 the taxation laws (amendment and miscellaneous provisions) bill 1986 arrangement of clauses chapter i preliminary1 short title and commencement  chapter ii amendments to the income-tax act2 amendment of section 2 3 amendment of section 10 4 amendment of section loa 5 amendment of section 3"2 ti amendment of section 34 7 amendment of section 41 8 amendment of section 4:~ 9 substitution of new section for se:tion 50 10 amendment of section bohh 11 amendment of section bohhc j 2 amendment of section 139 13 amendment of se~tion 220 14 amendment of section 221 15 amendment of section 245b 16 amendment of section 245d 17 amendment of section 245f is amendment of section 270 19 amendment of section 271 20 amendment of section 271a 21 amendment of section 271b 22 amendment of section 2'i'"2a 23 amendment of section 272aa 24 amendment of section 272b 25 amendment of section 273 26 tn!;ertion of new section 273b (', 27 amendment of sections 276a, 276ab, 276b, 276dd and 276e 28 j nsertion of new section 278aa 29 insertion of new section 278e 30 omission of the eighth schedule 31 omission of the n~nth  schedule 32 consequential amendments  chapter iii amendments to the wealth-tax act, 195733 amendment of section 18 34 amendment of section 18a 35 amendment of section 22b 36 amendment of section 22d 37 amendment of section 22f 38 amendment of section 35ee 39 insertion of new section 35-0  chapter iv amendments to the gift-tax act, 195840 amendment of section 17 41 insertion of new section 3sd  chapter v miscellaneous42 housing and urban development corporation ltd to be exempt for a certain period from liability to pay income-tax and !'urtax  the taxation laws (amendment and miscellaneous provisions) bill, 1986a bill !url1ler 10 amend the income-tax act, 1961, the wealth-tax act, 1957, the gift-tax act, 1958 and to provide for exemption to a government company from income-tax and surtax for a specified period be it enacted by parliament in the thirty-seventh year of the republic of inelia as follows:'- chapter i preliminary5 1 (1) this act may be called the taxation laws (amendment and miscellaneous provisions) act, 1986 short title and commencement, (2) save as otherwise provided in this act, it shall come into force at onr:e  chat'ter ii ro amendments '1'0 the income-tax act, 1961amendment of section 2 43 or 1961 2 in section 2 of the income-tax act, 1961 (hereafter in this chapter ,referred to as the income-tax act), after clause (10), the following clause shall he inserted with effect from the 1st day of april, 1988, namely:-' (11) "block of assets" means a group of assets fauing within a 15 class of assets, being buildings, machinery, plant or furniture, in respect of which the same percentage of depreciation is prescribed;' 3 in section 10 of the income-tax act, for clause (17), the foll~wing ~use shall be substituted and shall be deemed to have been substituted with effect from the 1st day of april 1986, namely:-amendmearof section 10  (17) any income by way of-(i) daily allowance received by any person by reason of his ;, membership of parliament or of any state legislature or of any committee thereof; or - (ii) all other allowances not exceeding rupees twelve hundred and fifty per month in the aggregate received by any person by reason of his membership of parliament or of any committee 10 t hereof, or all other allowances not exceeding rupees six hundred per month in the aggregate received by any person by reason of his membership of any state legislature or any committee thereof, which the central government may, by notification in the official gazette specify in this behalf;"   in section loa of the income-tax act with effect from the 1st day c-f april, 1987,-amendmcll1 of <;cclion \ 00\ (a) for sub-section (3) the following sub-section shall be substituled namely:- (3) the profits and gains referred to in subsection (1):in ~hall not be included in the total income of the assessee in respect of any five consecutive assessment years, falling within a period of eight years beginning with the assessment year relevant to the previous year in which the industrial undertaking hegins to manufacture or produce articles or things, specified by :is the assessee at his option: provided that nothing in this sub-section shall be construed to extend the aforesaid five assessment years to cover any period after the expiry of the said period of eight years"; (b) in sub-section (7) the words "for the initial assessment 30 year" shall be omitted; (c) in the explanation occurring at the end, for '!lause (ii), the fnuowing clause shall be substituted, namely:-- (ii) "relevant assessment years" means the five consecutive as!;essment years specified by the assessee at his option under 35 sub-section (3) ' ' 5 in section 32 of the income-tax act, with effect from the 1st day of april 1988,-amca4_ section 32 (1) in sub-section (1) ,-(a) clause (i) shall be omitted; (b) in clause (ii) ,-(i) for the opening phragraph, the following shall l··e substituted, namely:-"in the case ot any block of assets, such percentage on the written down value thereof as may be pres- 45-cribed: "; (ii) in the second proviso, the -words, brackets and figures "or clause (iii)" shall be omitted; 5 iu (iii) after the second proviso, the following e;r,tl~anations shall be inserted, namely:-'explanation i-where the business or profession of the assessee is carried on in a building not qwned by him but in respect of which the assessee holds a lease or other righl of occupancy and any capital expenditure is incurred by the assessee for the purposes of the busiuess or profession on the construction of any structure or doing of any work, in or in relation to, and by way of renovation or extension of, or improvement to, the building, then, the provisions of this clause shall apply 8s if the said structure or work is a building owned by the as~  ssee explanation 2-for the purposes of this clause "written down value of the block of assets" shall have the same meaning as in clause (c) of sub-section (6) of section 43; (d clauses (iia) (iii), (iv), (v) and (tn) shall be omitted; (2) sub-section (la) shall be omitted; 20 (3) in sub-section (2), for the words, brackets, figures and letters "under clause (i) or clause (ii) or clause (iia) or clause (iv) or (·lause (v) or clause (vi) of sub-section (1) or under clause (i) of sub-section (la) ", the words brackets and figures "under clause (ii) of sub-section (1)" shall be substituted; 2j i)' in section 34 of the income-tax act, sub-sections (1) and (2) shall bt: omitted with effect from the 1st day of april, 1988 aill:nj-ilicnt of section 34 7 in section 41 of the income-tax act, with effe~t from the 1st day 01 april 1988-amendment of section 41 (a) sub-section (2) and (2a) and the explanations thereunder :ie) shall be omitted; (b) in sub-section (4), for the explanation, the following explanation shall be substituted namely:- explanation-for the purposes of sub-section (3) ,--(1) "moneys payable" in respect of any -'uilding machinery, plant or furniture includes-'l") (a) any insurance, salvage or compensation moneys payable in respert thereof; (b) where the building, machinery,plant or furniture is sold, the price for which it is sold, so, however, that where the actual cost of a motor car is, in accordance with the proviso to clause (1) of section 43, taken to be twenty-five thousand rupees, the moneys payable in respect of such motor car shall be taken to be a sum which bears to the amount for whieh the motor car is sold or, as the case may be, the amount of any insurance, salvage or compensation moneys payable in respect thereof (including the amount of scrap value if any) the same proportion as the amount of twenty-five thousand rupees bears to the actual cost of the motor ear to the as'sessee as it would have been computed before applying the said proviso~ 5 (2) "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 amalgamation, of any asset by the "malgamating company to the amalgamated company where the amalgamated com-i (i pany is an indian company: (c) in sub-section (5), the wor'ds, brackets, figures and letter "sub-section (2), sub-seetion (2a)," shall be omitted 8 in section 43 of the income-tax act, with effect from the 1st day of april, 1988-15 (i) in clause (1) ,-amend· menl of section 43 (a) in explanation 1, for the words brackets figure;; and lelter "clause (i), clause (ii) or clause (iii) of s11:)·sectinn (1) or sub-section (la)" the words, brackets and figur p <; "c1aw:e (ii) of sub-section (1)" ~hall be substituted; 20 (b) for explanation 2, the following explanation shall be substituted, namely:-'explanation 2-where an asset is acquired by the assessee by way of gift or inheritance, the actual cost of the asset to the assessee shall be the actual cost to the pr~ous 25 owner, as reduced by-(a) the amount of depreciation actually allowed under this act and the corresponding provisions of the indian income-tax act, 1922 in respect of any previous 11 lit i":!:: year relevant to the assessment year commencing before 30 the 1st day of april, 1988; and (b) the amount of depreciation that would have been allowable to the assessee for any assessment year commencing on or after the 1st day of april, 1988, as if the asset was the only asset in the relevant block of 35 assets'; (c) for explanation 4, the following expllanation shall be substituted, namely:-"explanation 4-where any asset which had once belonged to the assessee and had been used by him for the purposes of 40 his business or profession and thereafter ceased to be his property by reason of transfer or otherwise, is re-acquired by him,tbe actual cost to the assessee shall be-(i) the actual cost to him when he first acquired the assets as reduced by-45 (ii) the amount of depreciation actually allowed to him under this act or under the corresponding provisions of the indian income-tax act, 1922, in i! of ]')n respect of any previous year relevant to the assessment year commencing be~ore the 1st day of april, 1988; and  -, (b) the amount of depreciation that would have been allowable to the assessee for any assessment year commencing on or after the 1st day of april, 1988, as if the asset was the only asset in the relevant block of assets; or (ii) the actual price for which the asset is re-acquired by him, whichever is less"; (ii) in clause (6),-(a) after the proviso, the following clause shall be inserted, 15 namely:-c/ (c) in the case of any block of assets,-(i) in respect of any previous year relevant to the assessment year commencing on the 1st day of april, 1988, the aggregate of the written down values of all the assets falling within that block of assets at the beginning of the previous year and adjusted,-(a) by the increase by the actual cost of any asset falling within that block, acquired during the previous year; and "}i j j (8) by the reduction of the moneys payable in respect of any asset falling within that block, which is sold or discarded or demolished or destroyed during that previous year together with the amount of the scrap value, if any, 'so, however, that the amount of such reduction does not exceed the written down value as so increased; and 1] (ii) in respect of any previous year relevant to the assessment year commencing on or after the 1st day of april, 1989, the written down value of that block of assets in the immediately preceding previous year as reduced by the depreciation actually allowed in respect of the block of assets in relation to the said preceding previous year and as further adjusted by the increase or the reduction referred to in item (i) _"; (b) in explano,tion 1, for the words "any asset", the words "any asset or any block of assets" shall be substituted; (c) for e:t'planations 2 and 2a, the following explanation shall be substituted, namely:-"explanation 2-where in any previous year, any block of assets is transferred,-(n) by a holding company to its subsidiary company or by a subsidiary company to its holding company and the conditions of clause (iv) or, as the case may be, ot clause (v) of se::tion 47 are satisfied; or (b) by the amalgamating company to the amalgamated company in a scheme of amalgamation, and the amalgamated company is an indian company 5 then, notwithstanding anything contained in clause (1), the actual cost of the block of assets in the case of the transferee company or the amalgamated company, as the case may be, shall be the written down value of the block of assets as in the case of the transferor company or the amalgamating 10 company for the immediately preceding previous year as reduced by the amount of uepreciation actually allowed in relation to the said preceding previous year"; (d) after exp1anation 3, the following explanation shall be inserted, namely:--- explanation 4--for the purposes of this clause the expressions "moneys payable" and "sold" shall have the same meaning as in the explanation below sub-section (4) of section 41' sub~ljlli­lion or 9 for section 50 of the income-tax act the following section shall he ::" sllbstituted with effect from the 1st day of april 1988, namely:-n~w ~cctio:l r"t ~ection 50 "50 notwithstanding anything contained in clause (42a) of sec-~ion 2, where the capital asset is an asset forming part of a block of assets in respect of which depreciation has been allowed under thi~ act jr under the in1ian income-tax act, 1922, the provisions of se::- 25 i i <if \9z2 tions 48 and 49 shall be subject to the following modifications:--spec:ial provision for computation of capital gains in c35e of deprccia"le assets "(1) where the full value of the consideration received or accruing as a result of the transfer of the asset together with the full value of such consideration received or accruing as a result of the transfer of any other capital asset falling within the block 3" of assets during the previous year, exceeds the aggregate of the following amounts, namely:-(i) expenditure incurred wholly and exclusively in connection with such transfer or transfers; (ii) the written down value of the block of 8sfef s at the 35 beginning of the previous year; and (iii) the actual cost of any asset falling within the block of assets acquired during the previous year, such excess shall be deemed to be the capital gains arising from the transfer of short-term capital assets; 40 (2) where any block of ilsiiets ceases to exist as such, for the reason that all the auets in that block are transferred during the previous year, the cost of acquisition of the block of assets shall be the written down value of the block of assets at the bejinnina of the previous year, as increased by the actual cost of any asset falling within that block of assets, acquired by the asllel8ee during the previous year and the income received or 8ccnung as a result of such tranlder or trml8~8 shall be deemed to be the capital gains arising from the transfer of short-tem capital assets" 10 in section 80hh of the income-tax act, for the ezplanation below sub-section (10), the following sub-section shall be substituted namely:-amendment of sectiun mihh 10 '(11) for the purposes of this section, "backward area" means such area 8s the central government may, having regard to the stage of development of that area, by notification in the official gazette, specify in this behalf: provided that any notification under this sub-section may be j 5 issued so as to have retrospective effecr to a date not earlier than the 1st day of april, 1983' 11 in section sohhc of the income-tax act with effect from the amend-1st day of april, 1987-ment of lie~ti(ln (it) in sub-section (1), for the portion beginning with the words ro hhc 20 "deduction of an amount" and ending with the words "provided that", the following shall be substituted namely:-"deduction equal to thc' aggregate of--(a) four per cent of the net foreign exchange realisation; and (b) fifty per cent of so much of the profits derived by the 2!j assessee from the export of such goods or merchandisf' as exceeds the amount referred to in clause (a):  provided that ~he deduction under this sub-section shall n(\t exceed the profits derived by the assessf'l' from the export of such goods or metc'handise: provided further that"; (b) after sub-section (3) and before' the explanation, the following sub-section shall be imlel'ted, namely:-35 "(4) the deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form along witli the return of