 the gift-tax bill, 195h(as introduced in lok sabra)  arrangement of clauses chapter i prmiminaryclausbs i short title, extent and commencement 2 definitions  chapter ii charge of gift-tax and gifts sub]bct to such charge3 charge of gift-tax 4 gifts to include certain transfers s exemption in respect of certain gifts 6 value of gifts how determined 7~amount of gift-tax how determined  chapter~iii gift-tax authoritibs8 gift-tax officers 9 appellate assistant commissionen of gift-tax 10 commissioners of gift-tax ii inspecting assistant commissioners of gift-tax - 12 gift-tax officers to be subordinate to the commissioner of gift-tax and the inspecting assistant commissioner of gift-tax,' 13 gift-tax authorities to follow orders, etc, of the board  chapter ivassessment 14 return of gifts is return after due date and amendment of return 16 assessment 17 gift escaping assessment 18 penalty for concealment 19 rebate on advance paymentaji  chapter v liability to assessment in spbcial casjis~o tax of deceased person payable by legal representative 21 assessment after partition of a hindu undivided family 22 liability in case of discontinued firm or assoc1&tion of persona  chapter viappbals, revisions, and rbferencbs 23 appeal to the appellate assistant commissioner from orders of gifttax officers 24 appeal to the appellate tribunal from orders of the appellate assistant commissioner 2, power of commissioner to revise orders of subordinate authorities 26 appeal to the appellate tribunal from orders of enhancement by commissioner 27 reference to high court 28 hearing by high court 29 appeal to supreme court  chapter vii payment and recovery of gift-tax30 gift-tax by whom payable 31 gift-tax to be charged on property gifted 32 notice of deml'nj 33 recovery of tax and penalties 34 mode of recovery  chapter viii miscellaneous35 rectification of mistakes 36 proaecution 37 power to take evidence on oath, etc 38 power to call for information 39 effect of transfer of authorities on pending proceedinp 40 computation of period of limitation 41 service of norice 42 prohibition of disclosure of information 43 bar of suits in civil courts 44 appearance before gift-tax authorities by authorised representatives, 45 agreement for avoidance or reijd of double-taxation with respect to gift-tax 46 act not to apply in certain cases 47 power to make rules thf schedulb  the g 1ft-tax bill, 1958 (as introduced in lok sabra)a bill to provide for the levy of gift-tu be it enacted by parliament in the ninth year of the republic of india as follows:-chapi'er i 5 1 (1) this act may be called the gift-tax act, 1958 preliminary short title extent and (2) it extends to the whole of india except the state of jammu commcblceand kashmir mmt deftnitiodb (3) it shall come into force on the 1st day of april, 1958 z in this act, unless the context otherwise requires,-10 (i) "appellate assistant commissioner" means 8 person empowered to exercise the powers of the appellate assistant commissioner of gift-tax under section 9:  (ii) "appellate tribunal" means the appellate tribunal appointed under sectior 5a of the income-tax act: (iii) "assessee" means a person by whom gift-ta or any other sum of money is payable under this act; (it') "aasessment year" means the year for which tax is chargeable under section 3; 4 of 19&40 20 (v) "board" means the central board of revenue constituted under the central board of revenue act, 1924; (vi) "commissioner" means a person empowered to exercise the powers of a commissioner of gift-tax under section 10; i of 1,,6 (vii) "company" means a company as defined in section 3 of the companies act, 1956, and includes a foreiill company within the meaning of section 591 of that act; (viii) "donee" means any person who acquires any property under a gift, and, where a gift is made to a trustee for the benefit s of another person, includes both the trustee and the beneficiary; (ix) "donor" means any person who makes a gift; (x) "executor" means an executor or administrator of the estate of a deceased person; (xi) "firm" has the meaning assigned to it in the indian 10 partnemhip act 1932· 9 of 1932 , , (xii) "gift" means the transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration, and includes the transfer of any property deemed to be a gift under section 4; 15 (xiii) "gift-tax officer" means the income-tax officer authorised to perform the functions of a gift-tax officer under section 8; (xiv) "income-tax act" means the indian income-tax act, 1922; 2011 of 1912 (xv) "income-tax officer" means a person appointed to be an -income-tax officer under the income-tax act; (xvi) "inspecting assistant commissioner of gift-tax" means a person empowered to exercise the functions of an inspecting assistant commissioner of gift-tax under section 11; 25 (xvii) upartner" has the meaning assigned to it in the indian partnership act, 1932, and includes a person who being 9 of 1'32 a minor has been admitted to the benefits of partnership; (xviii) uperson" includes a hindu undivided family; (xtx) "prescribed" means prescribed by rules made under 30 this act; 35 (xx) "previous year", in relation to any assessment year, means the previous year as defined in clause (11) of section 2 of the income-tax act if an assessment were to be made under that act for that year : provided that where in the case of an assessee there are different previous years under the income-tax act for different iources of income, the previous year for the purposes of this act shall be that previous year which expired last; (xxi) "principal officer", used with reference to a company or any association of persons, means--(a) the secretary, treasurer, manager, managing agent, managing director or agent of the company or association; or s (b) any person connected with the management of the affairs of the company or association upon whom the gifttax officer has served a notice of his intention of treating him as the principal officer thereof; 10 (xxii) "property" includes any interest in property, movable or immovable; (xxiii) "taxable gifts" means gifts chargeable to gift-tax under this act; (xxiv) "transfer of property" means any disposition, con-is veyance, assignment, settlement, delivery, payment or other alienation of property and, without limiting the generality of the foregoing, includes-(a) the creation of a trust in property; (b) the grant or creation of any lease, mortgage, charge, 20 easement, licence, power, partnership or interest in property; (c) the exercise of a power of appointment of property vested in any person, not the owner of the property, to determine its dispositiun in favour of any person other than 2s the donee of the power; and (d) any transaction entered into by any person with intent thereby to diminish directly or indirectly the value of his own property and to increase the value of the property of any other person; 30 (xxv) "valuer" means a valuer appointed under section 4 of the estate duty act, 1953  chapter ii charge of gift-tax and gifts subject to such charge3 subject to the other provisions contained in this act, there charle 35 shall be charied in the manner provided in section 7 for every lift-tal financial year commencing on and from the 1st day of april, 1958, a tax (hereinafter referred to as gift-tax) in respect of the gifts, if any, made by a person during the previous year explanation-for the purposes of this section, gifts made by the wife of any person out of any gifts made to her by her husband shall 5 be deemed to be gifts made by the husband 4 for the purposes of this act,-| gifts     ||-----------|| dude      || euain     || tranlfen |(a) where property is transferred for less than the full consideration therefor, the amount by which the market value of the property at the date of the transfer