body of individuals, or a company (in this clause referred to as the said concern), in which such shareholder 15  is a member or a partner or a shareholder, and in which he has a substantial interest; or  (iii)  to any person on behalf, or for the individual benefit, of such shareholder;  (ii) but does not include:— 20   (a) any advance or loan made to a shareholder or the said concern by a company in the ordinary course of its business, where the lending of money is a substantial part of the business of the company;  (b)  any dividend paid by a company which is set off by the company against the whole or any part of any sum previously paid by it and treated as a 25 dividend within the meaning of sub-clause (e), to the extent to which it is so set off;  (c) any payment made by a company on purchase of its own shares from a shareholder in accordance with the provisions of section 77a of the companies act, 1956; and  (d)  any distribution of shares pursuant to a demerger by the resulting company to the shareholders of the demerged company (whether or not there is a reduction of capital in the demerged company); (82) "dividend distribution tax" means the tax chargeable under section 109; (83) "document" includes an electronic record as defined in clause (t) of subsection (1) of section 2 of the information technology act, 2000;  (84) "domestic company" means a company resident in india;  (85) "disaster" shall have the same meaning as assigned to it under clause (d) of section 2 of the disaster management act, 2005;  (86) "due date" means—  (a) in relation to the return of tax bases—  (i) the 30th june following the financial year if the person is not a company and does not derive any income from business; or  (ii) the 31st august following the financial year, in all other cases;  30  1 of  1956 35  21 of 2000 53 of 2005  40 45  or  (b) in relation to any other return, such date as may be prescribed; (c) in relation to the report required to be furnished under section 88, the 31st august following the financial year  (87) "electoral trust" means a trust so approved by the board in accordance with the scheme made in this regard by the central government   (88) "employer" means a person who controls an individual under an express or implied contract of employment and is obliged to compensate him by way of salary;  (89) "equity oriented" in relation to a scheme means the scheme—  5 (a) of a mutual fund registered under the securities and exchange board of india act, 1992 or regulations made thereunder; and  15 of 1992  (b) which invests sixty-five per cent or more of its investible funds in the form of equity shares in domestic companies, computed with reference to the annual average of the monthly averages of the opening and closing figures;  10 (90) "equity shares" shall have the same meaning as assigned to it in section 85 of the companies act, 1956;  1  of 1956  (91) "execution of an authorisation for search or requisition" means -  (a) in the case of a search, on the conclusion of the search as recorded in the last panchnama drawn in relation to the person in whose case the authorisation has been issued; or  15  (b) in the case of requisition under section 136, on the date on which all the books of accounts, other documents or assets are received by the requisitioning officer;  (92) "ex-serviceman" means—  20 (a) a person who has served in any rank, whether as combatant or noncombatant, in the armed forces of the union (but excluding the assam rifles, defence security corps, general reserve engineering force, lok sahayak sena, jammu and kashmir militia and territorial army) for a continuous period of not less than six months after attestation and has been released, otherwise than by way of dismissal or discharge on account of misconduct or inefficiency; and  25  (b) in the case of a deceased or incapacitated ex-serviceman, it includes the spouse, children, father, mother, minor brother, widowed daughter and widowed sister, wholly dependant upon such ex-serviceman immediately before his death or incapacitation;  (93) "fair market value", in relation to an asset, means the price determined in such manner as may be prescribed;  30  (94) "family" in relation to an individual, means -  (a) the spouse and children of the individual; and  (b) the parents, brothers or sisters of the individual, if mainly dependant on the individual;  35  40  (95) "family pension" means a regular monthly amount payable by the employer to a person belonging to the family of an employee in the event of the death of the employee;  (96) "farm house" means any building which fulfills the following conditions, namely:—  (a) it is situated on, or in the immediate vicinity of an agricultural land; (b)  the building is used exclusively—  (i) as a dwelling house, store-house, or other out-building, for agricultural purpose; or  (ii) to carry out any process to render the produce raised or received by the owner fit to be taken to the market; and  (c) the building is—  (i) occupied by the cultivator or the receiver of rent-in-kind; or  (ii) owned and occupied by the receiver of rent; (97)"fees for technical services" - (a) means any consideration (including any lump sum consideration) paid or payable, directly or indirectly, for—  (i) rendering of any managerial, technical or consultancy services; (ii) provision of services of technical or other personnel; or (iii) development and transfer of a design, drawing, plan or software, or such other services; and  (b) does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head "income from employment";  (98) "finance charges" means— (a) any interest; or (b) any incidental financial charges; (99) "financial institution" means— (a) a banking company or a scheduled bank; (b) a non-banking financial company; (c) a public financial institution; (d) state financial corporations; (e) state industrial investment corporations; or  (f) a housing finance public company; 5 10 15  20  25  30 15 of  1992 22 of  1996 (100) "financial intermediary" means stock broker or sub-broker or such other intermediary registered under section 12 of the securities and exchange board of india act, 1992 or the depositories act, 1996;  (101)"financial lease" with its grammatical variations, means a lease transaction where—  (a) contract for lease is entered into between two parties for leasing of a specific asset; 35  (b) such contract is for use and occupation of the asset by the lessee; (c) the lease payment is calculated so as to cover the full cost of the asset together with the interest charges; and  (d) the lessee is entitled to own, or has the option to own, the asset at the end of the lease period after making the lease payment; 40  (102) "financial year" or "year" means—  (a) the period beginning with the date of setting up of a business and ending with the 31st day of march following the date of setting up of such business; (b) the period beginning with the date on which a source of income newly comes into existence and ending with the 31st day of march following the date on which such new source comes into existence;  5 (c) the period beginning with the 1st day of the financial year and ending with the date of discontinuance of the business or dissolution of the unincorporated body or liquidation of the company, as the case may be;  (d) the period beginning with the 1st day of the financial year and ending with the date of retirement or death of a participant of the unincorporated body;  10  (e) the period immediately following the date of retirement, or death, of a participant of the unincorporated body and ending with the date of retirement, or death, of another participant or the 31st day of march following the date of the retirement, or death, as the case may be; or  (f) the period of twelve months commencing from the 1st day of april of the relevant year in any other case;  15 (103) "firm" shall have the meaning assigned to it in the indian partnership act, 1932 and shall include a limited liability partnership as defined in the limited liability partnership act, 2008; (104) "foreign company" means a company which is not a domestic company; (105) "foreign currency" shall have the same meaning as assigned to it in section 9  of 1932   20  6  of 2009  2 of the foreign exchange management act, 1999;  42 of 1999  (106) "forward contract" means a contract with an authorised person, as defined in section 2 of the foreign exchange management act, 1999, for providing a specified sum in a foreign currency on or after a stipulated future date at the rate of exchange specified in the contract;  25  30  (107) "general public" shall have the same meaning assigned to it in clause (c) of section 103;  (108) "global depository receipts" means any instrument (by whatever name called)-  (a) created by the overseas depository bank outside india against issue of foreign currency convertible bonds or ordinary shares, of a domestic company; 35 and  (b) issued to non-residents;  (109) "gross total income" for a financial year means the aggregate of the gross total income from ordinary sources and the gross total income from special sources, for that financial year;  40  (110) "gross total income from ordinary sources" of a financial year means the net result of the aggregation under sub-section (2) or sub-section (3) of section 61, for that financial year;  (111) "gross total income from the special source" of a financial year means the net result of the aggregation under sub-section (2) or sub-section (3) of section 62, for 45 that special source for that financial year;  (112) "head office expenditure" means executive and general administration expenditure incurred by the assessee outside india, including expenditure incurred in respect of—  (a) rent, rates, taxes, repairs or insurance of any premises outside india used for the purposes of the business;  (b) salary, wages, annuity, pension, fees, bonus, commission, gratuity, perquisites or profits in lieu of or in addition to salary, whether paid or allowed to any employee or other person employed in, or managing the affairs of, any office outside india;  (c) traveling by any employee or other person employed in, or managing the affairs of, any office outside india; and (d) such other matters connected with administration as may be prescribed; (113) "heavy goods vehicle" shall have the same meaning as assigned to it in section 2 of the motor vehicles act, 1988;  (114) "horse race" means a horse race upon which wagering or betting is lawfully made;  (115) "hospital" includes a dispensary or a clinic or a nursing home; (116) "house property" means— (a) any building or land appurtenant thereto; along with facilities and services whether in-built or provided separately; or  (b) any building along with any machinery, plant, furniture or any other facility  or services whether inbuilt or provided separately;  (117) "housing development company" means any public sector company which is engaged in providing long-term finance for construction or purchase of houses in india for residential purposes;  (118) "housing-finance public company" means a company— (a) which is a public company; (b) whose main object is carrying on the business of providing long-term finance for construction or purchase of houses in india for residential purposes; and  (c) which is registered in accordance with the housing finance companies (nhb) directions, 1989 given under section 30 and section 31 of the national housing bank act, 1987;  (119) "incidental financial charges" means any fee, commission, brokerage, tax payable or any other similar expenditure incurred for the purposes of borrowing or incurring any debt or in respect of any credit facility which has not been utilised;  (120) "income" includes,—  (a) gross salary referred to in section 22; (b) gross rent referred to in section 26;   5 10 59 of 1988   15  20 25 30   53 of  1987  35  40  (c) the amount of any accrual or receipt from the businesses referred to in column (2) of the table in sub-section (2) of section 32;  (d) gross earnings from the business referred to in section 33;  (e) full value of the consideration received or accruing as a result of the transfer of any investment asset referred to in section 50;  (f) gross residuary income referred to in section 58;  trust; (g) gross receipts referred to in section 93;  (h) voluntary contributions received by a political party or an electoral   (i) any sum deducted at source on payment received, in accordance with the provisions of chapter xiii; and  (j) income of the nature referred to in column (3) of the table in part iii of the first schedule;  (121) "income from business" means the profits of the business as computed under section 32;  5 (122) "income under the head 'capital gains' " means the income in respect of that head as computed under sub-section (3) or sub-section (4), as the case may be; of section 60;  (123) "income under the head 'income from business' " means the income in respect of that head, as computed under sub-section (9) of section 60;  10  (124) "income from employment" means the income as computed under section 21;  (125) "income under the head 'income from employment' " means the income in respect of that head, as computed under sub-section (1) of section 60;  15  (126) "income from house property" means the income as computed under section 25;  (127) "income under the head 'income from house property' " means the income in respect of that head, as computed under sub-section (1) of section 60;  (128) "income from residuary sources" means the income as computed under section 55;  20  (129) "income under the head 'income from residuary sources' " means the income in respect of the head as computed under sub-section (11) of section 60;  (130) "income-tax officer" means a person appointed to be an income-tax officer under section 127; (131) "india" means— 25  (a) the territory of india as referred to in article 1 of the constitution;  30 (b) its territorial waters, continental shelf, exclusive economic zone or any other maritime zone as defined in the territorial waters, continental shelf, exclusive economic zone and other maritime zones act, 1976;  (c) the sea-bed and the subsoil underlying the territorial waters; and   80 of 1976 (d) the air space above its territory and territorial waters; (132) "indian company" means a body corporate which— (a) is registered or established or constituted by or under— 35  (i) the companies act, 1956; (ii) a central, state or provincial act;   1  of 1956 40  (iii) any law relating to companies formerly in force in any part of india other than the state of jammu and kashmir;  (iv) any law for the time being in force in the state of jammu and kashmir; and  (b) has its registered or, as the case may be, principal office in india; (133) "indian currency" shall have the same meaning as assigned to it in section 2 of the foreign exchange management act, 1999;  (134) "indian income-tax" means income-tax charged in accordance with the provisions of this code;  (135) "indian rate of tax" means the rate determined by dividing the amount of indian income-tax after deduction of any relief due under the provisions of this code but before deduction of any relief due under section 207, by the total income;  (136) "indian ship" shall have the same meaning as assigned to it in clause (18) of section 3 of the merchant shipping act, 1958;  (137) "infrastructure facility" means the following facilities, namely:— (a) a road including toll road, a bridge or a rail system; (b) a highway project including housing or other activities being an integral part of the highway project;  (c) a water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste management system; and  (d) a port, airport, inland waterway or inland port;  (138) "inspector of income-tax" means a person appointed to be an inspector of income-tax under section 127;  (139) "insurer" means an indian insurance company under clause (7a) and any person referred to in clause (9) of section 2 of the insurance act, 1938, which has been granted a certificate of registration under section 3 of that act;  (140) "interest" means any amount payable to any person (including any participant), in any manner, in respect of any borrowing or debt incurred or any other similar right or obligation and includes any service fee or other charges in respect of the money borrowed or debt incurred or in respect of any credit facility which has not been utilised;  (141) "investment asset" means,—  (a)  any capital asset which is not a business capital asset; (b) any security held by a foreign institutional investor; (c) any undertaking or division of a business; (142) "jewellery" in relation to a capital asset, includes—  (a) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel;  (b) precious or semi-precious stones, whether or not set in any furniture, utensil or other article, worked or sewn into any wearing apparel;  (143) "joint commissioner" means a person appointed to be a joint commissioner of income-tax or an additional commissioner of income-tax under section 127;  (144) "joint director" means a person appointed to be a joint director of income-tax or an additional director of income-tax under section 127;  (145) "keyman insurance policy" means a life insurance policy taken by— (a) an employer on the life of an employee or a former employee; or (b) a person on the life of another person who is, or was, connected in any manner whatsoever with the business of the first-mentioned person; | 44 of 1958     |     ||-----------------|-----||                 |     ||                 |     || 10              |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     || 15              |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     || 20  4 of  1938 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     || 25              |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     || 30              |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     || 35              |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     || 40              |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     || 45              |     | (146) "khadi" and "village industries" shall have the meanings respectively assigned to them in the khadi and village industries commission act, 1956;  61 of 1956 (147) "legal representative" shall have the same meaning as assigned to it in clause (11) of section 2 of the code of civil procedure, 1908;  5  of 1908  (148) "liabilities" in relation to a demerger shall include—  (a) the liabilities which arise out of the activities or operations of the undertaking;  (b) the loans or borrowings (including debentures) raised, incurred and utilised solely for the activities or operations of the undertaking; and  5 (c) in cases, other than those referred to in clause (a) or clause (b), so much of the amounts of general or multipurpose borrowings, if any, of the assessee as they stand in the same proportion which the value of the assets transferred in a demerger bears to the total value of the assets of such assessee immediately before the demerger;  10  (149) "life insurer" means an insurer who is wholly engaged in the business of providing assurance on the life of human beings;  (150) "light goods vehicle or other vehicle" means a vehicle which is not a heavy goods vehicle;  (151) "local authority" means—  15 20   (b) a municipality as referred to in clause (e) of article 243p of the constitution;  (a) a panchayat as referred to in clause (d) of article 243 of the constitution; (c) a municipal committee and a district board, legally entitled to, or entrusted by the government with, the control or management of a municipal or local fund; or  (d) a cantonment board as defined in section 3 of the cantonments 25  act, 2006;  (152) "long-term borrowings" means—  41 of 2006 (a) moneys borrowed from the government, a scheduled bank or a financial institution where the terms of the borrowings provide for the repayment during a period of not less than five years; or  30 (b) moneys borrowed or debt incurred in a foreign country for the purchase of plant and machinery outside india, where the terms of the borrowings provide for the repayment during a period of not less than seven years;  (153) "long-term finance" means any loan or advance where the terms under which money is loaned or advanced provide for its repayment along with interest thereon during a period of not less than five years;  (154) "long term leasing" means—  35 (a) a lease for a term of not less than twelve years; or  (b) a lease which provides for the extension of its term by a further term or terms, and the aggregate of the term for which such lease is granted or to be extended is not less than twelve years;  40  45  (155) "lottery" includes winnings from prizes awarded to any person by draw of lots or by chance or in any other manner whatsoever, under any scheme or arrangement by whatever name called; (156) "manufacture", with its grammatical variations, means a change in a nonliving physical object or article or thing—  (a) resulting in transformation of the object or article or thing into a new and distinct object or article or thing having a different name, character and use; or  (b) bringing into existence of a new and distinct object or article or thing with a different chemical composition or integral structure;  (157) "material" includes any books of account, document, money, bullion, jewellery or other valuable article or thing;  (158) "maximum marginal rate" means the rate of income-tax applicable in relation to the highest slab of income in the case of an individual or hindu undivided family or artificial juridical person, as specified in the first schedule;  (159) "medical authority" means,—    5 10  15  (i) the medical authority referred to in clause (p) of section 2 of the persons with disabilities (equal opportunities, protection of rights and full participation) act, 1995; or  (ii) such other medical authority as may be notified by the central government for this purpose  (160) "mineral" includes a group of associated minerals specified in part i or part ii of the eighteenth schedule;  (161) "mineral oil" shall have the meaning assigned to it in the eleventh schedule; (162) "mutual benefit finance company" means a company— (a) which carries on, as its principal business, the business of acceptance of deposits from its members; and  (b) which is a nidhi or mutual benefit society within the meaning of section 620a of the companies act, 1956;  | 1  of 1996   |     ||---------------|-----||               |     ||               |     ||               |     ||               |     ||               |     || 20            |     ||               |     ||               |     ||               |     ||               |     ||               |     ||               |     ||               |     || 25            |     || 1  of 1956   |     ||               |     ||               |     |(163) "mutual fund" means a mutual fund registered as such under the securities and exchange board of india act, 1992;  (164) "nabard" means the national bank for agriculture and rural development established under section 3 of the national bank for agriculture and rural development act, 1981;  (165) "national housing bank" means the national housing bank established under section 3 of the national housing bank act, 1987;  (166) "net worth" in relation to,—  (a) a demerged company, mean the aggregate of the paid-up share capital and general reserves as appearing in the books of account of the demerged company immediately before the demerger; and  (b) an undertaking or division transferred under slump sale, means the value determined in such manner as may be prescribed;  (167) "new investment asset" means the new investment asset within the meaning of section 55;   15 of  1992  30  61 of  1981 53 of  1987 35  40  2  of 1882 (168) "new pension system trust" means the new pension system trust established on the 27th day of february, 2008 under the provisions of the indian trusts act, 1882; (169) "non-profit organisation" means an organisation, by whatever name called, including a trust, if—  (i)  it is not established for the benefit of any particular caste or religious community;  5  (ii) it does not provide any benefit for the members of any particular caste or religious community;  (iii) it is established for the benefit of the general public or for the benefit of the scheduled castes, the scheduled tribes, backward classes, women or children;  10 (iv) it is established for carrying on charitable activities;  (v) it is not established for the benefit of any of its members; (vi) it actually carries on the charitable activities during the financial year; (vii) the actual beneficiaries of its activities are the general public, the scheduled castes, the scheduled tribes, backward classes, or women or chil- 15 dren; and  (viii) it is registered as such under section 98;  (170) "non-resident" means a person who is not a resident;  (171) "non-resident deductee" means a person who is non-resident in india and receives any amount which is liable to deduction of tax at source under chapter xiii; 20 (172) "notice" means the legal instrumentality by which intimation is provided; (173) "notification" means a notification published in the gazette of india and 25 the expression "notify" shall be construed accordingly;  (174) "option" in relation to sweat equity shares means a right but not an obligation, granted to an employee to apply for the sweat equity shares at a predeter- 30 mined price;  (175) "original investment asset" means an investment asset in respect of which deduction under section 55 is claimed;  (176) "overseas depository bank" means a bank authorised by the issuing company to issue global depository receipts against issue of foreign currency con- 35 vertible bonds or ordinary shares of the issuing company; (177) "owner" in relation to a house property includes— (a) an individual who transfers otherwise than for adequate consideration any house property to his or her spouse, not being a transfer in connection with an agreement to live apart, or to a minor child;  40 (b) the holder of an impartible estate;  (c) a member of a co-operative society, company or other association of persons to whom a building or part thereof is allotted or leased under a house building scheme of the society, company or association; and (d) a person who is allowed to take or retain possession of any building or part thereof in part performance of a contract of the nature referred to in section 53a of the transfer of property act, 1882 (178) "paid"— (a) in relation to "income from business" or "income from residuary  5 sources", means incurred or actually paid, according to the method of accounting on the basis of which the income under those heads are computed; and  (b) in all other cases, mean actually paid; (179) "participant" means— (a) a partner in relation to a firm; or 10  (b) a member in relation to an association of persons or body of individuals; (180) "partner" shall have the same meaning as assigned to it in the indian partnership act, 1932 and shall include—  (a) a partner of a limited liability partnership as defined in the limited liability partnership act, 2008; and 15   (b) any person who, being a minor, has been admitted to the benefits of partnership;   9  of  1932   6  of  2009  9  of  1932  6  of  2009 (181) "partnership" shall have the same meaning as assigned to it in the indian partnership act, 1932 and shall include a limited liability partnership as defined in the limited liability partnership act, 2008; 20   (182) "permanent account number" means a permanent account number allotted to a person under section 292;  (183)  "permanent establishment" means a fixed place of business through which the business of a non-resident assessee is wholly or partly carried on and—  (a) includes— 25   (i) a place of management; (ii) a branch; (iii) an office; (iv) a factory; (v) a workshop; 30  (vi) a sales outlet;  (vii) a warehouse in relation to a person providing storage facilities for others;  (viii) a farm, plantation other place where agricultural, forestry, plantation or related activities are carried on; 35   (ix) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources;  (x) a building site or construction, installation or assembly project or supervisory activities in connection therewith;  (xi) furnishing of services, including consultancy services, by the 40 assessee through employees or other personnel engaged by him for such purpose; and  (xii) an installation or structure or plant or equipment, used for exploration or for exploitation of natural resources; and  (b) deemed to include—  (i) a person, other than an independent agent being a broker, general commission agent or any other agent of independent status acting in the 5 ordinary course of his business, acting in india on behalf of an assessee, if such person—  (a) has and habitually exercises in india an authority to conclude contracts on behalf of the assessee, unless his activities are limited to the purchase of goods or merchandise for the assessee;  10  (b) habitually maintains in india a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the assessee; or  (c) habitually secures orders in india, mainly or wholly for the non-resident or for that non-resident and other non-residents 15 controlling, controlled by, or subject to the same common control, as that non-resident;  (ii) the person acting in india on behalf of an assessee engaged in the business of insurance, through whom the assessee collects premia in the territory of india or insures risks situated therein;  20  (iii) a substantial equipment in india which is being used by, for or under any contract with the assessee;  (184) "person" includes— (a) an individual, (b) a hindu undivided family,  25 (c) a company,  (d) a co-operative society or any other society, (e) a firm, (f) a non-profit organisation, (g) an association of persons, 30 (h) a body of individuals, (i) a local authority, (j) every artificial juridical person, not falling within any of the preceding sub-clauses;  whether or not the society, firm or organisation, association, body, local authority or 35 artificial juridical person was formed or established or incorporated with the object of deriving income;  (185) "person having a substantial interest in a concern", with its grammatical variations, means—  (a) a person who is the beneficial owner (including the beneficial ownership 40 held by one or more of his relatives, in case the person is an individual) of equity shares carrying not less than twenty per cent of the voting power, at any time during the financial year,  in a concern being a company; and (b) a person who is, at any time during the financial year, beneficially entitled (including the income which is beneficially entitled to one or more of his 45 relative, in case the person is an individual) to not less than twenty per cent of the income in any other concern being a hindu undivided family, or a firm or an unincorporated body; (186) "person of indian origin" means any person who or either of whose parents or any of whose grand parents— (i) was born in india, or 5 (ii) was born in india as defined in the government of india act, 1935, in case the person or the parent or the grand parent was born before the 15th day of august, 1947; (187) "person responsible for making specified payment" means— (a) an employer who makes the payment which is in the nature of salary; 10  (b) any person who makes the payment of the nature specified in column (2) of the third schedule or the fourth schedule; (188) "person with disability" means a person referred to,— (i) in clause (t) of section 2 of the persons with disabilities (equal opportunities, protection of rights and full participation) act, 1995; or 15  (ii) in clause (j) of section 2 of the national trust for welfare of persons with autism, cerebral palsy, mental retardation and multiple disabilities act, 1999 (189) "person with severe disability" means— (i) a person with eighty per cent or more of one or more disabilities, as 20 referred to in sub-section (4) of section 56 of the persons with disabilities (equal opportunities, protection of rights and full participation) act, 1995; or (ii) a person with severe disability referred to in clause (o) of section 2 of the national trust for welfare of persons with autism, cerebral palsy, mental retardation and multiple disabilities act, 1999; 25  1  of 1996   44 of  1999 1  of 1996  44 of  1999 (190) "personal effect" in relation to a capital asset means any movable property including wearing apparel and furniture held for personal use by the assessee or any member of his family dependant on him, but excludes,— (a) jewellery; (b) archaeological collections; 30  (c) drawings; (d) paintings; (e) sculptures; and (f) any work of art; (191) "perquisite" means,— 35  (a) the amenity, facility, privilege or service, whether convertible into money or not, provided directly or indirectly to an employee by the employer, whether by way of reimbursement or otherwise, being— (i) the value of any accommodation computed in such manner as may be prescribed; 40  (ii) any sum payable to effect an assurance on life or to effect a contract for an annuity; (iii) the value of any sweat equity share allotted or transferred, as on the date on which the option is exercised by the employee; or (iv) the value of any obligation which, but for payment by the 45 employer, would have been payable by the employee, computed in such manner as may be prescribed; (b) the value of any amenity, facility, privilege or service, other than those referred to in sub-clause (a) computed in such manner as may be prescribed but does not include,—   (i) the value of any medical treatment provided to an employee or any member of his family in a hospital maintained by the employer; (ii) any sum paid by an employer in respect of any expenditure actually incurred by an employee on medical treatment of himself or his family members in any hospital maintained by the government or any local authority or any other hospital approved by the government; 5 (iii) any sum paid by an employer in respect of any expenditure actually incurred by an employee on medical treatment of himself or his family members with regard to specified diseases, in any hospital approved by the chief commissioner in accordance with such guidelines as may be prescrbed; 10  (iv) any premium paid or reimbursed by an employer to effect or to keep in force an insurance on the health of an employee under any scheme approved by the central government or the insurance regulatory and development authority; 15 (v) any sum paid by an employer in respect of any expenditure actually incurred by an employee on medical treatment of himself or his family members [other than the expenditure on treatment referred to in items (i), (ii) and (iii)] to the extent it does not exceed fifty thousand rupees in a financial year; 20  (vi) any sum paid by an employer in respect of any expenditure actually incurred by an employee outside india on medical treatment of himself or his family members (including expenditure incurred on travel and stay abroad) if,— (a) the expenditure does not exceed the amount permitted by the reserve bank of india; and 25 (b) the income from employment excluding the amount of expenditure referred to in this sub-clause of such employee does not exceed five lakh rupees in the financial year; (192) "place of effective management" means— 30 (i) the place where the board of directors of the company or its executive directors, as the case may be, make their decisions; or (ii) in a case where the board of directors routinely approve the commercial and strategic decisions made by the executive directors or officers of the company, the place where such executive directors or officers of the company perform their functions: 35 (193) "plant" includes ships, aircrafts, vehicles, books, scientific apparatus and surgical equipment but does not include tea bushes, livestock, buildings or furniture and fittings; 40  (194) "political party" means a political party registered and recognised  under the representation of the people act, 1951; 43 of 1951  45  (195) "predecessor" in relation to a business reorganisation means— (a) the amalgamating company, in the case of amalgamation; (b) the merging company in the case of business reorganisation  referred to in sub-clause (b) of clause (41); (c) the demerged company, in the case of demerger; or (d) the unincorporated body or the proprietary concern, in the case of business reorganisation referred to in sub-clause (a) of clause (41);  (196) "preference shares" means preference shares within the meaning of section  85 of the companies act, 1956;  (197) "pre-paid taxes" means tax paid by way of, -  (a) tax deduction at source on payment received; (b) tax collection at source on payment made; (c) advance-tax;  (d) self-assessment tax; or  (e) foreign tax credit;  (f) credit for tax paid on book profit;  (198) "prescribed" means prescribed by rules made under this code;  (199) "primary co-operative agricultural and rural development bank" means a society having its area of operation confined to a taluk and the principal object of which is to provide for long-term credit for agricultural and rural development activities;  (200) "principal officer" in relation to a person, being a local authority or any other public body or a company or an unincorporated body, means—  (a) the secretary, treasurer, manager or agent of the person, or  (b) any person connected with the management or administration of the person upon whom the assessing officer has served a notice of his intention of treating him as the principal officer thereof;  (201) "private discretionary trust" means any entity, whether incorporated or not, which fulfills the following conditions, namely:—  (a) the shares of its beneficiaries are indeterminate or unknown; (b) it is not a non-profit organisation; and (c) it is not registered under any law of the central, state or provincial government for the regulation of the religious endowments; (202)"profits in lieu of or in addition to any salary" includes— (a) the amount of any compensation due to or received by an employee from his employer or former employer at or in connection with his voluntary retirement, the termination of his employment, or the modification of the terms and conditions relating thereto;  (b) any sum received under a keyman insurance policy including the sum allocated by way of bonus on such policy, if any part of the contribution to the policy is made by his employer or former employer; and  (c) any amount due to or received, directly or indirectly, by any assessee from any person—  (i) before his joining any employment with that person; or  (ii) after cessation of his employment with that person;  1  of  1956  5 10 15 20 25  30  35 40  (203) "public company" shall have the same meaning as assigned to it in section 3 of the companies act, 1956;  1  of 1956   1  of 1956 (204) "public financial institution" shall have the same meaning assigned to it in section 4a of the companies act, 1956; (205) "public sector company" means—  (a) any corporation established by or under any central, state or provincial act, or  (b) a government company as defined in section 617 of the companies act, 1956;  (206) "public servant" shall have the same meaning as assigned to it in section 1  of 1956 5   21 of the indian penal code;  45 of 1860  (207) "rate of exchange" means the rate of exchange determined or recognised by the central government for the conversion of indian rupee into foreign currency or vice versa;  10 (208) "rate of tax of the other country" means income-tax or wealth-tax, or as the case may be, and surcharge or cess thereon, if any, actually paid in the other country in accordance with the corresponding laws in force in the said country after deduction of all relief due, but before deduction of any relief due in the said country in respect of double taxation, divided by the whole amount of the income as assessed in the said country;  (209) "rate in force" , in relation to a financial year means the rate of income-tax or wealth-tax, as the case may be, specified for the relevant purpose—  (a) in this code; or  15 (b) in the relevant agreement entered into by the central government under section 291;  (210) "re-assessment" means any assessment of tax bases in pursuance of a notice issued under section 159, whether or not—  20  (a) a return of tax bases has been filed before, or after, the issue of the said notice; or  (b) an assessment of the tax bases has been made before the issue of the said notice;  25  42 of 1956 (211) "recognised stock exchange" means a recognised stock exchange as referred to in clause (f) of section 2 of the securities contracts (regulation) act, 1956 and which fulfils such conditions as may be prescribed and notified by the central government for this purpose;  30  (212) "recognised commodity exchanges" means a registered association as defined in clause (jj) of section 2 of the forward contracts (regulation) act, 1952;  74 of 1952   (213)"registered valuer" means a person registered as such by the board for determining the value of any asset in accordance with the procedure as may be prescribed;  (214) "relative", in relation to an individual, means— (a) spouse of the individual; (b) brother or sister of the individual;  35  40  (c) brother or sister of the spouse of the individual;  (d) brother or sister of either of the parents of the individual; (e) any lineal ascendant or descendant of the individual; (f) any lineal ascendant or descendant of the spouse of the individual; (g) spouse of the persons referred to in sub-clauses (b) to (f); or (h) any lineal descendant of a brother or sister of either the individual or of the spouse of the individual;  (215) "remission or cessation of any liability" includes the remission or cessation of any liability—  (a) by a unilateral act by the assessee by way of writing off such liability in his account or creating a reserve (by whatever name called); or  (b) by virtue of there being no transaction with the creditor during the period of five years from the end of the financial year in which the last transaction took place;  5  10  (216) "reserve bank of india" means the bank constituted under sub-section (1) of section 3 of the reserve bank of india act, 1934;  (217) "resident" means a person who is resident in india within the meaning of section 4;  (218) "resident deductee" means a person who is resident and receives any amount liable to deduction of tax at source under chapter xiii;  (219) "resulting company" means—  (a) one or more companies (including a wholly owned subsidiary thereof) to which the undertaking of the demerged company is transferred in a demerger, and the resulting company in consideration of such transfer of undertaking, issues shares to the shareholders of the demerged company; or  (b) any authority, body, local authority or a company established, constituted or formed as a result of demerger;  (220) "royalty" means consideration (including any lump-sum consideration but excluding any consideration which would be the income of the recipient chargeable under the head "capital gains") for—  (a) the transfer of all or any rights (including the granting of a licence) in respect of a patent, invention, model, design, trade mark, secret formula, process, or similar property;  (b) the imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret formula, process, trade mark,  or similar property;  (c) the use of any patent, invention, model, design, secret formula, process, trade mark, or similar property;  (d) the imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill;  (e) the use or right to use of any industrial, commercial or scientific equipment including ship or aircraft but excluding the amount, referred to in item numbers 7 and 8  of  the table in the fourteenth schedule, which is subjected to tax in accordance with the provisions of that schedule;  (f) the use or right to use of transmission by satellite, cable, optic fiber or similar technology;  (g) the transfer of all or any rights (including the granting of a licence) in respect of -  (i) any copyright of literary, artistic or scientific work;  2  of  1934  15  20  25  30  35  40 45  (ii) cinematographic films or work on films, tapes or any other means of reproduction; or (iii) live coverage of any event;  (h) the rendering of any services in connection with the activities referred to in sub-clauses (a) to (g);  (221) "rural area" means any area not being an urban area; (222) "safe harbour", in relation to computation of arm's length price under section 117, means circumstances in which the income-tax authorities shall accept the transfer price declared by the assessee;  (223) "salary" includes,— (a) wages; 5 (b) remuneration; (c) perquisites; (d) profits in lieu of or in addition to any salary; (e) any advance or arrear of salary; (f) any allowance or benefit granted to an employee—  10 (i) to meet his personal expenses at the place where the duties of his office or employment of profit are ordinarily performed by him or where he ordinarily resides;  (ii) to compensate him for the increased cost of living;  15  (iii) to meet expenses wholly, necessarily and exclusively for the performance of the duties of an office or employment of profit;  (iv) to remunerate or compensate him for performing duties of a special nature relating to his office or employment of profit; or  (v)  which is in the nature of house rent allowance;  20 (g) any allowance, other than the allowances referred to in sub-clause (f), concession or assistance;  (h) any payment received by an employee in respect of any period of leave not availed by him;  (i) any contribution made by an employer, in the financial year, to the account of an employee under a pension fund;  25 (j) any contribution made by an employer,  in the financial year, to the account of an employee in any other fund;  (k) any amount of interest credited, in the financial year, on the balance to the credit of an employee in a fund referred to in clause (j);  (l) any annuity, pension or any commutation thereof; 30 (m) any gratuity; (n) any fees or commission;  (224) "schedule" means a schedule to this code;  (225) "scheduled bank" means any bank listed in the second schedule to the 35 reserve bank of india act, 1934;  2  of 1934  40  (226) "scheduled castes" and "scheduled tribes" shall have the meaning respectively assigned to them in clauses (24) and (25) of article 366 of the constitution; (227) "scientific research and development" means systemic investigation and research in a field of technology, natural or applied science (including agriculture, animal husbandary or fisheries) if—  (a) it is carried out by the assessee by means of experiment or analysis; (b) it is in the nature of— (i) basic research, namely, work undertaken for the advancement of scientific knowledge without a specific practical application in view;  (ii) applied research, namely, work undertaken for the advancement of scientific knowledge with a specific practical application in view; or  (iii) experimental development, namely, work undertaken for the purpose of achieving technological advancement for the purpose of creating new, or improving existing materials, devices, products or processes, including incremental improvements thereto; and  (c) it is not in the nature of—  (i) market research or sales promotion;  (ii) quality control or routine testing of materials, devices, products or processes;  (iii) research in social sciences or  humanities;  (iv) prospecting, exploring or drilling for, or producing, minerals, petroleum or natural gas;  (v) the commercial production of a new or improved material, device or product or the commercial use of a new or improved process;  (vi) style changes; or  (vii) routine data collection; 5 10  15 20  25  (228) "security" shall have the same meaning as assigned to it in clause (h) of section 2 of the securities contracts (regulation) act, 1956;  42 of  1956   (229) "securities and exchange board of india" means the board established under section 3 of the securities and exchange board of india act, 1992;  (230) "self-assessment tax" means the tax paid after the financial year but before filing the return of tax bases;  (231) "senior citizen" means an individual resident in india who attains the age of sixty-five years or more at any time during the financial year;  (232) "service" for the purposes of non-compete agreement means service of any description which is made available to potential users and includes the provision of services in connection with business of any industrial or commercial nature such as accounting, banking, merchant banking, communication, conveying of news or information, advertising, entertainment, amusement, education, financing, insurance, chit funds, real estate, construction, transport, storage, processing, supply of electrical or other energy, boarding and lodging;  15 of  1992 (233) "sikkimese" means,—  (a) an individual, whose name is recorded in the register maintained under the sikkim subjects regulation, 1961 read with the sikkim subject rules, 1961 (in this clause referred to as the "register of sikkim subjects"), immediately before the 26th day of april, 1975; (b) an individual, whose name is included in the register of sikkim subjects by virtue of the government of india order no26030/36/90-ici, dated the 7th august, 1990 and order of even number dated the 8th april, 1991; or   (c) any other individual, whose name does not appear in the register of sikkim subjects, but it is established beyond doubt that the name of such individual's father or husband or paternal grandfather or brother from the same father has been recorded in that register;  5 (234) "slump sale" means the sale of any undertaking or division of a business for a lump-sum consideration without values being assigned to the individual assets and liabilities in such sale, other than the assignment of values to the assets or liabilities for the sole purpose of payment of stamp duty, registration fees or other similar taxes or fees;  (235) "society" means a society registered under the societies registration act, 10 1860 or under any law corresponding to that act in force in any part of india;  21 of 1860  (236) "sold" includes a transfer by way of exchange or a compulsory acquisition under any law for the time being in force but does not include a transfer, in a scheme of business reorganisation, of any asset by the predecessor to the successor;  (237) "special modes of acquisition" means—  (a) acquisition of converted property by a hindu undivided family; or  15 (b) acquisition by any person in any of the following manner,—  (i) upon distribution of any asset on the total or partial partition of a hindu undivided family; (ii) by way of a gift; (iii) under a will; 20  (iv) by way of succession, inheritance or devolution;  (v) upon distribution of any asset on the dissolution of an unincorporated body; (vi) upon distribution of any asset on the liquidation of a company; (vii) upon a revocable or an irrevocable settlement to a trust; or 25  (viii) under a transaction referred to in clause (d) to clause (h) of sub-section (1) of section 47;  (238) "special source", in its grammatical variation, shall have the meaning assigned to it in section 15  30  35  (239) "specified association" means any institution, association or body, whether incorporated or not, functioning under any law for the time being in force in india or the laws of the specified territory outside india and notified as such by the central government;  (240) "specified derivative transaction" means any transaction in derivatives,   if—  (a) it is carried out electronically on screen-based systems of a recognised stock exchange;  (b) it is carried out by a bank or mutual fund or any other person, through a financial intermediary; and  40  (c) it is supported by a time stamped contract note issued by the financial intermediary to every client indicating in the contract note— 45  (i) the unique client identity number allotted under any law for the time being in force; and  (ii) the permanent account number allotted under this code; (241) "specified knowledge-based industry or service" means— (a) information technology software; 5  (b) information technology service; (c) entertainment service; (d) pharmaceutical industry;  (e) bio-technology industry; and  (f) any other industry or service, as may be notified by the central gov-   10  ernment;  (242) "specified territory" means any area outside india and notified as such by the central government;  (243) "speculative business" means speculative transactions carried on in the nature of a business; 15   (244) "speculative transaction" means 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 other than the following transactions; namely,—  (a) a specified derivative transaction; 20   (b) a contract in respect of raw materials or merchandise entered into by a person in the course of his manufacturing or merchandising business to guard against loss through future price fluctuations in respect of his contracts for actual delivery of goods manufactured, or merchandise sold by him;  (c) a contract in respect of stocks and shares entered into by a dealer or  25 investor therein to guard against loss in his holdings of stocks and shares through price fluctuations; and  (d) a contract entered into by a member of a forward market or a stock exchange in the course of any transaction in the nature of jobbing or arbitrage to guard against loss which may arise in the ordinary course of his business as   30  such member;  (245) "speed boat" means a motor boat driven by a high speed internal combustion engine capable of propelling the boat at a speed exceeding 24 kilometers per hour in still water and so designed that when running at such speed, its bow will rise;  (246) "stamp duty value" means— 35   (a) the value adopted, or assessed, by any authority of the central government or a state government for the purposes of payment of stamp duty in respect of an immovable property; or  (b) the value which the stamp valuation authority would have, notwithstanding anything in any other law for the time being in force, adopted or  40 assessed, if it were referred to such authority for the purposes of payment of stamp duty;   (248) "state financial corporation" means a financial corporation established under section 3 or section 3a or an institution notified under section 46 of the state financial corporations act, 1951;  63 of 1951   (249) "state industrial investment corporation" means a government company within the meaning of section 617 of the companies act, 1956, engaged in the business of providing long-term finance for industrial projects;  (250) "state pooled finance entity" means such entity which is set up in accordance with the guidelines for the pooled finance development scheme notified by the central government;  1  of 1956 5  10  (251) "subsidiary" shall have the same meaning as assigned to it in section 4 of the companies act, 1956 and includes subsidiary incorporated outside india;  (252) "successor" in a "business reorganisation" means—  (a) the amalgamated company or amalgamated co-operative, in the case of amalgamation;  1  of 1956 (b) the merged company in the case of business reorganisation referred to in sub-clause (b) of clause (41);  (c) the resulting company, in the case of demerger; (253) "successor in business" means— (a) a successor in a "business reorganisation";  15 (b) a firm which succeeds another firm carrying on a business; and  (c) a person who succeeds any other person in a business; (254) "sweat equity share" means— (a) any security underlying any employees stock option granted under any plan, or scheme, of the employer; or  20 (b) any security issued by a company to its employee or director, at a discount or for consideration other than cash;  (255) "tax" means any tax chargeable under the provisions of this code and includes surcharge or cess, if any;  25 (256) "tax account number" means a number allotted under this code to a person who is liable to deduct tax at source or collect tax at source under sub-chapter a or sub-chapter b of chapter xiii;  (257) "tax arrear" means any amount of tax, interest, penalty, fine or any other sum, due from an assessee under this code;  (258) "tax bases" means—  30  (a) income or total income, as the case may be, in relation to income-tax; (b) net wealth in relation to wealth-tax; (c) dividend distributed in relation to dividend distribution tax or income distributed in relation to tax on distributed income;  (d) branch profits in relation to branch profits tax;  35 40  (e) the income or total income, net wealth, or dividend or income distributed referred to in sub-clauses (a) to (c) of any other person in respect of which the assessee is assessable under this code; (259) "tax recovery officer" means any income-tax officer who may be authorised by the chief commissioner or the commissioner, by general or special order in writing—  (a) to exercise the powers of a tax recovery officer; and  (b) to exercise or perform such powers and functions, which are conferred 5 on or assigned to an assessing officer, as may be prescribed;   (a) holds at least three-fourths of the book value of fixed assets of the predecessor acquired through business reorganisation, continuously for a mini-   10 mum period of five financial years immediately succeeding the financial year in which the business reorganisation takes place;  (b) continues the business of the predecessor for a minimum period of five financial years immediately succeeding the financial year in which the business reorganisation takes place; and 15   (c) fulfils such other conditions as may be prescribed to ensure the revival of the business of the predecessor or to ensure that the business reorganisation is for genuine business purpose;  (261) "threshold limit" means the maximum amount which is not liable to income- (260) "test of continuity of business"  stands satisfied, in case of a successor, if he— tax; 20   (262) "tonnage income scheme" means a scheme for computation of profits of business of operating qualifying ships under the provisions of the tenth schedule;  (263) "total income" of a financial year means the total income computed under section 63 for that financial year;  (264) "total income from special sources" of a financial year means the net result of the aggregation under sub-section (4) of section 62 for that financial year;  (265) "total turnover" in relation to a business means the gross sum received or receivable by the assessee, directly or indirectly, in respect of his world-wide sale of goods or supply of services, as the case may be, of the business including any tax, duty, cess or fee (by whatever name called) collected or collectible in respect of the sale or supply;  (266) "trade debt" means a debt—  (a) which has been taken into account in computing the income of the assessee in any financial year; or  (b) which is money lent in the ordinary course of banking or money lending which is carried on by the assessee;  (267) "transfer", in relation to a capital asset, includes—  (a) the sale, exchange or relinquishment of the asset; (b) the extinguishment of any rights in it; (c) its compulsory acquisition under any law for the time being in force; (d) its conversion into, or its treatment as, stock-in-trade of a business;   25 30  35 40 1  of  1956 (e) the buy-back of any shares or other specified securities referred to in clause (a) of the explanation to section 77a of the companies act, 1956, by the issuer of such shares or securities; (f) any contribution of the asset, whether by way of capital or otherwise, to a company or an unincorporated body, in which the transferor is, or becomes, a shareholder or participant, as the case may be;    (g) the distribution of the asset on account of dissolution of an unincorporated body;  (h) the distribution of the asset on account of liquidation or dissolution of a company;  5  (i) any transaction allowing the possession of an immovable property, to be taken or retained in part performance of a contract of the nature referred to in section 53a of the transfer of property act, 1882;  (j) any transaction which enables the enjoyment of the asset, being any immovable property, whether by way of becoming a participant in an unincorporated body or acquiring shares in a company or by way of any agreement, arrangement or in any other manner;  4  of  1882 10  (k) the maturity or redemption of a zero coupon bond; (l) slump sale; (m) any damage to the insured asset or its destruction as a result of—  (i) flood, typhoon, hurricane, cyclone, earthquake or any other convulsion of nature;  15 (ii) riot or civil disturbance;  (iii) accidental fire or explosion; or  (iv) action by an enemy or action taken in combating an enemy (whether with or without a declaration of war);  20 (n) transfer of securities by a person having beneficial interest in the securities held by a depository as registered owner;  (o) distribution of money or the asset to a participant in an unincorporated body on account of his retirement from the body; and  (p) any disposition, settlement, trust, covenent, agreement or arrangement  25 (268) "transfer pricing officer" means an additional commissioner, joint commissioner, deputy commissioner or assistant commissioner, authorised by the board to perform all or any of the functions for determining the arm's length price in respect of an international transaction and for levying any penalty connected thereto, in respect of any person or class of persons;  30  (269) "transportation charge" includes—  (a) any amount paid whether in or out of india to the assessee, or to any person on his behalf, on account of the carriage of passengers, livestock, mail (including courier) or goods from any place or any port in india;  35 (b) any amount received or deemed to be received in india by or on behalf of the assessee on account of the carriage of passengers, livestock, mail (including courier)  or goods, from  any place or any port outside india; (c) any amount paid to, or received or deemed to be received in india by, the assessee or any person on his behalf   by way of demurrage charges or handling charges or such other charges; or  40  45  (d) any amount paid to, or received or deemed to be received by, the assessee or any person on his behalf for charter, whether or not with crew, including an arrangement as slot charter, space charter, joint charter or any similar arrangement, of ships, aircraft or any other mode of transport, in relation to sub-clauses (a) and (b) above; (270) "trust" shall have the meaning assigned to it in clause (e) of section 103; (271) "unabsorbed current capital loss" means the amount determined under 5 sub-section (4) of section 60  (272) "unabsorbed current horse race loss" means the amount determined under sub-section (10) of section 60;  (273) "unabsorbed current loss from ordinary sources" means the amount determined under sub-section (3) of section 61; 10  (274) "unabsorbed current loss from the special source" means the amount determined under sub-section (3) of section 62;  (275) "unabsorbed current speculative loss" means the amount determined under sub-section (8) of section 60; (276) "unabsorbed preceeding year capital loss" means the unabsorbed cur- 15  rent capital loss, for the financial year immediately preceeding the relevant financial year;  (277 ) "unabsorbed preceeding year horse race loss" means the unabsorbed current horse race loss for the financial year immediately preceeding the relevant financial year;  (278) "unabsorbed preceeding year loss from ordinary sources" means the unabsorbed current loss from ordinary sources, for the financial year immediately preceeding the relevant financial year; (279) "unabsorbed preceeding year loss from the special source" means the unabsorbed current loss from the special source, of the financial year immediately preceeding the relevant financial year;  (280) "unabsorbed preceeding year speculative loss" means the unabsorbed current speculative loss for the financial year immediately preceeding the relevant financial year;  (281) "undertaking" in relation to demerger includes— (a) any part of an undertaking; (b) a unit or division of an undertaking;  (c) a business activity taken as a whole; or  (d) individual assets or liabilities or any combination thereof which constitutes a business activity; (282) "unincorporated body" means— (a) a firm; (b) an association of persons; or  (c) a body of individuals;   20  25  30   35  40   3  of  1956 (283) "university" means a university established or incorporated by or under a central, state or provincial act and includes an institution deemed to be a university under section 3 of the university grants commission act, 1956; (284) "urban area" means—  (a) an area within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area commit- 45  tee, town committee or by any other name) or a cantonment board and which has a population of more than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the financial year; or   (b) an area within such distance from the local limits of any municipality or cantonment board referred to in sub-clause (a), as the central government may having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification;  5 (285) "urban development authority" means any authority constituted in india by, or under, any law enacted for the purpose of—  (a) dealing with and satisfying the need for housing accommodation; or (b) planning, development or improvement of cities, towns and villages; (286) "valuation date" in relation to wealth-tax means the 31st day of march of the relevant financial year;  10  (287) "valuation officer" means a person appointed as a valuation officer by the central government and includes a regional valuation officer, a district valuation officer and an assistant valuation officer;  (288) "value of inventory of the business" as on the—  15  (a) close of the financial year means the value of stock of finished goods, work-in-progress, raw material, stores and spares or any other inventory remaining in stock, as on the close of the said financial year and the value is computed in accordance with the method of accounting regularly employed by the assessee; and  (b) beginning of the financial year shall be—  20  (i) nil, if the business has commenced during the financial year; and  (ii) the value of inventory of the business, as on the close of the immediately preceding financial year, in any other case;  25  (289) "value of sweat equity shares" shall be the value of the sweat equity shares on the date on which the option is exercised by the assessee, determined in accordance with the method as may be prescribed, as reduced by the amount actually paid by, or recovered from, the assessee in respect of such shares;  (290) "venture capital company" means a company—  30 (a) which has been granted a certificate of registration as a venture capital company under the securities and exchange board of india act, 1992; and  15   of 1992  (b) which fulfils all other conditions as may be prescribed in this behalf; (291) "venture capital fund" means a fund— 35 (a) which has been granted a certificate of registration as a venture capital fund under the securities and exchange board of india act, 1992; and (b) which fulfils all other conditions as may be prescribed in this behalf;  15   of 1992 (292) "venture capital undertaking" means a domestic company whose shares are not listed in a recognised stock exchange in india and which is engaged in the business of—  (a) nano-technology;  40  (b) information technology relating to hardware and software development; 45  (c) seed research and development; (d) bio-technology; (e) research and development of new chemical entities in the pharmaceutical sector;  (f) production of bio-fuels; (g) dairy and poultry; (h) building and operating composite hotel cum convention centre with seating capacity of more than three thousand;  (i) development of infrastructural facility; or  (j) any other business as may be prescribed; (293) "widely held company" means— (a) a company owned by the government or the reserve bank of india;  (b) a company in which not less than forty per cent of the paid-up share capital is held (whether alone or taken together) by the government or the reserve bank of india or a corporation owned by that bank; 10 15   (c) a company registered under section 25 of the companies act, 1956; (d) a mutual benefit finance company; (e) a co-operative sector company; (f) a public company; 1   of  1956 20  (g) a corporation established by or under a central, state or provincial act;   (h) a company in which not less than fifty per cent of the paid up equity share capital is held throughout the relevant financial year, by the companies (whether alone or taken together) to which this clause applies; or  25  (i) a company which is not a private company as defined in section 3 of the companies act, 1956 and the shares in such company, carrying not less than fifty per cent of the voting power, have been allotted and were throughout the relevant financial year held—  (i) by the companies referred to in clauses (a) to (h) (whether alone or taken together); or  (ii) by a subsidiary of a company referred to in clauses (a) to (h), if the whole of the paid-up share capital of such subsidiary company has been held by the parent company or by its nominees throughout the financial year;  (294) "working participant" means an individual who is actively engaged in conducting the affairs of the business or profession of the unincorporated body of which he is a participant; (295) "written down value" shall have the meaning assigned to it in section 45; (296) "written off" in relation to a debt means recording an appropriate entry in 1   of  1956  30  35  40  the account of the debtor so as to reduce the amount of the debt without any recovery thereof;  (297) "zero coupon bond" means a bond—  (a) issued by any company, fund or scheduled bank in accordance with a scheme notified by the central government; (b) in respect of which no payment and benefit is received or receivable before maturity or redemption from the company, fund or scheduled bank; and  (c) which the central government may, by notification, specify in this behalf  5 315  in this code, unless otherwise stated,—  (a) a reference to any income, or to the result of any computation, shall be construed as a reference to both the negative and positive variation of the income or the result, as the case may be;  (b) any direction for aggregation of two or more items, which are expressed as 10 amounts, shall be construed also to include a direction for aggregation of negative and postive amounts in all their combinations;  (c) the value of any variable in a formula shall be deemed to be nil, if the value of such variable is indeterminable or unascertainable   chapter xx 15 miscellaneousconstruction power to  make rules 316 (1) the board may, subject to the control of the central government, by notification, make rules for the whole or any part of india for carrying out the purposes of this code  (2) in particular, and without prejudice to the generality of the foregoing power, such 20    rules may provide for all or any of the following matters, namely:—  (a) the ascertainment and determination of any class of income;  (b) the manner in which and the procedure by which the income shall be arrived at, in the case of—  (i) agriculture income;  25 (ii) a person residing outside india; (iii) a person whose total income includes income referred to in section 9; (c) the determination of the amount of expenditure allowable under this code in such manner, extent and on such basis and conditions, as appears to the board to be proper and reasonable;  30  (d) the methods by which an estimate of any income liable to tax, or expenditure liable to deduction, may be made, if such income or expenditure cannot be definitely ascertained, or can be ascertained only with an amount of trouble and expense to the assessee which in the opinion of the board is unreasonable;  (e) the form and manner in which any document, application, claim, return or 35 information may be made or furnished and the fees that may be levied in respect of any document, application or claim;  (f) the class or classes of persons who shall be required to furnish any document, application, claim, return or information in electronic form;  (g) the form and manner in which a document, application, claim, return or infor- 40 mation may be furnished electronically;  (h) the document, statement, receipt, certificate or report which, regardless of anything to the contrary contained in this code, may not be furnished along with the return but shall be produced before the assessing officer on demand; (i) the computer resource or the electronic record to which a document, application, claim, return or information may be transmitted electronically;  (j) the manner in which any document, application, claim, return or information required to be filed under this code may be verified;  (k) the authority, agency or organisation who may receive any application, 5 claim, return or information on behalf of the board or the department;  (l) the procedure to be followed in calculating interest payable by assessees or interest payable by government to assessees under any provision of this code, including the rounding off of the period for which such interest is to be calculated in cases where such period includes a fraction of a month, and specifying the circum- 10  stances in which and the extent to which petty amounts of interest payable by assessees may be ignored;  (m) the form and manner in which any appeal or cross-objection may be filed under this code and the manner in which intimation of any such order as is referred to in clause (d) of sub-section (3) of section 184 may be served; 15   (n) the circumstances, the conditions and the manner in which, the commissioner (appeals) may permit an appellant to produce evidence which he did not produce or which he was not allowed to produce before the assessing officer;  (o) the fee payable in respect of any appeal, application, reference or ruling;  (p) the maintenance of a register of persons referred to in section 304, other than 20 legal practitioners or accountants, practicing before income-tax authorities and for the constitution of and the procedure to be followed by the authority referred to in subsection (4) of that section;  (q) the issue of certificate verifying the payment of tax by assessees;  (r) the authority to be prescribed for any of the purposes of this code; 25   (s) the procedure for giving effect to the terms of any agreement for the granting of relief in respect of double taxation or for the avoidance of double taxation which may be entered into by the central government under this code; and  (t) any other matter which by this code is to be, or may be, prescribed  (3) any  order  made,  proceeding  initiated  or  conducted,  or  liability  or  obligation 30   (4) the power to make rules conferred by this section shall include the power to give retrospective effect, from a date not earlier than the date of commencement of this code, to 35 the rules or any of them and, unless the contrary is permitted, no retrospective effect shall be given to any rule so as to prejudicially affect the interests of assessees  discharged, in accordance with the rules framed under this section shall be deemed to be duly made, initiated, conducted or discharged, in accordance with the provisions of this code  317 every rule and scheme made and notification issued under this code shall be laid, as soon as may be after it is made or issued 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 40  laying of rules,  schemes and notifications before parliament 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, scheme or notification or both houses agree that the rule, scheme or notification should not be made or issued, the rule, scheme or notification shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, 45 that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule, scheme or notification 318 (1) the income-tax act, 1961 and the wealth-tax act, 1957 are hereby repealed  repeals and savings (2) notwithstanding the repeal of the income-tax act, 1961 and the wealth-tax act, 43 of  1961 27 of  1957 43 of  1961 27 of  1957 1957 (hereinafter referred to as the repealed income-tax act or the repealed wealth-tax act, respectively),—  5  (a) where a return of income or wealth has been filed before the commencement of this code by any person for any assessment year, proceedings for the assessment of that person for that year may be taken and continued as if this code had not been enacted;  (b) where a return of income is filed after the commencement of this code, 10 otherwise than in pursuance of a notice under section 148 of the repealed income-tax act, by any person for the financial year ending on the 31st day of march, 2012, or any earlier year, the assessment of that person for that year shall be made in accordance with the procedure specified in this code;  (c) where a return of wealth is filed after the commencement of this code, other- 15 wise than in pursuance of a notice under section 17 of the repealed wealth-tax act, by any person for the financial year ending on the 31st day of march, 2012, or any earlier year, the assessment of that person for that year shall be made in accordance with the procedure specified in this code;  (d) any proceeding pending on the commencement of this code before any 20 income-tax authority, wealth-tax authority, the appellate tribunal, the authority for advance ruling and dispute resolution, the settlement commission or any court, by way of appeal, reference, application or revision, shall be continued and disposed under the repealed income-tax act, or as the case may be, the repealed wealth-tax act, as if this code had not been enacted;  25  (e) where in respect of any assessment year after the year ending on the 31st day of march, 2001—  (i) a notice under section 148 of the repealed income-tax  act or under section 17 of the repealed wealth-tax act had been issued before the commencement of this code, the proceedings in pursuance of the notice may be continued 30 and disposed of as if this code had not been enacted;  (ii) any income or wealth liable to tax has escaped assessment within the meaning of that expression in section 159 and no proceedings under section 147 of the repealed income-tax act or under section 17 of the repealed wealth-tax act in respect of any such income or wealth, as the case may be, are pending at 35 the commencement of this code, a notice under section 159 may be issued with respect to that financial year and all the provisions of this code shall apply accordingly;  (f) any proceeding for the imposition of a penalty in respect of any assessment completed before the first day of april, 2012, may be initiated and any such penalty 40 may be imposed under the repealed income-tax act, or as the case may be, the repealed wealth-tax act as if this code had not been enacted;  (g) any proceeding for the imposition of a penalty in respect of any assessment for the financial year ending on the 31st day of march, 2011, or any earlier year, which is completed on or after the 1st day of april, 2011, may be initiated and any such 45 penalty may be imposed under this code;  (h) any election or declaration made, or option exercised, by an assessee under any provision of the repealed income-tax act or as the case may be, the repealed wealth-tax act and in force immediately before the commencement of this code shall be deemed to have been an election or declaration made, or option exercised, under the 50 corresponding provision of this code; (i) where, in respect of any assessment completed before the commencement of this code, a refund falls due after such commencement, or default is made after such commencement in the payment of any sum due under such completed assessment, the provisions of this code relating to interest payable by the central government on refunds and interest payable by the assessee for default shall apply;  (j) any sum payable under the repealed income-tax act or as the case may be, the repealed wealth-tax act may be recovered under this code, but without prejudice to any action already taken for the recovery of such sum under such repealed acts;  (k) any agreement entered into under section 90 or section 90a of the repealed income-tax act or under section 44a of the repealed wealth-tax act shall, so far as it is not inconsistent with section 291 of this code, be deemed to have been entered into under section 291 of this code and shall continue in force accordingly;  (l) any appointment made under the provisions of the repealed income-tax act, or as the case may be, the repealed wealth tax act shall be deemed to have been made under the corresponding provisions of this code and shall continue to remain in force accordingly;  (m) any order made under any provision of the repealed income-tax act or as the case may be, the repealed wealth-tax act shall, so far as it is not inconsistent with the corresponding provisions of this code, be deemed to have been made under the corresponding provisions aforesaid and shall continue in force accordingly;  (n) where the period prescribed for any application, appeal, reference or revision under the repealed income-tax act or as the case may be, the repealed wealth-tax act had expired on or before the commencement of this code, nothing in this code shall be construed as enabling any such application, appeal, reference or revision to be made under this code by reason only of the fact that a longer period therefor is prescribed or provision is made for extension of time in suitable cases by the appropriate authority;  (o) the deduction under section 80-ia, section 80-ib (other than sub-section (9), section 80-ic, section 80-id, section 80-ie or section 80jja or section 80jjaa of the repealed income-tax act shall continue to be allowed under this code, if the assessee is eligible for such deduction for the assessment year beginning on the 1st day of april, 2012 subject to the conditions—  (i) that the amount of profits eligible for deduction under the provisions of aforesaid sections are calculated in accordance with the provisions of this code other than the provisions in clauses (d) and  (e) of paragraph (5) of the thirteenth schedule relating to capital expenditure, if applicable;  (ii) that the period for which the deduction is allowed under the provisions of aforesaid sections shall not include a period for which the deduction was otherwise not allowable under the repealed income-tax act;  (iii) that the amount related to capital expenditure if any excluded in (i) above shall not be allowed as deduction under this code in computing the gross total income; and  (iv) that the assessee otherwise continues to satisfy the conditions as specified in the respective sections in the financial year;   5  10  15  20 25  30 35  40  45 (p) the deduction under section 80-iab of the repealed income-tax act shall continue to be allowed under this code, if the assessee, being a developer engaged in the business of developing, operating and maintaining a special economic zone notified on or before 31st day of march, 2012 under the special economic zones act, 2005,  subject to the conditions— (i) that the amount of profits eligible for deduction under the provisions of the aforesaid section are calculated in accordance with the provisions of this code other than the provisions in clauses (d) and (e) of paragraph (4) of the twelfth schedule relating to capital expenditure; (ii) that the period for which the deduction is allowed under the provisions of the aforesaid section shall not include a period for which the deduction was otherwise not allowable under the repealed income-tax act; 5  (iii) that the amount related to capital expenditure if any excluded in (i) above shall not be allowed as deduction under this code in computing the gross total income; and 10 (iv) that the assessee otherwise continues to satisfy the conditions as specified in the respective section in the financial year; (q) the deduction under section 80la of the repealed income-tax act shall continue to be allowed under this code, if the assessee commences its business operation in the offshore banking unit, or unit of an international financial services centre, in the special economic zone on or before the 31st day of march, 2014, subject to the conditions— 15 (i) that the amount of profits eligible for deduction under the provisions of the aforesaid section are calculated in accordance with the provisions of this code other than the provisions in clauses (d) and (e) of paragraph (4) of the twelfth schedule relating to capital expenditure; (ii) that the period for which the deduction is allowed under the provisions of the aforesaid section shall not include a period for which the deduction was otherwise not allowable under the repealed income-tax act; 20 (iii) that the amount related to capital expenditure if any excluded in (i) above shall not be allowed as deduction under this code in computing the gross total income; and (iv) that the assessee otherwise continue to satisfy the conditions as specified in the respective section in the financial year; 25 30  (r) the deduction under section 10aa of the repealed income-tax act shall continue to be allowed under this code, if the assessee, being an entrepreneur as referred to in clause (j) of section 2 of the special economic zones act, 2005, begins to manufacture or produce articles or things or provide any service in the unit in the special economic zone on or before the 31st day of march, 2014, subject to the conditions— 28 of 2005  (i) that the amount of profits eligible for deduction under the provisions of the aforesaid section are calculated in accordance with the provisions of this code other than the provisions in clauses (d) and  (e) of paragraph (4) of the twelfth schedule relating to capital expenditure; 35  (ii) that the period for which the deduction is allowed under the provisions of the aforesaid section shall not include a period for which the deduction was otherwise not allowable under the repealed income-tax act; (iii) the amount related to capital expenditure if any excluded in (i) above shall not be allowed as deduction under this code in computing the gross total income; and 40 (iv) that the assessee otherwise continue to satisfy the conditions as specified in the respective section in the financial year; (s) the deduction under sub-section (9) of section 80-ib of the repealed incometax act shall continue to be allowed under this code, if the undertaking referred to in the said sub-section also fulfills any of the following, namely:— 45 50  (a) it is engaged in commercial production of mineral oil in any blocks licensed under a single contract, which is awarded under the new exploration licensing policy announced by the government of india vide resolution no o- 19018/22/95-ongdodl, dated 10th february, 1999 (hereinafter referred as the nelp) or has been awarded in pursuance of any law for the time being in force or has been awarded by the central or a state government in any other manner, before the commencement of this code; (b) it is engaged in refining of mineral oil and begins such refining on or after the 1st day of october, 1998 but not later than the 31st day of march, 2012; (c) it is engaged in commercial production of natural gas in blocks licensed under the viii round of bidding for award of exploration contracts under the nelp and begins commercial production of natural gas on or after the 1st day of april, 2009; (d)  it is engaged in commercial production of natural gas in blocks licensed under the iv round of bidding for award of  exploration contracts for coal bed methane blocks and begins commercial production of natural gas on or after the 1st day of april, 2009, subject to the conditions— (i) that the amount of profits eligible for deduction under the provisions of the aforesaid section are calculated in accordance with the provisions of this code other than the provisions in clauses (d) and (f) of paragraph 3 of the eleventh schedule relating to capital expenditure; (ii) that the period for which the deduction is allowed under the provisions of the aforesaid section shall not include a period for which the deduction was otherwise not allowable under the repealed income-tax act; (iii) that the amount related to capital expenditure if any excluded in (i) above shall not be allowed as deduction under this code in computing the gross total income; and (iv) that the assessee otherwise continue to satisfy the conditions as specified in the respective section in the financial year (3) in this section, "assessment year" shall have the same meaning as assigned to it in the repealed income-tax act, 1961 or the repealed wealth-tax act, 1957 as the case may be as they stood prior to their repeal 319 (1) if any difficulty arises— power to remove difficulties (i) in protecting the interests of the assessee; (ii) in preventing the loss of revenue; 43 of  1961 27 of  1957 30 (iii) in applying the provisions of the income-tax act, 1961 and the rules, orders or notifications issued thereunder as it stood before the commencement of this code; (iv) in clarifying or declaring the true intent of the rules, orders or notifications in their application under this code;  (v) in giving effect to the provisions of this code while repealing the income-tax 43 of  1961   35 act, 1961; or (vi) in generally giving effect to the provisions of this code, the central government may, by order, make such provisions not inconsistent with the provisions of this code, as it may appear to it to be necessary or expedient for the purpose of removing the difficulty (2) in particular, and without prejudice to the generality of the foregoing power, any such order may provide for the adaptations and modifications subject to which the repealed income-tax act, 1961 shall apply in relation to the assessments for the financial year ending on the 31st day of march, 2011, or any earlier year (3) no order under sub-section (1) shall be made after the expiry of a period of three years from the commencement of this code (4) every order made under this section shall be laid, as soon as may be after it is made, before each house of parliament | 43 of  1961      |     ||-------------------|-----||                   |     ||                   |     || 40                |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     || 45   43 of  1961 |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     || 50                |     |[see sections 2(4), 15(1), 62(1), 211(3), 230(11), 314(120)(k) and (158)] rates of  income-tax  part i5  the liability to income tax, of any person, in respect of his total income of a financial year, which does not include income from any special source, shall be the amount of incometax calculated at the rate specified, and in the manner provided, in the following paragraph a to paragraph f:   paragraph a10  (i)  in the case of every individual, other than the individual referred to in item (ii) of this paragraph, hindu undivided family or artificial juridical person, not being a case to which any other paragraph of this part applies,—  rates of income-tax  (1) where the total income does not nil; 15    exceed rs 2,00,000  (2) where the total income exceeds 10 per cent of the amount by which rs 2,00,000 but does not exceed the total income exceeds rs2,00,000; rs 5,00,000  (3) where the total income exceeds rs30,000 plus 20 per cent of the 20 rs5,00,000 but does not exceed amount by which the total income rs10,00,000 exceeds rs5,00,000 ;  | (4) where the total income exceeds    | rs1,30,000 plus 30 per cent of the   ||---------------------------------------|----------------------------------------|| rs10,00,000                          | amount by which the total income       || exceeds rs10,00,000;                 |                                        ||                                       |                                        |25  (ii)  in the case of every individual, being a resident in india, who is of the age of sixty-five years or more at any time during the financial year—  rates of income-tax  (1) where the total income does not nil; exceed rs 2,50,000  30 (2) where the total income exceeds 10 per cent of the amount by which the rs2,50,000 but does not total income exceeds rs 2,50,000 exceed rs5,00,000;  | (3) where the total income exceeds    | rs 25,000 plus 20 per cent of the amount   |     ||---------------------------------------|----------------------------------------------|-----|| rs 5,00,000 but does not exceed      | by which the total income exceeds            |     |35    rs 10,00,000 rs 5,00,000;  | (4) where the total income exceeds    | rs 1,25,000 plus 30 per cent of the   ||---------------------------------------|-----------------------------------------|| rs10,00,000                          | amount by which the total income        || exceeds rs 10,00,000;                |                                         ||                                       |                                         |paragraph b  40 (i) in the case of every co-operative society—  rates of income-tax  (1)  where the total income does not 10 per cent of the total income; exceed rs10,000 | (2) where the total income exceeds    | rs1,000                         ||---------------------------------------|----------------------------------|| plus                                  |                                  || 20 per cent of the                   |                                  || rs10,000 but does not exceed         | amount by which the total income || rs 20,000                            | exceeds rs 10,000;              || (3) where the total income exceeds    | rs 3,000                        || plus                                  |                                  || 30 per cent of the                    |                                  || rs 20,000                            | amount by which the total income || 5                                     |                                  ||                                       |                                  || exceeds rs 20,000                   |                                  ||                                       |                                  ||                                       |                                  |(ii) in the case of every other society—  rate of income-tax  on the whole of the total income 30 per cent  paragraph  c 10   in the case of every non-profit organisation,—  rate of income-tax  (i) when the total income does not nil; exceed rs 1,00,000 (ii) where the total income exceeds 15 per cent of the amount by which 15  rs 1,00,000 the total income exceeds rs 1,00,000  paragraph d in the case of every unincorporated body,— rate of income-tax  on the whole of the total income 30 per cent 20   paragraph e  in the case of a company,—   rate of income-tax  on the whole of the total income 30 per cent  part ii 25   in the cases to which paragraph a of part 1 applies, where the person has, in the financial year, any net agricultural income exceeding five thousand rupees, in addition to total income from ordinary sources and the total income exceeds the threshold limit, then,— (a) the net agricultural income shall be taken into account, in the manner provided in clause (b) [that is to say, as if the net agricultural income were comprised in the total    30  income after the threshold limit but without being liable to tax], only for the purpose of charging income-tax in respect of the total income; and (b) the income-tax chargeable shall be calculated as follows:  (i) the total income and the net agricultural income shall be aggregated and the amount of income-tax shall be determined in respect of the aggregate 35 income at the rates specified in the said paragraph a, as if such aggregate income were the total income;  (ii) the net agricultural income shall be increased by the amount of threshold limit, and the amount of income-tax shall be determined in respect of the net agricultural income as so increased at the rates specified in the said    40  paragraph a, as if the net agricultural income as so increased were the total income; (iii) the amount of income-tax determined in accordance with sub-clause (i) shall be reduced by the amount of income-tax determined in accordance with sub-clause (ii) and the sum so arrived at shall be the income-tax in respect of the total income   5 part iiiwhere, if the total income of a person specified in column (2) of the table given below includes income from any special source specified in the corresponding entry in column (3) of the said table, the liability to income-tax of the person shall be the aggregate of—  (a) the amount calculated at the rate specified in the corresponding entry in 10 column (4) of the said table on the income specified in the corresponding entry in column (3); and  (b) the amount of income-tax calculated in accordance with the provisions of part i and part ii in respect of the balance of his total income, that is, the "total income from ordinary sources":  15 table  serial person nature of income rate of tax number  (1) (2) (3) (4) (1) non-resident (a) on investment income by way of- 20 (i) interest 20 per cent  (ii) dividends on which distribution tax has not been paid under section 109 (iii) profit distributed by a fund on which tax on distributed income has 25 not been paid under section 110 20 per cent  (b) on income by way of royalty 20 per cent or fees for technical services  (c ) on income by way of 20 per cent insurance including reinsurance  30    (2) non-resident sportsperson, on income by way of— who is not a citizen of india (i) participation in india in any 10 per cent game [other than a game the winnings  wherefrom are taxable under item (ii) or item (iii) of 35 serial number 4] or sport; (ii) advertisement; or 10 per cent (iii) contribution of articles relating 10 per cent to any game or sport in newspapers, magazines or journals in india  40    (3) non-resident sports on income by way of guarantee 10 per cent association or institution money in relation to any game or sports played in india  (4) any assessee whether income by way of winnings from— 30 per cent resident or non-resident (i) any lottery or crossword puzzle; 45 (ii) race, including horse race (not being the income from the activity of owning and maintaining race horses); or (iii) card game or any other game 50 or gambling or betting  the second schedule[see sections 104(1), (6), 109(2), 110(3), 111(2), 112(2), 230(11) and 314(225)]  rates of other taxes a—tax on book profit1 the income-tax referred to in sub-section (1) of section 103 shall be calculated 5 at the rate specified hereunder:—  rate of tax  on the amount of book profit 20 per cent   b—tax on  distributed profits of a domestic company2 the tax referred to in sub-section (2) of section 109 shall be calculated at the rate    10  specified hereunder:—  rate of tax  on the amount of dividend declared, distributed 15 per cent or paid by a domestic company c—tax on distributed income 15   3 the tax referred to in sub-section (3) of section 110 shall be calculated at the rates specified hereunder:— rates of tax  on the amount of income distributed by  (i) a mutual fund to the unit holders of equity 05 per cent    20  oriented fund; or  (ii) life insurer to the policy holders of an approved equity oriented life insurance scheme 05 per cent   d—tax on branch profits4 the tax  referred to in sub-section (2) of section 111 shall be calculated at the rate    25  specified hereunder:—  rate of tax  on the branch profits 15 per cent   e—tax on net wealth5 the tax referred to in sub-section (2) of section 112 shall be calculated at the rates    30  specified and in the manner provided hereunder:—  rates of tax  (1) where the net wealth as on the valuation nil date does not exceed one crore rupees  (2) where the net wealth, as on the valuation date 1  per  cent  of the 35  exceeds rupees one crore amount   by   which the net wealth exceeds one crore  rupees   the third schedule [see sections 195(2) and 314(187)(b)] rates for deduction of tax at source(rates for deduction of tax at source in the case of resident deductee)  5 serial  nature of payment rate number (specified payment)  (1) (2) (3)  1 income from employment the average rate of income-tax on estimated income from 10 employment during the financial year, computed on the basis of the rates specified in part 1 of the first schedule 2 payment in respect of - 2 per cent 15 (a) works contract; (b) service contract; (c) broadcasting and telecasting; (d) supply of labour for carrying out any works, or service contract; 20 (e) advertising; or (f) carriage of goods and passengers by any mode of transport other than by railways  3 interest 10 per cent  25    4 dividend other than dividend in respect of 10 per cent which dividend distribution tax is paid  5 income