income, the report of an accountant, as aefined in the explanation below sub-section (2) of section 288, certifying that the deduction has ~een correctly claimed on the basis of the amount of net foreign exchange realisation as determined in accordance with the import and export policy of the government of india for the relevant period"; (c) after clause (b) of the explanation, the following clause shall be inserted, namely:-- (c) unet foreign exchange realisation" means the total free ~n board val\je of exports out of india of goods and merchandise to which this section applies as reduced by the aggregate of the 45 ~ost insurance and freight vaiue of all categories of import licences, to be iasued by the chief controller of import and exports, government of india, to which the assessee is entitled dllrmg the previous year, either against export obligation or against 'exports as replenishments'  12 in section la9 of the income-tax act,-amend· ment of section 139 (a) in sub-section (3), for the portion beginning with the words "within such further time" and ending with the words "in his discretion, allow", the following shall be substituted with etfect from the 1st day of april, 1987, namely:-"by the thirty-first day of july of the assessment year rele- 10 vanl to the previous year during which the loss was sustained"; (b) after sub-section (9), the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of april, 1986, namely: -"(10) notwithstanding anything contained in any other pro- 15 vision of this act, a return of income which shows the total income below the maximum amount which is not chargeable to tax shall be deemed never to have been furnished: provided that nothing hereinbefore to-contained shall apply 20 (a) a return furnished in response to 3 notice under subsectipn (2) or section 148; (b) a return of a partner of a firm; (c) a return of a person woo has claimed exemption of income from property held for charitable or religious pur- 25 poses; (d) a return of loss which has been furnished before the thirty-first day of july of the assessment year relevant to the previous year during which the loss was sustained: (e) a return furnished under sub-section (4b) in respect go of a po1itic~l party; and <f) a return furnished in support of a claim for refund under section 237"  13 in section 220 of the income-tax act, in sub-section (2a),-amendment of -ection 2» (a) in the opening portion, for the words "the board may" and 35 "on the recommendation made by the commissioner in this behalf, it is satisfied", the words ·'the commissioner may" and "he is satisfied" shall, respectively, be substituted with effect from the 1st day of april, 1987; (b) for the words "interest payable by an assessee", "would caul& 40 genuine hardship" and "interest was payable", the words"interest paid or payable by an assessee", "has caused or would cause genufne hardship" and "interest has been paid or was payable" shall, respectively, be substituted and shall be deemed to have been substituted with (1ject from the 1st day of october, 1984 15 in ~ection 245b of the income-tax act,-amendment of scctio 245b (a) in sub-section (2), for the words "and two other members", the words "and as many vice-chairmen and other members as the central government thinks fit" shall be substituted; 14 in section 221 of the income-tax act, in sub-section (1), for the amend-iiecond proviso, the following proviso shall be substituted, namely: _ ment of section "provided further that where the assessee proves to the satisfac-221 tion of the income-tax offieer that the default was for good and 5 sufficient reasons, no penalty shall be levied under this section" i (b) sub-section (2a) shall be omitted; 10 (c) in sub-section (3) ,-(i) in the opening portion, after the word "chairman", the w~rd '"vice-chairmen" shall be inserted; lii) in the first proviso, after the word "chairman", the 15 word ", vice-chairman" shall be inserted; (iii) the second proviso shall be omitted 16 in section 245d of the income-tax act, sub-section (5) shall be amendomitted ment of sectiod 2450 "(5) the powers or functions of the settlement commission may 145f be exercised or discharged by benches constituted by the chairman of the settlement commission from amongst the members thereof; (6) a bench constituted under sub-section (5) shall consist of three members, one of whom shall be the chaimlan or a vice-chairman; 17 in section 245f of the income-tax act, for sub-section (5), the fo1-amend-20 lowing sub-sections shall be substituted, namely: -ment of ~ction , , j - ' (7) the settlement commission shall, subject to the provisions of this chapter, have power 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 places at which the benches shall hold their sittings" 18 in section 270 of the income-tax act, the words "without reason-amendable excuse" shall be omitted ment ot section 270 35 19 in section 271 of the income-tax act, in sub-section (1) ,-amendmentol (a) the words "without reasonable cause", wherever they occur, section shall be omitted: 271 (b) in explomtion 1,-(i) in clause (b) for the words "not able to substantiate,", the words "not able to substantiate and fails to prove that such xpjanat~~n is bona ,fide !lrtd that all the facts relating to the same and material to the computation of his total income have been disclosed by him," shall be substituted; (ii) the proviso shall be omitted; (c) in explanation 5, for the portion beginning with the words ··unless such income is" and ending with the words "before the said 5 date", the following shall be substituted, namely:-·'unless--(1) such income is, or the transactions resulting in such income are recorded,-(i) in a case falling under c1au5e (a), before the date 10 of the search; and (ii) in 3 case falling under clause (b), on or before ~uch date, in the books of accounts, if any, maintained by him for any source of income or such income is otherwise disclosed to the j 5 commissioner before the said date; or (2) he, in the course of the search, makes a statement under sub-section (4) of section 132 that any money bullion, jewellery or other valuable article or thing found in his possession ur under his control, h~s "been acquired out of his in- ~n come which has not been disclosed so far in his return of income to be furnished before the expiry of time specifted in clause (a) or clause (b) of sub-section (1) of section 1:j9, and also specifies in the statement the manner in which such income has been derived and pays the tax, together with 25 interest if any, in respect of such income" 20 in section 271a of the income-tax act, the words", without reasonable caust!," shall be' omitted amendmeniof section 271a 21 in section 271b of the income-tax act the wor~s ", without reasonable cause," shall be omitted amendment of section :71 b , 22 in section 272a of the income-tax act, 'in su~section (2) , the word!- ", without reasonable cause or excuse," shall be omitted amend· mentol section 272a 23 in section 272aa of the income-tax act, the words " without reast)nable cause," shall be omitted amendmento! section 272aa 24 in section 272b of the income-tax act, the words " without rea- 35 son able cause," shall be omitted amendmentor section 272b 25 in section 273 of the income-tax act, the words "without reasonable cause", wherever they occur, shall be omitted, amendmentof section d penalty not to be im· posed in certain casali 26 after section 273a of the income-tax act, the foflowing section inaerahall be inserted, namely:-tion of new section 273b ·'273b notwithstanding anything contained in the provisions of seetion 270, clause (a) or clause (b) of sub-section (1) of section 271, section 271a, section 271 b, sub-section (2) of section 272a, section 272aa, section 272b or dause (b) of sub-section (2) of section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure' referred to in the said provis~ons if he proves that there was reasonable cause for the said failure" 10 27, in section 276a, 276ab, 276b, 27600 and 276e, the ", without reasonable cause oj' excuse," shall be omitted words amend ment of sections 276a, 276ab, 276l, 276dd and 276e 28 after section 278a of the income-tax act, the following section insertion si1;lll he in'scril'd namely:-of new section 278aa '::;78aa notwithstanding anything contained in the provisions of section 276a, section 276ab, section 276b, section 276qo or sect!on 276e, no person shall be punishable for any failure referred to in the said provisions if he proves that there was reasonable cause for such failure" punishment not to be imposed in certain cases 29 in the income-tax act after section 2780 the following section 20 shall be inserted, namely:-'inser· tion of new r;ection 278e '278e (1) ln any prosecution for any offence under this act which requires a culpable mental state on the part of the accused, the court sbaji presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had rio such mental state with respect to the act charged as an offence in that prosec'ution presumption as to culpable mental state explanation--in this sub-section, "culpable mental state" includes intention, motive or knowledge of a fact, or belief in, or reason to believe, a fact (2) for the purposes of this section, a fact is said to be proved only when the court believes it to exist beyond reasonable doubt and not merely when its existence is established 'by a preponderance of probability' 30 in the income-tax act, the eighth schedule shall be omitted and shall be deemed to have veen omitted with effect from the 1st day of 35 aprjl, 1984, omission 9f the eighth schedule 31 in the income-tax act, the ninth schedule shall be omitted wtth eftect from the 1st day of april, 1988 omission of the ninth sdlcdu1c 32 the following amendmenls (being amendments of a consequential nature) shall be made in the income-tax act with effect from the 1st day of april, 1988, namely:-' 5 (4) in seetion 32a, in sul>section (2), in the ezplcint&1fion, for clause (1), the following clause shah be substituted, nameiy:-- (1) (4) "new ship" or "new aircraft" includes a ship or aircraft which before the date of acquisition by the assessee was used by any other person, if it was not at any time previou'ij to 10 the date, of such acquisition owned by ally person resident in india; (b) "new machinery or plant" includes machinery or plant which before its installation by the assessee was used outside india by any other person, if the fohowing conditions are ful- 15 fuled, namely:-(i) such machinery or plant was not, at any time previous to the date ot ~uch installation by the assessee, used in india; (ti) such machinery or plant is imported into india from 20 any country outside india; and (iii) no deduction on account of depreciation in respect of such machinery or plant has been allowed or js allowable under the provisions of the inelian income-tax act, 1922 or ii of 1922-this act' in computfn~ the total income of any person for 25 any period prior to the date of the installation of the machinery or plant by the assessee'; (b) in section 35,-(1) in sub-section (2)-(i) in clause (iv), for the words, brackets fil'ures and 30 letters "clauses (i), (ii) (ha) , (ui) and (iv) of sub-section (1) or under sub-section (la)", the words, brackets and figures "clause (ii) of sub-s,:,ction (1)" shall be substituted; (ii) in clause (v), for the words, brackets and fhrures "clauses (i), (ii) and (iii) of 8ub~tion (1)", the words brackets and figures "clause hi) of sub-section (1)" shall be substituted; (2)' in sub-section (28), in druse (e) for the words, brackets, figures and letters "c1aus~s (i) (ii) (iia) and (iii) of subsection (1) or under sub-section (j a \" thf> words brackets and 40 figures "clause (ii) of sub-sectioj", (j)" shall be substituted; ~, , '(c) in section 38 in !1ub-section (2), for the words, brackets, figures and letters uclaus-s (i) on (hit) ~nd (iin of sub-sectlon (i)' and sub-sectloll (1a) ft, the words br~c1tets ~nd ftgures "c1awre (tt)' of $j1};)-s~ction (1) it 81,111 be substituted: - ·u (4) in eection 55, in iub«ction <1) ,-(i) for the words and figures "sections 48, 49 and 50", the words and ft~ "sections 48 and 49" shall be substituted; (ii) clause (a) shall be omitted; 5 (e) in section 57, in clause (ii),-(i) the brackets, figure and letter ", (la)" shall be omitted; (ii) for the words and figures "sections 34 and 38", the word and figures "section 38" shall be substituted; (f) in section 59, sub-sections (2) and (3) and the &rplanation 10 occurring thereunder shall be omitted; (g) in section 155, in the explanation below sub-section (4a), for the words, brackets and figures "e~la1i4tion to clnuse (vi) of sub-section (1) of section 32", the words, brackets, ftgul'es and letter "explanation below 9ub-section (2) of section 32a" shall be substi 15 tuted  chapter iii amendments to the wealth-tax act, 195733 in section 18 of the wealth-tax act 1957 (hereafter in this chapter referred to as the wealth-tax act)-amendment of section 18 20 (a) the words "without reasonable cause", wherever they occur, shall be omitted; (b) in sub-section (1) ,-(i) after clause (hi), before explanation 1 the following proviso shall be inserted, namely:-"provided that in the cases referred to in clause (a) or clouse (b), no penalty shall be imposable if the person proves that there was reasonable cause for the failure referred to in those clauses"; (ii) in explanation 2,-(1) in clause (b), for the words "not able to substantiate," the words "not able to substantiate and fails to prove that 9uch explanation is bona fide and that all the facts relating to the same and material to the computation of his llet wealth have been disclosed by him," shall be substituted;  35 (2) the proviso shall be omitted (iii) in explanation 5, for the portion beginning with the words "unlesa such assets are recorded" and ending with the words "before the said date", the following shall be substituted, namely:-"unless--- ir (1) such assets ~r~ recorded,-(i) in a case falling under clause (a) before the date of the search; and j (ii) in a case falling under clause (b), on or before such date, in the books of account, if any, maintained by him or such assets are otherwise disclosed to the commissioner before the said datej or 5 (2) he, in the course of the search, makes a statement under mlb-lection (4) of section 37a that any money, bullion, jewellery or other valuable article or thing found in his possession or undf'r his control, fotlns part of his net wealth which has not been disclosed so far in his return of net wealth to be furnished before 10 the expiry of the time specified in sub-section (1) of section 14, and also specifies in the statement the manner in which such net wealth haa been acquired and pays the tax together with interest, if any, in respect of such net wealth" 15 34 in section 18a of the wealth·tax act, in sub-section (2) ,-(i) the words ", without reasonable cause," shall be omitted; amendment of section 18a (ii) the following proviso shall be inserted at the end namely:·-"provided that no penalty shall be imposable under this subsection, if the person proves that there was reasonable cause for the said failur~" 35 in section 22b of the wealth·tax act,--amendment of section 22 b (a) in sub-section (2), for the words "and two other members" the words "and as many vice-chairmen and other members as the central government thinks fit" shall be substituted;  i(b) sub-section (2a) shall be omitted; (c) in sub-section (3) ,-(i) in the opening portion, after the word "chairman", 1he word ", vice--chainnen" shall be insertedj (ii) in the first proviso, after the word "chairman", the word ", vice·chainnan" shell be inserted; go (iii) the second proviso shall be omitted 36, in section 220 of the wealth·tax act, sub-section (5) shall be omitted am€:'ndment ot section 22 d 37 in section 22f of the wealth-tax act, for sub-section (5\ the amend mentof section 22f following sublections shall be ~ubstituted, namely: -35 ~ "(5) the powers or functiops of the settlement commission may be exercised or discharged by benches constituted by the chairman of the settlement commission from amongst the members thereof; "( 6) a bench constituted under sub-section (') shall consist of three members one of wbom shall be the chairman or a vice- 0 chai~m; , - (7) the settlement commission shall, subject to the provisions of this chapter, have power to