exceeds the value <yf the 10 consideration shall be deemed to be a gift made by the transferor; (b) where property is transferred for a consideration which in the opinion of the gift-tax officer, having regard to the circumstances of the case, has not pa6sed or'is not likely to pass 15 either in full or in part from the transferee to the transferor, the amount of the consideration which has not passed or is not likely to pass shall be deemed to be a gift made by the transferor; (c) where there is a release, discharge, surrender, forfeiture or abandonment of any debt, contract or other actionable claim 20 or of any interest in property by any person in favour of another, the value of the release, discharge, surrender, forfeiture or abandonment shall be deemed to be a gift made by the person responsible for the release, discharge, surrender, forfeiture or abandonment: 25 provided that nothing in this clause shall apply in respect of any debt which is proved to the satisfaction of the gift-tax officer to have become irrecoverable; (d) where a person absolutely entitled to property causes or has caused the same to be vested in whatever manner in 30 himself and any other person jointly and such other person makes an appropriation from or out of the said property, the amount of the appropriation used for the benefit of the person making the appropriation shall be deemed to be a gift made in his favour by the person who causes or has caused the property 35  to be 80 vested bxemption 5 (1) gift-tax shall not be charged under this act in respect of in rapect of gifts made by any personcertain lifta (i) of immovable property situate outside the territories to which this act extends; 40 - (ii) of movable property situate outside the said territorie§ unless the person-(a) being an individual, is a citizen of india; or  (b) not being an individual, is resident in the said territories during the previous year in which the gift is made; (iii) of property in the form of savings certificates issued by the central government, which that government, by notification in the official gazette, exempts from gift-tax; (iv) to the government or any local authority; 10 (v) to any institution or fund established for a charitable purpose to which the provisions of section 15b of the income-tax act apply; (vi) for any charitable purpose not falling within clause (v), subject to a maximum of rupees one hundred in respect of each is such gift; (vii) (a) being an individual, to any female relative dependent upon him for the necessaries of life on the occasion of her marriage; (b) being a hindu undivided family, to any female mem-20 ber of the family who under any law, order or decree of a court is entitled to maintenance from the joint family property, on the occasion of her marriage; subject in either case to a maximum of rupees ten thousand in respect of the marriage of each such relative; 25 (viii) to his wife, subject to a maximum of rupees one lakh in the aggregate in one or more previous years; (ix) of policies of insurance or annuities to his wife or children or to any other person dependent upon him for the necessaries of life, subject to a maximum of rupees ten thousand 30 in value in the aggregate in one or more previous years of the benefits in respect of each such donee; (x) under a will; (xi) in contempl~tion of death (2) without prejudice to the provisions contained in sub-section 35 (1), gift-tax shall not be charged under this act in respect of gifts made by any person during the previous year, subject to a maximum of rupees ten thousand; but such maximum shall have effect as if it had been reduced to rupees five thousand if the value of the taxable gifts to anyone donee during the previou& year exceeds rupees three thousand explanation-for the purposes of this section,-(a) a hindu undivided family, firm or other association of 5 persons shall be deemed to be resident in the territories to which this act extends durin~ any previous year unless, during that year, the control and management of its affairs was situated wholly outside the said territories; (b) a company shall be deemed to be resident in the terri- 10 tories to which this act extends during the previous year, u-(i) it is a company formed and registered under the companies act, 1956, or is an existing company within the meaning of that act; or (ii) during that year, the control and management of is that company was situated wholly in the said territories; (c) "gifts made in contemplation of death" has the same meaning as in section 191 of the indian succession act, 1925 39 of 1925 value of gifts, how determined 6 (1) the value of any property other than cash transferred by way of gift shall, subject to the provisions of sub-sections (2) and 20 (3), be estimated to be the price which in the opinion of the gift-tax officer it would fetch if sold in the open market on the date on which the gift was made (2) where a person makes a revocable gift, the value of the property gifted shall be the capitalised value of the income from the 2s  property gifted during the period for which the gift is not revocable (3) where the value of any property cannot be estimated under sub-section (1) because it is not saleable in the open market, the value shall be determined in the prescribed manner 7 for the purpose of determining the gift-tax payable by any 30 person for any financial year under this act-amount of gift-tax, bow determined (a) there shall first be ascertained, the value of all taxable gifts made by the donor during the five previous years immediately preceding the financial year (other than "gifts made before the 1st day of april, 1957) and the gift-tax that 35 would have been payable on the total value of all such gifte in accordance with the rates specified in the schedule if all such gifts had been made during the previous year; (b) the gift-tax payable for any financial year in respect of the gifts made during the previous year shall be that amount which bears to the amount of the gift-tax ascertained under clause (a) the same proportion as the total value of the taxable s gifts made during the previous year bears to the total value of all the taxable gifts made during the five previous years immediately preceding the financial year  chapter iii gift-tax authorities10 8 every income-tax: ofticer having jurisdiction or exercising gift-to powers as such under the income·tax act in respect of any person officers shall perform the functiolj8 of a glft·tax officer under this act in respect of that person explanation-for the purposes of this section, the income-tax is officer having jurisdiction in relation to a person who has no income assessable to income-tax under the income-tax act, means the income-tax officer of the area in which that person resides 9 the board may empower as many persons as it thinks fit to aapl?etanllatte - ss15 exercise under this act the functions of an appellate assistant com- commis-20 missioner of gift·tax, and on being so empowered the appellate ~~~f assistant commissioners shall perform their functions in respect of such areas or such persons or such classes of persons as the board may direct, and where such directions have assigned to two or more appellate assistant commissioners the same areas or the s'\me per-2s sons or the same classes of persons they shail perform their functions in accordance with such orders as the board may make for the distri· bution and allocation of the work to be performed 10 the board may empower as many persons as it thinks fit to commis·  f exercise under this act the functions of a commissioner of gift·tax, ~m~~~ 30 and on being so empowered the commissioners of gift-tax shall perform their functions in respect of such areas or such persons or such classes of persons as the board