 the gift-tax (amendment) bill, 1962(as introduced in lolt sabra on 16m november, 1962) corrigenda to the gifr-tax (amendment) bill, 1962 (to be/as introduced in lok sabha) 1 paee 4, line 2,-after "and" ~ ii " , 2 page 11, line 30,-after " substituted" for 3 page 11, line 34,-" " - ~ " it , iw: "accoopanies" ~ "accompanied" 4 page 12, line 3,-~ter "within" insert "the" 5 p8€e 13, in the marginal heading to clause 23,-~ itsections" read n sectionlt for "ordnarily" ~ "ordinarily" 7 page 41, against line 32,-i:2!: "45 of 1960" read it 45 of 1860" 8 page 43, line 7 from bottom-after ii rules" cmil "1" 9 correct line numbers on pages 5, 15 and 19 new delhi, no!hullb~j5" 1962 -  kartika -24-,--1884" tsal<a 1  the gift -tax (amendment) bill, 1962 (as introduced in lok sabha)a bill further to amend the gift-tax act, 1958 be it enacted by parliament in the thirteenth year of the republic of india as follows :-1 (1) this act may be called the gift-tax (amendment) act, 1962 short title and coid-(2) it shall come into force on such date as the central govern- menc:ement s ment may, by notification in the official gazette, appoint 2 in section 2 of the gift-tax act, 1958 (hereinafter referred to amendment 18 of 1958 ils the principal act),-olllmora 2 (a) for clauses (ii), (iii) and (iv), the following clauses shall be substituted, namely:-10 - (ii) "appellate tribunal" means the appellate tribunal constituted under section 252 of the income-tax act; (iii) "assessee" means a person by whom gift-tax or any other sum of money is payable under this act and includes-is (a) every person in respect of whom any proceeciidl under this act has been taken for the determination of gift-tax payable by him or by any other penon or the amount of refund due to him or such other -person; (b) every person who is deemed to be an uaesaee under this act; (c) every person who is deemed to be an assessee in default under this act; (iv) "assessment" includes re-assessment; (iva) "assessment year" means the period of twelve months commencing on the 1st day of april, every year;'; 2017 (b) ls-l (b) ifter clause (v), the following clause shan he ins,erted, namely:-'(va) "charitable purpose" includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility not involving the carrying on 5 of any activity for profit;'; (c) after clause (vii), the following clause shall be inserted, namely:-• (vit4) "director of inspection" includes an additional director of inspection, a deputy director of inspection and 10 an assistant director of inspection;'; (d) for clause (xiv), the following clause shall be substituted, namely:-'(xiv) "income-tax act" means the income-tax act, 1961;'; is 43 of 1961 (e) after clause (xvi), the following clauses shall be inserted, namely:-'(xvia) "inspector of gift-tax" means an inspector of income-tax empowered to work as an inspector of gift-tax under section 11; 20 (xvib) "legal representative" has the meaning assigned to it in clause (11) of section 2 of the code of civil procedure, 1908;'; 5 of 1908 (f) in clause (xx)-(i) in sub-clause (b), for the words, brackets, letters and 2s figures "under sub-clause (a) of clause (11) of section 2 of the income-tax act or such period determined as theprevious year under sub-clause (b) of clause (11) of that section, whichever expired last", the words, brackets, letters and figures "under sub-clause (a) or sub-clause (b), as the case 30 may be, of sub-section (1) of section 3 of the income-tax act or such period determined as the previous year under clause (c) of that sub-section, whichever expired last" shall be substituted; (ii) in sub-clause (c), for the words, brackets and figures 3s oic1ause (11) of section 2", the word and figure "section 3" shall be substituted amendment 3 in section 3 of the principal act, for the words "financial year", of ~tiod 3· the words "assessment year" shall be substituted , in :-ection 5 of the principal act,-(i) in sub-section (1), in clause (v), for the word, figures and letter "section i5b", the word and figures "section 88" shall be substituted; 5 (ii) in the explanation, in clause (a), for the words "in the taxable territories within the meaning of the income-tax act", the following shall be substituted, namely:-"within the meaning of section 6 of the income-tax act, subject to the modification that references in that section to 10 india shall be construed as referenc~s to the territories to which this act extends" 5 after section 7 of the principal act, the following section shan insertion  of new be inserted, name]y:-section "la is "7a (1) notwithstanding anything contained in section 7, power to th c  f·· th bl transfer e ommlssloner may, a ter glvmg e assessee a reasona e cases opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one gift-tax officer subordinate to him to another also subordinate to him, and the board may similarly transfer any case from one gift-tax officer to another: %0 provided that nothing in this sub-section shall be deemed to require any such opportunity to be given where the transfer is from one gift-tax officer to another whose offices are situated in the same city, locality or place (2) the transfer of a case under sub-section (1) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the gift-tax officer from whom the case is transferred e;rplanation-in this section the word 'case' in relation to any person whose name is specified in any order issued thereunder means all proceedings under this act in respect of any year which may be pending on the date of such order, or which may have been completed on or before such date, and includes also all proceedings under this act which may be commenced after the date of such order in respect of any year" 35 6 after section 9 of the principal act, the following section shall insertion be inserted namely:-of ~ew , sectlon 9a "9a (1) the board may empower as many persons as it directors thinks fit to exercise under this act the functions of a director of  f 1 t· inspection o nspec ion (2) a director of inspection shall be competent to make any enquiry under this act and, for this purpose, shall have all the powers that a gift-tax officer has under this act in relation to the making of enquiries (3) without prejudice to the provisions of sub-section (2), 5 a director of inspection shall exercise such other functions of any gift-tax authority as may be assigned to him by the board" :u~~ 7 for section 11 of the principal act, the following sections shall aectiod for be substituted, namely:-imdion 11 '11 acommissioder of gift-tax may empower any inspector 10 of income-tax to work as an inspector of gift-tax under any gift-tax authority and when he is so empowered, he shall perfarm silch functions in the execution of this act as are assigned to him by the said gift  tax authority lla (1) inspecting assistant commissioners shall be sub- is ordinate to the commissioner within whose jurisdiction they perform their functions and also to the director of inspection (2) gift-tax officers shall be subordinate to the commissioner and the inspecting assistant commissioner within whose "jurisdiction they perform their functions and also to the director 20  of inspection (3) inspectors of gift-tax shall be subordinate to the gift-tax ofticers or other gift-tax authority under whom they are empowered to work and to any other gift-tax authority to whom the aid offtcer or other authority is subordinate 2s explanation-foi' the purposes of sub-section (1), "director of inspection" does not include a deputy director of inspection or an assistant director of inspection and for the purposes of sub-section (2), "director of inspection" does not include an assistant director of inspection' 30 amend-1fteilt of iedlon 12 s section 12 of the principal act shall be re-numbered as subsection (1) thereof and after the sub-section so re-numbered, the following sub-section shall be inserted, namely:-"(2) every gift-tax officer employed in the execution of this act shall observe and follow such instructions as may be 3s iuued to him for his guidance by the director of inspection or by  the commissioner or by the inspecting assistant commissioner within whose jurisdiction he performs his functions", t,·inchapter iii of the principal act, after section 12, the following insertion section shall be inserted, namely:-~!cri~~    12a "12a the commissioner of gift-tax and the inspecting power of  assistant commissioner of gift-tax shall be competent to make ~~~~l~f s any enquiry under this act and for this purpose, shall have all gifdt-tfax an 0  the powers that a gift-tax ofticer has under this act in relation inspecting to the making of enquiries " assist~nt   commis-sioner of  gift-tax  to make enquiries under this act lj, in section 13 of the principal act,-amendment of (i) in sub-section (1), after the words "taxable gifts", the section 13 id·  words "or is assessable in respect of the taxable gifts made by any other person under this act" shall be inserted;  (ii) for sub-section (2), the following sub-section shall be , 8ub6tituted, namely:-is 10 "(2) in the case of any person who, in the gift-tax officer's opinion, is assessable under this act whether in respect of the gifts made by him or by any other person during the previous year, the gift-tax officer may, before the end pf the relevant assessment year, serve a notice upon him requiring him to furnish within thirty days from the date of service of the notice a return of the gifts made by him or by such other person during the previous year in the prescribed manner and setting forth such other particulars as may be prescribed" 11, after section 14 of the principal act, the following section shall infsertion o new sec-2s be inserted, namely:-tion 14a "14a the return made under section 13 or section 14 shall !h~u~n t~y 35 be signed and verifiedbe signed (a) in the case of an individual, by the individual himself; where the individual is absent from india, by the individual concerned or by some person duly authorised by him in this behalf; and where the individual is mentally incapacitated from attending to his affairs, by his guardian or by any other person competent to act on his behalf; (b) in the case of a hindu undivided family, by the karta, and, where the karta is absent from india or is mentally incapacitated from attending to his affairs, by any other