regulate its own proced\lre and the procedure of benches thereof in all matters ansmg out of the exercise of its 'powers or of the discharge of ib functions, includina the places at which the bcn~bcs shall hold their sittinas" 38 in section 35ee ot the wealth-tax act,-(i) the words ", without reasonable cause or excuse," shall be omitted; amendment of section 35ee (ii) the following proviso shall be inserted at the end, namely:-"provided that no person shall be punishable under this section if he proves that there was reasonable cause or excuse for 10 the said fallure" presump tion as to culpable mental state 39 after section 35n of the wealth-tax act, the following section insertion shall be inserted, namely:-of new section 35-0 '35-0 (l) in any prosecution for any offence under this act, 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 sllch mental state with respect to the act charged as an offence in that prosecution 20 explanation-in this sub-section, "culpable mental state" inclades intention, motive or knowledge of a fact, or belief in, or reason to believe, a fact  i (2) for the purposes of this section, a fact is said to be proved on~y when the court believes it' to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability' i  '::    chapter iv amendments to the gift-tax act, 195818 of 19s8 40 in section 17 of the gift-tax act, 1958 (hereafter in this chapter amondreferred to as the gift-tax act), in sub-section (1),-meot of (i) the words "without reasonable cause", wherever they occur, ~ection 11 shall be omitted; (ii) the following proviso shall be inserted at the end, namely:-35 ~ "  h "provided that in the cases referred to in clause (a) or clause (b), no penalty shall be imposable if the person proves that there was reasonable cause for the failure referred to in those clauses" 41 in the gift-tax act, after section 35c, the following section shall be inserted, namely:-in5crtion of new section ~m '35d (1) in any prosecution for any offence under this act which requires a culpable mental state on the part of the accused, the coul"t shall presume the existence of such mental state b~t it shall be a detence for the accused to prove the fact that he had no presumption 118 to culpable meatal state such mental state with reapect to the' act charpd as an ot!ellce in that prosecution  explanation-in this sulhlection, uculpa~e mental state" includes intention, motive or knowledge of a fact, or belief in, or reason to believe, a fact , 5 (2) for the purposes of this section, a fact is said to be proved only when the court be:lieves it to exmt beyond reasonable doubt and not merely when its existence is established by a preponderance of probability' chapter v - 10  miscellaneous43 of 1961 7of19u 42 notwithstanding anything contained in the income-tax act, 1981 at' the companies (profits) surtax act, 1964, the housing and urban development corporation ltd (a government company as deftned in section 617 of the companies act, 1956) shall not be liable to pay any 15 lof1958 tax-i tfi  j i ~, (a) on its income for the previous year relevant to the assessment year commencing on the 1st day of april, 1986 and for the four previous years next fouowin'g that previous year; and (b) on chargeable profits for the previous years relevant to go the· assessment years commencing on the 1st day of april, 1986 and the 1st day of april, 1987 fiousing and urban development corpora- tion ltd to be exempt for a certain period from liability to pay incometax and surtax the bill proposes to amend the ill'come-tax act, 1961, the wealth-tax act, 1957 the gift·tax act, 1958 and to provide exemption to a government company from income-tax and surtax for a limited period these amendments are intended mainly to implement certain proposals included in the long term fiscal policy, the budget speech for 1986-87 and certain announcements made in the lok sabha on the 5th may, 1986 the amendments to the direct tax laws are proposed to be made for the following purposes, namely:-(a) to empower the central government to exempt by notification certain allowances received by the members of parliament and of the state legislatures; (b) to enable a taxpayer deriving any profits or gains from an industrial undertaking in any free trade zone to avail of the existing tax holiday of five years, at any time within a time frame of eight years beginning from the year in which the industrial undertaking commences production; (c) to introduce a system of allowing depreciation in respect of blocks of assets in place of the present system of depreciation on individual assets; (d) to empoyer the central government to declare by notification any area as "backward area" for the purposes of tax holiday; (e) to pl'ovide that the deduction in respect of profits retained for export business will be equal to the aggregate of the four per cent of the net foreign exchange realisation and fifty per cent of the remaining export profitt:i subject to the condition that the deductions shall not exceed the export profits; (f) to provide, with certain exceptions,· that a return showing income below the taxable limit shall be deemed never to have been furnished and to deny the benefit of carry forward of losses in a case where the return is furnished after the 31st july in the relevant year; (g) to delegate to the commissioner of income-tax the existing powers of the central board of direct taxes to reduce or waive interest paid or payable for late payment or non-payment of taxes subject to the fulfilment of certain ~onditions; (h) to enable the central government to' reorganise the set~lement commission so that it may consist of a chairman and as many vice-chairmen and members as it thinks fit; (i) to remove weaknesses in the provisions in the direct tax laws in respect of penalties and prosecutions so as to shift the burden of pl'oof on tbe assessee and to provide that once th" evasion of tax is proved, the intention to evade need not be proved by tbe income-tax department; (j) to remove an anomaly in the existing provisions in respect of cases where penalty is impossible for concealment of income even if the taxpayer has no intention to fabricate evidence or to conceal his undisclosed in<:ome after search and seizure; (k) to continue the exemption to the housing and urban development corporation limited from the payment of income-tax and ~urtax for a limited period the bih seeks to achieve the above objects new delhi; vishw anath pratap singh, 13th august, 1986  pr~sident's recommendation under article 111 and 274 or the constitution of india[copy of letter no 155j57j86-tpl, dated the 13th august, 1986 from ~hri vishwanath pratap singh to the secretary-general, lok sabhal the president, baving been informed of the subject matter of the proposed bill, further to amend the income-tax act, 1961, wealth-tax act, 1957 gift-tax act, 1958 and exempt the total income and chargeable profits of the housing and urban development corporation limited from income-tax and surtax respectively, has recommended under article 117(1) and article 274(1) of the constitution of india, introduction and also consideration under article 117(3) of the taxation laws (amendment and miscellaneous provisions) bill, 1986, in lok sabba clauses 15 and 35 of the bill seek to amend sectiod 245b of the incometax act, lli61 and section 22b of the wealth-tax act, 1957, respectively to enable the central government to reorganise the income-tax settlement comm~ljion and the wealth-tax settlement commission by appolnttna a chaltmttn and as many vice-chairmen and members as it thinks ftt 2 clauses 17 and 37 of the aill seek to empower the chairman of the income-tax settlement commission and wealdt-tax settlement commission to constitute benches to discharge the functions of the said settlement" commission each bench will consist of three membet:'s 3 the implementation of the said provisions will call for the appointment of additional officers and staff the expenditure likely to be involved in the first year on addition of one more bench consisting of a vice-chairman and two members is estimated at rupees five lakhs as recurring expenditure and rupees three lakhs as non-recurring expenditure 4 the bill does not involve any other expenditure of a re~urring or non-recurring nature  memorandum regarding delegated legislationclause 5(1) (b) of the bill seeks to empower the central government to prescrilje percentage on the written down value of any block of assets which may be allowed as a deduction under section 32 of the income-tax act 1961 clause l1(b) of the bill seeks to insert sub-section (4) in section 80hhc whereunder the central government is proposed to be empowered to prescribe the form in which 'the accountant will give the report regarding the claim by the assessee of the amount of any foreign exchange realisation the matters in respect of which rules may be made by the central government are matters of administrative detail 2 the delegation of legislative power is, therefore, of a normal character  (43 of 1961)    10 in computing the total income of a previous year of any-person, any income falling within any of the following clauses shall not be included-incomes not included hi total income    - (17) any daily allowance reeeived by any person by reason of his membership of parliament or of any state legislature or of any committee thereof or any allowance received 'by a member of either house of parliament under the members of parliament (additional facilities) rules, 1975; - - - loa (1) '" - - - special provision in respect ofncwly established industrial undertakinp in free trade (3) the profits and gains referred to in sub-section (1) shall not be included in the total income of the assessee in respect of the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or things (such assessment year being hereafter in this section referred to al the initial assessment year) and each of the four assessment years immediately succeeding the initial as!!e!!sment year zone~, (7) notwithstanding anything contained in the foregoing provisions of this section, where the assessee, before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139 whether fixed nmtrlnally or on extension, for fumishing the retum of income for the initial assesfiment ye~r, furnishes to the income-tax officer a declaration in writing that the provisions of this section may' ntrt be made applicable to him, the provisions of this section sha:ll not apply to him fnr any of the relevant assessment years  e;cplll1tation-for the purposes of this section-(i) "free trade zone" means the kandla free trade zone and the santacruz electronics export processinr; zone and includes any other free trade zone which the central government "may, by notification in the official gazette, specify for the purposes of this set!tlon; (ii) "relevant\ assessment years" means the inidal assessment year and four assessment years immediately succeeding the initial assersment year - - - - - depr~ia­tion 38 (1) in respect of depreciation of buildings, machinery, plant or furniture owned by the assessee and used for the purposes of the business or profession, lhe following deductions shall, !3ubject to the provisions of section 34, be allowed-(i) in the case of ships other than ships ordinarily plying on inland waters, such percentage on the actual cost thereof to the assessee as may, in any case or class of cases or in respect of any period or periods be prescribed: provided that different percentages ~ay be prescribed for different periods having regard to the date of acquisition of the ship; (if) in the case of buildings, machinery, plant or furniture, other than ships covered by clause (i), such percentage on the written down value thereof as may in any case or class of cases be prescribed: provided that where the actual cost of any machinery of plant does not exceed seven hund-red and fifty' rupees, the actual cost thereof shall be allowed as a deduction in respect of the previous year in which such machinery or plant is first put to use by the assessee for the purposes of his business or profession: provided further that no deduction shall be allowed under this clause or clause (iii) in respect of any motor car manufactured outside india, where such motor car is acquired by the assessee after the 28th day of february, 1975 and is used otherwise uian in a business of running it on hire for tourists: (iia) in the case of any new machinery or plant (other than ships and aircraft) which has o(len installed after the 31st day of march, 1980 but before the 1st day of april 1985, a further sum equal to one-half of the amount admissible under clause (ii) (exclusive of extra allowance for double or multiple shift working of the machinery or plant and the extra allowance in respect of machinery or plant installed in any premises used as a hob·1) in respect of the previous year in which such machinery or plant is installed or, if the machinery or plant is first put to use in the immediately succeeding previous year than, in respect of that previous year: provided that no cleduction shall be allowed under this clause in respect of- (ta)' any machinery or plant installed in any office premises or any residential accommodation; '(b) any office appliances or road transport vehicles; and (e) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whethef bv way of depreclatlon or otherwise) in computin~ the income char~eable under the head "profits and gains of busine,:;s or profession" of anyone previoui y~ar ' '"!'"v  expzanati<>n-for the purposes of this claue,-(a) "new machinery or plant" shalj have the meaning assigned to it in clause (2) of the explanation below clause (vi) of this sub-~ection; (b) "residential accommodation" includes accommodation in the nature of a guest house but does not include premises used as a hotel; (iii) in the case of arly building machinery, plant or furniture which is sold, discarded, demolished or destroyed in the previous year (other than the previous year in which it is first brought into use), the amount by which the moneys payable in respect of such building, machinery, plant or furniture, together with the amount of scrap value, if any, fall short of the written down value thereof: provided that such deficiency is actually written off in the books of the assessee explanation-for the purposes of this clause,-(1) "moneys payable" in respect of any building machinery, plant or furniture inc1udes-(a) any insurance salvage or compensation moneys payable in respect thereof; ~ (b) where the building, machinery, plant or furniture fs sold, the price for which it is sold, so, however, that where the actual cost of a motor car is, in accordance with the proviso to clause (1) of section 43, taken to be twenty-five thousand rupees, the moneys payable in respect of such motor car shall be taken to be a sum which bears to the amount for which the motor car is sold or, as the case may be, the amount of any insurance, salv~l!