distributed by mutual fund on which 10 per cent income distribution tax is not paid,- (i) where the deductee is an individual 20 per cent 30 or a hindu undivided family; (ii) any other deductee  6 payment made by a life-insurer in respect of a life insurance policy other than the policy referred to in clause (d) or clause (e) of sub- 35 section (3) of section 59— (i)  where the deductee is an individual 10 per cent or a hindu undivided family; (ii) any other deductee 20 per cent  7 commission, brokerage, remuneration, 10 per cent 40 or prize (by whatever name called) for rendering any services  8 fees for professional or technical services 10 per cent  9 payment for royalty or non-compete fee 10 per cent  10 payment of compensation on compulsory 10 per cent 45 acquisition of immovable property other than agricultural land 11 rent— (i) for the use of machinery or plant or 2 per cent equipment; 10 per cent (1) (2) (3) 10 per cent  (ii) for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings 12 winnings from any lottery or crossword puzzle or card game or other game of any sort30 per cent 13 winnings from any horse race 30 per cent  the fourth schedule [see sections 195(3) and (4), 314(187)(b)](rates for deduction of tax at source in the case of non-resident deductee)  serial nature of payment rate 5 number (specified payment)  (1) (2) (3)  1 income from employment the average rate of income-tax on estimated income from employment during the 10 financial year, computed on the basis of the rates specified in part 1 of the first schedule  2 payment by way of - 20 per cent (i) interest; or 15 (ii) dividends on which dividend distribution tax has not been paid under secton 109; or (iii) profit distributed by a fund on which tax on distributed income 20 has not been paid under section 110  3 payment by way of royalty or fees for 20 per cent technical services  4 winnings from lotteries, crossword puzzles, 30 per cent card games or any other game or gambling 25 or betting  5 winnings from horse races (not related to 30 per cent the activity of owning and maintaining race horses)  6 payment to a non-resident sportsperson 10 per cent 30 (not being a citizen of india) by way of— (i) participation in india in any game or sport  (other than winnings referred to at serial numbers 4 and 5); (ii) advertisement; or 35 (iii) contribution of articles relating to any  game or sport in newspapers, magazines or journals in india  7 payment by way of guarantee money to a 10 per cent non-resident sports association or institution 40 in relation to any game or sports played in india  8 payment by way of insurance including                     reinsurance                                                         20 per cent 9             any other sum chargeable to tax 30 per cent [see sections 139(4), 219(1), (5), 220(14), 16, 238, 279(1) and 297(1)] procedure for recovery of tax  part i general provisions 1 (1) the tax recovery officer shall, upon assumption of jurisdiction under section 219, cause to be served upon the defaulter a notice requiring the defaulter to pay the amount specified in the certificate within a period of fifteen days from the date of service of the notice (2) the notice under sub-paragraph (1) shall also intimate to the defaulter the steps   10 which shall be taken to realise the amount under this schedule, if he defaults to make payment within the time specified therein or within such further time as the tax recovery officer may in his discretion, grant issue  of  notice 2 (1) no step in execution of a certificate shall be taken until the period of fifteen days has elapsed since the date of the service of the notice required under paragraph 1 15  | when        |     ||-------------|-----|| certificate |     || may be      |     || executed   |     |(2) the tax recovery officer may attach the whole or any part of the movable property of the defaulter, as would be liable to attachment in execution of a decree of a civil court, within the said period of fifteen days if— (b) the realisation of the amount of the certificate would in consequence be delayed or obstructed (3) the defaulter whose property has been so attached may furnish security to the satisfaction of the tax recovery officer and on such acceptance of the security by the tax recovery officer, the attachment shall be cancelled from the date on which the security is accepted (a) he is satisfied, for reasons to be recorded in writing, that the defaulter is likely to conceal, remove or dispose of the whole or any part of the movable property; 20 and 3 (1) if the amount mentioned in the notice is not paid within the time specified therein, or within such further time as the tax recovery officer may grant in his discretion, the tax recovery officer shall proceed to realise the amount by one or more of the following modes, namely:— (a) by attachment and sale of the defaulter's movable property; (b) by attachment and sale of the defaulter's immovable property; (c) by arrest of the defaulter and his detention in prison in accordance with the provisions of the code of criminal procedure, 1973; (d) by appointing a receiver for the management of the defaulter's movable and immovable properties (2) the defaulter's movable or immovable property, referred to in sub-paragraph (1), shall include any property transferred directly, or indirectly, otherwise than for adequate consideration by the defaulter to— (a) his spouse; or (b) minor child   25 30  35   2 of  1974 40 45  (3) in respect of any arrears due from the defaulter for the period prior to the date of attainment of majority by the minor child, the property shall continue to be included in the defaulter's movable or immovable property even after the date mode of recovery  4 there shall be recoverable, in the proceedings in execution of every certificate— (a) such interest upon the amount of tax or penalty or other sum to which the interest,  costs and  charges recoverable certificate relates as is payable in accordance with section 213, and (b) all charges incurred in respect of— (i) the service of notice upon the defaulter to pay the arrears, and of warrants and other processes, and (ii) all other proceedings taken for realising the arrears 5 (1) where property is sold in execution of a certificate, there shall vest in the purchaser merely the right, title and interest of the defaulter at the time of the sale, even though the property itself be specified  5 (2) where immovable property is sold in execution of a certificate, and such sale has become absolute, the purchaser's right, title and interest shall be deemed to have vested in him from the time when the property is sold, and not from the time when the sale becomes absolute  10 6 (1) no suit shall be maintained against any person claiming title under a purchase certified by the tax recovery officer in the manner laid down in this schedule, on the ground that the purchase was made on behalf of the plaintiff or on behalf of some one through whom the plaintiff claims  15 (2) nothing in paragraph (1) shall bar a suit to obtain a declaration that the name of any purchaser certified thereunder was inserted in the certificate fraudulently or without the consent of the real purchaser, or interfere with the right of a third person to proceed against that property, though ostensibly sold to the certified purchaser, on the ground that it is liable to satisfy a claim of such third person against the real owner  7 (1) whenever assets are realised by sale, or otherwise, in execution of a certificate, the proceeds shall be disposed of in the following manner, namely:— 20 (a) they shall first be adjusted towards the amount due under the certificate in execution of which the assets were realised and the costs incurred in the course of such execution; (b) if there remains a balance after the adjustment referred to in clause (a), the same shall be utilised for satisfaction of any other amount recoverable from the assessee under this code which may be due on the date on which the assets were realised; and 25 (c) the balance, if any, remaining after the adjustments under clauses (a) and (b) shall be paid to the defaulter (2) if the defaulter disputes any adjustment under clause (b) of sub-paragraph (1), the tax recovery officer shall determine the dispute  30 8 (1) except as otherwise expressly provided in this code, every question arising between the tax recovery officer and the defaulter or their representatives, relating to the execution, discharge or satisfaction of a certificate, or relating to the confirmation or setting aside by an order under this code of a sale held in execution of such certificate, shall be determined, by the order of the tax recovery officer before whom such question arises and not by suit in courts  35  (2) notwithstanding sub-paragraph (1), a suit may be brought in a civil court in respect of any question referred to in that sub-paragraph upon the ground of fraud  40  9 (1) any property exempted, under the code of civil procedure, 1908, from attachment and sale in execution of a decree of a civil court, shall be exempt from attachment and sale under this schedule 5  of 1908  (2) the tax recovery officer's decision as to what property is so entitled to exemption other than the property exempt under sub-paragraph (1) shall be conclusive  45  purchaser 's title  suit against purchaser  not maintainable on ground  of purchase  being made  on behalf  of plaintiff  disposal  of proceeds  of execution general bar  to jurisdiction  of civil  courts, save  where fraud alleged property exempt  from attachment investigation by tax recovery officer 50  10 (1) where any claim is preferred to or any objection is made, to the attachment or sale of any property in execution of a certificate, on the ground that such property is not liable to such attachment or sale, the tax recovery officer shall proceed to investigate the claim or objection (2) no investigation under sub-paragraph (1) shall be made, where the tax recovery officer considers that the claim or objection was designedly or unnecessarily delayed  (3) where the property to which the claim or objection applies has been advertised for sale, the tax recovery officer ordering the sale, may postpone it pending the investigation of the claim or objection, upon such terms as to security or otherwise as he thinks fit 5  (4) the claimant or objector must adduce evidence—  (a) in the case of an immovable property at the date of the service of the notice issued under this schedule to pay the arrears, or  (b) in the case of a movable property, at the date of the attachment, to show that he had some interest in, or was possessed of, the property in question— 10   (5) the tax recovery officer shall make an order releasing the property wholly or to such extent as he thinks fit, from attachment or sale, if he is satisfied or investigation that for the reason stated in the claim or objection, such property—  (a) was not, at the said date, in the possession of the defaulter or of some person in trust for him; 15  (b) was not in the occupancy of a tenant or other person paying rent to the defaulter; or  (c) being in the possession of the defaulter at the said date, it was so in his possession, not on his own account or as his own property, but on account of or in trust for some other person, or partly on his own account and partly on account of 20  some other person  (6) the tax recovery officer shall disallow the claim, for reasons to be recorded in writing, if he is satisfied that the property was— (a) at the said date, in the possession of the defaulter as his own property and not on account of any other person; 25   (b) in the possession of some other person in trust for the defaulter; or (c) in the occupancy of a tenant or other person paying rent to the defaulter (7) where a claim or an objection is preferred, the party against whom an order is made may institute a suit in a civil court to establish his right to the property in disputes; and subject to the outcome of such suit the order of the tax recovery officer shall be 30  conclusive   11 where—  (a) the amount due, with costs and all charges and expenses resulting from the attachment of any property or incurred in order to hold a sale, are paid to the tax recovery officer, or 35  (b) the certificate is cancelled,  the attachment shall be deemed to be withdrawn and, in the case of immovable property, the withdrawal shall, if the defaulter so desires, be proclaimed at his expense, and a copy of the proclamation shall be affixed in the manner provided in this schedule removal of  attachment on satisfaction,  or cancellation  of certificate 12 the attachment and sale of movable and immovable property may be made by    40  such persons as the tax recovery officer may from time to time direct  officer  entitled to   attach and sell  defaulting purchaser answerable  for loss on  resale 13 (1) any deficiency of price which may happen on a resale by reason of the purchaser's default, and all expenses attending such resale, shall be certified to the tax recovery officer by the officer holding the sale, and shall, at the instance of either the tax recovery officer or the defaulter, be recoverable from the defaulting purchaser under the 45 procedure provided in this schedule (2) no application under sub-paragraph (1) shall be entertained, if it is filed after the end of fifteenth day from the date of resale  14 (1) the tax recovery officer may, in his discretion, adjourn any sale hereunder to a specified day and hour; and the officer conducting any such sale may, in his discretion, 5 adjourn the sale, after recording his reasons for such adjournment  (2) if the sale is made in, or within the precincts of, the office of the tax recovery officer, no such adjournment shall be made without the leave of the tax recovery officer  (3) where a sale of immovable property is adjourned under sub-paragraph (1) for a longer period than one calendar month, a fresh proclamation of sale under this schedule 10    shall be made unless the defaulter consents to waive it  (4) every sale shall be stopped if, before the lot is knocked down, the arrears and costs (including the costs of the sale) are tendered to the officer conducting the sale, or proof is given to his satisfaction that the amount of such arrears and costs has been paid to the tax recovery officer who ordered the sale  15  15 (1) where a notice has been served on a defaulter under paragraph 1, the defaulter, or his representative in interest, shall not be competent to mortgage, charge, lease or otherwise deal with any property belonging to him except with the permission of the tax recovery officer, nor shall any civil court issue any process against such property in execution of a decree for the payment of money  20  (2) where an attachment has been made under this schedule, any private transfer, or delivery, of the property attached or of any interest therein and any payment to the defaulter of any debt, dividend or other moneys contrary to such attachment, shall be void as against all claims enforceable under the attachment  | 16 no officer or other person having any duty to perform in connection with any sale   |     ||-----------------------------------------------------------------------------------------|-----||                                                                                         |     ||                                                                                         |     ||                                                                                         |     || adjournment                                                                             |     || or stoppage  of                                                                         |     || sale                                                                                   |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     || private                                                                                 |     || alienation  to                                                                          |     || be void in                                                                              |     || certain  cases                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     ||                                                                                         |     || p r o h i b i t i o n                                                                   |     || against  bidding                                                                        |     || or  purchase by                                                                         |     || officer                                                                                |     |25    under this schedule shall, either directly or indirectly, bid for, acquire or attempt to acquire any interest in the property sold  17 no sale under this schedule shall take place on - (a) a sunday; (b) other general holiday recognised by the state government ; or  30  (c) any day which has been notified by the state government to be a local holiday for the area in which the sale is to take place  18 any officer authorised to attach or sell any property or to arrest the defaulter or charged with any duty to be performed under this schedule, may apply to the officer-incharge of the nearest police station for such assistance as may be necessary in the discharge 35    of his duties, and the authority to whom such application is made shall depute a sufficient number of police personnel for furnishing such assistance  19 a tax recovery officer may, with the previous approval of the joint commissioner, entrust any of his functions as the tax recovery officer to any other officer lower than him in rank (not being lower in rank than an inspector of income-tax) and such officer shall, in 40    relation to the functions so entrusted to him, be deemed to be a tax recovery officer   part ii attachment and sale of  movable propertyattachment  20 except as otherwise provided in this schedule, when any movable property is to prohibition against sale  on  holidays assistance  by  police entrustment of certain functions  by tax  recovery officer warrant 45   be attached, the officer shall be furnished by the tax recovery officer (or other officer empowered by him in that behalf) a warrant in writing and signed with his name specifying the name of the defaulter and the amount to be realised  21 the officer shall cause a copy of the warrant to be served on the defaulter  service of copy of  warrant  22 if, after service of the copy of the warrant, the amount is not paid forthwith, the officer shall proceed to attach the movable property of the defaulter attachment   property  in defaulter 's possession 23 (1) where the property to be attached is movable property (other than agricultural produce) in the possession of the defaulter, the attachment shall be made by actual seizure, 5 and the officer shall keep the property in his own custody or the custody of one of his subordinates and shall be responsible for due custody thereof (2) the officer referred in sub-paragraph (1) may sell the property seized at once, if— (a) the property seized is subject to speedy and natural decay; or value (b) the expense of keeping the seized property in custody is likely to exceed its    10    24 (1) where the property to be attached is agricultural produce the attachment shall be made by affixing a copy of the warrant of attachment— (a) where such produce is growing crop, on the land on which such crop has grown; or (b) where such produce has been cut or gathered, on the threshing floor or place for treading out grain or the like, or fodder-stack, on or in which it is deposited, in such manner as may be considered necessary (2) a copy of warrant of attachment, where the property to be attached is agricultural produce, shall also be affixed on the outer door or on some other conspicuous part of the house in which the defaulter ordinarily resides, or with the leave of the tax recovery officer, on the outer door or on some other conspicuous part of the house in which he— (a) carries on business or personally works for gain; or (b) is known to have last resided or carried on business or personally worked for gain (3) upon affixing the copy of warrant under sub-paragraphs (1) and (2), the produce shall be deemed to have passed into the possession of the tax recovery officer agricultural produce 25 (1) where agricultural produce is attached, the tax recovery officer shall make such arrangements for the custody, watching, tending, cutting and gathering thereof as he may deem sufficient; and he shall have power to defray the cost of such arrangements provisions as to  agricultural produce  under attachment (2) the defaulter may tend, cut, gather and store the produce and do any other act necessary for maturing or preserving it, subject to such conditions as may be imposed by the tax recovery officer in this behalf, either in the order of attachment or in any subsequent order (3) if the defaulter fails to do all or any of the acts referred to in sub-paragraph (2), any person appointed by the tax recovery officer in this behalf may, subject to the like conditions, do all or any of such acts, and the costs incurred by such person shall be recoverable from the defaulter as if they were included in the certificate (4) any agricultural produce attached as a growing crop shall not be deemed to have ceased to be under attachment or to require re-attachment merely because it has been severed from the soil (5) where an order for the attachment of a growing crop has been made at a considerable time before the crop is likely to be fit to be cut or gathered, the tax recovery officer may suspend the execution of the order for such time as he thinks fit, and may, in his discretion, make a further order prohibiting the removal of the crop pending the execution of the order of attachment (6) a growing crop which from its nature does not admit of being stored shall not be attached under this paragraph at any time less than twenty days before the time at which it is likely to be fit to be cut or gathered  15  20 25 30  35  26 (1) in the case of a debt not secured by a negotiable instrument, a share in a corporation or other movable property not in the possession of the defaulter except property deposited in, or in the custody of, any court, the attachment shall be made by a written order prohibiting,   (a) in the case of the debt the creditor from recovering the debt and the debtor from making payment thereof until the further order of the tax recovery officer;  (b) in the case of the share the person in whose name the share may be standing from transferring the same or receiving any dividend thereon;  5  (c) in the case of the other movable property (except as aforesaid) the person in possession of the same from giving it over to the defaulter  (2) a copy of such order shall be affixed on some conspicuous part of the office of the tax recovery officer, and another copy shall be sent, in the case of the debt, to the debtor, in the case of the share, to the proper officer of the corporation, and in the case of the other movable property (except as aforesaid), to the person in possession of the same  10 (3) a debtor prohibited under clause (a) of sub-paragraph (1) may pay the amount of his debt to the tax recovery officer, and such payment shall discharge him as effectually as payment to the party entitled to receive the same 15 27 (1) the attachment of a decree of a civil court for the payment of money, or for sale in enforcement of a mortgage or charge, shall be made by the issue to the civil court of a notice requesting the civil court to stay the execution of the decree unless and until—  (a) the tax recovery officer cancels the notice; or  (b) the tax recovery officer, or the defaulter, applies to the court receiving such notice to execute the decree  20 (2) where a civil court receives an application under clause (b) of sub-paragraph (1), it shall, on the application of the tax recovery officer, or the defaulter, and subject to the provisions of the code of civil procedure, 1908, proceed to execute the attached decree and apply the net proceeds in satisfaction of the certificate  25 (3) the tax recovery officer shall be deemed to be the representative of the holder of the attached decree, and to be entitled to execute such attached decree in any manner lawful for the holder thereof 28 where the property to be attached consists of the share, or interest, of the defaulter in movable property belonging to him and another as co-owners, the attachment shall be made by a notice to the defaulter prohibiting him from transferring the share or interest or charging it in any way  30 35   29 attachment of the salary or allowances of servants of the government, or a local authority, may be made in the manner provided under rule 48 of order 21 of the first schedule to the code of civil procedure, 1908, and the provisions of the said rule shall, for the purposes of this paragraph, apply subject to such modifications as may be necessary  | 5  of 1908   ||---------------||               ||               ||               |30 where the property is a negotiable instrument not deposited in a court or in the custody of a public officer, the attachment shall be made by actual seizure, and the instrument shall be brought before the tax recovery officer and held subject to his orders  40  31 (1) where the property to be attached is in the custody of any court or public officer, the attachment shall be made by a notice to such court or officer, requesting that such property, and any interest or dividend becoming payable thereon, may be held subject to the further orders of the tax recovery officer by whom the notice is issued debts  and shares  attachment of decree  share  in movable  property  salary of government  servants attachment of  negotiable instrument  attachment  of property  in custody  of court or  public officer 45  (2) where the property is in the custody of a court, any question of title or priority arising between the tax recovery officer and any other person, not being the defaulter, claiming to be interested in such property by virtue of any assignment, attachment or otherwise, shall be determined by the court 50  32 (1) where the property to be attached consists of an interest of the defaulter, being a partner, in the partnership property, the tax recovery officer may make an order charging the share of such partner in the partnership property and profits with payment of the amount due under the certificate (2) the tax recovery officer may, by the order referred to in sub-paragraph (1) or any 5 subsequent order, appoint a receiver of the share of such partner in the profits, whether already declared or accruing and of any other money which may become due to him in respect of the partnership, and direct accounts and inquiries and make an order for the sale of such interest or such other order as the circumstances of the case may require  (3) the other persons shall be at liberty at any time to redeem the interest charged or,   10  in the case of a sale being directed, to purchase the same  attachment of  partnership property  33 in the case of attachment of movable property by actual seizure, the officer shall, after attachment of the property, prepare an inventory of all the property attached, specifying in it the place where it is lodged or kept, and shall forward the same to the tax recovery officer and a copy of the inventory shall be delivered by the officer to the defaulter 15    inventory attachment not to be excessive  34 the attachment by seizure shall not be excessive, that is to say, the property attached shall be as nearly as possible proportionate to the amount specified in the warrant  35 attachment by seizure shall be made after sunrise and before sunset and not otherwise seizure between sunrise  and sunset  36 the officer may break open any inner or outer door or window of any building and   20 enter any building in order to seize any movable property, if the officer has reasonable grounds to believe that such building contains movable property liable to seizure under the warrant and the officer has notified his authority and intention of breaking open if admission is not given provided that before breaking open, he shall give all reasonable opportunity to women to withdraw 25   power to break open  doors 37 the tax recovery officer may direct that any movable property attached under this schedule or such portion thereof as may seem necessary to satisfy the certificate shall be sold  sale  38 when any sale of movable property is ordered by the tax recovery officer, the tax recovery officer shall issue a proclamation, in the language in use in the district, of the   30 intended sale, specifying the time and place of sale and whether the sale is subject to confirmation or not | issue  of                                                                  |     ||----------------------------------------------------------------------------|-----||                                                                            |     || proclamation                                                              |     ||                                                                            |     ||                                                                            |     ||                                                                            |     || 39 (                                                                      |     || 1                                                                          |     || ) such proclamation shall be made by beat of drum or other customary mode— |     |(a) in the case of property attached by actual seizure— (i) in the village in which the property was seized, or, if the property was    35  seized in a town or city, then, in the locality in which it was seized; and  (ii) at such other places as the tax recovery officer may direct;  (b) in the case of property attached otherwise than by actual seizure, in such places, if any, as the tax recovery officer may direct  (2) a copy of the proclamation shall also be affixed in a conspicuous part of the office 40  of the tax recovery officer  proclamation how made  sale after fifteen  days 40 except where the property is subject to speedy and natural decay, or when the expense of keeping it in custody is likely to exceed its value, no sale of movable property under this schedule shall, without the consent in writing of the defaulter, take place until after the expiry of at least fifteen days calculated from the date on which a copy of the sale 45  proclamation was affixed in the office of the tax recovery officer 41 (1) where the property to be sold is agricultural produce, the sale shall be held—  (a) if such produce is a growing crop, on or near the land on which such crop has grown, or  (b) if such produce has been cut or gathered, at or near the threshing floor or 5 place for treading out grain or the like, or fodder-stack, on or in which it is deposited  (2) the tax recovery officer may direct the sale to be held at the nearest place of public resort, if he is of the opinion that the produce is thereby likely to sell at a greater value  (3) the sale shall be postponed, where, on the produce being put up for sale—  10  (a) a fair price, in the estimation of the person holding the sale, is not offered for it, and  (b) the owner of the produce, or a person authorised to act on his behalf, applies to have the sale postponed till the next day or, if a market is held at the place of sale, the next market day  15  (4) when the sale has been postponed under sub-paragraph (3), it shall be then completed on the date postponed irrespective of any price offered for the produce  42 (1) where the property to be sold is a growing crop and the crop from its nature admits of being stored but has not yet been stored, the day of the sale shall be so fixed as to admit of the crop being made ready for storing before the arrival of such day, and the sale 20    shall not be held until the crop has been cut, or gathered, and is ready for storing  (2) where the crop from its nature does not admit of being stored or can be sold at a greater value in an unripe stage, it may be sold before it is cut and gathered, and the purchaser shall be entitled to enter on the land, and to do all that is necessary for the purpose of tending or cutting or gathering the crop  25  43 the property shall be sold by public auction in one, or more, lots as the officer may consider advisable, and if the amount to be realised by sale is satisfied by the sale of a portion of the property, the sale shall be immediately stopped with respect to the remainder of the lots 44 (1) where movable property is sold by public auction, the price of each lot shall be 30    paid at the time of sale or as soon after as the officer holding the sale directs and in default of payment, the property shall forthwith be resold  (2) on payment of the purchase-money, the officer holding the sale shall grant a certificate specifying the property purchased, the price paid and the name of the purchaser, and the sale shall become absolute  35  (3) where the movable property to be sold is a share in goods belonging to the defaulter and a co-owner, and two or more persons, of whom one is such co-owner, respectively, bid the same sum for such property or for any lot, the bidding shall be deemed to be the bidding of the co-owner  45 no irregularity in publishing, or conducting, the sale of movable property shall 40    vitiate the sale, but any person sustaining substantial injury by reason of such irregularity at the hand of any other person may institute a suit in a civil court  against him for compensation, or (if such other person is the purchaser) for the recovery of the specific property and for compensation in default of such recovery  46 the tax recovery officer may, notwithstanding anything  sale of agricultural produce  special provisions relating to growing  crops sale to be by auction  sale by public auction  irregularity not to  vitiate sale,  but any person  injured may  sue   negotiable instruments and shares in a corporation 45    in this schedule, authorise the sale of any property, which is a negotiable instrument or a share in a corporation, through a broker instead of directing the sale to be made by public auction  47 where the property attached is current coin or currency notes, the tax recovery officer may, at any time during the continuance of the attachment, direct that such coins or notes shall be credited to the central government and the amount so credited shall be dealt with in the manner specified in paragraph 7  part iii 5   attachment and sale of  immovable property attachmentorder for payment of coin or currency  notes to the assessing officer 48 the attachment of the immovable property of the defaulter shall be made by an order prohibiting the defaulter from transferring, or charging, the property in any way and prohibiting all persons from taking any benefit under such transfer or charge 10  | attachment   ||---------------||               ||               ||               |49 a copy of the order of attachment shall be served on the defaulter service  of notice  of attachment  50 the order of attachment shall be proclaimed at some place on, or adjacent to, the property attached by beat of drum, or other customary mode, and a copy of the order shall be affixed on a conspicuous part of the property and on the notice board of the office of the tax recovery officer 15   proclamation of   attachment  51 where any immovable property is attached under this schedule, the attachment shall relate back to, and take effect from, the date on which the notice to pay the arrears, issued under this schedule, was served upon the defaulter  saleattachment to relate  back from  the date of  service of notice  52 (1) the tax recovery officer may direct that any immovable property which has    20  been attached, or such portion thereof as may seem necessary to satisfy the certificate, shall be sold  (2) where any immovable property is ordered to be sold, the tax recovery officer shall cause a proclamation of the intended sale to be made in the language in use in the district 25   | sale and                                                                                       |     ||------------------------------------------------------------------------------------------------|-----|| proclamation                                                                                   |     || of sale                                                                                       |     ||                                                                                                |     ||                                                                                                |     ||                                                                                                |     ||                                                                                                |     ||                                                                                                |     || 53 a proclamation of sale of immovable property shall be drawn up after notice to the         |     || defaulter, and shall state the time and place of sale, and specify as fairly and accurately as |     || possible—                                                                                      |     ||                                                                                                |     || (                                                                                              |     || a                                                                                              |     || ) the property to be sold;                                                                     |     ||                                                                                                |     || (                                                                                              |     || b                                                                                              |     || ) the revenue, if any, assessed upon the property or any part thereof;                         |     || 30                                                                                             |     ||                                                                                                |     || (                                                                                              |     || c                                                                                              |     || ) the amount for the recovery of which the sale is ordered;                                    |     ||                                                                                                |     || (                                                                                              |     || d                                                                                              |     || ) the reserve price, if any, below which the property may not be sold; and                     |     ||                                                                                                |     || (                                                                                              |     || e                                                                                              |     || ) any other thing which the tax recovery officer considers it material for a                   |     || purchaser to know, in order to judge the nature and value of the property                     |     ||                                                                                                |     || contents of                                                                                    |     || proclamation                                                                                  |     ||                                                                                                |     ||                                                                                                |     ||                                                                                                |     ||                                                                                                |     ||                                                                                                |     ||                                                                                                |     ||                                                                                                |     ||                                                                                                |     ||                                                                                                |     ||                                                                                                |     ||                                                                                                |     ||                                                                                                |     || mode  of                                                                                       |     || making                                                                                         |     || proclamation                                                                                  |     || 54 (                                                                                          |     || 1                                                                                              |     || ) every proclamation for the sale of immovable property shall be made at some                  |     || 35                                                                                             |     || place on or near such property by beat of drum or other customary mode, and a copy of the      |     || proclamation shall be affixed on a conspicuous part of the property and also upon a            |     || conspicuous part of the office of the tax recovery officer                                    |     ||                                                                                                |     || (                                                                                              |     || 2                                                                                              |     || ) where the tax recovery officer so directs, such proclamation shall also be                   |     || published in the official gazette or in a local newspaper, or in both; and the cost of such    |     || 40                                                                                             |     || publication shall be deemed to be costs of the sale                                           |     ||                                                                                                |     || (                                                                                              |     || 3                                                                                              |     || ) where the property is divided into lots for the purpose of being sold separately, it         |     || shall not be necessary to make a separate proclamation for each lot, unless proper notice of   |     || the sale cannot, in the opinion of the tax recovery officer, otherwise be given               |     |55 no sale of immovable property under this schedule shall, without the consent in writing of the defaulter, take place until after the expiration of at least thirty days calculated from the date on which a copy of the proclamation of sale has been affixed on the property or in the office of the tax recovery officer, whichever is later  5  56 (1) the sale shall be by public auction to the highest bidder and shall be subject to confirmation by the tax recovery officer  (2) no sale under this paragraph shall be made, if the amount bid by the highest bidder is less than the reserve price, if any, specified under clause (d) of paragraph 53  57 (1) on every sale of immovable property, the person declared to be the purchaser 10    shall pay, immediately after such declaration, a deposit of twenty-five per cent on the amount of his purchase money, to the officer conducting the sale; and, in default of such deposit, the property shall forthwith be resold  (2) the full amount of purchase money payable shall be paid by the purchaser to the tax recovery officer on or before the fifteenth day from the date of the sale of the property  15  58 in default of payment within the period mentioned in paragraph 57, the deposit may, if the tax recovery officer thinks fit, after defraying the expenses of the sale, be forfeited to the government, and the property shall be resold, and the defaulting purchaser shall forfeit all claims to the property or to any part of the sum for which it may subsequently be sold 20  59 (1) where the sale of a property, for which a reserve price has been specified under clause (d) of paragraph 53, has been postponed for want of a bid of an amount not less than such reserve price, it shall be lawful for an assessing officer, if so authorised by the chief commissioner or the commissioner in this behalf, to bid for the property on behalf of the central government at any subsequent sale 25  (2) all persons bidding at the sale shall be required to declare, if they are bidding on their own behalf or on behalf of their principles (3) the bid shall be rejected if the person bidding on behalf of his principal fails to deposit the authority (4) where the assessing officer referred to in sub-paragraph (1) is declared to be the 30 purchaser of the property at any subsequent sale, nothing contained in paragraph 57 shall apply to the case and the amount of the purchase price shall be adjusted towards the amount specified in the certificate  60 (1) where immovable property has been sold in execution of a certificate, the defaulter, or any person whose interests are affected by the sale, may, at any time within a 35    period of thirty days from the date of the sale, apply to the tax recovery officer to set aside the sale, on his depositing— (a) the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered, with interest thereon at the rate of one and one-fourth per cent for every month calculated from the date of the proclamation of sale to the date 40 when the deposit is made; and (b) for payment to the purchaser, as penalty, a sum equal to five per cent of the purchase money, but not less than one rupee (2) where a person makes an application under paragraph 61 for setting aside the sale of his immovable property, he shall not, unless he withdraws that application, be entitled to 45 make or prosecute an application under this paragraph  61 (1) where immovable property has been sold in execution of a certificate by such income tax officer as may be authorised by the chief commissioner or the commissioner in this behalf, the defaulter or any person whose interests are affected by the sale, may at any time within thirty days from the date of the sale, apply to the tax recovery officer to set 50    aside the sale of the immovable property on the ground— | time of sale     |     ||-------------------|-----||                   |     ||                   |     ||                   |     ||                   |     || sale to be by     |     || auction          |     ||                   |     ||                   |     ||                   |     ||                   |     || deposit by        |     || purchaser  and    |     || resale  in        |     || default          |     ||                   |     ||                   |     ||                   |     ||                   |     || procedure  in     |     || default  of       |     || payment          |     ||                   |     ||                   |     ||                   |     ||                   |     || authority  to     |     || bid              |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     || application  to   |     || set aside sale    |     || of  immovable     |     || property  on      |     || deposit          |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     ||                   |     || application  to   |     || set aside sale of |     || i m m o v a b l e |     || property          | on  || ground of  non-   |     || service  of       |     || notice or         |     || irregularity     |     |(a) that notice was not served on the defaulter to pay the arrears as required by this schedule; or  (b) of a material irregularity in publishing, or conducting, the sale  (2) no sale shall be set aside on any ground referred to in sub-paragraph (1) unless the tax recovery officer is satisfied that the applicant has sustained substantial injury by 5 reason of the non-service or irregularity  (3) an application made by a defaulter under this paragraph shall be disallowed unless the applicant deposits the amount recoverable from him in the execution of the certificate 62 at any time within a period of thirty days of the sale, the purchaser may apply to   10 the tax recovery officer to set aside the sale on the ground that the defaulter had no saleable interest in the property sold   setting  aside sale  where defaulter  has no  saleable interest  63 (1) where no application is made for setting aside the sale under paragraphs 60 and 61 or where such an application is made and disallowed by the tax recovery officer, the tax recovery officer shall (if the full amount of the purchase money has been paid) make an    15  order confirming the sale and thereupon, the sale shall become absolute  (2) where application is made and allowed, and where, in the case of an application made to set aside the sale on deposit of the amount and penalty and charges, the deposit is made within a period of thirty days from the date of the sale, the tax recovery officer shall make an order setting aside the sale 20  (3) no order under sub-paragraph (2) shall be made unless notice of the application has been given to the persons affected thereby  confirmation of sale 64 where a sale of immovable property is set aside, any money paid or deposited by the purchaser on account of the purchase, together with the penalty, if any, deposited for payment to the purchaser, and such interest as the tax recovery officer may allow, shall be   25 paid to the purchaser  return  of purchase money  in  certain  cases  65 where a sale of immovable property has become absolute, the tax recovery officer shall grant a certificate specifying the property sold, and the name of the person who at the time of sale is declared to be the purchaser and such certificate shall state the date on which the sale became absolute 30   sale  certificate  66 (1) where an order for the sale of immovable property has been made, if the defaulter can satisfy the tax recovery officer that there is reason to believe that the amount of the certificate may be raised by the mortgage or lease or private sale of such property, or some part thereof, or of any other immovable property of the defaulter, the tax recovery officer may, on his application, postpone the sale of the property comprised in the order for   35 sale, on such terms, and for such period as he thinks proper, to enable him to raise the amount  (2) in such case, the tax recovery officer shall grant a certificate to the defaulter, authorising him, within a period to be mentioned therein, and notwithstanding anything contained in this schedule, to make the proposed mortgage, lease or sale 40   (3) all moneys payable under the mortgage, lease or sale referred to in sub-paragraph (2) shall be paid to the tax recovery officer and not to the defaulter  (4) no mortgage, lease or sale under this paragraph shall become absolute until it has been confirmed by the tax recovery officer  postponement of sale to enable defaulter to raise  amount due under certificate  fresh proclamation before  resale 67 every resale of immovable property, in default of payment of the purchase money 45 within the period allowed for such payment, shall be made after the issue of a fresh proclamation in the manner and for the period hereinbefore provided for the sale 68 where the property sold is a share of undivided immovable property, and two or more persons, of whom one is a co-sharer, respectively, bid the same sum for such property or for any lot, the bid shall be deemed to be the bid of the co-sharer    69 (1) without prejudice to the provisions contained in this part, an assessing officer, duly authorised by the chief commissioner or the commissioner in this behalf, may accept in satisfaction of the whole or any part of the amount due from the defaulter the property, the sale of which has been postponed for the reason mentioned in sub-paragraph (1) of paragraph 59, at such price as may be agreed upon between the assessing officer and the defaulter  5 10 (2) where any property is accepted under sub-paragraph (1), the defaulter shall deliver possession of such property to the assessing officer and on the date the possession of the property is delivered to the assessing officer, the property shall vest in the central government and the central government shall, where necessary, intimate the concerned registering officer appointed under the registration act, 1908, accordingly  16 of 1908  (3) where the price of the property agreed upon under sub-paragraph (1) exceeds the amount due from the defaulter, such excess shall be paid by the assessing officer to the defaulter within a period of three months from the date of delivery of possession of the property  15  (4) where the assessing officer fails to pay the excess amount referred to in subparagraph (3) within the period referred therein, the central government shall, for the period commencing on the expiry of such period and ending with the date of payment of the amount remaining unpaid, pay simple interest at one-half per cent for every month or part of a month to the defaulter on such amount  20 bid  of cosharer to  have preference  acceptance  of property  in satisfaction  of amount  due from  the defaulter  time limit  for sale of attached immovable property 70 (1) no sale of immovable property shall be made under this part after the expiry of the period of six years from the end of the financial year in which the order giving rise to a demand of any tax, interest, fine, penalty or any other sum, for the recovery of which the immovable property has been attached, has become final in terms of the provision of sub- chapter d of chapter xii  25 (2) the period of limitation referred to in sub-paragraph (1) shall stand extended by one year, if the immovable property is required to be re-sold—  (a) due to the amount of highest bid being less than the reserve price;  (b) under the circumstances mentioned in paragraph 57 or paragraph 58; or  (c) due to the sale being set aside under paragraph 61  30 (3) in computing the period of limitation under sub-paragraph (1), the following period shall be excluded— (a) the period during which the levy of the aforesaid tax, interest, fine, penalty or any other sum is stayed by an order or injunction of any court;  (b) the period during which the proceedings of attachment or sale of the immovable property are stayed by an order or injunction of any court; or  35 (c) the period commencing from the date of the presentation of any appeal against the order passed by the tax recovery officer under this schedule and ending on the day the appeal is decided  40  45  (4) where immediately after the exclusion of the period referred in sub-paragraph (3), the period of limitation for the sale of the immovable property is less than 180 days, such remaining period shall be extended to 180 days and the aforesaid period of limitation shall be deemed to be extended accordingly  (5) where the sale of immovable property is not made in accordance with the provisions of sub-paragraph (1), the attachment order in relation to the said property shall be deemed to have been vacated on the expiry of the time of limitation specified under this paragraph  part iv procedure for distraint  71 where any distraint and sale of movable property are to be effected by any assessing officer or tax recovery officer authorised for the purpose, such distraint and sale shall be made, as far as may be, in the same manner as attachment and sale of any 5 movable property attachable by actual seizure, and the provisions of this schedule relating to attachment and sale shall, so far as may be, apply in respect of such distraint and sale   part v appointment  of receiverprocedure  for distraint 72 (1) where the property of a defaulter consists of a business, the tax recovery    10  officer may attach the business and appoint a person as receiver to manage the business  (2) the attachment of a business under this paragraph shall be made by an order prohibiting the defaulter from transferring or charging the business in any way and prohibiting all persons from taking any benefit under such transfer or charge, and intimating that the business has been attached under this paragraph 15   (3) a copy of the order of attachment shall be served on the defaulter, and another copy shall be affixed on a conspicuous part of the premises in which the business is carried on and on the notice board of the office of the tax recovery officer  appointment of receiver for  business  73 where immovable property is attached, the tax recovery officer may, instead of directing a sale of the property, appoint a person as receiver to manage such property 20 appointment of receiver  for immovable property  74 (1) where any business or other property is attached and taken under management under paragraphs 72 and 73, the receiver shall, subject to the control of the tax recovery officer, have such powers as may be necessary for the proper management of the property and the realisation of the profits, or rents and profits, thereof  (2) the profits or rents and profits of such business or other property, shall, after    25  defraying the expenses of management, be adjusted towards discharge of the arrears, and the balance, if any, shall be paid to the defaulter  powers  of receiver 75 the attachment and management under this part may be withdrawn at any time at the discretion of the tax recovery officer, or if the arrears are discharged by receipt of such profits and rents or are otherwise paid 30    part vi arrest and detention of the  defaulterwithdrawal  of management notice to show  cause 76 (1) no order for the arrest and detention in civil prison of a defaulter shall be made unless the tax recovery officer has issued and served a notice upon the defaulter calling upon him to appear before him on the date specified in the notice and to show cause why he    35  should not be committed to the civil prison (2) the provisions of sub-paragraph (1) shall not apply if the tax recovery officer, for reasons recorded in writing, is satisfied— (a) that the defaulter has, with the object or effect of obstructing the execution of the certificate, after the drawing up of the certificate by the tax recovery officer, 40  dishonestly transferred, concealed, or removed any part of his property; or (b) that the defaulter has, or has had since the drawing up of the certificate by the tax recovery officer, the means to pay the arrears or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same (3) notwithstanding anything in sub-paragraph (1), a warrant for the arrest of the 45 defaulter may, be issued by the tax recovery officer, if he is satisfied, by affidavit or otherwise, that the defaulter is likely to abscond, or leave the local limits of the jurisdiction of the tax recovery officer, with the object, or effect, of delaying the execution of the certificate  (4) the tax recovery officer may issue a warrant for the arrest of the defaulter if appearance is not made in obedience to a notice issued and served under sub-paragraph 5      (1)  (5) a warrant of arrest issued by a tax recovery officer under sub-paragraph (3) or sub-paragraph (4) may also be executed by any other tax recovery officer within whose jurisdiction the defaulter may for the time being be found  (6) every person arrested in pursuance of a warrant of arrest under this paragraph 10    shall be brought before the tax recovery officer issuing the warrant as soon as practicable and in any event within twenty-four hours of his arrest (exclusive of the time required for the journey)  (7) the tax recovery officer shall at once release the defaulter if he pays the amount entered in the warrant of arrest as due and the costs of the arrest to the officer arresting him 15  (8) in this paragraph, the karta of a hindu undivided family shall be deemed to be the defaulter if the defaulter is the hindu undivided family  77 the tax recovery officer shall give the defaulter an opportunity of showing cause why he should not be committed to the civil prison, when the defaulter appears before the tax recovery officer in pursuant to the notice under paragraph 76 or is brought 20 before the tax recovery officer under the said paragraph  78 pending the conclusion of the inquiry, the tax recovery officer may, in his discretion, order the defaulter to be detained in the custody of such officer as the tax recovery officer may think fit or release him on his furnishing security to the satisfaction of the tax recovery officer for his appearance when required  25  79 (1) upon the conclusion of the inquiry, the tax recovery officer may make an order for the detention of the defaulter in the civil prison and shall in that event cause him to be arrested if he is not already under arrest  (2) in order to give the defaulter an opportunity of satisfying the arrears, the tax recovery officer may, before making the order of detention—  | 30                                                                                          |     ||---------------------------------------------------------------------------------------------|-----|| (                                                                                           |     || a                                                                                           |     || ) leaves the defaulter in the custody of the officer arresting him, or of any               |     || other officer, for a specified period not exceeding 15 days; or                             |     ||                                                                                             |     || (                                                                                           |     || b                                                                                           |     || ) release him on his furnishing security to the satisfaction of the tax recovery            |     || officer for his appearance at the expiration of the specified period if the arrears are not |     || so satisfied                                                                               |     || 35                                                                                          |     || (                                                                                           |     || 3                                                                                           |     || ) the tax recovery officer shall direct the release of the defaulter, who is under          |     || arrest, if he does not make an order of detention under sub-paragraph (                     |     || 1                                                                                           |     || )                                                                                          |     ||                                                                                             |     || 80 (                                                                                       |     || 1                                                                                           |     || ) every person detained in the civil prison in execution of a certificate may be so         |     || detained—                                                                                   |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     || hearing                                                                                    |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     || custody                                                                                     |     || pending                                                                                     |     ||                                                                                             |     || hearing                                                                                    |     ||                                                                                             |     ||                                                                                             |     || order  of                                                                                   |     || detention                                                                                  |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     ||                                                                                             |     || detention  in                                                                               |     || and  release                                                                                |     || from  prison                                                                               |     || (                                                                                           |     || a                                                                                           |     || ) where the certificate is for a demand of an amount exceeding two hundred                  |     || 40                                                                                          |     || and fifty rupees, for a period of six months; and                                           |     || (                                                                                           |     || b                                                                                           |     || ) in any other case, for a period of six weeks                                             |     || (                                                                                           |     || 2                                                                                           |     || ) the person so detained shall be released from detention—                                  |     || (                                                                                           |     || a                                                                                           |     || ) on the amount mentioned in the warrant for his detention being paid to the                |     || officer-in-charge of the civil prison, or                                                   |     || 45                                                                                          |     || (                                                                                           |     || b                                                                                           |     || ) on the request of the tax recovery officer on any ground other than the                   |     || grounds mentioned in paragraphs 81 and 82                                                  |     |(3) a defaulter released from detention under this paragraph shall not, merely by reason of his release be discharged from his liability for the arrears but shall not liable to be rearrested under the certificate in execution of which he was detained in the civil prison 81 (1) the tax recovery officer may order the release of a defaulter who has been arrested in execution of a certificate upon being satisfied that—  (a) he has disclosed the whole of his property and has placed it at the disposal of the tax recovery officer; and 5 (b) he has not committed any act of bad faith  (2) the tax recovery officer may order the rearrest of the defaulter in execution of the certificate, if he has ground for believing the disclosure made by the defaulter under subparagraph (1) to have been untrue  (3) the period of the detention of the defaulter in the civil prison shall not in the    10  aggregate exceed the period authorised under paragraph 80  release 82 (1) the tax recovery officer may, at any time after a warrant for the arrest of a defaulter has been issued, cancel the warrant on the ground of serious illness of the defaulter  (2) the tax recovery officer may, in a case where a defaulter has been arrested, release him if, in the opinion of the tax recovery officer, he is not in a fit state of health to 15 be detained in the civil prison  (3) a defaulter, who has been committed to the civil prison, may be released therefrom by the tax recovery officer on the ground of the existence of any infectious or contagious disease, or on the ground of his suffering from any serious illness  (4) a defaulter released under this paragraph may be rearrested, but the period of his   20 detention in the civil prison shall not in the aggregate exceed the period authorised under paragraph 80  release  on ground  of illness  83 for the purpose of making an arrest under this schedule—  (a) no dwelling house shall be entered after sunset and before sunrise;  (b) no outer door of a dwelling house shall be broken open unless such dwelling   25 house or a portion thereof is in the occupancy of the defaulter and he or other occupant of the house refuses or in any way prevents access thereto; but, when the person executing any such warrant has duly gained access to any dwelling house, he may break open the door of any room or apartment if he has reason to believe that the defaulter is likely to be found there; 30   (c) no room, which is in the actual occupancy of a woman who, according to the customs of the country, does not appear in public, shall be entered into unless the officer authorised to make the arrest has given notice to her that she is at liberty to withdraw and has given her reasonable time and facility for withdrawing  entry  into dwelling house 84 the tax recovery officer shall not order the arrest and detention in the civil    35  prison of—  (a) a woman; or  (b) any person who, in his opinion, is a minor or of unsound mind  part viimiscellaneous 40   prohibition against  arrest of  women or minors,  etc officers deemed to  be acting 85 every chief commissioner, the commissioner, tax recovery officer or other officer shall while acting in the discharge of his functions under this schedule, be deemed to be acting judicially within the meaning of the judicial officers protection act, 1850 judicially 18 of  1850 86 every chief commissioner, commissioner, tax recovery officer or other officer acting under the provisions of this schedule shall have the powers of a civil court while trying a suit for the purpose of receiving evidence, administering oaths, enforcing the attendance of witnesses and compelling the production of documents  5 87 no certificate shall cease to be in force by reason of the death of the defaulter   88 the proceedings under this schedule, except arrest and detention, may be continued against the legal representative of the defaulter, and the provisions of this schedule shall apply as if the legal representative were the defaulter, if the defaulter dies, at any time, after the certificate is drawn up by the tax recovery officer  10  89 (1) an appeal from any original order passed by the tax recovery officer under this schedule, not being an order which is conclusive, shall lie to the chief commissioner or commissioner (2) every appeal under this paragraph may be presented within a period of thirty days from the date of the order appealed against  15  (3) pending the decision of any appeal, execution of the certificate may be stayed if the appellate authority so directs, but not otherwise  (4) where a chief commissioner or commissioner is authorised to exercise powers as such in respect of any area, then, notwithstanding anything in sub-paragraph (1), all appeals against the orders passed before the date of such authorisation by any tax recovery 20 officer authorised to exercise powers as such in respect of that area, or an area which is included in that area, shall lie to such chief commissioner or commissioner  90 any order passed under this schedule may, after notice to all persons interested, be reviewed by the chief commissioner, commissioner, tax recovery officer or other officer who made the order, or by his successor in office, on account of any mistake apparent from 25 the record  91 a person may be proceeded against under this schedule, if he has become surety for the amount due by a defaulter, as if such person were the defaulter 92 (1) the sum payable for the subsistence of a defaulter, who is arrested or detained in the civil prison, from the time of arrest until he is released shall be borne by the tax 30 recovery officer (2) the sum shall be calculated on the scale fixed by the state government for the subsistence of judgment-debtors arrested in execution of a decree of a civil court (3) the sums payable under this paragraph shall be deemed to be the costs in the proceeding but the defaulter shall not be detained in the civil prison or arrested on account 35    of any sum so payable 93 the board may prescribe the form to be used for any order, notice, warrant, or certificate to be issued under this schedule power to  take evidence continuance of  certificate  procedure  on death  of  defaulter  appeals  review  recovery from  surety  subsistence allowance forms   power to make  rules 94 (1) the board may make rules, consistent with the provisions of this code, for regulating the procedure to be followed by chief commissioners, commissioners, tax 40    recovery officers and other officers acting under this schedule  (2) in particular, and without prejudice to the generality of the power conferred by sub-paragraph (1), such rules may provide for all, or any of the following matters, namely:—  (a) the area within which chief commissioners, commissioners or tax recovery officers may exercise jurisdiction;  45 (b) the manner in which any property sold under this schedule may be delivered; (c) the execution of a document or the endorsement of a negotiable instrument or a share in a corporation, by or on behalf of the tax recovery officer, where such execution, or endorsement, is required to transfer such negotiable instrument, or share, to a person who has purchased it under a sale under this schedule;  (d) the procedure for dealing with resistance, or obstruction, offered by any person to a purchaser of any immovable property sold under this schedule, in obtaining possession of the property; 5 (e) the fees to be charged for any process issued under this schedule;  (f) the scale of charges to be recovered in respect of any other proceeding taken under this schedule;  (g) recovery of poundage fee;  (h) the maintenance and custody, while under attachment, of livestock or other    10  movable property, the fees to be charged for such maintenance and custody, the sale of such livestock or property, and the disposal of proceeds of such sale; (i) the mode of attachment of business 95 nothing in this schedule shall affect any provision of this code whereunder the tax is a first charge upon any asset 15    saving regarding charge  96 in this schedule, unless the context otherwise requires,—  (a) "certificate", except in paragraphs 6, 44, 65 and sub-paragraph (2) of paragraph interpretations in this schedule 66, in respect of any assessee means the certificate referred to in sub-section (1) of section 219;  (b) "defaulter" means the assessee mentioned in the certificate; 20  (c) "execution" in relation to a certificate means recovery of arrears in pursuance of the certificate; (d) "movable property" includes growing crops;  (e) "officer" means a person authorised to make an attachment or sale under this  schedule; 25   (f) "paragraph" means a paragraph contained in this schedule; and  (g) "share in a corporation" includes stock, debenture-stock, debentures or bonds  35 sections 10 and 18 (1) (a)) income not included in the total income 1 agricultural income 5  2 subject to the provisions of sub-section (1) of section 9, any sum received by an individual as a member of a hindu undivided family if,— (a) the sum has been paid out of the income of the family; or (b) in the case of any impartible estate, the sum has been paid out of the income of the impartible estate belonging to the family 10  3 any sum received by a person, being a participant in an unincorporated body, towards his share as per the agreement of association, in the total income of  such body which is separately assessed 4 the amount of family pension received by the widow or children or nominated heirs, as the case may be, of a member of the armed forces (including para-military forces) of 15    the union, if the death of such member has occurred in the course of operational duties, in such circumstances and subject to such conditions, as may be prescribed 5 any income arising to a foreign company, as the central government may, by notification, specify in this behalf, by way of royalty or fees for technical services received in pursuance of an agreement entered into with the government for providing services in or 20 outside india in projects connected with security of india 6 any income of the european economic community, (established by the treaty of rome of 25th march, 1957) derived in india by way of interest, dividends or capital gains from investments made out of its funds under such scheme as the central government may, by notification specify in this behalf 25 7 any amount of interest payable— (a) on securities held by the issue department of the central bank of ceylon constituted under the ceylon monetary law act, 1949; (b) to a bank incorporated in a country outside india and authorised to perform central banking functions in that country, on deposits by it with any scheduled bank, 30 with the approval of the reserve bank of india; (c) to the nordic investment bank being a multilateral financial institution constituted by the governments of denmark, finland, iceland, norway and sweden, on a loan advanced by it to a project approved by the central government in terms of the memorandum of understanding entered into by the central government with that 35 bank on the 25th day of november, 1986; (d) to european investment bank, on a loan granted by it in pursuance of the framework-agreement for financial co-operation entered into on the 25th day of november, 1993 by the central government with that bank 8 income accruing to a person, if - 40  (a) the person is a member of a scheduled tribe as defined in clause (25) of article 366 of the constitution; and (b) the person resides in— (i) the states of arunachal pradesh, manipur, mizoram, nagaland and tripura, 45 (ii) any area specified in part i or part ii of the table appended to paragraph 20 of the sixth schedule to the constitution,  (iii) the areas covered by notification no tad/r/35/50/109, dated the 23rd february, 1951, issued by the governor of assam under the proviso to sub-paragraph (3) of paragraph 20 of the sixth schedule to the constitution as it stood immediately before the commencement of the north-eastern areas (reorganisation) act, 1971, or  (iv) the ladakh region of the state of jammu and kashmir and the income of such person is in the nature of dividend or interest on securities or from any source in the states or areas specified in clause (b)  9 income accruing from any source in the state of sikkim or by way of dividend or interest on securities to a sikkimese, other than a sikkimese woman who, on or after the 1st day of april, 2008, marries an individual who is not a sikkimese  10 any income, the nature and extent, accruing to a body or authority which is notified by the central government in this behalf if such body or authority—  (a) has been established or constituted or appointed under—  (i) a treaty or an agreement entered into by the central government with two or more countries; or (ii) a convention signed by the central government; and  (b) is not established, constituted or appointed for the purposes of profit; and  11 the amount of accumulated balance in the account of an employee participating in an approved provident fund and any accretion thereto, to the extent provided in paragraph 7 of part i of the nineteenth schedule  12 any payment from a provident fund to which the provident funds act, 1925, applies or from any other provident fund set up by the central government and notified by it in this behalf  13  any payment from an approved superannuation fund made—  (a) in lieu of or in commutation of an annuity on his retirement at or after a specified age or on his becoming incapacitated prior to such retirement; or  (b) on the death of a beneficiary  14 the amount of remuneration received by an individual who is not a citizen of india, if the following conditions are fulfilled, namely:—  (a) such individual is an official, by whatever name called, of an embassy, high commission, legation, commission, consulate or the trade representation of a foreign state, or as a member of the staff of any of these officials, for service in such capacity;  (b) the remuneration of the corresponding officials or, as the case may be, members of the staff, if any, of the government resident for similar purposes in the country concerned enjoys a similar exemption in that country; and  (c) the members of the staff are subjects of the country represented and are not engaged in any business or profession or employment in india otherwise than as members of such staff 15 the amount received by an individual who is not a citizen of india, by way of remuneration as an employee of a foreign enterprise for services rendered by him during his stay in india, if the following conditions are fulfilled, namely:—  (a) the foreign enterprise is not engaged in any trade or business in india;  (b) his stay in india does not exceed in the aggregate a period of ninety days in such financial year; and  (c) such remuneration is not liable to be deducted from the income of the employer chargeable under this code   81 of  1971 5 10  15 19 of  1925 20 25  30 35 40  45  16 the amount received by, or due to, any individual being a non-resident, who is not a citizen of india, by way of remuneration, if the following conditions are fulfilled, namely:—  (a) such remuneration is for services rendered in connection with the employment on a foreign ship; and  (b) his total stay in india does not exceed in the aggregate a period of ninety 5 days in the financial year  17 the amount of remuneration received by an individual who is not a citizen of india, if the following conditions are fulfilled, namely:—  (a) he is an employee of the government of a foreign state during his stay in india; and  10  (b) his stay in india is in connection with his training in any establishment or office of, or in any undertaking owned by,—  (i) the government;  (ii) any company in which the entire paid-up share capital is held by the central government, or any state government or state governments, or partly 15 by the central government and partly by one or more state governments;  (iii) any company which is a subsidiary of a company referred to in item (ii);   (iv) any corporation established by or under a central, state or provincial  14 of  1860 21 of  1985 act; or  20  (v) any society registered under the societies registration act, 1860, or under any other corresponding law for the time being in force and wholly financed by the central government, or any state government or state governments, or partly by the central government and partly by one or more state governments  25  18 any amount received by an assessee under the bhopal gas leak disaster (processing of claims) act, 1985 in excess of the amount, if any, allowed as a deduction in any financial year on account of any loss or damage caused to him by such disaster  19 any dividend declared, distributed or paid to a company or a non-resident, in respect of which dividend distribution tax has been paid under section 109 30  20  any income received from an equity oriented fund in respect of which tax on distribution of income has been paid under section 110  21  any amount of interest received on gold deposit bonds issued under the gold deposit scheme, 1999 notified by the central government  22  any income of a political party which is computed under the heads "income from 35  house property" or "capital gains" or "income from residuary sources" or any income by way of voluntary contributions received by it from any person, if—  (a) the political party keeps and maintains such books of account and other documents as would enable the assessing officer to properly deduce its income therefrom;  (b) the political party keeps and maintains a record of such contributions in excess of twenty thousand rupees, along with the name and address of the contributors;  (c) the accounts of such political party are audited by an accountant; and  40  45  43 of 1951 (d) the treasurer of such political party or any other person authorised by that political party in this behalf submits a report under sub-section (3) of section 29c of the representation of the people act, 1951 for the financial year 23  any amount of interest on deposits in a non-resident (external) account in any bank in india accruing to an individual, if he—  (a) is outside india in terms of clause (w) of section 2 of the foreign exchange management act, 1999; or  (b) has been permitted by the reserve bank of india to maintain the aforesaid account  24  any amount of interest payable by a scheduled bank, other than a co-operative bank, to a non-resident, on deposits in foreign currency where the acceptance of such deposits by the bank is approved by the reserve bank of india  25  any amount received by way of—  (a) daily allowance by any person by reason of his membership of parliament or of any state legislature or of any committee thereof; (b) an allowance by any person by reason of his membership of parliament under the members of parliament (constituency allowance) rules, 1986;  (c) constituency allowance by any person by reason of his membership of any state legislature under the act or rules made by the state concerned  26 any amount received, whether in cash or in kind—  (a) in pursuance of any award instituted by the central government or any state government or instituted by any other body and approved by the central government in this behalf; or  (b) as a reward from the central government or any state government for such purposes as may be approved by the central government in this behalf 27 any amount received by way of—  (a) pension by an individual, who had been in the service of the central government or state government and has been awarded "param vir chakra" or "maha vir chakra" or "vir chakra" or such other gallantry award as the central government may, by notification, specify in this behalf;  (b) family pension by any member of the family of the individual referred to in clause (a)  28 any sum received as compensation, from the multilateral fund of the montreal protocol on non-use of substances that deplete the ozone layer under the united nations environment programme, in accordance with the terms of agreement entered into by the government of india  29 any income accruing to an individual outside india, in a financial year from a source other than a business controlled in or a profession set up in india, if the individual—  (a) has been a non-resident in india in nine out of ten financial years preceding that financial year; or (b) has during the seven financial years preceding that financial year been in india for less than seven hundred and thirty days  30 any amount received from the central government, a state government or a local authority by an individual or his legal heir, by way of compensation on account of any disaster, in excess of the amount, if any, allowed as a deduction in any financial year on account of any loss or damage caused by such disaster, to him or his legal heir  31 any amount of interest on bonds—  (a) issued by a local authority or by a state pooled finance entity or a public sector company; and  (b) specified by the central government by notification 32 any amount of capital gain arising on account of the transfer of— (a) agricultural land situated in a rural area; (b) any personal effects; or (c) gold deposit bonds issued under the gold deposit scheme, 1999 notified by the central government  5 33 gross rent in respect of any one palace in the occupation of a ruler, if the annual value of the palace was exempt from income-tax before the commencement of the constitution (twenty-sixth amendment) act, 1971, by virtue of the provisions of the merged states (taxation concessions) order, 1949, or the part b states (taxation concessions) order, 1950, or, as the case may be, the jammu and kashmir (taxation concessions) order, 1958 34 any income and amount thereof notified by the central government accruing to any person from any international sporting event held in india, if such event—  (a) is approved by the international body regulating the international sport relating to such event; and  10 (b) has participation of more than two countries; and (c) is notified by the central government, for the purposes of this paragraph 35 any income of a venture capital company or a venture capital fund from investment in a venture capital undertaking  15 36 any income of a union or an association of such unions, which is computed under the head "income from house property" or "income from residuary sources" if— 20    (a) such union is registered under the trade unions act, 1926; and  (b) it is formed primarily for the purpose of regulating the relations between workmen and employer or amongst workmen   16 of 1926 37 any income received by an individual as a loan, either in lump sum or in instalment, in a transaction of reverse mortgage referred to in clause (v) of sub-section (1) of section 47 38 any allowance or perquisite paid or allowed outside india by the government to a citizen of india for rendering service outside india  25  39 any payment from new pension system trust to an employee having an account with the trust under the new pension scheme notified by the central government  40 any payment in commutation of pension received under any scheme of any employer, to the extent it does not exceed - (a) in a case where employee receives any gratuity, the commuted value of onethird of the pension which he is normally entitled to receive; and  30 (b) in any other case the commuted value of one-half of such pension  41 any payment received by the employee, from one or more employers, as the cash equivalent of the leave salary in respect of the period of earned leave at his credit at the time of his retirement, to the extent the aggregate of such amount does not exceed the limit as may be prescribed  35 42 any payment received by the employee, from one or more employers, by way of gratuity— (i) on his retirement; or (ii) on his becoming incapacitated prior to such retirement; or (iii) on termination of his employment; or 40  (iv) any gratuity received by the family on the death of the employee, 45  to the extent the aggregate of such amount does not exceed the limit as may be prescribed 43 any amount received by the employee, from one or more employers, in connection with termination of his service voluntary retirement or separation under any scheme framed for this purpose in accordance with such rules as may be prescribed, to the extent the aggregate of such amount does not exceed the limit as may be prescribed  44 any amount of compensation received by a workman under the industrial disputes act, 1947 or under any other law for the time being in force or under any award or contract of service, at the time of his retrenchment in accordance with the provisions of clause (b) of section 25f of the said act or five lakh rupees, whichever is less  45 any amount of scholarship received by a student to meet the cost of education 5 14 of  1947 10  46 any sum received by any person from an insurer in respect of a life insurance policy upon death of the insured person  47 income of a co-operative society from such activities and to such extent as may be prescribed  (see sections 11 and 90) persons, entity or funds  not liable to income-tax7  of  1942  1 the coffee board constituted under section 4 of the coffee act, 1942  5 2 the rubber board constituted under sub-section (1) of section 4 of the rubber board act,1947  24 of  1947 3 the tea board established under section 4 of the tea act, 1953  29 of  1953  4 the tobacco board constituted under the tobacco board act, 1975  5 the marine products export development authority established under section 4 of 4  of  1975   10 the marine products export development authority act,1972  13 of  1972  6 the agricultural and processed food products export development authority established under section 4 of the agricultural and processed food products export development authority act, 1985  7 the spices board constituted under sub-section (1) of section 3 of the spices 2  of  1986   15 board act, 1986  10 of  1986  45 of  1953 8 the coir board established under section 4 of the coir industry act,1953  9 the prime minister's national relief fund  10 the prime minister's fund (promotion of folk art)   20  11 the prime minister's aid to students fund  15 of  1992 12 the national foundation for communal harmony  13 the insurance regulatory and development authority 14 a mutual fund registered under the securities and exchange board of india act, 15 any provident fund to which the provident funds act, 1925 applies  16 new pension system trust  17 any approved provident fund 18 any approved superannuation fund  19 any approved gratuity fund 20 the deposit-linked insurance fund established under— 19 of  1925  (a) the coal mines provident funds and miscellaneous provisions act, 1948;  1992  25  30  46 of  1948  19 of  1952 (b) the employees' provident funds and miscellaneous provisions act, 1952; 21 the employees' state insurance fund set-up under the employees' state insurance 34 of  1948 act, 1948 22 any electoral trust so approved by the board in accordance with the scheme made 35 in this regard by the central government, if ninety-five per cent of the aggregate of all voluntary contributions received by it during the financial year and the surplus, if any, brought forward from any preceding financial year is distributed to political parties 23 a corporation established by a central, state or provincial act or any other body, institution or association (being a body, institution or association wholly financed by 40 government) where such corporation or other body or institution or association has been established or formed for promoting the interests of the members of the scheduled castes or the scheduled tribes or backward classes or of any two or all of them 24 any corporation established by the central or state government for promoting the interests of the members of a minority community notified as such by the central 45 government  25 any statutory corporation established for the welfare and economic upliftment of ex-servicemen, being the citizens of india  26 any co-operative society formed for promoting the interests of the members of the scheduled castes or the scheduled tribes or both if -  (a) the membership of the co-operative society consists of only other cooperative societies formed for similar purposes; and  (b) the finances of the society are provided by the government and such other societies  27 panchayat as referred to in clause (d) of article 243 of the constitution  28 municipality as referred to in clause (e) of article 243p of the constitution  29 municipal committee and district board, legally entitled to, or entrusted by the government with the control or management of a municipal or local fund  30 cantonment board as defined in section 3 of the cantonments act, 2006  31 any regimental fund or non-public fund established by the armed forces of the union for the welfare of the past and present members of such forces or their dependants  32 any fund set up, on or after, the 1st day of august, 1996, by an insurer under a pension scheme,—  (a) to which contribution is made by any person for the purpose of receiving pension from such fund; and  (b) which is approved by the controller of insurance or the insurance regulatory and development authority 33 an authority or board, by whatever name called, established in a state by or under any state or provincial act for the development of khadi or village industries in the state  34 any body or authority (whether or not a body corporate or a corporation sole) established, constituted or appointed by or under any central, state or provincial act which provides for the administration of any one or more of the following, namely:—  (a) public religious or charitable trusts; or  (b) endowments (including maths, temples, gurdwaras, wakfs, churches, synagogues, agiaries or other places of public religious worship); or  (c) societies for religious or charitable purposes registered as such under the societies registration act, 1860, or any other law for the time being in force  35 any association, authority, body, institution or trust registered under the central, state or provincial act for the regulation of public religious endowments  36 the south asian association for regional cooperation ''saarc'' fund for regional projects set-up by the colombo declaration issued on the 21st day of december, 1991 under the charter of (saarc) dated the 8th day of december, 1985  37 the central electricity regulatory commission constituted under sub-section (1) of section 76 of the electricity act, 2003  38 any agricultural produce marketing committee or board constituted under any law for the time being in force for the purpose of regulating the marketing of agricultural produce  39 any non-profit organisation, being a public religious trust or institution, if— (a) it is registered under section 98 of this code; (b) it is registered under a state act, if any;  (c) it applies its income wholly for public religious purposes; 5  10  41 of  2006  15 20  25  30  21 of  1860 35  36 of  2003   40  45  (d) it is established for the benefit of the general public;  (e) it maintains books of account and obtains an audit report from a accountant if its gross receipts in any financial year exceed five lakh rupees;  (f) its funds or assets are invested or held, at any time during the financial year 5 in the modes specified in section 95; and  (g) its funds or assets are not used or applied or deemed to have been used or applied, directly or indirectly, for the benefit of any interested person  40 a non-profit organisation of public importance as notified by the central government under sub-section (2) of section 90  the eighth schedule [see section 32(2)] computation of profits of the  insurance business1 the profits of the business of life insurance shall be the profit determined in the shareholders' account (non-technical account) in accordance with the insurance act, 1938  2 the profits referred to in paragraph 1 shall be— (a) increased by the aggregate of the amounts referred to in sub-section (2) of section 33 to the extent such amounts are not included in the profits referred to in that paragraph and the amounts referred to in sub-section (4) of section 35 and subsection (2) of section 36 to the extent such amounts have been claimed as deductions while computing the said profits; and (b) decreased by the amount allowable as deduction under clause (xxx) of subsection (2) of section 35 and finance charges allowable as deduction under subsection (1) of section 36 to the extent such amount has been included under clause (a) 3 the profits of the business of insurance other than life insurance shall be the profits disclosed in the annual accounts, copies of which are required to be furnished under the insurance act, 1938, to the controller of insurance 4 the profits referred to in paragraph 3 shall be— (a) increased by the aggregate of,— (i) the amounts referred to in sub-section (2) of section 33 to the extent such amounts are not included in the profits referred to in that paragraph; and (ii) the amounts referred to in sub-section (4) of section 35 and subsection (2) of section 36 to the extent such amounts have been claimed as a deduction in computing the profits referred to in that paragraph; (b) decreased by— (i) the amount allowable as deductions under clause (xxx) of subsection (2) of section 35 to the extent such amount has been included under sub-clause (i) of clause (a); (ii) the amount of finance charges allowable as deduction under subsection  (1) of section 36 to the extent such amount has been included under sub-clause (ii) of clause (a); and (iii) such amount carried over to a reserve for unexpired risks as may be prescribed 5 the profits of the branches in india of a person not resident in india and carrying on any business of insurance, may, in the absence of more reliable data, be deemed to be that proportion of the world income of such person which corresponds to the proportion which his premium income derived from india bears to his total premium income 6 the profits of the business of insurance determined under paragraphs 1 to 5 shall be aggregated and the profits so aggregated shall be the profit from the business of insurance 7 the profit from the business of insurance shall be aggregated with unabsorbed preceding year loss from the business of insurance, if any, and the net result of such aggregation shall be the current profit from the business of insurance for the financial year  5 36 of  2003  10 15 4  of 1938  20  25 30 35  40 45  8 the current profit from the business of insurance shall be treated as nil, if the net result of aggregation in paragraph 7 is negative and the absolute value of the net result of the aggregation shall be the amount of unabsorbed current loss of the business of insurance for the financial year 9 the profits computed under paragraphs 1 to 5 shall be presumed to have been computed—  (a) after giving full effect to every loss, allowance or deduction referred to in sub-sections (1) to (3) of section 35, sub-section (1) of section 36 and sections 37 to 5 40 (both inclusive);  (b) after giving full effect to any deduction allowable under sub-chapter iv of chapter iii in relation to the profits of the business of insurance  10 the written down value of any business asset used in the business of insurance shall be computed as if the assessee has claimed and has been actually allowed the deduction 10 in respect of depreciation under section 38, initial depreciation under section 39 and terminal allowance under section 40  11 the amount of common costs (including depreciation) attributable to the business of insurance shall be determined in such manner as may be prescribed  12 the successor in a business reorganisation of the business of insurance shall be 15 allowed a deduction in respect of the unabsorbed current loss of the business of insurance determined in the case of the predecessor for—   (a) the financial year immediately preceding the financial year in which the business reorganisation has taken place if the re-organisation is on the first day of the financial year; and  (b) the period beginning with the first day of the financial year and ending on the day immediately preceding the date of business re-organisation, in any other  case 13 in this schedule—  20 (a) "business of life insurance" means life insurance business as defined in clause (11) of section 2 of the insurance act, 1938;  (b) "business of insurance" means—  (i) the business of life insurance; and  (ii) the business of any insurance, not being life insurance;  (c) "common costs" means cost or expenditure incurred in the course of carrying on the business of insurance and any other business; and  4  of  1938 25  30  (d) world income in relation to the business of insurance of a person not resident in india shall be computed in the manner laid down in this code for the computation of the profits of the business of insurance carried on in india  [see section 15(2)] computation of  income from special sources1 the income from any special source shall be computed in accordance with the provisions of this schedule 5  2 the income from any special sources shall be the aggregate of—  (a) any amount by way of accrual or receipt, as the case may be;  (b) any amount accrued or received as reimbursement of any expenditure incurred by the person; and  (c) any tax borne by the person by whom the income is payable 10  3 no deduction or allowance or set-off of any loss shall be allowed in computation of income from the special sources  4 the income computed under paragraph 2 shall be presumed to have been computed after giving full effect to every loss, allowance or deduction under this code  5 the written down value of any business asset used for the purposes of earning 15 income from any special source shall be computed as if the person has claimed and has been actually allowed the deduction in respect of depreciation under section 38, initial depreciation under section 39 and terminal allowance under section 40  6 the amount of common costs (including depreciation) attributable to the special source and presumed to have been allowed under paragraph 4 shall be determined in such 20 manner as may be prescribed  the tenth schedule computation of profits of business of operating a qualifying ship1 the profits of the business of operating a qualifying ship for a financial year,—  5  (a) shall be computed in accordance with the provisions of this schedule, at the option of the assessee; and  (b) on exercise of the option, shall be determined in accordance with the formula—  a + b - c  10 where  a = the total tonnage income of the financial year;  b = the aggregate of the amounts referred to in sub-section (2) of section 33; and  c = the amount of negative profit computed under this schedule in re- 15 spect of the business of operating a qualifying ship, for the financial year immediately preceding the relevant financial year  2 the tonnage income of the financial year in respect of each qualifying ship shall be the daily tonnage income of the ship multiplied by the number of days during which the ship is operated by the company as a qualifying ship  20  3 the daily tonnage income of a qualifying ship having tonnage referred to in column (1) of the table given below shall be the amount specified in the corresponding entry in column (2) of the said table:   serial qualifying ship having amount of daily tonnage income 25 number net tonnage (1) (2) (3)  1  up to 1,000 tons rs 46 for each 100 tons 2  exceeding 1,000 tons but not more than   rs 460 plus rs 35 for each100 tons exceeding 10,000 tons 1,000 tons 30 3  exceeding 10,000 tons but not more rs 3,610 plus rs 28 for each 100 tons than 25,000 tons exceeding 10,000 tons 4  exceeding 25,000 tons rs7,810 plus rs 19 for each100 tons exceed ing 25,000 tons  4 the profits of the business of operating a qualifying ship shall be treated as 'nil' for the financial year if the profits determined under paragraph 1 is negative 35  5 the profits computed under this schedule shall be presumed to have been computed— (a) after giving full effect to every loss, allowance or deduction referred to in sections 35 to 40 (both inclusive); (b) after giving full effect to any deduction allowable under sub-chapter iv of 40 chapter iii in relation to the profits of the business of operating a qualifying ship 6 the written down value of any business asset used in the business of operating a qualifying ship shall be computed as if the assessee has claimed and has been actually allowed the deduction in respect of depreciation under section 38, initial depreciation under section 39 and terminal allowance under section 40  7 the amount of common costs (including depreciation) attributable to the business of operating a qualifying ship and any other business shall be determined in such manner as may be prescribed  8 the successor in a business reorganisation of the business of operating a qualifying ship shall be allowed a deduction in respect of the negative profit determined in the case of the predecessor for— 5  (a) the financial year immediately preceding the financial year in which the business reorganisation has taken place if the reorganisation is on the first day of the financial year; and  (b) the period beginning with the first day of the financial year and ending on the day immediately preceding the date of business reorganisation, in any other case 10  9 a company shall continue to be regarded as an operator of a qualifying ship even in the case of temporary cessation of operation of the ship  10 a company shall not be regarded as the operator in respect of a ship if the ship has been chartered out by it on bareboat charter-cum-demise terms  11 a ship shall not be considered as qualifying ship if it temporarily ceases to be a   15 qualifying ship  12  the book profit or loss derived from the core shipping activities of a qualifying shipping company shall be excluded from the book profit of the company for the purposes of section 104  13 the provisions of this schedule shall not apply to a qualifying shipping company    20 if it is party to any transaction or arrangement which amounts to an abuse of the tonnage income scheme as provided in this schedule  14 the board may make rules for the purposes of computation of income from the business of operating a qualifying ship in respect of the following, namely:—  (a) method and time for opting into the tonnage income scheme and the period 25 for, and circumstances under, which the option shall remain in force;  (b) circumstances under which a company may be excluded from the tonnage income scheme;  (c) such other conditions for applicability of tonnage income scheme having regard to the need for generating internal accruals for acquiring new ships and training 30 of crews;  (d) limits for charter in of tonnage;  (e) prevention of abuse of the tonnage income scheme, having regard to the need to ensure that no transaction or arrangement results, or but for the rules prescribed hereunder, would have resulted in a tax advantage being obtained for— 35  (i) a person other than a qualifying shipping company; or  (ii) a qualifying shipping company in respect of its activities other than its business of operating a qualifying ship;  (f) valuation of goods or services where these are transferred between the business of operating a qualifying ship and any other business carried on by a qualifying 40 shipping company;  (g) determination of arm's length price of the business transactions if the arrangement of transactions results in abuse of the tonnage income scheme 15 in this schedule, unless the context otherwise requires,—  (a) "bareboat charter" means hiring of a ship for a stipulated period on terms which give the charterer possession and control of the ship, including the right to appoint the master and crew;  5  (b) "bareboat charter-cum-demise" means a bareboat charter where the ownership of the ship is intended to be transferred after a specified period to the company to whom it has been chartered;  (c) "business of operating qualifying ships" means the core shipping activities and the permitted incidental shipping activities;  10 (d) "core shipping activities" means—  (i) the activities relating to operation of a qualifying ship;  (ii) the activities in connection with, or for the execution of, a service contract under which a qualifying shipping company agrees to transport a specified quantity of specified products at a specified rate, between designated 15 loading and discharging ports over a specified period by a qualifying ship;  (iii) on-board or on-shore activities of qualifying ship comprising of fares and food and beverages consumed on board; and  (iv) slot charters, space charters, joint charters, feeder services, or container box leasing, of a qualifying ship;  20  (e) "permitted incidental shipping activity" means any activity relating to chartering out of a qualifying ship on bareboat charter terms, maritime consultancy, loading or unloading of cargo, ship management or maritime education or recruitment if the aggregate accruals or receipts from all such activity does not exceed one-fourth per cent of the turnover from the core shipping activities;  25  (f) "qualifying shipping company" means a company, which fulfils all the following conditions, namely:—  (i) it is an indian company;  (ii) the place of effective management of the company is in india; (iii) it owns at least one qualifying ship; and 30  (iv) the main object of the company is to carry on the business of operating ships;  (g)  "qualifying ship" means a ship, which fulfils the following conditions, namely:—   35  (i) it is a seagoing ship or vessel of fifteen net tonnage or more; (ii) it is a ship registered or licensed under, or for the purposes of the merchant shipping act, 1958;  44 of  1958 (iii) a certificate indicating the net tonnage of the ship has been issued under, or for the purposes of, the merchant shipping act, 1958 and is in force;  44 of  1958   40  (v) the ship is not— (iv) it is owned or chartered in by the qualifying shipping company wholly, or partly in an arrangement such as slot charter, space charter, or joint charter; and (a) a seagoing ship or vessel if the main purpose for which it is used is the provision of goods or services of a kind normally provided on land; (b) a fishing vessel as defined in clause (12) of section 3 of the 45  44 of  1958 merchant shipping act, 1958; (c) a factory ship including a vessel providing processing services in respect of the processing of the fishing produce;  (d) a pleasure craft, being a ship primarily used for the purposes of sport or recreation; (e) harbour and river ferries; (f) offshore installations; and (g) used as a fishing vessel for a period of more than thirty days during a financial year;  (h) "seagoing ship" means a ship certified as such by the competent authority of any country;  (i) "tonnage" shall mean—  (i) the tonnage specified on a certificate issued under, or for the purposes of, the merchant shipping act, 1958; and  (ii) the deemed tonnage in a case where an arrangement has been entered into by the qualifying company for purchase of slots, slot charter or sharing of a qualifying ship, calculated in such manner as may be prescribed;  (j) "tonnage income scheme" means a scheme for computation of profits of the business of operating qualifying ships under paragraph 1 of this schedule;  5  10  44 of  1958 15  20  (k) "total tonnage income" shall mean the aggregate of tonnage income from operating of all the qualifying ships  the eleventh schedule [see sections 32(2) 44(7), 314(161) and 318(2)(s)(i)] computation of profits of the business of mineral oil or  natural gas5  1 the profits of the business of mineral oil or natural gas shall be the gross income from the business carried on by the assessee at any time during the financial year as reduced by the amount of business expenditure incurred by the assessee, wholly and exclusively, for the purposes of the business during the year  2 the gross income referred to in paragraph 1 shall be the aggregate of,—  10 (a) the accruals or receipts derived by the assessee from,— (i) the business of mineral oil or natural gas; (ii) the leasing or transfer of whole of, or part of, or any interest in, any— (a) mineral oil or natural gas rights; and (b) asset used in the business of mineral oil or natural gas; and  15  (iii) the demolition, destruction, discarding or transferring of any business capital asset (other than land, goodwill or financial instrument) in respect of which deduction has been allowed, or allowable, under paragraph 3 in any financial year; and  (b) the amounts referred to in sub-section (2) of section 33  20  3 the amount of business expenditure referred to in paragraph 1 shall be the aggregate of the amount of,-  (a) operating expenditure referred to in section 35, incurred by the assessee; (b) finance charges referred to in section 36, incurred by the assessee; (c) expenditure on any license charges, rental fees or other charges, if actually 25 paid;    (d) capital expenditure incurred by the assessee;  (e) expenditure on infructuous or abortive exploration of any area; (f) expenditure referred to in clauses (a) to (e) incurred before the commencement of the business  30  (g) payment to site restoration account maintained in state bank of india in accordance with the such schemes as may be prescribed 4 the profits computed under paragraph 1 shall be presumed to have been computed,-  (a) after giving full effect to every loss, allowance or deduction referred to in 35 sub-sections 35 to 40 (both inclusive);  (b) after giving full effect to any deduction allowable under sub-chapter-iv of chapter iii in relation to the profits of the business of mineral oil or natural gas  5 the written down value of any business asset used in the business of mineral oil or natural gas shall be computed as if the assessee has claimed and has been actually allowed 40 the deduction in respect of depreciation under section 38, initial depreciation under section 39 and terminal allowance under section 40  6 the amount of common costs including depreciation attributable to the business of mineral oil or natural gas and any other business shall be determined in such manner as may be prescribed 7 the provisions of this schedule shall apply to the business referred to in paragraph 1, which fulfils the following conditions, namely:—  (a) it is not set-up by splitting up, or the reconstruction, of a business already in existence;   (b) it is not set up by the transfer to the business of machinery or plant previously used for any purpose  8 in this schedule, unless the context otherwise requires,—  (a) "business of mineral oil or natural gas" means any business consisting of the prospecting for or extraction or production of mineral oil or natural gas;  (b) "mineral oil" means crude oil, being petroleum in its natural state before it is refined or otherwise treated but from which water and foreign substances have been extracted;  (c) "natural gas" means any sub-soil combustible gaseous fossil fuel;  | 5   |     ||-----|-----||     |     ||     |     ||     |     ||     |     ||     |     ||     |     ||     |     || 10  |     ||     |     ||     |     ||     |     ||     |     ||     |     ||     |     || 15  |     |(d) "oil and gas right" means any reconnaissance permit, technical cooperation permit, exploration right, or production right assigned under the oilfields (regulation and development) act, 1948, or any right or interest therein;  (e) any machinery or plant which was used outside india by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if—  (i) the machinery or plant was not, at any time prior to the date of the installation by the assessee, used in india;  (ii) the machinery or plant is imported into india from any country outside india; and  (iii) no deduction on account of depreciation in respect of the machinery or plant has been allowed or is allowable under the provisions of this code, or the income-tax act, 1961 as it stood before the commencement of this code, in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee;  (f) the condition specified in clause (b) of paragraph 7 shall be deemed to have been complied with if the total value of the machinery or plant or any part thereof, previously used for any purpose and transferred to the business referred to in paragraph 1, does not exceed twenty per cent of the total value of the machinery or plant used in the business;  | 53 of  1948   |     ||----------------|-----||                |     ||                |     ||                |     ||                |     ||                |     || 20             |     ||                |     ||                |     ||                |     ||                |     ||                |     ||                |     || 25             |     || 43 of  1961   |     ||                |     ||                |     ||                |     ||                |     ||                |     ||                |     || 30             |     ||                |     ||                |     ||                |     ||                |     ||                |     || 35             |     |(g) the capital expenditure referred to in clause (d) of paragraph 3 shall not include any expenditure incurred on the acquisition of any land including long-term lease, goodwill or financial instrument  the twelfth schedule [see sections 32(2) 44(7) and 318(2)(p) (i)] computation of profits of the business of developing of a special economic zone 5 manufacture or production of article or things or providing of any service by a unit established in a special economic zone1 the provisions of this schedule shall apply to the business specified herein below—  (a) the business of developing a special economic zone; and  10  (b) a unit established in a special economic zone engaged in the business of manufacture or production of article or things or providing of any service  2 the profits of the specified business under paragraph 1 shall be the gross income from such business carried on by the assessee at any time during the financial year as reduced by the amount of business expenditure incurred by the assessee, wholly and exclu- 15    sively, for the purposes of the business during the year  3 the gross income referred to in paragraph 2 shall be the aggregate of— (a) the accruals or receipts derived by the assessee from the specified business; (b) the accruals or receipts derived by the assessee from the demolition, destruction, discarding or transferring of any business capital asset (other than land, 20 goodwill or financial instrument) in respect of which deduction has been allowed, or allowable, under paragraph 4 in any financial year; and  (c) the amounts referred to in sub-section (2) of section 33  4 the amount of business expenditure referred to in paragraph 2 shall be the aggregate of the amount of—  25 (a) operating expenditure referred to in section 35, incurred by the assessee; (b) finance charges referred to in section 36, incurred by the assessee; (c) expenditure on any licence charges, rental fees or other charges, if actually paid; (d) capital expenditure incurred by the assessee;  (e) expenditure referred to in clauses (a) to (d) incurred before the commence- 30  ment of specified business  5 the profits computed under paragraph 2 shall be presumed to have been computed—  (a) after giving full effect to every loss, allowance or deduction referred to in 35 sub-sections (1) to (3) of section 35, sub-section (1) of section 36 and sections 37 to 40 (both inclusive);  (b) after giving full effect to any deduction allowable under sub-chapter-iv of chapter iii in relation to the profits of the specified business  6 the written down value of any business asset used in the specified business shall 40    be computed as if the assessee has claimed and has been actually allowed the deduction in respect of depreciation under section 38, initial depreciation under section 39 and terminal allowance under section 40  7 the amount of common costs (including depreciation) attributable to the specified business shall be determined in such manner as may be prescribed   8 the provisions of this schedule shall apply to a specified business, which fulfils the following conditions, namely:—  (a) it is not set-up by splitting up, or the reconstruction, of a business already in existence; and (b) it is not set-up by the transfer to the specified business, of machinery or plant previously used for any purpose  9 in this schedule, unless the context otherwise requires,—  (a) any machinery or plant which was used outside india by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if—  (i) the machinery or plant was not, at any time prior to the date of the installation by the assessee, used in india;  (ii) the machinery or plant is imported into india from any country outside india; and  (iii) no deduction on account of depreciation in respect of the machinery or plant has been allowed or is allowable under the provisions of this code, or the income-tax act, 1961 as it stood before the commencement of this code, in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee;  (b) the condition specified in clause (b) of paragraph 8 shall be deemed to have been complied with if the total value of the machinery or plant or any part thereof, previously used for any purpose and transferred to the specified business does not exceed twenty per cent of the total value of the machinery or plant used in the said business;  15   43 of  1961   20 25  (c) the capital expenditure referred to in clause (d) of paragraph 4 shall not include any expenditure incurred on the acquisition of any land including long term lease, goodwill or financial instrument  the thirteenth schedule [see sections 32(2) 44(7) and 318(o)(i), (q)(i), (r)(i)] computation of profits of a specified  business1 the provisions of this schedule shall apply to the following specified businesses 5 which fulfill such conditions as may be prescribed by the central government:— (a) business of generation, transmission or distribution of power; (b) business of developing, or operating and maintaining, any infrastructure facility;  (c) business of operating and maintaining a hospital in any area, other than the 10 excluded area; (d) business of processing, preservation and packaging of fruits and vegetables; (e) business of laying and operating a cross country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of the network;  15 (f) business of setting up and operating a cold chain facility;  (g) business of setting up and operating a warehousing facility for storage of agricultural produce;  (h) business of building and operating, anywhere in india, a new hotel of twostar or above category as classified by the central government and commences op- 20 eration on or after the 1st day of april, 2010;  (i) business of building and operating, anywhere in india, a new hospital with at least one hundred beds for patients and commences operation on or after the 1st day of april, 2010;  (j) business of developing and building a housing project under a scheme for 25 slum re-development or rehabilitation framed by the central government or a state government, as the case may be, and notified by the board in this behalf in accordance with the guidelines as may be prescribed and commences operation on or after the 1st day of april, 2010  2 the profits of every specified business shall be computed separately under this 30    schedule  3 the profits of any specified business shall be the gross income from the business carried on by the assessee at any time during the financial year as reduced by the amount of business expenditure incurred by the assessee, wholly and exclusively, for the purposes of the business during the year  35 4 the gross income referred to in paragraph 1 shall be the aggregate of— (a) the accruals or receipts derived by the assessee from the specified business; (b) the accruals or receipts derived by the assessee from the transfer, discardment, destroyal or destruction of any business captial asset (other than land, goodwill or financial instrument) in respect of which deduction has been allowed, or allowable, 40 under paragraph  5 in any financial year; and  (c) the amounts referred to in sub-section (2) of section 33  5 the amount of business expenditure referred to in paragraph 1 shall be the aggregate of the amount of—  (a) operating expenditure referred to in section 35, incurred by the assessee;  45 (b) finance charges referred to in section 36, incurred by the assessee;   paid; (c) expenditure on any licence charges, rental fees or other charges, if actually   (d) capital expenditure incurred by the assessee;  (e) expenditure referred to in clauses (a) to (d) incurred before the commencement of the business  6 the profits computed under paragraph 1 shall be presumed to have been computed—  (a) after giving full effect to every loss, allowance or deduction referred to in sections 35 to 40 (both inclusive);  (b) after giving full effect to any deduction allowable under sub-chapter-iv of chapter iii in relation to the profits of the specified business  7 the written down value of any business asset used in the specified business shall be computed as if the assessee has claimed and has been actually allowed the deduction in respect of depreciation under section 38, initial depreciation under section 39 and terminal allowance under section 40  8 the amount of common costs including depreciation attributable to the specified business and any other business shall be determined in such manner as may be prescribed  9 the provisions of this schedule shall apply to the business referred to in paragraph 1, which fulfils the following conditions, namely:—  (a) it is not set-up by splitting up, or the reconstruction, of a business already in existence;  (b) it is not set-up by the transfer to the specified business of machinery or plant previously used for any purpose; and  (c) in a case where the business is of the nature referred to in clause (e) of paragraph 1, the business—  | 5           |     ||-------------|-----||             |     ||             |     ||             |     ||             |     ||             |     ||             |     ||             |     || 10          |     ||             |     ||             |     ||             |     ||             |     ||             |     || 15          |     ||             |     ||             |     ||             |     ||             |     ||             |     ||             |     ||             |     || 20          |     ||             |     ||             |     ||             |     ||             |     ||             |     ||             |     ||             |     || 25          |     ||             |     ||             |     || 1  of 1956 |     |(i) is owned by a company formed and registered in india under the companies act, 1956 or by a consortium of such companies or by an authority or a board or a corporation established or constituted under any central or state act;  (ii) has been approved by the petroleum and natural gas regulatory board established under sub-section (1) of section 3 of the petroleum and natural gas regulatory board act, 2006 and notified by the central government in this behalf;  (iii) has made not less than such proportion of its total pipeline capacity as specified by the regulations made by the petroleum and natural gas regulatory board established under sub-section (1) of section 3 of the petroleum and natural gas regulatory board act, 2006 available for use on common carrier basis by any person other than the assessee or an associated person; and  (iv) fulfils any other condition as may be prescribed  10 in this schedule, unless the context otherwise requires—  (a) an "associated person" in relation to the assessee, means a person—  (i) who participates, directly or indirectly, or through one or more intermediaries in the management or control or capital of the assessee;  (ii) who holds, directly or indirectly, shares carrying not less than twentysix per cent of the voting power in the capital of the assessee;  30   19 of  2006  35   19 of  2006   40 45  (iii) who appoints more than half of the board of directors or members of the governing board, or one or more executive directors or executive members of the governing board of the assessee; or  (iv) who guarantees not less than ten per cent of the total borrowings of the assessee;  (b) any machinery or plant which was used outside india by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if—  5  (i) the machinery or plant was not, at any time prior to the date of the installation by the assessee, used in india;  (ii) the machinery or plant is imported into india from any country outside india; and  10  (iii) no deduction on account of depreciation in respect of the machinery or plant has been allowed or is allowable under the provisions of this code, or the income-tax act, 1961 as it stood before the commencement of this code, in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee;   43 of 1961  15 (c) the condition specified in clause (b) of paragraph 9 shall be deemed to have been complied with if the total value of the machinery or plant or any part thereof, previously used for any purpose and transferred to the specified business, does not exceed twenty per cent of the total value of the machinery or plant used in the business;  20 (d) the capital expenditure referred to in clause (d) of paragraph 5 shall not include any expenditure incurred on the acquisition of any land including long term lease, goodwill or financial instrument  (e) 'excluded area' means the areas of—  (i) greater mumbai urban agglomeration; (ii) delhi urban agglomeration; (iii) kolkata urban agglomeration; 25  (iv) chennai urban agglomeration; (v) hyderabad urban agglomeration; (vi) bangalore urban agglomeration; (vii) ahmedabad urban agglomeration; (viii) the district of faridabad; 30 (ix) the district of gurgaon;  (x) the district of gautam budh nagar; (xi) the district of ghaziabad; (xii) the district of gandhinagar; and  (xiii) the city of secunderabad; 35   the fourteenth schedule [see section 32 (2), 88(4), 170(4), (a), 314(220) (e)] determination of income on a presumptive basis1 the income from the business specified in column (2) of  the table given below, carried on by the assessee at any time during the financial year, shall, be the amount 5 specified in column 3 thereof, subject to the conditions specified in column (4) therein:  | serial                        | nature of business         | amount of income    | conditions   ||-------------------------------|----------------------------|---------------------|--------------|| number                        |                            |                     |              || 10                            |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              || (1)                           | (2)                        | (3)                 | (4)          ||                               |                            |                     |              ||                               |                            |                     |              || the total number of           |                            |                     |              || heavy goods and light         |                            |                     |              || goods vehicles owned by       |                            |                     |              || the assessee in the finan-    |                            |                     |              || 15                            |                            |                     |              || the aggregate amount of       |                            |                     |              || income from all the heavy     |                            |                     |              || goods vehicles and light      |                            |                     |              || goods vehicle owned by        |                            |                     |              || the assessee, calculated at   |                            |                     |              || the rate of -                 |                            |                     |              ||                               |                            |                     |              || cial year should be ten or    |                            |                     |              || less                         |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              || (                             |                            |                     |              || i                             |                            |                     |              || ) five thousand rupees        |                            |                     |              || from each heavy goods         |                            |                     |              || vehicle for every month       |                            |                     |              || or part of a month during     |                            |                     |              || which the vehicle is          |                            |                     |              || owned by the assessee         |                            |                     |              || in the financial year; or     |                            |                     |              ||                               |                            |                     |              || 20                            |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              || 25                            |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              || 1                            | buisness of plying, hiring |                     |              || or leasing of heavy goods     |                            |                     |              || or light goods vehicle       |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              || 2                            |                            |                     |              || any business (other than      |                            |                     |              || a profession and the busi-    |                            |                     |              || ness referred to in serial    |                            |                     |              || number 1)                    |                            |                     |              || (                             |                            |                     |              || ii                            |                            |                     |              || )   four thousand five        |                            |                     |              || hundred rupees from           |                            |                     |              || each light goods vehicle      |                            |                     |              || for every month or part       |                            |                     |              || of a month during which       |                            |                     |              || the vehicle is owned by       |                            |                     |              || the assessee in the finan-    |                            |                     |              || cial year                    |                            |                     |              ||                               |                            |                     |              || eight per cent of the total  |                            |                     |              || turnover, or gross receipts,  |                            |                     |              || of the assessee in the finan- |                            |                     |              || cial year from the business  |                            |                     |              || 30                            |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              || (                             |                            |                     |              || i                             |                            |                     |              || ) the assessee is a resi-     |                            |                     |              ||                               |                            |                     |              || dent;                         |                            |                     |              || (                             |                            |                     |              || ii                            |                            |                     |              || ) the assessee is an          |                            |                     |              || 35                            |                            |                     |              || individual,   a   hindu       |                            |                     |              || undivided family or a firm    |                            |                     |              || excluding   a   limited       |                            |                     |              ||                               |                            |                     |              || liability partnership; and    |                            |                     |              || (                             |                            |                     |              || iii                           |                            |                     |              || ) the total turnover or       |                            |                     |              || 40                            |                            |                     |              || gross  receipts  of  the      |                            |                     |              || assessee in the financial     |                            |                     |              || year from the business is     |                            |                     |              || one crore rupees or less     |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              ||                               |                            |                     |              |5 (1) (2) (3) (4)   the assessee is a foreign company 3 business of civil construction in connection with a turnkey power project approved by the 10 central government in this behalf  the amount shall be a sum equal to ten per cent of the amount paid or payable (whether in or out of india), directly or indirectly, to the assessee or to any person on his behalf on account of the civil construction 4 business of erection of 15 plant or machinery or testing or commissioning thereof, in connection with a turnkey power project approved by the 20 central government in this behalf the amount shall be a sum the assessee is a foreign equal to ten per cent of the company amount paid or payable (whether in or out of india), directly or indirectly, to the assessee or to any person on his behalf on account of erection, testing or commissioning  5 business of providing  the amount shall be a sum services or facilities in  equal to fourteen per cent  the assessee is a nonresident 25 connection with the pros- of aggregate of— pecting for, or extraction (i) the amount paid or payor production of, mineral oil or natural gas   30 35 40  45    6 business of supplying plant and machinery on hire, used or to be used, 50 in the prospecting for, or extraction or production of, mineral oils or natural gas  55  able (whether in or out of india), directly or indirectly, to the assessee or to any person on his behalf on account of the provisions of services and facilities in connection with the prospecting for, or extraction or production of, mineral oils in india; and (ii) the amount received or deemed to be received in india, directly or indirectly, by or on behalf of the assessee on account of the provisions of services and facilities in connection with the prospecting for, or extraction or production of, mineral oils outside india  the amount shall be a sum the assessee is a nonequal to fourteen per cent resident  of aggregate of— (i) the amount paid or payable (whether in or out of india), directly or indirectly, to the assessee or to any person on his behalf on account of the supply of plant | (1)                                                                                          | (2)                      ||----------------------------------------------------------------------------------------------|--------------------------||                                                                                              |                          || and machinery on hire,                                                                       |                          || used or to be used, in the                                                                   |                          || prospecting for, or extrac-                                                                  |                          || tion or production of, min-                                                                  |                          || 5                                                                                            |                          || eral oils in india; and                                                                      |                          ||                                                                                              |                          || (                                                                                            |                          || ii                                                                                           |                          || ) the amount received or                                                                     |                          || deemed to be received in                                                                     |                          || india, directly or indirectly,                                                               |                          || by or on behalf of the as-                                                                   |                          || 10                                                                                           |                          ||                                                                                              |                          || sessee on account of the                                                                     |                          || supply of plant and machin-                                                                  |                          || ery on hire,  used or to be                                                                  |                          || used, in the prospecting for,                                                                |                          || or extraction or production                                                                  |                          || of,  mineral  oils  outside                                                                  |                          || 15                                                                                           |                          ||                                                                                              |                          || india                                                                                       |                          ||                                                                                              |                          || the assessee is a non-                                                                       |                          || resident                                                                                    |                          ||                                                                                              |                          ||                                                                                              |                          || 7                                                                                           | business of operation of || ships (including an ar-                                                                      |                          || rangement such as slot                                                                       |                          || charter, space charter or                                                                    |                          || joint charter)                                                                              |                          || business of operation of                                                                     |                          ||                                                                                              |                          || 20                                                                                           |                          ||                                                                                              |                          ||                                                                                              |                          || the assessee is a non-                                                                       |                          || resident                                                                                    |                          ||                                                                                              |                          || 25                                                                                           |                          || 8                                                                                           |                          || aircraft (including an ar-                                                                   |                          ||                                                                                              |                          || rangement such as slot                                                                       |                          || charter, space charter or                                                                    |                          || joint charter)                                                                              |                          || ten per cent of transporta-                                                                 |                          || tion charges on account of                                                                   |                          || the carriage of passengers,                                                                  |                          || live-stock, mail or goods                                                                   |                          ||                                                                                              |                          ||                                                                                              |                          || seven per cent of the trans-                                                                |                          || portation charges on ac-                                                                     |                          || count of the carriage of pas-                                                                |                          || sengers, live-stock, mail or                                                                 |                          || goods                                                                                       |                          ||                                                                                              |                          || 2 the amount of income determined under paragraph1 shall be further increased by            |                          || the excess of the amount of income, if any, actually earned by the assessee from the         |                          || business over the amount specified in that paragraph                                        |                          ||                                                                                              |                          || 3 the income computed under paragraph 1 shall be presumed to have been com-                 |                          || puted after giving full effect to every loss, allowance or deduction under this code        |                          || 30                                                                                           |                          ||                                                                                              |                          || 4  the written down value of any business asset used for the purposes of earning            |                          || income from the business specified in column (2) of the table in paragraph 1 shall be        |                          || computed as if the person has claimed and has been actually allowed the deduction in         |                          || respect of depreciation under section 38, initial depreciation under section 39 and terminal |                          || allowance under section 40                                                                  |                          || 35                                                                                           |                          ||                                                                                              |                          ||                                                                                              |                          || 5 the amount of common costs (including depreciation) attributable to the business          |                          || specified in column (2) of the table in paragraph 1 and presumed to have been allowed        |                          || under paragraph 3 shall be determined in such manner as may be prescribed                   |                          ||                                                                                              |                          || 6 the provisions of this schedule shall not apply to—                                       |                          ||                                                                                              |                          || (                                                                                            |                          || a                                                                                            |                          || ) any income which is derived from any special source;                                       |                          || 40                                                                                           |                          ||                                                                                              |                          || (                                                                                            |                          || b                                                                                            |                          || ) any income from ordinary sources in respect of the business referred to in                 |                          || column (2) of the table in paragraph 1, at the option of the assessee, if—                   |                          || (                                                                                            |                          || i                                                                                            |                          || ) the assessee keeps and maintains all the books of account and other                        |                          || documents referred to in section 87 in respect of the business irrespective of               |                          || anything   in that section;                                                                  |                          || 45                                                                                           |                          ||                                                                                              |                          ||                                                                                              |                          || (                                                                                            |                          || ii                                                                                           |                          || ) the assessee gets his accounts audited and obtains a report of such                        |                          || audit as required under section 88 in respect of the business irrespective of                |                          || anything in that section;                                                                    |                          |(iii) the accounts are correct and complete to the satisfaction of the assessing officer;  (iv) the income can be properly deduced from the accounts; and  (v) the assessee produces the books of account and other documents 5 before the assessing officer, as and when called for  the fifteenth schedule [see section 38 (1), (4), (a), 39(1) (b), 40 (1) (b), 42 (1)] depreciation1  the allowance under section 37 in respect of depreciation of any block of assets, specified in column (3) of the table given below, shall be calculated at the 5 percentages, specified in corresponding entry in column (4) of the said table, on the adjusted value or written down value of such block of assets, as the case may be, as are used for the purposes of the business of the assessee at any time during the financial year   table10   rates at which depreciation is admissible| serial                                      | class of assets    | block of assets                          | depreciation    ||---------------------------------------------|--------------------|------------------------------------------|-----------------|| number                                      |                    | allowance as                             |                 || percentage of                               |                    |                                          |                 || adjusted value                              |                    |                                          |                 || 15                                          |                    |                                          |                 || or of written                               |                    |                                          |                 || down value of                               |                    |                                          |                 || block of assets                            |                    |                                          |                 || (1)                                         | (2)                | (3)                                      | (4)             ||                                             |                    |                                          |                 ||                                             |                    |                                          |                 ||                                             |                    |                                          |                 || 5                                           |                    |                                          |                 || 20                                          |                    |                                          |                 ||                                             |                    |                                          |                 || 100                                         |                    |                                          |                 ||                                             |                    |                                          |                 || 15                                          |                    |                                          |                 ||                                             |                    |                                          |                 || 25                                          |                    |                                          |                 ||                                             |                    |                                          |                 ||                                             |                    |                                          |                 ||                                             |                    |                                          |                 ||                                             |                    |                                          |                 ||                                             |                    |                                          |                 || 30                                          |                    |                                          |                 ||                                             |                    |                                          |                 || 1                                          | building           | (1) buildings which are used mainly  for |                 || residential purposes                       |                    |                                          |                 || (2) buildings which are purely temporary    |                    |                                          |                 || erections such as wooden structures        |                    |                                          |                 || (3) buildings used as, or for-—             |                    |                                          |                 || (                                           |                    |                                          |                 || i                                           |                    |                                          |                 || ) hotel or boarding house,                  |                    |                                          |                 || (                                           |                    |                                          |                 || ii                                          |                    |                                          |                 || ) railway station,                          |                    |                                          |                 || (                                           |                    |                                          |                 || iii                                         |                    |                                          |                 || ) airport,                                  |                    |                                          |                 || (                                           |                    |                                          |                 || iv                                          |                    |                                          |                 || ) sea port,                                 |                    |                                          |                 || (                                           |                    |                                          |                 || v                                           |                    |                                          |                 || ) bus terminal                              |                    |                                          |                 || (                                           |                    |                                          |                 || vi                                          |                    |                                          |                 || ) hospital, or                              |                    |                                          |                 || (                                           |                    |                                          |                 || vii                                         |                    |                                          |                 || ) convention centre                         |                    |                                          |                 || 10                                          |                    |                                          |                 || (4) any other building                     |                    |                                          |                 ||                                             |                    |                                          |                 ||                                             |                    |                                          |                 || 2                                          | furniture and      |                                          |                 || fittings                                    |                    |                                          |                 || furniture and fittings including electrical | 10                 |                                          |                 || fittings                                   |                    |                                          |                 ||                                             |                    |                                          |                 || 3                                          | vehicles           | (1) motor buses, motor lorries and motor | 30              || 35                                          |                    |                                          |                 || cars, used in a business of running         |                    |                                          |                 || them on hire                               |                    |                                          |                 || (2) any other motor bus, motor lorry or     | 15                 |                                          |                 || motor car                                  |                    |                                          |                 || 4                                          | aeroplanes         | aeroplanes including aeroengines        | 40              || 40                                          |                    |                                          |                 ||                                             |                    |                                          |                 ||                                             |                    |                                          |                 || 5                                          | rails              | (1) engines, coaches and wagons         |                 || 40                                          |                    |                                          |                 || (2) rolling stock                          |                    |                                          |                 || 15                                          |                    |                                          |                 ||                                             |                    |                                          |                 ||                                             |                    |                                          |                 || 6                                          | ships              | (1) ocean-going vessels                 |                 || 20                                          |                    |                                          |                 || (2) speed boats ordinarily operating on     |                    |                                          |                 || 20                                          |                    |                                          |                 || inland waters                              |                    |                                          |                 || 45                                          |                    |                                          |                 || (3) any other vessel ordinarily operating   |                    |                                          |                 || 20                                          |                    |                                          |                 || on inland waters                           |                    |                                          |                 ||                                             |                    |                                          |                 ||                                             |                    |                                          |                 || (1)                                              |               | (2)                                       ||--------------------------------------------------|---------------|-------------------------------------------||                                                  |               |                                           || 7                                               | books         | (1) annual publications used for carrying || on a profession                                 |               |                                           || (2) any other book used for carrying on a        |               |                                           || 5                                                |               |                                           || profession                                      |               |                                           || (3) book used for carrying on a business of      |               |                                           || running lending libraries                       |               |                                           || (4) any other book                              |               |                                           ||                                                  |               |                                           || 100                                              |               |                                           ||                                                  |               |                                           || 60                                               |               |                                           ||                                                  |               |                                           || 100                                              |               |                                           ||                                                  |               |                                           || 25                                               |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           || 8                                               | machinery and |                                           || 10                                               |               |                                           || plant                                            |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           || 15                                               |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           || 20                                               |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           || 25                                               |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           || 30                                               |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           || 35                                               |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           || 40                                               |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           || 45                                               |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           || 50                                               |               |                                           || (1) moulds used in rubber and plastic goods      |               |                                           || factories                                       |               |                                           || (2) air pollution control equipment             |               |                                           || (3) water pollution control equipment           |               |                                           || (4) solid waste control equipment               |               |                                           || (5) life saving medical equipment               |               |                                           || (6) containers made of glass, or plastic, used   |               |                                           || as refills                                      |               |                                           || (7) computers including computer software       |               |                                           || (8) energy saving devices                       |               |                                           || (9) renewable energy devices                    |               |                                           || (10) machinery and plant, used in semicon-       |               |                                           || ductor industry                                 |               |                                           || (11) wooden parts used in artificial silk        |               |                                           || manufacturing machinery                         |               |                                           || (12) bulbs of studio lights used for cinemato-   |               |                                           || graph films                                     |               |                                           || (13) wooden match frames used in match           |               |                                           || factories                                       |               |                                           || (14) tubs, winding ropes, haulage ropes,         |               |                                           || sand stowing pipes and safety lamps  used        |               |                                           || in mines and quarries                           |               |                                           || (15) salt pans, reservoirs and condensers,       |               |                                           || made of earthy, sandy or clayey material or      |               |                                           || any other similar material, used in salt works  |               |                                           || (16) rollers used in flour mills or sugar works |               |                                           || (17) rolling mill rolls used in iron and steel   |               |                                           || industry                                        |               |                                           || (18) gas cylinders including valves and regu-    |               |                                           || lators                                          |               |                                           || (19) glass manufacturing concerns  direct        |               |                                           || fire glass melting furnaces                     |               |                                           || (20) returnable packages used in field op-       |               |                                           || erations (above ground) distribution   by        |               |                                           || petroleum or natural gas concerns               |               |                                           || (21) plant used in field operations  (below      |               |                                           || ground) by petroleum or natural  gas con-        |               |                                           || cerns                                           |               |                                           || (22) machinery and plant acquired and in-        |               |                                           || stalled in a water supply project or water       |               |                                           || treatment system and which is put to use         |               |                                           || for the pupose of business of providing in-      |               |                                           || frastructure facility                           |               |                                           || (23) any other machinery or plant               |               |                                           || 30                                               |               |                                           ||                                                  |               |                                           || 100                                              |               |                                           || 100                                              |               |                                           || 100                                              |               |                                           || 40                                               |               |                                           || 50                                               |               |                                           ||                                                  |               |                                           || 60                                               |               |                                           || 80                                               |               |                                           || 80                                               |               |                                           || 30                                               |               |                                           ||                                                  |               |                                           || 100                                              |               |                                           ||                                                  |               |                                           || 100                                              |               |                                           ||                                                  |               |                                           || 100                                              |               |                                           ||                                                  |               |                                           || 100                                              |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           || 100                                              |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           || 80                                               |               |                                           || 80                                               |               |                                           ||                                                  |               |                                           || 60                                               |               |                                           ||                                                  |               |                                           || 60                                               |               |                                           ||                                                  |               |                                           || 60                                               |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           || 60                                               |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           || 100                                              |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           ||                                                  |               |                                           || 15                                               |               |                                           || (1)                                                                                                |                                                                         |   (2) |     ||----------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------|-------|-----||                                                                                                    |                                                                         |       |     || 9                                                                                                 | scientific re-                                                          |       |     || search assets                                                                                      |                                                                         |       |     ||                                                                                                    |                                                                         |       |     ||                                                                                                    |                                                                         |       |     || 100                                                                                                |                                                                         |       |     ||                                                                                                    |                                                                         |       |     || 25                                                                                                 |                                                                         |       |     || 10                                                                                                | family planning                                                         |       |     || asset                                                                                              |                                                                         |       |     ||                                                                                                    |                                                                         |       |     || all assets, other than land, used for scien-                                                       |                                                                         |       |     || tific research                                                                                    |                                                                         |       |     || all assets used by a company for the                                                               |                                                                         |       |     || purpose of promoting family planning                                                              |                                                                         |       |     || 5                                                                                                  |                                                                         |       |     ||                                                                                                    |                                                                         |       |     || 11                                                                                                |                                                                         |       |     || animals                                                                                            | animals                                                                |     0 |     || 12                                                                                                | intangible assets   (1) any right, by way of licence or franchise,   25 |       |     || to operate a business or to use a know-how,                                                        |                                                                         |       |     || patent, copyright,  trademark or any other                                                         |                                                                         |       |     || business  or commercial right of similar na-                                                       |                                                                         |       |     || 10                                                                                                 |                                                                         |       |     ||                                                                                                    |                                                                         |       |     || ture                                                                                              |                                                                         |       |     || (2) asset or project constructed, erected or   20                                                  |                                                                         |       |     || set up by the assessee if,—                                                                        |                                                                         |       |     || (                                                                                                  |                                                                         |       |     || a                                                                                                  |                                                                         |       |     || ) benefit or advantage arises to the as-                                                           |                                                                         |       |     || sessee over a fixed period  not exceeding                                                          |                                                                         |       |     || 15                                                                                                 |                                                                         |       |     ||                                                                                                    |                                                                         |       |     || ten years; and                                                                                     |                                                                         |       |     || (                                                                                                  |                                                                         |       |     || b                                                                                                  |                                                                         |       |     || ) asset is not owned by the assessee                                                              |                                                                         |       |     ||                                                                                                    |                                                                         |       |     || 15                                                                                                 |                                                                         |       |     || (3) asset or project constructed,                                                                  |                                                                         |       |     || erected or set up by the assessee if,—                                                             |                                                                         |       |     || (                                                                                                  |                                                                         |       |     || a                                                                                                  |                                                                         |       |     || ) benefit or advantage arises to the  as-                                                          |                                                                         |       |     || 20                                                                                                 |                                                                         |       |     ||                                                                                                    |                                                                         |       |     || sessee over a fixed period exceeding ten                                                           |                                                                         |       |     || years;and                                                                                          |                                                                         |       |     || (                                                                                                  |                                                                         |       |     || b                                                                                                  |                                                                         |       |     || ) asset is not owned by the assessee                                                              |                                                                         |       |     ||                                                                                                    |                                                                         |       |     ||                                                                                                    |                                                                         |       |     || 2 no depreciation shall be allowed in respect of any machinery or plant, if the actual            |                                                                         |       |     || cost thereof is allowed as a deduction in one or more years                                       |                                                                         |       |     || 25                                                                                                 |                                                                         |       |     ||                                                                                                    |                                                                         |       |     ||                                                                                                    |                                                                         |       |     || 3 the depreciation shall be one hundred per cent of the adjusted written down value              |                                                                         |       |     || of the block of assets referred to in the class of assets at serial number 12 of the table, if the |                                                                         |       |     || adjusted value or written down value of the block of assets is one lakh rupees or less            |                                                                         |       |     ||                                                                                                    |                                                                         |       |     || 4 in respect of any structure, or work, by way of renovation or improvement in, or in             |                                                                         |       |     || relation to, a building used for the purposes of business of the person, the percentage to be      |                                                                         |       |     || 30                                                                                                 |                                                                         |       |     || applied shall be the percentage specified in any sub-item of the block of assets in serial         |                                                                         |       |     || number 1 of the said table, as may be appropriate to the class of building in, or in relation to,  |                                                                         |       |     || which the renovation or improvement is effected                                                   |                                                                         |       |     ||                                                                                                    |                                                                         |       |     |5 in respect of any structure constructed, or work done, by way of extension of any building used for the purposes of business of the person, the percentage to be applied shall 35 be the percentage specified in any sub-item of the block of assets in serial number 1 of the said table above, as would be appropriate, as if the structure, or work, constituted a separate building  6 in this schedule—  (a) "buildings" include roads, bridges, culverts, wells and tubewells; 40   (b) "building mainly used for residential purpose" means a building where the built-up floor area thereof used for residential purposes is not less than sixty-six and two-third per cent of its total built-up floor area and shall include any such building in the factory premises;  (c) "water treatment system" includes water treatment system for desalination, 45  demineralisation and purification of water as well as pipes needed for delivery from the source of supply of raw water to the plant and from the plant to the storage facility; (d) "electrical fittings" include electrical wiring, switches, sockets and other fittings and fans;  (e) "computer software" means any computer programme recorded on any disc, tape, perforated media or other information storage device;  5  (f) "speed boat" means a motor boat driven by a high speed internal combustion engine capable of propelling the boat at a speed exceeding 24 kilometers per hour in still water and so designed that when running at a speed, its bow will rise from the water;  (g) "ocean-going ships" include dredgers, tugs, barges, survey launches, other 10 similar ships used mainly for dredging purposes and fishing vessels with wooden hull; (h) "air pollution control equipment" means— (i) electrostatic precipitation systems; (ii) felt-filter systems; (iii) dust collector systems; 15 (iv) scrubber-counter current,venture, packed bed, cyclonic scrubbers; and (v) ash handling system and evacuation system; (i) "water pollution control equipment" means— (i) mechanical screen systems;  (ii) aerated detritus chambers (including air compressor);  20 (iii) mechanically skimmed oil and grease removal systems; (iv) chemical feed systems and flash mixing equipment; (v) mechanical flocculators and mechanical reactors;  (vi) diffused air, mechanically aerated activated sludge systems; (vii) aerated lagoon systems; 25 (viii) biofilters;  (ix) methane-recovery anaerobic digester systems; (x) air floatation systems; (xi) air, steam stripping systems; (xii) urea hydrolysis systems; 30 (xiii) marine outfall systems;  (xiv) centrifuge for dewatering sludge;  (xv) rotating biological contractor or bio-disc; (xvi) ion exchange resin column; and (xvii) activated carbon column;  35 (j) "solidwaste control equipments" means—  (i) caustic, lime, chrome, mineral, cryolite recovery systems; and  (ii) solidwaste recycling and resource recovery systems; (k) "life saving medical equipment" means— (i) dc defibrillators for internal use and pace 40 makers; (ii) haemodialysors; (iii) heart lung machine; (iv) cobalt therapy unit; (v) colour doppler; (vi) spect gamma camera;  (vii) vascular angiography system including digital substraction angiog- 5 raphy;  (viii) ventilator used with anaesthesia apparatus; (ix) magnetic resonance imaging system; (x) surgical laser;  (xi) ventilators other than those used with anaesthesia; 10   (xii) gamma knife;  (xiii) bone marrow transplant equipment including silastic long standing intravenous catheters for chemotheraphy;  (xiv) fibre optic endoscopes including, paediatric resectoscope/audit resectoscope, peritoneoscopes, arthoscope, microlaryngoscope, fibreoptic flex- 15 ible nasal pharyngo bronchoscope, fibreoptic flexible laryngo bronchoscope, video laryngo bronchoscope and video oesophago gastroscope, stroboscope, fibreoptic flexible oesophago gastroscope; or (xv) laparoscope (single incision); (l) "energy saving device" means— 20  (i) specialised boilers and furnaces, being—  (a) lgnifluid/fluidized bed boilers;  (b) flameless furnaces and continuous pusher type furnaces; (c) fluidized bed type heat treatment furnaces; or (d) high efficiency boilers (thermal efficiency higher than 75 per 25  cent in case of coal fired and 80 per cent in case of oil/gas fired boilers);  (ii) instrumentation and monitoring system for monitoring energy flows, being—  (a) automatic electrical load monitoring systems;  (b) digital heat loss meters; 30  (c) micro-processor based control systems; (d) infra-red thermography; (e) meters for measuring heat losses, furnace oil flow, steam flow, electric energy and power factor meters;  (f) maximum demand indicator and clamp on power meters; 35   (g) exhaust gases analyzer; or  (h) fuel oil pump test bench;  (iii) waste heat recovery equipment, being— (a) economisers and feed water heaters; (b) recuperators and air pre-heaters; (c) heat pumps; or  (d) thermal energy wheel for high and low temperature waste heat recovery;  (iv) co-generation systems, being—  5  (a) back pressure pass out, controlled extraction, extraction-cum-condensing turbines for co-generation along with pressure boilers;  (b) vapour absorption refrigeration systems; (c) organic rankine cycle power systems; or (d) low inlet pressure small steam turbines; 10 (v) electrical equipment, being—  (a) shunt capacitors and synchronous condenser systems;  (b) automatic power cut off devices (relays) mounted on individual motors;  (c) automatic voltage controller;  15 (d) power factor controller for ac motors;  (e) solid state devices for controlling motor speeds;  (f) thermally energy-efficient stenters (which require 800 or less kilocalories of heat to evaporate one kilogram of water);  (g) series compensation equipment;  20  (h) flexible ac transmission (fact) devices - thyristor controlled series compensation equipment;  (i) time of day (tod) energy meters;  (j) equipment to establish transmission highways for national power grid to facilitate transfer of surplus power of one region to the deficient 25 region; (k) remote terminal units/intelligent electronic devices, computer hardware/ software, router/bridges, other required equipment and associated communication systems for supervisory control and data acquisition systems, energy management systems and distribution management sys- 30 tems for power transmission systems; or  (l) special energy meters for availability based tariff (abt); (vi) burners, being - (a) 0 to 10 per cent excess air burners; (b) emulsion burners; or 35 (c) burners using air with high pre-heat temperature (above 300°c); and  (vii) other energy saving device, being -  (a) wet air oxidation equipment for recovery of chemicals and heat; (b) mechanical vapour recompressors; 40 (c) thin film evaporators;  (d) automatic micro-processor based load demand controllers; (e) coal based producer gas plants; (f) fluid drives and fluid couplings; (g) turbo charges/super-charges;or (h) sealed radiation sources for radiation processing plants;  (m) "renewal energy device" means— 5  (i) flat plate solar collectors;  (ii) concentrating and pipe type solar collectors; (iii) solar cookers; (iv) solar water heaters and systems;  (v) air/gas/fluid heating systems; 10   (vi) solar crop driers and systems;  (vii) solar refrigeration, cold storages and air-conditioning systems; (viii) solar steels