adult member of such family; (c) in the case of a company, by 'the priacipal oftlcer thereof; (d) in the case of a firm, by any partner thereof, not being a minor; (e) in the case of any other association, by any member s of the association or the principal officer thereof; and (f) in the case of any other person, by that person or by some person competent to act on his behalf  12 in section 15 of the principal act,-(i) in sub-section (1) ,-10 amendment of section 15 (a) for the words "is complete", the words liis correct and complete" shall be substituted; (b) for the words "and determine the amount payable by him as gift-tax", the words "and determine the amount of gift-tax payable by him or the amount refundable to him on is the basis of such return" shall be substituted; (ii) in sub-section (3), after the words "any specified points", the words "and after taking into account all relevant material which the gift-tax officer has gathered" shall be inserted; (iii) in sub-section (5), after the words "the gift-tax oftlcer", 20 the words "after taking into account all relevant material which he has gathered" shall be inserted amend-13 in section 16 of the principal act, in sub-section (1), for clause ment of section 18 (a), the following clause shall be substituted, namely:-"(a) has reason to believe that by reason of the omission or 25 failure on the part of the assessee to make a return under section 13 of the gifts made by him or any other person in respect of which he is assessable under this act for any assessment year, or to disclose fully and truly all material facts necessary for assessment of the gifts made by him or such other person for 30 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" substitu-14 for section 17 of the principal act, the following section shall tionof new be substituted namel""-section for ' j - 3s section 17 penalty for failure to furnill~ retur  · 10 comply with notices and eonce_l  ment of lifts, etc "17 (1) if the gift-tax officer, appellate assistant commissioner, commissioner or appellate tribunal, in the course of any proceedings under this act, is satisfied that any person-(a) has without reasonable cause failed to furnish the return required to be furnished under sub-section (1) of 40 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 allowed and in the mader \ required by bub-section (1) of section 13 or by such notice, as the case may be, or (b) has without reasonable cause failed to comply with s a nouce under sub-section (2) or sub-section (4) of section 15; 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 by way of penalty-10 (i) in the cases referred to in clause (a), in addition to the amount of gift-tax payable by him, a sum equal to two per cent of the tax for every month during which the default continued, but not exceeding in the aggregate fifty per cent of the tax; is 20 (ii) in the cases referred to in clause (b), in addition to the amount of gift-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 return made by such person had been accepted as correct; (iii) in the cases referred to in clause (e), 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 amoqnt of the tax, if any, which would have been avoided if the return made by such person had been accepted as correct (2) no order imposing a penalty under sub-section (1) shail be made unless the assessee has been heard or has been given a reasonable opportunity of being heard 3s (3) notwithstanding anything contained in clause (iii) ot sub-section (1), if in a case falling under clause (e) of that subsection, the minimum penalty imposable exceeds a sum of rupees one thousand, the gift-tax officer shall refer the case to the inspecting assistant commissioner who shall, for the purpose, have all the powers conferred under this section for the imposition of penalty (4) an appellate assistant commissioner, commissioner or the appellate tribunal, on making an order under this section imposing penalty, shall forthwith send a copy of the same to the gift-tax officer" " insertion is,; ,aftle%: section 19 of the pridcipal act, the followm, aection shall fi~~er9~· be inserted, lwnely:-assessment of persons leaving india "19a (1) notwithstanding anything contained in section 3, when it appears to the gift-tax officer that any individual may leave india during the current assessment year or shortly after , its expiry and that he has no present intention of returning to india, the gifts made by such individual during the ,period from the expiry of the previous year for that assessment year up to the probable date of his departure from india, shall be chargeable to gift-tax in that assessment year 10 (2) the taxable gifts made in each completed previous year or part of any previous year included in such period shall be chargeable to gift-tax at the rate or rates specified in the schedule, and separate assessments shall be made in respect of each such completed previous year or part of any previous year 15 (3) the gift-tax officer may estimate the value of the gifts made by such individual during such period or any part thereof, where it cannot be readily determined in the manner provided in this act (4) for the purpose of making an assessment under sub- 20 section (1), the gift-tax officer may serve a notice upon such individual requiring him to furnish, within such time, not being less than seven days, as may be specified in the notice, a return in the same form and verified in the same manner as a return under sub-section (2) o~ section 13, giving particulars of the gifts 25 made by him during each completed previous year comprised in the period referred to in sub-section (1) and during any part ot the previous year comprised in that period; and the provisions of this act shall, so far as may be, and subject to the provisions of this section, apply as if the notice were a notice issued under 30 sub-section (2) of section 13 (5) the gift-tax chargeable under this section shall be in addition to the tax, if any, chargeable under any other provision of this act (6) where the provisions of sub-section (1) are applicable, 35 any notice issued by the gift-tax officer under sub-section (2) of section 13 or under section 16 in respect of any gift-tax cbargeable under any other provisions of this act may, notwithstanding anything contained in sub-section (2) of section 13 or section 18, as the case may be, require the furnishing of the return by such 40 individual within suah period, not being less than seven days, a the gift-tax officer may think proper" 16 in chapter v of the principal act, after section 21, the follow- insertion  t' h ii b  rt d 1 of new ida sec ion s a e idse e , name y: -section 21a s 10 "21a (1) where a gift-tax officer after using all due and assessreasonable diligence cannot find the donor who has made any dment of onee taxable gifts, for the purpose of service of notice under sub- when section (2) of section 13 or under section 16, the gift-tax officer ~~~o~can­may make an assessment of the value of all such taxable gifts found made by him and determine the gift-tax payable by him and for this purpose may, by the issue of the appropriate notice which would have had to be served upon the donor, require from the donee or donees any accounts, documents or other evidence which might, under the provisions of section 15, have been required from the donor is (2) where any assessment in respect of the taxable gifts made by the donor has been made under sub-section (1), every donee shall be liable for the gift-tax so assessed: provided that where the donees are more than one, they shall be jointly and severally liable for the amount of the gift-tax so assessed: 20 provided further that the amount of the gift-tax which may be recovered from each donee shall not exceed the value of the gift made to him as on the date of the gift (3) the provisions of sections 13, 14 and 16 shall apply to a donee as they apply to any person referred to in those sections" 25 17 in section 22 of the principal act,-(i) in sub-section (1)-amendment of section 22 (a) in clause (a), the word "his" shall be omitted; (b) in clause (j)-(l) for the words, brackets and figures "sub-section 30 (1) of section 46 of the income-tax act", the words, brackets and figures "sub-section (1) of section 221 of the income-tax act" shall be substituted; (2) the word "or" shall be added at the end; (c) after clause (i), the following clauses ahall be 3s idaerteci, namely:-"(9) objecting to an order of the gift-tax ofticer under section 34 having the effect of enhancing the auessment or reducing a refund or an order refusing to allow the claim made by the lulse~see under that section; or 2017 (b) ls-2 (h) objecting to any fine imposed by the gift-tax ofbcer under sub-aectioll (2) of ection 36;"; (u) after sub-aection(5), the following sub-aections shall b ldhneci, namely:-"(5a) in disposing of an appeal, the appellate assistant s commissioner may consider and decide any matter arising out of the proceedidgs in which the order appealed against was passed, nqtwithstanding that such matter \vas not raised before the appellate assistant commissioner by the appellant 10 (5b) the order of the appellate assistant commissioner disposing of the appeal shall be in writing and -shall state the points for determination, the decision thereon and the reasoda for the decieion" 18 in section 23 of the principal act,-is amendmentof eetion23 (i) lor sub-section (1), the following sub-section shall be substituted, namely:-"(1) an assessee, objecting to an order passed by the appellate assistant commissioner under section 17 or section 22 or sub-section (2) of section 36 or to an order passed by 20 the inspecting assistant commissioner under sub-&ection (3) of section 17, may appeal to the appellate tribunal within sixty days of the date on which the order is cojluilunicated to him"; (it) after sub-section (2), the following sub-section shall be 25 inserted, namely:-u(2a) the gift-tax ofbcer or the assessee, as the case may be, on receipt of notice that an appeal against the order of the appellate assistant commissioner has been preferred under sub-section (1) or sub-section (2) by the other party, 30 may, notwithstanding that he may not have appealed agains' such order or any part thereof, within thirty days of the receipt of the potice, file a memorandum