~e or compensation moneys payable in respect thereof (including the amount of scrap value, if any) the same proportion as the amount of twenty-five thousand rupees bears to the actual cost of the motor car to the assessee as it would have been computed before applying the said proviso; (2) "sold" includes a transfer by way of exchange or a compulsory acquisition under any law for the time being in force hut does not include a transfer, in a scheme of amalgamation, of any asset by the amalgamating company to the amalgamated company where the amalgamated company is an indian company; (iv) in the case of any building which has been newly erected after the 31st day of march, 1961, where the building is used solely for the purpose of residence of persons emp)oyed in the business and the income of each such person chargeable under the head "salaries" is ten thousand rupees or less, or where the building is used solely or mainly for the welfare of $uch persons as a hospital creche, school canteen, library, recreational centre, shelter, rest-room or lunch-room a sum equal to forty per cent of the actual cost of the building to the assessee ill respect of the previous year of erection of the building; but any such sum shall not be deductible in determining the written down value for the purposes of clause (ii) of sub-section (1); (v) in tbe case of any new building, the erection of which is completed after the 31st day of march, 1967, where the building is owned by an indian company and used by such company as a hotel and such hotel is for the time being approved in this behalf by the central government, a sum equal to twenty-five per cent of the actual cost of erection of the building to the assessee, in respect of the previous yeg in whieh the erection of the building is completed or, if such building is first brought into use as a hotel in the immediately succeeding previous year, then in respect of that previous year; but any such sum shall not be deductible in determining the written down value for the purposes of clause (it); (vi) in the case of a new ship or a new aircraft acquired after the 31st day of may, 1974 by an assessee engaged: in the business of operation of ships or aircraft or in the case of new machinery or plant (other than office appliances or road transport vehicles) installed after that date for the purposes of business of generation or distributior of electricity or any other form of power or of construction, manufacture or production of anyone or more of the articles or things specified in items 1 to 24 (both inclusive) in the list in the ninth schedule or in the case of new machinery or plant (other than office appliances or road transport vehicles) installed after that date in a small-scale industrial undertaking for the purposes of business of manufacture or production of any other articles or things, a sum equal to twenty per cent of the actual cost of the ship, aircraft, machinery or plant to the assessee, in respect of the previous year in which the ship or aircraft is acquired or the machinery or plant is installed, or if the ship, aircraft, machinery (lr plant is first put to us~ in the immediately succeeding previous year, then, in respect of that previous year; but any such sum shall not be deductible in determining the written down value for the purposes of clause (ii) ~ provided that the assessee may, before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139, whether fixedori&inally or on extension, for furnishing the return of income for the assessment year in respect of which the first becomes entitled to deduction under this clause, furnish to the income-tax officer a declaration in writing that the provisions of this clause shall not apply to him, and if he does so, the provisions of this clause shall not apply to him for that assessment year and for every subsequent assessment year; so, however, that the assessee may, by notice in writing furnished to the income-tax officer before the expiry of the time allowed under sub-section (1) or sub-::;ection (2) of section 139, whether fixed originally or on extension, for furnishing the return of income for any such subsequent assessment year, revoke hi~ declaration and upon such revocation, the provisions of this clause shall apply to the allsessee for  that subsequent assessment year and for every assessment year thereafter:  provided further that no deduction shall be allowed under this clause in respect of-(4) any machinery or plant installed in any office premises or any residential accommodation, including any accommodation in the nature of a guest-house: (b) any ship, aircraft, machinery or p1ant in ·respect of whlcjlr the deduction by way of development rebate is allowable under section 33; and (e) any ship or aircraft acquired after the 31st day of march, 1976 or any machinery or plant installed after that date   exp14nation-for the purposes of this clause,-(1) "new ship" or "new aircraft" includes a ship or aircraft which before the date of acquisition by the asse!sseo was used by any other person, if it was not at any time previous to the date of such acquisition owned by any person resident in india: (2) "new machinery or plant" includes machinery or plant which before its installation by the assessee was used outside india by any other person, if the following conditions are fulfilled, namely:-(a) such machinery or plant was not, at any time pre-vious to the date of such installation by the assessee, used in india; (b) such machinery or plant is imported into india from any country outside india; and ii of 1922 (e) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the p~ovisions of the indian income-tax act, 1922 or this act 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: (3) an industrial undertaking shall be deemed to be a small-scale industrial undertaking, if the aggregate value of the machinery and plant installed, as on the last day of the previous year, for the purposes of the business of the underj taking does not exceed seven hundred and fifty thousand rupees; and for this purpose the value of any machinery or plant shall be,-(a) in the case of any machinery or plant owned by the assessee, the actual cost ther'~of to the assessee; and (b) in the case of any machinery or plant hired by the assessee, the actual cost thereof as in the case of the owner of such machinery or plant (la) where the business or profession is carried on in a building dot owned by the assessee but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of the business or profession after the 31st day of march, 1970 on the construction of any structure or doing of any work in or in relation to, and by way of renovation or extension of, or improvement to, the building, then, in respect' of depreciation of such structure or work, the following deductions shall subject to the provisions of section 34 be allowed-(i) such percentage on the written down value of the structure or work as may in any ease or class of cases be prescribed; (ii) in the case of lull' such structure or work which is sold, discarded, demolished, destroyed or is surrendered as a result of the determination of the lease or other right of occupancy in respect of the building in the previous year (other than the previous year in which it is constructed or done) the amount by which the moneys payable in respect of such structure or work together with the amount of scl'ap value, if any, fall short of the written down value thereof: provided that such deficiency is actually written off in the books el the assessee etplcmation-for the purposes of this clause,-o (i) "moneys payable", in respect of any structure or work, includes-(a) any insurance or compensation moneys payable in res-pect thereof; (b) where the structure or work is sold, the price for which it is soldj and (ii) "sold" shan have the meaning assigned to it in the explanation to clause (iii) of sub-section (1) (2) where, in the assessnl:nt of the assessee, (or, if the assessee is a rc:~tered firm or an unregistered firm assessed a9 a registered firm, in the assesament of its partners) full effect cal1not be given to any allowance under clause (i) or clause (ii) or clause (ha) or clause (iv) or clause (t:) er clause (vi) of sub-section (1) or under clause (i) of sub-section (la) in any previous year owing to there being no profits or gains chargeable for that previous year, or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sub-section (2) ef section 72 and sub-section (3) of section 73, the allowance or part of ibe allowance to which effect has not been given as the case may be, shall be edded to the amount of the allowance for depreciation for the following previous year and deemed to be part of th2t allowance, or if there is no sucb allowance for that previous year, be deemed to be the allowance for that previo11s year, and so on for the succeeding previous years 32a (1) '" '" '" inveft/· melli allowaac:c (2) the ship or aircraft or machinery or plant referred to in subsection (1) shall be the following namely:-(a) a new ship or new aircraft acquired after the 31st day of march, 1976, by an assessee engaged in the business of operation of ahips or aircraft; (b) any new machinery or plant installed after the 31st day of march, 1976-(i) for the purposes of business of generation or distribution of electricity or any other form of power; or (ii) in a small-scale industrial undertaking for the purposes of business of manufacture or production of any article or thing; or (iii) in any oth~r industrial undertaking for the purposes of business of construction, manufacture or production of any article or thing, not being an article or thing sp!cified in the list in the eleventh schedule; (c) any new machinery or plant installed after the 31st day of march, 1983, but before the 1st day of april, 1988, for the purposes ()f business of repairs to ocean-going vessels or other powered craft if the business is carried on by an indian company and the business so carried on is for the time being approved for the purposes of this clause by the central government explanation-for the purposes ·of this sub-section and sub-5ections (2b) , (2c) and (4) '-(1) "new ship" or "new aircraft" or "new machinery or plant" shall have the same meanings as in the explanation to clause (vi) of sub-section (1) of section 32; - - -  34 (1) the deductions referred to sub-section (l) or sub-section (la) of section 32 shall be allowed only if the prescribed particulars hav! lteen furnished; and the deduction referred to in section 33 shall be allowed enly if the particulars prescribed for the purpose of clause (i) and clause (ii) of sub-section (1) of section 32 have been furnished by the assessee in respect of the ship or machinery or plant conditions for depreciation ;tllow'ance and developmeat rebate (2) for the purposes of section 32-ii of 1'22 2 of 1886 (i) the aggregate of all deductionf; in respect of depreciation made under sub-section (1) or sub-section (1a) of section 32 or under the indian income-tax act, 1922 or under any act repealed by that act or under the indian income-tax act, 1886, shall, in no case, exceed the actual cost to the assessee of the bl\ilding, macfiinery, ptant, furnitul'e, structure or work as the case may be; explanation-where a capital asset is transferred-(i) by a holding company to its subsidiary company or by a subsidiary company to its holding company, or (ii) by a company to another company in a scheme of amalgamation and the conditions specified in clause (iv), or clause (1'), or, as the case may be, clause (vi) of section 47 are satisfied, then, in determining the aggregate of all deductions in respect of depreciation under this clause, account shall also be taken of the deductions in respect of depreciation allowed in the case of the company from which the asset has been transferred; (ii) nothing in clause (i) or clause (ii) or clause (ha) or clause (iv) o~ clause (v) or clause (vi) of sub-section (1) of section 32 shall be deemed to authorise the allowance for any previous year of any sum in respect of any building, machinery, plant or furniture sold, discarded, demolished or destroyed in that year; (iii) nothing in elause (i) of sub-section (la) of section 32 shall be deemed to authorise the allowance for any previous year of any sum in respect of any structure or work in or in relation to a building referred to in that sub-section which is sold discarded, demolished or destroyed or is surrendered as a result of ·the determination of the lease or other right of occupancy in respect of the building in that year   35 (1)    - - - (2) -   - expenditure on scientific research (iv) where a deduction is allowed for any previous year under this section in respect of expenditure represented wholly or partly by an asset, no deduction shall be allowed under clauses (i), (ii) , (iia) , (iii) and (iv) of sub-section (1) or under sub-section (ia) of section 32 for the same or any other previous year in respect of that asset; (v) where the asset mentioned in clause (ii) is used in the business after it ceases to be used for scientific research related to that business, depreciation shall be admissible under clauses (i) , (ii) and (iii) of sub-section (1) of section 32 (2b) -  -    (e) where a deduction is allowed for any previous year under this sub-section in respect of expenditure represented wholly or partly by an asset, no de<iuction shall be allowed in respect of that asset under clauses (i), (ii) , (iia) and (iii) of sub-section (1) or under sub-section (ia) of section 32 for the same or any subsequent previous year -  - -  38 (1)   -  -  building etc, partly used for business etc, or dot exclusively so used (2) where any building, machinery, plant or furniture is not exc1usivt"ly used for the purposes of the business or profession, the deductions under sub-clause (ii) of clause (a) and clause (c) of section 30, clauses (i) and (ii) of section 31 and clauses (i), (ii), (iia) and (iii) of sub-section (1) and sub-section (ia) of section 32 shall be restricted to a :fair proportionate part thereof which the income-tax officer may determine, having regard to the user of such building machinery, plant or furniture for the purposes of the business or profession  -  - 41 (1) - - - - - profits chargeable to tax (2) where any building, machinery, :plant or furniture which is owned by the assessee add which was or has been used for the purposes of business or profession is sold, discarded, demolished or destroyed and the moneys payable ;n respect of such building, machinery, plant or furniture, as the case may be, together with 'the amount ~ scrap value if any, exceed the written down value, so much of the excess as does not exceed the difference between; the actual cost a~d the written down value shall be chargeable to income-tax as income of the business or 'jofession of· the previous year in which the moneys payable for the building, machinery, plant or furniture became due: provided that where the building sold, discarded, demolished or destroyed is a building to which explanation 5 to section 43 applies, and the moneys payable in respect of such building, together with the amount of scrap value, if any, exceed the actual cost as determined under that explanation, so much of the excess as does not exceed the difference between the actual cost so determined and the written down value shall be chargeable to income-tax as income of the business or profession of such previous year: provided further that where 8ft asset representing expenditure of a capital nature on scientific 'research within the meaning of clause (c) of sub-section (2b) oi section 35, read with clauae (4) of section 43 owijed by the 8s6essee which was or has been used for the purposes of business after it ceased to be· used for the ·purpose of scientific research related to the business is sold, discarded, demolished or destroyed, the provisions of this sub-section shall apply as if for the words "actuaj cost", at the first place where they occur, the words "actual cost as increased by twentyfive per cent, thereor' had been substituted explcnation-where the moneys 'payable in respect of the building, machinery, plant or fumiture referred to in this sub-section become due in a previous year in wbich the business or profession for the purpose of which the building, machinery, plant or furniture was being used is no longer in existence, the provisions of this sub-section shall apply as if the business or profession is· in existence in that previous year (2a) where any structure or work in or in connection with a building, being the structure or work referred ,to in sub-section (1a) of section 32, is sold, discarded, demolished, destroyed or is surrendered as a result of the determination of the lease or other right of occupancy in respect of the building and the moneys payable in respect of such structure or work together with the amount of !;crap value, if any, exceed the written down value, so much of the excess as does not exceed the difference between the actual cost of the structure or work and its written down value shall be chatgeable to income-tax as income of the husine!ll: or profession of the previous yoar in which the moneys payable for the structure or work became due explanation i-where the moneys payable in respect of the structure or work referred to in this sub-section become due in a previous year in which the business or profession for the putpose of which the structure or work was con"tructed or done is no longer in existence, the provisions of this sub-section sball apply as if the business or profession wore in existence in that previous year explanation 2 -for the ,pul'poscs of this sub-section, tbe expression "moneys payable" and the e1lpressioo "sold" shall have the same meaninp as in sub-section (1a) of scqtioo 32 - - - - (4) where·a deduction has been allowed in respect of a bad debt or f'art of debt under ttte provisiods of clause (vii) of sub-section (1 ) of section 36, then, if the amount subsequently recovered on any such debt or part is greater than the difference between the debt or pan of debt and the mnount so allowed, the excess shatl be deemed to be prollts and gains of busines$ or profession, and accordingly chargeable to income-tax as the income of the previous year in which it is recovered, whether the business or profession in respect of which the deduotion has been allowed is in existence in that year or not expjanaiion-the expression "moneys payable" and the expression "so,td" in &ub-sections (2) and (3} shall have the same meanil18s as in sub-section (1) of section 32 (5) where the business or profession rcfecre:d to in this section is no longer in existence and there is income chargeable 'to tax under sub-section (1), subsection (2) sub-section (2a), !iub-section (3) or sub-section (4) in respect of th·at business or prcfession, any loss, not being a loss sustained in speculation business or under the head "capital gains", which arose in that business or profession during the previous year in which it ceased ,to exist and which could not be set off against any other income of that previous year shall, so far as may he be set off against the income chargeable to tax under the sub-sections aforesaid  [10] m c43 in sections 28 to 41 and in this section, unless the context otherwise requires-(1) "acluu) cost" means the actual cost of the asscts to the assessee, reduced by that portion of the cost thereof, if any, as has been met directly or indirectly by any other person or authority: definitiolul of certain terms relevant to income from profits and gains of business or profession provided that where the actual cost of an asset, being a motor car which is acquired by the assessee after the 31st day of march 1967 but hefore the lst day of march, 1975 and is used otherwise than in a business of running it on hire for louosts exceeds twenty-five thousand rupees, the excess of the actual cost over such amount shall be ignor&:l, and the actual cost thereof shall be taken to be twenty,five thousand rupees explanation j -where an asset is used in the business after it ceases to be used for scientific research related to that business and a deduction has to be made under clause (i), clause (ii) or clause (iii) of sub-section (1) or su b-section (1 a) qf section 32 in respect of that asset the actual cost of the asset to the assessee shall be the actual cost to the assessee as reduced by the amount of any deduction allowed under clause (iv) of sub-section (i) of section 35 or under any correspondin~ provision of the indian income-tax act, 1922 it of 1922 explanation 2_wher~ an asset is acquired by the assessee by way nf gift or inheritance, the lsctual cost of the asset to the assessee shall be the written down vallie thereof as in the case of the previous owner for the previous year in which the asset is so acquired or the market value thereof on the da~ of such acquisition, whichever is the less  - - - - - explanation 4_where assets which had once belonged to the assessee and had been uaed by him for the purposes of his business or profession and thereafter ceased to be his prope?ty by reason of transfer or otherwise, are re-acquired by him, the actual cost to the assessee shan be the actual cost to him when he first acquired the assets less the depreciation actually allowed to him under this act or under the corre&ponding provisions' of the indian income-tax act, 1922, diminished by any loss  deducted,· or as the case may be, increased by any profit assessed, under the' pro-11 of 1922 vliilons of clause (iii) of sub-section (/), or clause (ii) of sub-section (la) , -of section 32 or &ub-section (2) or sub-section (2a) of section 41 of this act or under the corresponding provisions of the indian income-tax act, 1922, or the actual price for which the asset is reacquired by him, whichever is the less  - - - - -  (6) "written down value" means--(a) in the case of assets acquired in the previous year, the actual cost to the assessee; 11 of 1922 2 of 1886 (b) in the case of assets acquired before the previous year, the actual cost to the assessee less all depreciation, actually allowed to him under this act, or under the indian income-tax act, 1922 or any act repealed by that act, or under any executive orders issued when the indian income-tax act, 1886 was in force: 11 of 1922 provided that in determining the written down value in respect of buildings machinery or plant for the purposes of clause (i?) of sub-section (1) of section 32, "depreciation actually allowed" shall not include depreciation allowed under sub-clauses (a), (b) and (e) of clause (vi) of sub-section (2) of sect,on 10 of the indian incometax act, 1922, where such depreciation was not deductible in determining the written down value for the purposes of the said clause (vi) explanation 1-when in a case of succession in business or profession, an assessment is made on the successor under sub-section (2) of section 170 the written down value of any asset shall be the amount which would have been taken as its written down value if the assessment had been made directly on theperscn succeeded to explanation 2-when any capital asset is transferred by a holding company to its subsidiary company or by a subsidiary company to its holding company, then, if the conditions of clause (!v) or as the case may be, of clause (v) of section 47 are satisfied the written down value of the transferred capital asset to the transferee com-'pany shall be taken to be the sattle as it would have been if the transferor company had continuf'd to hold the capital asset for tbe purposes of its business explanation 2 a -where in a scheme of amal~amation, any capital asset is transferred by the amahramatin~ comdanv to the amalllamated company and the ~malgamated companv is an indian company, the written down value of the transferred capital asset to the amal-~amated company shan be taken to be the same as it would have  been if the amal~amating company had continued to hold the capital asset for the purpm1es of its business i ·erplanlltion 3'-any allowance in respect of anv depreciation ra:rripd f"rwam under flub-section (2) of section 32 shan be deemed to be denrnciation "actu~lly allowed" - - - - - so where the capital asset is an asset in respect of which a de~tion on account of depreciation has been obtained by the assessee in any" previous year either under this act or under the indian income-tax act, 11 of 1992 1922" or any act repealed by that act, or under executive qt'c:lersialued :1 of 1886 when the indian income-tax act, 1886, was in force, the prcwijiglls of sections 48 and 49 shall be subject to the following modifications:-special provision for compuling co  1 of fttquisilion in the case of depreciable assets (1) the written down value, as defined in clause (6) of section 43 of the asset as adjusted shall be taken as the cost ofacqu~ition of the asset (2) where under any provision of section 49, read ,with subsection (2) of section 55, the fair market value of the asset on the 1st day of april, 1974 is to be ~aken into account at the option of the assessee, then, the cost of acquisition of the asset shall, at the option of the assessee, be the fair market value of the asset on the said date as reduced by the amount of depreciation, if any, allowed to the assessee after the said date, and as adjusted 55 (1) for the purposes of sections 48, 49 and 50,-meaningof "adjusted", "cost of improvement" and "cost of acquisition" (0) "adjusted", in relation to written down value or fair market value means diminished by any loss deducted or increased by any profit assessed, under the provisions of clause (iii) of sub-section (j), or clause (ii) of subsection (la), of section 32 or sub-section (2) or sub--section (2a) of section 41, as the case may be, the computation for this purpose being made with reference to the period commencin2 from the 1st day of april, 1974, ~ cases to which clause (2) of ~ection 50 applies; - , - - - - - oeductions  5'7 the iocome ch-1rgeable under the head "income from other 6oulals" shall be computed after making the fouowing deductions, namely:-0) in the case of di"liden-ds, any rl!asonable sum paid by way of commission or remuneraticn to a banker o~ any o'her person for the purpose" of " realising such dividend on behalf of the assessee; (ij) in the case of incame of-the n:atttrt·teferr~· t~ i~ clauses fiil- ~d (iii) of sub-section (i) of section 56, deductions, so far as may be, in accordance with the provision" of sub-clause (ii) of clause (0) and clause (e) of section 30, section 31 and sub-sections (1) (l a) and (2) of section 32 and subject to the provisions of sections 34 and 38; - - - - - 9 (1) - - - - profits charfable to tax (2) when any building, machinery plant or furniture to which clauses (ii) and (iil') of sub-section (2) 'of section 56 apply are s(,ld, di~arded, demolisbed or destroyed, the provisions of sub-section (2) of section 41 shan apply, so far as may be, in computing the income cf an assessee under section 56 as they apply in computing the income of an asses~ee under t~e head "profits and ~ains of business or profession"   (3)  whore any sottlicturo or wort reterted to in sub-secti\)n (la) of section 32 in odd relation to a 'building to which dause (iii) of sub-section' (2) of secti6n s6 2pplies is sold, discarded demolished or destroyed or is surrendered as a result of the detccmination o£'the lease or other right of occupancy in l"~t of the building, the provisions of sub-section (2a) of section 41 shan apply, so far as may be, in computing the income of an a~sc:o;see under section s6 as they apply in computing the income of an assessee under the head "profits and gains of business or professioo", explanation_flor the pw'pose of this sectien, th! expression "sold" shall have the same meaning as in s~tion (1) of section 32     80bb (1) -     (10) nothing contained in this section shall apply in relation to any undertaking engaged in mining explanation-in this section, "backward area" means an area specified in the list in the eighth schedule,     - deduction in respect of profits and gains from newly established indu  trial undertake inss or hotel hu~iness in backward areas deduction in respect ,f prcfits retainl'~' !ltport hu~inesl sohbe (1) where an assessee, being an indian company or a person (other than a company) resident in india, is engaged in the business of export out of india of any goods or merchandise to which this section upplies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount, not exceeding fifty per cent of the pronts derived by the assessee from the export of such goods or merchandise:  provided that an amount equal to the amount of the deduction claimed under this sub-section is debited to the profit and loss account of the previous year in respect of which the deduction is to be al1(,wed and credited to a reserve account to be utilised for the purposes of the business of the assessee  -   -  chapter xiv procedure for assessment 139 (1)    return l,r income (3) if any person who has not been served with a notice under subsection (2), has sustained a loss in any previous year under the head "profits and gains of business or profes'!lion" or under the head "capital gains" and claims that the loss or any part thereof should be carried forward under sub-section (1) of section 72 or sub-section (2) of section 73, or sub-section (1) of section 74 or sub-section (3) of section 74a, he may furnish, within the time allowed under sub-section (l) or within such further time which, on an app!ication made in the pt'escribed manner, the income-tax officer may, in his discretion, allow, a return of loss in the prescribed form and verified in the prescribed manner and containing such other particulars as may be preicl'ibed, and all t1le provisiona of this act shall apply as if it were a retum under suboosection (1)  - 155 (1) -  -  -    (4a) - - other amendments (b) at any time before the expiry of ten years from the end of the previous year in which the ship or aircraft was acquired or the machinery or plant was installed, the assessee does not utilise the amount credited to the reserve account under sub-section (4) of 5ection 32a for the purposes of acquiring a new ship or a new aircraft or new machinery or plant other than machinery or plant of lhe nature referred to in clauses (a), (b) and (d) of the proviso to sub-section (1) of section 32a for the pw-poses of the business of the undertaking; or - -  -  explanation-for the purposes of clause (b), "new ship" or "new aircraft" or "new machinery or plant" shall have the same meanings as in the ex~lanat"on to clause (vi) of sub-section (1) of section 32 (:  -  220 (1)  - - - - (2a) notwithstanding anything contained in sub-section (2), the board may reduce or waive the amount of interest payable by an assessee under "the said sub-section if, on the recommendation made by the commissioner in this behalf, it is satisfied thnt-when tall payable and when aslellee deemed in default (0 payment of such amount would cause genuine hardship to the assessee: (iii) default in the payment of the amount on which interest was payable under the said sub-section was due to circumstances beyond the control of the assessee; and (i'ii) the assessee has co-operated in any inquiry relating to the allessment or any proceeding for the recovery of any amount due from him   - penalty payable when 221 (l) when an assessee is in default ox' is deemed to be in default in making a payment of tax, he shall, in addition to the amount of the arrears and the amount of inte'rest payable under sub-section (2) of section 220, be liable by way of penalty to pay such amount as the income-tax officer may direct, and in the case of a continuing default, such further amount or amounts as the income-tax officer may from time to time, direct, so, however, that the total amount of penalty does not exceed the amount of tax in arrears: provided that befql'e levying any such penalty the assessee 'shall be given a reasonable" opportu~ity of being heard: provided further that where the income-tax officer is satisfied that the default was for good and suftictent reasons, no penalty shall be levied udder this section expla7u!tion  for the removal of doubt, it is hereby declared that an assessee shall not cease to be liable to any penalty under this sub-section merely by re'ason of the fact that before the levy of such penalty he has paid the tax 2458 (1) the central governhlellt shall constitute a commission tg be called the income-tax settlement commission (hereafter in this chapter referred to as "the settlement commission") for the settlement of cases under this chapter (2) the settlement commission shall consist of a chairman and two other members and shall function within the department of the central government dealing with di,rect taxes (2a) notwithstanding anything contained 'in sub~ction (2), when the post of one of the other members of the settlement commission is vacant for any reason, the chairman and the other merlber of the settlement commission may function as, and exercise and discharge the powers and functions of, the settlement commission under this chapter: provided that if in any case the chairman and members 'so functioning differ on any point or points, they shall state the point or points on which they differ and refer the same as soon as may be after the said vacancy is filled, to the member appointed to fill the vacancy for hearing on such point or point's and such point or points shall be decided according to his opinion (3) the chairman and other members of the settlement eonimission shall be appointed by the central government from amongst persons of intl"grity and outstanding ability, having special knowledge of, and experience in, problems relating to direct taxes and business accounts: provided that, where a member of the board is appointed as the chairman or as a member of the settlement commission, he shall cease to be a member of the board: provided further that, until the members are appointed under this sub-section, it shall be competent for the central government to require, from time to time, any two members of the board to serve' as