 the direct tax laws (amendment) bill, 1987 arrangement of clauses chapter i preliminary clauses1 short title and commencement  chapter ii amendments to th1!! income-tax ar::r,· 19612 substitution of new authorities 3 amendment of section 2 4 substitution of new section for secti"on 3· 5 amendment of section 4 6 amendment of section 10 7 omission of sections 11, 12, 12a and 13 8 amendment of section 15 9 amendment of section 28 10 omissi"on of sections 35, 35b, 35c, 35cc, 35cca and 35ccb 11 amendment of section 36 12 omission of section 39 13 amendment of section 40 14 amendment of section 40a 15 amendment of section 43b 16 insertion of new section 54a 17 amendment of section 64 18 substituti"on of new section for section 67 19 omission of sect~ons 75, 76 and 77 20 amendment of section 78 21 amendment of section 80a 22 amendment of section 80b 23 omission of secti"on 80e 24 insertion of new section 80f 25 'amendment "of section 8og 26 omission of section 80gga 2,7 amendment of secti-on 80l 28 omission of section boqq 29 substitution of new "tion' for section 86 30 substitution of new sections for sections lui, 117 and 118 31 amendment of section 119 32 substitution of new section for section 120 33 omission of sections 121, 121a, 122, 123, 125, 125a, 126, 128, 130 and 130a \ 34 substitution of new section for section 124 35 substitution of new section for section 127 36 amendment of section 131 37 amendment of seciton 132 38 amendment of section 132a 39 amendment of section 133 40 amendment of section 133a 41 amendment of section 138 42 amendment of section 139 43 amendment of section 139a 44 amendment of section 140 45 amendment of section 140a 46 omission of section 141a 47 amendment of section 142 48 substitution of new section for section 143 49 amendment of section 144 50 amendment of section 144a 51 omission of section 144b 52 amendment of section 145, 53 omission of section 146 54 substitution of ne:w sections for sections 147 and 148 55 amendment of section 149 56 amendment of section 150 57 substitution of new section for section 151 58 ampndment of section 152 59 amendment of section 153 60 amendment of section 154 6l amendment of section 155 62 amendment of section ,158 63 insertion of new chapter xiv·b 64 amendment of section 164 65 amendment of section ] 64a 66 substitution of new sections for section, 10:'1a 67 omission of sections 182 and 183  clausm68 substitution of new sections for sections 184, 185 and 186 69 amendment of section 187 70 'insertion of new section i88a 71 amendment of section 189 72 insertion of new section 189a 73 amendment of section 194a 74 insertion of new section 19o1e 75 substitution of new sections for section 196 76 substitution of new sections for sections 207 and 208 77 amendment of section 209 78 omission of section 209a 79 substituti'on of new section for section 210 80 substitution of new section for section 211 81 omission of sections 212 and 213 82 amendment of section 214 83 amendment of section 215 84 substitution' of new section for section 218 85 amendment of section 220 86 amendment of section 222 87 substitution of new sections for sections 223, 224 and 225 88 amendment of section 226 89 omission of section 228 90 amendment of section 226a 9l amendment of section 230 92 amendment of section 230a 93 omission of section 231 94 insertion of new sections 234a, 234b and 234c 95 a-mendment of section 240 96 amendinent of section 243 97 amendment of section 244 96 insertion of new section for sec-tion 244a 99 amendment of sub-hea:din~ nnd substitution of new sections for ~ec­tion 246 100 omission of section 247 101 substitution of new section for section 267 102 amendment of section 268 103 amendment of section 2698s 104 amendment of section 269t 105 omission of section 270 106 substitution of new section for section 271 107 amendment of section 271a 108 insertion of new sections 271c, 271d and 271e 109 omission of section 272 110 substitution of new section for section 272a 111 omission of section 272b 112 amendment of section 273 113 amendment of section 273a 114 amendment of section 273b 115 amendment of section 274 116 amendment· of section 275 117 insertion of new section 276 118 substitution of new section for section 276b 119 omission of sect'ons 276dd and 276e 120 amendment of section 278aa 121 insertion of new section 293b: 122 substitution of new section for section 296 123 amendment of section 298 124 amendment of the second schedule 125 insertion of tenth schedule 126 consequential amendments chapter iii  amendments to the w!~lth-tax act, 1957127 substitution of new authorities and omission of references to appellate assistant commissioner 128 amendment of section 2 129 amendment of section 3 130 amendment of section 5 131 substitution of new sections for sections 8, 9, 10 and 11 132 omission of sections 8a, 8aa, sb, 9a, loa 11a, 11aa lib; 12 and 13 133 amendment of section·14 134 substitution of new section for section 15 135 amendment of section 15a 136 substitution of new section for section 15b 137 omission of section 15c 138 substitution of new section for section 16 139 amendment of section 17 140 amendment of section 17a 141 insertion of new section 17b 142 substitution of new sections of sections is and lsa 143 insertion of new chapter ivb 144 amendment of section 21a 145 amendment of section 21aa 146 amendment of section 23 147 insertion of new section 23a 148 amendment of section 31 149 amendment of section 32 hio amendment of section 34a 151 amendment of section 35 152 amendment of section 35k 153 amendment of section 37 154 amendment of section 37a 155 amendment of section 37b 156 insertion of new section 37c 157 amendment of section 3s 158 amendment of section 45 159 insertion of new section 47 160 consequential amendments  chapter iv amendments '110 the gift-tax act, 1958161 substitution of new authorities and omission of references to appellate assistant commissioner 162 amendment of section 2 163 amendment of section 3 164 substitution of new sections for sections 7, 8, 9 and 10 165 omission of sections 7a, '7aa, 7b, 8a, 9a, 11, 11a, llaa, 11b and 12 166 amendment of section 13 167 substitution of new section for section 14 168 amendment of section 14a 169 insertion of new section 14b 170 substitution of new section for section 15 171 amendment of section 16 172 amendment of section 1m 173 insertion of new section l6b l74 substitution of new sections for sections 17 and 17a 175 insertion of new chapter iva 176 amendment of section 22  - 177 insertion of new section 22a 178 amendment of section 32 179 amendment of section 33 180 amendment of section 33a 181 amendment of section 34 182 amendment of section 36 183 amendment of section 37 184 amendment of section 45 185 insertion of new section 47 186 consequential amendments  chapter v amendments to the companies (profits) surtax act~ 1964187 substitution of authorities 188 substitution of new section for section 3 189 amendment of section 18  billfarther to amend the income-tax act, 1961, the wealth-tax act, 1957, the gift-tax act, 1958 and the companies (profits) surtax act, 1964 be it cnacted by parliament in the thirty-eighth year of the republic '_'f india as j'jl1ows:- chapter i preliminary5 1 (1) this act may be called the direct tax laws  (amendment) short title act, 1987 and rommenccment (2) save as otherwise provided in thi~ act, it shall come into force on the 1st day of april, 1989 and any reference to the commencement of this act in any provision of this act shall b~ construed as a reference ]0 to the commencement of that provision  chapter ii amfndments to the income-tax acr, 1961substitu_ tion of dew authorities 2 in the income-tax act, 1961 (hereafter in this chapter referred to 43 of 1961 as the income-tax act), save as otherwise expressly provided in this act, and unle,ss ~he context otherwise requires, the reference to any 5 authority specified in column (1) of the table below shall be substituted with effect from the 1st day of april, 1988 by the references to the authority or authorities specified in the corresponding entry in column (2) of the said table, and such consequential changes as the rules of grammer may require, shall also be made: to | -                        | -            ||--------------------------|--------------|| --_,                    |              ||                          |              || __-_                    |              ||                        |              || _--                      |              || (1)                      |              || (2)                      |              || ---~-----                |              ||                       |              || ------------           |              || --                       |              ||                        | '           || -,--                     |              || 7:lirector of inspection | director     || deputy                   |              || dir~ctor                 |              || of inspection            |              || deputy director          |              || is                       |              || assistant director       |              || assistant director of    |              || inspection               |              || commissi'oner            |              || chief commissioner or    |              || commissioner             |              || deputy commissioner      |              || inspecting assistant     |              || commissioner             |              || 20                       |              || appellate assistant      |              || commissioner             |              || deputy                   | commissioner || (appeals)                |              || assessing officer:       |              || income-tax               |              || officer                  |              |prodded thai nothing contained in this section shall apply 10 the references to "commissioner" occurring in sections 245d, 253, 256, 263 25 and 264 3 in section ~ of the income-tax act,-amendment of section 2 (a) claus~s (1) and (1a) shall be renumbered as clauses (la) and (ib) respectively, and before clause (ia) as so renumbered, the following clause shall be inserted, namely:-30 - (1) "advance tax" means the advance tax payable in accordance with the provisions of chapter xvii-c;'; (b) after clause (7), the following clause shall be inserted with effect from the 1st day of april, 1988, namely:-'(7 a) "assessing officer" means the assistant commissioner 3s or the income-tax offieer who is vested with the relevant juri-:-diction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of this act, and the deputy commissioner who is directed under clau~e (b) of sub-section (4) of that section to exercise 40 or perform all or \ny of the powers and functions conferred on, i)r assigned to, an assessing officer under this act;';  (c) after clause (9), the following clause shall be inserted with effect from the 1st day of april, 1988, namely:-'(9a) "assistant commissioner" means a person appointed to be an assistant commissioner of income-tax under sub-sectioa 5 (1) of gec'tion 117;'; (d) clause (15a) shall be renumbered as clause (15b), and before ela1:18e (15b) as so renumbered, the following clause shall be inserted with effect fro~ the 1st day of april, 1988, namely:-, (15a) "chief commissioner" means a person appointed to 10 be a chief commissioner of income-tax under sub-section (1) of section 117;' ; (e) in clause (16), the words ", and includes a person appointed to be an ariditional commissioner of income-tax under that· subsection" shall be omitted with effect from the 1st day of april, 1988; 15 (f) aler clause (19), the following clauses shall be inserted, with effect from the 1st day of april, 1988, namely:-'(19a) "deputy commissioner" means a person appointe" to be a i>eputy commissioner of income-tax under sub-section (1) of section 117;'; 20 '(19b) "deputy commissioner (appeals)" means a person gppointed to be a deputy commissioner of income-tax (appeals) under sub-section (1) of section 117;'; (g) for clause (21), the following clause shall be substituted, with effect from the 1st day of april, 1988, namely:-25 '(21) "director general or director" means a person appointed to be a dire::tor general of income-tax or, as the case may be, a director of income-tax, under sub-section (1) of section 117, and includes a person appointed under that sub-section to be a deputy director of income-tax or an assistant director of income-tax": , , 30 (h) clause (22a) shall be renumbered as clause (22b) , and before clause (22b) as so renumbered, the following clause shall be inserted, namely:-'(22a) "domestic' company" means an indian company, or 35 any other company whkh, in respect of its income liable to tax under this act, has made the prescribed arrangements for the declaration and payment, within india, of the dividends (ihcluding dividends on preference shares) payable out of such income;'; (i) after clause (23), the following clause shall be inserted, 40 narnely:--'(23a) "foreign company" means a company which is not a domestic company;'; 4s (j) in clause (24), in sub-clause (iia) ,'for the words ", not being contributions made with a specific direction that they shall form part of the corpus of the trust or institution", the words, brackets, letters and figures "or by a trust or institutijn of· national importance referred to in clause (d) of sub-section (1) of section 8of" shall be substituted; ! (k) for clause (25), the following clause shall be substituted with effect from the 1st day of april, 1988, namely:-'(25) "income-tax officer" means a person appointed to be an 5 income-tax officer under sub-section (1) of section 117;'; (l) clause (27) shall be omitted with effect from the 1st day of april, 1988; (m) in clause (28), for the word, brackets and figure "sub-section (2)", the word, brackets and figure "sub-section (1)" shall be 10 substituted with effect from the 1st day of april, 1988; (n) after clause (29b) [as inserted by clause (c) of section 3 of the finance act, 1987j, the following clause shall be inserted, namely:-'(29c) "maximwn marginal rate" mea!'ls the rate of income- is tax (including surcharge on income-tax, if any) applicable m relation to the highest slab of income in the case of an individual as specified in the finance act of the relevant year;'; (0) in clause (37a),-(i) in sub-clause (0,-(1) the words, brackets, figures and letter "or subsection (9) of section 80e from any payment referred to therein" shall be omitted; (2) for the words, figures and letter "section 115b or section 164", at both the places where they occur, the words, 25 figures and letters "section 115b -or section 115bb or section h5e or section 164 or section 164a or section 167a" shall be substituted with effect from the 1st day of april, 1988; (3) after the words, figures and letter "or section 167a" , at both the places where they occur, the words, figures and 30 letter "or section 167b" shall be inserted; (4) for the words, figures and letter "section 115b or, as the case may be, section 164", the words, figures and letters "section 115b or section 115bb or section u5e or section 164 or section 164a or section 167a, as the case may be," 35 shall be substituted with effect from the 1st day of april, 1988; (5) after the word, figures and letter "section 167a", in the third place where they occur, the words, figures and letter "or section 167b" shall be inserted; w (ii) in sub-clause (ii) , for the figures" letter and word "194d and 195", th~ figures, letters and word "l94d, 194e and 195" hall be substituted with effect from the 1st day of april, 1988; (p) clause (39) shall be omitted; (q) clause (43b) shall be omitted; (r) for clause (44), the following clause shall be substituted, namely:-i '(44) "tax recovery officer" means any incom~tax oftlcer who may be authorised by the chief commissioner or commissioner by general or special order in writing, to exercise the pnwers of a tax recovery officer;'; (8) clause (48) shall be omitted ( for section 3 of the incom&-tax act, the following section shall be substituted, narnely:-sublltitution of new ~el:­tion for section 3 10 mprevious year" defined '3 (1) save as otherwise provided in this section, "previous year" for the purposes of this act, means the financial year immediately preceding the assessment year: provided that, in the case of a business or profession newly set up, or a source of income newly corning into existence, in the said 15 ftnancial year, the previuus year shall be the period beginning with the date of setting up of the business or profession or, as the case may be, the date on which the source of income newly comes into existence and ending with the said financial year (2) "previous year", in relation to the assessment year commenc-20 ing on the 1st day of april, 1989, means the period which begins with the' date immediately following the last day of the previous year relevant to the assessment year commencing on the 1st day of april, 1988 and ends on the 31st day of march, 1989: provided that where the assessee has adopted more than one 25 period as the "previous year" in relation to the assessment year commencing on the 1st day of april, 1988 for dift'erent sources of hi!; income, the previous year in relation to the assessment year commencing on the 1st day of april, 1989 shall be reckoned separately in the manner aforesaid in respect of each such source of income, and the 30 longer or the longest of the periods so reckoned shall be the previous year for the said assessment year (3) where the previous year in relation to the assessment year commencing on the 1st day of april, 1989, referred to in sub-section (2) exceeds a period of twelve months, the provisions of this act shall 35 apply subject to the modifications specified in the rules in the tenth schedule' 5 in section 4 of the incom~tax act, in sub-section (1) ,-amendment of ,eetion 4 (a) for the words "subject to the provisions of, this act", the w'ords and brackets "subject to the provisions (including provisions for the le:vy of additional income-tax) of, this act" shall be substituted; 40 (b) the words "or previous years, as the case may be," shall be omitted 6 it: section 10 of the income-tax act,-aaeddment of iictiod 10 (a) after clause (2), the following clause shall be inserted, namely:-"(2a) in the case of a person being a partner of a firm which is assessed as such, his share in the total income of the firm 5 expzanation-for the purposes of, this clause, the share of a partner in the total income of a firm assessed as such shall, notwithstanding anything contained in any other law, be an amount which bears to the total income of the firm the same proportion ali the amount of his share in the profits of the firm in accordance 10 with the partnership deed bears to such profits;"; (b) for clauses (4) and (4a), the following clause shall be substituted, namely:-"(4) (i) in the case of a non-resident, any income by way of interest on such securities or bonds as the central government 15 may, by notification in the official gazette, specify in this behalf, including income by way 'of premium on the redemption of such bonds; 46 of 1973 (n) in the case of an individual, who is a person resident outside india as defined in clause (q) of section 2 of the foreign 20 exchange regulation act, 1973, any income by way of interest on moneys standing to his credit in a non-resident (external) account in any bank in india in accordance with the said act and the rules made thereunder;"; (e) for clause (5), the following clause shall be substituted, namely:-25 '(5) subject to such conditions as the central government may prescribe (including conditions as to number of journeys and the amount which shall be exempt per head) in the case of an individual, the value of any travel concession or assistance received by or due to him,-30 (a) from his employer for himself and his family, in connection with his proceeding on leave to any place in india; (b) from h's employer or former employer for himself and his family, in connection with his proceeding to any place in india after retirement from service or after the termination of his service: provided that the amount exempt under sub-clause (a) or sub-clause (b) shah not, except in such cases and under such circumstances as may be prescribed having regard to the travel concession or assistance granted to the employees of the central 40 government, exceed the value of the travel concession or assistance which would hav(~ been received by or due to the individual in connection with his proceeding to any pla~e in india on leave or, as the case may be, after retirement from ~ervice or after the termination of his servicp-' provided further that the amount exempt under this c1au~ shall in no case