of cross objections, verified in the prescribed manner, against any part of the order of the appellate asaistant commiasioner and such 35 memorandum shall be disposed of by the appellate tribunal as if it were an appeal presented within the time specifled in aub-lection (1) or lub-aection (2)"i (iii) for sub-section (3), the following bub-section shall be iubstituted, namely:-"(3) the appellate tribunal may admit an appeal or permit the flling of a memorandum of cross objeetions after 5 the expiry of the relevant period referred to in sub-section (1) or sub-section· (2) or sub-section (2a) if it is satisfled that there was sufficient cause for not presenting it within that period"; (iv) in sub-section (11), for the words, brackets, flgures and il' letter "sub-sections (5), (7) and (8) of section sa of the incometax act", the words brackets and flgures "sub-sections (1), (4) and (5) of section 255 of the income-tax act" shall be substituted t9 in section 24 of the principal act, to bub-section (3), the amendfollowing ezplanation shall be added, namely: -:~n~:~ is "ezpl/ln/ltion~in computing the period of limitation for purposes of this sub-section, the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 38 and any period during which any proc~ding under this section is stayed by an order or injunction of any court shall be 20 excluded" !ft in section 25 of the principal act, for sub-section (1), the amendfollowing sub-section shall be substituted, namely:-=n~g~ "(1) an assessee objecting to an order passed by th~ commissioner under section 17 or to an order of enhancement passed 2s by him under section 24 may appeal to the appellate tribunal wfthin sixty days of the date on which the order is communicated to him" 21 in section 28 of the principal act,-amendment 01 (i) for sub-sections (1) and (2), the following sub4erlions section 28 30 shall be substituted namely:-"(1) the assessee or the commissioner may, within sixty days of the date upon which he is served with notice of an order under section 23 or section 23, by application in the p~bed fonn, accompanies, where the application is made 35 by the assessee, by a fee of rupees one hundred require the appellate tribunal to refer to the high court any question of law arising out of such order and, subject to the other provisions contained in this section, the appellate tribunal ~hall, within one hundred and twenty days of the receipt of 40 such application draw up a statement of the case and refer it to the high court (2) the appellate tribunal may, if it is satisfied that the appucant was prevented by sufficient cause from presenting the application within period specified in sub-section (1), allow it to be presented within a further period not exceeding thirty days"; 5 (ii) after sub-section (3), the following sub-section shall be tnserted, namely:-"(3a) if, on an application made under this section, the appellate tribunal is of the opinion that on account of a conflict in the decisions of high courts in respect of any 10 particular question of law, it is expedient that a reference should be made direct to the supreme court, the appellate tribunal may draw up a statement of the case and refer it through its president direct to the supreme court"; (iii) in sub-sections (4), (5) and (6), after the words "high 15 court", the words "or the supreme court" shall be inserted; / (iv) for sub-sections (7), (8) and (9), the following sub-section shall be substituted, namely:-"(7) the cost of any reference to the high court or the supreme court which shall not include the fee for making 20 the reference shall be in the discretion of the court" 22 in chapter vi of the principal act, after section 28, the following sections shall be inserted, namely:-insertion of new sections 28a and 28b tax to be paid notwithstanding reference, etc '28a notwithstanding that a reference has been made to the high court or the supreme court or an appeal has been preferred 2s to the supreme court, tax shall be payable in accordance with the assessment made in the case 28b in this chapter, "high court" mead$-(i) in relation to any state, the high court of that state: deftnition of high (ii) in relation to the union territories of delhi and 30 himachal pradesh, the high court of punj'ab; (m) in relation to the union territories of manipur and tripura, the high court of assam; (iv) in relation to the union territory of andaman and nicobar islands, the high court at calcutta; 35 (v) in relation to the union territory of laccadive, mintcoy and amindivi islands, the high court of kerla' 5 10 13 for section 29 of the principal act, the following section shall ~ubstitu­uon of new be substituted, namely:-sections for section 29 "29 subject to the provisions of this act, gift-tax shall be gift-tax payable by the donor but when in the opinion of the gift-tax :ly:~~~ officer the tax cannot be recovered from the donor, it may be recovered from the donee: provided that where the donees are more than one, they shall be jointly and severally liable for the amount of tax determined to be payable by the donor: provided further that the amount of tax which may be recovered from each donee shall not exceed the value of the gift made to him as on the date of the gift" is m for sections 31, 32 and 33 of the principal act, the following substitusections shall be substituted namely:-tio~ of new , sections tor sections 31, 32 and 33 "31 when any tax, interest, penalty, fine or any other sum notice of is payable in consequence of any order passed under this act, the demand gift-tax officer shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable 20 32 (1) any amount sp,ecified as payable in a notice of demand recovery under section 31 shall be paid within thirty-five days of the ~~d tax service of the notice at the place and to the person mentioned penalties in the notice: provided that, where the gift-tax officer has any reason to believe that it will be detrimental to revenue if the full period of thirty-five days aforesaid is allowed;he may, with the previous approval of the inspecting assistant commissioner, direct that the sum specified in the notice of demand shall be paid within such period being a period less than the period of thirty-five days aforesaid, as may be specified by him in the notice of demand 35 (2) if the amount specified in any notice of demand under section 31 is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at four per cent per annum from the day commencing after the end of the period mentioned in sub-section (1) (3) without prejudice to the provisions contained in subsection (2), on an application made by the assessee before the expiry of the due date under sub-section (1), the gift-tax officer may extend the time for payment or allow payment by instalments subject to such conditions as he may think fit to impose in the circumstances of the case (4) it "the amount is not ,aid within the time ltmtted under sub-seetlon (1) or extended under sub-section (3), as the case may be, at the place and to the person mentioned in the said notice, the assessee shall be deemed to be in default (5) if, in a case where payment by instalments is allowed s under sub-section (3), the assessee commits default in paying anyone of the instalments within the time fixed under that subo section, the assessee shall be deemed to be in default as to the whole of the amount then outstanding, and the other instalment or inbt8lments shall be deemed to have been due on the same 10 date as the1nstalmentactually in default (6) 0 where ,the assessee has 'presented an appeal under section 22, the gift-tax oftlcer may in his discretion and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of is the amount in dispute in the appeal, even though the time for payment has expired as long as such appeal remains undisposed of mode of recoyel')' 33 the provisions contained in sections 221 to 227, 229, 231 and 232 of the income-tax act and the second and third 20 schedules to that act and any rules made thereunder snail, so far as may be, apply as if the said provisions were provisions of this aet and referred to gift-tax and sums imposed by way of penalty, fine and interest under this act instead of to income-tax and ii11ms imposed by way of penalty, fine and interest under that 25 act and to gift-tax oftlcer and commissioner of gift-tax instead of to ineome-tax ofbcer and commissioner of income-tax j:~ i-any reference to sub-section (z) or subsection (6) of section 220 of the ineome-tax act in the said provisions of 0 that act or the rules made thereunder shall be 30 construed as ~eferences to sub-sections (2) and (6) respectively of section 32 of this act !'xpl4natio'n i1-the tax recovery ofticer and the tax recovery commissioner referred to in the income-tax act or the rules made thereunder shall be deemed to be the tax recovery 35 officer and the tax recovery commissioner for the purposes of recovery of gift-tax and 'sums imposed by way of 'penalty, fine ajld interest under this aa'a" zi after chapter vii of the principal act, the followinichapter insertion ihall be maerted namely: -of new , ~tel'  "chapter vita ruunds5 33a (1) where, as a result of any order passed in appeal or refunda other proceeding under this act, refund of any amount becomes due to the assessee the gift-tax officer shall, except as otherwise provided in this act, refund the amount to the assessee without his having to make any claim in that behalf 10 j5 (2) where an order giving rise to a refund is the iubject matter of an appeal or further proceeding or where any other proceeding under this act is pending, and the gift-tax officer is of the opinion that·the grant of refund is likely to adversely affect the revenue, the gift-tax oftieer may, with the previous approval of the commissioner withhold the refund till ncb time as the commissioner may determine 20 (3) where a refund is due to the assessee in pursuance of an order referred to in sub-section (1) and the gift-tu oftlcer does not grant the refund within a period of six months from the date of such order, the central government shall pay to the assessee simple interest at four per cent per annum on the amount of refund due from the date immediately following the expiry of the period of six months aforesaid to the date on which the refund is· granted  2s - 30 (4) where a refund is