and desalination systems; (ix) solar power generating systems;  (x) solar pumps based on solar-thermal and solar-photovoltaic con- 15  version;  (xi) solar-photovoltaic modules and panels for water pumping and other applications;  (xii) wind mills and any specially designed devices which run on wind mills; 20   (xiii) any special devices including electric generators and pumps running on wind energy;  (xiv) biogas-plant and biogas-engines;  (xv) electrically operated vehicles including battery powered or fuelcell powered vehicles; 25   (xvi) agricultural and municipal waste conversion devices producing energy;  (xvii) equipment for utilising ocean waste and thermal energy; or  (xviii) machinery and plant used in the manufacture of any of the above sub-items; 30   (n) "machinery and plant used in semi-conductor industry" means machinery and plant used in semi-conductor industry covering all integrated circuits (ics) (excluding hybrid integrated circuits) ranging from small scale integration (ssi) to large scale integration/very large scale integration (lsi/vlsi) as also discrete semi-conductor devices such as diodes, transistors, thyristors, triacs, etc, other than clauses 35  (h), (i), (j), (l) and (m) referred above  part i contributions or donations eligible for one hundred seventy-five per cent5 deduction  any research association or national laboratory or university, college or other institution if—  (a) it is engaged in carrying on scientific research and development; and  (b) such association, university, college or other institution is approved in this behalf 10 subject to conditions and in accordance with   such guidelines and manner   as may be prescribed   part ii contributions or donations eligible for one hundred  twenty-five  per cent deductionany research association or a university, college or other institution if-—  15 (a) it is engaged in carrying on statistical research or research in social science; and  (b) such association, university, college or other institution is approved in this behalf subject to conditions and in accordance with   such guidelines   as may be prescribed  20 partiii   donations eligible for hundred per  cent deduction1 the national defence fund set up by the central government  2 the prime minister's national relief fund  3 the prime minister's armenia earthquake relief fund  25 4 the africa (public contributions-india) fund  5 the national foundation for communal harmony  6 any university or educational institution of national eminence as may be approved by the prescribed authority in this behalf  7 any zila saksharta samiti constituted in any district under the chairmanship of the 30 collector of that district for the purposes of improvement of primary education in villages and towns in such district and for literacy and post-literacy activities  8 the national blood transfusion council or  any state blood transfusion council which has as its sole object, the control, supervision, regulation or encouragement in india of the services related to operation and requirements of blood banks  35 9 any fund set up by a state government to provide medical relief to the poor  10 the army central welfare fund or the indian naval benevolent fund or the air force central welfare fund established by the armed forces of the union for the welfare of the past and present members of such forces or their dependants  11 the national illness assistance fund  40  12 the chief minister's relief fund or the lieutenant governor's relief fund in respect of any state or union  territory, as the case may be, where such fund is— (a) the only fund of its kind established in the state or the union territory, as the case may be;  (b) under the overall control of the state or the union territory, as the case may be; (c) administered in such manner as may be specified by the state government or 5 the lieutenant governor, as the case may be  13 the national sports fund set up by the central government  14 the national cultural fund set up by the central government  15  the fund for technology development and application set up by the central government   10 16 the national trust for welfare of persons with autism, cerebral palsy, mental retardation and multiple disabilities constituted under sub-section (1) of section 3 of the national trust for welfare of persons with autism, cerebral palsy, mental retardation and multiple disabilities act, 1999  17 the government or any such local authority, institution or association as may be approved in this behalf by the central government, to be utilised for the purpose of promoting family planning  18 the indian olympic association or to any other association or institution established in india, as the central government may, having regard to the prescribed guidelines, by notification, specify in this behalf for—  (a) the development of infrastructure for sports and games; or  (b) the sponsorship of sports and games, in india and where the sum is paid by an assessee, being a company  19 a rural development fund set up and notified by the central government  20 the national urban poverty eradication fund set up and notified by the central government   part iv donations eligible for fifty per cent deduction1 the jawaharlal nehru memorial fund referred to in the deed of declaration of trust adopted by the national committee at its meeting held on the 17th day of august, 1964  2 the prime minister's drought relief fund  3 the national children's fund  4 the indira gandhi memorial trust, the deed of declaration in respect whereof was registered at new delhi on the 21st day of february, 1985  5 the rajiv gandhi foundation, the deed of declaration in respect whereof was registered at new delhi on the 21st day of june, 1991  6 any other fund or any institution or any organisation which is approved under section 98;  44 of  1999 7 the government or any local authority, to be utilised for any charitable purpose other than the purpose of promoting family planning  8 any authority constituted in india by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both 9 any corporation established by the central government or any state government for promoting the interests of a minority community   10 a temple, mosque, gurdwara, church or any other place as is notified by the central government to be of historic, archaeological or artistic importance or to be a place of public worship of renown throughout a state or states, to be utilised for the renovation or repair of such temple, mosque, gurdwara, church or other place  note:— (a) for the purposes of item 7 of part iii, "town" means a town which has a population not exceeding one lakh according to the last preceding census of which the relevant figures have been published before the first day of the financial year;  5  (b) for the purposes of item 8 of part iii, -  10    (i) "national blood transfusion council" means a society registered as such under the societies registration act, 1860 under the administrative control of the union ministry of health and family welfare;  21 of  1860  15  21 of 1860 (ii) "state blood transfusion council" means a society registered, in consultation with the national blood transfusion council, under the societies registration act, 1860 under the administrative control of the department of health of the respective state government  determination of cost of acquisition in certain cases| serial                                 |                    | nature of    | mode of acquisition    | cost of acquisition of the    ||----------------------------------------|--------------------|--------------|------------------------|-------------------------------|| number                                 | investment asset   |              |                        | investment asset              || 5                                      |                    |              |                        |                               || (1)                                    | (2)                | (3)          | (4)                    |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               || 1                                     | shares in an       |              |                        |                               || amalgamated                            |                    |              |                        |                               || company, being an                      |                    |              |                        |                               || indian                                 |                    |              |                        |                               || company or a                           |                    |              |                        |                               || successor co-                          |                    |              |                        |                               || operative bank                        |                    |              |                        |                               || by way of transfer                     |                    |              |                        |                               || referred to in clause                  |                    |              |                        |                               || (                                      |                    |              |                        |                               || k                                      |                    |              |                        |                               || ) or clause (                          |                    |              |                        |                               || l                                      |                    |              |                        |                               || ), as the                              |                    |              |                        |                               || case may be, of sub-                   |                    |              |                        |                               || section (                              |                    |              |                        |                               || 1                                      |                    |              |                        |                               || )                                      |                    |              |                        |                               ||                                        |                    |              |                        |                               || of section 47                         |                    |              |                        |                               ||                                        |                    |              |                        |                               || by way of transfer                     |                    |              |                        |                               || referred to in clause (                |                    |              |                        |                               || j                                      |                    |              |                        |                               || ) of                                   |                    |              |                        |                               || sub-section (                          |                    |              |                        |                               || 1                                      |                    |              |                        |                               || )                                      |                    |              |                        |                               || of section 47                         |                    |              |                        |                               || 2                                     | transferable       |              |                        |                               || interest of partner                    |                    |              |                        |                               || referred to in                         |                    |              |                        |                               || section 42 of the                      |                    |              |                        |                               || limited liability                      |                    |              |                        |                               || partnership act,                       |                    |              |                        |                               || 2008 (6 of 2009)                      |                    |              |                        |                               ||                                        |                    |              |                        |                               || 3                                     |                    |              |                        |                               || shares or debenture by way of transfer |                    |              |                        |                               ||                                        |                    |              |                        |                               || in a company                          |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               || 4                                     | shares in the      |              |                        |                               || resulting                              |                    |              |                        |                               || company or co-                         |                    |              |                        |                               || operative bank                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               || referred to in clause (                |                    |              |                        |                               || q                                      |                    |              |                        |                               || )                                      |                    |              |                        |                               || or clause (                            |                    |              |                        |                               || r                                      |                    |              |                        |                               || ) of sub-                              |                    |              |                        |                               || section (                              |                    |              |                        |                               || 1                                      |                    |              |                        |                               || ) of section 47                       |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               || by way of a transfer                   |                    |              |                        |                               || effected under a scheme                |                    |              |                        |                               || of demerger                           |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               ||                                        |                    |              |                        |                               || by way of transfer in any              |                    |              |                        |                               || manner                                |                    |              |                        |                               || 5                                     | original shares in |              |                        |                               || the demerged                           |                    |              |                        |                               || company or a                           |                    |              |                        |                               || co-operative bank                     |                    |              |                        |                               |of the entry at serial number 3 of this table the cost of acquisition to the assessee of the shares in the amalgamating company or   predecessor 10  co-operative bank the cost of acquisition to the assessee of the shares 15  in the company immediately before its conversion into limited liability partnership  20   that part of the cost of bond, debenture, debenture-stock or deposit certificates in relation to which the investment asset is acquired by the 25  assessee  the amount which bears to the cost of acquisition of shares held by the assessee in the demerged company or 30 co-operative bank,  the same proportion as the net book value of the assets transferred in a demerger bears to the net worth of the 35  demerged company  or co-operative bank immedi-  ately before such demerger the cost of acquisition of the original shares held by the 40 assessee in the demerged company immediately before the demerger  as reduced by the amount  as so arrived at under column (4) in respect 45  | (1)                                                   |                                             | (2)   ||-------------------------------------------------------|---------------------------------------------|-------||                                                       |                                             |       || 06                                                   | shares or any other                         |       ||                                                       |                                             |       ||                                                       |                                             |       || by way of purchase of the the amount actually paid by |                                             |       ||                                                       |                                             |       || security                                             |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       || the assessee for acquiring the                        |                                             |       || asset                                                |                                             |       ||                                                       |                                             |       || 5                                                     |                                             |       || 07                                                   |                                             |       || any right to                                          |                                             |       || renounce the                                          |                                             |       || entitlement to                                        |                                             |       || subscribe                                             |                                             |       || to shares or any                                      |                                             |       || 10                                                    |                                             |       || other                                                 |                                             |       || security                                             |                                             |       || 08                                                   |                                             |       || any right to                                          |                                             |       || subscribe to                                          |                                             |       || nil                                                   |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       || the amount actually paid by                           |                                             |       || the assessee for acquiring the                        |                                             |       || share or such other                                   |                                             |       || security                                             |                                             |       ||                                                       |                                             |       || by way of purchase of the                             |                                             |       || original share or other                               |                                             |       || security                                             |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       || by way of purchase of                                 |                                             |       || the original share or other                           |                                             |       ||                                                       |                                             |       || asset                                                |                                             |       || additional shares or security                        |                                             |       ||                                                       |                                             |       || 15                                                    |                                             |       || any other security                                    |                                             |       || on the basis of                                       |                                             |       || holding the original                                  |                                             |       || share or security                                    |                                             |       ||                                                       |                                             |       || 09                                                   | shares or any other                         |       || 20                                                    |                                             |       || security                                             |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       || by way of allotment on                                |                                             |       || the basis of holding any                              |                                             |       || share or any other                                    |                                             |       || security without payment                             |                                             |       ||                                                       |                                             |       || by way of purchase of                                 |                                             |       || such right from another                               |                                             |       || nil                                                   |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       || the aggregate of the amount                           |                                             |       || of purchase price paid by the                         |                                             |       || 10                                                   | right in the nature                         |       || of an entitlement to                                  |                                             |       || 25                                                    |                                             |       || subscribe to shares person                           |                                             |       || or any other security                                |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       || 30                                                    |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       || 11                                                   | sweat equity shares by way of allotment or |       || transfer, directly or                                 |                                             |       || indirectly, by an employer                            |                                             |       || to his employee (including                            |                                             |       || 35                                                    |                                             |       || former employee)                                     |                                             |       || assessee to the person                                |                                             |       || renouncing the right and the                          |                                             |       || amount paid by the assessee                           |                                             |       || to the company or institution,                        |                                             |       || as the case may be, for                               |                                             |       || acquiring the investment                              |                                             |       || asset                                                |                                             |       ||                                                       |                                             |       || the fair market value of the                          |                                             |       || sweat equity share  which has                         |                                             |       || been taken into account while                         |                                             |       || computing the value of                                |                                             |       || perquisite for the purposes of                        |                                             |       || section 22                                           |                                             |       ||                                                       |                                             |       || 12                                                   | shares of a                                 |       || recognised stock                                      |                                             |       || exchange in india                                    |                                             |       || 40                                                    |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       || 13                                                   | trading or clearing                         |       ||                                                       |                                             |       || cost of  acquisition by the                           |                                             |       || assessee of his original                              |                                             |       || membership of the stock                               |                                             |       || exchange                                             |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       ||                                                       |                                             |       || nil                                                   |                                             |       || 45                                                    |                                             |       || rights of a                                           |                                             |       || recognised stock                                      |                                             |       || exchange in india                                     |                                             |       || acquired by a                                         |                                             |       || shareholder                                          |                                             |       ||                                                       |                                             |       || under a scheme of                                     |                                             |       || demutualisation or                                    |                                             |       || corporatisation                                       |                                             |       || approved by the                                       |                                             |       || securities and                                        |                                             |       || exchange board                                        |                                             |       ||                                                       |                                             |       || of of india                                          |                                             |       || under a scheme of                                     |                                             |       || demutualisation or                                    |                                             |       || corporatisation                                       |                                             |       || approved by the                                       |                                             |       || securities and                                        |                                             |       || exchange board                                        |                                             |       || of india                                             |                                             |       || (1)                            |                     ||--------------------------------|---------------------||                                |                     || 14                            | shares or stocks of || a company                     |                     || cost of acquisition of the     |                     || shares or stock from which the |                     || investment asset is derived   |                     || 5                              |                     ||                                |                     ||                                |                     ||                                |                     ||                                |                     ||                                |                     || (                              |                     || a                              |                     || )   in   pursuance   of        |                     || consolidation or division      |                     || or sub-division of all or      |                     || any of the share capital of    |                     || the company into shares        |                     || of larger amount or            |                     || smaller amount, as the         |                     || case may be, than its ex-      |                     || isting shares; or              |                     || 10                             |                     ||                                |                     ||                                |                     ||                                |                     ||                                |                     ||                                |                     || (                              |                     || b                              |                     || ) by way of conversion         |                     || of any shares of the com-      |                     || pany into stock of the         |                     || same company, or re-con-       |                     || version thereof; or            |                     || 15                             |                     ||                                |                     ||                                |                     ||                                |                     ||                                |                     ||                                |                     ||                                |                     || (                              |                     || c                              |                     || ) by way of conversion         |                     || of one kind of shares of       |                     || the company into another       |                     || kind of shares of the same     |                     || company                       |                     || 20                             |                     | minerals and group of associated  minerals part i5 minerals 1 aluminium ores 2 apatite and phosphatic ores 3 beryl 4 chrome ore 10 5 coal and lignite 6 columbite, samarskite and other minerals of the "rare earths'' group 7 copper 8 gold 9 gypsum 15 10 iron ore 11 lead 12 manganese ore 13 molybdenum 14 nickel ores 20 15 platinum and other precious metals and their ores 16 pitchblende and other uranium ores 17 precious stones 18 rutile 19 silver 25 20 sulphur and its ores 21 tin 22 tungsten ores 23 uraniferous allanite, monazite and other thorium minerals 24 uranium bearing tailings left over from ores after extraction of copper and gold, 30 ilmenite and other titanium ores 25 vanadium ores 26 zinc 27 zircon   part ii 35 groups of associated minerals1 apatite, beryl, cassiterite, columbite, emeraid, felspar, lepidolite, mica, pitchblende, quartz, samarskite, scheelite, topaz, tantalite, tourmaline 2 iron, manganese, titanium, vanadium and nickel minerals 3 lead, zinc, copper, cadmium, arsenic, antimony, bismuth, cobalt, nickel, 40 molybenum, and uranium minerals, and gold and silver, arsinopyrite, chalcopyrite, pyrite, pyphrotite and pentalandite 4 chromium, osmiridium, platinum, and nickel minerals 5 kyanite, sillimanite, corrundum,dumortieite and topaz 6 gold, silver, tellurium, selenioum and pyrite 45 7 barytes, flourite, chalcocite, selenium, and minerals of zinc, lead and silver 8 tin and tungsten minerals 9 limestone, dolomite and magnesite 10 ilmenite, monazite, zircon, rutile, garnet and sillimanite 11 sulphides of copper and iron 50 12 coal, fireclay and shale 13 magnetite and apatite 14 magnesite and chromite 15 talc (soapstone and steatite) and dolomite 16 bauxite, laterite, aluminous clays, lithomorge, titanium, vanadum, galtium and 55 17 columbiur minerals  part—i approved provident  funds 1  a provident fund shall be granted approval in accordance with the provisions of 5 this part  application of part  2  (1) the commissioner may accord approval to any provident fund which, in his opinion, satisfies the conditions prescribed in paragraph 3 and the rules made by the board in this behalf, and may, at any time withdraw such approval if, in his opinion, the provident fund contravenes any of those conditions 10   (2) an order according approval shall take effect on such date as the commissioner may fix in accordance with any rules the board may make in this behalf, such date not being later than the last day of the financial year in which the order is made  (3) an order withdrawing approval shall take effect from the date on which it is made  (4) an order according approval to a provident fund shall not, unless the commis- 15  sioner otherwise directs, be affected by the fact that the fund is subsequently amalgamated with another provident fund on the occurrence of an amalgamation of these undertakings in connection with which the two funds are maintained, or that it subsequently absorbs the whole or a part of another provident fund belonging to any undertaking which is wholly or in part transferred to or merged in the undertaking of the employer maintaining the first- 20  mentioned fund  according approval  of provident fund and  its withdrawal  3 in order that a provident fund may receive and retain approval, it shall, subject to the provisions of paragraph 4, satisfy the conditions set out below and any other conditions which the board may, by rules, specify—  conditions tobe satisfied by approved provident funds (a)  all employees shall be employed in india, or shall be employed by an em- 25  ployer whose principal place of business is in india;  (b) the contributions of an employee in any year shall be a definite proportion of his salary for that year, and shall be deducted by the employer from the employee's salary in that proportion, at each periodical payment of such salary in that year, and credited to the employee's individual account in the fund; 30   (c) the contributions of an employer to the individual account of an employee in any year shall not exceed the amount of the contributions of the employee in that year, and shall be credited to the employee's individual account at intervals not exceeding one year;  (d) the fund shall be vested in two or more trustees or in the official trustee 35  under a trust which shall not be revocable, save with the consent of all the beneficiaries;  (e) the fund shall consist of contributions as above specified, received by the trustees, of accumulations thereof, and of interest credited in respect of such contributions and accumulations, and of securities purchased therewith and of any capital gains arising from the transfer of capital assets of the fund, and of no other sums;    40 19 to  1952 45  (f) the fund shall be a fund of an establishment to which the provisions of subsection (3) of section 1 of the employees' provident funds and miscellaneous provisions act, 1952 apply or of an establishment which has been notified by the central provident fund commissioner under sub-section (4) of section 1 of the said act, and such establishment shall obtain exemption under section 17 of the said act from the operation of all or any of the provisions of any scheme referred to in that section;  (g) the employer shall not be entitled to recover any sum whatsoever from the fund, save in cases where the employee is dismissed for misconduct or voluntarily leaves his employment otherwise that on account of ill-health or other unavoidable cause before the expiration of the term of service specified in this behalf in the regulations of the fund:  5  (h) the accumulated balance due to an employee shall be payable on the day he ceases to be an employee of the employer maintaining the fund;  (i) save as provided in clause (h) or in accordance with such conditions and restrictions as the board may, by rules, specify, no portion of the balance to the credit of an employee shall be payable to him   relaxation  of conditions 10  4 (1) notwithstanding anything contained in clause (a) of paragraph 3, the commissioner may, if he thinks fit, and subject to such conditions, if any, as he thinks proper to attach to the approval, accord approval to a fund maintained by an employer whose principal place of business is not in india, provided the proportion of employees employed outside india does not exceed ten per cent  15  (2) notwithstanding anything contained in clause (b) of paragraph 3, an employee who retains his employment while serving in the armed forces of the union or when taken into or employed in the national service under any law for the time being in force, may, whether he receives from the employer any salary or not, contribute to the fund during his service in the armed forces of the union or while so taken into or employed in the national 20 service a sum not exceeding the amount he would have contributed had he continued to serve the employer (3) notwithstanding anything contained in clause (e) or clause (h) of paragraph 3 - (a) at the request made in writing by the employee who ceases to be an employee of the employer maintaining the fund, the trustees of the fund may consent to retain 25 the whole or any part of the accumulated balance due to the employee to be drawn by him at any time on demand;  (b) where the accumulated balance due to an employee who has ceased to be an employee is retained in the fund in accordance with clause (a), the fund may consist also of interest in respect of such accumulated balance  30  (c) the fund may also consist of any amount transferred from the individual account of an employee in any approved provident fund maintained by his former employer and the interest in respect thereof  (4) subject to any rules which the board may make in this behalf, the commissioner may, in respect of any particular fund, relax the provisions of clause (c) of paragraph 3 -  35  (a) so as to permit the payment of larger contributions by an employer to the individual accounts of employees whose salaries do not in each case exceed five hundred rupees per mensem; and  (b) so as to permit the crediting by employers to the individual accounts of employees of periodical bonuses or other contributions of a contingent nature, where 40 the calculation and payment of such bonuses or other contributions is provided for on definite principles by the regulations of the fund  (5) notwithstanding anything contained in clause (i) of paragraph 3, in order to enable an employee to pay the amount of tax assessed on his total income as determined under subparagraph (4) of paragraph 10, he shall be entitled to withdraw from the balance to his credit 45 in the approved provident fund a sun not exceeding the difference between such amount and the amount to which he would have been assessed if the transferred balance referred to in sub- paragraph (2) of paragraph 10 had not been included in his total income 5 that portion of the annual accretion in any financial year to the balance at the credit of an employee participating in an approved provident fund as consists of -  (a) contributions made by the employer in excess of twelve per cent of the salary of the employee or one lakh rupees, whichever is less; and  (b) interest credited on the balance to the credit of the employee in so far as it is 5 allowed at a rate exceeding the rate as may be fixed by the central government by notification in this behalf  shall be deemed to have been received by the employee in that financial year and shall be included in total income for that financial year, and shall be liable to income-tax  employer's annual contributions, when  deemed to  be income received by employee 6 an employee participating in an approved provident fund shall, in respect of his   10 own contributions to his individual account in the fund in the financial year, be entitled to a deduction in the computation of his total income of an amount determined in accordance with section 69  exemption for  employee's contribution  7 (1) the accumulated balance due and becoming payable to an employee participating in an approved provident fund shall be excluded from the computation of his total   15  income—  (a) if he has rendered continuous service with his employer for a period of five years or more;  (b) if, though he has not rendered such continuous service, the service has been terminated by reason of the employee's ill-health, or by the contraction of discontinu-   20 ance of the employee's business or other cause beyond the control of the employee; or  (c) if, on the cessation of his employment, the employee obtains employment with any other employer, to extend the accumulated balance due and becoming payable to him is transferred to his individual account in any approved provident fund   25  maintained by such other employer  (2) where the accumulated balance due and becoming payable to an employee participating in an approved provident fund maintained by his employer includes any amount transferred from his individual account in any other approved provident fund or funds maintained by his former employer or employers, then, in computing the period of continu-   30 ous service for the purposes of clause (a) or clause (b) of sub-paragraph (1), the period or the periods for which such employee rendered continuous service under his former employer or employers aforesaid shall be included  exclusion from total income  of accumulated balance  8 where the accumulated balance due to an employee participating in an approved provident fund is included in his total income owing to the provisions of paragraph  7 not  35 being applicable, the assessing officer shall calculate the total of the various sums of tax which would have been payable by the employee in respect of his total income for each of the years concerned if the fund had not been an approved provident fund, and the amount by which such total exceeds the total of all sums paid by or on behalf of such employee by way of tax for such years shall be payable by the employee in addition to pay other tax for   40 which he may be liable for the financial year in which the accumulated balance due to him becomes payable  tax on accumulated  balance deduction  at source  of  tax payable on accumulated balance 9 the trustees of an approved provident fund, or any person authorised by the regulations of the fund to make payment of accumulated balances due to employees, shall, in cases where paragraph 8 applies, at the time an accumulated balance due to an employee is   45 paid, deduct therefrom the amount payable under that paragraph and all the provisions of chapter xi shall apply as if the accumulated balance were income chargeable under the head "income from employment" 10 (1) where approval is accorded to a provident fund with existing balances, an account shall be made of the fund up to the day immediately preceding the day on which the approval takes effect, showing the balance to the credit of each employee on such day, and containing such further particulars as the board may prescribe   5 (2) the account shall also show in respect of the balance to the credit of each employee the amount thereof which is to be transferred to that employee's account in the approved provident fund, and such amount (hereinafter called his transferred balance) shall be shown as the balance to his credit in the approved provident fund on the date on which the approval of the fund takes effect, and sub-paragraph (4) of this paragraph and subparagraph (5) of paragraph 4 shall apply thereto  (3) any portion of the balance to the credit of an employee in the existing fund which is not transferred to the approved fund shall be excluded from the accounts of the approved fund and shall be liable to income-tax in accordance with the provisions of this code, other than this part  10 15 (4) subject to such rules as the board may make in this behalf, the assessing officer shall make a calculation of the aggregate of all sums comprised in a transferred balance which would have been liable to income-tax if this part had been in force from the date of the institution of the fund, without regard to any tax which may have been paid on any sum, and such aggregate (if any) shall be deemed to be income received by the employee in the financial year in which the approval of the fund takes effect and shall be included in the total income of the employee for that financial year, and, for the purposes of assessment, the remainder of the transferred balance shall be disregarded, but no other exemption or relief, by way of refund or otherwise, shall be granted in respect of any sum comprised in such transferred balance  20 (5) nothing in this paragraph shall affect the rights of the persons administering an unapproved provident fund of dealing with it, or with the balance to the credit of any individual employee before approval is accorded, in any manner which may be lawful 25  11 (1) the accounts of an approved provident fund shall be maintained by the trustees of the fund and shall be in such form and for such periods, and shall contain such particulars, as the board may prescribe  (2) the accounts shall be open to inspection at all reasonable times by income-tax authorities, and the trustees shall furnish to the assessing officer such abstracts thereof as the board may prescribe  30  12 (1) an employer objecting to an order of the commissioner refusing to approved or an order withdrawing approval from a provident fund may appeal, within a period of sixty days of such order, to the board (2) the appeal shall be in such forms, verified in the manner and accompanied by such fees as the board may prescribe 35 13 (1) where an employer, who maintains a provident fund (whether approved or not) for the benefit of his employees and has not transferred the fund or any portion of it, transfers such fund or portion to trustee in trust for the employees participating in the fund, the amount so transferred shall be deemed to be of the nature of capital expenditure  40 (2) when an employee participating in such fund is paid the accumulated balance due to him therefrom, any portion of such balance as represents his share in the amount so transferred to the trustees (without addition of interest, and exclusive of the employee's contributions and interest thereon) shall, if the employer has made effective arrangements to secure that tax shall be deducted at source from the amount of such share when paid to the employee, be deemed to be an expenditure by the employer within the meaning of section 35 incurred in the financial year in which the accumulated balance due to the employee is paid  45  14 the provisions of paragraphs 2 to 13 shall not apply to a provident fund established under a schme framed under the following, namely:— 50  | treatment       |     ||-----------------|-----|| of balance  in  |     || newly           |     || approved        |     || provident       |     || fund           |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     || accounts  of    |     || approved        |     || provident       |     || funds          |     ||                 |     ||                 |     ||                 |     ||                 |     || appeals        |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     || treatment  of   |     || fund            |     || transferred  by |     || employer  to    |     ||                 |     || trustee        |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     ||                 |     || funds           |     || deemed  to  be  |     || approved       |     |(i) the provident funds act, 1925; 19 of  1925  (ii) the public provident fund act, 1968; 23 of  1968  (iii) the employees provident funds and miscellaneous provisions act, 1952; 19 of  1952 (iv) the coal mines provident fund and miscellaneous provisions act, 1948 and such provident fund shal be deemed to be an approved provident fund if it is notified by the board in accordance with the guidelines framed by the central government in this behalf 15 the board may, for the purposes of this part, prescribe:— provisions relating  to rules (a) the statements and other information to be submitted along with an application for approval; (b) limiting the contributions to an approved provident fund by employees of a company who are shareholders in the company; (c) regulating the investment or deposit or the moneys of an approved provident 19 of  1925   5 10  fund;  (d) providing for the assessment by way of penalty of any consideration received by an employee for an assignment of, or creation of a charge upon, his beneficial interest in an approved provident fund; (f) generally, to carry out the purposes of this part and to secure such further control over the approval of provident funds and the administration of approved   20 provident funds as it may deem requisite (e) determining the extend to and the manner in which exemption from payment   15 of tax may be granted in respect of contributions and interest credited to the individual accounts of employees in a provident fund from which approval has been withdrawn; and  16 in this part, unless the context otherwise requires,— (a) "employer" means any person who maintains a provident fund for the benefit of his or its employees, being— (i) a hindu undivided family, company, firm or other association of per-    25  sons, or (ii) an individual engaged in a business or profession the profits and gains whereof are assessable to income-tax under the head "profits and gains of business or profession"; (b) "employee" means an employee participating in a provident fund, but does   30  not include a personal or domestic servant; (c) "contribution" means any sum credited by or on behalf of any employee out of his salary, or by an employer out of his own monies, to the individual account of an employee, but does not include credited interest; (d) "balance to the credit of an employee" means the total amount to the credit of   35  his individual account in provident fund at any time; (e) "annual accretion" in relation to the balance to the credit of an employee, means the increase to such  balance in any year, arising from contributions and interest; (f) "accumulated balance due to an employee" means the balance to his credit, or    40  such portion thereof as may be claimable by him under the regulations of the fund, on the day he ceases to be an employee of the employer maintaining the fund; (g) "regulations of a fund" means the special body of regulations governing the constitution and administration of a particular provident fund; and (h) "salary" includes dearness allowance, if the terms of employment so provide,    45  but excludes all other allowances and perquisites  part-ii approved superannuation fundsinterpretations in this part 1 (1) the commissioner may accord approval to any superannuation fund or any part approval of superannuation fund  and its  withdrawal of a superannuation fund which, in his opinion, complies with the requirements of paragraph   50  2, and may at any time withdraw such approval, if in his opinion, the circumstances of the fund or part cease to warrant the continuance of the approval (2) the commissioner shall communicate in writing to the trustee of the fund the grant of approval with the date on which the approval is to take effect, and, where the approval is granted subject to conditions, those conditions  (3) the commissioner shall communicate in writing to the trustees of the fund any 5 withdrawal of approval with the reasons for such withdrawal and the date on which the withdrawal is to take effect  (4) the commissioner shall neither refuse nor withdraw approval to any superannuation fund or any part of a superannuation fund unless he has given the trustees or that fund an opportunity of being heard in the matter conditions for  approval 10  2 in order that a superannuation fund may receive and retain approval, it shall satisfy the conditions set out below and any other conditions which the board may by rule prescribe—  (a) the fund shall be a fund established under an irrevocable trust in connection with a trade or undertaking carried on in india, and not less than ninety per cent of the 15 employees shall be employed in india;  (b) the fund shall have for its sole purpose the provision of annuities for employees in the trade or undertaking on their retirement at or after a specified age or on their becoming incapacitated prior to such retirement, or for the widows, children or dependants of persons who are or have been such employees on the death of those 20 persons;  (c) the employer in the trade or undertaking shall be a contributor to the fund; and   (d) all annuities, pensions and other benefits granted from the fund shall be payable only in india  25  3  (1) an application for approval of a superannuation fund or part of a superannuation fund shall be made in writing by the trustees of the fund to the assessing officer by whom the employer is assessable, and shall be accompanied by a copy of the instrument under which the fund is established and by two copies of the rules and, where the fund has been in existence during any year or years prior to the financial year in which the application 30    for approval is made, also two copies of the accounts of the fund relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such account have been made up, but the commissioner may require such further information to be supplied as he thinks proper  (2) if any alternation in the rules, constitution, objects or conditions of the fund is 35 made at any time after the date of the application for approval, the trustees of the fund shall forthwith communicate such alteration to the assessing officer mentioned in sub-paragraph (1), and in default of such communication any approval given shall, unless the commissioner otherwise orders, be deemed to have been withdrawn from the date on which the alteration took effect  40  4 where any contributions by an employer (including the interest thereon, if any) are repaid to the employer, the amount so repaid shall be deemed for the purpose of income-tax to be the income of the employer of the financial year in which it is so repaid 5 where any contributions made by an employer, including interest on contributions, if any, are paid to any employee during his lifetime, in circumstances other than those application for  approval  contribution by  employer, when  deemed to  be income of  employer  deduction  of tax on contributions paid to an employee 45    referred to in paragraph 13 of the sixth schedule, tax on the amounts so paid shall be deducted at the average rate of tax at which the employee was liable to tax during the preceding three years or during the period, if less than three years, when he was a member of the fund, and shall be paid by the trustees to the credit of the central government within the time and in such manner as the board may direct 6 where an employer deducts from the emoluments paid to an employee or pays on his behalf any contributions of that employee to an approved superannuation fund, he shall include all such deductions or payments in the return which he is required to furnish under section 198  deduction from pay of   and contributions on behalf  of employee to be included in return  7  (1) an employer objecting to an order of the commissioner refusing to accord 5 approval to a superannuation fund of an order withdrawing such approval may appeal, within a period of sixty days of such order, to the board  (2) the appeal shall be in such form verified in the manner and accompanied by such fees as the board may prescribe  appeals  8 if a fund or a part of a fund for any reason ceases to be an approved superannuation   10 fund, the trustees of the fund shall nevertheless remain liable to tax on any sum paid on account of returned contributions (including interest on contributions, if any), in so far as the sum so paid is in respect of contributions made before the fund or part of the fund ceased to be an approved superannuation fund under the provisions of this part  liability of trustees  on cessation  of approval 9 the trustees of an approved superannuation fund and any employer who contrib-   15 utes to an approved superannuation fund shall, when required by notice from the assessing officer, within such period, not being less than twenty-one days from the date of the notice, as may be specified in the notice, furnish such return, statement, particulars or information, as the assessing officer may require  particulars  to be  furnished in respect  of superannua-  tion  funds  10  the board may, for the purposes of this part, prescribe— 20   (a) the statements and other information to be submitted along with an application for approval;  (b) the returns, statements, particulars, or information which the assessing officer may require from the trustees of an approved superannuation fund or from the employer; 25   (c) limiting the ordinary annual contribution and any other contributions to an approved superannuation fund by an employer;  (d) regulating the investment or deposit of the moneys of an approved superannuation fund;  (e) providing for the assessment by way of penalty of any consideration re-   30  ceived by an employee for any assignment of, or creation of a charge upon, his beneficial interest in an approved superannuation fund;  (f) determining the extent to, and the manner in, which exemption from payment of tax may be granted in respect of any payment made from a superannuation fund from which approval has been withdrawn; 35   (g) providing for the withdrawal for approval in the case of a fund which ceases to satisfy the requirements of this part or of the rules made thereunder; and  (h) generally, to carry out the purposes of this part and to secure such further control over the approval of superannuation funds and the administration of approved superannuation funds as it may deem requisite 40   provision relating  to rules interpretations in this part 11 in this part, unless the context otherwise requires, "employer", "employee", "contribution" and "salary" shall have, in relation to superannuation funds, the meaning respectively  assigned to them in paragraph 15 of part i in relation to provident funds  part iii approved gratuity  funds1  (1) the   commissioner may accord approval to any gratuity fund which, in his opinion, complies with the requirements of paragraph 2, and may at any time withdraw such 5 approval if, in his opinion, the circumstances of the fund or part cease to warrant the continuance of the approval  (2) the commissioner shall communicate in writing to the trustee of the fund the grant of approval with the date on which the approval is to take effect, and, where the approval is granted subject to conditions, those conditions  10  (3) the commissioner shall communicate in writing to the trustees of the fund any withdrawal of approval with the reasons for such withdrawal and the date on which the withdrawal is to take effect  (4) the commissioner shall neither refuse nor withdraw approval to any gratuity fund unless he has given the trustees or that fund an opportunity of being heard in the 15    matter approval  of gratuity  fund and  its withdrawal conditions for  approval 2 in order that a gratuity fund may receive and retain approval, it shall satisfy the conditions set out below and any other conditions which the board may prescribe—  (a) the fund shall be a fund established under an irrevocable trust in connection with a trade or undertaking carried on in india, and not less than ninety per cent of the 20 employees shall be employed in india;  (b) the fund shall have for its sole purpose the provision of gratuity to employees in the trade or undertaking, on their retirement at or after a specified age or on their becoming incapacitated prior to such retirement or on termination of their employment after a minimum period of service specified in the rules of the fund, or to the widow, 25 children or dependants of such employees on their death;  (c) the employer in the trade or undertaking shall be a contributor to the fund; and   (d) all benefits granted by the fund shall be payable only in india  3 (1) an application for approval of a gratuity fund shall be made in writing by the 30    trustees of the fund to the assessing officer by whom the employer is assessable and shall be accompanied by a copy of the instrument under which the fund is established and by two copies of the rules and, where the fund has been in existence during any year or years prior to the financial year in which the application for approval is made, also two copies of the accounts of the fund relating to such prior year or years (not being more than three years 35 immediately preceding the year in which the said application is made) for which such account have been made up, but the commissioner may require such further information to be supplied as he thinks proper  (2) if any alternation in the rules, constitution, objects or conditions of the fund is made at any time after the date of the application for approval, the trustees of the fund shall 40    forthwith communicate such alteration to the assessing officer mentioned in sub-paragraph (1), and in default of such communication any approval given shall, unless the commissioner otherwise orders, be deemed to have been withdrawn from the date on which the alteration took effect  4 where any gratuity is paid to an employee during his lifetime, the gratuity shall be 45    treated as salary paid to the employee for the purpose of this code  5 if a gratuity fund for any reason ceases to be an approved gratuity fund, the trustees of the fund shall nevertheless remain liable to tax on any gratuity paid to any employee  application for  approval  gratuity deemed to  be salary  liability of trustees  on cessation  of approval 6 where any contributions by an employer (including the interest thereon, if any) are repaid to the employer, the amount so repaid shall be deemed for the purposes of income-tax to be the income of the employer of the financial year in which they are so repaid   contributions by  employer, when  deemed to  be income of  employer  7 (1) an employer objecting to an order of the commissioner refusing to accord approval to a gratuity fund or an order withdrawing such approval may appeal, within a 5 period of sixty days of such order, to the board;  (2) the appeal shall be in such form, verified in the manner and accompanied by such fee as the board may prescribe  appeals  8 the trustees of an approved gratuity fund and any employer who contributes to an approved gratuity fund shall, when required by notice from the assessing officer, furnish   10 within such period, not being less than twenty-one days from the date of the notice, as may be specified in the notice, such return, statement, particulars or information, as the assessing officer may require  particulars to be furnished  in respect  of gratuity  funds 9  the board may, for the purposes of this part, prescribe—  provisions relating  to rules (a) the statements and other information to be submitted along with an applica-   15  tion for approval;  (b) limiting the ordinary annual and other contributions of an employer to the (c) regulating the investment or deposit of the moneys of an approved gratuity fund;   fund; ceived by an employee for any assignment of, or creation of a charge upon, his beneficial interest in an approved gratuity fund;  (e) providing for the withdrawal for approval in the case of a fund which ceases to satisfy the requirements of this part or of the rules made thereunder; 25   (f) generally, to carry out the purposes of this part and to secure such further control over the approval of gratuity funds and the administration of gratuity funds as it may deem requisite  20   (d) providing for the assessment by way of penalty of any consideration re-  interpretation under this part  10 in this part, unless the context otherwise requires, "employer", "employee", "contribution" and "salary" shall have, in relation to gratuity funds, the meaning respectively   30 assigned to them in paragraph 15 of part i in relation to provident funds [see sections 58(2)(u)113(2)(k) and 291(9)(c)]   computation of income attributable to a controlled foreign company1 the total income of a resident assessee for a financial year shall include an income 5 which is attributable to a controlled foreign company as computed in accordance with paragraph 3  2 the attributable income referred to in paragraph 1 shall be included in the total income of the assessee for the financial year, the year in which the accounting period of the company ends  3 the amount of attributable income shall be computed in accordance with the formula--a x b x c100 dwhere  a = specified income of the controlled foreign company as computed under paragraph 4;  b = percentage of—  (i) value of capital,  15 (ii) voting share or interest,  whichever is higher, held by the assessee, directly or indirectly, in the controlled foreign company;  c = number of days out of d, the voting shares or capital or interest has been held by the assessee in the controlled foreign company;  20  d = number of days the company remained as a controlled foreign company during the accounting period;  4 the specified income of the controlled foreign company shall be computed in accordance with the formula--$$\begin{array}{c}\mbox{(a+b-c-d)x}\ \ \mbox{e}\\ \mbox{f}\end{array}$$25 30 where a = net profit as per profit and loss account of the controlled foreign company for the accounting period prepared in accordance with the international financial reporting standards issued by the international accounting standards board, generally accepted accounting principles, international accounting standards or accounting standards notified under the companies act, 1956, as the case may be;10 to  1956  b = amounts set aside to provisions made for meeting liabilities or diminution in value of assets, other than ascertained liabilities;  c = amount or amounts of interim dividend paid out of profits of the  accounting period, if such dividend is not debited to profit and loss account;  35  40  d = the loss to the extent it has not been previously taken into account under this paragraph in respect of an earlier accounting period, where there is a net loss of the controlled foreign company for such accounting period;  e = number of days during which the company is a controlled foreign company during its accounting period;  f = number of days in the accounting period 5 in this schedule—  (a) "controlled foreign company" means a foreign company which satisfies the following conditions, namely:—  (i) for the purposes of tax, it is a resident of a territory with lower rate of taxation; 5  (ii) the shares of such company are not traded on any stock exchange recognised by law of the territory of which it is a resident for the purposes of tax;  (iii) one or more persons, resident in india, individually or collectively exercise control over the company;  (iv) it is not engaged in any active trade or business; 10   (v) the specified income of the company determined in accordance with the provisions of paragraph 4 exceeds twenty-five lakh rupees;  (b) one or more persons resident in india shall be said to exercise control over the company if -  (i) such persons, individually or collectively possess or are entitled to   15 acquire directly or indirectly shares carrying not less than fifty per cent of the voting power or not less than fifty per cent capital of the company;  (ii) such persons, individually or collectively are entitled to secure that not less than fifty per cent of income or asset of the company shall be applied directly or indirectly for their benefit; 20  (iii) such persons, individually or collectively, exercise dominant influence on the company due to special contractual relationship;  (iv) such persons, individually or collectively, have, directly or indirectly, sufficient votes to exert a decisive influence in a shareholder meeting of the company 25   (c) a company shall be regarded as a resident of a territory for the purposes of tax—   (i) if in an accounting period it is liable to tax in the territory by reason of its place of incorporation or the place of management;  (ii) if in any accounting period there are two or more territories falling in   30 sub-clause (i) above, then, the company shall in that accounting period be regarded for purpose of this schedule as a "resident" of any one of them—  (a) if, throughout the accounting period, the company's place of effective management is situated in one of those territories only, in that territory; and 35   (b) if, throughout the accounting period, the company's place of effective management is situated in two or more of those territories, then, in one of them in which, at the end of the accounting period, the greater amount of the company's assets is situated; and  (c) if neither item (a) nor item (b) above applies, then, in one of the 40 territories falling within sub-clause (i) above in which, at the end of the accounting period, the greater amount of the company's assets is situated; and  (iii) if in any accounting period a territory is not falling within sub-clause (i) above, then, for the purposes of this schedule it shall be conclusively pre-    45  sumed that the company is in that accounting period resident in a territory with a lower rate of taxation; (d) "territory with a lower rate of taxation" means a country or a territory outside india in which the amount of tax paid under the law of that country or territory in respect of profits of a company that accrue in any accounting period, is less than onehalf of the corresponding tax payable on those profits computed under this code, as if 5 the said company was a domestic company;  (e) a company shall be deemed to be engaged in active trade or business if and only if -  (i) it actively participates in industrial, commercial or financial undertakings through employees or other personnel in the economic life of the territory 10 of which it is resident for tax purposes; and  (ii) less than fifty per cent of income of the company during the accounting period is of the following nature, namely:—  (a) dividend; (b) interest; 15 (c) income from house property; (d) capital gains; (e) annuity payment; (f) royalty; (g) sale or licensing of intangible rights on industrial, literary or 20 artistic property;  (h) income from sale of goods or supply of services including financial services to—  (i) persons that directly or indirectly control the company; (ii) persons that are controlled by the company; 25  (iii) other persons which are controlled by persons referred to in sub-item (i);  (iv) any associated enterprise;  (i) income from management, holding or investment in securities, shareholdings, receivables or other financial assets;  30  (j) any other income falling under the head income from residuary sources;  (f) "associated enterprise" shall have the meaning as assigned to it in clause (5) of section 124  6 (1) unless otherwise provided, each period of twelve months ending with the 31st 35 day of march shall be the accounting period of a company  (2) where a company regularly adopts a period of twelve months ending on a day other than the 31st day of march for the purpose of—  (i) complying with the tax law of the territory of which it is a resident for tax purposes; or  40 (ii) reporting to its shareholders,  then the period of twelve months ending with such other day shall be the accounting period of the company (3) the first accounting period of the company begins from the date of its incorporation and end with the 31st day of march or such other day, as the case may be, following the date of such incorporation, and the later accounting period shall be the successive periods of twelve months  (4) if the company ceases to exist before the end of accounting period, as mentioned 5 in sub-paragraphs (1), (2) and (3), the accounting period shall end immediately before the company ceases to exist  7 a resident assessee shall furnish the details of its investment and interest in any entity outside india in such form and manner as may be prescribed  the twenty-first schedule [see section 178(1)(i)] orders appealable before commissioner  (appeals)| serial                                       | orders against which appeal                 | section, chapter    | income-tax   ||----------------------------------------------|---------------------------------------------|---------------------|--------------|| 5                                            |                                             |                     |              || number                                       | may be preferred or filed                   | or schedule         | authority by || under which                                  |                                             |                     |              ||                                              | whom order                                  |                     |              || order is                                     | is passed                                   |                     |              || passed                                       |                                             |                     |              || (1)                                          | (2)                                         | (3)                 | (4)          ||                                              |                                             |                     |              ||                                              |                                             |                     |              || 149                                          | assessing officer                           |                     |              || or the processing                            |                                             |                     |              || 10                                           |                                             |                     |              || 1                                           | an intimation, where the assessee objects   |                     |              || to the making of adjustments to its returned |                                             |                     |              || tax bases                                   |                                             |                     |              ||                                              |                                             |                     |              || authority                                    |                                             |                     |              ||                                              |                                             |                     |              || 155                                          | assessing                                   |                     |              || 2                                           | an order of assessment (except an order     |                     |              || passed in pursuance of directions of the     |                                             |                     |              || 15                                           |                                             |                     |              || dispute resolution panel)                   |                                             |                     |              ||                                              |                                             |                     |              || 3                                           | an order of best judgment assessment       |                     |              || officer                                      |                                             |                     |              ||                                              |                                             |                     |              ||                                              |                                             |                     |              || 156                                          |                                             |                     |              || assessing                                    |                                             |                     |              ||                                              |                                             |                     |              || officer                                      |                                             |                     |              ||                                              |                                             |                     |              ||                                              |                                             |                     |              ||                                              |                                             |                     |              || assessing                                    |                                             |                     |              || 4                                           | an order against the assessee where he      |                     |              || denies his liability to be assessed under    |                                             |                     |              || officer                                      |                                             |                     |              || 20                                           |                                             |                     |              || this code                                   |                                             |                     |              ||                                              |                                             |                     |              || under the                                    |                                             |                     |              || relevant                                     |                                             |                     |              || provisions of                                |                                             |                     |              || the code                                     |                                             |                     |              || 159                                          | assessing                                   |                     |              || 5                                           | an order of assessment, reassessment or     |                     |              || re-computation (except an order passed in    |                                             |                     |              || pursuance of the directions of the dispute   |                                             |                     |              || 25                                           |                                             |                     |              || resolution panel)                           |                                             |                     |              ||                                              |                                             |                     |              || officer                                      |                                             |                     |              ||                                              |                                             |                     |              ||                                              |                                             |                     |              ||                                              |                                             |                     |              || 161                                          |                                             |                     |              || assessing                                    |                                             |                     |              || 6                                           | an order made having the effect of enhanc-  |                     |              || ing the assessment or reducing a refund or   |                                             |                     |              || an order refusing to allow the claim made    |                                             |                     |              || by the assessee under the said section [ex-  |                                             |                     |              || 30                                           |                                             |                     |              || cept where such order is passed by the com-  |                                             |                     |              || missioner or commissioner (appeals) or by    |                                             |                     |              || the assessing officer in pursuance of the    |                                             |                     |              || directions of the dispute resolution panel] |                                             |                     |              ||                                              |                                             |                     |              || 7                                           | an order made treating the assessee as the  |                     |              || officer                                      |                                             |                     |              ||                                              |                                             |                     |              ||                                              |                                             |                     |              ||                                              |                                             |                     |              ||                                              |                                             |                     |              ||                                              |                                             |                     |              ||                                              |                                             |                     |              ||                                              |                                             |                     |              ||                                              |                                             |                     |              || 164                                          |                                             |                     |              || assessing                                    |                                             |                     |              || 35                                           |                                             |                     |              || agent of a non-resident                     |                                             |                     |              ||                                              |                                             |                     |              || officer                                      |                                             |                     |              ||                                              |                                             |                     |              || 168                                          |                                             |                     |              || assessing                                    |                                             |                     |              ||                                              |                                             |                     |              || 8                                           | an assessment order made upon business      |                     |              || reorganisation                              |                                             |                     |              ||                                              |                                             |                     |              || officer                                      |                                             |                     |              ||                                              |                                             |                     |              || 169                                          | assessing                                   |                     |              || 9                                           | an assessment order made after partition of |                     |              || a hindu undivided family                    |                                             |                     |              ||                                              |                                             |                     |              || officer                                      |                                             |                     |              ||                                              |                                             |                     |              || 170                                          |                                             |                     |              || assessing                                    |                                             |                     |              ||                                              |                                             |                     |              || 40                                           |                                             |                     |              || 10                                          | an assessment order made in respect of a    |                     |              || non-resident engaged in occasional ship-     |                                             |                     |              || ping business                               |                                             |                     |              ||                                              |                                             |                     |              || officer                                      |                                             |                     |              ||                                              |                                             |                     |              ||                                              |                                             |                     |              || 171                                          |                                             |                     |              || assessing                                    |                                             |                     |              ||                                              |                                             |                     |              || 11                                          | an assessment order in respect of persons   |                     |              || leaving india                               |                                             |                     |              ||                                              |                                             |                     |              || officer                                      |                                             |                     |              ||                                              |                                             |                     |              || 45                                           |                                             |                     |              || 12                                          | an assessment order in respect of an        |                     |              ||                                              |                                             |                     |              || assessing                                    |                                             |                     |              ||                                              |                                             |                     |              || 172                                          |                                             |                     |              ||                                              |                                             |                     |              || officer                                      |                                             |                     |              || unincorporated body formed for a             |                                             |                     |              || particular event or purpose                 |                                             |                     |              ||                                              |                                             |                     |              || (1)                                          | (2)                                          | (3)    ||----------------------------------------------|----------------------------------------------|--------||                                              |                                              |        || 173                                          |                                              |        || assessing                                    |                                              |        ||                                              |                                              |        || officer                                      |                                              |        ||                                              |                                              |        || 13                                          | an assessment order in respect of persons    |        || likely to transfer property to avoid tax    |                                              |        ||                                              |                                              |        || 174                                          |                                              |        || assessing                                    |                                              |        ||                                              |                                              |        || officer                                      |                                              |        ||                                              |                                              |        ||                                              |                                              |        || 14                                          | an assessment order in respect of a discon-  |        || tinued business                             |                                              |        ||                                              |                                              |        || 175                                          |                                              |        || assessing                                    |                                              |        || 5                                            |                                              |        ||                                              |                                              |        || 15                                          | an assessment order in respect of an unin-   |        || corporated body in case of change in its     |                                              |        || constitution                                |                                              |        ||                                              |                                              |        || officer                                      |                                              |        ||                                              |                                              |        ||                                              |                                              |        || 176                                          |                                              |        || assessing                                    |                                              |        ||                                              |                                              |        || officer                                      |                                              |        || 16                                          | assessment order in respect of any two       |        || unincorporated bodies in case of succes-     |                                              |        || sion of one unincorporated body by the       |                                              |        || other on account of death or retirement of   |                                              |        || all or any participant                      |                                              |        ||                                              |                                              |        || 10                                           |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        || 177                                          | assessing                                    |        || officer                                      |                                              |        ||                                              |                                              |        || 17                                          | an assessment order in respect of a deductor |        || or collector                                |                                              |        ||                                              |                                              |        || 213                                          |                                              |        || assessing                                    |                                              |        || 15                                           |                                              |        ||                                              |                                              |        || officer                                      |                                              |        ||                                              |                                              |        || 18                                          | an order of charging interest on failure to  |        || pay demand raised                           |                                              |        ||                                              |                                              |        || 214                                          |                                              |        || assessing                                    |                                              |        ||                                              |                                              |        || officer                                      |                                              |        ||                                              |                                              |        || 19                                          | an order of charging interest for failure to |        || deduct or pay tax                           |                                              |        ||                                              |                                              |        || 215                                          |                                              |        || assessing                                    |                                              |        ||                                              |                                              |        || 20                                          | an order of refund                          |        ||                                              |                                              |        ||                                              |                                              |        || officer                                      |                                              |        || 20                                           |                                              |        ||                                              |                                              |        || chapter xiv                                  |                                              |        || income-tax                                   |                                              |        ||                                              |                                              |        || authority below                              |                                              |        || 21                                          | an order imposing a penalty or enhancing     |        || the penalty                                 |                                              |        || the rank of                                  |                                              |        || commissioner or                              |                                              |        || commissioner                                 |                                              |        || 25                                           |                                              |        ||                                              |                                              |        || (appeals)                                    |                                              |        || tenth                                        |                                              |        || 22                                          | an order under the tenth schedule in rela-   |        || tion to a qualifying shipping company's      |                                              |        || application for opting for tonnage tax       |                                              |        || scheme                                      |                                              |        ||                                              |                                              |        || schedule                                     |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        || the prescribed                               |                                              |        || authority                                   |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        || assessing                                    |                                              |        || 23                                          | an order made under the provisions of this   |        || code in the case of such person or class of  |                                              |        || persons, as the board may, having regard     |                                              |        || to the nature of the cases, the complexities |                                              |        || involved and other relevant consideration,   |                                              |        || direct                                      |                                              |        ||                                              |                                              |        || under the                                    |                                              |        || relevant provi-                              |                                              |        || sions of the                                 |                                              |        || code                                         |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        || officer                                      |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        || 30                                           |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        || 35                                           |                                              |        ||                                              |                                              |        ||                                              |                                              |        ||                                              |                                              |        || 43 to  1961                                 |                                              |        || 24                                          | any order passed under the income-tax act,   |        || 1961 or the wealth tax act, 1957 and which   |                                              |        || was appealable under the said acts, before   |                                              |        || the commencement of this code               |                                              |        || 27 to  1957                                 |                                              |        ||                                              |                                              |        ||                                              |                                              |        || 40                                           |                                              |        || assessing                                    |                                              |        || officer or the                               |                                              |        || authority                                    |                                              |        || passing the                                  |                                              |        || order under the                              |                                              |        || relevant acts                               |                                              |        || under the                                    |                                              |        || provisions of                                |                                              |        || the income-tax                               |                                              |        || act, 1961 or                                 |                                              |        || the wealth-tax                               |                                              |        || act, 1957 as                                 |                                              |        || they stood                                   |                                              |        || before the                                   |                                              |        || commence-                                    |                                              |        || ment of this                                 |                                              |        || code                                         |                                              |        | deferred  revenue  expenditure  allowance1 the deferred revenue expenditure allowance for a financial year, in respect of an 5 expenditure of the nature specified in column (2) of the table given below, shall be the amount equal to the appropriate fraction of the amount of such expenditure  2 the appropriate fraction referred to in paragraph 1 shall be the fraction, the numerator of which is one and the denominator of which is the total number of the financial years specified in column (3) of the said table against the relevant deferred revenue expen- 10 diture  3 the deferred revenue expenditure allowance shall be allowable for such number of consecutive financial years as specified in column (3) of the said table against the relevant deferred revenue expenditure, the first such financial year of allowability being -  (a) in case of expenditure at serial numbers 1, 2, 3 and 5, the year in which such 15 amount is actually paid;  (b) in case of expenditure at serial number 4, the year in which business reorganisation takes place;  (c) in case of expenditure at serial number 6, the year in which the loss referred to therein has been incurred;  20  (d) in case of expenditure at serial number 7, the year of commencement of the business or extension of the business or setting up of new business, as the case may be  4  the total amount of deferred revenue expenditure allowable under clause (e) of sub-section (1) of section 37 shall be the aggregate of the amounts under this schedule   table25 serial nature of deferred revenue expenditure number of number  financial years for which expenditure 30 is allowable (1) (2) (3)  1   non-compete fee 6 2   premium for obtaining any asset on lease or rent 6 3   amount paid to an employee in connection with his 6 35 voluntary retirement in accordance with any scheme of voluntary retirement  4   expenditure incurred by an indian company wholly and 6 exclusively for the purposes of business reorganisation  5   expenditure incurred by a person resident in india wholly 10 40 and exclusively on any operations relating to prospecting for any mineral or the development of a mine or other natural deposit of any mineral, to such extent, as may be prescribed  6   any loss on account of forfeiture of any agreement entered 6 in the course of the business  45 7   any preliminary expenditure incurred 6 (a) before the commencement of the business; or (b) in connection with the extension of the business; or (c) in connection with the setting up of new business, shall be such as may be prescribed having regard to the 50 capital employed in the business and the cost of the project   statement of objects and reasonsthe income-tax act, 1961, has been subjected to numerous amendments since its passage fifty years ago it has been considerably revised, not less than thirty-four times, by amendment acts besides the amendments carried out through the annual finance acts these amendments were necessitated by policy changes due to the changing economic environment, increasing sophistication of commerce, increase in international transactions as a result of globalisation, development of information technology, attempts to minimise tax avoidance and in order to clarify the statute in relation to judicial decisions as a result of all these amendments, the basic structure of the income-tax act has been over burdened and its language has become complex tax administrators, accountants and tax payers have raised concerns about the complex structure of the income-tax act in particular, the numerous amendments have rendered the act difficult to decipher by the average tax payer the wealth-tax act, 1957 has also witnessed amendments  the government, therefore, decided to revise, consolidate and simplify the language and structure of the direct tax laws a draft direct taxes code along with a discussion paper was released in august, 2009 for public comments it proposed to replace the income-tax act, 1961 and the wealth-tax  act, 1957 by a single act, namely the direct taxes code public and stakeholder feedback on the proposals outlined in these documents was analysed and suggestions for amendments received from members of the public, business associations and other bodies were taken into account thereafter, a revised discussion paper addressing the major issues was released in june, 2010 the present bill is the outcome of this process  the notes on clauses explain in detail the various provisions contained in the bill new delhi; pranab mukherjee the 27th august, 2010   ———— president's recommendation under articles 117 (1) and 274 (1) of the constitution of india[copy of letter no f 152/10/2010-tpl, dated the 27th august, 2010 from shri pranab mukherjee, minister of finance to the secretary general, lok sabha]  the president has, in pursuance of clause (1) of article 117, read with clause (1) of article 274 of the constitution, recommended to lok sabha the introduction of the direct taxes code, 2010  notes on clausesthe code seeks to consolidate and amend the law relating to direct taxes chapter i deals with preliminary clause 1 provides the short title, extent and commencement of the code the clause provides that the direct taxes code, 2010, extends to the whole of india it also provides that unless otherwise specified, the code shall come into force on the 1st april, 2012  part a of the code relates to income-tax chapter ii provides for basis of charge clause 2 provides for liability to pay and charge of income-tax it provides that every person shall be liable to pay income-tax in respect of his total income of the financial year in accordance with the provisions of the code "total income" and "person" have been defined in clause 314 of the code  clause 2 also provides that subject to the provisions of the code, income-tax, including additional income-tax, shall be charged in respect of the total income of a financial year of every person the clause provides that where the income-tax is to be charged in respect of the income of a period other than the financial year, the incometax shall be charged accordingly such income-tax shall be charged at the rate specified in the first schedule in the manner provided therein the income-tax shall be deducted or collected at source or paid in advance in respect of the income chargeable to tax in accordance with the provisions of the code the chargeability of income–tax for any financial year shall be determined in accordance with the provisions of this code as they stand on the 1st april of that financial year  clause 3 deals with the scope of total income it provides that subject to the provisions of the code, the total income of any financial year of a person, who is a resident, shall include all income from whatever source derived which—  (a) accrues, or is deemed to accrue, to him in india during the year; (b) accrues to him outside india during the year; (c) is received, or is deemed to be received, by him, or on his behalf, in india during the year; or  (d) is received by him, or on his behalf, outside india during the year  the said clause also provides that subject to the provisions of the code, the total income of any financial year of a person, who is a non-resident, shall include all income from whatever source derived which—  (a) accrues, or is deemed to accrue, to him in india during the year; or  (b) is received, or is deemed to be received, by him, or on his behalf, in india during the year  any income which accrues to a resident outside india during the year, or is received outside india during the year by, or on behalf of, such resident, shall be included in the total income of the resident, whether or not such income has been charged to tax outside india  clause 4 provides for residence in india it provides that an individual shall be resident in india in any financial year, if he is in india—  (a) for a period, or periods, amounting in all to one hundred and eighty-two days, or more, in that year; or   (b) for a period, or periods, amounting in all to— (i) sixty days, or more, in that year; and (ii) three hundred and sixty-five days, or more, within the four years immediately preceding that year  the above shall, however, not apply in respect of an individual who is—  (a) a citizen of india and who leaves india in that year as a member of the crew of an indian ship; or  (b) a citizen of india and who leaves india in that year for the purposes of employment outside india the clause further provides that a company shall be resident in india in any financial year, if—  (a) it is an indian company; or (b) its place of effective management, at any time in the year, is situated in india the said clause also provides that every other person shall be resident in india in any financial year, if the place of control and management of its affairs at any time in the year is situated wholly or partly in india  for this purpose, "indian company" and "place of effective management" have been defined in clause 314 of the code  clause 5 relates to income which is deemed to accrue in india income shall be deemed to accrue in india, if it accrues, whether directly or indirectly, through or from: (a) any business connection in india; (b) any property in india; (c) any asset or source of income in india; or  (d) the transfer, of a capital asset situate in india  the said clause also provides that in addition to the above, the following income shall be deemed to accrue in india— (a) income from employment, if it is for service rendered in india or for service rendered outside india by a citizen of india and the income is receivable from the government; or the rest or leave period preceding or succeeding the period of service rendered in india and forms part of the service contract of employment;  (b) any dividend paid by a domestic company outside india;  (c) any insurance premium including re-insurance premium accrued from or payable by any resident or non-resident in respect of insurance covering any risk in india;  (d) interest accrued from or payable by any resident or the government;  (e) interest accrued from or payable by any non-resident, if the interest is in respect of any debt incurred and used for the purposes of a business carried on by the non-resident in india or for earning any income from any source in india;  (f) royalty accrued from or payable by any resident or the government;  (g) royalty accrued from or payable by a non-resident, if the royalty is for the purposes of a business carried on by the non-resident in india; or for earning any income from any source in india;  (h) fees for technical services accrued from or payable by any resident or the government; (i) fees for technical services accrued from or payable by any non-resident, in  respect of services utilised for the purposes of a business carried on by the non-resident in india or for earning any income from any source in india; (j) transportation charges accrued from or payable by any resident or the government; (k) transportation charges accrued from or payable by any non-resident, if the transportation charges are in respect of the carriage to, or from, a place in india the said clause also provides that in the case of a non-resident, income deemed to accrue in india shall not include the following— (a) any income accruing through, or from, operations which are confined to the purchase of goods in india for the purposes of export out of india; (b) interest accrued from or payable by a resident on any debt incurred and used for the purposes of a business carried on by the resident outside india or for earning any income from any source outside india; (c) royalty accrued from or payable by a resident for the purposes of a business carried on by the resident outside india or for earning any income from any source outside india; (d) royalty consisting of lump sum consideration accrued from or payment made by a resident for the transfer of any rights (including the granting of a licence) in respect of computer software supplied by the non-resident manufacturer, along with a computer or computer-based equipment, under any scheme approved under the policy on computer software export, software development and training, 1986; (e) fees for technical services, accrued from or payable by a resident, in respect of services utilised for the purposes of a business carried on by the resident outside india; or for earning any income from any source outside india; (f) transportation charges for the carriage by aircraft or ship, accrued from or payable by any resident, if the transportation charges are in respect of the carriage from a place outside india to another place outside india, except where the airport or port of origin of departure of such carriage is in india (g) income from transfer, outside india, of any share or interest in a foreign company, unless at any time in the twelve months preceding transfer, the fair market value of the assets in india owned, directly or indirectly, by the company represent at least fifty per cent of the fair market value of all assets owned by the company; (h) interest accrued from, or payable by, any non-resident as referred to in subitem (ii) of item (e) of sub-clause (2), if such interest has not been claimed by the non- resident as a deduction from his tax base chargeable in india the clause also provides that in the case of a business of which all the operations are not carried out in india, the income of the business deemed to accrue in india shall be only such part of the income as is reasonably attributable to the operations carried out in india the clause also provides that income (other than income from employment and any dividend paid by an indian company outside india) shall be deemed to accrue in india, whether or not,— (a) the payment is made in india; (b) the services are rendered in india; (c) the non-resident has a residence or place of business or any business connection in india; or (d) the income has accrued in india the clause further provides that where the income of a non-resident, in respect of transfer, outside india, of any share or interest in a foreign company, is deemed to accrue in india under clause (d) of sub-section (1), it shall be computed in accordance with the formula 'ab/c', where a denotes income from the transfer computed in accordance with provisions of this code as if the transfer was effected in india; b denotes fair market value of the assets in india, owned, directly or indirectly, by the company; and c denotes fair market value of all assets owned by the company "business  connection",  "royalty",  "fees  from  technical  services"  and  "transportation charges" have been defined in clause 314 of the code clause 6 provides that the following income shall be deemed to be received in the financial year, namely:— (a) any contribution made by an employer in the financial year to the account of an employee under a pension fund; (b) any contribution made by an employer in the financial year to the account of an employee in any other fund; and (c) the annual accretion in the financial year to the balance at the credit of any employee in a fund referred to in item (b) to the extent it exceeds the limit as may be prescribed clause 7 relates to dividend income clause 7 provides that any dividend declared, distributed or paid by a company shall be deemed to be the income of the financial year in which it is so declared, distributed or paid it also provides that any interim dividend shall be deemed to be the income of the financial year in which the amount of such dividend is unconditionally made available by the company to the member who is entitled to it for this purpose, clause 314 of the code defines "dividend" clause 8 provides that the total income of a person being a transferor, shall include the income of any other person if such income accrues to any other person by virtue of a transfer, without transfer of the asset from which the income accrues; or the income accrues to any other person by virtue of a revocable transfer of an asset however, such income shall not be included in the total income of the transferor in a case where any income accrues from an asset transferred to any trust or any other person, if the transfer is not revocable during the lifetime of the beneficiary of the trust or during the lifetime of such other person the clause further provides that a transfer shall be deemed to be revocable if it contains any provision for the re-transfer, directly or indirectly, of the whole or any part of the income or assets to the transferor or it, in any way, gives the transferor a right to re-assume power, directly or indirectly, over the whole or any part of the income or assets for the purpose of this clause, a transfer shall include any settlement, trust, covenant, agreement or arrangement clause 9 provides that the total income of any individual shall, inter alia, include all income accruing directly or indirectly— (i) to the spouse, by way of salary, commission, fees or any other form of remuneration, whether in cash or in kind, from a concern in which the individual has a substantial interest; (ii) from assets transferred, directly or indirectly, to the spouse by the individual, otherwise than for adequate consideration, or in connection with an agreement to live apart; (iii) from assets transferred, directly or indirectly, to the son's wife by the individual, otherwise than for adequate consideration; or (iv) from assets transferred, directly or indirectly, to any other person by the individual otherwise than for adequate consideration, to the extent to which the income from such assets is for the immediate or deferred benefit of the spouse or son's wife the income referred to in sub-clause (i) above shall be included in the total income of the spouse whose total income is higher the said clause also provides that the total income of any individual will not include any income accruing to the spouse where the spouse possesses technical or professional qualifications and the income is solely attributable to the application of the technical or professional knowledge and experience of the spouse the said clause further provides that the board may prescribe the method for determining the income referred to in sub-clauses (ii) and (iii) above the said clause further provides that the total income of any individual shall also include all income accruing to a minor child (other than a minor child being a person with disability or person with severe disability) of the individual such income shall be included in the total income of the parent who is the guardian of the minor child or the parent whose total income is higher, if both the parents are guardians of the child where any such income is once included in the total income of a parent, such income arising in the succeeding year shall not be included in the total income of the other parent, unless the assessing officer considers it necessary to do so, after giving an opportunity of being heard, to that other parent the clause provides that the total income of any individual shall not include all income accruing to a minor child on account of any manual work done by the child or activity involving application of the skill, talent or specialised knowledge and experience of the child  the clause also provides that the total income of an individual shall include all income derived from any converted property or part thereof as a member of a hindu undivided family or which is received by the spouse or minor child upon partition of the said family in the said clause, "property" has been defined to include any interest in property whether movable or immovable, the sale proceeds of such property in whichever form and where the property is converted into any other form of property by any method, such other property "converted property" has been defined in clause 314 of the code  clause 10 provides that the total income of a financial year of a person shall not include the income enumerated in the sixth schedule  clause 11 provides that the persons enumerated in the seventh schedule shall not be liable to income-tax under this code for any financial year, subject to the fulfillment of conditions specified in the said schedule  chapter iii deals with computation of total income sub-chapter i relates to general provisions  clause 12 provides that the total income shall be computed in accordance with the provisions of the chapter it also clarifies that unless otherwise provided in the code, reference to any accrual, receipt, expenditure, withdrawal, asset or liability shall be construed to be in relation to the financial year in respect of which, and the person in respect of whom, the income is computed  clause 13 relates to classification of sources of income it provides that for the purposes of computation of total income of any person for any financial year, income from all sources shall be classified as follows:  a— income from ordinary sources b— income from special sources  clause 14 deals with computation of income from ordinary sources it provides that the income from any source, other than a special source, shall be computed under the class "income from ordinary sources" and such income shall be classified under the following heads of income, namely:—  a— income from employment b— income from house property c— income from business d— capital gains e— income from residuary sources  clause 15 deals with computation of income from special sources it provides that every income listed in column (3) of the table in part iii of the first schedule shall be the income from a special source of the person specified in column (2) of the said table it further provides that the income from any special source shall be computed under the class "income from special sources" in accordance with the provisions of the ninth schedule it also provides that in case the income is attributable to the permanent establishment of a nonresident in india, the income shall not be considered as income from a special source; clause 16 deals with the apportionment of income between spouses governed by the system of community of property under the portuguese civil code of 1860 as in force in the state of goa and in the union territories of dadra and nagar haveli and daman and diu the said clause provides that the income of the husband and wife, governed by the communiao dos bens, from ordinary sources under each head of income (other than the head "income from employment") and from special sources shall be apportioned equally between the spouses the income so apportioned shall be included separately in the total income of the spouses the clause further provides that the income under the head "income from employment" shall be included in the total income of the spouse who has actually earned it clause 17 deals with avoidance of double taxation it provides that subject to the provisions of the code, any income which is included in the total income of a person for any financial year shall not be so included again in the total income of such person for the same or any other financial year it also provides that any income which is includible in the total income of any person shall not be included in the total income of any other person, except where for the purpose of protecting the interest of the revenue, it is necessary to do so clause 18 provides that in computing the total income of a person for any financial year, the following expenditure shall not be allowed as a deduction, namely:— (a) any expenditure attributable to income which is not included in the total income under the sixth schedule, determined in accordance with such method as may be prescribed; (b) any expenditure attributable to any income from special sources; (c) any expenditure which has been allowed as a deduction in any other financial year; (d) any expenditure incurred for an activity which is an offence or which is not permissible by law; (e) any provision made for any liability, if it remains unascertained by the end of the financial year; and (f) any unexplained expenditure referred to in item (q) of sub-clause (2) of clause 58 the said clause also provides that any amount allowed as a deduction under any provision of the code shall not be allowed as a deduction under any other provision of the code the provisions of this clause shall apply notwithstanding anything contained in any other provisions of chapter iii clause 19 provides that any amount on which tax is deductible at source under chapter xiii during the financial year shall not be allowed as a deduction in computing the total income if,— (a) the tax has not been deducted during the financial year; or (b) the tax, after such deduction, has not been paid on or before the due date specified in sub-clause (1) of clause 144 the said clause also provides that a deduction shall be allowed to the person in respect of such amount in any subsequent financial year, if— (a) tax has been deducted during the financial year, but paid in such subsequent year after the due date specified in sub-clause (1) of clause 144; or (b) tax has been deducted and paid in such subsequent financial year sub-chapter ii relates to heads of income part a of sub-chapter ii deals with income from employment clause 20 provides that the income of a person from employment shall be computed under the head "income from employment" clause 21 provides for computation of income from employment the income computed under the head "income from employment" shall be the gross salary as reduced by the aggregate amount of the deductions referred to in clause 23 clause 22 deals with the scope of gross salary the gross salary shall be the amount of salary due, paid, or allowed, whichever is earlier, to a person in the financial year by or on behalf of his employer or former employer "salary" has been defined in clause 314 it inter alia includes "perquisites" and "profits in lieu of, or in addition to, salary", which have also been defined in clause 314  clause 23 provides that the deductions from the gross salary for computation of income from employment to the extent included in the gross salary shall be the following, namely:—  (a) any sum paid by the employee on account of a tax on employment within the meaning of clause (2) of article 276 of the constitution;  (b) any allowance or benefit granted by an employer for journey by an employee between his residence and office or any other place of work, to such extent as may be prescribed;  (c) any allowance or benefit granted by an employer to an employee to meet expenses wholly, necessarily and exclusively in the performance of the duties of an office or employment of profit, as may be prescribed, to the extent such expenses are actually incurred for that purpose and to meet personal expenses, considering the place of posting or nature of duties or place of residence, subject to such conditions and limits as may be prescribed;  (d) any amount of contribution made by an employer in the financial year to the account of an employee under an approved pension fund notified by the central government, to the extent it does not exceed ten per cent of the salary of the employee;  (e) any amount of contribution made by an employer in the financial year to the account of an employee in an approved superannuation fund;  (f) any amount of contribution by an employer, in the financial year, to an account of an employee in an approved provident fund to the extent it does not exceed twelve per cent of the salary of the employee;  (g) any amount of interest credited, in the financial year, on the balance to the credit of an employee in an approved fund to the extent it does not exceed the amount of interest payable at the rate notified by the central government;  (h) any allowance provided by an employer to meet the expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the employee, to such extent as may be prescribed  the said clause provides that for the purposes of (d), (f) and (h) above, salary means basic salary and includes dearness allowance, if the terms of employment so provide  part b of sub-chapter ii relates to income from house property  clause 24 provides that the income from letting of any house property owned by any person shall be computed under the head "income from house property" the said clause further provides that the income from any house property shall be computed under this head notwithstanding that the letting, if any, of the property is in the nature of trade, commerce or business where the house property is owned by two or more persons having definite and ascertainable shares, the clause provides that the income from such house property shall be computed separately for each such person accordingly, in a case where the shares of the owners of such house property are not definite and ascertainable, such persons shall be assessed as an association of persons in respect of such property the clause also provides that the above provisions shall not apply,—  (a) to the house prperty, or any portion of the house property which is used by the person as a hospital, hotel, special economic zone, convention centre or cold storage and the income from which is computed under the head "income from business"; (b) to a house property which is not ready for use during the financial year for this purpose, "house property" and "owner" have been defined in clause 314 clause 25 provides for computation of income from house property the income from house property shall be the gross rent as reduced by the aggregate amount of the deductions referred to in clause 27  clause 26 deals with the scope of gross rent the gross rent in respect of a house property or any part of the property shall be the amount of rent received or receivable, directly or indirectly, for the financial year or part thereof, for which such property is let out the said clause also provides that where such property was vacant during any part of the financial year, the gross rent shall be the amount of rent received or receivable for such part of the financial year for which the house was not vacant  clause 27 provides that the deductions from gross rent for computation of income from house property shall be the following, namely:—  (a) the amount of taxes levied by a local authority in respect of such property, to the extent the amount is actually paid by him during the financial year;  (b) a sum equal to twenty per cent of the gross rent determined under clause 26 towards repair and maintenance of such property;  (c) the amount of any interest on loan taken for the purposes of acquisition, construction, repair or renovation of the property or on loan taken for the purpose of repayment of the said loan the interest which pertains to the period prior to the financial year in which the house property has been acquired or constructed shall be allowed as deduction in five equal instalments beginning from such financial year such interest shall be reduced by any part thereof which has been allowed as deduction under any other provision of the code  clause 28 provides that the amount of rent received in advance shall be included in the gross rent of the financial year to which the rent relates  clause 29 provides that income in respect of the rent received in arrears in a financial year shall be computed under the head "income from house property", whether or not the person continues to be owner of the property in that year the said clause also provides that a sum equal to twenty per cent, of arrears of rent shall be allowed as a deduction the amount of rent referred to above shall be included in the gross rent under clause 26 for that financial year  clause 14 of the code seeks to provide that the "income from the ordinary sources" shall be computed under following heads of income:  a— income from employment b—income from house property c—income from business d— capital gains e—income from residuary source  clause 30 seeks to provide that income from any business carried on by the person at any time during a financial year shall be computed under the head "income from business" the income of distinct and separate business which is specified in clause 31 shall be computed separately the said clause also provides that any income from a business after its discontinuance shall be deemed to be the income of the recipient in the year of receipt and shall, accordingly, be computed under the head "income from business" clause 31 seeks to provide that a business shall be distinct and separate from another business if there is no interlacing or inter-dependence between the businesses it further provides that a business shall be deemed to be distinct and separate from another business, if—  (a) one unit of the business is processing, producing, manufacturing or trading the same goods as in the other unit of the business and the first-mentioned unit is located physically apart from the other unit;  (b) one unit of the business is processing, producing or manufacturing the same goods as in the other unit of the business and the first mentioned unit utilizes raw material or manufacturing process, which is different from the raw material or the manufacturing process of the other unit;  (c) separate books of account are maintained or capable of being maintained, for any business; or  (d) it is a business in respect of which profits are determined under subclause (2) of clause 32  the said clause also provides that a speculative business shall also be deemed to be distinct and separate from any other business or any other speculative business  clause 32 provides that the income computed under the head "income from business" shall be the profits from the business the profits from the business of insurance shall be computed in accordance with the eighth schedule the profits from the business of operating a qualifying ship shall be computed in accordance with the tenth schedule the profits from the business of mineral oil or natural gas shall be computed in accordance with the eleventh schedule the profits from the business of developing a special economic zone or profits from the business of manufacture or production, or providing of services, by a unit in special economic zone shall be computed in accordance with the twelfth schedule the profits from the business of generation and distribution of power, development of infrastructure facility, cold chain facility, running a hospital, laying and operating a cross country natural gas or crude or petroleum oil pipeline network shall be computed in accordance with the thirteenth schedule  the profits from any business not referred to above shall be the gross earnings from the business as reduced by the amount of business expenditure incurred by the person  clause 33 seeks to provide that the gross earnings from the business not covered by the eighth, tenth, eleventh, twelfth and the thirteenth schedule, shall be the aggregate of the following, namely:—  (i) the amount of any accrual or receipt from, or in connection with, the business;  (ii) the value of any benefit or perquisite, whether convertible into money or not, accrued or received from, or in connection with, the business;  (iii) the value of the inventory of the business, as on the close of the financial year; and  (iv) any amount received from a business after its discontinuance  the said clause provides that the accruals or receipts referred to above shall, inter-alia, include—  (i) any consideration, accrued or received under a non-compete agreement; (ii) any amount or value of any benefit, whether convertible into money or not, accrued to, or received by a person, being a trade, professional or similar association, in respect of specific services performed for its members;  (iii) any consideration on sale of a licence, not being a business capital asset, obtained in connection with the business;  (iv) any consideration on transfer of a right or benefit accrued or received under any scheme framed by the government, local authority or a corporation established under any law for the time being in force;  (v) the amount of cash assistance, subsidy or grant received from any person or the government for, or in connection with, the business other than an amount to meet any portion of the cost of any business capital asset;  (vi) the amount of any remission, drawback or refund of any tax, duty or cess (not being a tax under this code), received or receivable;  (vii) the amount of remuneration (including salary, bonus and commission) or any interest accrued to, or received by, a participant of an unincorporated body from such body;  (viii) any sum received under a keyman insurance policy including the sum allocated by way of bonus on such policy;  (ix) the amount of profit on transfer, demolition or destruction of any business capital asset (other than a business capital asset used for scientific research and development) computed in accordance with the provisions of clause 42; (x) any consideration received or receivable on transfer of carbon credits; (xi) the amount of remission or cessation of any liability by way of loan, deposit, advance or credit;  (xii) any amount accrued to or received on account of the cessation or forfeiture of any agreement entered in the course of the business; and  (xiii) any interest accrued to, or received by, a person being a financial institution, etc  however, the gross earnings from business shall not include any dividend, any interest other than interest accrued to, or received by, a person being a financial institution, any income from letting of house property which is included under the head "income from house property" and any income from the transfer of an investment asset  clause 34, inter alia, provides that the amount of business expenditure shall be aggregate of the operating expenditure, finance charges and capital allowances  clause 35, inter alia, provides that the amount of operating expenditure for the purposes of clause 34 shall be the aggregate of -  (b) the value of inventory of the business, as at the beginning of the financial (a) the amount of expenditure specified in sub-clause (2), if it is laid out or expended, wholly and exclusively, for the purposes of the business and fulfills specified conditions;   year; (c) loss of inventory, or money, on account of theft, robbery, fraud or embezzlement, occurring in the course of the business, if the inventory, or the money, is written off in the books of account;  (d) any amount credited to the provision for bad and doubtful debts account, not exceeding one per cent of the aggregate average advances computed in the prescribed manner, if the person is a financial institution, the amount is charged to the profit and loss account for the financial year in accordance with the prudential norms of the reserve bank of india in this regard, and the amount of trade debt or part thereof written off as irrecoverable in the books of the person is debited to the provision for bad and doubtful debts account;  (e) the debit balance, if any, on the last day of the financial year, in the provision for bad and doubtful debts account made under clause (c), if the balance has been transferred to the profit and loss account of the financial year;  (f) trade debt or part thereof, if the person is not a financial institution, and the amount is written off as irrecoverable in the books of the person; and  (g) payment to a creditor during the financial year in discharge of any remitted or ceased liability which has been included in the gross earnings of any financial year under sub-clause (2) of clause 33  sub-clause (2) of the said clause, inter alia, provides that the following expenditure if laid out or expended, wholly and exclusively, for the purposes of the business shall be allowed,— (i) purchase of raw material, stores, spares and consumables, or stock-intrade; (ii) rent paid for any premises if it is occupied and used by the person; (iii) current repairs to buildings if it is occupied and used by the person; (iv) land revenue, local rates or municipal taxes in respect of premises occupied and used by the person; (v) current repair, of machinery, plant or furniture used by the person; (vi) current maintenance or repairs of computer software or hardware; (vii) salary or wages of employees; (viii) sales promotion including advertisement and publicity; (ix) use of hotel or boarding and lodging facilities; (x) legal services; (xi) entertainment and provision of hospitality, etc  the said clause further provides that any expenditure, being in the nature of, or on account of personal expenses, capital expenditure including expenditure in respect of which capital allowance is allowable under clause 37, finance charges, any unascertained liability of the person, remuneration payable to any participant other than a working participant, any expenditure incurred on advertisement in any souvenir, brochure, tract, pamphlet or the like published by a political party, any tax, interest or penalty payable under this code, any amount paid which is eligible for relief of tax under section 207 any dividend declared or distributed or paid and any amount of contributions by an employer during the financial year to an approved superannuation fund on account of an employee to the extent it exceeds one lakh rupees shall not be allowed as operating expenditure  clause 36 provides for the determination of finance charges in relation to business expenditure which shall be aggregate of the operating expenditure, finance charges and capital allowances clause 36 provides that the amount of finance charges for the purposes of clause 34 shall be—  (a) the amount of interest paid on any capital borrowed or debt incurred; (b) the amount of interest paid to trade creditors; (c) the amount of interest paid to any participant to the extent prescribed which is in acordance with the agreement of formation of unincorporated body and relates to the period falling after the date of such agreement; (d) the amount of any incidental financial charges;  (e) the proportionate amount of discount or premium payable on any bond or debenture issued by the person, calculated in the manner as may be prescribed  sub-clause (2) of clause 36, inter alia, provides that the amount of finance charges shall not include any amount paid in respect of capital borrowed or debt incurred for acquisition of a capital asset, incidental financial charges for issue of convertible debentures, bonds or share capital and any amount of interest referred to in section 23 of the micro, small and medium enterprises development act, 2006  sub-clause (3) of the said clause provides that the amount of interest on any capital borrowed or debt incurred, which is payable to any financial institution, shall be allowed as a deduction in the financial year in which the amount is actually paid or in the financial year in which the liability has accrued, whichever is later  sub-clause (4) of the said clause provides that any interest referred to in subclause (3) which has been converted into a loan or borrowing shall not be deemed to have been actually paid for the purposes of that sub-clause  sub-clause (5) of the said clause provides that, "capital borrowed" shall include recurring subscriptions received periodically from shareholders, or subscribers, in a mutual benefit finance company, which fulfils such conditions as may be prescribed  clause 34 provides that the amount of business expenditure shall be aggregate of the operating expenditure, finance charges and capital allowances clause 37 provides for the determination of capital allowances in relation to business expenditure which shall be the aggregate of the operating expenditure, finance charges and capital allowances the said clause seek to provide that the amount of capital allowances shall be the aggregate of the amount in respect of depreciation of business capital assets, initial depreciation of business capital assets, terminal allowance, scientific research and development allowance and deferred revenue expenditure allowance  the said clause further provides that the depreciation, initial depreciation or terminal allowance shall be allowed in respect of any business capital asset if the asset is owned, wholly or partly, by the person, and used for the purposes of the business of the person however, the condition of ownership, whether whole or in part, shall not apply in the case of a business capital asset being a capital expenditure on any building which is held by the person under a lease or other right of occupancy a business capital asset shall be deemed to be owned by the person if he is a lessee in terms of a financial lease  the said clause also provides that the amount of deferred revenue expenditure allowance referred to above shall be as specified and computed in accordance with the twenty-second schedule   clause 38, inter alia, seeks to provide that the amount of depreciation of business capital assets shall be the aggregate of the following, namely:— (a) such percentage of the adjusted value of any block of assets as specified in clause 45 read with the fifteenth schedule, in respect of all the business capital assets forming part of the relevant block of assets specified therein; and (b) nil, in respect of any other business capital asset not forming part of any block of assets specified in the fifteenth schedule the said clause further provides that the deduction under this clause in respect of such asset shall be restricted to fifty per cent if the asset is acquired by the person during the financial year, and is used for the purposes of business for a period of less than one hundred and eighty days in the relevant financial year clause 38 provides that the depreciation in respect of any business capital asset shall, notwithstanding anything contained in any other provisions of the code, not be deemed to have been actually allowed, if the asset does not form part of any block of assets specified in the fifteenth schedule or the expenditure incurred for acquiring the asset has been allowed as a deduction under any provision of this code clause 39 seeks to provide that in addition to depreciation, an initial depreciation of business capital assets shall be allowed to the person if he is engaged in the business of manufacture or production of any article or thing, the asset is a new asset (other than any office appliance) not used either within or outside india by any other person before its installation by the person and the whole of the actual cost of the asset is not allowed as a deduction (whether by way of depreciation or otherwise) in computing the income under the head "income from business" of any other financial year the said clause further provides that the initial depreciation referred shall be an amount equal to twenty per cent of the actual cost of the asset and it shall be allowed in the financial year in which the asset is used for the first time for the purposes of the business of the person the deduction under this clause shall be restricted to fifty per cent of the allowable sum, if the asset is used for the purposes of business for a period of less than one hundred and eighty days in the relevant financial year clause 40 seeks to provide that terminal allowance shall be allowed in respect of a block of asset, if the block of assets has ceased to exist by reason of being demolished, destroyed, discarded or transferred during the financial year and the percentage specified in the fifteenth schedule for computing depreciation in respect of the block of assets is zero the terminal allowance shall be aggregate of the written down value of the block of asset at the beginning of the financial year and the actual cost of any asset falling within that block, acquired during the financial year, as reduced by the amount accrued or received in respect of the assets which are demolished, destroyed, discarded or transferred during the financial year together with the value of the carcass or the scrap, if any the said clause further provides that the terminal allowance shall be treated as "nil", if the net result of the computation is negative clause 41 seeks to provide that a company shall be allowed a deduction equal to two hundred per cent of the expenditure (not being expenditure in the nature of cost of any land or building) incurred on creating and maintaining an in-house facility for scientific research and development and carrying out scientific research and development in the in-house facility the deduction under this clause shall be allowed, if the company creates and maintains an in-house facility for carrying out scientific research and development, the research facility is approved by the central government on the basis of recommendation of the prescribed authority and the company enters into an agreement with the prescribed authority for co-operation in the research and development facility and for audit of the accounts of such facility the said clause further provides that in case of business re-organisation the approval granted to a predecessor shall be deemed to have been granted to the successor if the approval is transferred to the successor the said clause also provides that the deduction under this clause shall not be allowed to a company, if the expenditure is incurred in the course of its business which is in the nature of scientific research and development the board may for the purposes of this clause, prescribe the nature of business, conditions and manner as may be considered necessary for grant of approval clause 42 provides for the method of computation of profit on transfer of a business capital asset in case of any asset, which forms part of a block of assets specified in the fifteenth schedule it provides that the amount of profit where such capital asset is transferred, discarded, destroyed or destructed shall, be the amount accrued or received in respect of such asset together with the amount of scrap value, if any, as reduced by the amount of written down value of the block of assets at the beginning of the financial year together with the actual cost of any asset falling within that block of assets and acquired during the financial year and in case of any asset not falling in the block of assets the consideration received on transfer less actual cost will be the profit the said clause further provides that if the net result of the computation is negative, the profit shall be treated as "nil" clause 43 provides for computation of deduction on account of capital allowance in a case where business reorganisation has taken place during the financial year the amount of deduction allowable to the predecessor shall be determined in accordance with the formula— a x b c where a = the amount of deduction allowable as if the business reorganisation had not taken place; b = the number of days comprised in the period beginning with the first day of the financial year and ending on the day immediately preceding the date of business reorganisation; c = the total number of days in the financial year in which the business reorganisation has taken place the said clause further provides that the the amount of deduction to the successor shall be determined in accordance with the formula - a x b c where a = the amount of deduction allowable as if the business reorganisation had not taken place; b= the number of days comprised in the period beginning with the date of business reorganisation and ending on the last day of the financial year; and c = the total number of days in the financial year in which the business reorganisation has taken place clause 44 seeks to provide the meaning of actual cost for the purposes of computation of income under the head 'income from business' the said clause, inter alia, provides that the actual cost of a business asset to the person shall be computed in accordance with the formula— a-[b+(c x a)] d where a = cost of the business asset to the person including the interest paid on the capital borrowed for acquiring the asset if such interest is relatable to the period before the asset is put to use; b = the amount of additional duty leviable under section 3 of the customs tariff act, 1975 or the amount of duty of excise, in respect of which a claim of credit has been made and allowed under the central excise rules, 1944; c = the amount of subsidy, grant or reimbursement (by whatever name called) received by the person, directly or indirectly, from the central government, state government, any authority established under any law for the time being inforce or by any other person in respect of, or with reference to, any asset including the relevant asset; d = cost of all the assets in respect of or with reference to which the amount 'c' is so received the said clause further provides that irrespective of the methodology provided above, the assessing officer may determine, with the prior approval of the joint commissioner, the actual cost if the assets were, at any time before the date of acquisition by the person, business assets and the assessing officer is satisfied that the main purpose of the transfer of the assets to the person was to reduce the income-tax liability by claiming depreciation with reference to an enhanced cost the said clause also provides that the actual cost of the business asset to the person shall be the deemed written down value, if the asset is acquired by way of gift or inheritance, the asset is converted into a business asset in any financial year or the person  is transferee holding company or a transferee subsidiary company the deemed written down value of a business asset shall be the actual cost to the person or the previous owner, as the case may be, when he first acquired the asset as reduced by the aggregate amount of depreciation that would have been allowable to the person or the previous owner, as the case may be, for the preceding financial year as if the asset was the only asset in the relevant block of assets the said clause further provides that in the case of sale and buy back transaction in the business asset, the actual cost of a business asset shall be the actual price for which the asset is re-acquired by him or the deemed written down value, whichever is lower the said clause also provides that where a business capital asset is acquired by the person and subsequently it is transferred back to the transferor by way of lease, hire or otherwise, the actual cost of the asset in the hands of the person shall be the written down value of the asset in the hands of the transferor at the beginning of the financial year in which the acquisition of the asset by the person has taken place it is further provided that where the person is a non-resident and a business capital asset, having been acquired by him outside india, is brought by him to india, the actual cost of the asset for the person shall be the cost of acquisition of the asset by him, as reduced by an amount equal to the amount of depreciation which would have been allowable, had the asset been used in india for the purposes of the business of the person since the date of such acquisition the clause provides that the actual cost of an asset shall be treated as 'nil', if deduction in respect of the cost of the asset has been allowed or is allowable to the person under the eleventh schedule or the twelfth schedule or the thirteenth schedule, or deduction in respect of the cost of the asset has been allowed or is allowable under any of the aforesaid schedules to any other person and the person has acquired or received the asset by any of the "special modes of acquisition" the said clause also provides that the board may, for the purposes of determining the actual cost of a business asset, prescribe any other cost which may be included in determining the actual cost and the method of determining the actual cost in the circumstances which are not provided for under the said clause it is provided that in the said clause, deemed written down value of a business asset shall be the actual cost to the person or the previous owner, as the case may be, when he first acquired the asset as reduced by the aggregate amount of depreciation that would have been allowable to the person or the previous owner, as the case may be, for the preceding financial years as if the asset was the only asset in the relevant block of assets  clause 45 relates to the meaning of the written down value and adjusted value of assets the said clause, inter alia, provides that the written down value of any block of assets at the beginning of the financial year shall be the written down value of the block of assets at the close of the immediately preceding financial year  the written down value of the block of assets at the close of the immediately preceding financial year shall be the adjusted value of the block of assets in the immediately preceding financial year as reduced by the amount of capital allowance, if any, allowed under clause 37 during that year together with any expenditure incurred for acquiring the asset to the extent allowed as a deduction in the financial year under any provision of the code  the adjusted value of any block of assets for any financial year shall be computed in accordance with the formula—  (a+b) - (c+d+e) where a= the written down value of the block of assets at the beginning of the financial year; b = actual cost of any asset falling within the block, acquired during the financial year; c = moneys receivable in respect of any asset falling within the block, which is sold or discarded or destroyed or destructed during the financial year; d = amount of the scrap value, if any;  e = the aggregate of the deemed written down value of the assets transferred by any of the modes referred to in sub-clause (3) of clause 44  the said clause further provides that the adjusted value of any block of asset shall be "nil" if the amount (c+d+e) exceeds the amount (a+b)  the said clause also provides that the adjusted value of the block of assets, acquired by a successor in a business reorganisation, for the financial year in which the business reorganisation has taken place shall be the amount which would have been taken as the adjusted value of the block of assets as if the business reorganisation had not taken place  the said clause also provides the formula for determining the written down value of the block of assets, acquired by a successor in a business reorganization, on the last day of the financial year in which the business reorganization has taken place as well as for computing the adjusted value of the block of assets where a block of assets comprises of any asset acquired in any financial year from a country outside india for the purposes of business and there is variation in liability in respect of acquisition of the asset after the date of such acquisition  it has been provided in the said clause that the amount of liability of the person, expressed in indian rupees at the time of making payment referred to above shall in a case where the person has entered into a forward contract, be computed with reference to the rate of exchange specified in such forward contract  the said clause also provides that the board may prescribe the method of determining the written down value or the adjusted written down value of the block of assets as on the first day of the first financial year, the method of determining the allocation of the written down value or the adjusted written down value of the assets between the different businesses carried on by the person and the method of determining the written down value or the adjusted written down value of the block of assets in the circumstances which are not provided for in the said clause accordingly, clause 46 provides that the income from the transfer of any investment asset shall be computed under the head "capital gains" in addition to such income, the income under the head "capital gains" shall also include—  (a) income from the transfer referred to in item (d) or item (e) of sub-clause (1) of clause 47, if the parent company or its nominee ceases to hold the whole of the share capital of the subsidiary company or the investment asset is converted by the transferee into, or treated by it as, its business trading asset, before the expiry of a period of eight years from the date of such transfer;  (b) the income from the transfer referred to in item (f) of sub-clause (1) of clause 47, if any of the conditions laid down in sub-clause (16) or sub-clause (74) of clause 314 is not complied with;  (c) the income from the transfer referred to in item (j) or item (n) of subclause (1) of clause 47, if any of the conditions laid down in the said clauses is not complied with;  (d) the amount of withdrawal referred to in sub-clause (4) of clause 55 to the extent of deduction allowed under sub-clause (2) thereof, if the condition laid down in the said sub-clause (4) is not complied with;  (e) the amount of deposit referred to in sub-clause (5) of clause 55 to the extent of deduction allowed under sub-clause (2) thereof, if the condition laid down in the said sub-clause is not complied with  (f) the amount of deduction allowed under sub-section (1) of section 55, if any of the conditions specified in sub-section (6) of the section  (55) is not complied with  clause 47 provides that the income from certain transfers shall not be treated as capital gains it, inter alia, provides that the following transfers shall not be included in the computation of income under the head "capital gains", namely:—  (a) distribution of any investment asset on the total or partial partition of a hindu undivided family;  (b) gift, or transfer under an irrevocable trust, of any investment asset (other than sweat equity share);  (c ) transfer of any investment asset under a will;  (d) transfer of any investment asset by a company to its indian subsidiary company, if the parent company or its nominees hold the whole of the share capital of such subsidiary and such subsidiary treats the asset as an investment asset;   (e) transfer of any investment asset by a subsidiary company to the indian holding company, if the whole of the share capital of the subsidiary company is held by such holding company or its nominees and the holding company treats the asset as an investment asset;  (f) transfer of any investment asset by a predecessor to a successor indian company in a scheme under a business reorganisation;  (g) transfer of any investment asset by a private company or unlisted public company to a limited liability partnership or any transfer of a share held in the company by a shareholder as a result of conversion of the company into a limited liability partnership, subject to the fulfillment of the conditions specified therein;  (h) transfer of shares of a predecessor co-operative bank by a shareholder under a scheme of business reorganisation, if the transfer is made in consideration of the allotment to the shareholder of shares in the successor co-operative bank;  (i) transfer of any investment asset by a sole proprietary concern to a company, subject to the fulfillment of the conditions specified therein; (j) transfer of any work of art, archaeological, scientific or art collection, book, manuscript, drawing, painting, photograph or print, to the government or a university or any public museum or institution of national importance or of renown throughout any state or states and notified by the central government;  (k) transfer of any investment asset by a company to its shareholders on its liquidation;  (l) transfer of any investment asset in a transaction of reverse mortgage under a scheme notified by the central government;  (m) transfer of any beneficial interest in a security by a depository  the said clause also defines "banking company", "banking institution", "private company", "public unlisted company" "depository" and "security"  clause 48 provides that the financial year of taxability of the income from the transfer of an investment asset shall be the financial year in which the transfer takes place and income shall be taxable in the hands of the transferor however, such income shall be deemed to be the income of the recipient in the following cases for the financial year specified below—  (a) in the case of any money or asset received under an insurance from an insurer on account of damage or destruction of an insured asset, the financial year in which the money or asset is received;  (b) in the case of any money or asset received by the participant on account of his retirement from a unincorporated body, the financial year in which the money or asset is received;  (c ) in respect of any money or asset received by the shareholder on account of liquidation or dissolution of a company as reduced by the amount assessed as dividend within the meaning of item (c) of sub-clause (81) of clause 314, the financial year in which the money or asset is received  the said clause also provides that any consideration from transfer made by the depository or participant of any beneficial interest in a security shall be deemed to be the income of the beneficial owner of the financial year in which such transfer took place  the said clause further provides that the amount referred to in item (d) of subclause (2) of clause 46 shall be the income of the financial year in which such amount is withdrawn and the amount referred to in item (e) of sub-clause (2) of clause 46 shall be the income of the third financial year immediately following the financial year in which the transfer of the original asset is effected the amount referred to in item (f) of subclause (2) of clause 46 shall be the income of the financial year in which any condtions referred to in sub-clause (6) of clause 55 is not complied with  the said clause also defines the term "beneficial owner"  clause 49 relates to the computation of income from transfer of any investment asset the income from the transfer of any investment asset during the financial year shall be the full value of the consideration accrued or received as a result of the transfer, as reduced by the aggregate amount of the deductions referred to in clause 51 the said clause further provides that for the purpose of such computation, where the investment asset is any beneficial interest in respect of securities referred to in item (d) of subclause (2) of clause 48, the cost of acquisition and the period of holding of such securities shall be determined on the basis of first-in-first-out method  clause 50 provides that the full value of the consideration shall be the amount received by, or accruing to, the transferor or the recipient, as the case may be, directly or indirectly, as a result of the transfer of the investment asset the said clause also specifies as to what amount would constitute the full value of consideration in respect of transfers made under certain specific circumstances  clause 51 relates to deduction for cost of acquisition of an investment asset sub-clause (1) of the said clause provides that for the purpose of computation of income from transfer of an investment asset, the cost of acquisition of an investment asset, the cost of improvement of such asset and the amount of expenditure incurred wholly and exclusively in connection with the transfer of such asset, shall be allowed as deduction  sub-clause (2) of the said clause provides that in the case of an equity share in a company or a unit of an equity oriented fund, transferred at any time after one year from the date on which such asset is acquired and such transaction is chargeable to securities transaction tax under chapter vii of the finance (no2) act, 2004, if the income computed after giving effect to sub-clause (1) is a positive income, a deduction amounting to hundred per cent of   the income so arrived at shall be allowed and if the income computed after giving effect to sub-clause (1) is a negative income, hundred per cent of the income so arrived at shall be reduced from such income  sub-clause (3) of the said clause provides that if an investment asset, not being an equity share or a unit of an equity oriented fund referred to in sub-clause (2) or referred to in sub-clause (5) of clause (53) is transferred at any time after one year from the end of the financial year in which the asset is acquired by the persons, the following deductions shall be allowed for the purposes of computation of income from the transfer of such asset :—  ( i) the indexed cost of acquisition, if any, of the asset;  ( ii) the indexed cost of improvement, if any, of the asset;  ( iii) the amount of expenditure, if any, incurred wholly and exclusively in connection with the transfer of the asset; and  (iv) the amount of relief for rollover of the asset, as determined under clause 55  clause 52 relates to indexed cost of acquisition or improvement the indexed cost of acquisition of an investment asset referred to in sub-clause (3) of clause 51 for the purposes of computation of income from transfer of such asset shall be the amount determined in accordance with the formula specified in sub-clause (1) of the said clause  the said clause further provides that the indexed cost of improvement of an investment asset referred to in sub-clause (3) of clause 51 shall be in accordance with the formula specified in sub-clause (2) of the said clause  clause 53 relates to cost of acquisition of an investment asset it, inter alia, provides that the cost of acquisition of an investment asset, shall be—  (a) the purchase price of the asset, or  (b) at the option of the person, the fair market value of the asset on the first day of  april, 2000, if the asset was acquired by the person before such date  sub-clause (2) of the said provides that the cost of acquisition of an investment asset specified in column (2) of the seventeenth schedule, acquired by the mode specified in column (3) of the said schedule, shall be the cost specified in column (4) therein  the said clause further provides that the cost of acquisition of an investment asset acquired by a person by any of the special modes of acquisition, shall be the cost at which the asset was acquired by the previous owner or at the option of the person, the fair market value of the asset on the 1st day of april, 2000, if the asset was acquired by the previous owner or the person before such date the said clause also provides that the cost of acquisition of an investment asset referred to in items (h), (i) or (j) of sub-clause (2) of clause 58 shall be the fair market value or the stamp duty value, as the case may be, which has been taken into account for the purposes of the said clauses the said clause further provides that the cost of acquisition of an investment asset being an undertaking or division of a business transferred by way of a slump sale referred to in sub-clause (267) of clause 314 shall be the net worth of such undertaking or division  the said clause also provides that the cost of acquisition of an investment asset forming part of a bundle of investment assets acquired by any participant, on distribution of the asset to him on account of his retirement from any unincorporated body, shall be the amount determined in accordance with the formula specified therein  further the cost of acquisition of an investment asset shall be "nil", in relation to,—  (a) an investment asset, where such asset has been acquired by selfgeneration;  (b) the asset which is acquired by way of compulsory acquisition and the compensation or consideration for such acquisition is enhanced or further enhanced by any court, tribunal or other authority; or  (c) the asset, where the cost of acquisition to the person or the previous owner, if any, cannot be determined or ascertained, for any reason  the said clause also defines the terms "previous owner"  clause 54 provides that the cost of improvement of an investment asset shall be any expenditure of a capital nature incurred in making any additions or alterations to the asset by the person or by the previous owner, if the asset is acquired by any special mode of acquisition referred to in sub-clause (237) of clause 314  the said clause also provides that the cost of improvement of the investment asset, in a case where the asset became the property of the person or the previous owner before the first day of april, 2000, shall be any capital expenditure incurred for any addition or alteration to such asset on or after the first day of april, 2000  the said clause further provides that the cost of improvement of an investment asset shall be "nil "  in relation to— (a) an investment asset acquired by self-generation; (b) an investment asset being an undertaking or division transferred by way of a slump sale; or (c) any investment asset if the cost of improvement cannot be determined or ascertained, for any reason  the said clause also provides that any expenditure deductible in computing the income under any other head of income shall not be taken into account while computing the cost of improvement  clause 55 relates to relief for rollover of investment asset it provides that an individual or a hindu undivided family shall be allowed a deduction, in respect of rollover of any original investment asset referred to in sub-clause (3) of clause 51, from the capital gain arising from the transfer of the asset such deduction shall be computed in accordance with the formula— $$\rm{313}$$$$\rm{ax}\frac{(b+c+d)}{e}$$where a  = the amount of capital gains arising from the transfer of the original investment asset;  b = the amount invested for purchase or construction of the new asset referred to in sub-clause (6) within a period of one year before the date of transfer of original investment asset;  c = the amount invested for purchase or construction of the new asset referred to in sub-clause (6) by the end of the financial year in which the transfer of the original investment asset is effected or six months from the date of transfer, whichever is later;  d = the amount deposited in an account in any bank by the end of the financial year in which the transfer of the original investment asset is effected or six months from the date of transfer, whichever is later, in accordance with the capital gains deposit scheme framed by the central government in this behalf;  e = the net consideration received as a result of the transfer of the original investment asset  the said clause further provides that such deduction shall not exceed the amount of capital gains arising from the transfer of the investment asset further, any amount withdrawn from an account under the capital gains deposit scheme shall be utilised within one month from the end of the month in which the amount is withdrawn, for the purposes of purchase or construction of the new asset also, the amount deposited in the account under the capital gains deposit scheme shall be utilised for the purposes of purchase or construction of the new asset within three years from the end of the financial year in which the transfer of the original asset is effected  the said clause further provides that such deduction shall be allowed if—  (a) the transferred investment asset (original investment asset) was an agricultural land during two years immediately preceding the year of transfer and the person, being an individual or hindu undivided family, acquires one or more pieces of agricultural land at least one year before the beginning of the financial year in which the transfer of the asset took place subject to the condition that the new asset shall not be transferred within one year from the end of the financial year in which the new asset is acquired;  (b) the transferred investment asset (original investment asset) was any asset acquired at least one year before the beginning of the financial year of transfer and the new investment asset is a residential house and the person does not own more than one residential house, other than the new investment asset on the date of transfer of the original asset subject to the condition that a new asset shall not be transferred within one year from the end of the financial year in which the new asset is acquired or constructed;  the said clause also defines the term "net consideration"  clause 56  provides that the income of every kind falling under the clause "income from ordinary sources", shall be computed under the head "income from residuary sources" if it is not required to be included in computing the income under any of the heads of income specified in items a to d of clause 14  clause 57 deals with computation of income from residuary sources it provides that the income computed under the head "income from residuary sources" shall be the gross residuary income as reduced by the amount of deductions referred to in clause 59 clause 58 deals with scope of gross residuary income it provides that the gross residuary income shall include all accruals or receipts in the nature of income, which do not form part of income from special sources and income under any of the heads specified in items a to d of section 14 in addition to such income, gross residuary income shall, inter alia, include—  (a) dividends (other than dividends in respect of which dividend distribution tax has been paid under clause 109);  (b) interest (other than interest accrued to or received by financial institutions); (c) interest received on compensation or on enhanced compensation; (d) income from the activity of owning and maintaining horses for the purpose of horse race;  (e) any amount received from employees as contributions to any fund set up for their welfare, if not included under the head "income from business";  (f) income from machinery, plant or furniture belonging to the person and let on hire, if not included under the head "income from business";  (g) any amount received under a keyman insurance policy (including the sum allocated by way of bonus on such policy) if not included under the heads "income from employment" or "income from business";  (h) the aggregate of any moneys and the value of any specified property, other than immovable property, received for inadequate consideration or without consideration by an individual or a hindu undivided family;  (i) the value of any immovable property received without consideration by an individual or a hindu undivided family;  (j) the value of any investment made by the person in the financial year to the extent for which he offers no explanation about the nature and source of the investments or offers an explanation but fails to substantiate it or such explanation offered by him is not satisfactory in the opinion of the assessing officer;  (k) the value of any money, bullion, jewellery or other valuable article owned by the person to the extent for which he offers no explanation about the nature and source of acquisition of the same or offers an explanation but fails to substantiate it or such explanation is not satisfactory in the opinion of the assessing officer;  (l) the amount of any expenditure incurred by the person in the financial year, if he offers no explanation about the source of such expenditure or offers an explanation but fails to substantiate it or such explanation is not satisfactory in the opinion of the assessing officer;  (m) any amount of income of a controlled foreign company attributable to a resident in accordance with the twentieth schedule;  (n) any amount received as advance, security deposit or otherwise from the long-term leasing or transfer of whole or part of or any interest in any investment asset;  (o) any sum received as family pension  the said clause provides that the value of any property referred to in (h) or (i) above shall be the stamp duty value in the case of an immovable property as reduced by the amount of consideration, if any, paid by the person and the fair market value in the case of any other property as reduced by the amount of consideration, if any, paid by the person the said clause further provides that the amount referred to in (h) above shall not include any amount received -  (a) from any relative;  (b) on the occasion of the marriage of the individual; (c) under a will or by way of inheritance; (d) in contemplation of death of the payer; (e) from any local authority; or (f) from any non-profit organisation  further,  "relative" and "specified property" have been defined in the said clause  clause 59 provides for deductions from gross residuary income the deductions for the purposes of computation of income from residuary sources shall be the aggregate of -  (a) the amount of expenditure specified in sub-clause (2), if the expenditure (other than capital expenditure) is laid out or expended, wholly and exclusively, for the purposes of making or earning the gross residuary income and it fulfills the conditions specified therein; and  (b) the amount of deductions specified in sub-clause (3) subject to the fulfilment of the conditions specified therein  (c) any amount received during the year as divident from a controlled foreign company as referred to in item (u) of sub-section (2) of section 58, to the extend such amount has been included in the total income of the person in any preceding financial year in accordance with provisions of the said clause  the said clause further provides certain monetary limits for allowable deduction in respect of certain income from residuary sources it also inter alia provides that any amount relating to personal expenses and any amount of tax, interest or penalty paid under this code or the income-tax act, 1961 or the wealth tax act, 1957 as it stood before the commencement of this code and any payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft subject to the conditions specified in the said clause shall not be allowed as a deduction the said clause also defines the term "capital sum assured'' in relation to a life insurance policy  sub-chapter iii of chapter iii deals with aggregation of income computed under various heads of income as provided under sub-chapter ii clause 60 seeks to provide the manner in which the income under each head of income is to be aggregated for a financial year so as to result in the income from any particular head of income for that financial year thus, the income for a financial year under each of the five heads of income would be determined in accordance with the provisions of this clause  the said clause further provides for the computation of the income from capital gains, speculative business and income from the activity of owning and maintaining horses for the purpose of horse race in such a manner that any loss from such sources shall be set off only against positive income from such sources  clause 61 seeks to provide the manner in which the current income from ordinary sources for a year is to be computed the classification of income as "income from ordinary sources"   and "income from special sources" has been provided in clause 13 of the code  the said clause further provides that the current income of a financial year under each head of income is to be aggregated to arrive at the current income from ordinary sources  this current income is to be further aggregated with the unabsorbed preceding year loss from ordinary sources to arrive at the gross total income from ordinary sources  the said clause also provides that if the gross total income from ordinary sources so arrived at is negative then it shall be treated as nil and the absolute value of the negative income shall be the unabsorbed current loss from ordinary sources  clause 62 seeks to provide for the aggregation of income from special sources the aggregate income from a special source in a financial year would be the current income from the special source for that financial year the incomes from special sources are enumerated in part iii of the first schedule to the code  the said clause further provides that the current income from the special source in a financial year shall be aggregated with the unabsorbed preceding year loss from the special source to arrive at the gross total income from the special source for that financial year  the said clause also provides that if the gross total income from the special source so arrived at is negative then it shall be treated as nil and the absolute value of the negative income shall be the unabsorbed current loss from the special source for the financial year  the said clause further provides that the gross total income from special source in respect of each special source shall be aggregated and the net result of the aggregation shall be the total income from special sources for the financial year clause 63 seeks to provide the manner in which the total income of any person in a financial year is to be determined for the sake of simplicity, the clause provides for the determination of total income by means of a mathematical formula the clause provides that the total income of a person for a financial year is to be determined by adding the total income from ordinary sources with the total income from the special sources the total income from ordinary sources shall, however, be reduced by the amount of deductions available to the person under sub-chapter iv of chapter iii before it is aggregated with the total income from special sources  clause 64 seeks to provide the manner in which income is to be aggregated in case of a business reorganisation or where a company is converted into a limited liability partnership in such cases, the unabsorbed current loss from ordinary sources of the predecessor in the financial year in which the business reorganisation takes place, shall be treated as the unabsorbed preceding year loss from ordinary sources of the successor in business in that year and the provisions of clause 61 shall apply similarly, the unabsorbed current loss from special sources of the predecessor in the financial year in which the business reorganisation takes place, shall be treated as the unabsorbed preceding year loss from special sources of the successor in business in that year and the provisions of clause 62 shall apply  sub-clause (2) of the said clause provides that the benefit of taking over the loss of the predecessor by the successor shall not be available to the latter in a case of business reorganisation if it does not satisfy the test of continuity of business test of continuity of business has been defined in clause 314 of the code as a set of conditions which the successor must fulfill to satisfy the test  sub-clause (2) further provides that the said benefit shall not be available to a successor in case of a business reorganisation if the predecessor is a sole proprietary concern or an incorporated body and the share holding of the sole proprietor ceases to be less than fifty per cent of the total value of the shares of the successor company at any time during the period of five years immediately succeeding the financial year in which the business reorganisation takes place  sub-clause (3) of the said clause provides that the benefit of taking over the loss of the predecessor by the successor in a case of conversion of a company into a limited liability partnership shall not be available to the successor if any of the conditions, specified in item (j) of sub-clause (1) of clause 47 of the bill are not fulfilled  sub-clause (4) of the said clause provides that the total income of the financial year, in which the business reorganisation or the conversion took place, and all the subsequent financial years shall, notwithstanding anything in this code, be rectified as if the provisions of this clause had never been given effect to in those financial years if the conditions specified therein are not fulfilled at any time during five financial years immediately succeeding the financial year in which the business reorganisation or conversion took place  clause 65 provides that in the event of a change in the constitution of an unincorporated body, due to death or retirement of a participant, the unabsorbed current loss from ordinary or special sources shall be reduced in proportion to the percentage of share holding of such deceased or retired participant for the financial year ending on the date of death or retirement of the participant  the said clause further provides that such reduced loss shall be the unabsorbed preceding year loss of the unincorporated body for the financial year beginning on the date immediately following the date on which the death or retirement of the participant took place  clause 66 seeks to provide that a closely held company shall not be allowed to aggregate the unabsorbed preceding year loss from ordinary or special sources with the income of the current financial year unless it satisfies the test of continuity of ownership  the said clause further provides that the closely-held company shall satisfy the test of continuity of ownership if the shares of the company beneficially held by persons, carrying not less than fifty-one per cent of the voting power on the last day of the financial year immediately preceding the relevant financial year, are held by the same persons on the last day of the relevant financial year the said clause also provides that while calculating the percentage of voting power— (a) any change in the voting power in the relevant financial year due to the death of a shareholder or on account of transfer of shares by way of gift to any relative of the donor shareholder shall be ignored;  (b) any change in the shareholding of an indian company, which is a subsidiary of a foreign company, as a result of amalgamation or demerger of a foreign company, shall be ignored, if fifty-one per cent shareholders of the amalgamating or demerged foreign company continue to be the shareholders of the amalgamated or the resulting foreign company  clause 67 seeks to provide that aggregation of losses generated in a financial year shall not be allowed if the return of tax bases for the said year is not furnished by the due date thus, the losses generated in the current year shall not be taken into consideration for any purposes of the code  sub-chapter iv of chapter iii of the bill deals with tax incentives tax incentives are the deductions available to a person while computing his total income for a financial year  clause 68 provides that the deductions under this sub-chapter are available only in respect of "gross total income from ordinary sources" and the aggregate amount of such deductions shall not exceed the gross total income from ordinary sources  the said clause further provides that any sum which qualifies for a deduction under this sub-chapter in any financial year, shall not qualify for deduction under any other provision of the code for the same or any other financial year or in the case of any other person even if full deduction of the sum referred therein has not been allowed  clause 69 seeks to provide that a person, being an individual, shall be allowed a deduction of a maximum of one lakh rupees for savings made by him in respect of the amount paid or deposited by the person in a financial year, as his contribution to any approved fund to an account of the individual, spouse or any child of such individual  clause 70 seeks to provide that a person, being an individual or a hindu undivided family, shall be allowed a deduction in respect of any sum paid or deposited during a financial year to effect, or keep in force, an insurance on the life of certain specified persons the persons specified are the individual, his spouse and children and the members of a hindu undivided family  the said clause further provides that the insurance policy, to be eligible for this deduction, should be one where the amount of the annual premium payable should not exceed five per cent of the capital sum assured in any year during the term of the policy  clause 71 seeks to provide that a person, being an individual or a hindu undivided family, shall be allowed a deduction in respect of any sum paid during a financial year to effect, or to keep in force, an insurance on the health of certain specified persons the persons specified are the individual, his spouse, dependant children and parents, and the members of a hindu undivided family  the said clause further provides that in the case of an individual, an additional deduction shall be allowed in respect of any contribution made to the central government health scheme  the said clause also provides that the health insurance scheme should be framed by an insurer which is approved by the insurance regulatory and development authority  clause 72 seeks to provide a deduction to a person, being an individual or a hindu undivided family, in respect of any sum paid during the financial year as tuition fee to any school, college, university or other educational institution situated within india for the purpose of full-time education of any two children of such individual or hindu undivided family  the said clause further provides that tuition fee shall not include any payment towards any development fee or donation or any payment of similar nature it also clarifies that fulltime education shall include education in a play school or pre-school  clause 73 seeks to provide a maximum limit on the amount of deduction available under clauses 70, 71 and 72 it lays down a ceiling of fifty thousand rupees on the amount of deduction available in respect of payments made for a life insurance policy, health insurance policy and education of children  clause 74 seeks to provide that a person, being an individual or a hindu undivided family, shall be allowed a deduction in respect of an amount paid or payable by way of interest on loan taken for the purpose of acquisition, construction, repair or renovation of a house property in the financial year in which such property is acquired or constructed or any subsequent financial year, subject to certain conditions specified therein  sub-clause (2) of the said clause specifies the conditions by providing that the deduction shall be available if - (a) the house property is owned by the person and not let out during the financial year;   (b) the acquisition or construction of the house property is completed within three years from the end of the financial year in which the loan was taken; and (c) the person obtains a certificate from the financial institution to whom the interest is paid or payable on the loan taken  sub-clause (3) of the said clause provides that the interest, which pertains to the period prior to the financial year in which the house property has been acquired or constructed, shall be allowed as deduction in five equal installments beginning from such financial year for example, if the total amount of interest paid prior to the financial year in which the house property has been acquired or constructed is one lakh rupees, then, the person would be eligible for a deduction of twenty thousand rupees every year for five years starting from the year in which the house property is acquired or constructed  sub-clause (4) of the said clause provides that the interest for such prior period shall be reduced by any part thereof which has been already allowed as a deduction under any other provision of this code  sub-clause (5) lays down the maximum limit of deduction that can be claimed under this clause this limit has been specified as one lakh and fifty thousand rupees  clause 75 provides that a person being an individual, would be allowed a deduction of any amount of interest