members ot the settlement commission for such period as the central government thinks fit, in addition to their duties as members of the board - - - - wd (1) '" '" - - - procedure of receipt of an application under section 24jc (5) subject to the provisions of sub-section (2a) of section 245b, the materials brought on record before the settlement commission shall be considered by all the members thereof before passing any order under sub-eection (4) and, in the case of a difference of opinion among the membtrs, the opinion of the majority shall prevail and such order shall be expressed in terms of the' views of the majority  - '" - - 245f (1) '" '" '" - - powers and procedure of soldemeat oomminion (5) the settlement commis'sion shall, subject to the provisions of this chapter, have power to regulate its own procedure (including the fixation of places and times of its rneeting-;) and may act notwithstanding that all the members of the settlell1ent commi881on are not presen~ at any of its meetings - - - failure' to furnish information reprdiq securitiel, etc z7u if any p~rson without reasonable excuse fails to comply with a notice issued under sub-section (6) of section 94, the income-tax officer may direct that such person shall pay by way of penalty a sum not exceeding five hundred rupees and by way of further penalty a like amount for every day after the infliction of such penalty during which the failul'e contmues   271 (1) if the income-tax officer or the ~ppellate assistant commissioner or the commissioner (appeals) in the course of any proceedings under this act, is satisfied that any pe;rson-failure to furnish returns, comply with notices concealment of income etc (a) has without reasonable cause failed to furnish the return of total income which he was ~uired to fl,lrnish under sub-section (l) of section 139 or by notice given under sub-section (2) of section 139 or section 148 or has without reasonable cause failed to furnish it within· the time allowed and in the manner requi,red by sub-section (l) of section 139 or by such notice, as the case jday be, or (b) has without reasonable cause failed to comply with a notice under 'sub-section (1) of section 142 or sub-section (2) of section 143 or falls to comply with a direct on issued under sub-section (2a) of section 142, or (c) has concealed the particulars of his income or furllished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty,-(i) in the cases referred to in clause (a) ,-(a) in the case of a person referred to in sub-section (4a) of section 139 where the total income in respect of which he is assessable as a representative assessee does not exceed the maximum amount which is not chargeable to income-tax, a sum not exceeding one per cent of the to~al income computed under this act without giving e1fect to the provisions of sections 11 and 12, for each year or part thereof during which the default continued; (b) in any other case, in addition to the amount of the tax, if any, payable by him, a sum equal to two per cent of the assessed tax for every month during which the default continued e:z:plcl1&cltiofl-in this clause, "assessed tax" means tax as reduced by the awn, if any, deducted at source under chapter xvil-b or paid in advance under chapter xvii-c; (ii)· in the cases referred to in clause (b), in addition to any tax payable by him, a sum which shall not be less than ten per cent but which shall not exceed fifty per cent of the amount of the tax, if any, which 'would have:been avoided if the income returned by such person had ,been accepted as the correct income; (iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed twice, the amount of tax soufht to be evaded by reason  of the concealment of particulars of his income or the furnishing of inaccurate particulars of such income: provided that,· if in a c!\se falling under clause (c), the amount of  income (as determined by the income-tax oftlcer on assessment) in respect of which the  particulars have been concealed or inaccurate particulars have been furnished exceeds a su~ of twenty-five thousand rupees, the income-tax officer shall not is'sue any direction for payment by way of penalty without the previous approval of the inspecting assistant commissioner e:rptallatio'n i-where in respect of any facts material to the computation of the total income of any person under this act,-(a) such person fails to offer an explanation or offers an explanation which is found by the income-tax officer or the appellate assistant commissioner or the commission~ (appeals) to be false, or (b) such person offers an explanation which he is notable to substantiate, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of \vhich particulars have been concealed: provided that nothing contained in this explanation shall apply to "i case referred to in clause (b) in respect of any amount added or dis-'howed as a result of the rejection of any explanation offered by such oerson, if sut"h explanation is bona fi~ and all the facts relating to the !'lame and material to the computation of his total income have been disclosed by him exp7an'ation 2-where the source of any receipt, deposit, outgoing or investment in any assessment year is claimed by any person to be an amount which had been added in computing the income or deducted in computing the loss in the assessment of such person for any earlier assessment year or years but in respect of which no penalty under clause (iii) of this sub-section had been levied, that part of the amount so added or deducted in such earlier assessment year immediately preceding the year in which the receipt, deposit, outgoing or investment appears (such earlier assessment year hereafter in this exp1aration referred to as the first preceding year) which is sufficient to cover the amount represented by such receipt, deposit or· outgoin~ or value of such investment (such amount or value hereafter in this explanation referred to as the utllised amount) shall be treated as the income of the assessee, particulars of which had been· concealed or inaccurate particulars of which had been furnished for the first preceding year; and where the amount so added or deducted in the first precedins{ year is not suffir-l('n f tf' t''lver the utiiired amount, that nat"t of the amount so added or ncductei in the year immediatelv precedinl!' the first precedin<t veal' which is sufficient to cover such part of the utilised amount as io:; not ~o covered shall be treated to be the income of the assessee, parti· r-ulars of which had been concealed or inaccurate particulars or whit'h h'ld been furnished for the veal' immediatelv preceding the first nrecedins{ vear and so on, until the entire utilised amount is covered by the amounts l'!0 ndded- or deducted in such earlier assessment ~'ears f~planati(jn 3-where any person who has not previouslv been 11 of 1922 as<;es~ed ~l~d~r the indian income-tax a-t, 1922, or under this act faus without l'edsionable cause, to furnisb within the period specified in subclause (iii) of clause (a) of sub-section (1) of section 153 8 return of hjs incollle which he is required to furnish under section 139 in respect of any assessment year commencing on or after the 1st day of april, 1974, and, until the expiry of the period aforesaid, no notice has been issued to him under sub-section (2) of section 139 or section 148 and the incometax officer or the appellate assistant commissioner or the commissioner (appeals) is satisfied that in respect of such assessment year sucn pers,n has taxable income, then, such perso;l shall, for the purposes of daul:ie (c) of this sub-section, be deemed to have concealed the particulars of his income in respect of such assessment year, notwithstanding that such person furnishes a return of his income at any time after the expiry of the period aforesaid in pursuance of a notice under section 148, explallation 4-for the purposes of clause (iii) of tllis sub-section, the expression "the amount of tax sougnt to be evaded:",-(a)· in any case where the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished exceeds the total income assessed, means the tax that would have been chargeab!e on the income in respect of which particulars have been concealed or inaccurate particulars have been fur-'lished had such income been the total income; (b) in any case to which explanation 3 applies, means the tax on the total income assessed; (c) in any other case, means the difference between the tax on the total income assessed and the tax that would have been chargeable bad such total income been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished <explanation 5-where in the course of a search under section 132, the· aseessee· is ·found to be the owner of any money, bunion, jewellery or other valuable article or thing (hereafter in this explanation referred to u assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income,""':' ,(a) for any previous year which has ended before the date of the search, but the return of income for such year haa not been furnished before the said date, or, where such return has been furnishf!d before the said d'lte, such income has not been declared therein; or (b) for any previous year which is to end on or after the date of the search, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, he shall, for the purpo8e!~ of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his in-~ome or furnished inaccurate particulars of such income, unless such income is, or the transactions resulting in such income are, recorded-(i) in a case falling under clause (a), before the date of the se:lrch; and ,"  (ii) in a case falling under clause (b), on or before such date, in the looks of account, if any, msintained by him for any source of income or such income is otherwise disclosed to the commissioner before tile said date - - - - - z71a without prejudice to the provisions of section 271, it any pers,on, without reasonable cause, fails to keep and maintain any such books of account and other documents as required by section 44aa or the rules made thereunder, in respect of any previous year or to retain such books failure to keep, maintain or retain books of account, documents etc c'~ account and other documents for the }jeriod specified in the said rules, the income-tax officer or the appellate assistant commissioner or the commissioner (appeals) may direct that such person shall pay, by way of penalty, a sum which shall not be less than ten per cent but which shall not exceed fifty per cent of the amount of the tax, it any, which would have been avoided if the income returned, by such person had been accepted as the correct income 271d if any person fails, without reasonable cause, to get his accounts failure to get accounts audited ~mdited in respect of any previous year or years relevant to an assessment year or obtain a report of such audit as required under section 44ab, the income-tax officer may direct that such person ~hall pay, by way of penalty, a sum equal fa one-half per cent of the total sales, turnover or gross receipts, as the case may be, in busines~, or of the gross receipts in profession, in such previous ye~r or years or a sum of one hundred thousand rupees, whichever is less 272a, (1) - - - - - (2) if a person, without reasonable cause or excuse, fails-(a) to furnish in due time any of the returns or statements mentioned in section 133, section 206, section 285, section 285b or section 286; or penalty for failure to answer questions, sign statements, allow inspections, (b) to allow inspection of any register referred to in section 134 or of any entry in such register or to allow copies of such register or of any entry therein to be taken; or (ba) to deliver or cause to be delivered in due time a copy of the deci:1j'ation mentioned in section 197a; or (c) to furnish a certificate as required by section 203; or (d) to deduct and pay tax as required by sub-section (2) of sectbll 226,  he shall pay hy way of penalty, a sum which may extend to ten rupees for everv day during which the failure continues - - - 272aa (1) if a person, without reasonable c811se, fails to comply with the provisions of section 133b, he shall, on an order passerl by the inspecting assistant commissioner; assistant director of inspection or the income-tax officer, as the case may be, pay, by way of penalty, a sum which may extend to one thousand rupees penalty for failure to comply with the provisions of section 1338 (2) no order under sub-section (1) shall be passed lidless the person on whom the penalty is proposed to be imposec:i is given an opportunity of being heard in the matter  pe •• lty lor failure to comply wit  the proviaioda of sec:tioa 13'a 2128 (1) if a person, without reasonable cause, fails to comply with the provisiolll of section 139a, he shall, on an order passed by the income-tax officer, pay, by way of penalty, a sum which may ex-tend to five· hundred rupees (2) no order under sub-section (1) shall be passed unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter 273 (1) if the income-tax officer, in the course of any proceeding! in connection with the regular assessment for any assessment year, is sa tisfied that ady assessee-fal estima  of, or _ilure to pay, advance tall: (a) has furnished under clause (0) of sub-section (1) of section 209a a etatement of the advance tax payable by him which he knew or had reason to beueve to be untrue, or (b) has without reasonable cause failed to furnish a statement of the advance tax payable by him in accordance with the provisions of clause (a) of sub-section (1) of section 209a, he may direct that such person shall, in addition to the amount of tax, if any, payable by him, pay by way of penalty a sum-(i) which, in the case referred to in clause (0), shall not be less than ten per cent but shall not exceed one and a hau times the amount by which the tax actually paid during the financial year immediately preceding the assessment year under the provisions of chapter xvii-c falls short of-(1) seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215, or (2) the amount which would have been payable by way of advance tax if the assessee had furnished a correct and complete statement in accordance with the provisions of clause (a) of sub-section (1) of section 209a, whichever is less; (ii) which, in the case referred to in clause (b), shall not be less than ten per cent but shall not exceed one and a half times of seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215: provided that in the case of· an assessee, being a company, the provisions of this sub-section shall have effect as if for the words "seventy-five per cent", at both the places where they occur, the words "eighty_three and one-third per cent" had been substituted (2) if the income-tax officer, in the course of any proceedings in connection with the regular assessment for the assessment year commencing on the 1st day of april, 19'10 'or ,any subsequent assessment year, is satisfied that any assessee-(a) has furnished under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (5)· of section 209a, or under subsection (1) or sub-section (2) of section 212, an estimate of the advance tu payable by him which he knew or had reason to believe to be untrue, or (aa) has furnished under sub-aection (4) of seetion 209a or under lub-section (3a) of section 212 an estimate of the advance tax payable by him which he knew or had reason to believe to be untrue, or  i i -;:"~ (b) bas without reasonable cause faued to furnish an estimate of the advance tax payable by him in accordance with the provisions of clause (b) of sub~ection (1) of section 209a, or (c) has without reasonable cause failed to furnish an estimate of the advance tax payable by him in accordance with the provisions of sub-section (4) of section 209a or sub-section (3a) of section 212, he may direct that such person shall, in addition to the amount of tax, if any, p~yable by ,him, pay by way of penalty a sum-(i) which, in the case referred to in clause (a) ,shall not be less than ten per cent but shall not exceed one and a half times the amount by which the tax actually paid during the financial year immediately preceding the assessment year under the provisions of chapter xvii-c falls short of-(l) seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215, or (2) where a statement under clause (a) of sub-section (1) of seetion 209a