withheld under the provisions of subsection (2), the central government shall pay interest at the aforesaid rate on the amount of refund ultimately determined to be due as a result of the appeal or further proceedings for a period commencing after the expiry of six months from the date of the order referred to in that sub-section to the date the ref\md 11 granted (5) where under any of the provisions of this act, a refund is found to be due to any person, the gift-tax oftlcer, appellate assistant commissioner or commissioner, as the case may be, 35 may, in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against the swn, if any, remaining payable under this act by the person to whom the refund is due, after giving an intimation in writing to such perion of the action proposed to be taken under this 1ec110d" subatitu-28 for section 34 of the principal act, the followina section iha11 lion of new b b tit ted 1  lection for e su s u ,name y-aection 34 "34 (1) with a view to rectifying any mistake apparent from the record-rectification of miatakea (a) the gift-tax officer may amend any order of assess- 5 ment or of refund or any other order passed by him; (b) the appellate assistant commissioner may amend any order passed by him under sub-section (l) of section 17 or under section 22; (c) the inspecting assistant commissioner may amend 10 any order passed by him under sub-section (3) of section 17; (d) the commissioner may amend any order passed by him under sub-section (1) of sectio:q 17 or under section 24; (e) the appellate tribunal may amend any order passed by it under sub-section (1) of section 17 or section 23 or is section 25 (2) subject to other provisions of this section, the authority concerned-(a) may make an amendment under sub-section (1) ot its own motion; and 20 (b) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee, and where the authority concerned is the appellate assistant commissioner or the appellate tribunal by the gift-tax officer also 25 - (3) an amendment, which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this section u,nless the authority concerned has given notice to the assessee of its intention so to do and has allowed the assessee a reasonable 30 opportunity of being heard (4)· where an amendment is made under this section, an order shall be passed in writing by the gift-tax authority cod-cerned  - (5) subject to the provisions of sub-section (2) of section 33, 35 where any such amendment has the effect of reducing the assessment, the gift-tax oftlcer shall make bay refund which may be due to such assessee s (6) where any such amendment has the effect of enhancing the assessment or reducing a refund already made, the gift-tax officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be issued under section 31 ami the provisions of this act shall apply accordingly (7) no amendment under this section shall be made after the expiry of four years from the date of the order sought to be amended" 10 27 in section 35 of the principal act,-amendmento! (i) after sub-section (2), the' following sub-section shall be section 811 inserted, namely:-is "(2a) if a person abets or induces in any manner another person to make and deliver an account, statement or declaration relating to any gifts chargeable to tax which is false and which he either knows to be false or does not believe' to be true, he shau, on conviction before a magistrate, be puilishable with simple imprisonment which may extend to six months or with fine which may extend to one thousand rupees or with both"; 20 (ii) for the explanation, the following expzanation shallbe substituted, namely:-"expzanation-for the purposes of this section, 'magistr:ate' means a presidency magistrate or a magistrate of the first class" s of 1908 28 for section 36 of the principal act, the following section shall substitube substituted, namely:-tiod of new secti'onlor section 36 "36 (1) the gift-tax officer, the appellate assistant com- power missioner, the commissioner and the appellate tribunal shall, rdei,arding h· a h h scovery, for the purposes of t 1s ct, ave t e same powers as are vested production in a court under the code of civil procedure, 1908, when trying ~~~~etc a suit in respect of the following matters, namely:-(a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath; 3s (c) compelling the production of books of account and other documents; and (d) issuing commissions 2017 (b) ls--3 (2) without prejudice to the provisions ot any other iaw for the time being in force, where a person to whom a summons is issued either to attend to give evidence or produce books of account or other documents at a certain place and time, intentionally omits to attend or produce the books of account or s document at the place or time, the authority empowered to issue such summons may impose upon him such fine not exceeding five hundred rupees as it thinks fit, and fine so levied may be recovered in the manner provided in chapter vii" amend-29 to section 38 of the principal act, the following proviso shall 10 ment of section 38 be added, namely:-"provided that the assessee concerned may demand that before the proceeding is so continued the previous proceeding or any part thereof be reopened or that before any order of assessment is passed against him, he be reheard" is ~ubstitu-30 for section 39 of the principal act, the following section shall bon of new  section for be substituted, namely:-section 39 computation of period of limitation "39 in computing the period of limitation prescribed for an appeal or an application under this act, the day on which the order complained of was served and if the assessee was not 20 furnished with a copy of the order when the notice of the order was served upon him, the time requisite for obtaining a copy ot such order, shall be excluded" amend-31 in section 40 of the principal act, after sub-section (2), the ment of section 40 following sub-sections shall be inserted, namely: -2s "(3) after a finding of total partition has been recorded by the gift-tax officer under section 20 in respect of ~y hindu family, notices under this act in respect of the gifts made by the family shall be served on the person who was the last manager of the hindu family, or if such person is dead, then on all sur- 30 viving 'adults who were members of the hindu family immediately before the partition (4) where a firm or other association of persons is dissolved, notices under this act in respect of the gifts made by the firm or association may be served on any person who was a partner 3s (not being a minor) or member of the association, as the case may be, immediately before its dissolution" s 10 32 for section 41 of the principal act, the following section shall substitube substituted namely' _ tion of new  ,  section for section 41 "41 the provisions of sections 137 and 280 of the income-tax prohibi-act shall apply to the disclosure of particulars contained in all tl}' on of disfc osure 0 accounts or in relation to statements, documents evidence or informaaffidavits given, produced or obtained in connecti~n with or in tion the course of any proceedings 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 (iv) of sub-section (3) of section 137 of that act shall be construed as a reference to anygift-tax authority" 33 in section 41a of the principal act, in sub-section (3), after amendclause (t), the following clause shall be inserted, namely:-~~~:f 41a "(ia) in the case of an assessee mentioned in clause (a) of sub-section (1) or in clause (b) of sub-section (2), who presented an appeal under sub-section (1) of section 23 against the order of penalty passed by the inspecting assistant commissioner under sub-section (3) of section 17, until the appeal is disposed of by the appellate tribunal;" 20 34 for section 43 of the principal act, the following section shall ~r~~~ution be substituted, namely:'::"-' be::t~on for sect10n 43 "43 an assessee who is entitled to or required to attend ~ror!r~ift: before any gift-tax authority or the appellate tribunal in con- tax authorinection with any proceeding under this act, except where he is ::h~~i sed required under this act to attend in person, may attend by a repres ntaperson who would be entitled to represent him before any in- tives come-tax authority or the appellate tribunal under section 288 of the income-tax act"  35 in section 45 of the principal act, in clause (e), for the words, amend-30 brackets and figures "clause (i) of sub-section (3) of section 4", the meft o~5 word and figure "section 11" shall be substituted sec ion  36 in section 46 of the princljhll act, for sub-section (4), the amendfollowinlt sub-section shall be substituted namely:-me~t of "(4) the central government shall cause every rule made section 46 35 under this act to be laid as soon as may be after it is made before each house of parliament while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions and if, before the expiry of the session in which it is so laid or the session immediately following, both houses agree in making any modifications in the rule or both houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be, so however that any such modification or annulment shall be without prejudice to the validity of ~y  thing previously done under that rule"  statement of objects and reasonsthe income-tax law has been recodified in the income-tax act, 1961 as the ba~dc pattern of the gift-tax law is the same as that of the income-tax law, it has become necessary to bring the provisions of the gift-tax act, 1958 in line with the'scheme of the income-tax act, 1961 it has also been found necessary to introduce certain changes in the provisions of the gift-tax act to meet the problems which have arisen in the working of the act the changes which are independent of those made as a result of the recodification of the income  tax act, 1961 are as follows:-(1) under the existing law gift-tax assessment proceedings can be taken against the donor only, the donee being liable to pay the tax after the liability has been determined and the amount of tax is found incapable of recovery from the donor it is proposed to make the donee also lia'ble, where the donor cannot be found, for the assessment and payment of tax in respect of a gift subject to the limitation that the tax payable by the donee shall not exceed