exceed the amount of expenses actually incurred for the purpose of such travel 5, explanat'ion-for the purposes of this clause, "family", in relation to an individual, means-(i) the spouse and children of the individual; and (ii) the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual'; (d) in clause (10),-10 15 20 (i) in sub-clause (iii), for the words "calculated on the baiis of the average salary for the three years immediately preceding the year in which the gratuity is paid, subject to a maximum of thirty-six thousand rupees or twenty months' salar; so calculated, whichever is less", the words "calculated on the basis of the average salary for the ten months immediately preceding the month in which any such event occurs, subject to such limit as the central government may, by notification in the official gazette, specify in this behalf having regard to the limit applicable in this behalf to the employees of that government" shall be substituted; (ii) in the first and second provisos, for the words "shall not exceed thirty-six thousand rupees", the words "shall not exceed the limit so specified" shall be substituted; (iii) the third and fourth provisos shall be omitted; 25 (iv) in the explanation, for the words "in this clause", the words, brackets, figures and letters "in this clausje, and in clause (10aa) " shall be substituted; (e) in clause (loa), the proviso shall be omitted; (f) in clause (loaa), in sub-clause (ii) ,-30 (i) for the words "six months", the words "eight months" shall be substituted and shall be deemed to have been substituted with effect from the 1st day of july, 1966; (ii) for the words "or thirty thousand rupees, whichever is less", the words "subject to such limit as the central govern-35 ment may, by notification· in the official gazette, specify in this behalf having regard to the limit applicable in this behalf to the employees of that government" shall be substitu~ed and shall be deemed to have been substituted with effect from the 1st day of july, 1986; 40 (iii) in the first and second provisos, for the words "shall not exceed thirty thousand rupees", the words "shall not exceed the limit so specified" shall be substituted and shall be deemed to have been substituted with effect from the 1st day of july, 1986; (iv) the third and fourth provisos shall be omitted and shall 45 be deemed to have been omitted with effect from the 1st day of julv 1986; (v) in the explanation, the brackets and ·figure "(i)", and clause (ii) shall be omitted and shall be deemed to have beed omitted with effect from the 1st day of july, 1986 (g) in clause (lob), in the first proviso, for clause (ii), the following clause shall be substituted, namely: -5 "(ii) such amount, not being less than fifty thousand rupees, i as the central government may, by notification in the oftlcial gazette, specify in this behalf,"; (h) for clause (14), the following clause shall be substituted, namely:-10 "(14) (i) any such special allowance or benefit, not being in the nature of a perquisite within the meaning of clause (2) of section 17, specifically granted to meet expenses wholly, necessarily and exclusively incurred in the performance of the duties of an office or employment of profit, as the central government is may, by notification in the oftlcial gazette, specify, to the extent to which such expenses are actually incurred for that purpose; (ii) any such allowance granted to the assessee either to meet his personal expenses at the place where the duties of his oftice or employment of profit are ordinarily performed by him 20 or at the place where he ordinarily resides, or to compenate him for the increased cost of living, as the central government may, by notification in the official gazette, specify, to the extebt specified in the notification;"; (i) in clause (15), for sub-clauses (i), (ia) , (ib), (ii) and (ii4), 2s the following sub-clause shall be substituted, namely:-"(i) income by way of interest, premium on redemption or other payment on such securities, bonds, annuity certificate, savings certificates, other certificates issued by the central government and deposits as the central government may by notl- 30 flcation in the official gazette, specify in this behalf, subject to such conditions and limits as may be specified in the said nou-acation;"; (j) for clauses (17a) (17b) and (18), the man be substituted, namely:-· following clause 35 "(17a) any payment made, whether in cash or in kind,-(i) in pursuance of any award instituted in the public interest by the central government or any state government or instituted by any other body and approved by the central government in this behalf; or 4g (ii) as a reward by the central government or any state government for such purposes as may be approved by the central government in this behalf in the publie interest;"; (k) clauses, (21) and (23) shall be omitted; 45 (i) in clause (23c),-(i) in sub-clause (iii), the word "or" occurring at th~ end shall be omitted; (ii) sub-clauses (iv) and (v) and the proviso shall be omitted 5 (m) after clause (23c) , the following clause shall be in¥rted with effect from the 1st day of april, 1988, namely:-10 '(23d) any income from such mutual fund set up by a public sector bank or a public financial institution and subject to such conditions, including the condition that at least ninety per cent of the income from the mutual fund shall be distributed to the unit holders every year, as the central government may, by notification in the official gazette, specify in this behalf explanation-for the purposes of this clause,-23 of l~ss 15 31 ct 1959 ~ of 1970 400( 1980 20 (a) the expression "public sector bank" means the state bank of india constituted under the state bank of india act, 1955, a subsidiary bank as defined in the state bank of india (subsidiary banks) act, 1959, a corresponding new bank constituted under section 3 of the banking companies (acquisition and transfer of undertakings) act, 1970, or under section 3 of the banking companies (acquisition and transfer of undertakings) act, 1980; 1 of 1956 (b) the expression "public financial institution" shall have the meaning assigned to it in section 4a of the companies act, 1956' 7 sections 11, 12, 12a and 13 of the income-tax act shall be omitted omission of sectioll8 il,12,12a and 13 amendment of section u 25 8 in section 15 of the income-tax act, the explanation shall be numbered as explanation 1, and after explanation 1 as so numbered, the following explanation shall be inserted, namely:-'explanation 2-any salary, bonus, commission or remuneration, by whatev~ name called, due to, or received by, a partner of a firm 30 from the firm shall not be regarded as "salary" for the purposes of tbia lection' 9 in section 28 of the income-tax act,-amend mento! llection 28 (a) after clause (iv) , the following clause shall be inserted, namely:-3s "(v) any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by, a partner of a firm from such firm"; (b) explanation 1 shall be omitted 18 sections 35, 35b, 35c, 35cc, 35cca, and 35ccb of the incoiijle-~ tax act shall be omitted omisaiod ofsectionj 35, 35b, 35c 35cc 35cx:aancl 350cb 11 in section 36 of the income-tax act,--(a) in sub-section (1) ,-amendmentof section 36 (i) in clause (ii) , the provisos shall be omitted; (ii) in clause (vw) , in the opening portion, for the worda "any debt or part thereof which is established to· have become a bad debt in the previous year", the words "any bad debt or 5 part thereof which is written off as irrecoverable in the accounts of the assessee for the previous year" shall be substltuted; (iii) in clause (viia), in the explanation, for clause (ii), the following clausje shall be substituted, namely: -10 - (it) "schedule bank" means the state bank of india constituted under the state bank of india act, 1955, a sub-23 of 1955 sidiary bank as defined in the state bank of india (subsidiary banks) act, 1959, a corresporiding new bank consti-18 of 19 tuted under section 3 of the banking companies (acquisition 15 and transfer' of undertakings) act, 1970, or under section 3 5 of 1970 of the banking companies (acquisition and transfer of undertakings) act, 1980, or any other bank being a bank 40 of 1980 included in the sec'ond schedule to tlu! reserve bank of india act, 1934, but does not include a co-operative bank;,;20 2 of 1~4 (b) in sub-section (2),-(i) for clause (i), the following clause shall be substituted, namely:-i "(i) no such deduction shall be allowed unless such debt or part thereof has been taken into account in comput- 2s ing the income of the assessee of the previous year in which the amount of such debt or part thereof is written off or of an earlier previous year, or represents money lent in the ordinary course of the business of banking or money-lending which is carried on by the assessee;"; 30 (ii) in clause (iii), after the words "earlier previous year", the brackets, words, figures and letters" (being a previous year relevant to the assessment year commencing on the 1st day at april, 1988, or any earlier assessment year)" shall be inserted; (iii) in clause (iv), after the words "accounts of the previ- 35 ous year", the brackets, words, figures and letters "(being a previous year relevant to the assessment year commencing on the 1st day of april, 1988, or any earlier assessment year)" shall be inserted; 12 section 39 of the income-tax act shall be omitted 40 0  01 iedtion 39, 13 in section 40 of the income-tax act,-amend mentof aect1tid·40 (i) in the opening portion, for the words and figures "sectioda 30 to 39", the wordi and figures "sections 30 to 38" shall be iubstltutedi (ii) for clause (b), the following clauses shall be substituted, namely:-, (b) in the case of any firm assessable as such,-i (i) any payment of salary, bonus, commission or remuneration, by whatever name called (hereinafter referred to as remuneration) to any partner who is not a whole-time working partner; or 10 (ii) any payment of remuneration to any partner who is a whole-1ime working partner, or of interest to any partner, which, in either case, is not authorised by, or is not in accordance with, the terms of the partnership deed; or 20 (iii) any payment of remuneration to any part'ler who is a whole-time working partner, or of interest to any partner, which, in either case is authorised by, and is in accordance with, the tenns of the partnership deed, but which relates to any period (falling prior to the date of such pa'rtnership deed) for which such payment was not authorised by, or is not in accordance with, any earlier partnership deed, so, however, that the period of authorisation for such payment by any earlier partnership deed does not cover any period prior to the date of such earlier partnership d~ed; or 25 (iv) any payment of interest to any partner which is authorised by, and is in accordance with, the terms of the partnership deed and relates to any period falling after the date of such partnership deed in so far as such amount exceeds the amount calculated at such rate of interest as may be prescribed having regard to the maximum rate of interest payable by a scheduled bank on its deposits; or 3(j (v) any payment of remuneration to any partner who is a whole-time working partner, which is authorised by, and is in accordance with, the terms of the partnership deed and relates to any period falling after the date of such partnership deed in so far as the amount of such payment to all the partners during the previous year exceeds the aggregate amount computed as hereunder:-35 (1) in case of a firm carrying on a profession referred to in section 44aa or which is notified for the purpose of that section,-at the rate of 90 per cent; (a) on the first rs, 5c,000 , of the book-profit 40 | at     | the         | rate        ||--------|-------------|-------------|| per    |             |             || cent; |             |             || (b)    |             |             || on     | the         | next        || rs    | 50000      |             || of     | the         | book-profit || at     |             |             || the    | rate        | of          || 40     |             |             || per    | cent;      |             || (c)    |             |             || on     | the         | balance     || of     |             |             || the    | book-profit |             |,(2) in the case ot any other firm,-(a) on the first rs 50,000 of the book-profit (b) on the next ~ 00,000 of the book-profit at the rate of 75" per cent; at the rate of 50 per cent; at the rate of 25 5 per ;:ent i (c) on the balance of the book-profit  e~u1nation i-in this clause,-(a) "whole-time workmg partner" means a partner of the firm who is in receipt of any payment by way of salary, bonus, commission or remuneration, by whatever name 10 called, from the firm for services rendered to that firm and who is not in receipt of any similar payment froro any other person; (b) "book-profit" means the profit wl'tjch would have bf:en computed in accordance with the provisions of parts ii and iii of the slxth schedule to the companies act, 1956 if 5 1 of 19st' those provisions had been applicable to a firm and before making any deduction of any loss brought forward or any unabsorbed depreciation allowance or any other allowance or deduction brought forward from ally earlier previous year and without making any deduction under section 32ab or 20 section 33ab or under cnaptet' vi-a as increased by the following amounts if they have been taken into account in arriving at such profits-(1) the aggregate amount of the remuneration and the interest to all the partners of the firm; 25 (2) income-tax; (3) reserves or provisions of any kind; (4) depreciation; and as reduced by the de'preciation computed in accordance with the provisions of sub-section (1) of section 32 and the 30 aggregate amount of interest allowed to all the partners of the firm under this clause; (c) "scheduled bank" shall have the same meaning as assigned to it in the expzanation to clause (viia) of subsection (1) of section 36 3s explanation 2-where an individual is a partner in a firm on behalf, or for the benefit, of any other person (such partner and the other person being hereinaft~r referred to as "partner in a representative capacity" and "person so represented", respectively) ,-40 (i) interest paid by the firm to such individual otherwise than as partner in a ~presentative capacity, shall not be taken into account for the purposes of this clause; (ii) interest paid by the "firm to such individual as partner in a representative ~apadty and interest paid by tbe4' arm to the person so rep~sented shall be taken into account fer the purposes of this clause explanation 3-where an individual is a partner in a firm otherwise than as partner in a representative capacity, interest paid by the firm to such individual shall not be taken into account for the purposes of this clause, if such interest 1s 5 recei~ed by him on behalf, or for the benefit, of any other person; 21 of 1860 10 (ba) in the case of an association of persons or body of' individuals [other than a company or a co-operative society or a society registered under the socreties registration act, 1860 or' under any law correspo'nding to that act in force in any part of india], any payment of interest, salary, bonus, commission or remuneration, by whatever name called, made by such association or body to a me~ber of such association or body 15 20 explarvation l-where isterest is' paid by an association ot' body to any member thereof who has also paid interest to the association or body, the amount of interest to be disallowed under this clause shall be limited to the amount by which the payment of interest by the association or body to the :member exceeds the payment of interest by the member to the association or body 25 explanation 2-w'here an individual is a member of an association or body on behalf, or for the benefit, of any otlier person (such member and the other person being hereinafter referred to as "member in a representative capacity" and ~r­son so represented", resuectively,-30 (i) interest paid by the association or body to such individual or by such individual to the association or body otherwise than as member in a representative capacity, shall not be taken into account for the purposes' of this clause; 35 (ii) interest paid by the association or body to sitch individual or by such individual to the association or body as member in a representative capacity and interest paid by the association or body to the person so represented or by the person so represented to the association or body,shall be taken into account for the purposes of this clause explanation 3-w'here an individual is a member of an association or body otherwise than as member in a representative capacity, interest paid by the associ anon or body to lueh individual shall not be taken into account far the purposes of this clause, if such interest is received by him on behalf, or for the ben~fit, of any other person;';  (iii) clause (c) shall be omitted 14 in section '4oa of the income-tax act,-manto! «(i) in sub-section (3), for the words "two thousand five sectioo hundred rupees", wherever they occur, the words "ten thousand ~ rupees" shall be substituted; (b) sub-sections (5) and (6) shall be omitted 15 in section 43b of the income-tax act,-(a) in clause (b), the word "or" shall be inserted at the ad; amend mentof section ~b (b) after clause (b), the following clause shall be fdserted, namely:-- "(c) any sum referred to in clause (ii) of sub-sectiod (1) of s section 36,"; (e) in the first proviso (as inserted by section 10 of the finance act, 1987), after the word, brackets and letter "clause (a) fl, the words, brackets and letter "or clause (e) " shall be inserted; (d) the explanation snail be numbered as explanation 1, and 10 after erplanation 1 as so numbered, the following explanation shall be inserted, namely:-t'explanation 2-for the removal of doubts it is hereby declared that where a deduction in respect of any sum referred to in clause (c) of this section is allowed in computing the 15 income referred to in section 28 of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of anril, 1988 or any earlier assessment year) in which the liability to pay such sum was mcurred by the assessee, the assessee shall not be entitled to any deduction 20 under this section in respect of such sum in computing the income of the previous year in w1lich the sum is actually paid by him" 11 after section 54 of the income-tax act, the following section shall be inserted, namely: -' 25 insertion of new aection ma 'ma (1) where the capital gain arises from the transfer of a long term capital asset being property specified in sub-section  (~)  (tl}e capital asset so transferred being hereafter in this section referred to as the original asset), and the assessee has, during the previous year in which the transfer took place or within a period 30 of six months after the close of such previous year aequired an· other capital asset (such asset being hereafter in this section referred to as the new asset), to be held for the same purposes as those for which the original asset was held, then, the capital gain  ~ arfsfng from the transfer shan be dealt with-ln accordariee- with the 3s following provisions, that is to say,-relief of tax on capital gains 011 transfer of property held under trust for charitable orre-ugloub purposes or by certain fn8tl tutionll (a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the net coni- 40 deration in respect of the original asset, so much, of the capital gain as bears to the whole of the capital gain the same pr0-portion as the cost of acquisition of the new asset be81's to the net consideration shall not be charged under section 4&: provided that in a case where the transfer of the orl,mll 45 asset is by way of compulsory acquisition under any law and the full amount of compensation awarded for such acquisition is not received by the assessee on the date of such transfer but ia received after the expiry of the previous year, the period of six months referred to in this section shall, in relation to so much of s such compensation as is not received before such expiry, be reckoned from the date immediately following the date on which such compensation is received by the assessee (2) the propert:r ~eferred to in sub-section (1) shall be the following, namely:·-10 (a) property held under trust wholly for charitable or religious purposes in india or by an institution established wholly for iluch purposes in india; (b) property held under trust in part only for charitable or religious purposes in india, the trust having been created be-is fore the commencement of this act; (e) property held under a trust created on or after the