may direct, and where such directions have assigned to two or more commissioners the same area, or the same persons or the same ela!l;ses of persons they shall have con· 3s current jurisdiction subject to such orders, it any, as the board may make for the distribution and allocation of the work to be perfonned 11 the qommissioner of gift-tax may empower as many persons ainspectinit su8tan lis he thinks fit to exercise under this act the tunctions of an commisinspecting assistant commissioner of gift·tax, and on being sol~'ift~~~f empowered the inspecting assistant commissloners of gift-tax shall perform their function!! in respect of such area!! or such persons or such classes of persons as the commissioner may direct, and where such directions have assigned to two or more inspecting assistant commissioners the same area or the same persons or the same 5 classes of persons they shall perfonn their functions in accordance with such orders as the commissioner may make for the distribution and allocation of the work to be performed gift-tax offi-12 the gift-tax officers shall be subordinate to the commissioner ~~bo:3in~~e of gift-tax and the inspecting assistant commissioner of gift-tax 10 to t~e com- within whose jurisdiction they perform their functions nu~s1oner of gift-tax and the-inspecting assistant commi~soner of gift-tax gift-tax ~ 13 all officers and other persons employed in the execution au thori ti cs to rollow~ of this act shall observe and follow the orders, instructions and ~f~~~'boe;rcd~ directions of the board: provided that no orders, instructions or directions shall be 15 given by the board so as to interfere with the discretion of, the appellate assistant commissioner of gift-tax in the exercise of his appellate functions  chapter iv assessment20 return of 14 (1) every person who during a previous year has made any gifu taxable gifts shall, before the thirtieth day of june of the corresponding assessment year, furnish to the gift-tax officer a return in the prescribed form and verified in the prescribed manner (2) if the gift-tax officer is of opinion that in respect of the 2s - gifts made by a person during any previous year he is liable to gift-tax under this act, then notwithstanding any thin$! contained in sub-section (1), he may serve a·notice upon such -person requiring him to furnish within such period, not being less than thirty days, as may be specified in the notice, a return in the prescribed 30 form and verified in the prescribed manner (3) the gift-tax officer may in his discretion extend the date for the delivery of the return under this section 15 jf any person has not furnished a return within the time return after allowed under section 14, or having furnished a return under that due ddm amen 8te ani d en section, discovers any omission or a wrong statement therein, he of return may furnish a return or a revised return as the case may be, at any s time before the assessment is made 16 (1) if the gift-tax officer is satisfied without requmng the assessment presence of the assessee or the production by him of any evidencp that a return made under section i4 or section 15 is complete, he shall assess the value of the taxable gifts made by the assessee and 10 detennine the amount payable by him as gift-tax (2) if the gift-tax officer is not so satisfied, he shall serve a notice on the assessee either to attend in person at his office on a date to be speoified in the notice or to produce or cause to be produced on that date any evidence on which the assessee may is rely in support of his return , (3) the gift-tax officer, after hearing such evidence as the p~rson may produce and such other evidence as he may require on any specified points shall, by order in writing, assess the value' of taxable gifts made by the assessee and determine the amount 20 payable by him as gift-tax (4) for the purpose of making an assessment under this act, the gift-tax officer may serve on any person who has made a return under sub-section (1) of section 14 or section 15, or upon whom a notice has been serveq under sub-section (2) of section )4, a notice 25 requiring him to produce or cause to be produced on a date specified in the notice such accounts, records or other documents as the gift-tax officer may require (5) if any person fails to make a return in response to any notice under sub-section (2) of section 14 or fails to comply with 30 the terms of any notice issued under sub-section (2) or sub-section (4), the gift-tax officer shall estimate the value of taxable gifts to the best of his judgment and determine the amount payable by the person as gift-t~x 35 17 (1) if the gift-tax officer-gift escapin assessment, (a) has reason to believe that by reason of omission or failure on the part of an ~ssessee to make a return under section 14 for any assessment year or to disclose fully and truly all material facts necessar·y for his assessment for that year, any taxable gift has escaped assessment for that year, whether by reason of under-assessment or assessment at too low a rate or otherwise; or (b) has, in consequence of any information in his possession, reason to believe, notwithstanding that there has been no such omission or failure as is referred to in clause (a), that any s taxable gift has escaped assessment for any year, whether by reason of under-assessment or assessment at too iowa rate or otherwise; he may, in cases falling under clause (a) at any time within eight years and in cases falling under clause (b) at any time within four 10 years of the end of that assessment year, serve on the assessee a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 14, and may proceed to assess or re-assess any taxable gift which has escaped assessment, and the provisions of this act shal~, so far as-may be, is apply as if the notice had issued under that sub-section (2) nothing contained in this section limiting the time within which any assessment or re-assessment may be made shall apply to an assessment or re-assessment made on the assessee or any person in consequence of or to give effect to ~ny findin,g or direc- 20 tion contained in an order under section 23, section 24, section 25, section ,27 or section 29 penalty for 18 (1) if the gift-tax officer, appellate assistant commissioner, concealment" commissioner or appellate tribunal, in the course of· any proceedings under this act, is satisfied that any personzs (a) has without reasonable cause failed to furnish the return which he is required to furnish under sub-section (1) or sub-sect'ion (2) of section 14 or section 17 or has without reasonable cause failed to furnish it within the time allowed and in the manner required; 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 gift or deliberately furnished inaccurate particulars thereof; he or it may, by order in writing; direct that such person shall pay 3s by way of penalty-(i) in the case referred to in clause (a), in a«1dition to the amount of gift-tax payable by him, a sum not exceeding one and a half times the amount of such tax, and ( ii ) in the case referred to in cia use (b) or cia use (c }, in addition to the amount of gift-tax payable by him, a sum not exceeding one and a half times the amount of the tax, if any, which would have been avoided if the return made by such s person under section 14, section 15 or section 17, as the case may be, had been accepted as correct (2) no order shall be made under sub-section (1) unless the person concerned has been given a reasonable opportunity of being heard 10 (3) no prosecution for an offence under this act shall be instituted in respect of the same factti in relation to which a penalty has been imposed under this section (4) the gift-tax officer shall not impose any penalty under this section without the