was furnilhed by the assessee or where a notice under section 210 was issued to the assessee, the amount payable under such statement or, as the case may be, such notice; (ia) which, in the case referred to in clause (oa>, shall not be less than ten per cent but shall not exceed one and a half times the amount by which the tax actually paid during the financial year immediately preceding the assessment year under the provisions of chapter xvii-c falls short of seventy-five per cent of the assessed tax as defined in sub-section (5) ot section 215; (ii) which, in the case referred to in clause (b), shall not be less than ten per cent but shall not exceed one and a half times of seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215; and (iii) which, in the case referred to in clause (c), shall not be less than ten per cent but shall not exceed one and a half times the amount by which-(a) where the assessee has sent a statement under clause (a), or an estimate under clause (b), of sub-section (1) of sectton 209a, or an estimate in lieu of a statement under sub-section (2) of that section, the tax payable in accordance with such statement or estimate; or (b) where the assessee was required to pay advance· tax in accordance with the notice issued to him under !jeci;ion 210, the tax payable under such notice, falls short of seventy-five per cent of the assessed tax as defined in sub-section (5) of section 215: provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect as if for the words "seventyfive per cent", wherever they occur, the words "eighty-three and onethird per cent" had been ,ubstituted explanation- por the purposes of clause (ia), the amount pai~ by the assessee on gr before the date extended by the commissiofler under the first proviso to sub-section (4) of section wa or, a& the ease may be, lust proviso to sub-section (:1a) of section 212 shall, where the date so extended falls beyond the financial year immediately preceding the assef'sment year, also be regarded as tax actually paid during that financial year - - • ~ - - 276a if a person, without reasonable cause or excuse,-(i) fails to give the notice in accordance with sub-section (1) of section 178; or  (ii) fails to set aside the amount as required by sub-section (3) of that section; or failure to comply with the provisions ofaub sections (1) and (3) of section 178 (iii) parts with any of the assets of the company or the proper  ties in hi8 hands in contravention of the provisions of the aforesaid sub- e"tion, he shall be punishable with rigorous imprisonment for a term which may extend to two years: provided that in the absence of special and adequate reasons to thecontrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six :months  - - - - - 276ab whoever, without reasonable cause or excuse, fails to comply with the provisions of section 269uc or fails to 'surrender or deliver possession of the property under sub-section (2) of section 269ue or ~ontravenes the provisions of sub-section (2) of section 269ul shall be punishable with rigorous imprisonment for 3 term which may extend to two years and shall also be  liable to fine: provided that in the absence of special and adequate reasons to the failure to comply with the provisions of sections 269 ue, 269 ue and 269ul ~nntrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six months 276b if a person, without reasonable cause or excuse, fails to deduct failure to deduct or pay tax q!, after deducting, fails to pay the tax as required by or under the provisions of sub-section (9) of section 80e of chapter xvii-b, he shall be punishable,-(i) in a case where the amount of tax which he has failed to rleduct or pay exceeds one hundred thousand rupees, with rigorous imprisonment for a term which ~hal1 not be less than six months but wh!eh may extend to seven years and with fine; (ii) in any other case, with rigorous imprisonment for a term which £hau not be less than three months but which may extend to three years and with fine - -  376jjd 1£ a person, 'without reasonable cause or excuse, takes or accepts any loan or deposit in contravention of the provisions of section 269s$ he shall be punishable with imprisonment for a term which m:1y extend to two ye:1rs a11~ shall also be liabje to fine equal to the amount "if such loan or _obit failure 10 comply with the provisions of section 269ss failure to comply with the provisions of section 269t - - z18e if a person, without reasonable cause or excuse, repays any deposit referred to in section 269t otherwise than in accordance with the provisions of that section, he shall be punishable with imprisonment for a term which may extend to two years and shall also be liable to  fine equal to the amount of such deposit - - -  the eighth schedule (see section bohr) list of backward arecun am e of stale or union territory backward areas --- ---,,----_ ----_ __ __-andhra pradesh th~ di!ltricts of anantpur, chiu()or, cuddapah karim:lagar, khammam, kurnool, mahhubnagar, medak, nalgonda, nellore, nizamahad, gngole, srikakulam and warangal assam the di!ltricts of cae-har, goalpara, kamrup, lakhimpw', mikir hills, north cachar hills and nowgong bihar  - the districts of aurangabad, begusarai, bhagalpur, bh'~pur, darbhanga, east champaran, gaya, madhubani, mong-hyr, muzaffarpur, nalanda, nawadah, palamau, purnea, saharsa, samastipur, santhal parganas, saran, sitamarhi, siwan, "aish~lj and 'vest champaran gujtrraf the districts of amreli, banas kantha, bharuch bhavnagar, jun~gadh, kutch, mahcsana, panch mahals, sabar kantha and suf(·ndranagar the distrie-ts of bhiwani hissar, jind and mahendragarh  himaclm{ pradesh thr district~ o/,chamua, hamirptir, kangra, kinnaur, kulu, lahul and spiti, sirmur solan and una jammu and karh'tiir the districts ofanantn:lg, baramula, doda, jammu, kathua, ladakh, punch, rajauri srinagar and udhamj1l1r  kamataka the district~ of belgaum, bidar, bijapur, dharwar, gu)ual'ga, hassan, l\'1ysore, north kanara, raichur, south kanara and tumku ktrala the distri (is cf a1lepr<:y, cammnore, malaptuam, trichur and trivandmm -------_------_  __  _----_-(i) | madjrja                                   | praduh                              ||-------------------------------------------|-------------------------------------|| the                                       | di8trictl                           || of                                        |                                     || balaghat,                                 |                                     || baatar,                                   |                                     || hetul,                                    |                                     || bilaspur, bhind, chhatarp':lr, chhind-    |                                     || wara,                                     |                                     || damoh,                                    |                                     || datis,                                    |                                     || dewu,                                     |                                     || dhar,                                     |                                     || guna, hoshangabad,                        | jhabua,                             || mandla, mandsaur, morena, narsim-         |                                     || hapur, panna, raigarh, raipur, raisen,    |                                     || rajgarh, rajnandgaon, ratlam, rewa,       |                                     || sagar, sehore, seoni, shajapur, shivpuri, |                                     || sidhi, surguja, tikkamgarh and vidisha   |                                     || maiul,ashl,a                              |                                    || the                                       | districts                           || bhir, buldhaua, chandrapur, dhulia and    |                                     || jalgaon; the district                     |                                     || of                                        | kolaba excluding                    || such portion thereof as                   |                                     || is                                        | comprised in the                    || area designated                           |                                     || as                                        | the site for the proposed           || new town                                  |                                     || of                                        | new bombay by notification          || no                                       | rpb 1171-18j24-iw, dated the 20th || march,                                    |                                     || 1971,                                     | issued under sub-section            || (i)                                       |                                     || of                                        | section                             || and town planning act,                    |                                     || 1966                                      | (maharash-                          || tra act                                   |                                     || 37                                        | of                                  || maharashtra (under development, public    |                                     || health and housing department)            |                                     || as                                        |                                     || amended by notification no rpb           |                                     || 1173-1-                                   |                                     || rpc, dated thc 16th august,               | 1973,                               || by that government; the districts         | of                                  || nanded, osmanabad, parbhani, ratnagiri    |                                     || and                                       | yeotmal                            || the                                       | whole                               || m"ipur                                   |                                     || meghalaya                                 |                                     || the                                       | districts                           || khasi hills                              |                                     || the                                       | whole                               || nagalanil -                               |                                     || orissa                                    |                                    || the                                       | districl&                           || kanal, kalahandi, keonjhar, koraput,      |                                     || mayurbhanj and phulbani                  |                                     || punjab                                   |                                     || the                                       | district of bhatinda;               || district                                  |                                     || of                                        | faridkot                            || district                                  |                                     || of                                        | bhatinda on the                     || july, 1972; the                           | di'itricts                         || gurdaspur, hoshiarpur and                 | sangrur                            || rajastiuln                                |                                     || the                                       | districts                           || bhilwara, churu, dungarpur, jaisalmer,    |                                     || jalor, jhalawar jhunjhunu, jodhpur,       |                                     || nagaur, sikar, sirohi, tonk and udaipur  |                                     || the                                       | whole                               || sikkim                                    |                                     || t                                         |                                     || amit                                      |                                     || nodll                                     | -                                   || the                                       | districti                           || madurai, north arcot, ramanathapuram,     |                                     || south arcot, thanjavur and tiruchira-     |                                     || palli                                    |                                     || the                                       | whole                               || of                                        |                                     || the state                                |                                     || trijlllra                                 |                                     |utlfj1' pradesh the districts of almora, azamgarh, baharaich, ballia,· banda, bara banki, ba'1ti, budaun, bulandshahr, chamoli, deoria~ etah, etawah, faizabad, farrukhabad, fatehpur, garhwal, ghazipur, gonda, hamirpur, hardoi, jalaun, jaunpur, jhansi, mainpuri, mathura, moradabad, pilibhit, pithoragarh, pratapgarh rae bareli, rampur, shahjahanpur, sitapur, sultanpur, tehri-garhwal, unnao and uttarka'lhi west bengal the districts ofbankura, birhhum, burdw-m, cooch behar, darjeeling, hooghly, jalpaiguri, maida, midnapore, murshidabad nadia, purulia and west dinajpur andaman and vicobfj1' islands the whole of the union territory | the       | whole of the union territory    ||-----------|----------------------------------|| arunachal | pradesh                          || the       | whole of the union territory    |dadra and ]i{agar havtli the whole of the union territory goa, daman and diu lakshadweep the whole of the union territory the whole of the union territory mizoram pondichmy the whole of the union territory -_  _----- -- ------------- ----- _--__--explanauon-save as otherwise expre9sly provided, reference to any district in this schedule shall be construed,-(i) in the case of the districts of aurangabad, begusarai, bhojpur, gaya, monghyr, nalanda and n8iw'8dah in the state of bihar; the district of ferozepur in the state of punjab; and the district of rampur in the state of uttar pradesh, as a reference to the areas comprised in the district codcts'ded on the 15th day of march, 1976, being the date of introducticll of the finance bill 19'16· in the house of the people; and (ii) in the ·case of any other district, as a referenc~ to the areas comprised in that district on the 3rd day of september, 1973, being the date of introduction of the direct taxes (amendment) bill, 1973 in the house of the people  the ninth schedule [see section 32 (1) (vi)] lilt of '4rticlh 07' thitag1 iron and steel (metal) 2 non-ferrous metala 3 ferro-alloys and special st~ 4 steel castings and forgings and alloy, malleable and s g iron castings 5 thermal and hydro power generation equipment 6 transfor~ers and switch gears 7 electric motors 8 industrial and agricultural machinery 9 earth moving machinery 10 machine tools 11 fertilisers, namely, ammonium sulphate, ammonium sulphate nitrate (double salt), ammonium nitrate, caldum ammonium nitrate (nitrolime stone) ammonium chloride, super phosphate, urea and complex fertilisers of synthetic origin containing both nitrogen and phospho,rus, such as ammonium phosphates ammonium sulphate pho'sphate and ammonium nitro phosphate 12 soda ash 13 caustic soda 14 commercial vehicles 15 ships 16 aircraft 17 tyres and tubes 18 paper, pulp and newsprint 19 sugar 20 vegetable oils 21 textiles (including those dyed,printed or otherwise processed) made wholly or maijl!y of cotton, including cotton yam, hosiery and rope 22 textiles (including those dyed, printed or otherwise processed) made wholly or mainly of jute, including jute twine and jute rope 23 cement and refractories 24 pesticides exp14nation-the article specified in item 24 does not include any formulation of pesticides unless the formulation is prepared by the manufacturer or producer of the basic pesticidal cbemieals from which such formulation has been prepared 25 carbon and graphite