lst day of april, 1952, or by an institution established on or after that date, for a charitable purpose which· is for the benefit of citizens of india abroad or which tends to promote international welfare in which india is interested; (d) property held by a trust or institution of national importance referred to in clause (d) of sub-section (1) of sectiod 8of (3) in the case of a capital asset being property falling under 25 clause (b) of sub-section (2), the provisions of sub-section (1) shan apply only to that fraction of the capital gain arising from the transfer of such capital asset which represents the exfenl to which the income derived from the capital asset transferred was, immediately before such transfer, applicable to charitable or religious 30 purposes explanation-in this section, "net consideration" shall have the meaning assigned to it in explanaticm 5 below sub~ection (1) of section me' 17 in section 64 of tit income-tax act, in sub-section (1) ,-(a) clause (i) shall be omitted; 35 amendmento! sectiaa &l (0) in clause (ii), for the proviso, the following proviso shan be lubstituted, namely:-"provided that nothing in this clause shall apply in relation to any such income arising to the spouse from a finn carrying on any such profession as is referred to in sub-section (1) of tectlon 44aa, where the ,spouse possesses any technical or professional qualification in the nature of a degree or diploma of a university within the meaning of clause (e) of the explmlcl- below sub-section (2b) of section 32a;"; (el i clause (iii) shall be omitted; , (d) in clause (iv), the words, brackets and figure loin a case not falling under clause (i) of this sub-section," shall be omitted; (e) in clause (v), the words, brackets and figures "in a case not falling under clause (iii) of this sub-section," and the brackets 5 and words" (not being a married daughter)" shall be omitted; (f) in clause (vii), the brackets and words cc (not being a married daughter)" shall be omitted; (g) for explanation 1, the following explanation shall be substituted, namely:-10 "explanation i-for the, purposes of clause (ii) , the individual, in computing whose total income the income referred to in that clause is to be included, shall be the husband or wife whose total income (excluding the income referred to in that clause) is greater; and where any such income is once included 15 in the total income of either spouse, any such income arising in any succeeding year shall not he included in the total income of the other spouse unless the assessing officer is satisfied, after giving that spouse an opportunity of being heard, that it is necessary so to do"; 20 (h) explanation la and explanation 2a shall be omitted; (i) for explanation 3, the following explanation shall be substituted, namely:-"explanation 3-for the purposes of clauses (iv), (v) and (vi), where the assets transferred directly or indirectly by an 25 individual to his spouse or minor child or son's wife or son's minor child (hereafter in this explanation referred to as "the transferee") are invested by the transferee,-(i) in any business, such investment being not in the nature of contribution of capital as a partner in a finn or, 30 as the case may be for being admitted to the benefits of partnership in a firm, that part of t~ income arising out of the business to the tnmsferee in any previous year, which bears the same proportion to the income of the transferee from the business as the value of the assets aforesaid as on 35 the first day of the previous year bears to the total investment in the business by the transferee as on the said day; (ii) in the nature of contribution of capital as a partner in a firm or, as the case may be, for being admitted to the benefits of partnership in a firm, that part of the interest 40 receivable by the transferee from the firm in any previous year, which bears the same proportion to the interest receivable by the transferee from the finn as the value of the mvestment aforesaid as on 'the first day of the previous year bears to the total investment by way of capital contribution 45 as a partner in the firm as on the said day, shall be included in the total income of the individual in that previous year" 18 for section 67 of the income-tax act, the following section shall substibe substituted, narn,ely: -tution of new &eetionfor tection 6'1 5 21 af 1860 10 '67 (1) in computing the total income of an assessee who is a member of an association of persons or a body of individuals wherein the shares of the members are determinate and known [other than a company or a co-operative society or a society registered under the societies registration act, 1860 or under any law corresponding to that act in force in any part of india], whether the net result of the computation of the total income of such association or body is a profit or a loss; his share (whether a net profit or net loss) shall be computed as follows, namely:-15 method of computing a member' share in the income of asso-ciation ot persons or ,body of mdlvl (a) any interest, salary, bonus, commission or remuneration duals, by whatever name called, paid to any member in respect of the previous year shall be deducted from the total income of the association or body and the balance ascertained and apportioned among the members in the proportions in which they are entitled to share in the income of the association or body; 20 (b) where the amount apportioned to a member under clause (a) is a profit, any interest, salary, bonus, commission or remuneration aforesaid paid to the member by the association or body in respect of the previous year shall be added to that amount, and the result shall be treated as the member's sbme in the income of the association or body; 25 30 (c) where the amount apportioned to a member under clause (a) is a loss, any interest, salary, bonus, commission or remuneration aforesaid paid to the member by the association or body in respect of the previous year shall be adjusted against that amount, and the result shall be treated as the member's share in the income of the association or body 35 (2) the share of a member in the income or loss of the assoeia· 110n or body, as computed under sub-section (1), shall, for the purposes of assessment, be apportioned under the various heads of income in the same manner in which the income or loss of the association or body has been determined under each head of income 40 (3) any interest paid by a member bn capital borrowed by him tor the purposes of investment in the association of body shall, in computing his share chargeable under the head "profits and gains of business or profession" in respect of his share iii the income of the association or body, be deducted from his share exptanation-in this section, "paid" has the same meaning as 18 usigned to it in clause (2) of section 43' i9 sections 75, 76 and 77 of the income-tax act shall be omitted  bmiiiiod of ~ '15,'16 8i1d 77zoo in section 78 of· the income-tax act, for sub-section (1), the following sub-section shall be substituted, na~ly:-amend· ment of section 78 "(1) where a change has occurred in the constitution of a firm, nothing in this chapter shall entitle the firm to have carried for- 5 ward and set off so much of the loss proportionate to the share of a retired or deceased partner as exceeds his share of profits, if any, in the firm in respect of the previous year" 21 in section 80a of the income-tax act, for sub-section (3), the following sub-section shall be substituted, namely:-10 amend· ment of section i!oa "(3) where in computing the total income of an association of persons or a body of indivlduals, any deduction is admissible under section bog or sa<>tion 80hh or section borha or section 80hhb or section 80hhc or section 80-1 or section 80j, no deduction under the same section shall be made in computing the total incom'~ of a mem-15 ber of the associat!on of persons or body of individuals in relation to the share of such member in the income of the association or body" 2lz in section bob of the income-tax act, clauses (2), (4), (6) and (8) shall be omitted 20 amend· ment of section £lob  23 section 80e of the income-tax act shall be omitted24 after section 80e of the income-tax act following section shall be inserted, namely:-as so omitted, the omission of sectioo bob j inaertion of new section 801' '80f (1) in computing the total income of an assessee, being-(a) a person in receipt of income derived from property 25 held under trust· wholly for charitable or religious purposes in india or by an institution established wholly for such purposes in india; or deduct,ion in respect of llmr)unig applied for chari table or religious purposes, etc (b) a person in receipt of income derived from property held under trust in part only for charitable or religious pur- 30 poses in india, the trust having been created before the commencement of this act; or (e) a person in receipt of income derived from propert, held under a trnst created on or after the 1st day of april, 1952 or by an institution established on or after that date, for a charitable purpose which is for the benefit of citizens of india 5 abroad or which tends to promote international welfare in which india is interested; or | (d) a                       | trust                                     | or                                                   | institution declared by                           | the                                  | board, by noti-                 ||-----------------------------|-------------------------------------------|------------------------------------------------------|---------------------------------------------------|--------------------------------------|---------------------------------|| fication                    |                                           |                                                      |                                                   |                                      |                                 || in                          |                                           |                                                      |                                                   |                                      |                                 || the                         | official gazette, to                      | be                                                   | a                                                 | trust                                | or                              || national importance, having |                                           |                                                      |                                                   |                                      |                                 || regard                      | to                                        | the                                                  | objects set out                                   |                                      |                                 || in                          |                                           |                                                      |                                                   |                                      |                                 || 10                          | the                                       | instrument creating                                  | the                                               | trust                                | or                              || the                         | opinion of such experts                   | in                                                   | the                                               | respective fields of activity        |                                 || of                          |                                           |                                                      |                                                   |                                      |                                 || the                         | trust                                     | or                                                   | institution as                                    | the                                  | board                           || and                         | other                                     | relevant factors,                                    |                                                   |                                      |                                 || there shall                 |                                           |                                                      |                                                   |                                      |                                 || be                          | deducted,                                 |                                                      |                                                   |                                      |                                 || in                          |                                           |                                                      |                                                   |                                      |                                 || accordance                  | with                                      | and                                                  | subject                                           |                                      |                                 || to                          |                                           |                                                      |                                                   |                                      |                                 || the                         | pro-                                      |                                                      |                                                   |                                      |                                 || is                          | visions of this section,                  | the                                                  | sums specified hereunder,                         | namely:-                             |                                 || (i)                         |                                           |                                                      |                                                   |                                      |                                 || any amount applied          | in                                        | india                                                | by                                                | the                                  | person referred                 || to                          |                                           |                                                      |                                                   |                                      |                                 || in                          |                                           |                                                      |                                                   |                                      |                                 || clause                      |                                           |                                                      |                                                   |                                      |                                 || (a),                        |                                           |                                                      |                                                   |                                      |                                 || or                          | by                                        | the                                                  | trust                                             | or institution referred to in clause |                                 || (d),                        |                                           |                                                      |                                                   |                                      |                                 || during                      | the                                       | previous year wholly                                 | and exclusively to                                | the                                  |                                 || purposes of                 | the                                       | trust                                                | or                                                | institution;                         |                                 || 20                          |                                           |                                                      |                                                   |                                      |                                 || (it)                        |                                           |                                                      |                                                   |                                      |                                 || any amount applied          | in                                        | india by                                             | the                                               | person referred to                   |                                 || in                          |                                           |                                                      |                                                   |                                      |                                 || clause                      |                                           |                                                      |                                                   |                                      |                                 || (b)                         |                                           |                                                      |                                                   |                                      |                                 || during                      | the                                       | previous                                             | year                                              | wholly                               | and                             || to                          |                                           |                                                      |                                                   |                                      |                                 || the                         | charitable                                | or                                                   | religious purposes of                             | the                                  | trust;                          || (iii)                       |                                           |                                                      |                                                   |                                      |                                 || any                         | amount applied outside india              | by                                                   | the                                               | person refer-                        |                                 || red                         | to                                        | in                                                   | clause (c) during                                 | the                                  | previous year wholly and exclu- || 2s                          |                                           |                                                      |                                                   |                                      |                                 || sively for                  | the                                       | benefit or citizens of india abroad or for promoting |                                                   |                                      |                                 || international welfare       |                                           |                                                      |                                                   |                                      |                                 || in                          | which india is                            | interested, where                                    | the                                               |                                      |                                 || board has, by general       | or                                        | special order, directed such amount to               |                                                   |                                      |                                 || be                          | deducted:                                 |                                                      |                                                   |                                      |                                 || provided                    |                                           |                                                      |                                                   |                                      |                                 || that                        | any such amount applied wholly and exclu- |                                                      |                                                   |                                      |                                 || 30                          | sively for                                | the                                                  | benefit of citizens of india abroad shall qualify |                                      |                                 || for                         |                                           |                                                      |                                                   |                                      |                                 || the                         | deduction urder this clause               | only                                                 | if                                                | such amount                          | 1s                              || applied                     |                                           |                                                      |                                                   |                                      |                                 || in                          |                                           |                                                      |                                                   |                                      |                                 || accordance                  | with                                      | a                                                    |                                                   |                                      |                                 || s~hemc                      |                                           |                                                      |                                                   |                                      |                                 || framed                      | by                                        | such person                                          |                                                   |                                      |                                 || and                         | approved by the board and notified in     | the                                                  | official                                          |                                      |                                 || gazette;                    |                                           |                                                      |                                                   |                                      |                                 || 35                          |                                           |                                                      |                                                   |                                      |                                 || (iv)                        |                                           |                                                      |                                                   |                                      |                                 || any                         | amount invested                           | or                                                   | deposited during                                  | the                                  | previous                        || year                        | in                                        | such form                                            | or                                                | mode,                                | in                              || as                          |                                           |                                                      |                                                   |                                      |                                 || may                         | be prescribed, where such investment      | or                                                   | deposit                                           |                                      |                                 || is                          |                                           |                                                      |                                                   |                                      |                                 || held                        |                                           |                                                      |                                                   |                                      |                                 || by such person or, as       |                                           |                                                      |                                                   |                                      |                                 || the                         | case                                      | may                                                  | be, trust                                         | or                                   | institution for a               || period of                   |                                           |                                                      |                                                   |                                      |                                 || not                         | less                                      | than                                                 | six months ending with                            | the                                  | due date for                    || 40                          | furnishing the                            | return                                               | of income under sub-section                       |                                      |                                 || (1)                         |                                           |                                                      |                                                   |                                      |                                 || of section                  |                                           |                                                      |                                                   |                                      |                                 || 139                        |                                           |                                                      |                                                   |                                      |                                 |(2) the deduction under sub-section (1) shall not be allowed uhless the following conditions are fulfilled, namely:-45 (a) the person in receipt of the income or, as the case may be, the trust or institution has made an application for registration of the trust or institution in the prescribed form and :in the prescribed manner to the commission?r or any other authority prescribed in this behalf before the expiry of r, period of one year from the date of the creation of the trust or the establishment of the institution: so provided that the commissioner or the authority 10 pre-crij:-ed may, in his or its discretion, admit an application for the registration of any trust or institution after the period aforesaid explanation-where an application for registration of the trust or institution has been made to the commissioner in s accordance with the provisions of section 12a as it stood immediately before the 1st day of april, 1989, the requirements of this clause shall be deemed to have been complied with; (b) where the gross total income of the trust or institution for the previous year exceeds fifty thousand rupees, the accounts 10 of the trust or institution for the previous year have been audited by an accountant as defined in the explanation belciw sub-section (2) of section 288 and the person in receipt of the income furnishes along with the return of income for the relevant assessment year the report of such audit in the prea-15 cribed form duly signed and verifl~d by such accountant :md setting forth such particulars as may be prescribed; (c) such other conditions as the board may, having regard to the interests or quantum of the revenue, by general or special order ( impose, and such conditions may include a condition that a nominee 20 of the board shall, notwithstanding 'anything contained in any other law for the time being in force or iil any instrument constituting the trust or institution concerned or governing the working thereof, be appointed on the board of trustees of the said trust or, as the case may be, the governing body of the institution; 2~ (3) the deduction under sub-section (1) shall not be allowed where-(a) any part of the property of the trust or institution is held for a private religious purpose which does not enure for the benefit of the public or any part of the income from such 30 property is applied to any such purpose as aforesaid; (b) in the case of a trust for charitable purposes or a charitable institution created or established after the commencement of this act, the trust or institution is created or established for 3s the, benefit of any particular religious community or caste; (c) (i) in the case of a trust or an institution created or established after the commencement of this act, any part of the income of the trust or institution, under the terms of the trust or the ru)~s governing the institution, enures, or (ii) in the case of a trust or institution whenever created 40 or established, any part of the income or any property of the trust or institution is, during the previous year, used or applied, in a manner which results directly or indirectly in conferring any benefit, amenity or perquisite (whether convertible into money or not) on any interested person; or 45 (d) any funds of the trust or institution are invested or deposited, for any period during the previous year, otherwile than in any such form or mode, in such manner and for luch period as is prescribed for the purposes of clause (iv) of subsection (1): s 10 provided that the chief commissioner or the commissioner may, if he is satisfied, on an application by the trust or institution, that the application of the provisions of sub-clause (i) or sub-clause (ii) of clause (c) would result in grave hardship to the trust or institution, allow the deduction wholly or to such extent as he may deem fit having regard to the extent of the benefit, amenity or perquisite derived or enjoyed by the interested person: 15 provided further that in the case of a trust or institution created or established before the commencement of this act, the provisions of sub-clause (ii) of clause (c) shall not apply to any use or application, whether directly or indirectly, of any part of such income or any property of the trust or institution in the manner specified in that clause, if such use or application is by way of compliance with a mandatory term of the trust or a mandatory rule governing the institution 20 25 (4) without prejudice to the generality of the provisions of clause (c) of sub-section (3), the income or the property of the trust or institution or any part of such income or property shall, for the purposes of that clause, be deemed to have been used or applied in a manner which results directly or indirectly in conferring any benefit, amenity or perquisite (whether convertible into money or not) on any interested person, if-(a) any part of the income or property of the trust or institution is, or continues to be, lent to any interested person for any period during the previous year without either adequate security or adequate interest or both; (b) any land, building or other property of the trust or institution is, or continues to be, made available for the use of any interested person for any period during the previous year  without charging adequate rent or other compensation; 35 (c) any amount is paid by way of salary, allowance or otherwise during the previous year to any interested person out of the resources of the trust or institution for services rendered by that person to such trust or institution and the amount so paid is in excess of what may be reasonably paid for such services; 40 (d) the services of the trust or institution are made available to any interested person during the previous year without adequate remuneration or other compensation; 4s (e) any share, security or' other property is purchased by or on behalf of the trust or institution from -any interested person during the previous year for a consideration which 18 more than adequate; (f) any share, security or other property is sold by or on behalf of the trust or institution to any interested person during the previous year for a consideration which is less than ad quate; (g) any income or property of the trust or institution is diverted during the previous year in favour of any interesteq person: provided that this clause shall not apply where the income, or the value of the property or, as the case may b:e, the aggre- 5 gate of the income and the value of the property so divert~d does not exceed one thousand rupees; (h) any funds of the trust or institution are, or continue to remain, invested for any period during the previous year in i any concern in which any interested person has a substantial 10 interest: provided that in a case where the aggregate of the fundi of the trust or institution invested in a concern referred to in this clause does not exceed five per cent of the capital of that concern, the deduction under sub-section (1) in respect of the 15 amount referred to in clause (i) or clause (ii) of that subsection shall not be denied in relation to the application of any income other than the income arising to the trust or institution from such investment, by reason only of this clause (5) where deduction has been allowed under sub-section (1) 20 for any previous year with reference to any amount referred to in clause (iv) of that sub-section and in any subsequent previous year the whole or any part of the investment or deposit in which such amount is held is realised or cljnverted into cash, the amount so realised or converted into cash shall, notwithstanding anything 25 contained in any other provision of this act, be deemed to be the income of the assessee of the previous year in which it is so realised or converted and shall be chargeable to tax accordingly (6) the deduction under sub-section (1) shall not be allowable in a case where the whole or any part of the income of 30 the person or, as the case may be, trust or institution referred to in that sub-section is chargeable to income-tax, by virtue of the provisions of sections 60 to 63, as the income of the author of the ! trust or founder of the institution or any other person who has made a transfer of any income or asset to ~ trust or institution 3s (7) where the property referred to in clause (a) or clause (b) or clause (c) of sub-section (1) consists wholly or partly of a business undertaking, or any person, trust or institution referred to in clause (a) or clause (b) or clause (c) or clause (d) of that subsection derives income from a business carried on by him or it, 40 the foregoing provisions of this section shall apply subject to the following conditions and with the following modifications, namely:-(a) separate books of account are maintained by such person trust or institution in respect of such business; such accounts are maintained on the cash system of accounting &nif 45 are audited by an accountant as defined in the exp1anatu below sub-section (2) of section 288, and the person, trust or jutftution furnishes, along with the return of income for u relevadt ul8llment year, the report of such audit in tba prescribed form duly signed and verified by such accountant add settipg forth such particulars as may be prescribed; (b) in computing the profits and gains of such business, no 5 deduction shall be allowed in respect of any expenditure which results directly or indirectly in the provision of any remuneration, perquisite, benefit or amenity to any interested person, whether for any services rendered or otherwise; (c) the provisions of sections 71 and 72 sliall not be 10 applicable in relation to any loss pertaining to such business; (d) any amount referred to in clause (i) or clause (ii) or clause (iii) of sub-section (1), in so far as such amount is applied out of the profits and gains of such business, shall qualify for the deduction under that sub-section, if-15 (i) such amount is so applied during the previous year; or (ii) such amount is so applied during the financial year next following the previous year and, until it is so applied, the amount is kept in deposit in 'a separate account 20 in any scheduled bank and it is not utilised for any purpose which is not a purpose of the trust or institution, and any amount which is not so applied out of such deposit during the financial year aforesaid shall be chargeable to tax as the income under the head "profits and gains olousmess 25 or profession" of such person, trust or institution of the next following previous year and all the provisions of this act shall apply accordingly; (e) any amount referred to in clause (iv) of sub-section (1) shall not be taken into account for the purpose of allowing the 30 deduction under that sub-section, in so far as such amount relates to the profits and gains of su~h business; (i) without prejudice to the provisions of sub-section (3), the deduction under sub-section (1) shall not be allowed in a case where--35 (i) such business consists, wholly or partly, in-(a) the purchase and sale of any securities or shares; or (b) money-lending or financing in any form; or (c) speculation in securities or shares or any other commodities; or 40 (d) engaging in the conduct of, or participating in, any lottery or crossword puzzle, races including horse races, card games or other games of any sort or gambling or betting of any form ,or nature whatsoever; or (e) such other activity as may be prescribed; or 45 (ii) the person, trust or institution aforesaid engages in any business transaction with any interested person or y,;th any concern in which any interested person has a subtttantial interest; (iii) such person; trust or institution enters into iilf partnership or joint venture or forms any association of persons or a body of individuals with any interested person or with any conctern in which any interested person has a substantial interest s (8) the board may, by general or special order direct that any power or authority conferred upon it under this section may, subject to such conditions and restrictions as it may think fit to impose, be exercised also by such officer not below the rank of a commissioner as it may specify in the order 10 ezpla7u1tion i-for the purposes of this section-(a) "interested person" means-(i) the author of the trust or the founder of the institution; (ii) any person who has made a substantial contribu- is tion to the trust or institution, that is to say, any person whose total contribution up to the end of the relevant previous year exceeds twenty-five thousand rupees; (iii) where such author, founder or person is a hindu undivided family, a member of the family or any relative 20 of such member; (iv) any trustee of the trust or manager (by whatever name called) of the institution; (v) any relative of any such author, founder, person, member, trustee or manager as aforesaid; 2s (vi) any concern in which any of the persons referrm to in sub-clau5es (i), (ii) , (iii), (iv) and (v) has a substantial interest; (b) "relative", in relation to an individual, means,-(i) spouse