the value of the gift received by him (2) under the existing law the donees are liable to pay the tax determined as payable by the donor if it cannot be recovered from the donor this liability is subject to the limitation of proportionate amount of tax on the value of gift received by the donee it is proposed to amend the existing provision by limiting the liability of the donee to the extent of the value of the gift received by him as on the date of the gift (3) the absence of any power with the commissioner of gift-tax and the central board of revenue to transfer the case of a gift-tax assessee without simultaneously transferring his income-tax case from one gift-tax officer to another has caused considerable administrative difficulties with a view to removing these difficulties it is proposed to invest these authorities with power to transfer a case from one gift-tax oftlcer to another the present bill seeks to secure the above objectives the notes on clauses explain in detail the various provisions of the bill nzw delhi; morarji desai the 7th november, 1962  notes on clausesclause 2 (a) -this clause substitutes the existing clauses (ii), (iii) and (iv) of section 2 by new clauses (i) new clause (ii) brings the definition of "appellate tribunal" in line with the definition of the term in section 2(4) of the income-tax act, 1961 (ii) new clause (iii) corresponds to section 2(iii) of the existing act, but the definition of "assessee" has been made more comprehensive on the lines of section 2(7) of the income-tax act, 1961 so as to include all possible categories, eg, persons who are themselves liable to pay tax on gifts made by them, persons liable to pay tax on gifts made by other persons and persons deemed under certain sections of the act to be assessees or assessees in default (iii) a definition of "assessment" has been inserted on the lines of section 2(8) of the income-tax act, 1961 (iv) it brings the definition of 'assessment year' ilj line with its definition as given in section 2(9) of the income-tax act, 1961 clause 2(b)-a definition of "charitable purpose" has been inserted on the lines of section 2(15) of the income;tax act, 1961 clause 2 'c) -director of inspection is not one of the authorities under the existing act this clause has been inserted to make the director of inspection an authority under the act and to clarify that the term includes his deputies and assistants also clause 2(d)-reference to the "income-tax act, 1922" has been substituted by reference to the "income-tax act 1961" clause 2(e)-two new clauses (xvia) and (xvib) have been inserted in section 2 of the act (i) a definition of "inspector of gift-tax" has been given as he has been made one of the authorities under the act (ii) the term "legal representative" has been defined on the  lines of section 2 (29) of the income-tax act, 1961 as in the exist-  ing act there is no definition of this term although it is used in the act clause 2 (i) -in the definition of the term "previous year" references to the provisions of the income-tax act, 1922 have been substituted by references to the corresponding sections of the incometax act, 1961 clause 3-since the term "assessment year" has been defined in the act, the words "every financial year" have been replaced by the words "every assessment year" to clarify the intention this brings the provisions in line with section 4 of the income-tax act 1961 clause 4-sub-clause (i) -in section 5 (1) (v) reference to section 15b of the income-tax act, 1922 has been substituted by reference to the corresponding provision of the income-tax act, 1961 sub-clause (ii) -this clause seeks to bring the provisions regarding residence in line with the provisions of the incometax act, 1961, while making allowance for the fact that the gifttax act does not apply to the whole of india clause s-this clause introduces a new section conferring on the central board of revenue and the commissioner power to transfer cases from one gift-tax officer to another clause 6-this clause introduces a new section which authorises the board to empower persons to exercise the functions of a director of inspection and defines those functions czause 7-by this clause a new section 11 has been inserted which makes an inspector of gift-tax as an authority under the act the new section 11a substitutes the existing section 11 and is in line with section 118 of the income-tax act, 1961 clause 8-this clause introduces a new provision on the lines of section 119(2) of the income-tax act, 1961 making it obligatory on the gift-tax officer to follow the instructions issued by the director of inspection, commissioner and the inspecting assistant commissioner within whose jurisdiction he performs his functions clause 9-this clause introduces a new section conferring on the commissioner and the inspecting assistant commissioner powers similar to those conferred under section 135 of the income-tax act, 1961 on like authorities for making enquiries clause lo-this clause amends section 13 of the existing act on the lines of section 139 of the income-tax act, 1961 it has been made clear that the provisions of section 13, apart from applying to a person who has made a gift, also apply to a person who is assessable in respect of a gift made by any other person ciause l1-this clause introduces a new section which is intended to state· comprehensively the position as regards the persons who should sign and verify returns of gifts in respect of the various kinds of assessees it is modelled on section 140 of the income-tax act, 1961 clause 12-this clause makes certain drafting changes in section 15 of the act to bring out that the amount of refund, if any, due to the assessee, ts sp~cifled, in the {lsse83ment order passed on the basis of a return found to be correct and complete sub-sections (3) and (5) of section 15 have also been amended to make it clear that the gift-tax officer shall, in framing an assessment, consider any material which he might have gathered independently these changes bring the provisions of the section in line with those of sections 143 and 144 of the income-tax act, 1961 clause 13,-this clause makes a drafting change in section 16(i) (a) to clarify that it covers also the case ot an assessee who has to file a return in respect of gifts made by another person it has become necessary as a consequence of the amendment made in section 13, clause 14-this clause replaces the existing section 17 by a new section to bring its provisions in line with the corresponding provisions in sections 271 and 274 of the income-tax act, 1961 the changes made are:-(i) in the existing section 17 maximum penalty only is specified the new section lays down both the minimum and the maximum penalties for various offences, (ii) the existing section requires that the gift-tax officer should have previous approval of the inspecting assistant commissioner for all penalty orders passed by him under the new provisions the inspecting assistant commissioner himself will pass orders in cases falling under section 17 (1) (c) (deliberate concealment of particulars about gifts) where the minimum penalty imposable exceeds rupees one thousand the need for obtaining previous approval of the inspecting assistant commissioner where penalty order is to be passed by the gift-tax officer is dispensed with clause is-this clause introduces a new provision in the act to enable the gift-tax officer to make assessments in cases where the donor is likely to leave india before the commencement of the assessment year or shortly after it without any intention of returning to india this follows the corresponding provisions of section 174 ot the income-tax act, 1961 clause 16-this clause introduces a new provision which empowers the gift-tax officer to make an assessment on the donees in a case where the donor is not available for assessment section 29 of the act provides that the tax may be recovered from the donee if it cannot be recovered from the donor but there is no provision in the act enabling the gift-tax officer to make an assessment on the donee if the donor cannot be found the clause seeks to remove this deficiency the clause also seeks to make the donees jointly and severally iiabie for the tax while limiting the liability of a donee to the maximum of the value of the gifts received by him clause 17-sub-clause (i) (a) -by this sub-clause the word 'his' has been omitted from section 22 (1) (a) to entitle a donee also to file an appeal where an assessment is made on him sub-clause (i) (b) -this sub-clause substitutes reference to section 46(1) of the income-tax act, 1922 by reference to the corresponding provisions contained in section 221 (1) of the income-tax act, 1961 sub-clause (i) (c) -this sub-clause provides for additional rights of appeal against the gift-tax officer's orders rectifying a mistake under section 34 baving the effect of enhancing the tax or reducing a refund or refusing to admit an assessee's claim under the section or against an order impolling fine for non-compliance with summons under section 36 sub-clause (ii) -this sub-clause seeks to make the existing practice a requirement under the law the changes mentioned follow the pattern of sections 246, 250 (6) and explanation to section 251 of the income-tax act, 1961 clause 18-sub-clause (i) substitutes sub-section (1) of section 23 by a new sub-section on the lines of section 253 (1) of the income-tax act, 1961 it confers on the assessee additional rights of appeal against an order passed by the appellate assistant commissioner imposing fine under section 36 and against an order passed by the inspecting assistant commissioner imposing penalty under section 17 (3) of the act the provision for appeal against orders of the commissioner under section 17 has been incorporated in section 25 which contains similar provisions sub-clause (ii) introduces a new provlslon corresponding to section 253 (4) of the income-tax act, 1961 enabling the assessee or the gift-tax officer to file a memorandum of cross objections in an appeal filed before the tribunal by the other party sub-clause (iii) confers on the tribunal power to condone delay in the filing of a memorandum of cross obiections this power is similar to the existing power of the tribunal to condone delay in filing of appeals, and is in line with section 