products 26 inorganic heavy chemicals (othet than soda ash and caustic soda mentioned in items 12 and 13 respectively) 27 organic heavy chemicals 28 synthetic, rubber and rubber chemicals' (meludihg carbon black) 29 industrial explosives 30 basic drugs 31 industrial sewing mac1i1nes 32 finished leather and leather goods (including footwear made wholly or mainly of leathej:) - 33 electronic components and raw materials; computers and peripherals; communication equipment; process control, instrumentation, industrial and professional grade electronic equipment -- - - -  extract from the wealth-tax ac:r, 1957-  (27 of 1957) - •- 18 (1) if the wealth-tax: ofticer, appellate assistallt commissioner, commissioner (appeals), commissioner or appellate tribunal in the course of any proceedings under this act is satisfied that any person-penalty lor failure to furnish returns, to comply with notices and con_ ceaimentof assets, etc (a) has without reasonable cause failed to furnish the return which he is required' to furnish under sub-section (1) of section 14 or by notice given under sub-section (:2) of section 14 or section 1'/, or has without reasonable cause failed to furnish it within the time allowed and in the manner required by sub-section (1) of section 14 or by such notice, as the case may be; or (b) has without reasonable cause failed to comply with a notice under sub-section (2) or sub-section (4) of section 16; or (c) has concealed the particulars of any assets or furnished inaccurate particulars of any assets or debts; he or it mrty, by order in writing, direct that such person shall pay by way of penalty-(i) in the cases referred to in clause (a), in addition to the amount of wealth-tax, if any, payable by him, a sum equal to two per cent of the assessed tax for every month during which the default continued e;cplanation-in this clause, "assessed tax" means the wealthtax (hargeable under the provisions of this act; (ii) in the cases referred to in clause (b), in addition to the amount of wealth-tax payable by him, a sum which shall not be less than ten per cent, but which shall not exceed fifty per cent of the amount of the wealth-tax, if any, which would have been avoided if the net wealth returned by such person had been accepted an the correct net wealth; (iii) in the cases referred to in clause (c) in addition to auy wealth-tax payable by him, a sym which shall not be less than, but which shall not exceed five times, the amount of tax sought to be evaded by reason of the concealment of particulars of any assets or the furnishing of inaccurate particulars in respect of any a8l8t5 or debts e:rplgnaticln i-for the purposes of clause (iii) of thib sub-section, ~e expression "the amount of tax sought to be evaded"-(a) in a case to which explanation 3 applies, means the tax on the net wealth assessed; (b) in any other case, means the difference between the tax on the net wealth assessed and the tax that would have been chargeable had the net wealth assessed been reduced by the amount which r~presents the value of any assets in respect of which particulars have been concealed or idaccurate particulars have been furnished and of any debts in respect of which inaccurate particulars have been furnished el:planatiotl 2-where in respect of any iacts material to the computation of the net wealth of any person under this act-(a) such person fails to offer an explanation or offers an explanation which is found by the wealth-tax officer or the appellate assi~tant commissioner or the commissioner (appeals) to be false, or i (8) such person offers an explanation wfiich he is not able to substantiate, then, the amount added or disallowed in computing the net wealth of such persoo as a result thereof shall, for the purposes of clause (c) of this bub-section, be deemed to represent the value of the assets in respect of which particulars have been concealed: provided that nothing contained in this explanation ~hall apply to a case referred to in clause (8) in respect of any amount added or disallowed as a result of the rejection of any explanation offered by such person, if such explan!ltion is bona fide and all the facts relating to the same and material to the computation of his net wealth have been disclosed by him explanation 3-where any person who has not previously been assessed under this act fails, without reasonable cause, to furnish within the period specified in clause (a) or, as the case may be, clause (b) of sub-section (1) of section 17a a return of his net wealth which he is required to furnish under section 14 in respect of any assessment year and, until the expiry of either of the periods applicable to him, no notice had been issued to him under sub-section (2) of section 14 or sub-section (1) of section 17 and the wealth-tax oftlcer or the appellate assistant commissioner or the commissioner (appeals) is satisfied that in respect of such assessment year such person has rssessable net wealth, then, such person shall,for the purposes of clause (c) of this sub-section, be deemed to have concealed the particulars of his assets or fumished inaccurate particulars of any assets or debts in respect of such assessment year, notwithstanding that such person furniaheg a return of his net wealth at any time after the expiry of either of the periods aforesaid applicable to him in pursuance of a notice udder section 17 exp,~c:l'nation 4-where the value of any asset returned by any person is less than seventy per cent of the value of sjch asset as determined in'lq assessment udder section 16 or section 17, such person ·shall be deemed to have furnished inacc:urate particulars of such asset within the meaning of clause (c) of this sub-section, unless he proves that the value of the asset as returned by him is the correct value "explanation 5-where in the course of a search under section 37a, the assessee is found to be- the owner of any money, bullion, jewellery or other valuable article or thing (hereafter in this explanation referred to as assets) and the assessee claims that such assets represent or form part of his net wealth,-(a) on any valuation date falling be~ore the date of the search, but the return in respe-:t of the net wealth on such date has not been furnished before the date of the search or, where such return has been furnished before the said date such assets have not been declared in such return: or (b) of any valuation date falling on or after the date of the search, then, notwithstanding that such assets are declared by him in any return of net wealth furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section be deemed to have concealed the particulars of such assets or furnished inaccurate parti<:ulars of such ass~ts, unless such assets are recorded,-(i) in a case falling under clause (a), before the date of the search; and (ii) in a case falling under clause (b) on or before such date, in the books of account, if any, maintained bv him or such assets are otherwise disclosed to the commissioner before the said date" (2) no order shall be made under sub-section (1) wlless the perf;on concerned has been given a reasonable opportunity of bein~ heard (3) notwithstanding anything contained in clause (iii) of subsection (1), if, in a case falling under clause (c) of that sub-section, the amount (as determined by the wealth-tax officer on assessment) in respect of which penalty is imposable under clause (c:) aforesaid exceeds a sum of twenty-five thousand rupees, the wealth-tax officer shall not issue any direction under sub-section (1) for payment by way of penalty without the previous approval of the inspecting assistant commissiuner (3a) notwithstanding anything contained in this section, the penalty imposed under clause (iii) of sub-section (1) read with explanation ~ to that sub-section and the penalty imposed under clause (i) of that <;ub-section shall not exceed, in the aggregate, five times the amount of the tax sought to be evaded (4) an appellate assistant commissio~er, a comm~ioner (appeals), a commissioner or the appellate tribunal on making an order, under this section imposing a penalty, shall forthwith send a copy of the sam€' to the wealth-tax officer (5) no order imposing a penalty under this section shall be passed-(a) in a case where the assessment to which the proceedings for imposition of penalty relate is the subject matter of an appeal to the apptlllate assistant commissioner or commissioner (appeals) under section 23 or an appeal to the appellate tribunal undet' subsection (2) of section 24, after the expiration of a period of-(i) two years from the end 'of the financial year in which the proceedings in the course of which action for imposition of penalty has been initiated, are completed, or (ii) six months from the end of the month in which the order of the appellate assistant commissioner or commissioner (appeals) or, as the case may be, the appellate tribunal is received by the commissioner, whichever period expires later; (b) in any other case, after the expitation of two years from the end of the financial year in which proceedings, in the course of which action for imposition of penalty has been initiated, are completed explanation_in computing the period of limitation [or the purposes of this section,-(i) any period during which the immunity granted under section 22h remained in force; (ii) the time taken in giving an opportunity to the assessee to be re-heard under the proviso to section 39; and (iii) any period during which a proceeding under this section for the levy of penalty is stayed by an order or injunction of a:ly court, shall be excluded ira (1)     (2) if a person, without reasonable cause, fails to furnish in due time such statement or information which such person is bound to furnish to the wealth-tax officer under section 38, he shall pay, by way of penalty, a sum which may extend to ten rupees for every day during which the failure continues penalty for failure to answer questions, sign state_ ments, allow inspections, etc: (3) no order shall be made under this section except by an appellate assistant commissioner or an inspecting assistant commissioner or a commissioner (appeals) or a commissioner, and where a contra-vention, fflilure or default for which any penalty is imposable under· this section occurs in the course of any proceeding before a wealth-tax officer, the' wealth-tax offt~er shall refer the case to the inspecting assistant commissioner or a commissioner (appeals) for passing such orders as he deems fit  (4) no order under this section shall be passed by any ofticer referred to· in sub-6ection (3), unless the person on whom the peilalty is proposed to be imposed is given an opportunity of being heard in the matter by such oftlcar - ••  - - - wealth-tax settlemedt commission zzb (1) the central government shall constitute a commission to be called the wealth·tax settlement commission (hereafter in this chapter referred to as "the settlement commission',) for the settlement of cases under this chapter (2) the settlement commission shall consist of a chairman lind two other members and shall function within the department of the central government dealing with direct taxes  (2a) notwithstanding anything contained in sub·section (2), when the post of one of the other members of the settlement commission is vacant for any reason, the chairman and the other member of the settlement commission may function as, and exercise and discharge the powers and functions of, the settlement commission under this chapter: provided that if in any case the chairman and member so function in~ differ on any point or points, they shall state the point or points on which they differ and refer the same, as soon as may be aftpr the said vacancy is: filled, to the member appointed to fill the vacancy for hearil1g' on such point or points and such point or points shall be deci~ed according to his opinion (3) the chairman and other members of the settlement commi~sion shall be appointed bv the ~pntrpi government from amon:rst p  t"sons of integrity and oub;tandin(! ability havine- special kn{lwlenee of and experience in, px:ob1ems relaffilg to direct taxes and business accnuntc;: provided that, where a member of the board is appointen as the chairman or as a member of the settlement com~ission, he shall cease to be a member of the board: provided further that, until the members are appointed under this sub-section, it shall be competent for the central government to require, from time to time any two members of the board to serve as members of the settlement commission for such period as the centrri govemrrent thinks fit, in addition to their duties as members of the boarc1 - - - - • - 22d (1) ( (5) subject to the provisions of subsection (2a) of section :12b the materials brought on record before the settlement commission shall be considered by all the members thereof before passing any order under sub-sec!tion (4) and, in the case of a difference of opinion among the members, the opinion of the majority shall prevail and such order shall be expressed in terms of the views of the majority  - - - - - - power and procedure ,f settlement conllniuio" (os) the settlement commission shall, subject to the provisions of this chapter, have power to regulate its own procedlue (including the fixation of places and times of its meetings) and may act notwithstanding that all the members of the settlement commission are not present at any of its meetings  - - - - - failure to furnish particulars under section 34acc - 35ee if a person referred to in section 34acc fails, vyithout reasonable cause or excuse, to intimate to the board the particulars of conviction or finding referred to in the said section, he shall be punishable with rigorous imprisonment for a term which may extend to two years and shall also be liable to fine - - -   extracts from the gift-tax act, 1958 (18 of '958)-  -  17 (1) if the gift-tax officer, appellate assistant commissioner, commissioner (appeals), commissioner or appellate tribunal, in the collrse of any proceedings under this act, is satisfied that 'iny person-penalty for failure to furnish returns, to comply with noticcll aad coilcealment of sifts, etc (a) has without reasonable cause failed to furnish the return required to be furnished under sub-section (1) of section 13 or by notice given under sub-section (2) of section 13 or section 16 or has, without reasonable cause, failed to furnish it within the time allowpd and in the manner required by sub-section (1) of section 13 or by such notice, as the case may be, or (b) has without reasonable cause failed to comply witb a notice under sub-section (2) or sub-section (4) of section 15; or (c) has concealed the particulars of any gift or deliberately furnished inaccurate r>articulars thereof he or it may, ~y order in writing, direct that such person shall pay l,y way of penalty-(i) in the cases referred to in clause (a), in addition to the amount of the ~ft-tax, if any, pavable by him, a sum equal to two rer cent of the assessed tax for every month during which the default continued e;rplanation-in this clause, "assessed tax" means the gift-tax chargeable under the provisions of this act as reduced bv the amount if any, for whieh credit is allowed under section 18; (ii) in the cases referred to in clause (b) in addition to the at'lount of gift-tax payable by him, a sum which shall not be if1~ than ten per cent but which shall not exceed ftftv per cent of the amount of tlie tax, if any, which would have been avomed if the return made by such person had been accepted as correct; (iii) in the cases referred to in clause '(c), in addition to any' gift-tax payable by him, a sum which shall not be less than twenty per cent but which shall not exceed one and half times the amount of the tax, if any, which would have been avoided if the return mil de by such person had been accepted as correct  - - - -  (4) an appellate assistant commissioner, a commissioner (appeals), a commissioner or the appellate tribunal on malring an order under this section imposing penalty, shall forthwith send a copy fj{ the same to the gift-tax officer        a billfurther to amend the income-tax act, 1961, the wealth-tax act, 1957, the gift-tax: act" 1958 and to provide for exemption to a government company from income-tax and surtax for a specified period (shti vibhwanath pratgp siftgh minister of fincmce) 