of the individual; 30 (ii) brother or sister of the individual; (iii) brother or sister of the spouse of the individual; (iv) any lineal ascendant or descendant of the individual; (v ) any lineal ascendant or descendant of the spouse of the individual; 3s (vi) spouse of a person referred to in sub-clause (ii) , sub-clause (iii), sub-clause (iv) or sub-clause (v); (vii) any lineal ascendant or descendant of a brother or sister of either the individual or of the spouse of the individual; 40 (c) "scheduled bank" shall have the same meaning as ia clause (ii) of the explanation to clause (viia) of sub-section (1) of section 36; , (d) "trust" includes any other legal obligation; (e) any reference to "institution" shall be construed u ia- 45 cluding also a reference to "fund" "esqlanation 2-a trust or institution created or elltabl1ahed tor the benefit of schedu~ castes, backward classes, scheduled trlbet or women and children shall not be deemed to be a trust or institutioncreated or established for the benefit of a religious community s or caste within the meaning of clause (b) of sub-section (3) i explanation a-for the purposes of this section, a person shall be deemed to have a substantial interest in a concern,-(i) in a case where the concern is a company, if its share (not being shares entitled to a fixed rate of dividend whether 10 with or without a further right to participate in profits) carrying not less than twenty per cent of the voting power are, at any time during the previous year, owned beneficially by such person, or partly by such person and partly by one or more of the other persons referred to in dause (a) ofexplanation 1; , (ii) in the case of any other concern, if such person is entitled, or such person and one or more (jf the other persons re--ferred to in clause (a) ,of explanation 1 a~ entitled in the aggregate, at any time during the previous year, to not less than twenty per cent of the profits of such concern' 25 in section sog of the income-tax act,-20 amad menlo! sccdoa bog (a) in sub-section (1), in clause (n, for the words, brackets, figures and letter "sub-clause (iiia) or in", the words, brackets, i figures and letters "sub-clause (iiia) or sub-clause (iiid) or subclause (iiie) or" shall be substit"uted; ls (b) in sub-section (2) after sub-clause (iiic) of clause (a), the following sub-clauses shall be inserted namely:-"(iiid) the rural development fund set up and notified by the central government in this behalf: or (iiie) a trust or institution of national importance referred 30 to in clause (d) of sub-section (1) of section 80f which has as its main object the undertaking of scientific research or carrying out of any rllral develonmenf programme or carrying out of any programme of conservation of natural resources or of aft'orestation of wasteland; or"; 3s (c) for sub-section (4), the follmving sub-section shall be !nlbstituted, namely:-" (4) where the aggregate of the sums referred to in subclauses (iv) , (v), (vi) and (vii) of clause (a) and in clause (b) of sub-section (2) exceeds ten per cent of the gross total income (as reduced by any portion thereof on which income-tax is not payable under any provision of this act and by any amount in respect of which the assessee is entitled to a deduction under any other provision of this chapter) then the amount in excess of ten per cent of the gross total income shall be ignored for "5  the purpose of computing the aggregate of the sums in respect of which deduction is to be allowed under sub-section (1)"; (d~ in ub-section (5) los' clautle (i) the followtdg·  imil  substituted, namely:-ii (i) where the institution or fund derives any income iuch income would not be liable to be included in its total fdeome ) l'  j i i under the provisions of clause (22) or clause (22a) or clauae (23aa) or clause (23c) of clause 10 or the trust or iutltution [other than the trust or institution referred to in iu~ (iiie) of clause (a) of sub-section (2)] is eligible for the deduction under section 8of;"; (e) in ezplanation 2 for clauaes ('ii) and (ii), the tellowidi 10': clauses shall be substituted, namely:-, cc (i) that, subsequent to the donation, the trust or institution has become ineligible for the deduction under section bof due to non-eompliance with any of the provisions of that section; (ii) that the deduction under section 80f is denied in re- is lation to the application of any income arising to it from any investment referred to in clause (h) of sub-seetlon (4) of that section where the aggregate of the funds invested by 'it in a concern referred to in the said clause (h) does not exeeed five per cent of the capital of that concem;"  26 section 80gga of the income-tax act shall be omitted| oml       |     ||-----------|-----|| ofseetion |    || iogga    |     |111 in section 80-l of the income-tax act, in sub-section (1), after clause (v), the following clause shall be inserted with e1fect from the 1st day of april, 1988, namely:-  i i ameadmeat of ilection bol "(va) income received in respect of units of a mutual fond 25 specified under clause (23d) of section 10;" 28 section 80qq of the income-tax act shall be omitted 219 for section 86 of the income-tax act the following section shall be substitu~d, namely: -: omission of section 80qq substitution of new section for mction 86 "86 where the assessee is a member of an association of persons 30 or body of individuals [other than a company or a co-operative society i"r a society registered under the societies registration act, 1860 or under any law corresponding to that act in force in any part of india, income-tax shall not be payable by the assessee in respect of his share in the income of the association or body com- 35 puted in the manner provid~ in section 67: provided that,-(a) where the association or body is chargeable to tax on its total income at the maximum marginal rate' or any higher rate, under any of the provisions of this act, the share of a mem- 4'0 share of member of an association of pe1'lods or body of individuals in the ineome oftbe  oda· tlonor ~ ber computed as atoresaid shall not be included in his total income; i (b) in any other case, the share of a member computed as aforesaid shall form part of his total income: 5 provided further that where no income-tax is chargeable on the total income of the ajsociation or body, the share of a member computed as aforesaid s!lall be chargeable to tax as part o'f his tota! income and nothing containe1 in this section shall apply to the case" 30 for sections 116, 117 and 118 of the income-tax act, the following 10 sections shall be substituted with effect from the 1st day of april, 19188, namely:-substitution of new· sections for sections 116, 117 and 118 j'116 there shall be the following classes of income-tax authorities for the purposes of this act, namely:-incometax authorities (a) the central board of direct taxes constituted under the central board~ of revenue act, 1963, 54 of 1963 15 (b) directors-general of income-tax or chief commissioners of income-tax, (c) directors of income-tax or commissioners of income-tax or commissioners of inrome-tax (appeals), 20 (d) deputy directors of income-tax or deputy commissioners of income-tax or deputy comm~ssioner of income-tax (appeals) , (e) assistant directors of income-tax or assistant com-'f missioners of income-tax, (f) income-tax officers, 25 (g) tax recovery officers, (h) inspectors of income-tax 117 (1) the central government l1lay appoint such persons as it thinks fit to be jncome-tax authorities appointment of incometax authorities 30 (2) without prejudice to the provisions of sub-section (1), and subject to the rules and orders of the central government regulating the conditions of service of persons in public services and posts, the central government may authorise the board or a director-general a chief commissioner or a director or a commissioner to 55 i appoint income-bx authorities below the rank of an assistant commissioner 40 (3) subiect to the rules and orders of the central government regulating the cond~tions of service of persons in public services and posts, an income-tax authority authoriser! in this behalf by the board may appoint such executive or ministerial staff as may 'be necessary to assist it in the execution of its functions control of income tax authorities 118 the board may, by notification in the official gazette, direct that any income-tax authority or authorities specified in the notification shall be subordinate to such other income-tax authority or authorities as may be specified in such notification" 31 in secti~n 119 of tile income-tax act iwith effect from the 1st day 5 of april, 1988,-amendment of section 119 (a) in sub-section (2), in clause (b), for the words "the commissioner or the income-tax officer", the words and brackets "any income-tax authority not being a deputy commissioner (appeals) or 10 commissioner (appeals)" shall be substituted; (b) sub-section (3) shall be omitted substitution of 32 for section 120 of the income-tax act, the following sections shall be substituted with effect from the 1st day of april, 1988, namely:-~w section for section 120 jurisdiction of incometax authorities "120 (1) income-tax authcrities shall exercise all or any of the powers and perfonn all or any of the functions conferred on, or, 15 as the case may be, assigned to such authorities by or under this act in accordance with such directioru as the board may issue for the exercise of the powers and performance of the functions by all or any of those authorities (2) the directions of the board under sub-section (1) may 20 authorise any other income-tax authority to issue orders in wrlting for the exercise of the powers and performance of the functions by all or any of the other income-tax authorities who' are subordinate to it (3) in issuinlz the directions or orders referred to in ~ub- 25 sections (1) and (2), the board or other income-tax authority authorised by it may have regard to anyone or more c5f the following criteria, namely:-(ci) territorial area; (b) persons or classes of persons; 30 (c) incomes or classes of income; and , (d) cases or classes of cases (4) without prejudice to the provisions of sub-sections (1) ~!ld (:;), the bo;)rd may, by general or special order, and subject to such conditions, restrictions or limi~ations as may be specified therein,- 35 (a) authorise any director-general or director to perform sll';n fw1ctions of any other income-tax authority as may be assigned to him by the board; (b) empower the director general or chief commissioner or comr,jssiq~r to 1ssue orders in writin~ that the powers and 4q 5 10 functions conferred on, or :s the case may be, assigned to, t~ asl'lessing officer by or under this act in respect of any specified area or persons or classes of persons or incomes or clas~s of income or cases or classes of cases, shall be exercised or perform-pod by a deputy commissioner, and, wher~ any order is made under this clause, references in any other provision of this act, or in any r\olle made thereunder to the assessing officer shall be deemed to be references to such deputy commissioner by whom the powers and functions are to be exercised or performed under such order, and any provision of this act requiring approval or l'lanction of the deputy commissioner shall not apply 15 20 25 (5) the directions and orders referred to in sub-sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require· two or more assessing officers (whether or not of the same class) to exercise and perform, concurrently, the powers and functions it: respect of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases; and, where such powers and functions are exercised and performed concurrently by the assessing officers of different classes, any authority lower in rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct, and, further, references in any other provision of this act or in any rule made thereunder to the assessing officer shall be deemed to be references to such higher authority and any provision of this act requiring approval or sanction of any such authority shall not apply 30 35 (6), notwithstanding anything contained in any direction or order issued under this section, or in section 124, the board may, by notification in the official gazette, direct that for the purpose of furnishing 0'£ the return of income or the doing of any other act or thing under this act or any rule made thereunder by any pel"loll or class of persons, the income-tax authority exercising and performing the powers and functions in relation to the said person or class of persons shall be such authority as may be specified in the notification"  33 sections 121, 121a, 122, 123, 125, 125a, 126, 128, 130 and 130a of the income-tax act shall be omitted with effect from the 1st day of april, 1988 omission of sections 121, 121a, 122, 123, 125, 125a, 126, 128, 130 and 130a 34 }4'or section 124 of the income-tax act, the following section shall substitu_ 40 be substituted with effect from t~ 1st day of april, 1988, namely: -tion of new sec~ tion for section 124 jurisdiction of assesainl officers "124 (1) where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 120, the assessing officer has been vested with jurisdiction over any area, within the limits of such area, he shan have jurisdiction-(a) in respect of any person carrying on a business or pr0-fession, if the plce at which he carries on his busill;ess or profession is situ3te within the area, or where his business or· profession is < arried on in more places ,than one, if the principal place uf his business or profession is situate within the area, s and (b) in respect of any other person res~ing within the area (2) where a questi'on arises under this section as to whether an assessing officer has j uxisdiction to assess any person, the question shall be de~rmined by the dir~ctor general or the chief commis-10 sioner or the commissioner; or where the question is one relating to areas within the jurisdiction of different directors genera} or cruef commissioners or commission~rsj by the direc~ors general or chief commissioners or commissioners concerned or, if tl¥?y are not in agreement, by the board or by such director ge·neral or chief com- 15 missioner or commissioner as the board may, by notification in the <;)fticial gazette specify (3) no person shall be entitled to call in question the jurisdiction of an assessing officer- (a) where he has made a return under sub-section (1) of' 20 section 139, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 142 or sub-section {2) of section 143 or after the completion of the assessment, whichever is earlier; (b) where he has made no such return, after the expiry of 25  the time allowed by the notice under sub-section -11) of section 142 or under section 148 for the making of j;he return or by the notice under the first proviso to section 144 to show cause why the assessment should not be completed to the best 30 of the judgment of the assessing officer, whichever is earlier (4) subject to the provisions of sub-section (3), where an assessee calls in question the jurisdiction of an assessing -officer, then the assessing officer shall if not satisfied with the correctness of the claim refer the matter for determination under sub-section (2) before the assessment is made 35 (5) notwithstanding anything contained in this section or jn any direction or order issued under section 120, every assessing officer shall have all the powers conferred by or under this act on an assessing officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested 40 with jurisdiction by virtue of the directions or orders issued under sub-section (1) or sub-section (2) of section 120" bubatitu- 35 for section 127 of the income-tax act  the following section shall tion of be substituted with effect from the 1st day of april, 1988, namely:-!lew sec· tion for seet10n 12'1 power to transfer e  '121 (1) the director general or chief commissioner or com- 45 missioner may, after giving the assessee a reaso':lable opportunity of being heard in the matte·r, wher,ever it is possible to do so, and after recording his reasons for doing so, transfer any ease from one at' more assessing officers subordinate to him (whether with or without concurrent jurisdiction) to aoy other assessing officer or assessing officers (whether with or without concurrent jurisdiction) also subordinate to him 5 (2) where the assessing officer or assessing officers' 1rom whom the case is to be transferred and the assessing officer or assessing officers to whom the case is to be transferred are not subordinate to the same director ge~ral or chief commissioner or commissioner,-]0 15 «(i) where the directors general or chief commissioners or commissioners to whom such assessing officers are subordinate are in agreement, then the director general or chief commiesioner or commissioner from whose jurisdiction the casie is to be transferred may after giving the assessee a reasonable opportunity of being heard in the matter, ,wherjever it is possible to do so, and after recording his reasons for doing so, pass the order; 20 (b) where the dfrectors general or chief commissioners or commissionjers aforesaid are not in agreement, the order trans-jerring the case may similarly, be passed by the board or any such director general or chief commissioner or commissioner as the board may, by notification in the official gazette, authorise in this ~half 25 (3) nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any assessing officer or assessing officers (whether with or without concurren,t jurisdiction) to any qther assessing officer or assessing officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situatea in the same city, locality or place 30 (4) the transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the assessing officer or assessing officers from whom the case is transferred 35 40 explanation-in section 120 and this section, the word "cue", in relation to any person whose name is specified in 8iiy' order or direction issued thereunder, means all proceedings under thii act in respect of any year which may be pending on the date of iuch order or direction 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 or direction in respect of any year' 36 in section 131 of the income-tax act,-45 amead ment of section 131 (a) in sub-section (la); for the words "if the assistant director of inspection", the words, brackets and figures "if the 'direclor-general or director, or the authorised officer referred to in subsection (1) of section 132, before he takes action under clauses (i) to (v' of that sub-section," shall be substituted; (0) sub-section (2) shall be omitted ~ in section 132 of the income-tax act,-(a) in sub-section (1) ,-amend  ment of ,ection 132 :-,(i) for the words "or income-tax officer" occurring in ~lauses (a) and (b), the words "assistant commissioner or 5 ~come-tax officer" shall be substitutedj (ii) in the proviso, for the word and figures "section 121", the word and figures "section 120" shall be substitutedj (b) in sub-section (la), for the word and figures "section 121", the word and figures "section 120" shall be substituted; 10 i (e) in sub-section (3), the following explanation shall be insert-'ed at the end, namely: -"explanation-for the removal of doubts, it is hereby declared that serving of an ord[er as aforesaid under this subsection shall not be deemed to be seizure of such books of account 15 other documents, money, bullion, jewellery or ot~r valuable article or thing under clause (iii) of sub-section (1) "; (d) in sub-section (4), the following explanation shall be insert-' ed at the end, namely:-"explanauon-for the removal of doubts, it is hereby dec1ar- 20 ed that the examination of any person under this sub-section i may be not merely in respect of any books of account, other documents or assets found as a result o'f the £earch, but also in respect of all matters relevant for the purposes of any investigation connected 'with any proceeding under the indian income-tax 25 act, 1922, or under this act"; 11 of 1912 (e) after sub-section (8), the fonowing sub-section shall be in-,,erted, namely:-"(8a) an order under sub-section (3) shall not be in force for a period exceeding sixty days from the date of the order, 30 ucept' where the authorised officer, for reasons to be recorded by , , him in writing, extends the period of operation of the' order beyond sixty days, after obtaining the approval of the commlslioner· for such extension: provided that the commissioner shall not approve the ex-35 tension of the period for any period beyond the expiry of thirty days after the completion of all the proceedings under this act in respect of the years for which the books of account, other