previous approval of the inspecting assistant is commissioner of gift-tax 19 (1) if a person making a taxable gift of the value of not less rebate on than rupees ten thousand pays into the treasury within fifteen days ~~;:~t8 of his making the gift, an amount calculated in the manner specified in sub-section (2), he shall, at the time of assessment under 20 section 16, be given credit in addition to the amount so paid, for an amount equal to ten per cent of the amount so paid (2) the amount to be paid into the treasury under sub-section (1) shall be-(a) where the value of the gift does not exceed rupees fifty 25 thousand, four per cent of the value; (b) where the value of the gift exceeds rupees fifty thousand but does not exceed rupees two hundred thousand, eight per cent of the value; and (c) in any other case, fifteen per cent of the value  chapter v liability to assessment in special cases20 (1) where a person dies, his executor, administrator, or tax of other legal representative shall be liable to payout of the estate ~~~:~~ed of the deceased person, to the extent to which the estate is capable cayable 3s of meeting the charge, the gift-tax determined as payable by such p~es~~~::~ person, or any sum which would have been payable by him under this act if he had not died (2) where a person dies without having furnished a return under section 14, or after having furnished a return which the gift-40 tax officer has reason to believe to be incorrect or incomplete, the gift-tax officer may make "an assessment of the value of the taxable gifts made by such person and determine the gift-tax payable by· him, and 'for this purpose may, by the issue of the appropri~te notice which would have had to be served upon the deceased person if, he had survived, require from the executor, administrator or s other legal representative of the deceased person any accounts, documents or other evidence which might, under the provisions of section 16, have been required from the deceased person (3) the provisions of sections 14, 15 and 17 shall apply to an executor, administrator or other legal representative as they apply 10 to any person referred to in that section 21 (1) where, at the time of making an assessment, it is brought to the notice of the gift-tax officer that a partition has taken place among the members of a hindu undivided family, and the gift-tax officer, after enquiry, is satisfied that the joint family 15 property has been partitioned among the various members or groups of members in definite portions, he shall record an order to that effect and he shall make asses~ents on the amount of taxable gifts made by the family as such as if, no partition had taken place and each member or group of members shall be liable jointly zo and severally for the tax assessed on ~he value of the taxable gifts made by the joint family as such (2), where the gift-tax officer is not so satisfied, he may, by order, declare that such family shall be deemed for the purposes of this act to continue to be a hindu undivided family 2s 22 where a firm or association of persons ijable to pay gift-tax under this act has been discontinued or dissolved, every person who was at the time of such discontinuance or dissolution a partner of such firm or a member of such association shall, in respect of the taxable gifts made ~y the fir~ or association, be jointly and 30 severally liable to assessment and for the amount of tax payable by such firm or association under this act and the provisions of this act shall, so far as may be, apply to any suah assessment /  chapter vi appeals, revisions and references35 23 (1) any person,-(a) objecti"ng to the value of his taxable gifts determined under this act; or (b) objecting to the amount of gift-tax determined 81 appeal to the appellate assistant commissioner from orders of gift-tax officers payable by him under this act; or 40 (c) denying his liability to be assessed under this act; or (d) objecting to any penalty imposed' by the gift-tax officer under section 18; or (e) objecting to a,py order of the gift-tax officer under s sub-section (2) of section 21; or </> objecting to any penalty imposed by the gift-tax officer under sub-section (1) of, section 46 of the income-tax act as applied under section 34 for the purposes of gift~tax; may appeal to the appellate assistant commissioner against the 10 assessment or order, as the case may be, in the prescribed form and verified in the prescribed planner: provided that no appeal shall lie under clause (f) unless the tax has been paid before the appeal is filed (z) an appeal shall be presented within thirty days of the is receipt of the notice of demand relating- to the assessment or penalty objected to, or the date on which any order objected to, is communicated to him, but the appellate assistant commissioner may admit an appeal after the expiration of the period aforesaid if he is satisfied that the appellant had sufficient cause for not pre-20 senting the appeal within that period (3) the appellate assistant commissioner shall fix a day and place for the hearing of the appeal and may from time to time adjourn the hea·ring (4) the appellate assistant commissioner may,-25 (a) at the hearing of an appeal allow an appellant to go into any ground of appeal not specified in the grounds of appeal; (b) before disposing of rn appeal, make such further inquiry as he thinks fit or cause further inquiry to be made by the gift-tax officer 30 (5) in disposing of an appeal, the appellate assistant commissioner may pass such order as he thinks fit which may include an order enhancing the amount of gift-tax determined or penalty imposed: provided that no order enhancing the amount of gift-tax !s determined or penalty imposed shall be made unless the person affected hereby has been given a reasonable opportunity of showing cause against such enhancement (6) a copy of every order passed by the appellate assistant commissioner under this section shall be forwarded to the appellant and the commissioner 24 (1) any assessee objecting to an order passed by the appellate assistant commissioner under section 23 may appeal to the s appellate tribunal within sixty days of the date on which he is served with notice of such order appeal to the appellate tribunal from orden of the appellate assistant commissioner (2) the commissioner may, if, he is not satisfied as to the correctness of any order passed by an appellate assistant co:nunissioner under section 23, direct the gift-tax officer to appeal to the 10 appellate tribunal against such order, and such appeal may be made at any time before the expiry of sixty days of the date on which the order is communicated to the commissioner (3) the appellate tribunal may admit an appeal after the expiry of sixty days referred to in sub-sections (1) and (2) if it is satis- 15 fied that there was sufficient cause for not presenting it within tha t l!teriod (4) an appeal to the appellate tribunal shall be in the prescribed form and shall be verified in the prescribed manner and shall, except in the case of an appeal referred to in sub-section (2),20 be accompanied by a fee of rupees one hundred (5) the appellate tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, and any such orders may include an order enhancing the amount of gift-tax determined or penalty imposeo: 25 provided that no order enhancing the amount of gift-tax determined or penalty imposed shall be made unless the person affected thereby has been given a reasonable opportunity of showing cause against such enhancement (6) where the appellant objects to the valuation of any gift, the 30 appellate tribunal may, and if the appellant so requires, shall, refer the question of disputed value to the arbitration of two valuers, one of whom shall be nominated