253 (5) of the income-tax act, 1981 sub-clause (iv) substit~tes reference to sub-sections (5), (7) and (8) of section 5a of the income-tax act, 1922 by references to the corresponding provisions in sub-sections (1), (4) and (5) of section 255 of the income-tax act, 1961 clause 19-this clause introduces a new explanation which provides that in computing the limitation period of two years under section 24 (3) the time spent in giving a rehearing to the assessee under section 38 or the time for which the proceedings under the section are stayed by a court shall be excluded this provision is similar to the explanation in section 263 of the income-tax act, 1961 clause 20-see notes on clause 18 clause 21-this sub-clause substitutes existing sub-sections (1) and (2) of section 26 by new sub-sections following changes have been made to'bringthe provisions in line with those of section 256 of the income-tax act, 1961:-(a) the time within which an application should be made to the tribunal to refer a question of law to the high court has been reduced from 90 days to 60 days as provided in other direct tax laws (b) the tribunal has been required to dispose of the application within 120 days (c) under the new provision the tribunal's power to condone delay in entertaining a reference application has been restricted to 30 days sub-clauae (ii) introduces a new provision similar to that contained in section 257 of the income-tax act, 1961 enabling the tribunal to refer a question of law direct to the supreme court if there is a c:onflict in the decisions of high courts on that question sub-clause (iii) applies the procedural provisions of sub-sections (4), (5) and (6) of section 26 to direct references to the supreme court also sub-clause (iv)-suh-sections (7) and (8) of section 26 h!lve beer substituted by a new sub-section, modelled on section 260 (2) of the income-tax act, 1961, to provide that-the cost of a reference to the supreme court shall be in the discretion of the court as in the cac;e of a reference to the high court sub-section (9), having become redundant, has b~n deleted clause 22-this clause introduces two new sections, viz, sections 28a and 28b the former, based on section 285 of the income-tax act, 2017 (b) ~ 1961, provides that tax will be payable as per assessment made notwithstanding that a reference has been made to courts the latter, based on section 269 of the income-tax act, 1961, provides for a definition of high court in respect of states as well as union territories dl"ause 23-'l'his clause substitutes existing section 29 by a new section the new section while providing for the joint and several liability of the donees for the payment of tax limjts the liability of a donee to the value of the gift  clause 24- (i) this clause substitutes existing sections 31, 32 and 33 by new sections in section 31 interest, fine ot any other sum payable under the act has also been mentioned reference to time within which the amount due is to be paid has been omitted as the time for payment is proposed to be prescribed in section 32 the new section is based on section 156 of the income-tax act, 1961 section 82 has been redrafted to bring its provisions in line with those of section 220 of the income-tax act, 1961 the changes made are--" (a) for the sake of simplicity the time limit for payment has been specified as 35 days in normal cases as a measure of safeguard, it has been provided that this period may be reduced in cases where it will be detrimental to revenue to allow so much time; (b) it 'has been provided that the assessee shall be liable to pay simple interest at 4% per annum from the date of expiry of the time specified in the notice of demand; (c) a specific provision has been made authorising the gifttax officer to extend the time for payment or allow payments by instalments subject to payment of interest at 4% per annum; (d) it has been made clear that the power to treat an assessee, who has filed an appeal, as being not in default, is confined to the amo~nt in dispute and that the power can be exercised even though the time for payment has expired as long as the appeal remains pending (iii) section 33 has been redrafted to apply the provisions of sections 221 to 227, 229, 231 and 232 of the income-tax act, 1961 and second and third schedules to that act and rules framed under the second schedule for recovery of any sums due under the act under the new section a unifonn procedure for effecting recovery will be followed in all the states clause 25-this clause introduces a new provision on the lines of chapter xix of the income-tax act, 1961 requiring that if a refund becomes due to an assessee in appeal, etc, the gift-tax officer will refund the amount without the assessee having to niake a claim for it the gift-tax officer has been empowered to withhold refund' or set it off against any {llllount due from the assessee in certain circumstances provision has also been made for payment of interest @ 4% per ~um to the assessee if a refund is not granted within the prescribed period or withheld in certain circumstances clause 26-this clause brings the provisions of section 34 of the act in line with the corresponding provisions of section 154 of the income-tax act, 1961 clause 27-this clause introduces a new provision making abetment of evasion an offence punishable with imprisonment and/or fine under the existing provision presidency ~gistrates, magistrates of the first class and magistrates of the second class, if specially empowered, can take cognisance of offence under the act the clause omits specially empowered magistrates of the second class these changes al"e in line with the provisions of sections 278 and 292 of the income-tax act, 1961 in section 35 of the act clause 2b-this clause brings the provisions of section 36 in line with the corresponding provisions of section 131 of the income-tax act, 1961 clause 29-this clause provides that in the event of one gift-tax authority being succeeded by another the assessee may demand that before the proceedings are continued he may be heard again the provision is the same as in section 129 of the income-tax act, 1961 czause 30-this clause makes only a drafting 'change in section 39 to bring out its intention more precisely the new section is similar to section 268 of the income-tax act, 1961 clause 31-this clause introduces a new provision on the lines of section 283 of the income-tax act, 1961 prescribing the procedure to be adopted for service of notice where a joint hindu family is disrupted or a firm or other association of persons is dissolved clause 32-this clause substitutes a new section for the existing section 41 which applies the provisions of sections 137 and 280 of the income-tax act, 1961 in place of the provisions of section 54 of the income-tax act, 1922 the prosecution under the new section for violating its prohibitory provisions will be sanctioned by the central government and not by the commissioner as under the existing provision clause 33-this clause provides that in a ease where the inspeeting assistant commissioner passes order levying pelialty, the name of the assessee can be published only after the appeal, if any, is disposed of by the appellate tribunal this is in line with section 287 (3) of the income-tax act, 1961 clau8es 34 and 35-these clauses are self-explanatory clause 36-this clause proposes to modify theprovlsionsof sub  section (4) of section 46 on the lines of section 296 of the ineome-;tax act,i96l  rrnancial memorandumthe officers who administer the income-tax act administer the gift-tax act also this bill will, therefore, not involve any additional expenditure - - -  chapter ipre1iminary i (1) this act may be called the gift-tax act, 1958 mwrt title1 extent ana commencement (2) it extends to the whole of india except the state of jammu and kashmir definitions (3) it shall be deemed to have come into force on the 1st day of april, 1958 z in this act, unless the context otherwise requires,-- - - - (ii) "appellate tribunal" means the appellate tribunal appointed under section 5a of the income-tax act; (iii) "assessee' means a person by whom gift-tax or any other sum of money is payable under this act, and includes every pers9n in respect of whom any proceeding under this act has been taken for the determination of the gift-tax payable by him; (iv) "assessment year" means the year for which tax is chargeable under section 3; (v) "board" means the central board of revenue constituted under the central board of revenue act, 1924; -4 of 1924 (vi) "commissioner" means a person empowered to exercise the powers of a commissioner of gift-tax under sec~ion 9; 1 of 1958 11 of 1912  (vii) "company" means a company as defined in section 3 of the companies act, 1956, and includes a foreign company within the meaning of section 591 of that act; - - - - '" (xiv) "income-tax act" means the indian income-tax act, 1922; - - - - - so (l:l:) "previous year", in relation to any assessment year-(a) in the case of an assessee having no source of income, profits or gains or having a source of income, profits or gains in respect of which there is no previous year under the income-tax act, means the twelve months ending on the 31st day of man:h immediately preceding the assessment year; (b) in the case of an assessee having different previous years under the income-tax act for different sources of income, profits or gains, means that previous year of twelve months determined as the previous year under sub-clause (a) of clause (11) of section 2 of the income-tax act or such period determined as the previous year under sub-clause (b) of clause (11) of that section, whichever ·expired last;· (c) in the case of any other assessee, 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 a person who has not been assessed under this act for any assessment year makes a gift on a date which does not fall within a previous yea·r as defined in subclause (a) or sub-clause (b) or sub-clause (c), the previous year shall be the twelve months ending on the 31st day of march immediately preceding the assessment year: provided further that where an assessment has been' made under this act for any assessment yearin respect of gifts made by an assessee durin~ any previous year, the meaning of the expression ccprevious year" as then applicable to him shall