documents, money, bullion, jewellery or other valuable articles or thinggare' relevant"; 40 38 in section 132a of the income-tax act, in su~~ti()n (1), for the amendwords "or income-tax officer", the words ii, assistant commissioner or ment of section income-tax officer" shall be substituted 132a 39 in section 133 of the income-tax act,-5 amendmentol section 133 (a) in clause (4), for the words "four hundred rupees", the words "one thousand rupees, or such higher amount as may be prescribed" shall be substituted; (b) the following proviso shall be added at the end, namely:-"provided that the powers referred to in clause (6), may 10 also be exercised by the director-general, the chief commissioner, the director and the commissioner" 40 in section 133a of the income-tax act; in th~ explanation, in clause amend-(a), for the words "if so authorised by the income-tax officer", the words ment of "if so authorised by any such authority" shall be substituted section 133a 15 41 in section 138 of the income-tax act, in sub-section (1) ,-amendment of section 138 20 (i) in clause (a), for the words and figures i'relating to any assessee in respect of any assessment made under this act or under the indian income-tax act, 1922", the following shall be substituted, namely:-"received or obtained by any income-tax authority in the performance of his functions under this act"; (ii) in clause (b),-11 of 192:l 25 (i) for the words, figures and letters "in respect of any assessment made under this act or the indian income-tax act, 1922 on or after the 1st day of april, 1960", the words "received or obtained by any income-tax authority in the performance of his functions under this act" shall be substituted; '  (2) the words "in respect of that assessment only" shall be omitted 30 42 in section 139 of the income-tax act,-amendment of sub-section shan be sub- section (a) for sub-section (1), the following stituted, namely:-139  - (1) every person, if his total income or the total income of any other person in respect of which he is assessable under this 53 act during the previous year exceeded the maximum a,mount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other "person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other 40 particulars as may be prescribed explanaticm-in this sub-section, "due date" means-(a) where the assessee is a company, th~ 31~t day of december of the assessment year; (b) where the assessee is a person, other than a company,-(i) in a case where the accounts of the assessee art: required under this act or any other law to be audited, or in the case of a co-operative society, the 31st day of 5 i october of the assessment year; (ii) in a case where the total income referred to in this sub-section includes any income from business or profession, not being a case falling under sub-clause (i), the 31st day of august of the assessment year; 10 (iii) in 'any other case, the 30th day of june of the assessment year'; (b) sub--section (2) shall be omitted; (e) in sub-section (3) [as amended by section 12 of the taxation laws (amendment and miscellaneous provisions) act, 1986],-15 46 of 1988 i (i) the words, brackets and figures "has not been served with a notice under sub-section (2) ," shall be omitted; (ii) the words "or by the thirty-first day of july of the assessment year relevant to the previous year during which the loss was sustained" shall be omitted; 20 (d) for sub-sections (4) and (4a) , the following sub-sections ahall be substituted,· namely:-"(4) any person who has not furnished a return within the time allowed to him under sub-section (1), o:r within the time allowed under a notice issued under sub-section (1) of section 25 142, may ful'ilish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier: provided that where the return relates to a previous year 30 relevant to the assessment year commencing on the 1st day ot april, 1988, or any earlier assessment year, the re~rence to one year aforesaid shall be construed as a reference to two years from the end of the relevant assessment year (4a) every person, trust or institution referred to in sub- 35 aection (1) of section 80f shall, if the total income in respeet of which such person, trust or institution is assessable (the total income for this purpose being computed without giving effect to the provisions of that section) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such 40 income of the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed, and all the provisions of this act shall, so far as may be, apply as if it were a return required to be fu,miahc:d, undw sub-~tion (1) ";  (e) for sub-section (5), the following sub-eection shall be submituted, namely:- (5) if any person, having furnished a return under suitsection (1), or in pursuance of a notice issued under sub-aectloil 5 (1) of section 142, discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier: 10 provided that where the return relates to the previous year relevant to the assessment year commencing on the 1st day of april, 1988, or any earlier assessment year, the ~ence to one year aforesaid shall be construed as a reference to two years from the end of the relevant assessment year "; 15 <f) in sub-sections (6) and (6a) , for the words, brackets and figures "in sub-sections (1), (2) and (3) ", the words, bntckets and figures "in sub-aections (1) and (3) of this section, and in clause (it of sub-section (1) of section 142" shall be substituted; (g) 8ub-section (7) shall be omitted; 20 (h) in sub-section (8), after clause (b), the following clause shall be inserted, namely:-ce (c) the provisions of this sub-section shall apply in respect of the assessment for the assessment year commencing on the 1st day of april, 1988 or any earlier assessment year, and refer-25 ences therein to the other provisions of this act shall be construed as references to the said provisions as they were appli-i cable to the relevant assessment year"; (i) in sub-section (10) in the proviso, for clauses (e) and (ei) the following clauses shall be substituted, namely:-30 "(c) a return of loss which has been furnished in accordance with the provisions of sub-section (3); (d) a return furnished under sub-section (4a), in respect of a person, trust or institution ljeferred to in sub-section (1) of section sof;" 3s 43 in section 139a of the income-tax act,-amende jdeotof section ida (i) in sub-sections (1) and (2) for the words "any accounting year", the words ceany previous year" shall be substituted; (u) in sub-section (6) after clause (b), the following clause shall be inserted, namely:-"(c) the categories of documents pertaining to business or profession of the persons to whom permanent account numben have been allotted, in which such numbers shall be quoted by tbem"i (iii) in the ezpi4ution, clause (a) shall be omitted  44 in section 140 of the income--tax act,-(i) for clause (a), the following clause shall be substituted, namely:-amendlzleni of mctba 140  (a) in the case of an individual,-(i) by the individual himself; 5 (ii) where he is absent from india, by the individual himself or by some person duly authorised by him in this behalf; (iii) where he is mentally incapacitated from attending to his affairs, by his guardian or any other person competent 10 to act on his behalf; and (iv) where, for any other reason, it is not possible for the individual to sign the return, by any person duly authorised by him in this behalf: provided that in a case referred to in 8ub-clause (ii) or bub 15 clause (iv), the person signing the return holds a valid power of attorney from the individual to do so, which shall be attached to the return;"; (ii) to clause (c), the following provisos shall be added, namely:-"provided that where the company is not resident in india, 20 the return may be signed and verified by a person who holds a valid power of attorney from such company to do so, which shall be attached to the return:  provided further taat,-(a) where the company is being wound up, whether 25 under the orders of a court or otherwise, or where any person has b~ appointed as the receiver of any assets of the company, the return shall be signed and verified by the liquidator referred to in sub-section (1) of section 178; (b) where the management of the company has been 30 taken over by the central government or any state government under any law, the return of the company shall be signed and verified by the principal officer thereof;"; (iii) after clause (d), the following clause shall be inserted, bamely: -3!)  (dd) in the case of a political party referred to in subsection (4b) of section 139, by the chief executive oftlcer of such party (whether such chief executive ofticer is known as secretary or by any other designation);"  45 in section 140a of the income-tax act,- 40(a) in sub-8ection (1),-amendmentor aec:tiod 140\ (i) for the words "the assessee shall be liable to pay iuch tax before furnishing the return and the return shan be accompanied by proof of payment of such tax", the following shall be substituted, namely:-"the assessee shall be liable to pay such tax, together with interest payable under any provision of this act for any 5 delay in furnishing the return or any default or delay in payment of advance tax, before furnishing the return and the return shall be accompanied by proof of payment of such tax and interest"; (ii) the following explanation shall be inserted at the end, 10 namely:-"explanation_where the amount paid by the assessee under this sub-section falls short of the aggregate of the tax and interestbb aforesaid, the amount so paid shall first be adjusted towards the interest payable as aforesaid and 15 the balance, if any, shall be adjusted towards the tax payable"; (b) for sub-section (3)" the following sub-section shall be substituted, namely:-20 "(3) if any assessee fails to pay the whole or· any part of such tax or interest or both in accordance with th~ provisions of sub-section (1), he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax or interest or both remaining unpaid, and all the provisions of this act shall apply accordingly" 46 section 141a of the income-tax act shall be omitted 25 omission of be,etlon 141a 47 in section 142 of the income-tax act, in sub-section (1),-amend mentor sectioa 142 30 (a) in the opening paragraph for the words, brackets and figures "or to whom a notice has been issued under sub-section (2) of section 139 (whether a return has been made or not) ", the words, brackets and figure "or in whose case the time allowed under sub-section (1) of that section for furnishing the return has expired" shall be substituted; (b) clauses (i) and (ii) shall be re-numbered as clause (ii) and (iii) thereof respectively, and before clause (ii) as so re-numbered, '35 the following clause shall be inserted, namely:-ii (i) where such person has not made a return before the end of the relevant assessment year to furnish a return of his income or the income of any other person in respect of which he is auessable under this act, in the prescribed form and veri-40 fied in ~e prescribed manner and setting forth such other paracu1an as may be preacribed, 01"' a for aecuon 143 of the income-tax aet, the following section iball be substituted, namely:-"143 (1) (4) where a return has been made under section 138, or in response to a notice under sub-section (1) of sectron 142,-(i) if any tax or interest is found due on the basis ot such 5 return, after adjustment of any tax deducted at source, aj:iy advance tax paid and any amount paid otherwise by way of tax or interest, then, without prejudice to the provisiom ,of subsection (2) an intimation shall be sent to the assessee speclfyina the sum 10 payable, and such intimation ahall be deemed 10 to be a notice of demand issued under section 156 and all the provisions of this act shall apply accordingly; and (ii) if any refund is d~ on the basis of such return, it shall be granted to the assessee: provided that in computing the tax or interest payable by, or 15 refundable to, the assessee, the following adjustments shall be made i the income or loss ~lared in the return, namely:-(i) any arithmetical error~ in the return, accounts or documents accompanying it shall be rectified; (ii) any loss carried forward, deduction allowance or 20 relief, which on the basis of the information available in such return, accounts or documents, is pri,1714 facie admissible but which is not claimed in the return, shall be allowed; (iii) any loss carried forward, deduction, allowance or relief clai~ in the return, which, on the basis of the information 25 available in such return accounts or documenta is prima facie inadmissible, shall be disallowed (b) where as a result of an order made under section 147 or section 154 or section 15~ or section 250 or section 254 or section 260 or section 262 or section 263 or section 264, or any order of settlement 30 made uncer sub-section (4) of section 245d relating to any earlier assessment ~ar and passed subsequent to the filing of the retum referred to in clause (a), there is any variation in the carry forward loss, deduction, allowance or relief claimed in the return, and as it result of which,-35 (i) if any tax or inte~t is found due, an intimation shall be sent to the assessee specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under section 156 and all the provisions of this act shall apply accordingly, and 40 (ii) if any refund is due, it shall be granted to the assessee: provided that an intimation for any tax or interest due under this clau~ shall not be sent after the expiry of four years from the end of the financial year in /which any such ot'der \vas passed (2) in a case referred to in sub-section (1), if the assesaing ojilcer codsidera it neeeaary or expedient to ensure that the bsieiii88 bas not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, he shall serve on the 5 assessee a notice requiring him on a date to be specified therein, either to attend his office or to produce, or cause to be produced there, any evidence on which the assessee may rely in support of the return: provided that no notice under this sub-section shall be served 10 on the assessee after the expiry of the financial year in which the return is furnished or the expiry of six months from the end of the month in which the return is furnished, whichever is later (3) on the day specified in the notice issued under sub-section (2), or as soon afterwards as may be, after hearing such evidence is as the assessee may produce and such other evidence as the assessing officer may require on specified points, and after taking into account all relevant material which he has gathered, the assessn!s officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and detennine the sum payable 20 by him on the basis of such assessment" 49 in section )44 of the income-tax act-amendment of (a) in clause (a) for the words, brackets and figures "by any section notice given under sub-section (2) of section 139", the words, brackets 144 and figures "under sub-section (1) of section 139" shall be substituted; 2s (b) for the words "shall make the assessment", the words "shall, after giving the assessee an opportunity of being heard, make the assessment" shall be substituted; (c) the words "or refundable to the assessee" shall be omitted; (d) the following provisos shall be added at the end, namely:-30 "provided that such opportunity shall be given by the assessing officer by serving a notice calling upon the assessee to show cause, on a date and time to be specified in the notiee,  why the assessment should not be completed to the best of his judgment: 35 provided further that it shall not be necessary to give such opportunity in a case where a notice under sub-section (1) of section 142 has been issued prior to the making of an assessment under this section" 50 in section 144a of the incomfi!-tax act, sub-section (z) shall be amend-40 omitted ment of \cction 144a 51 section 144b of the income-tax act shan be omitted omission of seelion ih8 52 in section 145 of the income-tax act, in sub-section (1), after the proviso, the following proviso shall be inserted, name1y:-amcndmentor section 145 "provided further that where no method of accounting is regularly employed by the assessee, any income by way of interest on securities shall be chargeable to tax as the income of the previous 5 year in which such interest is due to the assessee" 53 section 146 of the income-tax act shall be omitted omission of section 146 m for sections 147 and 14'8 of the income-tax act, the following sections shall be substituted, namely:-substitution of new sectioda for lections 147 and 148 income escaping luiiie-ment "147 if the assessing officer, for reasons to be recorded by him 10 in writing, is of the opinion that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the pro- 15 ceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): provided that where an assessment under sub-section (3) of 20 section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to t&x has escaped assessment for such assessment year by rea90n of the failure on the part of the assessee 25 to make a return under section 139 or in response to a notice issued under sub-sectk>n (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year explanation i-production before the assessing ofticer of 30 account books or other evidence from which material evidence could with due diligence have been discovered by the assessing officer nil! not necessarily amount to disclosure within the meaning of the foregoing proviso explanation 2-for the purposes of this section, the following 35 shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely:-(a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this act 4 ) during the previous year exceeded the maximum amount which is not chargeable to income-tax; 5  (b)  where a return of income has deen furnished by the iise8&ee but no assessment has been made and it is noticed by the assellling ofticer that the assessee has understated the income or has claimed excessiv~ loss, deduction, allowance or relief in the return; (c) where an assessment has been made, but-(i) income chargeable to tax has been underassessed; or (ii) such income has been assessed at too iowa rate; or (in) such income has been made the subject of excessive rejief under this act; or, 10 (i~) excessive loss or depreciation allowance or any other allowance under this act has been computed 15 &iue of diiiiei where ill come has escaped assessment 20 148 before making the assessment, reassessment or recomputation under section 147, the assessing officer shall serve on the assessee a notice requiring him to furnish within -sucfl period, not being less than thirty days, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139" 55 in section 149 of the income-tax act, for sub-section (1), the 25 following sub-section shall be substituted, name1y:-amend ment of section 149 "(1) no notice under section 148 shall be issued for the relevant assessment year,-(a) in a case where an assessment under sub-section (3) of section 143 or section 147 has been made for such assessment 30 year,-(i) if four years have elapsed from the end of the relevant assessment year, unless the case falls under sub-clause (ii) or sub-clause (iii); 35 (ii) if four years, but not more than seven years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees fifty thousand or more for that year; 40 (iii) if seven years, but not more than ten years, have elapsed from the end of the relevant 81isessment year, unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to more than rupees one lakh or more for that year; (b) in any other ease,-45 (i) if four years have elapsed from the end of the relevant assessment year, unless the case falls under sub-clause (it) or sulh:1aulle (iii); (ii) if four years but dot more than teved year  have elapsed from the end of the relevant  ment year, unlem the income chargeable to tax which has escaped bblebsment amounts to or is likely to amount to rupees twenty-five thousand or more for that year; 5 (iii) if seven years, but dot more than ten years, have , elapsed from the end of the relevant assessment year, udlea the income chargeable to tax which haa escaped assessment amounts to or is likely to amount to rupees fifty thousand or more for that year 10 explanation-ln determining income chargeable to tax which has escaped assessment for the purposes of thia su~ection, the provisions of explanation 2 of section 147 shall apply as they apply for the purposes of that section" 56 in section 150 of the incom!!