by the appellant and the other by the respondent, and the appellate tribunal shall, so far as that question is concerned, pass its order under sub-section (5) 35 conformably to the decision of the valuers: provided that if there is a difference of opinion between the two valuers, the matter shall be referred to a third valuer nomiiiated by agreement, or failin, aifeement, by the appellate tribunai, and the decision of that valuer on the question of valuation shall be final (7) the costs of any arbitration proceeding under sub-section 5 (6) shall be borne by the central government or the assessee, as the case may be, at whose instance the question was referred to the valuers: provided that where the assessee has been wholly or partialiy s~ccessful in any reference made at his instance, the extent to' 10 which the co~ts shall be borne by the assessee shall be at the discretion of the appellate tribunal (8) the valuers may, in disposing of any matter referred to them for arbitration under sub-section (6), hold or cause to be held such inquiry as they think fit, and after giving the appellant 15 and the respondent an opportunity of being heard, pass such orders thereon as they think fit and shall send a copy of such order to the appellate tribunal (9) a copy of every order passed by the appellate tribunal under this section shall be forwarded to the assessee and the 20 commissioner (10) save as provided in section 27, any order passed by the appellate tribunal on appeal shall be final (11) the provisions of sub-sections (5), (7) and (8) of section 5a of the income-tax act shall apply ~o the appellate tribunal in 25 the discharge of its functions under this act as they apply to it in the discharge of its functions under the income-tax act 25 (1) the commissioner mey, either on his own motion or on power  of application made by an assessee in this behalf, call for the record ~n;!!li:!~fs; of any proceeding under this act in which an order has been passed ~~~~~d11at:f 30 by any authority subordinate to him, and may make such inquiry or authorities cause such inquiry to be made, and, subject to the provisions of this act, pass such order thereon not being an order prejudicial to the al:>l:iessee, as the commissioner thinks fit: provided that the commissioner shall' not revise any order under 35 this sub-section in any case-(a) where an appeal against the order lies to the appellate assistant commissioner or to the appellate tribunal and the time within which such appeal can be made has not expired or, in the case of the appellate tribunal, the assessee has not waived his right of appeal; (b) where the order is pending in appeal before the appellate assistant commissioner or has been the subject of an appeal 5 to the appellate tribunal; (c) where the application is made by the aaseshe for luch revision unless-(i) the application is accompanied by a fee of rupees twenty-five; and 10 (ii) the application is made within one year from the date of the order sought to be revised or within such further period as the commissioner may think fit to allow on bdng satisfied that tne assessee was prevented by sufficient cause from making the application within that period; and 15 (d) where the order is sought to be revised by the commissioner on his own motion, if such order is made more than one year previously explanation-for the purposes of this sub-section,-(a) the appellate assistant commissioner shall be deemed 20 to be an authority subordinate to the commissioner, and (b) an order by the commissioner declining to interfere shall be deemed not to be an order prejudicial to the assessee (2,) without prejudice to the provisions contained in sub-section (1), the commissioner may eall for and examine the record of any 25 proceeding under this act, and, if he considers that any order passed therein by a gift-tax officer is erroneous in so far it is prejudicial to the interests of revenue, he may, after giving the assessee an opportunity of being heard, and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the 30 circumstances of the case justify, including an order enhancing or modifying the assessment or cancelling it and directing a fresh assessment (3) no order shah be made under sub-section (2) after the expiry of two years from the date of the order sought to be revisei is al (1) any assessee objecting to an order of enhancement made ajpea11 to tj: appe late by the commissioner under section 25 may appeal to the appellate tribunal tribunal within sixty days of the date on which the order is ~f~ communicated to him  ment by commissioner , (2) an appeal to the appellate tribunal ullder sub-section (1) shall be in the prescribed form and shall be verified in the prescribed manner and shall be accompanied by a fee of rupees one hundred (3) the provisions of sub-sections (3) and (5) to (10) inclusive of section 24 shall apply in relation to any appeal under this section as 10 they apply in relation to any appeal under that section 27 (1) within ninety days of the date upon which he is served~!hc:: with an order under section 24 or section 26, the assessee or the commissioner may present an application in the prescribed form and where the application is by the assessee, accompanied by a fee of 15 rupees one hundred, to the appellate tribunal requiring the appellate tribunal to refer to the high court any question of law arising out of such order, and the appellate tribunal shall, if in its opinion, a question of law arises out of such order, state the case for the opinion of the high court -20 (2) an application under sub-section (1) may be admitted after the expiry of the period of ninety days aforesaid if the appellate tribunal is satisfied that there was sufficient cause for not presenting it within the said period '(3) if, on an application made under sub-section (1), the appellate ~s tribunal,-(a) refuses to state a case on the ground that no question of law arises, ()ii' (b) rejects it on the ground that it is time-barred, the applicant may, within ninety days from the date on which he 30 is served with a notice of refusal or rejection, as the case may be,  apply to the high court, and the high court may, if it is not satisfied with the correctness of the decision of the appellate tribunal, require the appellate tribunal to state the case to the high court, and on receipt of such requisition the appellate tribunal shall state 3, the case: -provided that, if in any case where the appellate tribunal has been required by an assessee to state a case the appellate tribunal refuses to do so on the ground that no question of law arises, the assessee may, within thirty days from the date on which he receives notice of refusal to state the case, withdraw his application, and if he does so, the fee paid by him under sub-section (1) shall be refunded to him (4) the statement to the high court shall set forth the facts, the, determination of the appellate tribunal and the question of law which arises out of the case (5) if the high court is not satisfied that the case as stated is sufficient to enable it to determine the question of law raised thereby, it may require the appellate tribunal to make such modification 10 therein as it may direct (6) the high court, upon hearing any such case, shall decide the question of law raised therein, and in doing so, may, if it thinks fit, alter the form of the question of law and shall deliver judgment thereon containing the grounds on which s~ch decision is founded r s and shall send a copy of the judgment under the seal of the court and the signature of the registrar to the appellate tribunal and the appellate tribunal shall pass such orders as are necessary to dispose of the case conformably to such judgment (7) where the amount of any assessment is reduced as a