paid on a loan taken by him from any financial institution for financing the higher education of himself or of his relatives  sub-clause (2) of the said clause provides that the deduction shall be allowed for eight years beginning from the initial year of repayment of interest or till the interest is repaid in full, whichever is earlier  sub-clause (3) of the said clause provides the definitions of certain expressions used in the clause like, "financial institution", "higher education", etc it clarifies that the term relative means the spouse and the child of the individual and also a student for whom the individual is the legal guardian  clause 76 provides that a person, being a resident individual or hindu undivided family, shall be allowed a deduction in respect of any amount paid during the financial year for medical treatment of the prescribed disease or ailment of any specified person  sub-clause (2) of the said clause provides that the deduction available shall be a maximum of sixty thousand rupees in case the payment is made for a senior citizen and forty thousand rupees if the payment is made for any other person  sub-clause (3) of the said clause provides that the deduction allowable shall be reduced by the amount received, if any, under an insurance from an insurer, or reimbursed by an employer, for the medical treatment of the specified person  sub-clause (4) of the said clause provides that the deduction shall not be allowed unless the person obtains a certificate from a prescribed specialist working in a government hospital  sub-clause (5) of the said clause defines the terms "specified person" and "government hospital"  clause 77 seeks to provide a deduction to a person, being a resident individual and having a disability, subject to certain conditions the deduction shall be allowed if the person obtains a certificate from a medical authority in the prescribed form and manner and the certificate remains valid during the relevant financial year or part thereof  the said clause further provides that the amount of deduction shall not exceed— (a) one lakh rupees, if he is a person with severe disability; and (b) fifty thousand rupees, if he is a person with disability clause 78 seeks to provide a deduction to a person, being a resident individual or hindu undivided family, in respect of - (a) any expenditure incurred during the financial year for the medical treatment, nursing or training and rehabilitation of a dependant person with disability; or (b) any amount paid or deposited during the financial year under a scheme framed by any insurer and approved by the board in this behalf, for the maintenance of a dependant person with disability  sub-clause (2) of the said clause provides that the deduction available shall be one lakh rupees in case the dependant person is a person with severe disability and fifty thousand rupees if he is a person with disability  sub-clause (3) of the said clause provides that the deduction in respect of the payment under the insurance scheme referred to in sub-clause (1) shall be allowed only if the scheme referred to therein provides for payment of an annuity or a lump sum amount for the benefit of the dependant person with disability, in the event of the death of the individual or the member of the hindu undivided family who subscribes to such scheme  sub-clause (4) of the said clause provides that the deduction under this clause shall be allowed only if the person claiming the deduction obtains a certificate from a medical authority in the prescribed form and manner and the certificate remains valid during the relevant financial year or part thereof  sub-clause (5) of the said clause provides that in the event of the dependant person with disability predeceasing the individual or the member of the hindu undivided family who has subscribed to the insurance scheme referred to in sub-clause (1), any amount received by such individual or hindu undivided family shall be deemed to be his or its income for the financial year in which the amount is received  sub-clause (6) of the said clause defines the term "dependant"  clause 79 seeks to provide that a person shall be allowed a deduction of -  (a) one hundred and seventy-five per cent of the amount of money paid by him in the financial year as contribution or donation to any person specified in part-i of the sixteenth schedule;  (b) one hundred and twenty-five per cent of the amount of money paid by him in the financial year as contribution or donation to any person specified in part-ii of the sixteenth schedule;  (c) one hundred per cent of the amount of money paid by him in the financial year as donation to any person specified in part-iii of the sixteenth schedule;  (d) fifty per cent of the aggregate amount of money paid by him in the financial year as donation to any person specified in part-iv of the sixteenth schedule  parts i, ii, iii and iv of the sixteenth schedule to the bill contain the names of the organisations/institutions/funds to which such contribution or donation is to be made so as to be eligible for the deduction under this clause  sub-clause (2) of the said clause provides that the aggregate of the amount of money paid to persons specified in part iv of the sixteenth schedule shall be limited to ten per cent of the gross total income from ordinary sources, if the aggregate exceeds ten per cent of such gross total income from ordinary sources  sub-clause (3) of the said clause provides that the deduction under this clause shall not be allowed in respect of any amount of money paid to any person referred to in subclause (1) if the amount is utilized by such person (the donee) for any religious activity or for the benefit of any particular caste other than the scheduled castes or the scheduled tribes  sub-clause (4) of the said clause provides that the donation to any organisation/ institution/fund specified in part iv of the sixteenth schedule shall be eligible for deduction under sub-clause (1) only if such organisation/institution/fund obtains the approval of the prescribed authority  sub-clause (5) of the said clause provides that deduction to a donor shall not be denied merely on the ground that, subsequent to the donation, the donee has ceased to be a non-profit organisation thus, this provision protects the donor in a situation where the donee may lose its status of being a non-profit organisation for any reason whatsoever  clause 80 seeks to provide that a person, being an individual and not in receipt of any house rent allowance, shall be allowed a deduction of any expenditure incurred by him in excess of ten per cent of his gross total income from ordinary sources towards payment of rent in respect of any furnished or unfurnished accommodation occupied by him for his own residence  the said clause further provides that the deduction shall be allowed up to a maximum limit of two thousand rupees per month and shall be subject to such other conditions as may be prescribed having regard to the area in which the accommodation is situated  the said clause also provides that deduction under this clause shall not be available to a person if any residential accommodation is owned by him or by his spouse or minor child in the same place where he ordinarily resides or performs duties of his office or employment or carries on his business  clause 81 seeks to provide that a person shall be allowed a deduction in respect of any contribution made by him in a financial year to a political party or electoral trust  the said clause further provides that the deduction shall not exceed five per cent of the average of the net profit determined in accordance with the provisions of sections 349 and 350 of the companies act, 1956 during the three immediately preceding financial years, in the case of a company and five per cent of the gross total income from ordinary sources, in any other case  the clause also defines the term "contribution"  clause 82 seeks to provide that a person, being an investor protection fund, shall be allowed a deduction of the amount of contribution received from any recognised stock exchange, or recognised commodity exchange, and the members thereof if such amount is included in its gross total income from ordinary sources  the said clause further provides that the deduction shall be allowed if the investor protection fund is set up, either jointly or separately, by recognised stock exchanges or recognised commodity exchanges and such investor protection fund is notified by the central government  clause 83 seeks to provide a deduction of up to three lakh rupees to a resident individual, who is an author, in respect of income earned by him as a lump sum consideration for the assignment or grant of any of his interest in the copyright of the book written by him or as a royalty or copyright fee in respect of the said book, if such income is included in his gross total income from ordinary sources  the said clause further provides that the book should be of literary, artistic or scientific nature  the said clause also provides that brochures, commentaries, diaries, guides, journals, magazines, newspapers, pamphlets and tracts, etc, shall not be eligible for deduction under this clause  clause 84 seeks to provide a deduction to a resident individual, who is a patentee, in respect of income earned by him by way of royalty in respect of a patent registered on or after the 1st day of april, 2003 under the patents act, 1970, if such income is included in his gross total income from ordinary sources  the said clause further provides that the deduction under this clause shall be equal to the amount of royalty allowable under the terms and conditions of a licence settled by the controller under the patents act, 1970, if a compulsory licence is granted in respect of any patent under that act or three lakh rupees, whichever is lower  the terms like, "patent", "patentee", "royalty", etc, have also been defined in the said clause  clause 85 seeks to provide that a primary co-operative society shall be eligible for a deduction of the entire amount of its income from the business of providing banking, or credit, facility to its members  the said clause further provides that a primary cooperative society means a "primary agricultural credit society" within the meaning of part v of the banking regulation act, 1949 or a "primary co-operative agricultural and rural development bank" having its area of operation confined to a taluk and being mainly engaged in providing long-term credit for agricultural and rural development activities  clause 86 seeks to provide that a primary co-operative society shall be eligible for a deduction of the entire amount of its income from agriculture or agriculture-related activities it shall also be eligible for a deduction of a maximum of one lakh rupees in respect of income derived by it from any other activity  the said clause further provides the meaning of the terms "agriculture-related activities" and "primary co-operative society"  clause 87 seeks to provide for the system and procedure of maintenance of accounts accordingly, the said clause provides that every person shall keep and maintain such books of account and other documents which would enable the assessing officer to compute his total income in accordance with the provisions of this code any person carrying on legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration or any other notified profession or carrying on business shall keep and maintain such books of account if -  (i) his income from the business exceeds two lakh rupees;  (ii) his total turnover or, gross receipts as the case may be, in the business exceeds ten lakh rupees in any one of the three financial years immediately preceding the relevant financial year; or  (iii) his income or, total turnover as the case may be, is in a case of a newly set up business in any financial year, is likely to exceed two lakh rupees or ten lakh rupees, respectively, during such financial year  the said clause further provides that every person who has entered into an international transaction shall keep and maintain such information and documents in respect of such transactions, as may be prescribed  the said clause also provides that the board may prescribe the books of account other than those enumerated in the clause and also the period for which the books of account and other documents required to be kept and maintained under this clause shall be retained  clause 88 seeks to provide the method, manner and mechanism for audit of accounts and reporting of international transactions  accordingly, the said clause provides that every person, who is required to keep and maintain books of account under clause 87, shall get his accounts for the financial year audited if the gross receipts from the profession exceed twenty-five lakh rupees in the financial year or the total turnover or gross receipts of the business exceed one crore rupees in the financial year the audit of the accounts shall be carried out by an accountant and the report of the audit should be obtained by the person before the due date in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed  the said clause further provides that a person who has entered into an international transaction during a financial year shall furnish a report of such transaction to the transfer pricing officer, on or before the due date, obtained from an accountant in the prescribed form duly signed and verified in the prescribed manner by such accountant  clause 89 relates to the method of accounting  sub-clause (1) of the said clause provides that the income chargeable under the head "income from business" or "income from residuary sources" shall, except as otherwise  provided in the clause, be computed in accordance with either cash or mercantile system of accounting regularly employed by the person  sub-clause (2) of the said clause provides that the central government may from time to time notify the accounting standards to be followed by any class of persons or in respect of any class of income  sub-clause (3) of the said clause provides that the valuation of purchase of goods and inventory for the purposes of determining the income chargeable under the head "income from business" shall be in accordance with the method of accounting regularly employed by the person and further adjusted to include the amount of any tax, duty, cess or fee actually paid or incurred by the person to bring the goods to the place of its location and condition as on the date of its valuation  sub-clause (4) of the said clause provides that the value of sale of goods for the purposes of determining the income chargeable under the head "income from business" shall be determined in accordance with the method of accounting regularly employed by the person and further adjusted to include the amount of any tax, duty, cess or fee leviable on the sale of the goods  sub-clause (5) of the said clause provides that the interest on bad or doubtful debts of any financial institution shall be included in its total income of the financial year in which the interest is credited to the profit and loss account or is actually received, whichever is earlier  sub-clause (6) of the said clause provides that the interest received by a person on compensation or on an enhanced compensation shall be included in the total income of the financial year in which it is received  sub-clause (7) of the said clause defines the term "bad or doubtful debts"  chapter iv deals with special provisions relating to the computation of total income of non-profit organisations  clause 90  provides that chapter-iv shall be applicable to a non-profit organisation, other than any organisation of public importance, specified in the seventh schedule it also provides that the central government may, subject to such conditions as may be considered necessary, notify a person as a non-profit organisation of public importance for the purpose of the seventh schedule  for this purpose, a non-profit organisation has been defined in clause 314 to mean an organisation, by whatever name called, including a trust, if—  (i) it is not established for the benefit of any particular caste or religious community;  (ii) it does not provide any benefit for the members of any particular caste or religious community;  (iii) it is established for the benefit of the general public or for the benefit of the scheduled castes, the scheduled tribes, backward classes, women or children; (iv) it is established for carrying on charitable activities; (v) it is not established for the benefit of any of its members;  (vi) it actually carries on the charitable activities during the financial year;  (vii) the actual beneficiaries of its activities are the general public, scheduled castes, the scheduled tribes, backward classes, women or children; and  (viii) it is registered as such under clause 98  clause 91 provides that the total income of a non-profit organisation shall be computed in accordance with the provisions of chapter iv  clause 92 provides for the computation of total income of a non-profit organisation it provides that subject to the provisions of section 8, the total income of any non-profit organisation in relation to any charitable activity during the financial year shall be the gross receipts as reduced by the amount of outgoings, computed in accordance with the cash system of accounting the said clause also provides that where the non-profit organisation is a company registered under section 25 of the companies act, 1956, such total income shall be computed in accordance with the mercantile system of accounting  clause 93 provides that the gross receipts of the non-profit organisation from any charitable activity shall be the aggregate of the following, namely:—  (a) the amount of voluntary contributions received;  (b) any rent received in respect of a property held by it consisting of any building or landappurtenant thereto;  (c) the amount of income derived from any business carried on by it, if the business is incidental to any charitable activity so carried on;  (d) income from transfer of any capital asset computed in accordance with the provisions of sections 46 to 54 (both inclusive) where the asset is not used for the purposes of any charitable activity or any business incidental to such charitable activity; (e) full value of the consideration received from the transfer of any business capital asset, other than the asset referred to clause (d);  (f) the amount of income received from investment of its funds or assets; and  (g) the amount of any incoming, realisation, proceeds, or subscription received from any source  (h) any amount, which was received in the last month of the immediately preceding financial year and was deposited in a specified deposit account as referred to subitems (e) of clause 94'  the said clause further provides that such gross receipts shall not include any loan taken during the financial year and voluntary contributions received with a specific direction that they shall form part of the corpus of the non-profit organisation clause 94 provides that for the purpose of computation of the total income, the amount of outgoings during the financial year of a non-profit organisation shall be the aggregate of -  (a) the amount paid for any expenditure other than capital expenditure incurred wholly and exclusively for earning or obtaining any receipts referred to in clause 92;  (b) the amount paid for any expenditure, other than capital expenditure, incurred for the purposes of carrying out any charitable activity;  (c) the amount paid for any capital expenditure for the purposes of any business, if the business is incidental to any charitable activity carried on by the non-profit organisation; (d) any amount applied outside india, if the amount is applied for an activity which tends to promote international welfare in which india is interested and the nonprofit organisation is notified by the central government in this behalf; (e) any amount which is received during the last month of the financial year and has been deposited on or before the last day of the financial year in a specified deposit account under such deposit account scheme as may be prescribed; and (f) any amount accumulated or set apart for carrying on any charitable activity— (i) to the extent of fifteen per cent of the total income (before giving effect to the provisions of this clause) or ten per cent of the gross receipts, whichever is higher; and (ii) invested or deposited in the modes specified in clause 95, for a period not exceeding three years from the end of the financial year clause 95 stipulates that the modes of investing or depositing the money referred to in item (f) of clause 94 it also provides that the funds or the assets of the non-profit organisation (other than any assets forming part of its corpus as on the 1st day of june, 1973) shall be invested or held, at any time during the financial year, in any of the said modes  clause 96 provides that any amount referred to in item (f) of clause 94 shall be deemed to be the income of the non-profit organisation, if the amount is not utilised for the purpose for which it was accumulated or set apart during the period specified therein or the amount ceases to remain invested or deposited in any of the modes specified in clause 95  the said clause further provides that for the purposes of this clause, the amount shall be deemed to be the income of the financial year immediately following the expiry of the specified period if the amount is not utilised during the financial year for the purpose for which it was accumulated or set apart, or in which the amount ceases to remain so invested or deposited in any of the specified modes  clause 97 relates to use or application of funds or assets for the benefit of an interested person it provides that the funds or the assets of the non-profit organisation shall not be used or applied, directly or indirectly, for the benefit of an interested person the said clause further provides that the funds or assets of the non-profit organisation shall be deemed to have been used or applied for the benefit of an interested person, if -  (a) its funds or assets are lent to any interested person, for any period during the financial year without either adequate security or adequate interest or both;  (b) its land, building or other asset is made available for the use of any interested person for any period during the financial year without charging adequate rent or other compensation;  (c) any amount is paid by way of salary, allowance or otherwise during the financial year to any interested person for services rendered to the non-profit organisation and the amount so paid is in excess of what may be reasonably paid for such services;  (d) the services of the non-profit organisation are made available to any interested person during the financial year without adequate remuneration or other compensation;  (e) any share, security or other property is purchased by or on behalf of the nonprofit organisation from any interested person during the financial year for consideration which is more than adequate;  (f) any share, security or other property is sold by or on behalf of the non-profit organisation to any interested person, during the financial year, for consideration which is less than adequate;  (g) any fund or asset of the non-profit organisation are diverted during the financial year in favour of any interested person if the aggregate of the funds and value of assets exceeds one thousand rupees;  (h) any funds of the non-profit organisation are, or continue to remain, invested for any period during the financial year in any concern in which any interested person has a substantial interest and such investment exceeds five per cent of the capital of that concern  the term "interested person" has been defined in clause 103  clause 98 provides the procedure for registration of a non-profit organisation any non-profit organisation which has been granted approval or registration under the income  tax act, 1961, as it stood immediately before the commencement of this code, will not be required to apply for registration under the code, if it fulfils the prescribed conditions any other non-profit organisation shall make an application for its registration in the prescribed form and manner to the commissioner  the said clause also provides that on receipt of such application, the commissioner shall call for such documents or information as he considers necessary in order to satisfy himself about the objects and genuineness of its activities and may make such further inquiries as may be required thereafter, the commissioner shall, within a period of six months from the end of the month in which such application was received, pass an order in writing registering the non-profit organisation if he is satisfied about its objects and the genuineness of its activities or refusing to register it, if he is not so satisfied, after giving the organisation an opportunity of being heard  the said clause further provides that the registration so granted shall be valid from the financial year in which the said application was made however, where the commissioner is satisfied that the activities of the non-profit organisation are not genuine or are not being carried out in accordance with its objects or are not being carried out in accordance with the any other law which is applicable to it or under which it is registered or approved, he shall pass an order in writing cancelling the registration or withdrawing the approval, after giving the organisation an opportunity of being heard  clause 99 provides that a non-profit organisation shall keep and maintain the prescribed books of account it shall also maintain separate books of account in respect of business incidental to charitable activity the said clause further provides that if the gross receipts referred to in clause 93 of the non-profit organisation in any financial year exceed five lakh rupees, it shall obtain an audit report from an accountant in the prescribed form before the due date of filing of the return of tax bases  clause 100 deals with anonymous donations received by a non-profit organisation the said clause defines "anonymous donation" to mean any voluntary contribution, where a person receiving such contribution does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed the said clause provides that where the total income of a non-profit organisation includes any anonymous donation, the income-tax payable shall be the aggregate of -  (a) the amount of income-tax calculated at the rate of thirty per cent on the aggregate of anonymous donations received in excess of five per cent of the total donations received by it or one lakh rupees, whichever is higher, and  (b) the amount of income-tax with which the organisation would have been chargeable on its balance income  the said clause also provides that the above provisions shall apply even if the anonymous donation has been made with a specific direction that it shall form part of the corpus of the non-profit organisation besides, no outgoings shall be allowed in respect of any anonymous donation received  clause 101 deals with the consequences of conversion of a non-profit organisation the clause provides that a non-profit organisation shall be liable to income-tax at the rate of thirty per cent in respect of its net worth if—  (a) it converts into any form of organisation which does not qualify as a nonprofit organisation;  (b) it merges with any form of organisation which does not qualify as a nonprofit organisation;  (c) it fails to transfer upon dissolution all its assets to any other non-profit organisation, within a period of three months from the end of the month in which the dissolution takes place  the net worth of the non-profit organisation shall be computed as on the date of conversion or merger in a case falling under (a) or (b) above and the date of dissolution in a case falling under (c) above "net worth" has been defined in the said clause to mean the aggregate value of its total assets as reduced by its liabilities computed in accordance with such rules of valuation as may be prescribed  clause 102 provides that the provisions of chapter iv shall not apply to any person who—  (a) holds any business under trust, notwithstanding any specific direction that the business shall form part of the corpus of such person or that the income from the business shall be applied only for charitable activity;  (b) fails to comply with the conditions specified in clause 96;  (c) ceases to be a non-profit organisation at any time during the financial year, irrespective of registration granted under clause 97; or  (d) carries on any business which is not incidental to charitable activity  the said clause further provides that the non-profit organisation which ceases to be a non-profit organisation on account of conversion, merger or dissolution as referred to in sub-clause (1) of clause 101 shall be liable to income-tax in respect of its net worth in accordance with that section the said clause also provides that the total income of any person falling under (a), (b), (c) or (d) above shall be computed in accordance with the other provisions of the code clause 103   provides the meaning of certain terms used in chapter-iv it defines "charitable activity" to mean the following activities carried out in india, namely:— (i) relief of the poor; (ii) advancement of education;  (iii) medical relief;  (iv) preservation of environment including watersheds, forests and wildlife;  (v) preservation of monuments or places or objects of artistic or historic interest; or  (vi) advancement of any other object of general public utility, not involving the carrying on of any activity in the nature of trade, commerce or business or any activity of rendering any service in relation thereto, for a cess, fee or any other consideration (irrespective of nature of use, application or retention of the income from such activity) and where the gross receipts during the financial year from such activity exceed ten lakh rupees  the said clause also defines the phrases "business incidental to charitable activity" and "general public"  clause 104 seeks to provide the method of computation of book profit in case of a company for the purposes of computation of the tax payable on such book profit  the said clause provides that notwithstanding of anything in this code, where the normal income-tax payable for a financial year by a company is less than the tax on book profit, then the book profit shall be deemed to be the total income of the company for such financial year and it shall be liable to income-tax on such total income at the rate specified in paragraph a of the second schedule this is essentially the concept of a minimum alternate tax the terms "normal income-tax" and "tax on book profit" used in this sub-clause have been defined in sub-clause (6) of the said clause paragraph a of the second schedule provides for a rate of tax of twenty per cent on such deemed total income  the clause further provides a formula for the calculation of the book profit the formula's starting point is the net profit of the company computed in accordance with the provisions of parts ii and iii of schedule vi to the companies act, 1956 the sub-clause provides for various adjustments to be made to the net profit to determine the book profit the adjustments have the effect of both increasing and decreasing the net profit the book profit would be higher than the net profit if the adjustments have a net positive impact and vice versa  the said clause also provides that every company, to which this clause applies, shall obtain a report in the prescribed form from an accountant certifying that the book profit has been computed in accordance with the provisions of this clause  clause 105 relates to preparation of profit and loss account for computing book profit the said clause seeks to provide the manner in which a company has to prepare its profit and loss account for the purposes of computation of its book profit under clause 104  accordingly, the clause provides that the profit and loss account of the company for a financial year shall be in accordance with the provisions of parts ii and iii of schedule vi to the companies act, 1956 for the purposes of this clause, the accounting policies, the accounting standards adopted for preparing such accounts (including profit and loss account) and the method and rates adopted for calculating the depreciation shall be the same as have been adopted by the company for the purpose of preparing and laying of such accounts at its annual general meeting in accordance with the provisions of section 210 of the companies act, 1956  the said clause further provides that where the company has adopted or adopts a financial year under the companies act, 1956, which is different from the financial year under this code, then the accounting policies, the accounting standards adopted for preparing such accounts (including profit and loss account) and the method and rates adopted for calculating the depreciation shall correspond to the accounting policies, accounting standards and the method and rates for calculating the depreciation which have been adopted for preparing such accounts for such financial year or part of such financial year falling within the relevant financial year  clause 106 seeks to provide the manner in which tax credit for a financial year, arising due to payment of income-tax on book profit in such year, is to be calculated and carried forward and the manner in which such tax credit is to be allowed in succeeding years  the said clause, inter alia, provides that the tax credit of a financial year to be allowed under this clause shall be the excess of tax on book profit over the normal income-tax in other words, a tax credit would arise only in a year where the company pays income-tax on its book profit further, the amount of such tax credit shall be equal to the amount by which the income-tax on book profit exceeds the income-tax on income computed in accordance with the provisions of part a of the code (other than the provisions of this chapter)  the clause also provides that no interest shall be payable on the tax credit allowed under this clause  the clause further provides that the tax credit shall be allowed in a financial year in which the normal income-tax exceeds the tax on book profit and the credit shall be allowed to the extent of the excess of the normal income-tax over the tax on book profit in other words, the credit shall be allowed only in respect of the amount of income-tax payable over and above the amount of income-tax that was payable on the book profit for example, if the normal income-tax payable is one lakh rupees and the income-tax payable on book profit is sixty thousand rupees, then tax credit shall be allowed to the extent of forty thousand rupees only the balance amount of sixty thousand rupees shall be carried forward for the remaining period  the clause also provides that the tax credit determined under this clause shall be carried forward and allowed not beyond the fifteenth financial year immediately succeeding the financial year for which the tax credit becomes allowable  clause 107 provides that apart from the specific exclusions provided in this chapter from the application of certain provisions of the code, all other provisions of the code shall apply to a company referred to in this chapter  clause 108 seeks to provide that notwithstanding anything in this code, any income received by a person out of investments made in a venture capital company or venture capital fund shall be chargeable to income-tax in the same manner as if it were the income received by such person had he made investments directly in the venture capital undertaking in other words, this clause provides a pass through status to venture capital companies and funds and they would have no income-tax liability on any income received on account of investments made by them in any venture capital undertaking  the said clause further provides that the venture capital company, the venture capital fund or the person responsible for making payment of the income on behalf of such company or fund shall furnish, within the prescribed time limit, a prescribed statement giving the details of the nature of the income paid during the financial year and other relevant details, to the person receiving such income and to the prescribed income-tax authority  the said clause also provides that the income paid by the venture capital company and the venture capital fund shall be deemed to be of the same nature and in the same proportion in the hands of the person receiving such income as it had been received by the said company or the fund during the financial year  the said clause also clarifies that the provisions of part b (tax on distributed profits of domestic companies) or part c (tax on distributed income of mutual funds or life insurers) of the code shall not apply to the income paid by a venture capital company or venture capital fund  clause 109 is the only clause of part b and chapter vii of the bill and deals with tax on distributed profits of domestic companies or dividend distribution tax the said clause provides that every domestic company shall be liable to pay tax on the amount of dividend declared, distributed or paid (whether interim or otherwise) to its shareholders, whether out of current or accumulated profits the dividend distribution tax shall be charged on the  dividend declared, distributed or paid at the rate specified in paragraph b of the second schedule to the bill  the said clause further provides that the dividend on which the tax is to be levied shall be reduced by the amount of dividend, if any, received by the domestic company during the financial year if -  (i) such dividend is received from its subsidiary; and  (ii) the subsidiary has paid tax under this clause on such dividend  the said clause also provides that the tax on dividend shall be paid to the credit of the central government within fourteen days from the date of declaration, distribution or payment of such dividend, whichever is earliest  the clause also provides that the dividend distribution tax paid by the domestic company shall be treated as the final payment of tax in respect of the dividend declared, distributed or paid and no further credit shall be claimed by the domestic company or by any other person in respect of such tax further, no deduction on the amount of dividend charged to tax or the tax paid shall be allowed either to the company or to the shareholder  the clause further provides that if the domestic company or the principal officer of such company fails to pay the whole or any part of the dividend distribution tax within a period of fourteen days then, it or he shall be deemed to be an assessee in default and also be liable to pay simple interest at the rate of one per cent for every month or part thereof on the amount of such tax for the period of default  the clause also defines the terms "subsidiary company" and "dividend"  clause 110 is the only clause of part c and chapter viii of the bill and deals with tax on distributed income of mutual funds and insurance company the said clause provides that every mutual fund shall be liable to pay tax on any amount of income distributed or paid to the unit holders of an equity oriented fund and every life insurer shall be liable to pay tax on any amount of income distributed or paid to the policy holders of an approved equity oriented life insurance scheme the tax shall be charged on the distributed income at the rate specified in paragraph c of the second schedule  the said clause also provides that the tax on distributed income shall be paid to the credit of the central government within fourteen days from the date of distribution or payment of such income, whichever is earlier  the clause further provides that the tax paid by the mutual fund or the life insurer on distributed income shall be treated as the final payment of tax in respect of such income and no further credit shall be claimed by either of them or by any other person in respect of the tax so paid besides, no deduction under any other provision of this code shall be allowed to the mutual fund or the life insurer in respect of the distributed income charged to tax or the tax paid  the said clause also provides that if the mutual fund or the life insurer or the person who is responsible for making payment of distributed income on its behalf fails to pay the whole or any part of the tax on distributed income within a period of fourteen days, then, it or he shall be deemed to be an assessee in default and shall also be liable to pay simple interest at the rate of one per cent for every month on the amount of such tax for the period of default  the terms "equity oriented fund" and "approved equity oriented life insurance scheme" have also been defined in the said clause  clause 111 is the only clause of part d and chapter ix of the bill and deals with tax on branch profits of a foreign company the said clause provides that every foreign company shall be liable to branch profits tax in respect of branch profits of a financial year and such tax shall be charged at the rate specified in paragraph d of the second schedule this tax shall be in addition to any income-tax payable by the said foreign company  the clause further provides that the branch profits shall be the income attributable, directly or indirectly, to the permanent establishment or to an immovable property situated in india and included in the total income of the foreign company for the financial year, as reduced by the amount of income-tax payable on such attributable income  the said clause also provides that the liability to branch profits tax shall be discharged by payment of pre-paid taxes and the tax charged under this clause shall be collected after allowing credit for such pre-paid taxes, if any, in accordance with the provisions of the code  clause 112 provides that every person, other than a non-profit organisation, shall be liable to pay wealth-tax on his net wealth as on the valuation date of a financial year and such wealth-tax shall be charged at the rate specified in paragraph e of the second schedule in the manner provided therein  the said clause further provides that the liability to wealth-tax shall be discharged by payment of pre-paid taxes and the wealth-tax charged under this clause shall be collected after allowing credit for such pre-paid taxes, if any, in accordance with the provisions of this code  clause 113 provides the manner in which the net wealth is to be computed for the sake of simplicity, the manner has been expressed as a formula the formula provides that the net wealth shall be the aggregate value of all the specified assets of the person on the date of valuation as reduced by the aggregate value of all the debts owed by the person, which have been incurred in relation to the specified assets  the said clause further provides a detailed list of all the specified assets and also lists out certain assets that shall not be treated as specified assets for the purposes of this clause it also lists the categories of houses which shall be excluded from the specified asset, being "house"  the clause also provides that the value of any specified asset, other than cash, shall be determined in such manner as may be prescribed and clarifies that the term "valuation date" means the 31st day of march in every financial year  clause 114 provides that if the specified assets are held by certain relatives, such as spouse or minor child, associates or associated entities of a person, then they shall be deemed to be belonging to such person if they fulfill certain conditions specified therein and shall be charged to wealth-tax in his hands  the said clause further provides that if a minor child holds a specified asset which has been acquired from his own income, it shall not be deemed to be belonging to his parent or parents  clause 115 relates to disallowance of expenditure having regard to fair market value and seeks to provide that a person shall not be allowed a deduction under the code in respect of any expenditure, whether capital or revenue in nature, which is considered by the assessing officer to be excessive or unreasonable if the payment in respect of the expenditure has been made to any associated person and it is excessive, or unreasonable, having regard to—  (i) the fair market value of the goods, services or facilities for which the payment is made;  (ii) the legitimate needs of the business of the person; or  (iii) the benefit derived by, or accruing to, the person from such payment  clause 116 seeks to provide that the amount of any income, or expense, arising from an international transaction shall be determined having regard to the arm's length price the term "arm's length price" has been defined in clause 124 and means a price which is applied in a transaction between unrelated persons in uncontrolled, unrelated or independent conditions  the said clause further provides that the allocation or apportionment of, or any contribution to, any cost or expense incurred in connection with a benefit, service or facility provided to any associated enterprise shall be determined having regard to the arm's length price of such benefit, service or facility if—  (a) two or more associated enterprises have entered into a mutual agreement or arrangement for the allocation or apportionment of, or any contribution to, such cost or expense; and  (b) the benefit, service or facility provided to any one or more associated enterprises involves an international transaction  the clause also provides that its provisions shall not apply in a case where the determination of any income or allocation of any expense has the effect of reducing the income chargeable to tax, or increasing the loss computed, on the basis of entries made in the books of account for the financial year in which the international transaction was entered  clause 117 relates to determination of arm's length price the said clause seeks to provide that the arm's length price in relation to an international transaction shall be determined in accordance with the most appropriate method out of all the prescribed methods the most appropriate method shall be determined having regard to the nature of transaction, class of transaction, class of associated enterprises or functions performed by such enterprises or such other relevant factors as may be prescribed  the said clause further provides that the arm's length price shall be the price determined by the most appropriate method if only one price is determined by such method or the arithmetical mean of the prices determined by the most appropriate method if more than one  price is determined by such method further, the price at which the international transaction has actually been undertaken shall be deemed to be the arm's length price if the variation between the arm's length price and the actual price does not exceed five per cent of the latter  the clause also provides that no deduction under sub-chapter iv of chapter iii (tax incentives) shall be allowed in respect of the amount of income by which the total income of the person is enhanced after computation of income under this clause  the said clause further provides that the determination of arm's length price shall be subject to the prescribed safe harbour rules  clause 118 seeks to provide that the central board of direct taxes, with the approval of the central government, may enter into an advance pricing agreement with any person, specifying therein the manner in which arm's length price is to be determined in relation to an international transaction to be entered into by that person  the said clause further provides that the arm's length price of any international transaction, in respect of which the advance pricing agreement has been entered into, shall be determined in accordance with such advance pricing agreement the advance pricing agreement shall be valid for a period as specified in the agreement but shall not exceed five consecutive financial years  the said clause also provides that the advance pricing agreement entered into shall be binding only on the person in whose case, and only in respect of the transaction in relation to which, the agreement has been entered into it shall be binding on the commissioner and the income-tax authorities subordinate to him only in respect of the said person and the said transaction however, the agreement shall not be binding if there is any amendment to the code which has a bearing on it  the clause also provides that the board may declare an agreement to be void ab initio if it has been obtained by the person by fraud or misrepresentation of facts  clause 119 relates to avoidance of income-tax by transactions resulting in transfer of income to non-residents and seeks to provide that the total income of a person shall include all income accruing to any non-resident, if—  (a) the income accrues by virtue of a transfer of any asset by the person to the non-resident;  (b) the person acquires any rights by virtue of which he has power to enjoy such income or is entitled to receive, or has received, any capital sum, the payment of which is in any way connected with the transfer; and  (c) the income would have been included in the total income of the person, had the transfer not taken place  the said clause further provides that to determine whether a person has power to enjoy the income, the substantial result and effect of the transfer and all benefits which may at any time accrue to such person as a result of the transfer shall be taken into account  the said clause also provides that this clause shall not apply if the person referred herein shows to the satisfaction of the assessing officer that the transfer and all associated operations were bona fide commercial transactions and were not designed for the purpose of avoiding any tax liability  clause 120  relates to avoidance of tax by sale and buy-back transaction in a security and provides that the total income of any person shall include any interest accruing from any security owned by any other person if the transaction relating to sale and buy back of the security has been undertaken by the other person, if the interest accrues to the other person as a result of such transaction and if the transfer had not taken place, the income would have been included in the total income of the first-mentioned person  clause 121  seeks to provide that the transaction relating to buy and sale back of security under clause 120 shall, in the case of the other person referred to therein, be ignored and shall not be taken into account if the interest accruing to the other person is not included in his total income by virtue of the provisions of that clause  the said clause further provides that the loss, if any, arising to a person on account of any buy and sale back transaction in any security undertaken by him, shall be ignored for the purposes of computing his total income, if any other income accruing to the person on such security is not included in his total income and the loss shall be ignored to the extent it does not exceed the amount of any other income referred to therein  clause 122 provides that the income accruing from a debt instrument, transferred by a person at any time during the financial year, shall not be less than the amount of broken-period income from the instrument the term "broken-period income" has been defined in clause 124  clause 123 seeks to provide that any arrangement entered into by a person may be declared as an impermissible avoidance arrangement and the consequences, under this code, of such arrangement may be determined by—  (a) disregarding, combining or re-characterising any step in the arrangement;  (b) treating the arrangement as if it had not been entered into or carried out or in such other manner as in the circumstances of the case, the commissioner deems appropriate for the prevention or reduction of the relevant tax benefit;  (c) disregarding any accommodating party or treating any accommodating party and any other party as one and the same person;  (d) deeming persons who are connected persons in relation to each other to be one and the same person;  (e) re-allocating, amongst the parties to the arrangement, any accrual, or receipt, of a capital or revenue nature or any expenditure, deduction, relief or rebate; or  (f) re-characterising any equity into debt or vice versa, any accrual, or receipt, of a capital or revenue nature, or any expenditure, deduction, relief or rebate   the clause further provides that the above provisions may be applied in the alternative for, or in addition to, any other basis for determination of tax liability and they shall apply in accordance with such guidelines as may be prescribed  clause 124 seeks to define various terms used in chapter xi such as "accommodating party", "arm's length price", "asset", "associated enterprise", "impermissible avoidance arrangement", "international transaction", "round trip financing", "safe harbour", "tax benefit", etc  clause 125 relates to presumption of the purpose for which an arrangement is entered into and seeks to provide that an arrangement shall be presumed to have been entered into, or carried out, for the main purpose of obtaining a tax benefit unless the person obtaining the tax benefit proves that obtaining such benefit was not the main purpose of the arrangement  the term "arrangement" has been defined in clause 124  clause 126 seeks to provide for the classes of income-tax authorities for the purpose of the code the income-tax authorities provided in the clause are—  (a)  the central board of direct taxes constituted under the central boards of revenue act, 1963,  (b) chief commissioners of income-tax or directors-general of income-tax,  (c) commissioners of income-tax or directors of income-tax or commissioners of income-tax (appeals),  (d) additional commissioners of income-tax or additional directors of incometax,  tax, (e) joint commissioners of income-tax or joint directors of income-tax,  (f) deputy commissioners of income-tax or deputy directors of income-tax, (g) assistant commissioners of income-tax or assistant directors of income- (h) income-tax officers,  (i) tax recovery officers, (j) inspectors of income-tax  clause 127 relates to appointment and control of income-tax authorities listed in clause 126  the said clause provides that the central government may appoint such persons as it thinks fit to be income-tax authorities subject to the rules and orders of the central government regulating the conditions of service of persons in public services and posts, the central government may also authorise the board, or a director-general, a chief commissioner or a director or a commissioner to appoint income-tax authorities below the rank of an assistant commissioner  further an income-tax authority authorised in this behalf by the board may appoint such executive or ministerial staff as may be necessary to assist it in the execution of its functions  the said clause also provides that the board may direct by way of notification that any income-tax authority will be subordinate to the other  clause 128 relating to power of higher authorities, seeks to provide that any incometax authority, above the rank of assessing officer, shall have all the powers that an assessing officer has in relation to the making of inquiries  clause 129 relates to powers of the board to issue instructions  the said clause seeks to provide that the board may, from time to time, issue such orders, instructions, directions or circulars to other income-tax authorities as it may consider expedient or necessary for the proper administration of the provisions of the code  the said clause further provides that the board shall not exercise its powers so as to require any income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner, or require the commissioner of income-tax (appeals) to dispose off any matter before it in a particular manner  the said clause also empowers the board to issue general or special orders in respect of—   (a) any class of tax bases or class of cases, explaining the principles, specifying the guidelines or procedures to be followed by other income-tax authorities in the work relating to assessment or collection of revenue including charging of interest or the initiation of proceedings for the imposition of penalties;  (b) any case or class of cases, for avoiding genuine hardship, authorising any income-tax authority (other than commissioner of income-tax (appeals)) to admit any application or claim for any exemption, deduction, refund or any other relief under the code after the expiry of the period specified by or under the code for making the application or claim and deal with the same on merits in accordance with law;  (c) any case or class of cases, relaxing any requirement or conditions contained in the code in relation to grant of any relief , on fulfillment of certain conditions the said clause also provides that the orders, instructions, directions and circulars issued by the board under this clause shall be binding on all other income-tax authorities and other persons employed in the execution of the provisions of the code clause 130 relates to the jurisdiction of income-tax authorities the said clause seeks to provide that the income-tax authorities shall exercise its powers and performs its functions in accordance with the directions of the board the board may in turn authorise any other income-tax authority to issue orders in writing for the exercise of the powers and performance of the functions by all or any of its other income-tax authorities who are subordinate to it the orders of jurisdiction shall be made having regard to territorial area, persons or classes of persons, incomes or classes of income or cases or classes of cases the said clause further provides that a higher income-tax authority can exercise the powers and perform the functions of the lower income-tax authority, if so directed by the board the said clause also provides that the assessing officer being lower in rank shall follow the directions of the assessing officer being higher in rank, if two or more assessing officers of different class have been assigned concurrent jurisdiction further any income-tax authority, being an authority higher in rank, can exercise the powers and perform the functions of the income-tax authority being an authority lower in rank, if so directed by the board  clause 131 relates to jurisdiction of assessing officers the said clause provide that the assessing officer having jurisdiction over an area shall, within the limits of such area, have jurisdiction in respect of any person carrying on a business if his principal place of business is situated within that area or any other person residing within the area any dispute in the matter shall be decided by the concerned chief commissioner however, if the dispute relates to areas within the jurisdiction of different chief commissioners, it will be decided by consensus and if there is no agreement, by the board or the chief commissioner so directed by it  the said clause further provides that the jurisdiction of an assessing officer cannot be challenged after the specified time  clause 132 relates to power to transfer cases the said clause seeks to provide that the chief commissioner or the commissioner may order transfer of a case from one assessing officer to other assessing officer if both are subordinate to him the chief commissioner may also order transfer cases from one assessing officer subordinate to him to another assessing officer subordinate to any other chief commissioner, if both chief commissioners are in agreement with such transfer however, if both the chief commissioners are not in agreement with a transfer, the board, or the chief commissioner as may be authorised by the board, may transfer the case in certain circumstances  the said clause also provides that the transfer of a case may be made at any stage of the proceedings, and it shall not be necessary to re-issue any notice already issued by the transferor assessing officer  the said clause also seeks to define the expression "case" for the purposes of chapter xii relating to tax administration and procedure  clause 133 relating to change of incumbent seeks to provide that the income-tax authority who succeeds another authority as a result of change in jurisdiction or for any other reason, shall continue the proceeding from the stage at which it was left by his predecessor the assessee in such a case may be given, if so requested, an opportunity of being heard before passing any order under this code in his case  clause 134 relating to powers regarding discovery and production of evidence, etc, seeks to provide that the prescribed income-tax authorities and the dispute resolution panel shall, for the purposes of the code, have the same powers as are vested in a court under the code of civil procedure, 1908 when trying a suit, in respect of the following matters— (a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath; (c) compelling the production of books of account and other documents; and (d) issuing commissions  the said clause further provides that for the purposes of making any inquiry or investigation, the prescribed income-tax authority shall be vested with the powers referred above, whether or not any proceeding is pending before it  the said clause also provides that any prescribed income-tax authority may, subject to the rules made in this behalf, impound any books of account or other documents produced before it and retain them in its custody for such period as it thinks fit if such authority is of rank of joint commissioner and above any income-tax authority below the rank of joint commissioner shall not retain in his custody any impounded books or documents for a period exceeding thirty days without obtaining the approval of the chief commissioner or the commissioner  clause 135 relates to search and seizure it inter alia, provides that the competent investigating authority may authorise any authorised officer to carry out search and seizure if the competent investigating authority has, in consequence of information in his possession, reason to believe that,— (a) any person to whom a summons or notice was issued under the specified sections or the clauses of the income-tax act, 1961 or the wealth-tax act, 1957 or the code, as the case may be, has omitted or failed to furnish the material as required by such summon or notice; or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any material which will be useful for, or relevant to, any proceeding under the income-tax act, 1961, or the wealth-tax act, 1957, or under the code; or (c) any person is in possession of any tax bases or property which has not been, or would not be, disclosed for the purposes of the income-tax act, 1961, or the wealthtax act, 1957, or the code  the said clause also provides that the authorised officer may, while carrying out the search and seizure, enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that any material are kept, or break open the lock of any door, box, locker, safe, almirah etc, or search any person and seize any such material, not being stockin-trade, found as a result of such search he may also place marks of identification on any books of account or other documents and make a note or an inventory of any such material including stock in trade  sub-clause (3) of the said clause provides that the competent investigating authority may exercise the powers of search and seizure over a person on whom he exercises jurisdiction the said clause also provides that the authorised officer may requisition the services of any police officer or of any officer of the central government to assist him and it shall be the duty of every such officer to comply with such requisition  the said clause also provides that the authorised officer may serve an order on the owner or the person, who is in immediate possession or control of any material, that he shall not remove or part with it except with his prior permission, if the authorised officer considers that it is not possible or practicable to take physical possession of such material, not being stock-in-trade, to a safe place due to its volume, weight or other physical characteristics (including its dangerous nature) and such action of the authorised officer shall be deemed to be seizure the said clause also provides that the authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any material and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the income-tax act, 1961, or the wealth-tax act, 1957, or under the code, as the case may be further the provisions of the code of criminal procedure, 1973, relating to search and seizure shall apply, so far as may be, to search and seizure under this clause  clause 136 relates to powers to requisition material taken into custody the said clause seeks to provide that the competent investigating authority may authorise any income-tax authority to require any officer or authority to deliver the material, which have been taken into custody by such officer or authority under any other law for the time being in force, to the requisitioning officer  the said clause further provides that the authorisation could be issued in cases and circumstances similar to the ones as for search and seizure referred to in clause 135 the said clause also provides that the officer or authority in whose custody the material exists, shall deliver the material to the requisitioning officer either forthwith or when such officer or authority is of the opinion that it is no longer necessary to retain the same in his or its custodythe provisions of clause 135 shall apply to this clause also  clause 137 relates to retention and release of books of account or documents seized or requisitioned the said clause seeks to provide that the authorised officer or the requisitioning officer shall hand over the books of account or documents seized under clause 135 or delivered under clause 136, as the case may be, within a period of sixty days from the date on which the last of the authorisations for search was executed or the books of account were received, to the assessing officer having jurisdiction over the case  however, the authorised officer or the requisitioning officer may allow the assessee to make copies or take extracts of the books of account or documents seized or requisitioned on his making an application it is further provided that the assessing officers may retain the books of account or documents, seized or requisitioned, up to a period of thirty days from the date of assessment and beyond this period after obtaining the approval of the chief commissioner or the commissioner the retention, however, cannot be allowed beyond a period of thirty days from the date on which the proceedings under the code are completed clause 138 relating to delivery of material belonging to other persons, seeks to provide that the assessing officer, having jurisdiction over the person in whose case search and seizure was carried out under section 135, or requisition was made under section 136, shall hand over any material to the assessing officer having jurisdiction over another person, if he is satisfied that the material seized, or requisitioned, belongs to the other person  clause 139 relates to retention and application of seized or requisitioned assets the said clause seeks to provide that the assessing officer may recover the amount of any liability existing till the date of search or requisition or determined after such date till the release of assets out of assets seized or requisitioned or by any other mode it further provides that the assessing officer may recover the existing liability and release the remaining portion of the asset, if any, within a period of one hundred and twenty days from the date on which the last of the authorisations for search under clause 135 was executed, to the person from whose custody the assets were seized, on fulfillment of certain conditions  clause 140 relating to power to call for information seeks to provide that for the purposes of the code, the board may require -  (a) any prescribed person to furnish information within such time and in such form and manner as may be prescribed; and  (b) any prescribed income-tax authority to call for the prescribed information in such form and manner as may be prescribed  the said clause further provides that any income-tax authority, not below the rank of an income-tax officer, may require any person, including a banking company or any officer thereof, to furnish any information as may be useful for, or relevant to any enquiry or proceeding, pending before him under this code, in such form, manner and within such time as may be specified by him the said clause also provides that the expression ''person'' in this clause shall include a banking company or any officer thereof  clause 141 relates to power of survey the said clause seeks to provide that the prescribed income-tax authority may within his jurisdiction enter, or authorise any other income-tax authority to enter, any place at which a business is carried out by a person, if he has reason to suspect that the person has not complied with the provisions of this code the income-tax authority shall enter any place of business referred to therein only after sunrise and before sunset, or during the hours at which such place is open for the conduct of business the income-tax authority may, upon entering the place, inspect the books of account or documents available there and check or verify the cash, stock or other valuable article or thing found there  the income-tax authority may place marks of identification on the books of account, documents or record inspected by him and take extracts, or copies, therefrom, impound any books of account, documents or record inspected by him, after recording the reasons for doing so, make an inventory of cash, stock or valuables and also examine on oath any person if his statement would be useful for, or relevant to, any proceeding under the code  the said clause also provides that the prescribed income-tax authority, for the purpose of verifying the expenditure made by the person in connection with any function, ceremony or event, after such function, ceremony or event, may require the person by whom such expenditure has been incurred or any other person who is likely to posess the information regarding such expenditure, to furnish such information which may be useful for, or relevant to, any proceeding under this code and record the statements of the person or any other person in this behalf  while exercising the power under this clause, the income-tax authority shall not remove any cash, stock or other valuable article or thing from such place clause 142 relates to power to disclose information in respect of any person this clause seeks to provide that the board, or any person specified by it by an order in this behalf, may furnish any information in respect of an assessee to other person who is performing any functions under any law relating to the imposition of any tax, duty or cess, or dealings in foreign currency or a person who is performing any function under any other law and notified by the central government the said clause further provides that the chief commissioner or the commissioner may furnish, or cause to be furnished, to any person any information relating to any assessee received or obtained by any income-tax authority in the performance of his functions under this code, if— (a) the person makes an application to the chief commissioner   or the commissioner in the prescribed form; and (b) the chief commissioner or the commissioner is satisfied that it is in the public interest so to do the said clause also provides that such decision of the chief commissioner or the commissioner shall be final and shall not be called in question in any court of law further, it is provided that the central government may direct by notified order that no information shall be furnished under sub-clauses (2) or (4) in respect of such matters relating to such class of assessees, or to such authorities, as may be specified in the order clause 143 seeks to provide that any proceeding under the code before an income-tax authority shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 and for the purposes of section 196 of the indian penal code, 1860 further, every income-tax authority shall be deemed to be a civil court for the purposes of section 195, but not for the purposes of chapter xxvi of the code of criminal procedure, 1973 clause 144 relates to self-reporting of tax bases the clause, inter alia, provides that every person who is liable to pay income-tax under this code or who intends to carry forward any loss shall furnish a return of tax bases on or before the due date to the assessing officer or the prescribed authority or agency the said clause further provides that a company resident in india, a mutual fund or a life insurer who distributes dividend or income, as the case may be, and is liable to pay tax on dividend or income distributed, is also required to file the return of tax bases on or before the due date the said clause also provides that in relation to net wealth, every person (other than a non-profit organisation) in whose case the net wealth exceeds the maximum amount which is not chargeable to wealth-tax is required to furnish the return of tax bases on or before the due date the said clause provides that the return of tax bases shall also be a return of tax bases of any other person of which such person is a representative assessee the return of tax bases shall be furnished in the prescribed form and manner the said clause also specifies the person who is required to sign and verify such return the said clause provides that if a person discovers any omission or any wrong statement in the return of tax bases furnished by him, he may revise such return at any time before the expiry of one year from the end of the financial year in which the return was due or before the completion of the assessment, whichever is earlier the said clause provides that any person who is otherwise not required to furnish a return of tax bases under the code may furnish such return before the expiry of one year from the end of the financial year to which it pertains it also provides that a person may furnish the return for any financial year at any time before the expiry of one year from the end of the financial year in which the return was due or before the completion of the assessment, whichever is earlier, if he has not furnished a return by the due date and no notice under clause 146 has been served on him clause 145 relates to tax return preparers the clause provide that the board may frame a tax return preparer scheme allowing a tax return preparer to prepare and furnish the return of tax bases of any specified class of persons clause 146 relates to the issue of notice to furnish the return of tax bases it provides that the assessing officer may serve on a person in whose case the due date of furnishing such return has expired, a notice requiring such person to furnish the return for the relevant financial year such notice may be issued within a period of twenty-one months from the end of the financial year in which the return was due the said clause further provides that the person in receipt of such notice shall furnish the return in the prescribed form and manner within fourteen days from the date of such receipt  clause 147 relates to self-assessment tax it provides that the assessee shall be liable to pay self-assessment tax before furnishing the return of tax bases the amount paid as selfassessment tax for any financial year shall first be adjusted towards the interest payable under the code and the balance shall be adjusted towards the tax payable the said clause further provides that after a regular assessment has been made under clause 154 or clause 155, any amount paid as self-assessment tax shall be deemed to have been paid towards such assessment the clause also provides that if any assessee fails to pay such self-assessment tax, he shall be deemed to be an asssessee in default and all the provisions of the code shall apply accordingly  clause 148 provides that on receipt of any return of tax bases for any financial year, the assessing officer or any other authorised person shall issue an acknowledgement for receipt of the return  clause 149 relates to processing of returns it provides that the assessing officer or any authorised person shall process the return received under clause 144 or clause 146 for this purpose, the tax and interest shall be computed on the basis of the tax bases, after making adjustments relating to any arithmetical error in the return or an incorrect claim apparent from the existence of any information in the return the said clause further provides that the sum payable or refundable shall be determined after giving credit for taxes paid or relief allowable under clause 207  the said clause also provides that the processing authority shall send intimation to the assessee specifying the sum payable by, or refundable, to him the processing authority shall also send an intimation to the assessee where the loss declared in the return is adjusted, but no tax or interest is payable or refundable the said clause also provides that the processing authority shall not send any intimation in respect of any sum payable, if the return is processed after the expiry of twelve months from the end of the financial year in which the return is furnished it provides that the acknowledgement of the return shall be deemed to be the intimation where no sum is payable or refundable and where no adjustment has been made  the said clause provides that the board may make a scheme for centralised processing of returns for expeditious determination of the tax payable or refundable  for this purpose, "return of tax bases" and "due date" have been defined in clause 314 in relation to adjustments, clause 149 defines "an incorrect claim apparent from the existence of any information in the return"  clause 150 relates to notice for inquiry before assessment it provides that the assessing officer may make an assessment on receipt of return under clause 144 or clause 146, if he considers it necessary or expedient to ensure that the assessee has not understated his tax bases or computed excessive loss or allowance or under-paid the tax in any manner the said clause provides that the assessing officer shall serve on the assessee a notice requiring him, inter alia, to furnish necessary information and to produce evidence, accounts or documents (not relating to a period more than six years prior to the relevant financial year) besides, the assessing officer may make necessary inquiry in order to obtain full information in respect of tax bases of any person for the relevant financial year  the said clause also provides that no such notice shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished clause 151 deals with special audit it provides that the assessing officer may direct the assessee to get his accounts audited by an accountant, if he is of the opinion that considering the nature and complexity of the accounts and in the interests of revenue, it is necessary to do so it further provides that the assessing officer shall not issue any such direction unless the assessee has been given an opportunity of being heard and prior approval of the chief commissioner or commissioner has been obtained  the said clause also provides that the accountant, who shall be nominated by the chief commissioner or commissioner, shall furnish his report to the assessing officer and to the assessee, within the time allowed by the assessing officer, which shall not exceed one hundred and eighty days from the date on which the direction for audit of accounts is received by the assessee it also provides that the remuneration of the accountant and other expenses of the audit shall be determined and paid in accordance with prescribed rules  clause 152 deals with determination of value of assets it, inter alia, provides that for the purposes of assessment, the assessing officer may require a valuation officer to make and report to him an estimate of the value of any asset, property, investment or expenditure the said clause provides specific powers to the valuation officer for this purpose, subject to the rules in this behalf  the said clause also provides that after taking into account such evidence as the assessee may produce and the material in his possession or gathered by him, the valuation officer shall estimate the value of the asset, property, investment or expenditure, after giving an opportunity of being heard to the assessee, or to the best of his judgment if the assessee does not co-operate or comply with his direction  the said clause further provides that the valuation officer shall furnish a copy of such estimate to the assessing officer and the assessee within a period of six months from the end of the month in which the reference was made  clause 153 deals with the determination of arm's length price it, inter alia, provides that the assessing officer may, with the prior approval of the commissioner, refer to the transfer pricing officer, the computation of arm's length price under clause 117 in relation to any international transaction entered into by the assessee in any financial year the said clause further provides that upon such reference, the transfer pricing officer shall determine the arm's length price in relation to the international transaction in accordance with the provisions of clause 117 and shall send a report of his determination to the assessing officer and the assessee before the expiry of a period of forty-two months from the end of the financial year in which the international transaction is entered into  clause 154 deals with the determination of an impermissible avoidance agreement and consequences thereof it provides that the commissioner shall, for the purposes of clause 123, serve on the assessee a notice requiring him, inter alia, to produce any evidence or particulars in support of his claim that the provisions of clause 123 are not applicable to him it further provides that after taking into account such particulars and evidence, the commissioner shall pass an order, before the expiry of twelve months from the end of the month in which such notice is issued, declaring an arrangement as being an impermissible avoidance agreement or otherwise for the purposes of clause 123  the said clause also provides that upon declaring an arrangement as an impermissible avoidance agreement, the commissioner shall issue directions to the assessing officer to make necessary adjustments to the total income or tax liability and shall forward a copy of such order to the assessee and to the jurisdictional commissioner of the other party to the arrangement for taking necessary action in accordance with the provisions of this clause  clause 155 relates to assessment it provides that consequent to a notice issued under sub-clause (1) of clause 150, the assessing officer shall, by an order in writing, make an assessment of the tax bases of the assessee after taking into account the evidence furnished by the assessee, any report of audit under clause 151, any report of the valuation officer, any order of the transfer pricing officer, any direction of the commissioner under clause 154, any direction of the joint commissioner under clause 157 and the material in his possession, in respect of which an opportunity of being heard has been provided to the assessee  the said clause further provides that on the basis of such assessment, the assessing officer shall determine the sum payable or refundable after adjusting the sum paid by, or refunded to, the assessee in pursuance of the intimation issued under sub-clause (2) of clause 149  the said clause also provides that the assessing officer shall forward the draft order to the eligible assessee if he proposes to make any variation in the income or loss returned which is prejudicial to the interests of such assessee, who may within thirty days of receipt of the draft order, file his acceptance to the assessing officer or file his objections to such variations to the dispute resolution panel and the assessing officer thereafter, the assessing officer shall complete the assessment on the basis of the draft order, if the assessee accepts it, or in conformity with the direction of the dispute resolution panel within a period of one month from the end of the month in which such direction is received  the said clause also defines the term "eligible assessee"  clause 156 relates to best judgment assessment it, inter alia, provides that the assessing officer shall make the assessment of the tax bases to the best of his judgment, if—  (a) the assessee fails to furnish the return required under clause 144 or clause 146 or to comply with all the terms of a notice issued under sub-clause (1) of clause 150 or to comply with a direction issued under clause 151 or to make the return in response to notice under clause 159;  (b) the assessee fails to regularly follow the accounting standards or the method of accounting laid down in clause 89; or  (c) he is not satisfied about the correctness or completeness of the accounts of the assessee  the said clause further provides that in making the assessment, the assessing officer shall take into account all relevant material which he has gathered or is available on record  clause 157 relates to directions for assessment by joint commissioner it provides that a joint commissioner may, on a reference made to him by the assessing officer or on an application of an assessee or on his own motion, call for and examine the record of any proceeding in which an assessment is pending and issue such directions as he thinks fit for the guidance of the assessing officer so as to enable him to complete the assessment the joint commissioner shall not issue any direction prejudicial to the assessee unless an opportunity of being heard is given to him the said clause further provides that any such direction issued shall be binding on the assessing officer  clause 158 deals with directions for assessment by dispute resolution panel it, inter alia, provides that where any objection is received under sub-clause (5) of clause 155, the dispute resolution panel may call for and examine the record of any proceeding relating to the draft order or make, or cause to be made, any such enquiry and issue directions for the guidance of the assessing officer, within a period of nine months from the end of the month in which the draft order is forwarded to the assessee  the said clause further provides that the dispute resolution panel may confirm, reduce or enhance the variations proposed in the draft order, but shall not set aside any proposed variation or issue any direction for further enquiry before passing of the assessment order besides, any difference of opinion among the members of the dispute resolution panel on any issue shall be decided according to the opinion of the majority the direction issued by the dispute resolution panel shall be binding on the assessing officer clause 159 deals with reopening of assessment it, inter alia, provides that the assessing officer shall reopen a case for reassessment, for reasons recorded in writing, if he has reason to believe that any tax bases chargeable to tax have escaped assessment for the relevant financial year the said clause lists the circumstances under which the tax bases chargeable to tax shall be deemed to have escaped assessment  the said clause also provides that the notice for reopening of assessment shall be issued for the seven financial years immediately preceding the financial year in which the search and seizure has been carried out or the material has been requisitioned, and within a period of seven financial years from the end of the relevant financial year in any other case  the said clause also provides that where an assessment has been made under clause 155 or clause 156 or under this clause, no such notice shall be issued by an assessing officer below the rank of joint commissioner—  (i) within a period of four years from the end of the relevant financial year, unless the joint commissioner is satisfied on the reasons recorded by such assessing officer that it is a fit case for issue of such notice;  (ii) after the expiry of a period of four years from the end of the relevant financial year, unless the commissioner is so satisfied;  the said clause further provides that in any other case, no such notice shall be issued by an assessing officer below the rank of joint commissioner after the expiry of a period of four years from the end of the relevant financial year, unless the joint commissioner is satisfied on the reasons recorded by such assessing officer that it is a fit case for issue of such notice  the said clause also provides that any assessment proceeding relating to any financial year falling within the abovementioned period of seven financial years shall abate, if it is pending on the date of the initiation of the search or on the date of requisitioning the material in the case of the person on whom search has been conducted or to whom such material pertains  the said clause also provides that on receipt of a return in pursuance of the notice for re-opening of assessment, or after the expiry of the time specified therein for furnishing the return, the assessing officer shall, by an order in writing, make the re-assessment of the total income it provides that in the re-assessment so made, the tax shall be chargeable at the rate or rates at which it would have been charged had the tax base not escaped assessment the said clause also provides for certain circumstances under which re-assessment proceedings shall be dropped  clause 160 relates to approval for search assessment it provides that no order of search assessment or re-assessment shall be passed by an assessing officer without the approval of the joint commissioner  clause 161 deals with rectification of mistake it, inter alia, provides that an incometax authority may amend any order passed or intimation issued by it in order to rectify any mistake apparent on the face of the record within a period of four years from the end of the financial year in which the order sought to be amended was passed  the said clause also provides that the income-tax authority may make an amendment on its own motion or on an application made by the assessee or the assessing officer it provides that such application shall be decided within a period of six months from the end of the month in which the application is received by it it also provides that where the order has been decided in an appeal or revision, the power of the authority to so amend shall be restricted to matters not decided in appeal or revision  clause 162 relates to notice of demand it provides that any sum payable in consequence of any order made or intimation issued under this code shall be demanded by an income-tax authority by serving upon the assessee a notice of demand in the prescribed form and manner it also provides that the intimation issued under sub-clause (2) of clause 149 shall be deemed to be the notice of demand for this purpose  clause 163 provides time limits for completion of assessment or re-assessment it also provides that such time limit shall not apply in respect of assessment, re-assessment or recomputation to be made in consequence of, or to give effect to, any finding or direction contained in any order of specified appellate authorities or of any court in a proceeding otherwise than by way of appeal or reference under this code  the said clause also provides that in computing such period of limitation, certain specified time periods shall be excluded it provides that the period of limitation available to the assessing officer for making an order of assessment, re-assessment or recomputation shall be extended to sixty days, if the period immediately after the exclusion of the specified time periods is less than sixty days  clause 164 seeks to provide that for the purposes of this code, "representative assessee" in respect of an assessee means—  (a) the agent of a non-resident, if the assessee is a non-resident;  (b) the guardian, or manager, of a minor, lunatic or idiot, if the assessee is a minor, lunatic or idiot;  (c) the court of wards, the administrator-general, the official trustee, any receiver or manager (including any person who manages property on behalf of the assessee) appointed by, or under, any order of a court, if such person receives, or is entitled to receive, income on behalf, or for the benefit, of the assessee;  (d) a trustee appointed under an oral trust, or a trust created under an instrument in writing and entitled to receive, income on behalf or for the benefit of any person, if the assessee is a trust;  (e) the legal representative, or the executor, if the assessee dies;  (f) a participant, or the legal representative of the deceased participant, in the case of dissolution of an unincorporated body; and  (g) the liquidator appointed under section 448, or section 490, of the companies act, 1956 in the case of a company  the said clause further provides as to who could be "agent" in relation to a nonresident and executor in relation to a deceased person  clause 165, inter alia, provides that every representative-assessee shall, in his representative capacity, be liable to assessment only in respect of the tax bases of the person represented by him  the said clause further provides that every representative-assessee shall be subject to the same duties, responsibilities and liabilities as if the tax bases accrued to him and the taxes shall be levied upon him in the manner as it would have been leviable upon the principal  the said clause also provides that any proceeding initiated, or which could have been initiated, before the death or dissolution of the principal or the appointment of the liquidator, shall be deemed to have been taken against, or can be initiated in case of, the representative assessee  clause 166 provides that nothing in the sub-chapter shall prevent the direct assessment of the principal or the recovery of any sum payable under this code from the principal  clause 167 seeks to provide that the assessing officer shall have the same remedy against all property of any kind vested in any representative-assessee as he would have against the property of the principal clause 168 relates to assessment in the event of business reorganisation and provides the manner in which the predecessor and the successor in a business reorganisation shall be assessed  the said clause provides that the predecessor shall be assessed in respect of the income for the period beginning with the first day of the financial year and ending on the day immediately preceding the date of business reorganisation and the successor shall be assessed in respect of the income for the period beginning with the date of business reorganisation and ending on the last day of the financial year  the said clause further provides that any proceeding taken against the predecessor shall be deemed to have been taken against the successor and may be continued against the successor from the stage at which it stood on the date of the business reorganisation  clause 169 relates to assessment of a hindu undivided family after its partition and provides that such a family shall be deemed to continue as such except where a finding of partition has been given under this clause in respect of the hindu undivided family  the said clause provides that the assessing officer, after making necessary inquiries, shall record a finding as to whether there has been a total, or partial, partition of the joint family property and, if there has been such a partition, the date on which it has taken place the clause clarifies that no claim of partial partition of a family shall be inquired into or recognised as a partition further, all provisions of the code as they applied to the hindu undivided family prior to its total partition, shall continue to apply till the date on which the total partition of such family has taken place  the clause further provides that in case of a partial partition of a hindu undivided family, the family shall continue to be assessed under this code as if no partial partition had taken place and the liability of that family or its members shall remain the same  the clause also seeks to define the terms "partition" and "partial partition"  clause 170 relates to assessment of the income of a non-resident from the occasional business of operation of ships and provides that such assessment shall be made in accordance with the provisions contained therein  the said clause, inter alia, provides that the master of a ship belonging to, or chartered by, a non-resident shall, before the departure of the ship, furnish to the assessing officer a return of the full amount of transportation charges accrued to, or received by, the owner or charterer, since the last arrival of the ship in that port  the clause further provides that on receipt of the return, the assessing officer shall assess the income in accordance with serial number 7 of the table under paragraph 1 of the fourteenth schedule and the tax determined shall be payable by the master of the ship or any other person authorised by him further, a port clearance shall be granted to the ship after the tax has been duly paid or satisfactory arrangements have been made for the payment  the clause also provides that the assessment of the income for the relevant financial year of the owner, or charterer, of the ship can also be made, at his option, in accordance with the other provisions of the code  clause 171 seeks to provide that the tax bases of an individual for part of a financial year may be chargeable to tax in that financial year, if it appears to the assessing officer that the individual may leave india during or shortly after the expiry of the financial year and has no intention of returning to india  the said clause further provides that the assessing officer may require the individual to furnish the return of tax bases for the purposes of assessment and may estimate the tax bases of the individual for part of a financial year if it cannot be readily determined in accordance with the code further, the tax payable on the tax bases computed under this clause shall be in addition to the tax, if any, payable under any other provision of the code clause 172 provides that where it appears to the assessing officer that an unincorporated body formed for a particular event or purpose in a financial year is likely to be dissolved in the financial year or shortly thereafter, then he may charge to tax in that financial year the tax bases of the unincorporated body for the period beginning from the first day of the financial year to the likely date of its dissolution further, the provisions of clause 171 shall apply to any proceeding under this clause as they apply in the case of a person leaving india  clause 173 provides that where it appears to the assessing officer that any person is likely to charge, sell, transfer, dispose of or otherwise part with any of his assets, in any financial year, with a view to avoiding payment of any liability under this code, then he may charge to tax in that financial year the tax bases of such person for the period beginning from the first day of the financial year to the date when the assessing officer commences proceedings under this clause further, the provisions of clause 171 shall apply to any proceeding under this clause as they apply in the case of a person leaving india  clause 174 relates to discontinued business and provides that where any business is discontinued in any financial year, the assessing officer may charge to tax in that financial year the tax bases of such business for the period beginning from the first day of the financial year to the date on which the business has been discontinued  the said clause further provides that any person discontinuing any business shall give notice of the discontinuance to the assessing officer within a period of fifteen days from such discontinuance  the clause also provides that the assessing officer may require the person whose business has been discontinued to furnish the return of tax bases and, upon receipt of the return or after the expiry of the notice period to file such return, he shall proceed to make the assessment in accordance with the provisions of the code further, the tax payable on the tax bases computed under this clause shall be in addition to the tax, if any, payable under any other provision of the code  clause 175 relates to assessment of an unincorporated body in case of change in its constitution and provides that the assessing officer shall, in such a case, make a single assessment in respect of the entire financial year in which the change has occurred a change is said to have taken place if existing participants