continue to apoly for any subsequent assessment year unless the assesse(> is allowed to vary it with the consent of the gift-tax officer who may, in allowing any such variation, impose such conditions as he may think fit; - - - - -  chapl'er ii charge of gift-tax and gifts !'lubject to such charge3 subject to the other provisions contained in this act, there shall charge of be charged for every financial year commencing on and from the 1st gift-tax day of april, 1958, a tax (hereinafter referred to as gift-tax) in respect of the gifts, :f any, made by a person during the previous year (other than gifts made before -the lit day of april ltd?) at the rate or rates specified in the schedule  - - - - - ~':~~~ 5 (1) gift-tax shall not be charged under this act in respect of of certain gifts made by any person-bilts (i) of immovable property situate outside the territories to which this act extends; (ii) of movable property situate outside the said territories unless the person-(a) being an individual, is a citizen of india and is ordinarily resident in the said territories, 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 iss~ed by the central government, which that government, by notificatior in the official gazette, exempts from· gifwax; (iv) to the government or any local authority; (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 rlause "(v)-(a) made at any time before the 1st day of april, 1958; or (b) made at any time after that date subject, in respect of each such gift, to a maximum of rupees one hundred in value and, in respect of such gifts in anyone previous year to the same donee, to a maximum of rupees five hundred in value in the aggregate; (vii) to any relative dependent upon him for suj)port and maintenance, on the occasion of the marriage of the relative, subject to a maximum of rupees ten thousand in value in respect of the marriage of each such relative; (viii) to his or her spouse, subject to a maximum 'of rupees ode ,lakh in value in the aggregate in one or more previous years" tre xpression "spouse" in this clause, where there are more wivea than one, meaning all the wives together; (ir) of policies of insurance or annuities to any person (other than his wife) who is dependent upon him for support and maintenance, subject to a maximum of rupees ten thousand in value in the aggregate in one or more previous years of the benefit in respect of each such donee; (x) under a will; (xi) in contemplation of death; '(xii) for the education of his children, to the extent to which the gifts are proved to the satisfaction of the gift-tax officer as being reasonable having regard to the circumstances of the case; (xiii) being an employer, to any employee by way of bonus, gratuity or pension or to the dependents of a deceased employee, to the extent to which the payment of such bonus, gratuity or pension is proved to the satisfaction of the gift-tax officer as being reasonable having regard to the circumstances of the case and is made solely in recognition of the services rendered bv the f'mployee; (xiv) in the course of carrying on a business, profession or vocation, to the extent to which the gift is proved to the satisfaetion of the gift-tax officer to have been made bona fide for the purpose of such business, profession or vocation; (xv) to imy person in charge of any such bhoodan or sampattidan movement as the central government may, by notiftcation in the official gazette, specify; ·(xvi) out of the sums, if any, guaranteed or assured by the central government as his privy purse, if the gifts are made tor-(a) the maintenance of any relatives dependent on him for support and maintenance; or (b) for the performance of any official ceremonies: provided that such gifts are in accordance with the practice, usage or tradition of the family to which the person making the gift belongs (2) without prejudice to the provisions contained in sub-section "(1), gift-tax shall not be charged under this act in respect of gifts madf' by any person during the previous year, subject to a maximum of ruppes ten thousand in value (~) notwithstandin~ anything contained in sub-section (1) or subsection (2), where either spouse makes any gifts out of any such gifts h17 (b) i,s-a received by that spouse as fall within clause (viii) of :mb·section (1), the gifts so made shall be deemed to be taxable gifts made by that spouse and nothing contained in sub-section (1) or sub-section (2) shall apply in relation to any such gifts explanatwn-for the purposes of this section,-(a) an individual shall be deemed to be ordinarily resident in the territories to which this act extends during the previous year in which the gift is made if during that year he is regarded as a resident but not as not ordnarily resident in the taxable territories within the meaning of the income-tax act; (b) a hindu undivided family, firm or other association of persons shall be deemed to be resident in the territories to whieh this act extends during any previous year unless, during that year, the control and management of its affairs was situated wholly outside t~said territories; (e) a company shall be deemed to be resident in the territories to which this act extends during the previous year, if--(i) it is a company formed and registered under the companies act, 1956, or is an existing company within the meaning 1 of 1958 of that act; or (ii) during that year, the control and management of that company was situated wholly in the said territories; (d) "gifts made in contemplation of death" has the same meaning as in section 191 of the indian succession act, 1925 39 of 1925  - - - - " chapter iii gift-tax authorities - - - - - gift-tax 11 the gift-tax officers shall be subordinate to the commissioner ~:!~~~rtgi- of gift-tax and the inspecting assistant commissioner of gift-tax nate ~ the within whose jurisdiction they perform their functions comrmssioner of gift-tax and the inspecting asiiistant commissioner of gift-tax gift-tax 12 all officers and other persons employed in the execution of this t~~~~f~~es act shall observe and follow the orders, instructions and directions of orders, etc, the board: of the board provided that no orders, instructions or directions shall be 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 assessmentu (1) every person who during a previous year has made any return of laxable gifts shall, before the thirtieth day of june of the correspond- gifts in, auessment year, furnish to the gif~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 gifts made by a person during any previous year he is liable to gift-tax under this act, then notwithstanding anything contained in subsection (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 pre~cribed 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 (1) if the gift-tax officer is satisfied without requiring the pre- assessment sence of the assessee or the production by him of any evidence that a return made under section 13 or section 14 is complete, he shall assess the value of the taxable gifts made by the assessee and determine the amount payable by him as gift-tax  - - - - iii (3) the gift-tax officer, after hearing such evidence as the person may produce and such other evidence as he may reauire on any specified points 8ha~l, by order in writing, assess the value of taxable gifts made by the assessee and determine the amount payable by him as gift-tax '" - '" - - (5) if any person fails to make a return in response to any notice under sub-section (2) of section 13 or fails to comply with the terms of any notice issued under sub-section (2) or sub-section (4), the gifttax officer shall estimate the value of taxable gifts to the best of his judgment and determine the amount payable by the person as gifttax 16 (1) if the gift-tax officer-gitteseapingauess-' menl (a) has reason to believe that by' reason sf omission or failure on the part of an assessee to make a return under section 13 for any assessment year or to disclose fully and truly all material facts necessary 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 iowa 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 taxable gift has escaped assessment for any year, whether by reason of under-assessment or assessment at too low a rate or otherwisej 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 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 13, and may proceed to assess or re-assess any taxable gift which has escaped assessment, and the provisions of this act shall, so far as may be, apply as if the notice hald issued under that sub-section  - - - - - penalty for 17 (1) if the gift-tax officer, appellate assistant commissioner, default and commissioner or appellate tribunal, in the' course of any proceed ina concealment under this act, is satisfied that any person-(a) has without reasonable cause failed to furnish the retura which he is required to furnish under sub-section (1) or ubsection (2) of section 13, or section 16 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 15; or (c) has concealed the particulars of any gift or deliberately furnished inaccurate particul'ars thereof; he or it may, by order in writing, direct that such person shall pay by way of penalty-(i) in the case referred to in clause (a), in addition to t •• amount of gift-tax payable by him,'a sum not exceed ina one uti a half times the amount of such tax, and (ii) in the case referred to in clause (b) or· clause (c), ia addition to the amount of gift-tax payable by him, a sum not ex ceedine one and a half tim  the amount of the tax, if aay, wlaic& would have been avoided if the return made by such person ander section 13, section 14, or section 16, 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 beini heard (3) no prosecution for an offence under this act shall be instituted in respect of the same facts in relation to which a penalty has been imposed under this section (4) the gift-tax officer shall not impose any penalty under tbis section without the previous approval of the inspecting assistant commissioner of gift-tax " " " " "  chapi'er v liabilin:' to assessment in special cases " " " " " chapter vi appeals, revisions and referenceszz (1) any person,-(0) objecting to the value of his taxable gifts determined ~p~al to under this act· or apl?ellate , assistant (b) objecting to the amount of