result 20 of any reference to the high court, the amount, if any, overpaid as gift-tax shall be refunded with such interest as the commissioner may allow, unless the high court, on intimation given by the commissioner within thirty days of the receipt of the result of such reference that he intends to ask for leave to appeal to the supreme 3, court, makes an order authorising the commissioner to postpone payment of such refund until the disposal of the appeal in the supreme court (8) the costs of any reference to the high court shall be in the discretion of the court  30 (9) section 5 of the indian limitation act, 1908, shall apply to - ef 1,01 an application to the high court under this section , heari0j bj 28 when a case has been stated to ,the high court under section h;~" court r:- "17, it shall be heard by a bench of not less than two judges of the high court and shall be decided in accordance with the opinion of 35 such judges or of the majority of such judges, if any: provided that where there is no such majority, the judges shall state the point of law upon lirhich they differ and the cue abau then be heard upon that point only by one or more of the judges of the high court, and such point shall be decided according to the opinion of the majority of the judges who have heard the case, including those who first heard it , 29 (1) an appeal shall lie to the supreme court from any judg- t~g:!~o ment of the high court delivered on a case stated under section 27 courl in any case which the high court certifies as a fit case for appeal to the supreme court (2) where the judgment of the high court is varied or reversed 10 on appeal under this section, efyect shall be given to the order of the supreme court in the manner provided in sub-section (6) of section 27 (3) the high court may, on application made to it for the execution of any order of the supreme court in respect of any costs 15 awarded by it, transmit the order for execution to any court subordinate to the high court  chapter vnpay'ioient and recovery 0'" girr-tax 30 gift-tax shall be payable by the donor but where in the gift-tu ~ opinion of the gift-tax officer the tax cannot be recovered from the ~y~~l~~ donor, it may be recovered from the donee: provided that the amount of the tax which may be recovered from the donee shall not exceed that portion of the gift-tax which is attributable to the value of the gift made to the donee by the donor 25 as at the date of the gift 31 gift-tax payable in respect of any gift comprising immovable ~e~~!~ property shall be a first charge on that property but any such charge 0!1 property shall not affect the title of a bona fide purchaser for valuable consi- gifted  deration without notice of the charge 30 32 when any tax or penalt~ is due in consequence of any order ~~~d~ passed under this act, the gift-tax officer shall serve upon the assessee or other person liable to pay such tax or penalty a notice of demand in the prescribed form specifying the sum so payable and the time within which it shall be payable 35 33 (1) any amount specified as payable in a notice of demand recovery of issued under section 32 shall be paid within the time, at the place, ~aw~ and to the person mentioned in the notice, or if no time is so ment ioned, then on or before the first day of the second month following the date of service of the notice, and any assessee or other person liable to pay the amount failing so to pay shall be deemed to be in default (2) notwithstanding anything contained in this section, where aft assessee has presented an appeal under section 23, the gift-tax s officer may, in his discretion treat the assessee as not being in default as long as such appeal is undisposed of mode of recovery 34 the provisions of sub-sections (1), (la), (2), (3), (4), (5), (5a), (6) and (7) of section 46 and section 47 of the income-tax act shall apply as if the said provisions were provisions of this act, and 10 referred to gift-tax and sums imposed by way of penalty under this act instead of to income-tax and sums imposed by way of penalty under that act, and to gift-tax officer and commissioner of gift-tax instead of to income-tax officer and commissioner of income-tax  chapter viti miscellaneousrectificatioa fil mistakes 35 at any time within four years from the date of any crder passed by him, or it, the gift-tax officer, the appellate assistant commissioner, the commissioner and the appellate tribunal may on his, or its, own motion rectify any mistake apparent from the ~ record and shall, within a like period rectify any sj,lch mistake which has been brought to the notice of the gift-tax officer, the appellate assistant commissioner, the commissioner or the appellate tribunal, as the case may be, by an assessee: provided that no such rectification shall be made which has the:ls effect of enhancing the amount of gift-tax detennined unless the assessee has been given a reasonable opportunity of being heard in the matter prosecution 36 (1) if any person fails without reasonable c8use,-(a) to furnish in due time any return of gifts under this 30 act; (b) to produce, or cause to be produced, on or before the dat  mentioned in any notice under sub-section (2) or sub-section (4) of section 16, such accounts, records and documents as are referred to in the notice;  (c) to furnish within the time specified any statement or infonnation which such person is bound to furnish to the gift-taz officer under section 3ft; he shall, on conviction before a magistrate, be punishable with fine which may extend to rupees ten for every day during which the default continues (2) if a person makes a statement in a verification in any return 5 of gifts furnished under this act or in a verification mentioned in section 23, 24 or 26 which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable with simple imprisonment which may extend to one year, 01' w'ith fine which may extend to rupees one thousand, or with both 10 (3) a person shall not be proceeded against for an offence under this section except at the instance of the commissioner (4) the commissioner may either before or after the institution of proceedings compound any such offence ,  explanation-for the purposes of this section "magistrate" means tj a presidency magistrate, a magistrate of the first class or a magistrate of the second class specially empowered by the central government to try offences under this act ito' 37 the gift-tax officer, the appellate assistant commissioner, the power to commissioner and the appellate tribunal shall, for the purposes of take evidenca  a h h  on oath etc: ~o this ct, ave t e same powers as are vested m a court under the code of civil procedure, l!w8, when trying a suit in respect of the following matters, namely:-(a) enforcing the attendance of any person and examining him on oath; ~" " 25 (b) requiring the discovery and production of documents; (c) receiving evidence on affidavit; ~ (d) issuing commissions for the examination of witnesses' , " and any proceeding before the gift-tax officer, the appellate assistant commissioner, the commissioner or the appellate tribunal shall 30 be deemed to be a judicial proceeding within the meaning of sections 1860 193 and 228 of the indian penal code 38 where, for the purposes of determining the gift-tax payable by p  ower to any person, it appears necessary for the gift-tax officer to obtain call for any statement or information from any person, the gift-tax officc1ldfonnatiod 35 may ~erve a notice requi~ing such person, on or before a date co be therem specified, to furolsh such statement or information on the i -,points specified in the notice, and that person shall, notwithstandin" :·'i  : ,\ i,1 -  ,  anything in any law to the contrary, be bound to furnish such sbtement or