move out or new participants are admitted or all the participants continue with a change in their respective shares or in the shares of some of them  the said clause further provides that its provisions shall not apply if the change in constitution is on account of the death of a participant or the retirement of all the participants  clause 176 seeks to provide that the assessing officer shall make separate assessments on any two unincorporated bodies, if—  (a) one unincorporated body succeeds another unincorporated body; and  (b) the succession is by virtue of retirement of all participants in the unincorporated body or death of any of the participants  the said clause also provides that the separate assessments shall be made in accordance with the provisions of clause 168 as if the unincorporated body, succeeding the other unincorporated body, is the successor and the unincorporated body being succeeded is the predecessor  clause 177 provides that the assessing officer shall assess every return filed by a deductor or collector as if it were a return of tax bases further, where a person has failed to file such return, the assessing officer shall issue a notice to the person requiring him to furnish the return within the time specified therein all the other provisions of this code shall apply as if the return referred to herein were a return of tax bases clause 178 relates to appeals before the commissioner (appeals) and provides that an assessee may prefer an appeal to the commissioner (appeals) where he is aggrieved by an order passed by any income-tax authority below the rank of the commissioner as specified in the twenty-first schedule to the code or by an intimation issued under clause 149  the said clause further provides that the assessee may also prefer an appeal where an application filed by him under clause 161 has not been disposed of by the assessing officer within a period of six months from the date of filing of the application or where he is required to bear the liability in respect of the tax deductible on the income payable to a non-resident under any agreement or other arrangement and he claims that no tax was deductible by him on such income and he has deposited the tax to the credit of the central government  clause 179 provides the manner in which appeals are to be preferred before the commissioner (appeals) the appeal by an assessee shall be preferred within the specified time limit and should be in the prescribed form and accompanied by the prescribed fee  the clause further provides that the commissioner (appeals) may admit an appeal after the expiry of the specified time if he is satisfied that the appellant had sufficient cause for not preferring it within that time and the delay in preferring the appeal does not exceed a period of one year  clause 180 relates to the procedure to be followed in case of an appeal before the commissioner (appeals) it, inter alia, provides that the commissioner (appeals) may, before disposing of any appeal, make such inquiry as he thinks fit or direct the assessing officer to do so he may also allow the appellant to go into any new ground of appeal if he is satisfied that the omission was not wilful or unreasonable  clause 181 relates to the powers of the commissioner (appeals) and, inter alia, provides that, in case of an appeal before him, he shall have the power to confirm, reduce, enhance or annul an assessment or to confirm or cancel a penalty or enhance or reduce it  the said clause further provides that the commissioner (appeals) may consider and decide any matter which was not considered by the assessing officer  clause 182 relates to the constitution of the appellate tribunal and provides that the central government shall constitute an appellate tribunal consisting of a president and as many judicial and accountant members, as it thinks fit, to exercise the powers and discharge the functions conferred on the appellate tribunal by this code  the said clause also provides as to who shall be eligible to be the president, a vicepresident, a judicial member or an accountant member of the appellate tribunal  clause 183 seeks to provide that an assessee may prefer an appeal to the appellate tribunal if he is aggrieved by any of the orders specified therein similarly, the commissioner may, if he is not satisfied with the order passed by the commissioner (appeals), direct the assessing officer to prefer an appeal to the appellate tribunal against such order  the said clause further provides that no appeal shall lie to the appellate tribunal against the order of the commissioner (appeals) or commissioner in the case of a public sector company  the clause also provides that every appeal shall be preferred within the time period specified therein and allows the respondent to file a memorandum of cross-objection against any part of the order of the commissioner (appeals) the appellate tribunal may admit an appeal, or a memorandum of cross-objection, after the expiry of the period specified if it is satisfied that the appellant had sufficient cause for not preferring it within that time and the delay in filing the appeal does not exceed a period of one year clause 184 relates to an order of stay of demand by the appellate tribunal the said clause inter alia provides that the tribunal may grant a stay of demand to the assessee for a period of one hundred and eighty days in the first instance and extend up to a maximum period of three hundred and sixty-five days and endeavour to dispose of the appeal in such time  clause 185 deals with the orders of the appellate tribunal and, inter alia, provides that the tribunal may, after hearing both parties, pass such orders as it thinks fit it shall also have the power to rectify any mistake apparent on the face of the record within the period of four years from the date of such order and, accordingly, amend any order passed by it  clause 186 deals with constitution of benches and procedure of the appellate tribunal the said clause seeks to provide that the powers and functions of the tribunal may be exercised and discharged by its benches constituted by the president from among the members each bench shall consist of one judicial member and one accountant member the president may constitute a special bench consisting of three or more members, one of whom shall necessarily be a judicial member and one an accountant member if on any point the members of a bench differ in opinion, it shall be decided according to the opinion of the majority  the said clause further provides that any proceeding before the appellate tribunal shall be deemed to be a judicial proceeding within the meaning of section 192 and section 228 and for the purpose of section 196 of the indian penal code the appellate tribunal shall also have powers to regulate its own procedure and procedure of benches  clause 187 deals with appeals to the high court and seeks to provide that an appeal shall lie to the high court from every order passed in appeal by the appellate tribunal, if the high court is satisfied that the case involves a substantial question of law  the said clause further provides that the chief commissioner or the commissioner or an assessee may file an appeal to the high court within the specified period and in the specified form the high court may admit an appeal after the expiry of the specified period if it is satisfied that there was sufficient cause for not filing the appeal within that period  the said clause also provides that the high court may exercise its power to hear the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question of law, and shall decide the question of law so formulated and deliver such judgment as it deems fit effect to such order shall be given by the assessing officer on the basis of a certified copy of the judgment  the said clause also provides that the provisions of the code of civil procedure, 1908, relating to appeals to the high court shall apply in the case of appeals under this clause  clause 188 provides that an appeal filed before the high court to be heard by a bench of not less than two judges of the high court and shall be decided in accordance with the opinion of such judges or of the majority of such judges  clause 189 deals with appeals before the supreme court and provides that an appeal shall lie to the supreme court from any judgment of the high court delivered under clause 187 which the high court certifities to be a fit case for appeal to the supreme court  clause 190 relates to hearing before the supreme court and seeks to provide that the provisions of the code of civil procedure, 1908, relating to appeals to the supreme court shall apply in the case of appeals under section 189 as they apply in the case of appeals from decrees of a high court  the said clause also provides that where the judgment of the high court is varied or reversed in the appeal, effect shall be given to the order of the supreme court in the manner provided in section 187  clause 191 deals with revision of orders prejudicial to revenue and, inter alia, seeks to provide that the commissioner may revise any order passed by any income-tax authority subordinate to him after examining all available records, hearing the assessee and making such inquiries as he considers necessary if he is satisfied that the order sought to be revised is erroneous in so far as it is prejudicial to the interests of the revenue  the said clause also provides that the revision order may have the effect of enhancing or modifying the assessment but shall not be an order cancelling the assessment and directing a fresh assessment further, the power of the commissioner for revising an order shall not extend to certain orders specified therein besides, no order shall be made after the expiry of a period of two years from the end of the financial year in which the order sought to be revised was passed  the said clause also provides that an order passed by an income-tax authority shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if it falls in any of the specified categories of orders it also provides that an order shall not be considered to be erroneous in so far as it is prejudicial to the interests of the revenue if the order has been made by holding a view sustainable in law and the commissioner is not in agreement due to the existence of another view sustainable in law  the clause also defines the expression ''record''  clause 192 seeks to provide that the commissioner may revise any order passed by an income-tax authority subordinate to him, other than an order to which clause 191 applies, after examining all available records however, such revision order shall not be prejudicial to the assessee  the said clause further provides that the power of the commissioner for revising an order shall not extend to such orders as specified therein  this clause also provides that the assessee should make an application for revision of any order within the specified time, accompanied by the prescribed fee further, the revision order shall not be passed after the expiry of a period of one year from the end of the financial year in which such application is made or a period of one year from the date of the order sought to be revised if the commissioner revises the order suo motu  chapter xiii of the code deals with the provisions relating to collection and recovery part a of this chapter deals with deduction of tax at source  clause 193 relates to deduction or collection of tax at source or advance payment of tax the clause seeks to provide that the tax on any income shall be payable by deduction or collection at source or by advance payment, as the case may be, in accordance with the provisions of chapter xiii, notwithstanding that the regular assessment in respect of such income is to be made in a later financial year  sub-clause (2) of the said clause is an overriding provision stipulating that nothing in this clause shall prejudice the charge of tax on such income under the provisions of subclause (2) of clause 2  clause 194 relating to direct payment seeks to provide that the tax on income has to be paid directly by the person if there is no provision under chapter xiii for deduction or collection of income-tax at the time of payment or income-tax has not been deducted or collected in accordance with the provisions of chapter xiii  sub-clause (2) of the said clause provides that any person who is required to deduct or collect any sum in accordance with the provisions of the code does not deduct or collect, or after so deducting or collecting fails to pay the whole or any part of the tax required to be collected or deducted under the code, and where the assessee has also failed to pay such tax directly, then, such person shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of such tax  clause 195 relating to liability to deduct tax at source seeks to provide that any person responsible for making a specified payment shall, at the time of payment, deduct income-tax therefrom at the appropriate rate the clause further provides that the specified payment and the appropriate rate shall be such as are listed in the third schedule in the case of a resident deductee and in fourth schedule in the case of a non-resident deductee  the said clause further provides that in the case of a non-resident deductee, where a rate in respect of such specified payment has been provided in the relevant agreement entered into by the central government under clause 291, the appropriate rate shall be lower of the scheduled rate or the rate provided in such agreement  the said clause also provides that if the deductee is required to obtain permanent account number and does not furnish such number to the deductor, deduction of tax at source in such case shall be at the rate of twenty per cent or at the rate specified in the said clause, whichever is higher  clause 196 relating to payment of income and deduction of tax, inter alia, provides that deduction at source shall have to be made at the earliest point of the making of payment in cash, by issue of a cheque or draft, by credit to any account, whether called suspense account or by any other name, or by any other prescribed mode  the clause further provides that where the payment is wholly or partly in kind, the deductor should ensure the payment of tax deductible at source before making the payment it is further provided that where the payment is to be taxed under the head "income from employment" or is in nature of interest, the deductor can adjust the amount of deduction to offset any deficiency or excess of previous deduction or non-deduction during the financial year the said clause further enjoins the deductor to take into account any other income from employment and tax deducted thereon of the deductee from any other employer and also the tax relief for arrears or advance receipts  the said clause also provides that in a case where the tax payable on any payment is to be borne by the deductor in pursuance of an agreement or arrangement, the payment has to be grossed up to such amount as would, after deduction of tax thereon at the appropriate rate, be equal to the net amount payable under such agreement or arrangement  clause 197 seeks to empower the assessing officer to give a certificate for lower or no deduction of tax to the deductee where the deductee is a resident or to the deductor where the deductee is a non-resident, if the assessing officer is satisfied that the total income of the deductee justifies deduction of tax at a lower or nil rate accordingly, the clause provides that deduction shall be made in accordance with the certificate, until such certificate is cancelled by the assessing officer or the expiry of the validity of the certificate, whichever is earlier  clause 198 relating to obligations of deductor, seeks to provide that every deductor shall pay the sum deducted to the credit of the central government within the prescribed time and manner, furnish a certificate to the deductee and also deliver a return of tax deduction in the manner provided in clause 199  clause 199 relates to payments to resident without deduction of tax the said clause seeks to provide that every deductor, being a financial institution or cooperative society or any other notified deductor, shall deliver, or cause to be delivered, a return in respect of payment of interest to residents without deduction of tax the clause further empowers the board inter alia to provide for the period of such return, its form, manner of verification, time in which it is to be filed, medium of filing  clause 200 seeks to provide for the cases in which no deduction of tax shall be made it, inter alia, provides that in the case of resident deductee, no deduction of tax shall be made if - (a) any payment, other than salary, is made by an individual or a hindu undivided family who is not required to get its accounts audited for the financial year immediately preceding the financial year in which the payment is made; (b) any interest payable on any security,— (i) of the central government or a state government; or (ii) issued by a company, if such security is in dematerialized form and is listed on a recognised stock exchange in india; (c) any interest on certain debenture payable to an individual, if the aggregate amount payable during the financial year does not exceed five thousand rupees;  (d) any interest on certain time deposits with a bank or a housing-finance public company, if the aggregate amount payable by the branch of the bank or company during the financial year, does not exceed ten thousand rupees;  (e) any interest payable to any banking company, co-operative bank, financial corporation established by or under a central or state or provincial act, insurer, mutual fund or any notified institution, association or body;  (f) any interest payable by a firm to a partner of the firm;  (g) any amount payable on maturity, or redemption, of a zero coupon bond;  (h) any payment for carriage of goods by road transport if the payee furnishes his permanent account number to the payer;  (i) any payment to a contractor in respect of works contract, service contract, advertising, broadcasting and telecasting, supply of labour for carrying out any works, or service, contract or carriage of goods or passengers by any mode of transport, other than by railways, if -  (i) the amount of any payment during the financial year does not exceed thirty thousand rupees; and  (ii) the aggregate amount of the payments during the financial year does not exceed seventy-five thousand rupees;  (j) any payment of rent, if the aggregate amount of the payments during the financial year does not exceed one lakh eighty thousand rupees;  (k) any payment of compensation on compulsory acquisition of immovable property, if the aggregate amount of the payments during the financial year does not exceed two lakh rupees;  further, in the case of a non-resident deductee, being a foreign institutional investor, deduction shall not be made on any payment made to it as a consideration for sale of securities listed on a recognised stock exchange  clause 201 relating to credit for tax deducted, seeks to provide that for the purposes of computing total income of a deductee, the sum deducted on payments made to him shall be deemed to be his income received further the clause seeks to provide that the sums which have been deducted and paid to the credit of the central government, shall be treated as a payment of tax on behalf of the deductee the clause further seeks to empower the board to prescribe the procedure for giving credit to the deductee, the financial year for which such credit may be given and any other matter connected therewith  clause 202,  seeks to inter alia provide that any person, being a seller, lessor or licensor, who is responsible for collecting any amount on account of—  (a) sale of alcoholic liquor for human consumption, tendu leaves, timber obtained under a forest lease or otherwise, any other forest produce not being timber or tendu leaves, or scrap; or  (b) granting of lease or licence or contract or transfer of any right or interest, either in whole or in part, for a parking lot or toll plaza or for mining or quarrying,  shall collect three per cent of such sum as income-tax  the said clause further provides that the collection should be made at the earliest of the time when the the payment is received in cash, by way of a cheque or draft, by debit to any account, whether called "suspense account" or by any other name or by any other prescribed mode it is further provided that the sum so collected has to be paid to the credit of the central government within prescribed time and manner the person responsible for collecting any amount is also required to furnish to the buyer, lessee or licensee, a certificate of tax collection within prescribed time, and to file a return of tax collected at source in the form and manner as prescribed by the board  clause 203 relating to credit for tax collected seeks to provide that all sums collected from a collectee and paid to the credit of the central government shall be deemed to be a payment of tax on behalf of the person from whom such amount has been collected the clause further seeks to empower the board to prescribe the procedure for giving credit to the collectee, the financial year for which such credit may be given and any other matter connected therewith  clause 204 relates to interpretations under the sub-chapter a and b for this purpose the said clause, inter alia, defines the terms "broadcasting and telecasting", "professional or technical services", "service contract", "work", "buyer", "lessee", "licensee", "lessor", "licensor", "scrap" and "seller"  clause 205 relates to the liability to pay advance tax the said clause seeks to provide that every person shall be liable to pay advance-tax during any financial year if the amount of advance income-tax payable by him exceeds ten thousand rupees for ascertaining the liability to pay advance-tax, the tax on estimated total income is reduced by the tax deductible or collectible at source and the amount of any tax credit available under clause 207  the said clause further provides that persons other than companies are liable to pay advance income-tax, in three instalments ie on or before 15th september, 15th december and 15th march amount payable by these three dates should amount to 30 per cent, 60 per cent and 100 per cent of the advance-tax payable similarly for a company, there are four instalments, the dates being on or before 15th june, 15th september, 15th december and 15th march the corresponding percentages in the case of a company are 15 per cent, 45 per cent, 75 per cent and 100 per cent it is further provided that any amount of advance income-tax paid after 15th march but before the expiry of the financial year shall be treated as advance income-tax paid during the financial year  the said clause also empowers the assessing officer to issue an order to an assessee (not after last date of february of the financial year) to pay advance income-tax in such instalments as specified in the order, if in the opinion of the officer, the assessee is liable to pay such amounts as advance income-tax however, the assessee may still pay the advance tax in accordance with his estimation after filing such estimation to the assessing officer  clause 206 seeks to provide that the assessing officer shall grant relief in the prescribed manner to a person if he is in receipt in any financial year of any arrears, or advance, of salary or family pension relating to any other financial year an application is required to be made to avail of such relief such relief, however, would not be allowed in respect of any compensation received towards retrenchment, voluntary retirement or termination of service  clause 207 relates to foreign tax credit allowable to an assessee, being a resident in india in any financial year on income which is taxed in india as well as outside india  the said clause further provides that where the assessee is required to pay indian income-tax in respect of an income which has been taxed in any specified territory or other country with which india has an agreement under clause 291, the foreign tax credit shall be allowed in accordance with the agreement entered into with such specified territory or country where there is no such agreement, the tax credit shall be determined at the indian rate of tax or the rate of tax of the other country, whichever is lower the credit, in either case shall not exceed the indian income-tax payable in respect of income which is taxed outside india and the indian income-tax payable on total income of the assessee  clause 208 of the bill seeks to provide that wealth-tax referred to in clause 112 shall be payable by the due date of filing of the return of tax-bases  clause 209 relates to interest for default in furnishing return of tax-bases and it, inter alia, provides that for default in furnishing return of tax bases, the assessee shall be liable to pay simple interest at the rate of one per cent per month, in specified circumstances  this clause further provides the method of computation of the period for which the interest shall be payable, the amount on which the interest shall be chargeable etc the interest shall be increased or reduced, in accordance with the variation in the amount of tax on which interest was payable under this clause  clause 210 relates to interest for default in payment of advance income-tax the circumstances specified in which this interest is chargeable are where the assessee is liable to pay advance income-tax and has failed to pay such tax, or where the advance income-tax paid by such assessee is less than ninety per cent of the assessed tax  this clause further provides the method of computation of the period for, and the amount on, which the interest is chargeable the interest is payable at the rate of one per cent per month the interest shall be increased or reduced, in accordance with the variation in the amount of tax on which interest was payable under this clause  clause 211 relates to interest for deferment of advance income-tax the clause seeks to provide that where an assessee who is liable to pay advance income-tax has failed to pay such tax or has paid lesser advance tax before the due dates as specified, he shall be liable to pay simple interest at the rate of one per cent per month for a period of three months  the said clause also specifies the manner in which the interest has to be calculated the interest shall not be payable on any shortfall in the advance income-tax payable on account of under-estimation or failure to estimate the amount of capital gains and income of the nature listed at serial number 4 in the table in part iii of the first schedule  clause 212 relating to interest on excess refund, seeks to provide that an assessee shall be liable to pay simple interest at the rate of one-half per cent per month on the excess amount of refund granted to him in specified circumstances and for the period as mentioned in this clause  clause 213 relating to interest payable on demand raised seeks to provide that an assessee shall be liable to pay simple interest at the rate of one per cent per month for the delay in payment of any demand after the expiry of the notice period for such payment  clause 214 relates to interest for failure to deduct or pay tax the said clause seeks to provide that where any person who is required to deduct or collect any tax in accordance with the provisions of the code, does not deduct or collect the whole or any part of the tax, or after deduction or collection fails to pay the tax, he shall be liable to pay simple interest -  (a) at the rate of one per cent per month on the amount of such tax for the period from the date on which such tax was deductible or collectible to the date on which such tax is deducted or collected, as the case may be; and  (b) at the rate of one and one-half per cent per month on the amount of such tax for the period from the date on which such tax was deducted or collected, as the case may be, to the date on which such tax is paid  clause 215, inter alia, provides that an assessee shall be entitled to a refund of the excess of any amount paid by him for any financial year over the amount with which he is liable under the code however, where an assessment is set aside or cancelled or an order of fresh assessment is directed to be made in an appeal, etc, he shall be entitled to the refund only on the making of the fresh assessment  clause 216 relates to interest on refunds the said clause seeks to provide that assessee shall be entitled to receive simple interest at the rate of one-half per cent per month on any amount refundable to him under clause 215 in respect of any financial year for the period specified in the said clause  the said clause further provides that no interest shall be payable if the amount of refund is less than ten per cent of the tax determined under clause 149 or on regular assessment the specified period shall not include the period of delay attributable to the assessee  the said clause also provides that an assessee shall be entitled to receive simple interest at the rate of one-half per cent per month on the amount of interest receivable by him under this clause for the period from the date of grant of refund to the date of actual payment of such interest, if such interest is not paid to him along with the refund  clause 217 seeks to provide for persons who shall be entitled to claim refund in certain special cases like on account of death, incapacity, insolvency, liquidation, etc, of the person entitled to claim the refund in first place  clause 218 relating to recovery by assessing officer seeks to provide that any amount specified as payable in a notice of demand, otherwise than by way of advance tax, shall be paid within thirty days of the service of the notice, to the credit of the central government this period, however, can be reduced with the previous approval of the joint commissioner if the assessing officer has reason to believe that full period shall be detrimental to the interest of revenue  the said clause further provides that the assessing officer can extend the time for payment, or allow payment by instalments during the pendency of appeal with the commissioner (appeals) on such conditions as he thinks fit on default in payment of instalments, the assessee shall be deemed to be an assessee in default in respect of the whole of the amount outstanding the recovery in such cases may be made by any of the modes provided in clause 220  the said clause also provides that the assessing officer shall cease to exercise power for recovery of any amount after the tax recovery officer is vested with the powers to recover the tax arrear  clause 219 relating to recovery by tax recovery officer seeks to provide that such officer may draw up under his signature a statement of tax arrears (certificate) and shall proceed to recover from the assessee the amount specified in the certificate by one, or more, of the modes referred to in clause 220 or in the fifth schedule  clause 220 seeks inter alia to provide for the modes of recovery for the assessing officer or the tax recovery officer the recovery of tax arrears can be made through employer, debtor or by applying to the court which has custody over the money belonging to the assessee  clause 221, inter alia, seeks to provide as to who shall be the tax recovery officer competent to take action under clause 219 such tax recovery officer shall be the one within whose jurisdiction the assessee carries on his business or the principal place of the business of the assessee is situate or the assessee resides or any movable or immovable property of the assessee is situate or who has been assigned jurisdiction under clause 130  the said clause also provides that if the tax recovery officer competent to take action under clause 219 is not able to recover the tax arrears, he may send a certificate to the other tax recovery officer in whose jurisdiction the assessee resides or has property and then such tax recovery officer shall assume jurisdiction for recovery of tax arrears clause 222 seeks to provide that the amount of tax arrears due from a non-resident may be recovered from any asset of the non-resident, wherever located or from any amount payable by any person to the non-resident  clause 223 relates to recovery in the case of a company in liquidation the said clause, inter alia, provides that the liquidator shall inform the concerned assessing officer of his appointment within a period of thirty days and thereafter, the assessing officer shall intimate to the liquidator, within a period of three months the amount sufficient to provide for any tax arrears or any amount which is likely to become payable thereafter by the company the liquidator shall not part with any of the assets of the company, or the properties, in his custody until he has been intimated by the assessing officer the amount so intimated shall be the first charge on the assets of the company remaining after payment of the workmen's dues and debts due to secured creditors to the extent specified  clause 224 relating to liability of manager of a company, seeks to provide that every person being a manager at any time during the financial year shall be jointly and severally liable for the payment of any amount due under the code in respect of the company for the financial year, if the amount cannot be recovered from the company these provisions shall not apply, if the manager proves that non-recovery cannot be attributed to any neglect, misfeasance or breach of duty on his part in relation to the affairs of the company the provisions of this section shall prevail over anything to the contrary contained in the companies act, 1956  clause 225 relates to joint and several liability of participants it seeks to hold every person, being a participant in an unincorporated body at any time during the financial year, or the representative assessee of the deceased participant, jointly and severally liable, along with the unincorporated body, for payment of any amount payable by the unincorporated body under the code  the said clause further provides that in case of a limited liability partnership, these provisions shall not apply, if the partner proves that non-recovery cannot be attributed to any neglect, misfeasance or breach of duty on his part in relation to the affairs of the partnership  clause 226 seeks to provide that if the recovery of tax in any area has been entrusted to a state government under clause (1) of article 258 of the constitution, the state government may direct that the recovery shall be made in the same manner and by the same person as the recovery of municipal tax or local rate  clause 227 relates to recovery of tax in pursuance of agreements with foreign countries or specified territory and inter alia provides for procedure to be followed by the board and the tax recovery officer for recovery of tax in this regard  clause 228 relating to tax clearance certificate in certain cases, seeks to provide that no person shall leave the territory of india unless he furnishes to the notified authority an undertaking to the effect that he has made satisfactory arrangement for discharging his tax liability, if any, in respect of any income or wealth liable to tax in india such person shall be one who is not domiciled in india, who has come to india in connection with a business or employment, and who has income derived from any source in india  the said clause further provides that every person, who is domiciled in india at the time of his departure from india, shall furnish to the notified authority prescribed particulars and obtain a certificate that he has no liability, if in the opinion of the assessing officer it is necessary to do so the central government may notify the classes of persons to whom the above provisions shall not apply  the said clause also provides that the owner or charterer of any ship, or aircraft, shall be personally liable (and also deemed to be an assessee in default in respect of the liability) to pay the whole, or any part, of the amount payable under the code by any person required to obtain a no objection certificate if the person leaves india without obtaining the certificate clause 229 relates to recovery by suit not with any other law the said clause seeks to provide that the several modes of recovery specified in this chapter shall not affect in any way any other law for the time being in force relating to the recovery of debts due to government, or the right of the government to institute a suit for the recovery of the tax arrears from the assessee  clause 230 deals with penalty for under-reporting of tax bases it provides that a person shall be liable to a penalty, if he has under reported the tax bases for any financial year, of a sum which shall not be less than, but which shall not exceed two times, the amount of tax payable in respect of the amount of tax bases under reported for the financial year  the said clause provides that the amount of tax bases under reported shall be the aggregate amount of the addition or disallowance made by the assessing officer, the commissioner or the commissioner (appeals), as the case may be it lists the circumstances under which a person shall be considered to have under reported the tax bases as well as the circumstances under which he shall not be so considered the said clause, inter alia, provides that no addition or disallowance shall form the basis for imposition of penalty, if it has been the basis of imposition of penalty in the case of the person for the same or any other financial year  the said clause also provides that the penalty shall be imposed by the assessing officer, commissioner or commissioner (appeals), as the case may be  clause 231 relates to penalty where search has been initiated   it provides that a person shall be liable to a penalty in respect of the undisclosed tax bases for the specified financial year, if a search and seizure has been conducted under clause 135 in his case such penalty shall be imposed  by the assessing officer it also provides the quantum of penalty imposable in such case  the said clause defines the terms "undisclosed tax bases" and "specified financial year"   clause 232 relates to penalty for other defaults it provides that a person shall be liable to a penalty if he has, without reasonable cause, committed the defaults that have been listed therein the said clause also provides the quantum of penalty imposable for different defaults  clause 233 deals with the procedure for imposition of penalties it provides that the specified income-tax authority shall issue a notice within the stipulated time period to any assessee requiring him to show cause why the penalty should not be imposed on him it further provides that no order imposing a penalty under this chapter shall be made unless the assessee has been given an opportunity of being heard the said clause also lays down the procedure for approval of an order imposing penalty by the joint commissioner  clause 234 provides the time limits for passing the penalty orders it also provides that in computing such period of limitation, certain specified time periods shall be excluded  clause 235 provides that the provisions of chapter xv shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force relating to prosecution for offences  clause 236 deals with contravention of any restraint order it provides that whoever contravenes any restraint order referred to in sub-clause (7) of clause 135 shall be punishable with rigorous imprisonment and with fine the said clause also provides the term and quantum of such punishment  clause 237 provides that if a person who is required to afford the authorised officer the necessary facility to inspect the books of account or other documents under item (d) of sub- clause (2) of clause 135, fails to afford such facility, he shall be punishable with rigorous imprisonment and with fine the said clause also provides the term and quantum of such punishment clause 238 deals with removal, concealment, transfer or delivery of property to thwart tax recovery it provides that whoever fraudulently removes, conceals, transfers or delivers to any person, any property or any interest therein, with the intention of preventing such property or interest therein from being taken in execution of a certificate under the provisions of the fifth schedule shall be punishable with rigorous imprisonment and with fine the said clause also provides the term and quantum of such punishment clause 239 provides that if a person fails to give information as required by subclause (1) of clause 223 or fails to set aside the amount as required by sub-clause (3) of that clause or parts with any of the assets of the company or the properties in his custody in contravention of the provisions of the said sub-clause (3), he shall be punishable with rigorous imprisonment and with fine the said clause provides the term and quantum of such punishment it also provides that no person shall be punishable for any such failure to pay tax deducted or collected, if he proves that there was reasonable cause for the same clause 240 deals with failure to pay the tax deducted or collected at source or to pay the dividend or income distribution tax under the provisions of this code it provides that if a person fails to pay such tax to the credit of the central government, he shall be punishable with rigorous imprisonment and with fine the said clause provides the term and quantum of such punishment it also provides that no person shall be punishable for any such failure, if he proves that there was reasonable cause for the same clause 241 provides that if a person wilfully attempts in any manner to evade any tax, penalty or interest chargeable or imposable under this code, he shall be punishable with rigorous imprisonment and with fine it provides that such punishment shall be without prejudice to any penalty that may be imposable on him under any other provision of this code the said clause also provides for separate term and quantum of such punishment in respect of a case where the amount sought to be evaded exceeds one lakh rupees and other cases where it does not the said clause also provides that if a person wilfully attempts in any manner to evade the payment of any tax, penalty or interest under this code, he shall be punishable with rigorous imprisonment and shall in the discretion of the court also be liable to fine it provides that such punishment shall be without prejudice to any penalty that may be imposable on him under any other provision of this code the said clause provides the term of such punishment the said clause defines the phrase "wilful attempt to evade" clause 242 deals with failure to furnish return of tax bases it provides that if a person wilfully fails to furnish in due time the return of tax bases under sub-clause (1) of clause 144 or in response to a notice under clause 146 or clause 159, he shall be punishable with rigorous imprisonment and with fine the said clause also provides for separate term and quantum of such punishment in respect of a case where the amount sought to be evaded exceeds one lakh rupees and other cases where it does not the said clause also provides that a person shall not be so proceeded against for failure to furnish in due time the return of tax bases under certain specified circumstances clause 243 provides that if a person wilfully fails to produce, or cause to be produced, the accounts and documents on or before the specified date as required by any notice served on him under sub-clause (2) of clause 150, he shall be punishable with rigorous imprisonment or with fine or with both the said clause provides the term and quantum of such punishment clause 244 provides that if a person wilfully fails to comply with a direction issued to him under sub-clause (1) of clause 151, he shall be punishable with rigorous imprisonment or with fine or with both the said clause provides the term and quantum of such punishment clause 245 provides that if a person makes a statement in any verification under this code or under any rule made thereunder or delivers an account or statement which is false and which he either knows or believes to be false, or does not believe to be true, he shall be punishable with rigorous imprisonment and with fine the said clause also provides for separate term and quantum of such punishment in respect of a case where the amount sought to be evaded exceeds one lakh rupees and other cases where it does not  clause 246 deals with wilful falsification of books of account or documents by any person in order to enable any other person to evade any tax or interest or penalty chargeable and imposable under this code it provides that such person shall be punishable with rigorous imprisonment and with fine the said clause also provides that for establishing the charge under this clause, it shall not be necessary to prove that the other person has actually evaded such tax, penalty or interest  clause 247 provides that if a person abets or induces in any manner another person to make and deliver an account, statement or declaration relating to any tax bases chargeable to tax which is false and which he either knows to be false or does not believe to be true or to commit an offence under sub-clause (1) of clause 241, he shall be punishable with rigorous imprisonment and with fine the said clause also provides for separate term and quantum of such punishment in respect of a case where the amount sought to be evaded exceeds one lakh rupees and other cases where it does not  clause 248 deals with offences by companies in respect of any such offence, it provides that the company as well as every person who, at the time the offence was committed, was in charge of and was responsible for the conduct of the business of the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly however, the said clause also provides that any such person shall not be so liable if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of the offence  the said clause provides that where an offence under this code has been committed by a company and it is proved that the offence has been committed with the consent or connivance of or is attributable to any neglect on the part of any director, manager, secretary or other officer of the company, such person shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly  the said clause also provides that where an offence under this code has been committed by a company and the punishment for such offence is imprisonment and fine, then the company shall be punished with fine and every person referred to in the preceding paragraphs shall be liable to be proceeded against and punished in accordance with the provisions of this code  the said clause defines the terms "company" and "director"  clause 249 deals with proof of entries in records or documents  it provides that entries in the records or other documents which are in the custody of an income-tax authority shall be admitted in evidence in any proceeding for the prosecution of any person for an offence under this chapter the said clause further provides that the entries may be proved by the production of the records or other documents (containing such entries) which are in the custody of the income-tax authority or by the production of a copy of the entries certified by that authority under its signature as true copy of the original entries  clause 250 deals with presumption as to assets, books of account, etc, in certain cases it provides that where during the course of any search made under clause 135, any material has  been found in the possession or control of any person and such material  is tendered by the prosecution in evidence against such person, or against such person and the person referred to in clause 247 for an offence under this code, the provisions of clause 311 shall accordingly apply in relation to such material the said clause also provides that where any  material taken into custody from the possession or control of any person,  is delivered to the requisitioning officer under clause 136 and such  material  is tendered by the prosecution in evidence against such person, or against such person and the person referred to in clause 247 for an offence under this code, the provisions of clause 311 shall accordingly apply in relation to such material  clause 251 relates to presumption as to culpable mental state it provides that in any prosecution for any offence under this code which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state however, the said clause also provides that it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution  the said clause provides that a fact is said to be proved only when the court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability  the said clause defines the term "culpable mental state"  clause 252, inter alia, provides that no person shall be proceeded against for an offence under clauses 236 to 247, except with the previous sanction of the commissioner or commissioner (appeals), as the case may be  the said clause further provides that the chief commissioner may issue such instructions or directions to such commissioner or commissioner (appeals) as he may think fit for institution of proceedings under this clause it also provides that the chief commissioner may compound any offence under this chapter under the prescribed circumstances and for the prescribed amount, either before or after the institution of proceedings however, an offence in relation to which a punishment has been awarded by a court shall not be compounded  clause 253 deals with punishment for second and subsequent offences it provides that if any person convicted of an offence under clauses 240, 241, 242, 243, 245, 246 and 247 is again convicted of an offence under any of the said provisions, he shall be punishable for the second and every subsequent offence with rigorous imprisonment and with fine the said clause provides the term of such punishment  clause 254 provides that any offence punishable under this chapter shall be deemed to be non-cognizable within the meaning of the code of criminal procedure, 1973, notwithstanding anything contained in that code  clause 255 deals with disclosure of information by public servants it provides that if a public servant furnishes any information or produces any document in contravention of the provisions of clause 142, he shall be punishable with imprisonment and with fine it also provides the term of such punishment  the said clause provides that no prosecution shall be instituted under this clause except with the previous sanction of the central government it also provides that such sanction may be accorded only after giving the public servant an opportunity of being heard  chapter xvi of the code deals with advanced rulings and disputes resolutions  clause 256 relates to the scope of ruling and dispute resolution available with the authority for advance rulings and dispute resolution the said clause provides that an applicant or an appellant may seek a ruling or, as the case may be, a resolution of dispute on matters specified therein the applicant or appellant, as the case may be, who may seek an advance ruling could be a non-resident, a resident any class of residents as notified by the central government a public sector company or a commissioner  clause 257 relates to the constitution of the authority for advance rulings and dispute resolution the said clause, inter alia, provides that the central government shall constitute an authority for advance rulings and dispute resolution for the purposes of pronouncing an advance ruling and resolution of dispute and such authority shall consist of a chairperson and such number of vice-chairpersons and legal and revenue members as the central government may deem fit  the said clause further provides that a bench shall consist of the chairperson or the vice-chairperson and one legal member and one revenue member the principal bench of the authority shall be located at delhi and other benches of the authority shall be located at such places as deemed fit by the central government  clause 258 relates to the procedure of the authority in dealing with advance ruling and, inter alia, provides that an applicant may make an application for seeking an advance ruling in the prescribed form and accompanied by the prescribed fees  the said clause further provides that the authority may, after examining the application and the records called for, either allow or reject the application by an order in writing the authority shall not allow the application in the circumstances as specified therein  the said clause also provides that where an application is allowed, the authority shall pronounce its advance ruling on the question specified in the application after examining all relevant material and after hearing the applicant and the commissioner  clause 259 seeks to provide that no income-tax authority, or the appellate tribunal, shall proceed to decide any issue in respect of which an application has been made by a person falling within the class of persons notified under clause 256  clause 260 provides that the advance ruling pronounced by the authority shall be binding only on the applicant in whose case, and in respect of the transaction in relation to which, the ruling has been pronounced it shall also be binding on the commissioner, and the income-tax authorities subordinate to him, in respect of the applicant and the said transaction  the said clause further provides that the advance ruling shall not be binding if there is a change in law, or fact, on the basis of which the advance ruling has been pronounced  clause 261 seeks to provide that the authority may declare an advance ruling to be void ab initio if it finds that the ruling has been obtained by the applicant by fraud or misrepresentation of facts and in such case, all the provisions of the code shall apply to the applicant as if such advance ruling had never been made  clause 262 relates to the procedure for dispute resolution the said clause, inter alia, provides that a public sector company or commissioner may file an appeal against the orders referred to in clause 256 for seeking resolution of a dispute and such appeal shall be preferred within the specified period further, it allows the respondent to file a memorandum of crossobjection against any part of the order of the commissioner (appeals)  the said clause also provides that the authority may admit an appeal, or a memorandum of cross-objection, after the expiry of the period specified in specified circumstances the clause further provides that the orders passed by the authority shall be final and binding on both the parties  clause 263 relates to an order of stay of demand by the authority the said clause provides that the authority may grant a stay of demand to the public sector company for a period of one hundred and eighty days in the first instance and may extend such stay, on an application being made by the public sector company, to a maximum of three hundred and sixty-five days, if it is satisfied that the delay in disposing of the appeal is not attributable to the company  clause 264 seeks to provide that the authority shall have the power to rectify any mistake apparent from the record and may, accordingly, amend any order passed by it under clause 262 however, no such order shall be passed after a period of four years from the date on which the order sought to be amended was made clause 265 provides that the authority shall have all the powers of a civil court under the code of civil procedure, 1908 as are referred to in clause 134 of this code and shall be deemed to be a civil court for the purposes of section 195 of the code of criminal procedure, 1973  the said clause further provides that every proceeding before the authority shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the indian penal code, and for the purposes of section 196 of the said code  clause 266 provides that the authority shall have the powers to regulate its own procedure in all matters pertaining to it  clause 267 defines certain terms that have been used in the chapter, such as "advance ruling", "appellant", "application", "authority", "chairperson", etc  clause 268 seeks to provide that the central government will constitute an incometax settlement commission for the settlement of cases, consisting of a chairperson and as many vice-chairpersons and other members as the government deems fit who shall function within the department of the central government dealing with direct taxes these persons would be appointed from amongst the officers of the indian revenue service who have served for at least 28 years in the service, including at least 5 years in the rank of commissioner or above  clause 269 relates to jurisdiction and powers of the settlement commission the said clause seeks to provide that a bench of the commission would be presided over by the chairperson or a vice-chairperson, and would consist of two other members however, if third member is unable to discharge his functions or in case of vacancy, the bench may function with only two members the bench headed by the chairperson will be the principal bench and other benches will be called additional benches the chairperson may, for the disposal of any particular case, constitute a special bench consisting of more than three members these benches would sit at the notified places except a special bench which will sit at a place to be fixed by the chairperson  clause 270 seeks to provide that if there is vacancy in the office of chairperson or if he is not in a position to discharge his duties, the notified vice-chairperson shall act as the chairperson  clause 271 seeks to provides for  power of chairperson to transfer cases from one bench to another which can be done on the application of the assessee or the chief commissioner or commissioner or on his own motion, after recording the reasons  clause 272 seeks to provide that the benches shall take decision by majority and on equal division, will make a reference to the chairperson the clause further seeks to provide the procedure to be adopted subsequently  clause 273  relates to application for settlement of cases the said clause, inter-alia, provides that the application should contain full and true disclosure of income or wealth, its manner of deriving and the additional amount of tax payable, etc the application can be made only after furnishing return of tax bases and payment of income-tax or wealth-tax on income or wealth disclosed in the application the clause further seeks to provide that the additional tax should be a minimum of fifty lakh rupees in a case of search or requisitioning of material and ten lakh rupees in any other case, for making the application an application once made cannot be withdrawn  clause 274 seeks to provide working for calculating the additional amount of income-tax  clause 275 relates to admission of application the said clause seeks to provide that the settlement commission would issue notice of hearing to applicant within ten days and after hearing him, within a period of twenty days will reject or allow his application however, if no such order is passed, the application shall be deemed to be allowed the said clause further provides that the commission shall call for the report of the commissioner within forty-five days of the making of application and within a period of fifteen days of the said report may declare an application as invalid on the basis of such report  clause 276  relates to further inquiry into the case for this purpose the commission is empowered to call for records from the commissioner, direct him to make further enquiries, submit reports, etc  clause 277 relates to order of settlement such order shall provide for the terms of settlement including any demand by way of tax, penalty, etc the settlement will be avoid if later it is found that it was obtained by fraud or misrepresentation the order is to be passed within a period of eighteen months from the end of the month in which the application was made the order may also cover any other matter relating to the case not covered by the application  clause 278  relates to payment of tax on settlement and specifies the time limit for payment of tax in pursuance of the order of the settlement commission under section 277, circumstances of its extension, etc it also provides that simple interest at the rate of fifteen per cent per annum shall be payable on any default from the date of the expiry of period of thirty days of the receipt of the order of settlement commission under clause 277  clause 279 relates to power of settlement commission to order provisional attachment to protect revenue and, inter alia, provides for time limits for which such attachments shall be effective  clause 280 relates to revival of proceedings before assessing officer the said clause provides that if the order passed by the settlement commission becomes void in the circumstances where it was obtained by fraud or misrepresentation, the proceedings before the assessing officer with respect to the matters covered by the settlement shall be deemed to have been revived from the stage at which the application was admitted by the settlement commission and the assessing officer will get twenty-one months from the end of the financial year in which the order becomes void, to frame the assessment  clause 281 relates to powers of settlement commission after admission the said clause seeks to provide that the commission would have powers as are vested in an incometax authority it also provides the time period up to which the settlement commission will have concurrent jurisdiction with the assessing officer and thereafter exclusive jurisdiction  clause 282 relates to inspection and furnishing of reports the said clause empowers the commission to provide copies of reports submitted before it, on payment of prescribed fee  clause 283 relates to power of settlement commission to grant immunity the said clause seeks to provide that the commission may, subject to certain conditions, grant immunity from penalty and prosecution with respect to the case covered by the settlement the immunity can be withdrawn in the circumstances specified  clause 284 relates to abatement of proceeding before settlement commission the said clause seeks to provide that the proceedings before the settlement commission shall abate if the application has not been allowed or declared as invalid or the order has not been passed within the time specified in such circumstances, the assessing officer will pass order as if no application has been made the time taken in proceedings before the commission would be excluded for assessment purposes and the material available before the commission can be used by the assessing officer in proceedings before him  clause 285 relates to credit for tax paid in case of abatement of proceedings the said clause seeks to provide that in a case of abatement, the assessing officer shall allow the credit for the tax and interest paid on or before the date of making the application before the settlement commission or during the pendency of the case before the commission clause 286 relates to   recovery of sums due under order of settlement the said clause seeks to provide that the jurisdictional assessing officer may recover any sum specified in an order of settlement and any penalty for default in making payment of such sum may be imposed and recovered in accordance with the provisions of chapter xiii clause 287 relates to  order of settlement to be conclusive the said clause seeks to provide that every order of settlement will be conclusive on the matters stated therein clause 288 relates to bar on subsequent application the said clause seeks to provide the circumstances when a person shall not be entitled to file subsequent application before the settlement commission and the exceptions in this regard clause 289 seeks to provide that any proceeding before the settlement commission shall be a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196 of the indian penal code clause 290 seeks to provide certain interpretations relevant for chapter xvii part—h and chapter xviii of the code deal with general provisions clause 291 relates to agreement with specified territory or foreign countries the said clause seeks to provide that the central government may enter into an agreement with the government of any country or specified territory for the granting of relief or avoidance of double taxation, for exchange of information for the prevention of evasion or avoidance of income-tax or wealth-tax, for tax recovery, etc where for such agreements, the other country has designated certain associations, the clause provides that any specified association in india may enter into such agreement with the specified association of the specified territory outside india and the central government will notify the agreement for adopting it the said clause further provides that where such an agreement has been entered into, then the provisions of this code will apply to the assessee to whom the agreement is applicable, if such provisions are more beneficial to him except for provisions regarding general anti avoidance rule, levy of branch profit tax and control foreign company rules which will apply, whether or not such provisions are beneficial to him clause 292 relates to permanent account number the said clause, inter alia, provides that every person fulfilling prescribed requirements has to apply for the allotment of a permanent account number which shall be allotted to him any other person may also apply for such allotment the number is required to be quoted in prescribed transactions the board has been empowered to prescribe rules with regard to form of application, the categories of transactions, and the income-tax authority authorized to receive such application etc clause 293 relates to tax account number the number is required to be obtained by a deductor or collector of tax at source and has to be quoted in prescribed transactions or documents clause 294 relates to  mode of acceptance or repayment of certain loans or deposits the said clause provides that loans or deposits with aggregate amount in a financial year exceeding  fifty thousand rupees, shall not be accepted or repaid otherwise than by an account payee cheque or bank draft the clause will not apply to any loan or deposit taken or accepted from, the government, any banking company, post office savings bank or cooperative bank and other listed entities clause 295 relates to obligation to furnish annual information return the said clause seeks to provide that every person  responsible for registering or maintaining books of account or other documents containing a record of any specified financial transaction shall furnish an annual information return in respect of such specified financial transaction such persons, inter alia, are registrar or sub-registrar appointed under registration act, 1908, the registering authority empowered to register motor vehicles, the post master general, the collector, the recognised stock exchange, a depository, etc the said clause further provides that "specified financial transaction" will mean a transaction of purchase, sale of property, a transaction by way of an investment made or an expenditure incurred, etc the return is required to be furnished for transactions above a specified limit  the said clause also provides the time and manner of filing of such return, the circumstances in which it would be treated as defective, etc  clause 296 relates to  certain transfers to be void the said clause seeks to provide that a transfer of asset or creation of charge on it during the pendency of any proceeding under the code or after completion shall be void as against any claim in respect of any sum payable unless made for adequate consideration and without knowledge of the pendency of such proceeding or of any such sum payable by the person or with the previous permission of the assessing officer however, the provisions of this clause shall not apply to transfer of any business trading asset  clause 297 relates to  provisional attachment to protect revenue in certain cases the said clause seeks to provide that the assessing officer can provisionally attach any property belonging to the assessee to protect interest of revenue, with prior  approval of the chief commissioner or commissioner the said clause further provides for time limits for which such attachments would be effective  clause 298 relates to service of notice generally the said clause seeks to provide for the manner of service of any notice, summons, requisition, order, etc, made under the code  clause 299 relates to  authentication of notices and other documents the said clause seeks to provide the manner of authentication of a notice or any other document issued or served for the purposes of the code clause 300 relates to notice deemed to be valid in certain circumstances the said clause seeks to provide that a notice would be deemed to be duly served if the person has appeared in any proceeding or co-operated in any inquiry relating to an assessment the provision will not apply if the person has raised the objection before the completion of the assessment  clause 301 relates to service of notice when family is disrupted or unincorporated body is dissolved the said clause seeks to provide that in such cases, the notice can be served on the last manager of the hindu undivided family or its adult member in specified circumstances and on a participant of an unincorporated body before its dissolution  clause 302 relates to publication of information respecting assessees in certain cases the said clause seeks to empower the central government to publish in public interest particulars like name, etc, relating to any proceeding or prosecution certain exceptions have been provided in case of penalty  clause 303 relates to appearance by registered valuer in certain matters the said clause seeks to provide that an assessee entitled or required to attend before any income-tax authority or the appellate tribunal, in connection with valuation of any asset, may attend through a registered valuer except where he is required to attend personally  clause 304 relates to appearance by authorised representative   the said clause, inter alia, seeks to provide that an assessee entitled or required to attend before any incometax authority or the appellate tribunal, in connection with any proceeding under the code, may attend through an authorised representative except where he is required to attend personally the said clause further seeks to provide meaning of "authorised representative" and person not qualified to represent an assessee  clause 305 relates to rounding off of tax bases, tax, etc it provides for rounding off of tax-bases to the nearest multiple of hundred rupees and amount payable or receivable by an assessee to the nearest multiple of ten rupees  clause 306 relates to indemnity the said clause seeks to provide that every person deducting, retaining, or paying any tax in pursuance of the code in respect of income belonging to another person is indemnified for the deduction, retention, or payment thereof clause 307 relates to power to tender immunity from prosecution  the said clause seeks to empower the central government to tender immunity to any person from prosecution and the imposition of penalty on fulfilment of certain conditions the immunity can also be withdrawn also in specified circumstances like concealment of particulars for obtaining immunity, giving of false evidence, etc  clause 308 relates to cognizance of offences  the said clause seeks to provide that no court inferior to that of a metropolitan magistrate or a magistrate of the first class will try any offence under the code  clause 309 seeks to provide that the provisions of section 360 of the code of criminal procedure, 1973, or the probation of offenders act, 1958, shall apply to a person convicted of an offence under this code, unless the person is of eighteen years of age or more  clause 310 relates to return of tax bases, etc, not to be invalid on certain grounds the said clause seeks to provide that no return of tax-bases, assessment, notice, summons, etc, shall be invalid merely by reason of any mistake, defect or omission if in substance and effect it is in conformity with the intent and purpose of the code  clause 311 relates to presumption as to material found the said clause seeks to provide that where any material is found in the possession or control of any person during search or survey, it shall be presumed that the material belongs to such person, the contents of the material, being books of account and other documents, are true, etc presumption as regards search will also apply to a case of requisition under provisions of clause 136  clause 312 relates to bar of suits in civil courts the said clause seeks to provide that no suit shall be brought in any civil court to set aside, or modify, any proceeding taken or order made under the code and that no prosecution, suit or other proceeding shall lie against the government, or any officer of the government, for anything in good faith done, or intended to be done, under the code  clause 313 seeks to provide power to rescind to the central government or the board or an income-tax authority regarding any notification or order, or approval or registration in respect of an assessee the power shall be exercised after recording reasons in writing and giving the   assessee a reasonable opportunity of showing cause against the proposed rescindment  clause 314 deals with interpretations the said clause provides definitions of terms used in this code and which have not been separately provided in the respective chapters certain definitions correspond to the definitions provided in the income-tax act, 1961 as it stood before the commencement of this code other definitions are new and have been provided for the first time in this code  clause 315 provides the rule of construction for interpreting the provisions of this code it provides that a reference to any income or to the result of any computation shall be construed as a reference to both the negative and positive variation of the income or the result the said clause further provides that any direction for aggregation of two or more items expressed as amounts shall be construed also to include a direction for aggregation of negative and positive amounts in all their combinations the said clause also provides that the value of any variable in a formula shall be deemed to be nil, if the value of such variable is indeterminable or unascertainable  clause 316 relates to power to make rules and seeks to empower the board to notify rules for the purposes of the code subject to the control of the central government  the said clause seeks to provide power in general terms as well as in specific matters mentioned therein like the ascertainment and determination of any class of income, the manner of arriving at the income in case of agriculture, a person residing outside india, the form and manner in which any document, application, claim, return or information may be made or furnished, the fee that may be payable, the authority to be prescribed for any of the purposes of the code, the procedure of giving effect to the terms of any agreement for avoidance of double taxation etc the clause further seeks to provide that the power to make rules will include the power to give retrospective effect, from a date not earlier than the date of commencement of the code however, no retrospective effect will be given to any rule so as to prejudicially affect the interests of the assessees clause 317 relates to rules, scheme and certain notifications to be placed before parliament the said clause seeks to provide that every rule and scheme made and notification issued under this code shall be laid before each house of parliament within time as specified and that if both houses agree in making any modification or annulment, the rule, scheme or notification will be modified to that extent so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule, scheme or notification clause 318 relates to repeal and savings the said clause seeks to repeal the incometax act, 1961 and the wealth-tax act, 1957 the said clause further provides for savings of certain specified proceedings, agreements, appointments, orders, declaration, etc, under the acts sought to be repealed the said clause, inter alia, provides for saving of certain deductions like the deduction under section 80-ia, section 80-iab, section 80-ib, section 80-ic, section 80-id, section 80-ie or section 80jja or section 80jjaa of the income-tax act, 1961 if the assessee is eligible for such deduction for the assessment year beginning on the 1st day of april, 2012 and subject to certain conditions clause 319 relates to power to remove difficulties the said clause seeks to empower the central government for the purpose of removing any difficulty which arises in giving effect to the provisions of the code   schedulesthe first schedule of the code seeks to provide various rates for calculating incometax payable on total income the schedule is divided into three parts part i provides rates of income-tax on total income from sources other than a special source the income of a society, other than a co-operative society, unincorporated body, local authority, and a company is proposed to be taxed at a flat rate whereas, tax slabs have been provided for individual, cooperative society, hindu undivided family and artificial juridical person further, for resident individuals, different slabs have been provided for women tax-payers and senior citizens as relief is proposed to be provided to them vis-à-vis other resident tax-payers the schedule also provides for a flat rate of tax for a non-profit organisation after a threshold limit  part ii of the schedule seeks to provide the method of aggregation of agricultural income for rate purposes in a case where the person to whom part i is applicable, has net agricultural income during a year exceeding 5000 rupees, and total income exceeds the threshold limit  part iii seeks to provide rates of taxation if the person has income from any special source the rates listed pertain to a non-resident or where the person, whether resident or non-resident, has income by way of lottery, crossword puzzle, race, including horse race or card game or any other game or gambling or betting  the second schedule seeks to provide rates of other taxes, namely, tax on book profit, tax on distributed profits (dividend) of a domestic company tax on distributed income-tax on branch profits and tax on net wealth  the third schedule seeks to provide a list of specified payments and the appropriate rates on which deduction of tax at source is required to be made in the case of a resident deductee the fourth schedule seeks to provide a list of specified payments and the appropriate rates on which deduction of tax at source is required to be made in the case of a nonresident deductee clause 219, inter alia, provides that the tax recovery officer shall proceed to recover from the defaulter, the amount specified in the certificate of tax arrears by the modes referred to in the fifth schedule accordingly, the fifth schedule provides the procedure for recovery of tax it corresponds to the second schedule of the income-tax act, 1961, as it stood before the commencement of this code part i of the schedule contains general provisions of the procedure for recovery of tax it provides the manner of execution of a certificate by the tax recovery officer and the various modes of realisation of the amounts mentioned in the certificate it further provides that in discharging his duties, the tax recovery officer may seek assistance of the police part ii of the schedule provides the procedure for attachment and sale of movable property part iii thereof provides the procedure for attachment and sale of immovable property part iv thereof contains the procedure for distraint and sale of movable property it provides that such distraint and sale shall be made in the same manner as attachment and sale of any movable property attachable by actual seizure part v of the fifth schedule relates to the appointment of receiver for business and for immovable property it provides that the receiver shall have such powers as may be necessary for the proper management of the property and realisation of the profits or rents thereof part vi thereof provides the procedure for arrest and detention of the defaulter for certain acts committed by such defaulter which impede recovery of tax arrears part vii of the fifth schedule contains miscellaneous provisions for recovery of tax relating to evidence, appeals, review etc it also provides that the board is empowered to make any rules for regulating the procedure under this schedule clause 10 of this code provides that the total income for a financial year of a person shall not include certain specified incomes accordingly, the sixth schedule of the code lists such income in certain cases, such income is exempt subject to the fulfilment of the conditions stipulated therein in other cases, the income is exempt without any conditions the schedule also provides for notification of income in certain cases by the central government for this purpose clause 11 of this code provides that certain persons shall not be liable to income-tax for any financial year accordingly, the seventh schedule of the code enumerates such persons in certain cases, the schedule provides that the persons shall not be so liable to income-tax, subject to the fulfilment of conditions stipulated therein in other cases, the entity shall be completely exempt from tax without any conditions sub-clause (2) of clause 32 of this code, inter alia, provides that the income from the business of insurance is to be computed in accordance with the eighth schedule accordingly, the eighth schedule seeks to provide that the profits of the business of life insurance shall be the profit determined in the shareholders' account (non-technical account) in accordance with the insurance act, 1938 as increased and reduced by items specified in the said schedule similarly, it is provided that the profits of the business of insurance other than life insurance shall be the profits disclosed in the annual accounts, copies of which are required to be furnished under the insurance act, 1938, to the controller of insurance as increased and reduced by items specified in the said schedule the profits of business of insurance will be the aggregate of the aforesaid amounts the said schedule further provides that the loss from any business of insurance shall be allowed to be set off from the profits of the same business of the succeeding years the schedule also seeks to define certain terms relevant to the schedule sub-clause (2) of clause 15 provides that the income from any special source shall be computed under the class "income from special sources" in accordance with the provisions of the ninth schedule accordingly, the ninth schedule provides for the computation of income accrued or received from any special source it further provides that income from special source shall be presumed to have been computed after giving effect to loss, allowance or deduction under this code it also provides that the amount of common costs attributable to any special source which are presumed to have been allowed shall be determined in the prescribed manner  sub-clause (2) of clause 32 of this code, inter alia, provides that the profits from the business of operating a qualifying ship shall be computed in accordance with the provisions contained in the tenth schedule  accordingly, the tenth schedule provides that the profits of the business of operating a qualifying ship for a financial year shall be determined in accordance with the formula specified therein it further provides that the computation of such profits shall be presumed to have been made after giving effect to loss, allowance or deduction under this code it also provides that the amount of common costs attributable to such business shall be determined in the prescribed manner  the said schedule further provides that the board may make rules for the purpose of computation of income from the business of operating a qualifying ship it also defines various terms for the purpose of computation of such income  sub-clause (2) of clause 32, inter alia, provides that the profits from the business of mineral oil or natural gas shall be computed in accordance with the provisions contained in the eleventh schedule  accordingly, the eleventh schedule provides that the profits of the business of mineral oil or natural gas for a financial year shall be the gross income from such business as reduced by the amount of the business expenditure incurred by the assessee wholly and exclusively for the purpose of such business it further provides that the computation of such profits shall be presumed to have been given after giving effect to loss, allowance or deduction under this code it also provides that the amount of common costs attributable to such business shall be determined in the prescribed manner the circumstances under which the provisions of this schedule shall apply have also been specified therein it also defines various terms for the purpose of computation of such profits  sub-clause (2) of clause 32, inter alia, provides that the profits from the business of developing a special economic zone or manufacture or production of article or things or providing of any service by a unit established in a special economic zone shall be computed in accordance with the provisions contained in the twelfth schedule  accordingly, the twelfth schedule provides that the profits of the business of developing or operating from a special economic zone or manufacture or production of article or things or providing of any service by a unit established in a special economic zone for a financial year shall be the gross income from such business as reduced by the amount of the business expenditure incurred by the assessee wholly and exclusively for the purpose of such business it further provides that the computation of such profits shall be presumed to have been made after giving effect to loss, allowance or deduction under this code it also provides that the amount of common costs attributable to such business shall be determined in the prescribed manner the circumstances under which the provisions of this schedule shall apply have also been specified therein  sub-clause (2) of clause 32, inter alia, provides that the profits from the business specified in paragraph 1 of the thirteenth schedule shall be computed in accordance with the provisions contained in the said schedule  accordingly, the thirteenth schedule provides the list of such specified businesses the provisions of this schedule shall apply to the said specified businesses which fulfil the prescribed conditions the said schedule further provides that the profits of every specified business shall be computed separately the profits of any specified business shall be the gross income from such business as reduced by the amount of the business expenditure incurred by the assessee wholly and exclusively for the purpose of such business it further provides that the computation of such profits shall be presumed to have been made after giving effect to loss, allowance or deduction under this code it also provides that the amount of common costs attributable to such business shall be determined in the prescribed manner the circumstances under which the provisions of this schedule shall apply have also been specified therein  sub-clause (2) of clause 32, inter alia, provides that the profits from the business listed in fourteenth schedule where income is determined on presumptive basis shall be computed in accordance with the provisions contained in the said schedule  accordingly, the fourteenth schedule provides the list of such businesses it provides that the income from such business carried on by the assessee at any time during the financial year shall be the amount specified therein and subject to the conditions specified therein  the said schedule further provides that the computation of such income shall be presumed to have been made after giving effect to loss, allowance or deduction under this code it also provides that the amount of common costs attributable to such business shall be determined in the prescribed manner the circumstances under which the provisions of this schedule shall not apply have also been specified therein  the fifteenth schedule relates to depreciation depreciation of business capital assets is one of the capital allowances allowed under clause 37 of the code the manner of calculation of depreciation of business capital assets is provided in clause 38 of the code the said clause makes a reference to fifteenth schedule in respect of any block of assets , the depreciation is to be allowed at the percentages specified against such block of assets in the table given in the said schedule on the adjusted value or written down value of such block of assets, as the case may be, as are used for the purposes of the business of the person at any time during the financial year the said table broadly divides business capital assets, into twelve classes of assets these are building, furniture and fittings, vehicles, aeroplanes, rails, ships, books, machinery and plant, scientific research assets, family planning asset, animals and intangible assets depreciation shall not be allowed, in respect of any other business capital asset not forming part of any block of assets specified in the fifteenth schedule the said schedule further provides that no depreciation shall be allowed in respect of any machinery or plant, if the actual cost thereof is allowed as a deduction in one or more years it is also provided that the depreciation shall be one hundred per cent of the adjusted written down value of the block of assets, being intangible assets, if the adjusted value or written down value of the block of assets is one lakh rupees or less the schedule also seeks to provide list of various items included in the assets listed in the table in the schedule  clause 79 of this code provides that a person shall be allowed a deduction of a specified sum of the amount of money paid by him in the financial year as contribution or donation to any person specified in the sixteenth schedule  accordingly, the sixteenth schedule provides the list of such persons parts i, ii, iii and iv thereof enumerate the entities in respect of whom contributions or donations are eligible for deduction of one hundred and seventy-five per cent, one hundred and twentyfive per cent, one hundred per cent and fifty per cent, respectively  sub-clause (3) of clause 53 of this code, inter alia, provides that the cost of acquisition of an investment asset specified in the seventeenth schedule and acquired by the specified mode shall be the cost specified in the said schedule  accordingly, the seventeenth schedule provides the method of determination of the cost of acquisition of investment asset being shares or certain rights which have been acquired by the various modes specified therein sub-clause (160) of clause 314 of this code defines "mineral" as including a group of associated minerals specified in the eighteenth schedule  accordingly, part i and part ii of the eighteenth schedule respectively provide the list of such minerals and group of associated minerals  the nineteenth schedule to the bill deals with three types of funds, ie, approved provident fund, approved superannuation fund and approved gratuity fund and seeks to provide the guidelines that would govern their approval and functioning the said schedule has three parts part i deals with approved provident funds, part ii with approved superannuation funds and part iii with approved gratuity funds  part i relating to approved provident funds, provides that the commissioner shall accord or withdraw approval to a provident fund and the conditions, upon the satisfaction of which he will accord approval to such fund, have been specified in certain circumstances, the conditions can also be relaxed this part also provides that certain funds established under a scheme of other specified acts will be deemed to be approved if notified in this behalf  the said part also provides that contribution by an employer in excess of twelve per cent of the salary or one lakh rupees, whichever is less, and interest credited in excess of the rate of interest prescribed by the central government for this purpose, shall be deemed to be the income of the concerned employee and shall be liable to income-tax besides, an employee will be entitled to a deduction in computation of his income in respect of his contribution to his account, subject to a specified limit  part ii of the schedule relates to approved superannuation funds as in case of provident funds, the commissioner shall accord or withdraw approval to a superannuation fund the conditions, upon the satisfaction of which an approval shall be accorded by the commissioner, have also been specified  the said part further provides as to when the contribution by an employer shall be deemed to be the income of an employer and also for deduction of tax on contributions paid to an employee it also provides that deduction from the pay of, and contributions on behalf of, employees is to be included in the return to be filed by the employer the part also specifies the liability of trustees on cessation of approval given to a superannuation fund and provides for the particulars to be furnished in respect of such funds  part iii of the schedule relates to approved gratuity funds as in case of provident funds, the commissioner shall accord or withdraw approval to a gratuity fund the conditions, upon the satisfaction of which an approval shall be accorded by the commissioner, have also been specified further, it has also been provided as to when the contribution by an employer shall be deemed to be the income of an employer it also specifies the liability of trustees on cessation of approval given to a gratuity fund and provides for the particulars to be furnished in respect of such funds  in the nineteenth schedule, for all three parts, it has also been provided that an aggrieved employer may file an appeal before the central board of direct taxes within sixty days from the date of the commissioner's order of not according an approval to a fund or of withdrawal of approval further, the board may make rules for the smooth regulation of the funds besides, some relevant terms like ''employer", "employee", "contribution", "balance to the credit of an employee", "annual accretion", etc have been defined  the twentieth schedule provides the method and manner for computation of income attributable to a controlled foreign company, which shall be included in the total income of an assessee, who is resident in india, for a financial year, in accordance with clause 58 the said schedule, for the sake of simplicity, has provided formulae for the determination of the amount of income attributable to a controlled foreign company and for the specified income of such a company  the said schedule has also defined certain terms like "controlled foreign company", "territory with a lower rate of taxation" and "associated enterprise" clause 178 provides that an assessee may prefer an appeal to the commissioner (appeals) where he is aggrieved by an order passed by an income-tax authority below the rank of commissioner, as specified in the twenty-first schedule accordingly, the twentyfirst schedule provides a list of orders that are appealable before the commissioner (appeals)  clause 37 of this code, inter alia, provides that one of the items of capital allowances viz deferred revenue expenditure allowance shall be computed in accordance with the twenty-second schedule accordingly, the twenty-second schedule seeks to provide the items of deferred revenue expenditure on which deferred revenue expenditure allowance would be available for a financial year the items provided, inter alia, are non-compete fee, premium for obtaining any asset on lease or rent, amount paid to an employee in connection with his voluntary retirement, expenditure incurred by an indian company, any loss on account of forfeiture in respect of any agreement entered in the course of the business and prescribed preliminary expenditure incurred before the commencement of the business, or in connection with the extension of the business, or in connection with the setting up of new business  financial memorandumthis bill seeks to replace the indian income-tax act, 1961 and the wealth tax act, 1957 and thus no additional expenditure of significance, apart from what is being spent on the administration of these acts, is contemplated by reason merely of the passing of this bill   memorandum regarding delegated legislation1 clause 6 of the bill provides that the following income shall be deemed to be received in the financial year—  (a) any contribution made by any employer, in the financial year, to the account of an employee under a pension fund;  (b) any contribution made by any employer, in the financial year, to the account of an employee in any other fund;  (c) the annual accretion, in the financial year, to the balance at the credit of any employee in a fund referred to in clause (b) to the extent it exceeds the limit as may be prescribed  accordingly, it is proposed to empower the central government to make the rules in this regard for the purposes of this clause  2 clause 9 of the bill provides that the total income of any individual shall include, besides other income, all income which accrues, directly or indirectly from assets transferred, directly or indirectly, to the spouse by the individual, otherwise than for adequate consideration, or in connection with an agreement to live apart; and from assets transferred, directly or indirectly, to the son's wife by the individual, otherwise than for adequate consideration it has been further provided that the board may prescribe the method for determining the income referred to above  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  3 clause 18 of the bill provides that in computing the total income of a person for any financial year, any expenditure attributable to income which is not included in the total income under the sixth schedule, and determined in accordance with such method as may be prescribed, shall not be allowed as a deduction  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  4 clause 23 of the bill provides for the deductions from the gross salary for computation of income from employment these deductions include - any allowance or benefit granted by an employer for journey by an employee between his residence and office or any other place of work, to such extent as may be prescribed; any allowance or benefit granted by an employer to an employee to meet expenses wholly, necessarily and exclusively in the performance of the duties of an office or employment of profit, as may be prescribed, to the extent such expenses are actually incurred for that purpose, and to meet personal expenses, considering the place of posting or nature of duties or place of residence, subject to such conditions and limits as may be prescribed; any amount of interest credited, in the financial year, on the balance to the credit of an employee in an approved fund to the extent it does not exceed the amount of interest payable at the rate notified by the central government; any allowance provided by an employer to meet the expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the employee, to such extent as may be prescribed  accordingly, it is proposed to empower the central government to make the rules and notify the "rate of interest" in this regard for the purposes of this clause  5 clause 33 of the bill provides that the gross earnings referred to in clause 32 shall also include any payment or aggregate of payments made to a person in a day, in respect of an expenditure incurred during the financial year or in respect of a liability incurred and allowed as a deduction in any preceding financial year, which has been made otherwise than by an account payee cheque drawn on a bank or by an account payee bank draft; exceeds a sum of thirty-five thousand rupees if the payment is made to transporter for   carriage of goods by road, or a sum of twenty thousand rupees in any other case; and has not been made in such cases and in such circumstances as may be prescribed  accordingly, it is proposed to empower the central government to make the rules in this regard for the purposes of this clause  6 clause 35 of the bill specifies the operating expenditure with respect to business expenditure and includes remuneration to any working participant to the extent prescribed which is in accordance with the agreement of the unincorporated body or the limited liability partnership, as the case may be, association