gift-tax determined as pay- ~fo~~is-able by him under this actj or frodm f or ers ° (c) denying his liability to be assessed under this actj or gomift-tax cera (d) objecting to any penalty imposed by the gift-tax officer under section 17; or (e) objecting to any order of the gift-tax officer under subsection (2) of secti~n 20; or (f) objecting to any penalty imposed by the gift-tax officer under sub-section (l) of section 46 of the income-tax act as applied under section 33 for the purposes of gift-taxj may appeal to the appellate assistant commissioner against the assessment or order, as the case may be  in the prescribed form and verified in the prescribed manner: provided that no appeal shall lie under clause (i) unless the tax has been paid before the appeal is filed 13 (1) any assessee objecting to an order passed py the appellate assistant commissioner under section 17 or section 22 or to an order passed by the commissioner under section 17 may appeal to the appellate tribunal within sixty days of the date on which he is served with notice of such order  - - - - - (2) the appellate tribunal may admit an appeal after the expiry of sixty days referred to in sub-sections (1) and (2) if- it is satisfied that there was sufficient cause for not presenting it within that period  - - - - - (11) the provisions of sub-sections (5), (7) and (8) of section 5a of the income-tax act shall apply to the appellate tribunal in the discharge of its functions under this act as they apply to it in the discharge of its functions under the income-tax act 24 (1) - - - - - (3) no order shall be made under sub-section (2) after the expiry of two years from the date of the order sought to be revised power of commissioner to reviac orders of subordinate authorities appeal to 25 (1) any assessee objecting to an order of enhancement made x';pellate by the commissioner under section 24 may appeal to the appellate - - - - - ~'!"!!len tribunal within sixty days of the date on which the order is commuof enhance· nicated to him mentby commissioner reference to high court 26 (1) within·ninety days of the date upon which he is served with an order under section 23 or section 25, 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 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 (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 - - - -  (4) the statement to the high court shall set forth the facti, the determination of the appellat~ tfihunal and the question of law which (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 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 coritaining the grounds on which such decision is founded 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 appeuate 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 of any reference to the high court, the amount, if any, overpaid as gifttax 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 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  - of 1908 (9) section 5 of the indian limitation act 1908 shall apply to an  application to the high court under this section - - - - -  chapter vii payment and recovery of gift-tax29 gift-tax shan be pavable by the donor but wher~ in the opinion gift-tax   by whom of the gift-tax officer the tax cannot be recovered from the donor, it payable 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 thp donee hy the donor as at the date of the gift  - - - - - st when any tax or penalty is due in consequence of any order notice of passed under this act, the gift-tax ofticer shall serve upon the demand 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 ltecovery of tax and· penalti • 32 (1) any amount specified as payable in a notice of demand issued under section 31 shall be paid within the time, at the place, and to the person mentioned in the notice, or if no time is so mentioned, 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 an assessee has presented an appea} under section 22, the gift-tax otftcer may, in his discretion treat the assessee as not being in default as long as such appeal is nndisposed of mode , recovery 33 the provisions of sub-sections (1), (1a), (2), (3), (4), (5), (sa), (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 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 oftlcer and commissioner of gift-tax instead of to income-tax officer and commissioner of income-tax  chapter viii miscellaneousrectiftca -tion of mistakes 34 at any time within four years from the date of any order passed by him, or it, the gift-tax oftlcer, 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 such mistake which has been brought to the notice of the gift-tax oftlcer, the appellate asiistant 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 effect of enhancing the amount of gift-tax determined unless the assessee has been given a reasonable opportunity of being heard in the matter 35 (1) if any person fails without reasonable cause,-prosecution (a) to furnish in due time any return of gifts under this act; (b) to produce, or cause to be produced, on or before the date mentioned in any notice under sub-section (2) or sub-section (4) of section 15, such accounts, records and documents as are referred to in the notice; (e) to furnish within the time specified any statement or information ~hich such person is bound to furnish to the gift-tax officer under section 37; j 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 of gifts furnished under this act or in a verification mentioned in section 22, 23 or 25 which is false, and which he either knows or believes to be false, or does not believe to be true, he shall on conviction before a magistrate, be p~shable with simple imprisonment which may extend to one year, or with fine which may extend to rupees one thousand, or with both (3) a person shan 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 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 5 of 1908 36 the gift-tax officer, the appellate assistant commissioner, the power to commissioner and the appellate tribunal shall, for the purposes of tak:e  evldence this act, have the same powers as are vested in a court under the code on oath, of civil procedure, 1908, when trying a suit in respect of the following etc, matters, namely:-(a) enforcing the attendance of any person and examining him on oath; (b) requiring the discovery and production of documents; (c) receiving evidence on afftdavitj (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 be deemed to be a judicial proceeding within the meaning of sections 193 45 of 1960 and 228 and for the purposes of section 196 of the indian penal code  - - - - - 38 whenever in respect of any proceeding under this act any effect of gift-tax authority ceases to exercise jurisdiction and is succeeded by =:iti~~ another who has and exercises such jurisdiction, the authority so on pending succeeding may continue the proceeding from the stage at which the f~~~ed­proceeding was left by his predecessor 2017 (b) ls--6 computation of period of limitation 39 iii computing the period of limitation, prescribed for an appeal under this act or for an application under section 26, the day on which the order complained of was made and the time requisite for obtaining a copy of such order shall be excluded  - - - - 7~~ition 4l (1) subject to the provisions contained in sub-section (2), the ~losure of provisions of section 54 of the income-tax act shall apply to all ~nform8-accounts or in relation to statements, documents, evidence or affidavits  on given, produced or obtained in connection 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-section (3) and to the "commissioner" in sub-section (5) of section 54 of that act shall be construed as a reference to any "gift-tax authority" and to the "commissioner of gift-tax", respectively (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 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 34 of 1953 act, 1957, or the expenditure-tax act, 1957, where it is necessary or ~~ ~~ ~:g~: desirable to disclose the same to him for the purposes of this act or any of the other acts aforesaid appearance before giftta:it authoritiel by autboriied representatives 43 any 'assessee who is entitled to, or required to attend beforeany gift-tax authority or the appellate tribunal in connection with any proceeding or inquiry under this act, except where he is required under this act, to attend in person, may attend by a person authorised by him in writing in this behalf, being a relative of, or a person regularly employed by, the assessee or a legal practitioner or a cbartered accountant or any other person having such qualifications as may be prescribed -  expzanation-for the purposes of this section,-(a) the expression "a person regularly employed by 'the assessee" 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 38 of 19451 - - - - - - 45 the provisions of this act shall not apply to gifts made by- act no~ to apply m (a) a government company as defined in section 617 of the certain c  a t 1956 cases omparues c, ; 1 of 1956 (b) a corporation established by a central, state or provincial act; (c) any company (other than a private company as defined in section 3 of the companies act, 1956): provided that the affairs 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 previous iear 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 the income whereof is exempt from income-tax under clause (i) of sub-section (3) of section 4 of the income-tax act explanation-for the purpose of computing the number of 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 together with that other person shall be treated as a single person - 46 (1) the board may, by notification in the official gazette, power make rulesl for carrying out the purposes of this act ~l:u - - - - - (4) all rules made under this act shall be laid before each house of parliament as soon as may be after they are made and shall be subject to such modifications as parliament may make during the session in which they are so laid or the session immediately followinl  - - - - - a bill further to amend the gift-tax act, 1958 the president has, in pursuance of clauses (1) and (3) of article 117 of the constitution of india, recommended to lot sabha the introduction and consideration of the bill m n kaul, secretary (shri mormji desai, minister of finance) 