information to the gift-tax officer: provided that no legal practitioner shall be bound to furnish any statement or information under this section based on any professional communications made to him otherwise than as permitted by section s 126 of the indian evidence act, 1872 i f 1172 meet of 39 whenever in respect of any proceeding under this act any ~f-=:oritie8 gift-tax authority ceases to exercise jurisdiction and is succeeded by on= another who has and exercises such jurisdiction, the authority so pr s succeeding may continue the proceeding from the stage at which the jo proceeding was left by his predecessor  computation of period of limitation 40 in computing the period of limitation, prescribed for an app!:!al under this act or for an application under section 27, the day on which the order c0mplained of was made and the time requisite for obtaining a copy of such order shall be excluded is service of notice s of ipo~, 41 (1) a notice or a requisition under this act may be served on the person therein named either by post or as if it were summor;; issued by a court under the code of civil procedure, 1908 (2) any such notice or requisition may, in the case of a firm or a hindu undivided family be addressed to any member of the firm or ao to the manager or any adult male member of the family, and in the  case of a company or association of persons be addressed to the principal'officer thereof prohibition of disclosure of information j 42 (1) subject to the provisions contained in sub-section (2), the provisions of section 54 of the income-tax act shall apply to ail~' accounts or in relation to statements, documents, evidence or affidavits given, produced or obtained in oonnection with or in the course of any proceeding under this act as they apply to or in relation to similar particulars under that act subject to the modification that the reference to any "income-tax authority" in clause (d) of sub- 30 section (2) and to the "commissioner" in sub-section (5) of that act shall be construed as a reference to any "gift-tax authority" and to the "commissioner of gift-tax", respectively 304 of i9ss 27 of 1957 29 of 19'7 (2) nothing contained in section 54 of the income-tax act shall apply to the disclosure of any such particulars as are referred to in 3s sub-section (1) to any person acting,in the execution of this act or the income-tax act, or the estate duty act, 1953, or the wealth-tax act, 1957, or the expenditure-ta~ act, 1957, where it is necessary or desirable to disclose the same to him for the purposes of this act or any of the other acts aforesaid 43 no suit shall lie in any civil court to set aside or modify any ~ar of suit assesslllent made under this act, and no prosecution, suit or other ~~ll legal proceeding shall lie against any officer of the government for anything in good faith done or intended to be done under this act 5 44 any assessee who is entitled to or required to attend before apfo:~ce any gift-tax authority or the appellate tribunal in connection with !':x o::t~~~: any proceeding or inquiry under this act, except where he is required ~ea b1d auunder this act, to attend in person, may attend by a person authoris- re~~ta­ed by him in writing in this behalf, being a relative of, or a person tive •• 10 regularly employed by, the assessee or a legal practitioner or a chartered accountant or any other person having such qualifications as may be prescribed explanation-for the purposes of this section,-(a) the expression "a person regularly employed by the 15 ass~ee" includes any officer of a scheduled bank with which the assessee maintains a current account or has other regular dealings; (b) "chartered accountant" means a chartered accountant as defined in the chartered accountants act, 1949 37 of 1949 20 45 the central government may enter into any agreement with ajreement the government of any reciprocating country for the avoidance or ~~r a!li~~ce relief of double taxation with respect to gift-tax payable under this double act and under the corresponding law in force in the reciprocating :ti:!pect country and may, by notification in the official gazette, make such to gift-tax 25 provision as may be necessary for implementing the agreement explanation-the expression "reciprocating country" for the purposes of this act means any country which the central gov~rn­ment may, by notification in the official gazette, declare to be a reciprocating country 30 46 the provisions of this act shall not apply to gifts made by-act dot to apply in certain cues (a) a government company as defined in section 617 of the companies act, 1956; i of 1956 (b) a corporation established by a central, state or provincial act; 3s (c) any company (other than a private company as defined in section 3 of the companies act, 1956): provided that the aftairs of the company or the shares in the company carrying more than fifty per cent of the total voting power were at no time during the pre¥ioua year controlled or held by less than six persons; (d) a company which is a subsidiary of and in which more , than half the nominal value of equity share capital is held by a company referred to in clause (c); (e) any institution or fund to which the provisions of section 15b of the income-tax act apply: explanation-for the purpose of computing the number of 10 six persons referred to in the proviso to clause (c), persons who are related to one another as husband and wife, brother and sister, brothers, sisters or who are lineal descendants or ascendants of one another and persons who are nominees of any other person togetaer with that other person shall be treated 15 as a single person power to~ make rules 47 (1) the board may, by notification in the official gazette, make rules for carrying out the purposes of this act (2) in particular, and without prejudice to the generality of the foregoing power, rules made under this section may provide for-20 (a) the manner in which the market value of any property may be determined; (b l the form in which returns under this act shall be made and the manner in which they shall be verified; (c) the form in which appeals and applications under this 25 act may be made, and the manner in which they shall be verified; (d) the form of any notice of demand under this act; (e) the refunds which may be made under this act; (f> the areas for which lists of valuers may be drmvn up; 30 (g) any other matter which has to be, or may be, prescribed for the purposes of this act (3) the power to make rules conferred by this section shall on the first occasion of the exercise thereof include the power to give retrospective effect to the rules or any of them from a date not earlier ¥ than the date of commencement of this act (4) all rul~s made under this act shall be laid before each house 1)f parliament as soon as may be after they are made and shall be subject to such modifications as parliament may make during the aession in which they are so laid or the session immediately fqllolving 40  rates of gin-taxrate of ~ 5 ta7-(1) on the first rs 50,000 of the value of all taxable gifts 4% (2) on the next rs 50,000 of the value of all taxable gifts 6% (3) on the next rs 50,000 of the value of all taxable gifts 8% (4) on the next rs 5id,000 of the value of all taxable gifts 10% 10 (5) on the ext rs 1,00,000 of the value of all taxable gifts 12% (6) on the next rs 2,00,000 of the value of all taxable gifts 15% (7) on the next rs 5,00,000 of the value of all taxable gifts 20% (8) on the next rs 10,00,000 of the value of all taxable gifts 25% (9) on the next rs 10,00,000 of the value of all taxable gifts 30% is (10) on the next rs' 20,00,000 of the value of all taxable gifts 35% (ii) on the balance of the value of all taxable gifts 40%  statement of objects and reasonsthe object of this bill