and relates to the period falling after the date of such agreement; contribution by a person, being an employer, to an approved fund subject to such limits and conditions, as may be prescribed and to the extent the amount is actually paid;  7 clause 35 further specifies the deductions for the purpose of determination of operating expenditure, which include contribution by the person, being an employer, to an approved fund subject to such limits and conditions, as may be prescribed and to the extent the amount is actually paid; as well as, any amount credited to the provision for bad and doubtful debts account, no exceeding one per cent of the aggregate average advances computed in the prescribed manner if the person is a financial institution or a non-banking finance company as may be notified  accordingly, it is proposed to empower the central government to make rules and issue notifications in this regard for the purposes of this clause  8 clause 36 of the bill specifies the finance charges with respect to business expenditure and includes the amount of interest paid to any participant to the extent prescribed which is in accordance with the agreement of formation of unincorporated body and relates to the period falling after the date of such agreement; the proportionate amount of discount or premium payable on any bond or debenture issued by the person, calculated in the manner as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  9 clause 37 of the bill provides deduction of an amount in accordance with such deposit scheme in respect of the person carrying on business of growing and manufacturing tea or coffee or rubber in india, as may be prescribed  accordingly, it is proposed to empower the central government to make the rules in this regard  10 clause 41 of the bill provides that a company shall be allowed a deduction equal to two hundred per cent of the expenditure (not being expenditure in the nature of cost of any land or building) incurred on creating and maintaining an in-house facility for scientific research and development; and carrying out scientific research and development in the inhouse facility, if—  (a) the company creates and maintains an in-house facility for carrying out scientific research and development;  (b) the research facility is approved by the central government on the basis of recommendation of the prescribed authority; and  (c) the company enters into an agreement with the prescribed authority for co-operation in the research and development facility and for audit of the accounts maintained for such facility  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 11 clause 41 of the bill further provides that for the purposes of granting approval to a research facility for claiming deduction for scientific research and development allowance, the board may prescribe the nature of business, conditions and manner as may be considered necessary for grant of such approval  12 accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  13 clause 44 of the bill provides that the board may, for the purposes of determining the actual cost of a business capital asset, prescribe- (a) any other cost which may be included in determining the actual cost; and (b) the method of determining the actual cost in the circumstances which are not provided for in this section  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  14 clause 45 of the bill provides that the board may prescribe-(a) the method of determining the allocation of the written down value or the adjusted written down value of the assets between the different businesses carried on by the person; and (b) the method of determining the written down value or the adjusted written down value of the block of assets in the circumstances which are not provided for in this section  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  15 clause 47 of the bill provides that the income from the transfer of any work of art, archaeological, scientific or art collection, book, manuscript, drawing, painting, photograph or print, to the government or a university or any public museum or institution of national importance or of renown throughout any state or states and notified by the central government, shall not be included in the computation of income under the head "capital gains"  accordingly, it is proposed to empower the central government to issue notification(s) in this regard for the purposes of this clause  16 clause 47 further provides that the transfer of any investment asset in a transaction of reverse mortgage under a scheme notified by the central government shall not be included in the computation of income under the head "capital gains"  accordingly, it is proposed to empower the central government to frame the scheme in this regard for the purposes of this clause  17 clause 58 of the bill provides that the gross residuary income shall inter alia include any payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, if it has not been incurred in such cases and under such circumstances, as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  18 clause 59 of the bill provides that for the purposes of computation of income from residuary sources, any payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, if it has not been incurred in such cases and under such circumstances, as may be prescribed, shall not be allowed as a deduction  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  19 clause 69 of the bill provides that a person, being an individual, shall be allowed a deduction for savings in respect of the aggregate of the sums specified in the said clause as does not exceed to the extent of one lakh rupees paid or deposited by the person in a financial year the specified sums include any sum as a contribution to any provident fund set up and notified by the central government where such contribution is to an account of the individual, spouse or any child of such individual; any sum to effect or keep in force a contract for any annuity plan of any insurer as approved by the board in accordance with the prescribed guidelines; any sum as a contribution to a pension scheme, approved and notified by the board in accordance with the prescribed guidelines  accordingly, it is proposed to empower the board to issue notification in this regard for the purposes of this clause  20 clause 75 of the bill provides that a person, being an individual, shall be allowed a deduction in respect of any amount paid by him in the financial year by way of interest on loan taken by him from any financial institution for the purpose of- (a) pursuing his higher education; or (b) higher education of his relatives for the purposes of this clause, "financial institution" means a banking company or any other financial institution which the central government may, by notification, specify in this behalf  accordingly, it is proposed to empower the central government to issue notification in this regard for the purposes of this clause  21 clause 76 of the bill provides that a person, being resident individual of hindu undivided family, shall be allowed a deduction in respect of any amount paid during the financial year for medical treatment of the prescribed disease or ailment of any specified person this deduction shall not be allowed unless the person obtains a certificate in the prescribed form from a prescribed specialist working in a government hospital  according, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  22 clause 77 of the bill provides that a person, being resident individual, shall be allowed a deduction of one lakh rupees, if he is a person with severe disability; and of fifty thousand rupees, if he is a person with disability this deduduction shall be allowed if the person obtains a certificate from a medical authority in the prescribed form and manner and the certificate remains valid during the relevant financial year or part thereof  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  23 clause 78 of the bill provides that the deduction under this clause shall be allowed if the person, claiming a deduction under this section, obtains a certificate from a medical authority in such form and manner as may be prescribed and the certificate remains valid during the relevant financial year or part thereof  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  24 clause 79 of the bill provides that the donation to any person specified in part iv of the sixteenth schedule shall be eligible for deduction under sub-clause (1), if the donee obtains the approval of the prescribed authority in accordance with the procedure and subject to such conditions, as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the nominee of this clause  25 clause 80 of the bill provides that a person, being an individual and not in receipt of any house rent allowance, shall be allowed a deduction of any expenditure incurred by him in excess of ten per cent of his gross total income from ordinary sources towards payment of rent in respect of any furnished or unfurnished accommodation occupied by him for his own residence this deduction shall be allowed up to a maximum of two thousand rupees per month and shall be subject to such other conditions as may be prescribed having regard to the area or place in which the accommodation is situated  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 26 clause 82 of the bill provides for a deduction of income of investor protection fund, if the fund is notified by the central government  accordingly, it is proposed to empower the central government to issue notification in this regard for the purposes of this clause  27 clause 87 of the bill provides that every person who has entered into an international transaction shall keep and maintain such information and document in respect thereof, as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  28 clause 87 of the bill further provides that any person carrying on legal, medical, engineering, architectural profession or profession of accountancy, technical consultancy, interior decoration or any other profession as is notified by the board, shall keep and maintain such books of account and other documents as may enable the assessing officer to compute his total income in accordance with the provisions of the code  accordingly, it is proposed to empower the board to issue notifications in this regard for the purposes of this clause  29 clause 87 of the bill further provides that in respect of the maintenance of accounts, the bills or receipts issued to any person shall contain the name, address and such other particulars as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  30 clause 87 of the bill further provides that the board may, having regard to the nature of the business carried on by any class of persons, prescribe- (a) any other books of account and documents to be kept and maintained; (b) the particulars to be contained in the books of account and documents; and (c) the form and the manner in, and the place at, which the books of account and other documents shall be kept and maintained the board may, also prescribe the period for which the books of account and other documents required to be kept and maintained under this section shall be retained  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  31 clause 88 of the bill provides that every person, who is required to keep and maintain books of account under clause 87 shall get his accounts for the financial year audited the report of this audit shall be obtained in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed a person shall be deemed to have complied with the provisions of this clause if the person gets the accounts of his business audited as required by, or under, any other law for the time being in force, before the due date; and obtains by the due date the report of the audit as required under such other law and a further report by an accountant in the form prescribed under this clause further, a person who has entered into an international transaction shall furnish a report of the international transaction entered into during the financial year to the transfer pricing officer on or before the due date this report shall be obtained from an accountant in the prescribed form duly signed and verified in the prescribed manner by such accountant  accordingly, it is proposed to empower the central government to make rules and forms in this regard for the purposes of this clause  32 clause 89 of the bill provides that the income chargeable under the head "income from business" or "income from residuary sources" shall, except as otherwise provided in this section, be computed in accordance with either cash or mercantile system of accounting regularly employed by the person the central government may from time to time notify accounting standards to be followed by any class of persons or in respect of any class of income  accordingly, it is proposed to empower the central government to make rules and issue notifications in this regard for the purposes of this clause 33 clause 89 of the bill further specifies that for the purposes of this clause, "bad or doubtful debts" shall be such debts as may be prescribed, having regard to the guidelines issued by the reserve bank of india or the national housing bank, as the case may be, in relation to such debts  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  34 clause 90 of the bill provides that the central government may, subject to such conditions as may be considered necessary, notify a person as a non-profit organisation of public importance for the purpose of the seventh schedule  accordingly, it is proposed to empower the central government to issue notifications in this regard for the purposes of this clause  35 clause 94 of the bill provides that the amount of outgoings during the financial year for the purpose of computation of the total income shall include any amount applied outside india, if - (i) the amount is applied for an activity which tends to promote international welfare in which india is interested; and (ii) the non-profit organisation is notified by the central government in this behalf  accordingly, it is proposed to empower the central government to issue notifications in this regard for the purposes of this clause  36 clause 94 of the bill further provides that the amount of outgoings during the financial year for the purpose of computation of the total income shall be the aggregate of the amounts specified therein these amounts include any amount accumulated or set apart for carrying on any charitable activity- (i) to the extent of fifteen per cent of the total income (before giving effect to the provisions of this clause) or ten per cent of the gross receipts, whichever is less; and (ii) invested or deposited in the modes specified in clause 95, for a period not exceeding three years from the end of the financial year the modes of investing or depositing the money in such activity include any other mode of investment or deposit as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of clause 95  37 clause 98 of the bill provides that a non-profit organisation shall make an application for its registration in the prescribed form and manner to the commissioner these provisions shall not apply to any non-profit organisation which has been granted approval or registration under the income tax act, 1961 before the commencement of the code, if the organisation fulfils such conditions as may be prescribed  accordingly, it is proposed to empower the central government to make rules and forms in this regard for the purposes of this clause  38 clause 99 of the bill provides that the non-profit organisation shall keep and maintain such books of accounts, in the manner as may be prescribed further, the nonprofit organisation shall obtain a report of audit in the prescribed form from an accountant before the due date of filing of the return of tax bases , if the gross receipts referred to in clause 93 in any financial year exceed five lakh rupees  accordingly, it is proposed to empower the central government to make rules and forms in this regard for the purposes of this clause  39 clause 100 of the bill defines "anyonmous donation for the purpose of the said clause to mean any voluntary contribution, where a person receiving such contribution does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  40 clause 101 of the bill provides that a non-profit organisation shall be liable to income-tax at the rate of thirty per cent in respect of its net worth subject to the conditions specified in the said clause "net worth" of the non-profit organisation has been defined to mean the aggregate value of the total assets of the non-profit organisation as reduced by the liabilities of such organisation computed in accordance with such rules of valuation as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  41 clause 104 of the bill provides that every company to which this clause in respect of computation of book profit applies, shall obtain a report in such form as may be prescribed from an accountant certifying that the book profit has been computed in accordance with the provisions of this clause  accordingly, it is proposed to empower the central government to make rules and issue forms in this regard for the purposes of this clause  42 clause 108 of the bill provides that the venture capital company, the venture capital fund or the person responsible for making payment of the income on behalf of such company or fund shall furnish, within such time as may be prescribed, to the person receiving such income and to the prescribed income-tax authority, a statement in the prescribed form and manner, giving details of the nature of the income paid during the financial year and such other relevant details as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for th purposes of this clause  43 clause 110 of the bill provides that every life insurer shall be liable to pay tax on any amount of income, computed in the manner prescribed, distributed or paid to the policy holders of an approved equity oriented life insurance scheme  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  44 clause 110 of the bill further provides that in this clause "approved equity oriented life insurance scheme" means—  (i) a life insurance scheme where more than sixty-five per cent of the total premia received under such scheme are invested by way of equity shares in domestic companies; and  (ii) such scheme is approved by the board in accordance with such guidelines as may be prescribed  accordingly, it is proposed to empower the board to frame the guideline in this regard for the purposes of this clause  45 clause 113 of the bill provides that in relation to computation of net wealth for the purposes of chargeability of wealth-tax, the value of any specified asset, other than cash, referred to in the said clause, shall be determined in such manner as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  46 clause 117 of the bill provides that the arm's length price in relation to an international transaction shall be determined in accordance with any of the methods as may be prescribed, being the most appropriate method; the most appropriate method shall be determined having regard to the nature of transaction, class of transaction, class of associated enterprises or functions performed by such enterprises or such other relevant factors as may be prescribed; and the most appropriate method determined as above shall be applied for determination of arm's length price in such manner as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 47 clause 116 of the bill further provides that the determination of arm's length price shall be subject to safe harbour rules, as may be prescribed in this behalf  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  48 clause 118 of the bill provides that the board may, by notification, frame a scheme for advance pricing agreement in respect of an international transaction  accordingly, it is proposed to empower the board to frame the scheme in this regard for the purposes of this clause  49 clause 123 of the bill provides that the provisions in respect of general antiavoidance rule shall apply in accordance with such guidelines as may be prescribed  accordingly, it is proposed to empower the central government to frame the guidelines in this regard for the purposes of this clause 50 clause 124 of the bill provides that for the purposes of the chapter on "special provisions relating to avoidance of tax", two enterprises shall be deemed to be associated enterprises at any time during the financial year, if they are associated with each other by virtue of the conditions specified in the said clause these conditions include - 'any specific or distinct location of either of the enterprises as may be prescribed'; 'any other relationship of mutual interest, existing between the two enterprises, as may be prescribed'  accordingly, it is proposed to empower the central government to make rules in this regard for the purpose of this clause 51 clause 127 of the bill further provides that the board may, by notification, direct that any income-tax authority or authorities specified in the notification shall be subordinate to such other income-tax authority or authorities as may be specified in such notification  accordingly, it is proposed to empower the board to issue notification in this regard for the purposes of this clause  52 clause 139 of the bill provides in relation to retention and application of seized assets, the assessing officer shall release, within the time and subject to such conditions as may be prescribed, to the person from whose custody the assets were seized, any asset or proceeds thereof, which remains after the liabilities referred to in the said clause are discharged  accordingly, it proposed to empower the central government to make rules in this regard for the purposes of this clause  53 clause 135 of the bill provides that in relation to search and seizure, the board may make rules - (a) to provide for the procedure to be followed by the authorised officer - (i) for obtaining ingress into any building, place, vessel, vehicle or aircraft to be searched where free ingress thereto is not available; and (ii) for ensuring safe custody of any material seized; and (b) any other matter in relation to search and seizure under this clause accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  54 clause 140 of the bill provides that for the purposes of the direct taxes code, the board may, notwithstanding anything contained in any other law for the time being in force, require -  (a) any prescribed person to furnish such information within such time and in such form and manner as may be prescribed; and (b) any prescribed income-tax authority to call for such information in such form and manner as may be prescribed  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause 55 clause 142 of the bill provides that the chief commissioner or the commissioner may furnish, or cause to be furnished, to any person any information relating to any assessee received or obtained by any income-tax authority in the performance of his functions under this code, if the person makes an application to the chief commissioner or the commissioner in the prescribed form; and the chief commissioner or the commissioner is satisfied that it is in the public interest so to do accordingly, it is proposed to empower the central government to issue the form in this regard for the purposes of this clause 56 clause 142 of the bill further provides that the board, or any person specified by it by an order in this behalf, may furnish, or cause to be furnished, any information in respect of an assessee to any other person performing any functions under any other law as the central government may, if in its opinion it is necessary so to do in the public interest specify by notification in this behalf accordingly, it is proposed to empower the central government issue notification in this regard for the purposes of this clause 57 clause 144 of the bill provides that every person shall furnish a return of tax bases on or before the due date to the assessing officer or such other authority or agency as may be prescribed accordingly, is proposed to empower the central government to make rules in this regard for the purposes of this clause 58 clause 144 of the bill further provides that the person required to furnish a return of tax bases in relation to income shall also include; besides those enumerated in the said clause, any class or classes of persons as may be prescirbed accordingly, it is proposed to empower the central government to make rules/issue notification in this regard for the purposes of this clause 59 clause 144 of the bill further provides that the return of tax bases shall be furnished in such form, verified in the manner and setting forth such particulars, as may be prescribed accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 60 clause 145 of the bill provides that the board may, without prejudice to the provisions of clause 144 frame a tax return preparer scheme so as to allow a tax return preparer to prepare and furnish the return of tax bases of any specified class of persons, in accordance with the scheme accordingly, it is proposed to empower the board to frame the tax return preparer scheme in this regard for the purposes of this clause 61 clause 149 of the bill provides that the board may make a scheme for centralised processing of returns for expeditious determination of the tax payable by, or the refund due to, the assessee accordingly, it is proposed to empower the board to frame the scheme in this regard for the purposes of this clause 62 clause 151 of the bill provides that the assessing officer may direct the assessee to get his accounts audited by an accountant, if, at any stage of the proceeding, he is of the opinion that, having regard to the nature and complexity of the accounts of the assessee and the interests of revenue, it is necessary to do so the accountant shall furnish the report of the audit in such form, duly signed and verified by him, and setting forth such particulars as may be prescribed and such other particulars as the assessing officer may require accordingly it is proposed to empower the central government to make rules/forms in this regard for the purposes of this clause 63 clause 151 of the bill further provides that the remuneration of the accountant and other expenses of the special audit shall be determined and paid by the chief commissioner or commissioner in accordance with such guidelines as may be prescribed accordingly, it is proposed to empower the central government to frame the rules in this regard for the purposes of this clause 64 clause 155 of the bill provides that for the purpose of assessment, "eligible assessee" includes any class or classes of persons as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 65 clause 159 of the bill provides that for reopening a case, the assessing officers shall serve on the assessee a notice requiring him to furnish, within a period of thirty days, a return of tax bases for any financial year, in such form, verified in the manner and setting forth such other particulars as may be prescribed accordingly, it is proposed to empower the central government to make rules/forms in this regard for the purposes of this clause 66 clause 162 of the bill provides that any sum payable in consequence of any order made, or intimation issued, under this code shall be demanded by an income-tax authority by serving upon the assessee a notice of demand in such form and manner as may be prescribed accordingly, it is proposed to empower the central government to make rules/forms in this regard for the purposes of this clause 67 clause 179 of the bill provides that every appeal under clause 178 to commissioner (appeals) shall be in such form and verified in such manner and accompanied by a fee as may be prescribed  accordingly, it is proposed to empower the central government to make rules/forms in this regard for the purposes of this clause  68 clause 183 of the bill provides that an appeal or the memorandum of crossobjection to the appellate tribunal shall be in such form and be verified in such manner as may be prescribed the appeal by an assessee shall be accompanied by such fees as may be prescribed accordingly, it is proposed to empower the central government to make rules/forms in this regard for the purposes of this clause 69 clause 184 of the bill provides that an assessee may make an application to the appellate tribunal for stay of demand in relation to the appeal preferred by him under clause 183 and such application shall be accompanied by such fees as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  70 clause 192 of the bill provides that every application by an assessee for revision of any order passed by an authority subordinate to the commissioner, other than an order to which section 190 applies, shall be accompanied by such fees as may be prescribed accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 71 clause 196 of the bill provides that for the purposes of the liability to deduct tax at source, the specified payment shall be deemed to have been made, if the payment has been made in cash; by issue of a cheque or draft; by credit to any account, whether called 'suspense accout' or by any other name; or by any other mode as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 72 clause 196 the bill further provides that for the purposes of making any deduction of tax from the payment liable to be taxed under the head "income from employment", the deductor shall take into account the specified particulars, if any, furnished by the deductee in such form and manner as may be prescribed  accordingly, it is proposed to empower the central government to make rules/forms in this regard for the purposes of this clause 73 clause 197 of the bill provides that the deductee may make an application, in such form and manner, as may be prescribed, to the assessing officer seeking a certificate for deduction of income-tax at a lower rate or, as the case may be, no deduction of income-tax from payments to be received by him further, the deductor may make an application, in such form and manner as may be prescribed, to the assessing officer seeking a certificate for deduction of income-tax at a lower rate or, as the case may be, no deduction of incometax from payments to be made by him to a non-resident deductee  accordingly, it is proposed to empower the central government to make rules/forms in this regard for the purposes of this clause  74 clause 197 of the bill further provides that the board may prescribe the circumstances and the cases in which an application may be made for the grant of the certificate for lower or no deduction of tax and the conditions subject to which such certificate may be granted and provide for all other matters connected therewith  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  75 clause 198 of the bill provides that every deductor shall pay the sum deducted to the credit of the central government with such time and manner as may be prescribed further, every deductor shall furnish to the deductee a certificate to the effect that tax has been deducted within such time and containing such particulars as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 76 clause 199 of the bill provides that the central government may, by notification in the official gazette, require any deductor to deliver, or cause to be delivered, a return in respect of any payment without deduction of tax  accordingly, it is proposed to empower the central government to issue notifications in this regard for the purposes of this clause  77 clause 199 of the bill further provides that the board shall, in respect of the return of tax-deduction and the return under this clause, prescribe the following:  (a) the period in respect of which the return is to be furnished; (b) the form of the return and the particulars therein; (c) the manner of verification of the return;  (d) the time by, and the medium in, which the return is to be delivered;  (e) the income-tax authority, or any other person, authorised to receive the return; and  (f) any other matters connected therewith  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  78 clause 200 of the bill provides that no tax shall be deducted at source, where the payee is a resident, from any interest payable to any institution, association or body, or class of institutions, associations or bodies, which the central government may, for reasons to be recorded in writing, notify in this behalf further, the same shall also apply for any interest payable in respect of deposits under any scheme framed by the central government and notified by it in this behalf accordingly, it is proposed to empower the central government to issue notifications and make scheme in this regard for the purposes of this clause  79 clause 201 of the bill provides that for the purposes of giving credit in respect of tax deducted, the board may prescribe -  (a) the procedure for giving credit to the deductee, or any other person; (b) the financial year for which such credit may be given; and  (c) any other matter connected therewith  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  80 clause 202 of the bill provides that for the purposes of tax collection at source, the collection of an amount shall be deemed to have been made, if the amount has been received in cash; by way of a cheque or draft; by debit to any account, whether called "suspense account" or by any other mode as may be prescribed, whichever is earlier  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  81 clause 202 of the bill further provides that any person collecting any amount in the form of tax collected at source shall pay the sum so collected to the credit of the central government within such time and manner as may be prescribed also, every person responsible for collecting any amount the form of tax collected at source shall furnish to the buyer, lessee or licensee a certificate of tax collection within such time as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  82 clause 202 of the bill further provides that the board shall prescribe the following in respect of the return of tax collection:—  (a) the period in respect of which the return is to be furnished; (b) the form of the return and the particulars therein; (c) the manner of verification of the return;  (d) the time by, and the medium in, which the return is to be delivered;  (e) the income-tax authority, or any other person, authorised to receive the return; and  (f) any other matter connected therewith  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  83 clause 203 of the bill provides that for the purpose of giving credit in respect of tax collected, the board may prescribe -  (a) the procedure for giving credit to the collectee, or any other person; (b) the financial year for which such credit may be given; and (c) any other matter connected therewith  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  84 clause 204 of the bill provides that for the purposes of the chapter on "collection at source", 'professional or technical services' means services rendered by a person in the course of carrying on legal, medical, engineering, architectural or accountancy profession, technical consultancy, interior decoration or any other profession as notified by the board  accordingly, it is proposed to empower the board to make rules/issue notifications in this regard for the purposes of this clause  85 clause 205 of the bill provides that where in the opinion of the assessing officer may, any person is liable to pay advance income-tax, he may by an order in writing - require such person to pay advance income-tax calculated in such manner as may be prescribed; and issue to such person a notice of demand under section 168 specifying the instalments in which such tax is to be paid further, the person, who has been served with such an order, may file an estimation, in such form as may be prescribed, to the assessing officer, if in his estimation, the advance tax payable by him is lower than the amount specified in the said order, and pay the advance tax in accordance with his estimation on or before the due dates specified in this section  accordingly, it is proposed to empower the central government to make rules and forms in this regard for the purposes of this clause  86 clause 206 of the bill provides that the assessing officer shall, on an application made to him by any person, grant such relief as may be prescribed, if the person is in receipt in any financial year of any arrears, or advance, of salary or family pension relating to any other financial year  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  87 clause 207 of the bill provides that the central government may, for the relief or avoidance of double taxation, prescribe,—  (a) the method for computing the amount of credit; (b) the manner of claiming credit; and (c) such other particulars as may be considered necessary  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  88 clause 210 of the bill provides that in relation to interest for default in furnishing return of tax-bases, the assessing officer shall serve on the assessee a notice of demand, in such form as may be prescribed, specifying the sum payable on account of increase in the interest payable as a result of modification in the assessed income on account of any rectification, revision or appellate order under the code, and such notice shall be deemed to be a notice under section 168  accordingly, it is proposed to empower the central government to issue the forms in this regard for the purposes of this clause 89 clause 210 of the bill provides that in relation to interest for defaults in payment of advance income-tax, the assessing officer shall serve on the assessee a notice of demand in such form as may be prescribed specifying the sum payable on account of increase in the interest on account of any rectification, revision or appellate order under the code and such notice shall be deemed to be a notice under section 168 and the provisions of this code shall apply accordingly  accordingly, it is proposed to empower the central government to issue the forms in this regard for the purposes of this clause  90 clause 215 of the bill provides that an assessee shall be entitled to a refund of the excess of any amount paid by him or on his behalf, or treated as paid by him or on his behalf, for any financial year over the amount with which he is liable under the code, and every claim for refund shall be made within such time and such form and manner, as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  91 clause 216 of the bill provides that in relation to interest on refunds, the assessing officer shall serve on the assessee a notice of demand in such form as may be prescribed specifying the amount of excess interest paid to him where interest is reduced in accordance with the variation in the amount on which the interest was payable as a result of any rectification, revision or appellate order under the code, and such notice shall be deemed to be a notice under section 161 accordingly, it is proposed to empower the central government to issue the forms in this regard for the purposes of this clause 92 clause 218 of the bill provides that any amount specified as payable in a notice of demand, otherwise than by way of advance tax, shall be paid within thirty days of the service of the notice, to the credit of the central government in such manner as may be prescribed accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 93 clause 219 of the bill provides that the tax recovery officer may draw up under his signature a statement of tax arrears of an assessee in default referred to in sub-section (3) or sub-section (4) of section 213, in the prescribed form accordingly, it is proposed to empower the central government to issue the forms in this regard for the purposes of this clause 94 clause 220 of the bill provides that the assessing officer or the tax recovery officer may require the employer of the assessee to deduct from any payment to the assessee such amount as is sufficient to meet the tax arrear from the assessee upon such requisition, the employer shall comply with the requisition and shall pay the sum so deducted to the credit of the central government in the prescribed manner accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 95 clause 220 of the bill further provides that the assessing officer or the tax recovery officer may, by notice in writing, require any debtor of the assessee to pay such amount, not exceeding the amount of debt, as is sufficient to meet the tax arrear of the assessee upon receipt of such notice, the debtor shall comply with the requisition and shall pay the sum to the credit of the central government in such manner as may be prescribed within the time (not being before the debt becomes due to the assessee) specified in the notice accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 96 clause 221 of the bill provides that the tax recovery officer, may send a certificate, in such manner as may be prescribed, specifying the tax arrear to be recovered, to another tax recovery officer within whose jurisdiction the assessee resides or has property, if the first-mentioned tax recovery officer is not able to recover the entire amount by sale of the property, movable or immovable, within his jurisdiction; or is of the opinion that, for the purpose of expediting, or securing, the recovery of the whole, or any part, of the amount under this chapter, it is necessary so to do accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 97 clause 228 of the bill provides that every person, who is domiciled in india at the time of his departure from india, shall furnish to the notified authority such particulars as may be prescribed; and obtain a certificate from the notified authority that he has no liability, if in the opinion of the assessing officer it is necessary for such person to obtain such certificate accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 98 clause 228 of the bill further provides that no person shall leave the territory of india unless he furnishes to such authority, as may be notified, an undertaking to the effect that he has made satisfactory arrangement for discharging his tax liability, if any, in respect of any income or wealth liable to tax in india accordingly, it is proposed to empower the central government to notify the authority in this regard for the purposes of this clause 99 clause 228 of the bill further provides that board may having regard to the interest of revenue may prescribe—  (a) the circumstances  (b) the form and manner in which the undertaking is to be furnished and  (c) any other manner connected therewith accordingly it is proposed to empower the board to make rules and issue forms in this regard for purposes of this clause  100 clause 252 of the bill provides that the chief commissioner may compound, either before or after the institution of proceedings, any offence under chapter xv, under the circumstances and for the amount, as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 101 clause 256 of the bill provides that an applicant or appellant, being any class of residents as notified by central government in the official gazette in this behalf, may seek a ruling or, as the case may be, a resolution of dispute on matters concerning a determination in respect of an issue relating to computation of tax bases is pending before any income-tax authority, or the appellate tribunal, and such determination shall include the determination of any question of law or of fact relating to such computation of tax bases specified in the application  accordingly, it is proposed to empower the central government to make rules and issue notifications in this regard for the purposes of this clause  102 clause 257 of the bill provides that in respect of the authority for advanced rulings and dispute resolution, the salaries and allowances payable to, and the terms and conditions of service of, the members shall be such as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  103 clause 258 of the bill provides that in respect of the procedure for advance ruling, the application shall be made in such form and manner as may be prescribed, and be accompanied by such fees as may be prescribed accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  104 clause 258 of the bill further provides that in respect of the procedure for advance ruling, a copy of the advance ruling pronounced by the authority, duly signed by the members and certified in such manner as may be prescribed shall be sent to the applicant and to the commissioner, as soon as may be, after such pronouncement  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  105 clause 262 of the bill provides that in respect of the procedure for dispute resolution, the appeal, or the memorandum of cross objections, shall be in such form and manner and be verified in such manner as may be prescribed further, the appeal by the public sector company shall be accompanied by such fees as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  106 clause 263 of the bill provides that a public sector company may make an application to the authority for advanced rulings and dispute resolution for stay of demand relating to the appeal preferred by it under section 256 and such application shall be accompanied by such fees as may be prescribed accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 107 clause 269 of the bill provides that the principal bench and the additional benches of the settlement commission shall ordinarily sit at such places as the central government may, by notification in the official gazette, specify  accordingly, it is proposed to empower the central government to issue notifications in this regard for the purposes of this clause  108 clause 270 of the bill provides that in respect of the settlement commission, the vice-chairperson or, as the case may be, one of the vice-chairperson as the central government may, by notification in the official gazette, authorise in this behalf, shall act as the chairperson  accordingly, it is proposed to empower the central government to issue notifications in this regard for the purposes of this clause  109 clause 273 of the bill provides that an assessee may, at any stage of a case relating to him, make an application to the settlement commission in such form and manner as may be prescribed, to have the case settled such application shall contain, besides the specified particulars, such other particulars as may be prescribed  it has also been provided that every application made to the settlement commission shall be accompanied by such fees as may be prescribed further, the assessee shall, on the date on which he makes such an application to the settlement commission, also intimate the assessing officer in such manner as may be prescribed, of having made such application to the settlement commission accordingly, it is proposed to empower the central government to make rules and forms in this regard for the purposes of this clause  110 clause 282 of the bill provides that no person shall be entitled to inspect, or obtain copies of, any reports made by any income-tax authority to the settlement commission; but the settlement commission may, in its discretion, furnish copies thereof to any such person on an application made to it in this behalf and on payment of such fee as may be prescribed further, for the purpose of enabling any person whose case is under consideration to rebut any evidence brought on record against him in any such report, the settlement commission shall, on an application made in this behalf, and on the payment of such fee as may be prescribed, furnish such person with a certified copy of any such report or part thereof relevant for the purpose  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  111 clause 291 of the bill provides that in respect of any agreement with foreign countries or specified territory, the central government may, by notification in the official gazette, make such provisions as may be necessary for implementing the agreements  accordingly, it is proposed to empower the central government to issue notifications in this regard for the purposes of this clause 112 clause 291 of the bill further provides that in respect of any agreement with foreign countries or specified territory, a person shall not be entitled to claim relief under the provisions of the agreement unless a certificate of his being a resident in the other country or specified territory is obtained by him from the tax authority of that country or specified territory, in the prescribed form  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  113 clause 292 of the bill provides that every person who fulfils such conditions and requirements as may be prescribed shall make an application for the allotment of a permanent account number and the applicant shall be allotted a permanent account number further, a permanent account number may, having regard to the nature of transactions as may be prescribed, be allotted to any other person, whether or not an application is made by him also, any person who has been allotted a permanent account number shall quote the number in the transactions, or documents, as may be prescribed accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 114 clause 292 of the bill further provides that the board shall prescribe the following in respect of the permanent account number: (a) the form and the manner in which an application may be made for the allotment of a permanent account number and the particulars which such application shall contain; (b) the income-tax authority, or any other person, authorised to receive the application or allot the permanent account number; (c) the categories of transactions in relation to which permanent account numbers shall be quoted by every person in the documents pertaining to such transactions; (d) the categories of documents in which such numbers shall be quoted by every person; (e) class, or classes, of persons to whom the provisions of this section shall not apply; (f) the form and the manner in which the person who has not been allotted a permanent account number shall make his declaration; (g) the manner in which the permanent account number shall be quoted in respect of the categories of transactions referred to in clause (c); and any other matters connected therewith accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause 115 clause 293 of the bill provides that any person who has been allotted a tax account number shall quote the number in the transactions, or documents, as may be prescribed accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 116 clause 294 of the bill provides that no person shall accept from, or repay to, any other person any loan or deposit otherwise than by an account payee cheque or bank draft, if the aggregate amount of such loan or deposit in a financial year exceeds fifty thousand rupees however, these provisions shall not apply to any loan or deposit taken or accepted from, or by such other institution, association or body or class of institutions, associations or bodies which the central government may, for reasons to be recorded in writing, notify accordingly, it is proposed to empower the central government to issue notifications in this regard for the purposes of this clause 117 clause 295 of the bill provides that every person responsible for registering or maintaining books of account or other documents containing a record of any specified financial transaction, under any law for the time being in force, shall furnish an annual information return, in respect of such specified financial transaction such person will also include a designated person in the case of an office of government accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 118 clause 295 of the bill further provides that the annual information return in respect of the specified financial transactions shall be furnished to such authority, in such form and manner (including on a floppy, diskette, magnetic cartridge tape, cd-rom or any computer readable media) and within such time as may be prescribed accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  119 clause 295 of the bill further provides that for the purposes of furnishing the annual information return, "specified financial transaction" shall include any other transaction as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  120 clause 295 of the bill further provides that the annual information return in respect of the financial transactions shall be furnished if the aggregate value of each such transaction in any financial year exceeds the amount as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  121 clause 295 of the bill further provides that the prescribed income-tax authority may, if he considers that the annual information return furnished is defective, intimate the defect to the person who has furnished such return and give him an opportunity of rectifying the defect within a period of one month from the service of such intimation further, the prescribed income-tax authority shall treat the annual information return as invalid if such defect is not removed within the time allowed, and the provisions of the code shall apply as if such person had failed to furnish the annual information return accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  122 clause 295 of the bill further provides that if a person who is required to furnish an annual information return under the said clause has not furnished the same within the prescribed time, the prescribed income-tax authority may serve upon such person a notice requiring him to furnish such return within a period not exceeding sixty days from the date of service of the notice and such person shall furnish the annual information return within the time specified in the notice  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  123 clause 304 of the bill provides that any assessee who is entitled, or required, to attend before any income-tax authority, or the appellate tribunal, in connection with any proceeding under this code, may attend through an authorised representative an "authorised representative" means a person authorised by the assessee in writing to appear on his behalf, including any person who has acquired such educational qualifications as may be prescribed for this purpose  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 124 clause 304 of the bill further provides that a person, not being a legal practitioner or an accountant, who is found guilty of misconduct in connection with any income-tax proceedings by the prescribed authority, shall not be qualified to represent an assessee as his authorised representative  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  125 clause 305 of the bill provides that the method of rounding off of the amount of tax bases to the nearest multiple of hundred rupees, and any amount payable, or receivable, by the assessee, to the nearest multiple of ten rupees under the provisions of the code shall be such as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 126 sub-clause (18) of clause 314 of the bill defines "approved fund" to also mean a provident fund, superannuation fund, gratuity fund, pension fund, or any other fund, as approved by the board in accordance with the scheme framed and prescribed by the central government in this behalf;  accordingly, it is proposed to empower the central government to frame the scheme in this regard for the purposes of this clause  127 sub-clause (31) of clause 314 of the bill defines "backward classes" to mean such classes of citizens, other than the scheduled castes and the scheduled tribes, as may be notified, from time to time, by the central government or any state government  accordingly, it is proposed to empower the central government and the state governments to issue notifications in this regard for the purposes of this clause  128 sub-clause (34) of clause 314 of the bill defines "board" to mean the central board of direct taxes constituted under the central boards of revenue act, 1963 and notified by the central government for the purposes of this code  accordingly, it is proposed to empower the central government to issue notification in this regard for the purposes of this clause  129 sub-clause (36) of clause 314 of the bill defines "broken-period income" to mean the income for the period commencing from the date on which the debt instrument is acquired by the person or the beginning of the financial year, whichever is later, and ending on the date on which the security is sold, and calculated in such manner as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  130 sub-clause (55) of clause 314 of the bill defines "competent investigating authority" to mean any income-tax authority not below the rank of joint commissioner prescribed as such  accordingly, it is proposed to empower the central government to notify/make rules in this regard for the purposes of this clause  131 sub-clause (57) of clause 314 of the bill defines "computer software" to mean any computer programme recorded on any disc, tape, perforated media or other information storage device; or any customised electronic data or any product or service of similar nature, as may be notified by the board  accordingly, it is proposed to empower the board to issue notification in this regard for the purposes of this clause  132 sub-clause (63) of clause 314 of the bill defines "cost inflation index" in relation to a financial year as the index as the central government may specify by notification, having regard to seventy-five per cent of the average rise in the consumer price index for non-urban manual employees for the immediately preceding financial year  accordingly, it is proposed to empower the central government to notify the "index" in this regard for the purposes of this clause  133 sub-clause (74) of clause 314 of the bill provides that the transfer, in relation to "demerger", shall be in accordance with such other conditions as may be notified by the central government having regard to the necessity to ensure that the transfer is for genuine business purposes it is further provided that the splitting up or the reconstruction of any authority or a body constituted or established under a central, state or provincial act, or a local authority or a public sector company to form a resulting company, shall be in accordance with the conditions as may be notified by the central government  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 134 sub-clause (86) of clause 314 of the bill defines "due date" in relation to any other return, other than the return of tax bases, to mean such date as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  135 sub-clause (87) of clause 314 of the bill defines "electoral trust" to mean a trust so approved by the board in accordance with the scheme made in this regard by the central government  accordingly, it is proposed to empower the central government to make the scheme in this regard for the purposes of this clause  136 sub-clause (93) of clause 314 of the bill defines "fair market value", in relation to an asset, to mean the price determined in such manner as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  137 sub-clause (112) of clause 314 of the bill defines "head office expenditure" to mean executive and general administration expenditure incurred by the assessee outside india, including expenditure incurred in respect of, in addition to the matters specified therein, such other matters connected with administration as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  138 sub-clause (159) of clause 314 of the bill defines "medical authority" as - (i) the medical authority referred to in clause (p) of section 2 of the persons with disabilities (equal opportunities, protection of rights and full participation) act, 1995; or (ii) such other medical authority as may be notified by the central government for this purpose  accordingly, it is proposed to empower the central government to notify the "medical authority" in this regard for the purposes of this clause  139 sub-clause (166) of clause 314 of the bill defines "net worth" in relation to an undertaking or division transferred under slump sale, to mean the value determined in such manner as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  140 sub-clause (191) of clause 314 of the bill provides that the value of the perquisites defined therein shall be computed in such manner as may be prescribed  accordingly, it is proposed to empower the central government to make rules in respect of the manner of computation of the value of perquisites for the purposes of this clause  141 sub-clause (211) of clause 314 of the bill defines "recognised stock exchange" to mean a recognised stock exchange as referred to in clause (f) of section 2 of the securities contracts (regulation) act, 1956 and which fulfils such conditions as may be prescribed and notified by the central government for this purpose  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  142 sub-clause (213) of clause 314 of the bill defines "registered valuer" to mean a person registered as such by the board for determining the value of any asset in accordance with the procedure as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 143 sub-clause (239) of clause 314 of the bill defines "specified association" to mean any institution, association or body, whether incorporated or not, functioning under any law for the time being in force in india or the laws of the specified territory outside india and notified as such by the central government  accordingly, it is proposed to empower the central government to issue notification in this regard for the purposes of this clause  144 sub-clause (241) of clause 314 of the bill defines "specified knowledge-based industry or service" to mean any other industry or service, other than those specified therein, as may be notified by the central government  accordingly, it is proposed to empower the central government to issue notification in this regard for the purposes of this clause  145 sub-clause (242) of clause 314 of the bill defines "specified territory" to mean any area outside india and notified as such by the central government  accordingly, it is proposed to empower the central government to issue notification in this regard for the purposes of this clause  146 sub-clause (250) of clause 314 of the bill defines "state pooled finance entity" to mean such entity which is set up in accordance with the guidelines for the pooled finance development scheme notified by the central government  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  147 sub-clause (259) of clause 314 of the bill defines "tax recovery officer" to mean any income-tax officer who may be authorised by the chief commissioner or the commissioner, by general or special order in writing to exercise the powers of a tax recovery officer to exercise or perform such powers and functions which are conferred on, or assigned to, an assessing officer as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  148 sub-clause (260) of clause 314 of the bill provides that "test of continuity of business" stands satisfied, in case of a successor, if he, in addition to fulfiling the conditions specified therein, fulfils such other conditions as may be prescribed to ensure the revival of the business of the predecessor or to ensure that the business reorganisation is for genuine business purpose  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  149 sub-clause (284) of clause 314 of the bill defines "urban area" as an area within such distance from the local limits of any municipality or cantonment board referred to in item (a), as the central government may having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification  accordingly, it is proposed to empower the central government to issue notification in this regard for the purposes of this clause  150 sub-clause (289) of clause 314 of the bill provides that "value of sweat equity shares" shall be the value of the sweat equity shares on the date on which the option is exercised by the assessee, determined in accordance with the method as may be prescribed, as reduced by the amount actually paid by, or recovered from, the assessee in respect of such shares accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 151 sub-clause (290) of clause 314 of the bill defines "venture capital company" to mean a company,—  (a) which has been granted a certificate of registration as a venture capital company under the securities and exchange board of india act, 1992; and (b) which fulfils all other conditions as may be prescribed in this behalf accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  152 sub-clause (291) of clause 314 of the bill defines "venture capital fund" to mean a fund,—  (a) which has been granted a certificate of registration as a venture capital fund under the securities and exchange board of india act, 1992; and (b) which fulfils all other conditions as may be prescribed in this behalf accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  153 sub-clause (292) of clause 314 of the bill defines "venture capital undertaking" to mean such domestic company whose shares are not listed in a recognised stock exchange in india and which is engaged in the business of—  (a) nanotechnology;  (b) information technology relating to hardware and software development; (c) seed research and development; (d) bio-technology;  (e) research and development of new chemical entities in the pharmaceutical sector;  (f) production of bio-fuels; (g) dairy or poultry; (h) building and operating composite hotel-cum-convention centre with seating capacity of more than three thousand;  (i) development of infrastructure facility; or  (j) any other business as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  154 sub-clause (297) of clause 314 of the bill defines "zero coupon bond" to mean a bond issued by any company, fund or scheduled bank in accordance with a scheme notified by the central government; in respect of which no payment and benefit is received or receivable before maturity or redemption from the company, fund or scheduled bank; and which the central government may, by notification, specify in this behalf  accordingly, it is proposed to empower the central government to frame and notify the scheme in this regard for the purposes of this clause  155 clause 316 of the bill provides that the board may, subject to the control of the central government, make rules for the whole or any part of india for carrying out the purposes of this code it has been further provided that in particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters namely:—  (a) the ascertainment and determination of any class of income; (b) the manner in which and the procedure by which the income shall be arrived at, in the case of— (i) agriculture income;  (ii) a person residing outside india; (iii) a person whose total income includes income referred to in section 8; (c) the determination of the amount of expenditure allowable under this code in such manner, to such extent, and on such basis and conditions, as appears to the board to be proper and reasonable;  (d) the methods by which an estimate of any income liable to tax, or expenditure liable to deduction, may be made, if such income or expenditure cannot be definitely ascertained, or can be ascertained only with an amount of trouble and expense to the assessee which in the opinion of the board is unreasonable;  (e) the form and manner in which any document, application, claim, return or information may be made or furnished and the fees that may be levied in respect of any document, application or claim; (f) the class or classes of persons who shall be required to furnish any document, application, claim, return or information in electronic form;  (g) the form and manner in which a document, application, claim, return or information may be furnished electronically; (h) the document, statement, receipt, certificate or report which, regardless of anything to the contrary contained in this code, may not be furnished along with the return but shall be produced before the assessing officer on demand;  (i) the computer resource or the electronic record to which a document, application, claim, return or information may be transmitted electronically;  (j) the manner in which any document, application, claim, return or information required to be filed under this code may be verified;  (k) the authority, agency or organisation who may receive any application, claim, return or information on behalf of the board or the department;  (l) the procedure to be followed in calculating interest payable by assessees or interest payable by government to assessees under any provision of this code, including the rounding off of the period for which such interest is to be calculated in cases where such period includes a fraction of a month, and specifying the circumstances in which and the extent to which petty amounts of interest payable by assessees may be ignored;  (m) the form and manner in which any appeal or cross-objection may be filed under this code and the manner in which intimation of any such order as is referred to in clause (d) of sub-section (3) of section 184 may be served; (n) the circumstances in which, the conditions subject to which and the manner in which, the commissioner (appeals) may permit an appellant to produce evidence which he did not produce or which he was not allowed to produce before the assessing officer; (o) the fee payable in respect of any appeal, application, reference or ruling; (p) the maintenance of a register of persons referred to in section 270, other than legal practitioners or accountants, practicing before income-tax authorities and for the constitution of and the procedure to be followed by the authority referred to in sub-section (4) of that section; (q) the issue of certificate verifying the payment of tax by assessees; (r) the authority to be prescribed for any of the purposes of this code;  (s) the procedure for giving effect to the terms of any agreement for the granting of relief in respect of double taxation or for the avoidance of double taxation which may be entered into by the central government under this code; and  (t) any other matter which by this code is to be, or may be, prescribed  the aforesaid clause also provides that any order made, proceeding initiated or conducted, or liability or obligation discharged, in accordance with the rules framed under this section shall be deemed to be duly made, initiated, conducted or discharged, in accordance with the provisions of the code it has also been provided that the power to make rules conferred by this clause shall include the power to give retrospective effect, from a date not earlier than the date of commencement of the code, to the rules or any of them and, unless the contrary is permitted, no retrospective effect shall be given to any rule so as to prejudicially affect the interests of assessees  accordingly, it is proposed to empower the board to make rules and notifications in this regard for the purposes of this clause  156 paragraph 93 of the fifth schedule of the bill provides that the board may prescribe the form to be used for any order, notice, warrant, or certificate to be issued under the fifth schedule  accordingly, it is proposed to empower the board to prescribe forms in this regard for the purposes of this clause  157 paragraph 4 of the sixth schedule of the bill provides that the amount of family pension received by the widow or children or nominated heirs, as the case may be, of a member of the armed forces (including para-military forces) of the union, if the death of such member has occurred in the course of operational duties, in such circumstances and subject to such conditions, as may be prescribed  accordingly, it is proposed to empower the central government to frame the scheme and make rules in this regard for the purposes of this clause  158 paragraph 5 of the sixth schedule of the bill provides that income not included any income arising to a foreign company, as the central government may, by notification, specify in this behalf, by way of royalty or fees for technical services received in pursuance of an agreement entered into with the government for providing services in or outside india in projects connected with security of india  accordingly, it is proposed to empower the central government to issue notification in this regard for the purposes of this clause  159 paragraph 6 of the sixth schedule of the bill provides that income not included in the total income shall also comprise any income of the european economic community (established by the treaty of rome of 25th march, 1957), derived in india by way of interest, dividends or capital gains from investments made out of its funds under such scheme as the central government may, specify in this behalf  accordingly, it is proposed to empower the central government to frame the scheme and issue notification in this regard for the purposes of this clause  160 paragraph 10 of the sixth schedule of the bill provides that income not included in the total income shall also comprise any income, the nature and extent, accruing to a body or authority which is notified by the central government in this behalf if such body or authority—  (a) has been established or constituted or appointed under—  (i) a treaty or an agreement entered into by the central government with two or more countries; or (ii) a convention signed by the central government; and (b) is not established, constituted or appointed for the purposes of profit accordingly, it is proposed to empower the central government to issue notification in this regard for the purposes of this clause  161 paragraph 12 of the sixth schedule of the bill provides that income not included in the total income shall also comprise any payment from a provident fund to which the provident funds act, 1925, applies or from any other provident fund set up by the central government and notified by it in this behalf  accordingly, it is proposed to empower the central government to issue notification in this regard for the purposes of this clause  162 paragraph 27 item (a) of the sixth schedule of the bill provides that income not included in the total income shall also comprise any amount received by way of pension by an individual, who had been in the service of the central government or state government and has been awarded "param vir chakra" or "maha vir chakra" or "vir chakra" or such other gallantry award as the central government may, by notification, specify in this behalf accordingly, it is proposed to empower the central government to issue notification in this regard for the purposes of this clause  163 paragraph 31 of the sixth schedule of the bill provides that income not included in the total income shall also comprise any amount of interest on bonds issued by a local authority or by a state pooled finance entity as a public sector company and specified by the central government by notification  accordingly, it is proposed to empower the central government to make rules and issue notification in this regard for the purposes of this clause  164 paragraph 34 of the sixth schedule of the bill provides that income not included in the total income shall also comprise any income and amount thereof notified by the central government accruing to any person from any international sporting event held in india, if such event is approved by the international body regulating the international sport relating to such event; has participation of more than two countries; and is notified by the central government for the purposes of this paragraph  accordingly, it is proposed to empower the central government to issue notification in this regard for the purposes of this clause 165 paragraph 41 of the sixth schedule of the bill provides that income not included in the total income shall also comprise any payment received by any employee, from one or more employers, as the cash equivalent of the leave salary in respect of the period of earned leave at his credit at the time of his retirement, to the extent the aggregate of such amount does not exceed the limit as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  166 paragraph 42 of the sixth schedule of the bill provides that income not included in the total income shall also comprise any payment received by any employee, from one or more employers, by way of gratuity on his retirement, or on his becoming incapacitated prior to such retirement, or on termination of his employment; or any gratuity received by the family on the death of the employee, to the extent the aggregate of such amount does not exceed the limit as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  167 paragraph 43 of the sixth schedule of the bill provides that income not included in the total income shall also comprise any amount received by any employee, from one or more employers, in connection with his voluntary retirement or termination of his service or voluntary separation under any scheme framed for this purpose in accordance with such rules as may be prescribed, to the extent the aggregate of such amount does not exceed the limit as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  168 paragraph 47 of the sixth schedule of the bill provides that income not included in the total income shall also comprise income of a co-operative society from such activities and to such extent as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  169 paragraph 22 of the seventh schedule of the bill provides that any electoral trust so approved by the board in accordance with the scheme made in this regard by the central government, shall not be liable to income-tax, if ninety five per cent of the aggregate of all voluntary contributions received by it during the financial year and the surplus, if any, brought forward from any preceding financial year is distributed to political parties  accordingly, it is proposed to empower the central government to frame the scheme in this regard for the purposes of this clause  170 paragraph 24 of the seventh schedule of the bill provides that any corporation established by the central or state government for promoting the interests of the members of a minority community notified as such by the central government, shall not be liable to income-tax  accordingly, it is proposed to empower the central government to issue notification in this regard for the purposes of this clause  171 paragraphs 3 and 4 of the eighth schedule of the bill provides that the profits of the business of insurance other than life insurance shall be the profits disclosed in the annual accounts, copies of which are required to be furnished under the insurance act, 1938, to the controller of insurance such profits shall also be decreased by such amount carried over to a reserve for unexpired risks as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  paragraph 11 of the eighth schedule of the bill provides that the amount of common costs (including depreciation) attributable to the business of insurance shall be determined in such manner as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  172 paragraph 6 of the ninth schedule of the bill provides that the amount of common costs (including depreciation) attributable to the special source and presumed to have been allowed under paragraph 4 thereof shall be determined in such manner as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  173 paragraph 7 of the tenth schedule of the bill provides that the amount of common costs (including depreciation) attributable to the business of operating a qualifying ship and any other business shall be determined in such manner as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 174 paragraph 14 of the tenth schedule of the bill provides that the board may make rules for the purposes of computation of income from the business of operating a qualifying ship in respect of the following:—  (a) method and time for opting into the tonnage income scheme and the period for, and circumstances under, which the option shall remain in force;  (b) circumstances under which a company may be excluded from the tonnage income scheme;  (c) such other conditions for applicability of tonnage income scheme having regard to the need for generating internal accruals for acquiring new ships and training of crews;  (d) limits for charters of tonnage;  (e) prevention of abuse of the tonnage income scheme, having regard to the need to ensure that no transaction or arrangement results, or but for the rules prescribed hereunder, would have resulted in a tax advantage being obtained for—  (i) a person other than a qualifying shipping company; or  (ii) a qualifying shipping company in respect of its activities other than its business of operating a qualifying ship;  (f) valuation of goods or services where these are transferred between the business of operating a qualifying ship and any other business carried on by a qualifying shipping company;  (g) determination of arm's length price of the business transactions if the arrangement of transactions results in abuse of the tonnage income scheme  it is proposed to empower the board to make rules in this regard for the purposes of this clause  176 paragraph 14 of the tenth schedule of the bill further provides that the 'deemed tonnage' in a case where an arrangement has been entered into by the qualifying company for purchase of slots, slot charter or sharing of a qualifying ship, calculated in such manner as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  177 paragraph 3 of the eleventh schedule of the bill provides that for the purpose of computing the profits of the business of mineral oil or natural gas, the amount of business expenditure shall be the aggregate of the amounts specified therein, payment to site restoration account maintained in state bank of india in accordance with the scheme as may be prescribed  accordingly, it is proposed to empower the central government to frame the scheme in this regard for the purposes of this clause  178 paragraph 6 of the eleventh schedule of the bill provides that the amount of common costs including depreciation attributable to the business of mineral oil or natural gas and any other business shall be determined in such manner as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  179 paragraph 7 of the twelfth schedule of the bill provides that the amount of common costs (including depreciation) attributable to the specified business referred to that schedule shall be determined in such manner as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 180 paragraph 1 of the thirteenth schedule of the bill provides that the provisions of that schedule shall apply to the specified businesses enumerated therein which fulfil the prescribed conditions and are notified by the central government in the official gazette accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  181 paragraphs 1, item (j) of the thirteenth schedule of the bill further provides that 'specified business' for the purposes of that schedule shall, inter alia, include the business of developing and building a housing project under a scheme for slum redevelopment or rehabilitation framed by the central government or a state government, as the case may be, and notified by the board in this behalf in accordance with the guidelines as may be prescribed accordingly, it is proposed to empower the central government and the state governments to make the scheme and guidelines and the board to issue notifications and prescribe rules in this regard for the purposes of this clause 182 paragraph 8 of the thirteenth schedule of the bill provides that the amount of common costs including depreciation attributable to the specified business and any other business referred to in that schedule shall be determined in such manner as may be prescribed accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  183 paragraph 9 of the thirteenth schedule of the bill provides that the provisions of that schedule shall apply to the business referred to in paragraph (1) therein, which fulfils the conditions specified therein along with any other condition as may be prescribed accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause 184 item (ii) and (iii) of paragraph 9 of the thirteenth schedule of the bill provides that the provisions of that schedule shall apply to the specified business of laying and operating a cross country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of the network, which fulfils the condition that it has been approved by the petroleum and natural gas regulatory board established under sub-clause (1) of clause 3 of the petroleum and natural gas regulatory board act, 2006 and notified by the central government in the official gazette in this behalf accordingly, it is proposed to empower the central government to issue notification in this regard for the purposes of this clause  185 paragraph 5 of the fourteenth schedule of the bill provides that the amount of common costs (including depreciation) attributable to the business specified in column 2 of the table in paragraph 1 and presumed to have been allowed under paragraph 3 shall be determined in the prescribed manner accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  186 part i of the sixteenth schedule of the bill specifies the contributions or donations eligible for one hundred seventy-five per cent deduction this includes any research association or national laboratory or university, college or other institution if it is engaged in carrying on scientific research and development; and such association, university, college or other institution is approved in this behalf subject to conditions and in accordance with such guidelines and manner as may be prescribed accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  187 part ii of the sixteenth schedule of the bill specifies the contributions or donations eligible for one hundred twenty-five per cent deduction this includes any research association or a university, college or other institution if it is engaged in carrying on statistical research or research in social science; and such association, university, college or other institution is approved in this behalf subject to conditions and in accordance with such guidelines and as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  188 part iii of the sixteenth schedule of the bill specifies the contributions or donations eligible for one hundred per cent deduction this includes any university or educational institution of national eminence as may be approved by the prescribed authority in this behalf; the government or any such local authority, institution or association as may be approved in this behalf by the central government, to be utilised for the purpose of promoting family planning; the indian olympic association or to any other association or institution established in india, as the central government may, having regard to the prescribed guidelines, by notification, specify in this behalf for— (a) the development of infrastructure for sports and games; or (b) the sponsorship of sports and games, in india and where the sum is paid by an assessee, being a company; a rural development fund set up and notified by the central government; the national urban poverty eradication fund set up and notified by the central government  accordingly, it is proposed to empower the central government to make rules and issue notifications in this regard for the purposes of this clause  189 part d of the sixteenth schedule of the bill specifies the contributions or donations eligible for fifty per cent deduction this includes a temple, mosque, gurdwara, church or any other place as is notified by the central government to be of historic, archaeological or artistic importance or to be a place of public worship of renown throughout a state or states, to be utilised for the renovation or repair of such temple, mosque, gurdwara, church or other place accordingly, it is proposed to empower the central government to issue notification in this regard for the purposes of this clause  190 paragraph 3 of part-i of the nineteenth schedule of the bill provides that in order that a provident fund may receive and retain approval, it shall, subject to the provisions of paragraph 4, satisfy the conditions set out thereunder and any other conditions which the board may, by rules, specify it further provides that the board may by rules specify the conditions and restrictions in respect of portion of balance to the credit of employees payable to him  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  191 paragraph 4 of part-i of the nineteenth schedule of the bill further provides that where approval is accorded to a provident fund with existing balances, an account shall be made of the fund up to the day immediately preceding the day on which the approval takes effect, showing the balance to the credit of each employee on such day, and containing such further particulars as the board may prescribe  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  192 paragraph 5 of part-i of the nineteenth schedule of the bill provides that that portion of the annual accretion in any financial year to the balance at the credit of an employee participating in an approved provident fund as consists of - (a) contributions made by the employer in excess of twelve percent of the salary of the employee or one lakh rupees, whichever is less; and (b) interest credited on the balance to the credit of the employee in so far as it is allowed at a rate exceeding such rate as may be fixed by the central government in this behalf by notification, shall be deemed to have been received by the employee in that financial year and shall be included in total income for that financial year, and shall be liable to income-tax accordingly, it is proposed to empower the central government to fix the rate and issue notification in this regard for the purposes of this clause 193 paragraph 11 of part-i of the nineteenth schedule of the bill provides that the accounts of an approved provident fund shall be maintained by the trustees of the fund and shall be in such form and for such periods, and shall contain such particulars, as the board may prescribe it is further provided that the accounts shall be open to inspection at all reasonable times by income-tax authorities, and the trustees shall furnish to the assessing officer such abstracts thereof as the board may prescribe accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause 194 paragraph 12 of part-i of the nineteenth schedule of the bill provides that an employer objecting to an order of the commissioner refusing to approve or an order withdrawing approval from a provident fund, may appeal, within sixty days of such order, to the board the appeal shall be in such form and shall be verified in such manner and shall be subject to the payment of such fee as the board may prescribe accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause 195 paragraph 15 of part-i of the nineteenth schedule of the bill provides that in addition to any power conferred by that part, the board may make rules— (a) prescribing the statements and other information to be submitted along with an application for approval; (b) limiting the contributions to an approved provident fund by employees of a company who are shareholders in the company; (c) regulating the investment or deposit or the moneys of an approved provident fund;   (d) providing for the assessment by way of penalty of any consideration received by an employee for an assignment of, or creation of a charge upon, his beneficial interest in an approved provident fund; (e) determining the extend to and the manner in which exemption from payment of tax may be granted in respect of contributions and interest credited to the individual accounts of employees in a provident fund from which approval has been withdrawn; and (f) generally, to carry out the purposes of this part and to secure such further control over the approval of provident funds and the administration of approved provident funds as it may deem requisite accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause 196 paragraph 2 of part-ii of the nineteenth schedule of the bill provides that in order that a superannuation fund may receive and retain approval, it shall satisfy the conditions set out therein and any other conditions which the board may, by rules, prescribe accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause 197 paragraph 5 of part-ii of the nineteenth schedule of the bill provides that where any contributions made by an employer, including interest on contributions, if any, are paid to any employee during his lifetime, in circumstances other than those referred to in paragraph (13 of the sixth schedule, tax on the amounts so paid shall be deducted at the average rate of tax at which the employee was liable to tax during the preceding three years or during the period, if less than three years, when he was a member of the fund, and shall be paid by the trustees to the credit of the central government within the prescribed time and in such manner as the board may direct accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  198 paragraph 7 of part-ii of the nineteenth schedule of the bill provides that an employer objecting to an order of the commissioner refusing to accord approval to a superannuation fund of an order withdrawing such approval may appeal, within sixty days of such order, to the board the appeal shall be in such form and shall be verified in such manner and shall be subject to the payment of such fee as may be prescribed  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  199 paragraph 10 of part-ii of the nineteenth schedule of the bill provides that in addition to any power conferred by that part, the board may make rules—  (a) prescribing the statements and other information to be submitted along with an application for approval;  (b) prescribing the returns, statements, particulars, or information which the assessing officer may require from the trustees of an approved superannuation fund or from the employer;  (c) limiting the ordinary annual contribution and any other contributions to an approved superannuation fund by an employer;  (d) regulating the investment or deposit of the moneys of an approved superannuation fund;  (e) providing for the assessment by way of penalty of any consideration received by an employee for any assignment of, or creation of a charge upon, his beneficial interest in an approved superannuation fund; (f) determining the extent to , and the manner in , which exemption from payment of tax may be granted in respect of any payment made from a superannuation fund from which approval has been withdrawn;  (g) providing for the withdrawal for approval in the case of a fund which ceases to satisfy the requirements of this part or of the rules made thereunder; and  (h) generally, to carry out the purposes of this part and to secure such further control over the approval of superannuation funds and the administration of approved superannuation funds as it may deem requisite  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  200 paragraph 2 of part-iii of the nineteenth schedule of the bill, inter alia, provides that in order that a gratuity fund may receive and retain approval, it shall satisfy the conditions set out below and any other conditions which the board may, by rules, prescribe—  (a) the fund shall be a fund established under an irrevocable trust in connection with a trade or undertaking carried on in india, and not less than ninety per cent of the employees shall be employed in india;  (b) the fund shall have for its sole purpose the provision of gratuity to employees in the trade or undertaking on their retirement at or after a specified age or on their becoming incapacitated prior to such retirement or on termination of their employment after a minimum period of service specified in the rules of the fund on to the widows, children or dependants of such employees on their death;  (c) the employer in the trade or undertaking shall be a contributor to the fund; and (d) all benefits granted by the fund shall be payable only in india accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  201 paragraph 7 of part-iii of the nineteenth schedule of the bill provides that an employer objecting to an order of the commissioner refusing to accord approval to a gratuity fund or an order withdrawing such approval may appeal, within sixty days of such order, to the board the appeal shall be in such form and shall be verified in such manner and shall be subject to the payment of such fee as may be prescribed  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  202 paragraph 9 of part-iii of the nineteenth schedule of the bill provides that in addition to any power conferred by that part, the board may make rules—  (a) prescribing the statements and other information to be submitted along with an application for approval;  (b) limiting the ordinary annual and other contributions of an employer to the fund;   fund; (c) regulating the investment or deposit of the moneys of an approved gratuity   (d) providing for the assessment by way of penalty of any consideration received by an employee for any assignment of, or creation of a charge upon, his beneficial interest in an approved gratuity fund;  (e) providing for the withdrawal for approval in the case of a fund which ceases to satisfy the requirements of this part or of the rules made thereunder;  (f) generally, to carry out the purposes of this part and to secure such further control over the approval of gratuity funds and the administration of gratuity funds as it may deem requisite  accordingly, it is proposed to empower the board to make rules in this regard for the purposes of this clause  203 paragraph 7 of the twentieth schedule of the bill provides that a resident assessee shall furnish the details of its investment and interest in any entity outside india in such form and manner as may be prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  204 paragraph 22 of the twentieth schedule of the bill provides that an order under the tenth schedule in relation to a qualifying shipping company's application for opting for tonnage tax scheme, passed by an authority as may be prescribed, shall be an appealable order before commissioner (appeals)  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  205 paragraph 3 of the twenty-second schedule, inter alia, provides that the deferred revenue expenditure allowance shall be allowable for ten consecutive financial years, the first such financial year of allowability being the year in which such amount is actually paid, in case of expenditure incurred by a person resident in india wholly and exclusively on any operations relating to prospecting for any mineral or the development of a mine or other natural deposit of any mineral, to the extent prescribed  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  206 paragraph 3 of the twenty second schedule further provides that in the case of expenditure incurred by a person resident in india wholly and exclusively on any operations relating to prospecting for any mineral or the development of a mine or other natural deposit of any mineral, to the extent as may be prescribed, the deferred revenue expenditure allowance shall be allowable for ten consecutive financial years, the first such financial year of allowability being the year in which such amount is actually paid further, the deferred revenue expenditure allowance shall be allowable for six consecutive financial years, the first such financial year of allowability being the year of commencement of the business or extension of the business or setting up of new business, as the case may be, in case of any preliminary expenditure incurred—  (a) before the commencement of the business; or  (b) in connection with the extension of the business; or  (c) in connection with the setting up of new business,  which shall be such as may be prescribed having regard to capital employed in the business and cost of the project  accordingly, it is proposed to empower the central government to make rules in this regard for the purposes of this clause  207 the rules and scheme made and notification issued under the proposed legislation shall be required to be laid before the parliament  208 the matters in respect of which rules or scheme may be made or notifications issue are matters of procedure and administrative detail and it is not practicable to provide for them in the bill itself the delegation of legislative power is, therefore, of a normal character  lok sabha —————  a billto consolidate and amend the law relating to direct taxes ————— (shri pranab mukherjee, minister of finance )  