-tax act, in sub-section (1), the 15 words "or by a court in any proceeding under any other law" shall be added at the end amendment of section 150 57 for section 151 of the income-tax act, the following section shall be substituted, namely:-substitution of new 8e(:-tion for section 151 sanction for iaue of dodce "151 (1) in a case where an assessment under sub-section 20 (3) of section 143 or section 147 has been made for the relevant assessment year, no notice shall' be issued under section 148 except by an assessing officer of the rank of assistant commissioner or deputy commissioner: provided that, after the expiry of four years from the end of 25 the relevant assessment year, no such notice shall be issued unless the chief commissioner or commissioner is satisfted, on the reasons recorded by the assessing officer aforesaid, that it is a fit case for the issue of such notice (2) in a case other than a case falling unaer sub-section (1), no 30 notice shall be issued under section 148 by an assessing ofticer, who is below the rank of deputy commissioner, after the expiry of four years from the end of the relevant aueasment year, unless the deputy commissioner is satisfied, on the reasons recorded by such as~essing oftlcer, that it is a fit case for the ilsue of such notice" 35 amendment ef section 152 58, in section 152 of the income-tax act, in sub-section (2), for the words, brackets, letter and figures "in circumstances falling under clause (b) of section; 147"" the words and figures "under section 147'" shall be substituted 59 in section 153 of the income-tax act,-40 amendment of aection lb! (a) for sub-section (1), the following sub-eection shall be substituted, namely:-"(1) no order of assessment shall be made under section 143 or section 144 at any time after the expiry of two years from the end of tae aaeament yeer in whieh the income wal first assessable"; (b) for sub-section (2), the following bub-section shall be substituted, namely:-"(2) no order of assessment, reassessment· or recomputation shall be made under section 147 after the expiry of two years from the end of the financial year in which the notice under section 148 was served: provided that where the notice under section 118 was 10 served on or before the 31st day of march, 198'7, such assessment, reassessment or recomputation may be made at any time up to the 31st day of march, 1990 "; (c) clause (iv) of erp14nation 1 shall be omitted 60 in section 154 of the income-tax act, for sub-section (1) the 1 s following sub-section shall be substituted, namely;-amendment of section 154, "(1) with a view to rectifying any mistake apparent from the record an income-tax authority referred to in section 116 may,-(ij) amend any order passed by it under the provisions of this act; 20 (b) amend any intimation sent by it under sub-section (1) of section 143, or enhance or reduce the amount of refund granted by it under that sub-section" 81 in section 155 of the income-tax act,-amendment of ledion iss (a) in sub-section (1), in the opening paragraph, for the words ''where in respect of any completed assessment of a partner in a firm", the words, figures and letters "where, in respect of any completed assessment of a partner in a firm for the assessment year i commencing on the 1st day of april 1989, or any earlier assessment year," shall be substituted; 30 (b) sub-4ectio!ll (3) ad (13) shall be omitted; (c) sub-sections (5b), (6) (7a) , (8), (ia), (i), (9a), (10), (lob) and (loe!) shall be omitted with effect from the 1st day of april, 1m ~d­ment of metion 1s8 82 in section 158 of the income-tax act, for the words ''whenever a 3$ registered ftrm is bssmled", the words, figures and letters "whenever, in respect of the assessment year commencing on the 1st day of april, 1989, or any earlier 8saessment year, a registered firm is useaed"shall be _blltltute4 - after section 158a of the i~tax act the followm, chaptel shall be inserted, namely:- "chapi'er xlv-b charg& of additional income-tax in certain casi'b1mb t1) where in the case of any person, the total income 5 iletermined in the regular, assessment for any assessment year ~hereafter in this section referred to as assessed income) exceeds ihe total income declared in the return of income furnished by suca person for that assessment year (hereafter in this section referred ~ as returned income) by any amount, the assessing officer shall 1 -  make an order in writing that luch person shall, apart from the sum determined as payable by him on the basis of the assessment under section 143 or section 144:, be liable to pay, by way of additionaj income-tax, in respect of the said assessment year, a sum calculated on such excess amount at the rate of thirty per cent is (2) for the purposes of sub-section (1) ,-(a) where such person has furnished two or more returil£ of income for the same assessment year, the total income declared in the return furnished last before the service of a notice under sub-section (2) of section 143 on such person shall be 2 treated as the returned income; fb) where such person tails to furnish the return of income in respect of any assessment year and the assessment for that year is made under section 144, the returned income shall be aken to be the total income on which tax, by way of advance 25 tax, deduction of tax at source and otherwise, has been paid, and where no such tax has been paid, the returned income shall be taken to be nil; (c) where such person fails to furnish a return of income for any assessment year under section 139, but furnishes such return 3 after he is served with a notice under section 148, the returned income shall be taken to be the total income on which tax, by way of advance tax, deduction of tax at source and otherwise, i bas been paid, and where no such tax has been paid, the returned income shall be taken to be nit; 35 (d) where such person has furnished a return of loss under i iiub-section (3) of section 139 for any assessment year, the addi- , tional income-tax under sub-section (1) shall be calculated at the rate specified in that sub-secti'on on the sum or as the case may be, the aggregate at the sums by which the loss is reduced 48 to a lower amount or, as the caose may be, converted into a positive amount of income in the regular assessment (3) where, as a result of an order under section 17 or section· 1m or· section 155 or ~ection 250 or section 254 or section 280 or eetion 262 or section 2~ or section 2m or an order of settlement 45 passed under sub-section (4) of section 245d, the amount on which the additional income-tax is payable under sub-section (1) has be ••  increased or reduced" as the case may be, the admtional incometak shall be increased or reduced accordingly, and- (i) in a case where the additional income-tax is increased, the assessing officer shall serve on the assessee a notice of deman in the prescribed fqtdl specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 156 and all the provisions of this act shall apply accordingly; (ii) in a case where the additional income-tax is reduced, the excess amount paid, if any, shall be refunded (4) the chief commissioner or commissioner may, in his discrewon, whether on his own motion or otherwise, waive or  reduce the amount of additional income-tax payable under sub-section (1) by any person, if he is satisfied that the whole or, as the case may be, any part of the excess amount referred to in that sub-section is attn-15 butable to any amount added or disallowed in computing the assessed income or loss as a result of the rejection of any explanation (by war of interpretation of any provision of this act or otherwise) offered by such person, if such explanation is bona fide and all the facts relating to the same and material to the computation of the assessed 20 income or loss have been disclosed by him: provided that-(i) where an appeal before the deputy commissioner (appeals) or the commissioner (appeals) has also been filed by the assessee against the order of assessment, the petition for 25 waiver or reduction of the amount of additional income-tax cad be filed by the assessee only after the decision on s'-'~ appeal; (ii) the petition for waiver or reduction of the amount of additional 'income-li:ax shall be accompanied by a fee of one hundred rupees 30 (5) where, in the course of a search under section 132, the assessee is found to be the owner of any money, bullion jewellery or other valuable article or thing and the assessee claims that such asset have been acquired by him by utilising (wholly or in part) his income,-35 (a) for any previous year which has ended before the date of the search, but the return of income for such year has not been furnished before the said date or, where such return has been furnished before the said date, such income has not heed declared therein; or (b) for any previous year which is to end on or after the date of the search, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, such income shall '!lot, for the purposes of liability to t~ additional incometu \u1der this section, be treated as farmin, ~ of the ntumecl income, unless,-(i) such income is, or the transactions resulting in such ifteome are, reeorded,-(a) in - cue falling under c:lauict (ca), before the date s of the aearch; and (b) in a case falling under clause (b), on or before the date of the search, in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the chief 10 commissioner or comm::i6ioner before the said date; or (ii) the asseasee, in the course of the search, makes a statement under sub-section (4) of section 132 that the money, bullion, jewellery or other valuable article or thing found in his posees~  on or under his control, has been acquired out of his income 15 which has not been disclosed so far in his return of income to be furnished before the expiry of the time specified in sub-section (1) of section 189, and also specifies in the statement the manner in which such income has been derived and pays the tax together with interest, if any, in respect of such income 20 (6) th~ additional income-tax payable under this section shan not be lncluded-(i) in the ~ount of the tax payab1e on the total income 81 determined on regular assessment, for the purposes of 8u\>section (l) of section 234a; or  5 (io in the amount of the assessed tax, for the purposes of 8u~section (1) of section ~" if in section 164 of the income-tax act,-(a) in su~section (1) ,-amendment of aection 1m (i) in the opening portion, for the brackets, figures and worda 30 " (1) subject to the provisions of sub~ections (z) and (3), where" the word "where" ahall be substituted: (ii) in the first proviso, for the words "assoclation of pel'lolll", in the two places where they occur, the word "individual" shall be sudstituted; 3s (b) sub-sections· (2) and (3), and explanation 2 shall be omitted   in section 164a of the income-tax act, in the ezpla"atioft, clause (i) shall be omitted amendment of lectioa 164a lubltitatiod of  in chapter xv of the income-tax act, for the bub-headini "dd-alociatioft of persons-8pecial cases", and section 167a below it, the lot 40 lowing ,hall be substituted, namely:-ilew leotiona tor lcctioa 167a 167a in the case at a 1lri8 which is ulessaue as a firm, tax allul be charged oil it total income at the maximum margidal rate caarp of tax m the cue of a tirm 21 of 1860 5 16'1b (1) where the individual shares of the members of ad association of persons or body of individuals [other than a companj or a co-operative society or a society registered under the socleti  registration act, 1860 or under any law corresponding to that act in force in any part of india] in the whole or any part of the income of such association or body are indeterminate or unknown, tax shall be charged on the total income of the uaodation or body at the maximum marginal rate 10 cbarac of tax where lharetl of members 10 luisociatlod of persons or body of lnuividuab ankdowd, $ is (2) where, in the case of an associ,ation of persons or bod, at individuals as aforesaid [not being a case falling under sub-section (1)], the total income of any member thereof for the previous year (excluding his share from such association or body) exceeds the maximum amount which is not chargeable to tax in the case of an individual under the finance act of the relevant year, tax shall be chargec\on the total income of the association or body at the maximum marginal rate: provided that, where the total income of any member of uch 20 association or body (whether or not it exceeds the maximum amount aforesaid) is chargeable to tax at a rate which is higher than the maximum marginal rate, tax shall be charged on the total income of the association or body at such higher rate' erplcmation-j'or the purposes of this section, the individual ls shares of the members of an ablociation of persons or body of individuals in the whole or any part of the income of such associauoil or body shall be deemed to be indeterminate or unlmown if such share8 (in relation to the whole or any part of such income) are indetermi  nate or unknown on the date of formation of such association or bod, 30 or at any time thereafter" 67 sub-heading "a-assessment of firms" and sections 182 and 183 of the income-tax act shall be omitted omission ii iecliodl 182 an4 ill 68 for the sub-heading "b-registration of finn'" before section 1m and for sections 184, 185 and 186 of the income-tax act, the following 35 sections shall be substituted, namely:-substi tution of new aectioll8 for aectiona 184, 181 add 1m "1m (1) a firm lbau be albesaed al a firm for the ~ 01 a-- thia act, ifmen&  - 8ra (i) the partnership is evidenced by an instrumentj anc! (it) the individual ,bani of the partner are apeoiw iia that illslrument (2) a certified copy of the instrument of partnership referred to· in sub-seetion (1) shall aecompanythe return of income of the firm of the previous year for the assessment year in respect of whick assessment as a firm is first sought explanaltion-for the purposes of thil sub-section, the copy of 5 the instrument of partnership shall be certified in writing by all the partners (not being minors) or, where the return is made after the dissolution of the finn, by all persons (not being minors) who were partners in the finn immediately before its dissolution and by the legal representative of any such partner who is deceased 10 (3) the return of income referred to in sub-section (2) shall be signed and verified by all the partners, not being minors (4) where a firm is assessed as such for any assessment year, it shall be assessed in the same capacity for every subsequent year if there is no change in the constitution of the firm or the shares 15 of the partners as evidenced by the instrument of partnership on the basis of which the assessment as a firm was first sought (5) where any such change had taken place in the previous year, the firm shall furnish a certified copy of the revised instrument of partnership along with the return of income for the -assessment 20 year relevant to such previous year and all the provisions of this section shall apply accordingly (6) notwithstanding anything contained in the foregoing provisions of this section, where, in respect of any assessment year, there is, on the part of a firm any such failure as is mentioned in section 2 144, the firm shall not be assessed as such for the said assessment year and, ~reupon, the finn shall be assessed in the same manner as an association of persons, and all the provisions of this act shall apply accordingly , 185- where a finn does not comply with the provisions of section 30 184 for any assessment year, the firm shall be assessed for that assessment year in the same manner as an association of persons, and all the provisions of this act shall apply accordingly" assess· ment when iection 184 not co~ pllecl with 69 in section 187 of the income-tax act, in su~section (1), the proviso, shall be omitted 3~ amend mentof lection 187 70 after section 188 of the income-tax act, the following sectio shall be ;nserted, namely:-insertion of new section 188a joint and iiievera1 liability "l88a every person who was, during the previous year, a partner of a firm, and the legal representative of any such person who is deceased, shall be jointly and severally liable along with the firm 4q  for the amount of tax, penalty or other sum payable by the firm for the assessmellt year to which such previous year is relevant, and all the provisions of this act: so far as may be, shall apply to the ;:- assessment of such tax orimposttion or levy of iuch penalty or ,othej: sum 41 o~ part ner, for tax payable br firm 71 in section 189 of the income-tax act, the exp~nation below stabsection (3) shall be omitted 72 in chapter xvi of the income-tax act, after section 189, the following section shall b,e inserted, namely:-amend ment ot section lsi insertion ef new ecuon 189a "189a in relation to the assessment of any firm and its partners for the assessment year commencing on the 1st day of april, 1988, or any earlier assessment year, the provisions of this chapter as they stood immediately before the date of commencement of the direct tax laws (amendment) act, 1987, shall continue to apply" provisions applicable to pqt aasessments ot firms l' 73 in section 1~ of the income-tax act, in sub-section (3), clause (iv) shall be omitted with effect from the 1st day of april, 1988 amendment ot ection 194a 74 after section iimd of the income-tax act, the following sectioil shall be inser~d with effect from the 1st day of april, 1988, namely:-insertion rnew lection 194e "194e (1) any person assessable as a firm who is responsible for paying to a partner any income by way of,-15 (a) interest on capital or any other sum borrowed by it from the partner; (b) salary, bonus, commission or remuneration', by whatevtu" na~ called lnterest, salary, bonus, commissioo ec remuneration to partners :20 shall at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct incometax on the estimated amount of the interest or, as the case may be, salary, bonus, comniission or remuneration aforesaid due to the partner during the financial year at the average rate of income-tax computed on the basis of the rates in force for that financial year in which such income is credited or paid to the partner '  30 40 (2) where, during the financial year, an assessee derives such income simultaneously from more than one firm or where he was successively a partner in more than one ftrm, he may furnish to the firm ~sponsible for making the payment referred to· in sub-&ection (1) (being one of the said firms as the assessee may, having regard to the circumstances of his case, choose), such details of the payments referred to in sub-section (1) d~ or received by him tram the other ftnn or firms, the tax deducted at source therefrom and such other particulars, in such form and verified in liuch manner 8smay be prescribed, and thereupon the ftnn responsible for making the payment referred to above shall take into account the details 80 furnished for the purp08es of making the deduction under sub-section (1)  (3) where an assessee who receives the payments referred to in sub-section (1) has, in addition, any income other than the income ref_red, to bl iub-lection (1) (not beb\g a loss under any head of income) for the same financial year, he may aend to the firm q5ponlible for making the pay\ident referred to in sub-section (1) the particulars of such other income end of any tax deducred tb!ereon under any other provision of this chapter, in lueh form and verified 5 in such manner as may be prescribed and thereupon the firm responsible as aforesaid shall take such other income and the tax, if any, deducted thereon also into account for the purposes of making the deduction under sub-section (1): provided that this bub-tect1on shall not in any case have the 10 effect of reducing thie tax deduetible from the payments referred to in sub-section (1) below the amount that would be so deductible if the other income and the tax deducted thereon had not been talmn into account (4) the firm respcnsible tor making the payment referred to in i) sub-aection (1) may, at thie time of maldng any deduction, increase tr reduce the amount to be deducted under this section for the purpose gf adjusting any exc1e6s or deficiency arising out of any previous deduction or failure to deduct during ttie financial year" 'fs for section 196 of the income-tax act, the following sections shall 20 be substituted with effect from the 1st day of april, 1988, namely:-"196 notwithstanding anything contained in the foregoing provitiloils of this chapter, no deduction of tax shall be made by any person from any sums payab~ to-(i) the government, or (ii) the reserve bank of india, or subltihationor new icc:uot for aectica 196 inlereet or divideall or otiaer luma payable togovenmenlo reserve bank (iii) a corporation eetablished by or under a central act which is, under any law for the time being in foree, exempt from income-tax on its incomle· 