is to levy a tax on gifts made by individuals, hindu undivided families, companies, firms and associations of persons gifts from one person to another provide a convenient means of avoiding or reducing liability to estate duty, income-tax, wealth-tax, and expenditure-tax the only e1fective method of checking such attempts at evasion or reduction of tax liability is by levying a tax on gifts with the introduction of this tax, the integrated tax ~tructure which the government have been aiming at will be complete the notes on clauses explain the various provisions contained in the bill j nehru new delhi; the 28th february, 1958  notes on clausesclatl8e 2 defines, inter alia, "gift", "previous year" and "transfer of property" all voluntary transfers of property without consideration and transfers deemed to be gifts under clause 4 of the bill are covered by the definition of "gift" the definition of "previous year" secures that all gifts made during the period between the valuation dates determined for two consecutive wealth-tax assessments are charged to gift-tax in one year the definition of "transfer of property" is designed to cover all possible transfers of property cla1lse 3 is the charging clause which provides that the tax is to be levied on all gifts made during the previous year by individuals, hindu undivided families, companies, firms and associations of persons the persons referred to in clause 46 are however exempt from the charge the liberal exemption provided for gifts made to one's wife may lead to avoidance of tax by gifts being made through one's wife and the explanation to this clause seeks to check such avoidance clause 4 brings ~o charge certain transfers which are for nominal or inadequate consideration or for a consideration which although stipulated is not meant to pass actually similarly release or discharge from one's debts or liabilities, appropriations or withdrawals from joint accounts for the benefit of a person other than the person who made the original deposit or investment, are brought within the scope of gifts clause 5 provides for the exemption of various types of gifts besides the gifts of property enumerated in sub-clauses (i) to (xi) which are exempt from charge to the extent indicated therein, there is a basic exemption of rs 10,000 which will be reduced to rs 5,000 if the taxable gift to an individual donee exceeds rs 3,000 this reduction of basic exemption is meant to ciiscourage large gifts being made to the same individual cla1lse 6 provides for the manner in which the values of gifts may be determined ordinarily the market value of the property gifted would be the value of the gift clause 7 while providing that the tax is charged on the value of gifts made during the previous year, lays down that the rate of tax shall be determined by the value of the gifts made during the five previous years preceding the assessment year gifts made before the lst day of april, 1957 though within the five year period, will not be taken into account for aggregation g:la1lses 8 to 13 deal with the administrative machinery the intention is to entrust the administration of this act to the officers of the income-tax department under a procedure which follows broadly the procedure in the income-tax act clauses 14 to 18 are assessment provisions which follow similar provisions in the income-tax, wealth-tax and expenditure-tax acts clawe 19 provides for a rebate of 10 per cent on advance payments towardii tax liability made within fifteen days of making a gift the amount to be paid is calculated at specified percentages on the value of the gift this provision is meant to encourage prompt payments clauses 20 to 29 relate to assessment in special cases, appeals, revisions and references and are similar to those in the lncomtax, wealth-tax and expenditure-tax acts cl4use 30 provides that the tax is primarily the liability of tlle donor, but in the interests of revenue it also provides that the donee will be jointly and severally liable for the tax the donee's liabili~ is, however, restricted to the tax attributable to the gift received by him clause 31 makes the gift-tax a first charge on the immovable property comprised in the gift cla:uses 32 to 45 provide for payment and recovery of the tax and other connected matters they follow similar provisions in the income-tax, wealth-tax and expenditure-ta, acts clause 46 exempts government companies, corporations establishoed by central, state or provincial act, public limited companies whose affairs are controlled by not less than six persons and charitable institutions or funds from the application of the act clause 47 makes the usual provision authorising the central board of revenue to make rules for carrying out the purposes o~ the act  the bill proposel to levy a tax on gifts made by individuals, hindu undivided familiel, companies, firms and associations o~ persons although this ia a new tax, the procedure for assessment, appeal and collection follows the same pattern as in income-tax, wealth-tax and expenditure-tax acts it is, therefore, proposed to administer the tax through the income-tax department which is administering the wealth-tax and expenditure-tax acts as well the pressure of work on the income-tax department has even otherwise considerably increased since last year consequent on the reduction of minimum taxable limit to rs 3,000 the department cannot, therefore, take on the responsibility of administering this new tax without some expansion of staff at the various levels of the departmental cadres 2 the increase of personnel, along with incidental expenses of administration, including payment of remuneration to valuers is estimated to cost rs 8 lakhs actual recruitment of staff will, however, be made as and when it is found really necessary   i volume of work •as we have no reliable data regarding the number of gifts made in a year, the extent and value, it is very difficult to make even a rough estimate of the number of persons who would be called upon to pay gift-tax if the bill is enacted as proposed it would, however, be safe to assume that normally only the very well-to-do persons would be in a position to make substantial gifts which attract liability to this tax as a rough guess the number of such assessees may be taken as 10,000 in anyone year  ii requirement of personnel and finane!no cost ri a officers: no of inspecting assistant commissioners and appellate assistant commissioners (2+2) 4 4x1200x12 57,600 no of gift-tax officers taking the average disposal per officer per annum at 400 25 25x500x12 1,50,000 b staff: inspectors no of supervisors no of head clerks no of udcs no of ldes no of stenographers no of steno-typists 36,000 21,000 72,000 1,04,400 41,760 7,200 45,360 12 12x250x12 5 5x350x12 24 24x250x12 58 58x150x12 29 29x120x12 4 4x150x12 27 27x140x12 5,35,320 say 5,50,000 - c incidental expenditure: incidental expenses including class iv staff, contingencies and payment of remuneration to valuers estimated nt 2,50,000 total 8,00,000  memorandum regarding delegated legislationclause 47 of the bill authorises the central board of revenue to make rules with respect'to matters like the manner in which market value of property gifted may be determined in cases where they are not easily determinable, the form in which returns may be made under the act, the form in which appeals should be filed or notices of demand issued and the manner in whioh refunds may be made the rule making power is of a normal character  billto provide for the levy of gift-tax the president has, in pursuance of clauses (i) and (3) of article ii7 of the constitution of india, recommended to the lok sablla, the introduction and consideration of the bill m n kaul, secretary (shri jqfj)aharlal nehru, minister of pinance) 