01' certaill corporations (iv) a mutual fund specified under clause (23d) of section 3<) 10, where such sum is payable to it by way of interest or dividend in retpect of any securities or shares owned by it 01' in which it has full bieneficlal interest, or any other ineorne accruing or arising to it tuoot lobe deduc1lld from 196a notwithstanding anythjng eontained in the toregoin~ 35 pro"tsiol'ls of thta chapter, no deduetlon of tax shall be made by a publte seetor lbank at a public fblanclai institution refernd to in dause «23d) of aeetion 10 trom any sums payable to udft-holders of a mutual p'lutd speeifted under that elauee" loma payable te aft holdel'l almatuai puiid 71 for spctions 207 and 208 of the income-tax act, the following sections shall be substituted with effect from the 1st day of june, 1987, namely:-, , ~ i i tiode to eetioda 207 and 208 5 uabillty for payment of advane taz '207 tax shall be payable in advance during any financial year, in accordance with the provisions of sections 208 to 219 (both inclusive), in respect of the total income of the assessee which would be chargeable to tax for the assessment year immediately following that financial ye~, such income being hereafter in this chapter refer red to as "current income" 10 208 advance tax shall be payable during a financial year in every case where the amount of such tax payable by the uses,ee during that year, as computed in accordance with the provision of this chapte-r, is one thousand five hundred rupees or more' conditions of liability top87advance tas 77 in section 209 of the income-tax act, with effect from the 1st day is of june, 1988,-amendment of ~ 209 (a) for sub-section (1), the following sub-section shall be substituted, namely:-"(1) the amount of advance tax payable by an assessee in the financial year shall, subject to the provisions of sub-tect1od1 (2) and (3), be computed as follows, namely:-20 25 (a) where the calculation is made by the assessee for the purposes of payment of advance tax: under sub-lectiod (1) or sub-section (2) or sub-section (5) or suh-section (6) of section 210, he shall first estimate rlls cur:-eilt income and income-tax thereon shall be calculated at the rates in torce in the financial year; 30 (b) where the calculation is made by the assessing ofticer for the purpose of making an order under sub-sectlon (3) of section 210, the total income of the latest previous year in respect of which the assessee has been assessed: by way of regular assessment or the total income retumed by the assessee in any return of income furnished by him for any subsequent previous year, whichever is higher, shall be taken and income-tax thereon shall be calculated at the rates in force in the financial year; 40 (c) where the calculation is made by the assessing officer for the purpose of making an amended order under sub-section (4) of section 210, the total income declared in the return furnished by the assessee for the later previoui year, or, as the case may be, the total income in respect of which the regular assessment, referred to in that sub-secti~ has been made, shall be taken and income-tax thereon ihad be calculated at the rates in force in the financial yem"; cd) the income-tax calculated under mule (ii) or clau (b) or clause (c) shall, fa each cue, ~ ndqeed liir  -mt f iji,  ta wti wftw kit "  ~ source during the said financial year under any provlaion of this act from any income (as computedbefore allowing any deductions admissible under this act) which has been taken into account in computing the current income or, as the case may be, the total income aforesaid; and the 5 amount of income-tax as so reduced shall be the advance to: payable"; (b) in sub-section (2) ,-(i) in clause ,(4) ,-, , i (a) in the opening portion, for the words, brackets, 10 figures and letter "where the assessee sends a statement under sub-section (1) of section 209a or where the incometax officer makes an order under sup-section (1) or subsection (3) of section 210", the words, brackets and figures "where the assessing officer makes an order under sub- 15 section (3) or sub-section (4) of section 210" shall be substituted; (b) for sub-clause (ii) , the following aub-clauie 8ha1l be substituted, namely:-"(ii) if the total income declared by the assessee 20 for the later previous year referred to in sub-section (4) of section 210 forms the basis of computation of advance tax; the nei agricultural income as returned by the assessee in the return of income for the assessment year relevant to such later previous year;"; 2s (ii) for clause (b), the following clause ahall be substituted, namely:-"(b) in cases where the advance tax is paid by the assessee on the basis of his estimate of his current income under sub-section (1) or sub-section (2) or sub-section (5) or 30 sub-section (6) of section 210, the net agricultural income, as estimated by him, of the period which would be the previoui year for the immediately following assessment year;"; (c) in sub-section (3) ,-(i) in the opening portion, for the words and figures "under 35 section 210", the words, brackets and figures "under sub-section (3) or sub-section (4) of section 210" shall be substituted; (ii) in clause (b), for the words, figures and letter "on the basis of which tax has been paid by the hindu undivided family under section 140a", the words, figures and brackets "in respect 40 of which a return of income is furnished by the hindu undivided family wlder section 139 or in response to a notice under subsection (1) of section 142" shall be substituted 78 section 209a of the income-tax act shall be omitted with effect from the 1st day of april, 1988 4s omission at mction da "': 1'or section 210 of the income-tax act, the following section ,shall be substituted 'with 'etfect from the 1st day' of june, 1988, namely:-substi· tution of new mction lot' lectioa 210 "210 (1) every person who is liable to pay advance tax uader  tion 208 (whether or not he has been previously assessed by way of regular assessment) shall of his own accord, pay, on or before each of the due dates specified in section 211, the appropriate percentage, specified in that section, of the advance tax on his current income, calculated in the manner laid down in section 209 10 (2) a person who pays any instalment or instalments of advanee tax under sub-section (1), may increase or reduce the amount of ad- vance tax payab'e in the remaining instalment or in!'ltalments to accord with his estimate of his current income and the advance tax payable thereon, and make payment of the said amount in the remaining instalment or instalments accordingly paymentof advance tax by the' apes see at hja own recont  or in pursuance of order of assesi-mg officer 15 20 (3) in the case of a person who has been already assessed by way of regular assessment in respect of the total income of any previous year and who has not paid any advance tax under sub-section (1) the assessing officer, if he is of opinion that such person is liable to pay advance tax, may, at any time durin!! the financial year but not later than the last day of february by order in writing require such person to pay advance tax calcu'ated in the manner laid down in section 209 and issue to such person a notice of demand under section 156 specifying the instalment or instalments in which such tax is to be paid i  r f~ 2s (4) if, after the makin~ of an order by the assessin(! officer under sub-section (1) and at any time hefore th~ t!':t o::lv of march_ 1'1 retum of income is furnished by the as!':f'ssee under section 139 or in l'esl)onse to a notice under sub-section (1) of section 142, or a 30 ~lar ass~sment of the assessee is made in respect of a previous year later than that referred to in !':ub-section (3), the assessing ofbcer may make an amended order and issue to such as!':essee a notice of  demand under section 156 reouiring the assessee to pay, on or before the due date or each of the due dates specified in section 211 3s faufn~ after the date of the amended order, the appropriate percentage, specified in section 211, of the advance tax computed on the basis of the total income declared in such return or in respect of which the regular assessment aforesaid has been made 40 4s (5) a person who is served with an order of the assessin~ offtcer under sub-~tion (3) or an amended i')rder under sub-section (4) may if tnhfs estimation the advance tax payable on his current income would be less than the amount of the advance tax specifie1 in such order or amended order, send an intimation in th  prec;criheo form: to the assessing officer to that effect and pay such advance tax as· accords with his estimate calculated in the manner laid down in section 209, at the apnropriate percanta~e thereof snecified in !':ectfon 211, on or before the due date or each nf tlie due dates specified in section 211 falling after the date of such intimation (6) a perlon who i aerved with an order 01 the ai  id om under ub-aeetion (3) or amended order under sub-sectlon (4) ball, if in his estimation the advance tax payable on his current income would exceed the amount of advance tax speclfted in such order or amended order or intimated by him under sub-section (5), pay on or before s the due date of the last instalment specified in eetion 211, the appropriate part or, as the case may be, the whole of such higher amount of advance tax as accords with his estimate, calculated in the manner laid down in section 209" subm;l· 80 for section 211 of the income-tax act, the following section hall 10 be substituted with effect from the 1st day of june, 1988, namely:-ti1~ ~ --ieetioa foraectloa 3ll "211 (1) advance tax an the current income, calculated in the manner laid down in section 209 shall be payable by au the asseueea who are liable to pay the same in three instalments during each ftnanelal year, the due date of, and the amount payable in, each such {natal- 15 ment being as specifted in the following table: lditi1-mat of advance taz an4  tajita due date of instalment amount payable on or before the 15th september not less than twenty per cent of such advance tax 20 on or before the 15th december not less than fifty per cent of such advance tax, as reduced by the amount, if any, paid in the earlier instalment on or before the 15th march the whole amount of such ad- 2s vance tax as reduced by the amount or amounts, jf any, paid in the earlier instalment or instalments: provided that any amount paid by way of advance tax on or before the 31st day of march shall also be'treated as advance tax paid during 30 the financlal year ending on that day for all the purposes of this aet (2) if the notice of demand issued under section 156 in pursuance of an order of the assessing officer under sub-section (3) or sub-saetion (4) of section 210 is served after any of the due dates specified in iu~ _ section (1), the appropriate part or, as the case may be, the whole of 35 the amount of the advance tax specified in such notice shall be payable on or before each of such of those dates as fall after the date of service of the notice of demand" 7" 81 sections 212 and 213 of the income-tax act shall be omitted with effect from the 1st day of june, 1988 40 omleaioa of ioctioat  u in aection 214 of the income-tax act,-5 (a) in sub-section (la), after the word and figures "section 264", the words, brackets, figures and letter "or an order of the settlement commission under sub-section (4) of section 245d" ailau be inserted; (b) after sub-section (2), the following sub-section shan 1 inserted, namely:-u (3) this section and sections 215, 216 and 217 shan not ap"ly td respect of any assessment for the assessment year commencin~ on the 10 1st dav of april 1989 or any subsequent agsessment year and, in the , application of the· said sections to the assessment for any earlier assessment year references therein [except in sub-section (1a) and subsection (3) of section 215] to the other provisions of this act shall be construed as references to those provisirms as for the time being fd 15 force and appucab1e to the relevant assessment year" 83 in recti on 215 of th(' income-tax act in sub-section (3), after the amed4-word and figures "section 264" the words brackets, fi~rer and letter meat at "or an order of the settlement commission under sub-section (4) of iectjoa 215 !=ection 245d" shall be inserted 20 84 for section 218 of the income-tax act, the following s~tion shall subltibe substituted with effect from the 1st day of june, 1988, namely:-tutiod of dew' i8ctlod for i8ctloil 218 2s when  lee deemed to be tad fault 30 "218 if any assesspp d~ not "ay on the date snecifier! in subsection (n n!!eetlon 211, any instalment of advance tax that he is j'ai:i'1:it"ed to pay by an order of the assessin~ officer under sub-section (3) or sub-section (4) of section 210 and does not on or before the date on which anv such instalment as is not paid becomes due send to the assessing offtcer an intimation under sub-section (5) of section 21001' does not pavon the basis of his estimate of his current income the advance tax payable by him under sub-section (6) of section 210 he shan be deemed to be an assessee in default in respect of such instalment or instalments" i ama4 85 in section 220 of the income-ta"c act,-mat of (a) in sub-section (1), for the words "thirty-five days", wherever hct101l they occur the words "thirtv days" shall be substituted; • (b) in sub-section (2) ,-3s (t) for the words, brackets and fi~res "fifteen per cent per annum from the day commencing after the end of the period mentioned in sub-section (1) " the words brackets and figure "one and one-half per cent fat' f!!very month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and eddm~ with the day on which the amount ir paid" shall be iubatftuted:  : ' " [ 7'lj (ii) in the proviso, after the word and ftgure "aeetton 2m", the wdrds, brackets, figures and letter "or an order of the settlement commission under sub-section (4) of section 245d" shall be inserted; (iii) after the proviso, the following proviso shall be inserted, 5 namely:-"provided further that in respect of any period commencing on or before the 31st day of march, 1989 and ending after that date, such interest shall, in respect of so much of such period as falls after that date, be calculated at the rate of om 10 and one-half per cent for every month or part of a month  86 in section 222 of the income-tax act,-(4) in sub-section (1), for the portion beginning with the worda "when an assessee is in default" and ending with the words "in accordance with the rules laid down in the second schedule-", the follow- 15 ing shall be substituted, namely:-~ "when an assessee is in default or is deemed to be in default in making a payment of tax, the tax recovery officer may draw up under his signature a statement in the prescribed form specifying the amount of arrears due from the assessee (such statement being 20 hereafter in this chapter and in the second schedule referred to as "certificate") and shall proceed to recover from such assessee the amount specified in the certificate by one or more of the modes mentioned below, in accordance with the rules laid down in the second schedule-'" 25 , (b) for sub-section (2), the following sub-section shall be substituted, namely:-ic (2) the tax recovery officer may take action under 1l1bsection (1), notwithstanding that proceedings for recovery of the arrears by any other mode have been taken" 30 87 for sections 223, 224 and 225 of the income-tax act, the following sections shall be substituted, namely:-substi-tution of new sectiona for sectiodl 223, ~ and 125 "223 (1) the tax recovery officer competent to take action under section 222 shall be-tax recov~ officer by whom recover, ijto be effected (a) the tax recovery omcer within whose jurisdiction the 35 assessee carries  on his business or profession or within whose jurisdiction the principal place of his business or profession ii situate, or (b) the tax recovery oftlcer within whose ju,risdictlon the assessee resides or any movable or immovable property of the 40 assessee is situate, h jurisdiction for this purpose being the jurisdiction gssigiled to the tax recovery officer under th~ orders or directions issued by the board, or by the chief commissioner or commissioner who is authorised in this behalf by the board in pursuance of section 120 5 (2) where an assessee has property within the jurisdiction of more than one tax recovery officer and the tax recovery officer by whom the certificate is drawn up-('4) is not able to recover the entire amount by sale of the property, movable or immovable, within his jurisdiction, or 10 (b) is of the opinion that, for the purpose of expediting or securing the recovery of the whole or any part of the amount under this chapter, it is necessary so to do, he may send the certificate or, where only a part of the amount is to be recovered, a copy of the certificate certified in the prescribed manner and specifying 15 the amount to be recovered to a tax recovery officer within whose jurisdiction the assessee resides or has property and, thereupon, that tax recovery officer shall also proceed to recover the amount under this chapter as if the certificate or copy thereof had been drawn up by him 20 224 it shall not be open to the assessee to dispute the correctness of any certificate drawn up by the tax recovery officer on any ground whatsoever, but it shall be lawful for the tax recovery officer to cancel the certificate if, for any reason, he thinks it necessary so to do, or to correct any clerical or arithmetical mistake therein vali dity of certificate and cance!-lation or amendment thereot 25 30 stay of proceed-ings in pursu- nee of certificate and amendment or cancellation thereot 35 40 225 (1) it shall be lawful for the tax recovery officer, to grant time for the payment of any tax and when he does so, he shan stay the proceedings for the recovery of such tax until the expiry of the time so granted (2) where the order giving rise to a demand of tax for which a certificate has been drawn up is modified in appeal or other proceeding under this act, and, as a consequence thereof, the demand is reduced but the order is the subject-matter of further proceeding under this act, the tax recovery officer shall stay the recovery of such part of the amount specified in the certificate as pertains to the said reduction for the period for which the appeal or other proceeding remains pending (3) where a certificate has been drawn up and subsequenuy the amount of the outstanding demand is reduced as a result of an appeal or other proceeding under this act, the tax recovery officer shall, when the order which was the subject-matter of such appeal or other proceeding has become final and conclusive, amend the certia-cate, or cancel it, as the case may be" 88 in section 226 of the income-tax act,-(a) for sub-section (1), the following sub-sections shall be substituted, namely:-amend· ment of section 228 "(1) where no certiflcate has been drawn up under sectiod 222, the assessing officer may recover the tax by anyone or more of the modes provided in this section ' i (1a) where a certificate has been drawn up under section 222, the tax recovery officer may, without prejudice to the modes of recovery specified in that section, recover the tax by anyone or more of the ~odes provided in this section"; (b) in sub-sections (2), (3), (4) and (5) i for the words "income- 5 tax officer", wherever they occur, the words "assessing officer or tax recovery officer" shall be substituted  88 section 228 of the income-tax act shall be omitted0idia-iloa of tedlod us to in section 22sa of the income-tax act,-amend ment or lection 32sa (a) in sub-section (1) i in clause (a), for the words "l!ipecified in 10 a certificate received from an income-tax officer", the worda and figures "specified in a certificate drawn up by him under section 222" shall be substituted; (b) for sub-section (2), the following sub-section sliall be iubstituted, namely: -1 s "(2) where an assessee is in default or is deemed to be in default in making a payment of tax, the tax recovery officer may, if the assessee has property in a country outside india (being a country with which the central government has entered into an agreement for the recovery of income-tax under 20 this act and the corresponding law in force in that country), forward to the board a certificate drawn up by him under section 222 and the board may take such action thereon as it may deem appropriate having regard to the terms of the agreement with such country" 25 amend· mentot 8eetion 230 91 in section 230 of the income-tax act, in sub-section (1), for the portion beginning with the words "no person who is not domiciled in india", and ending with the worda "shall leave the territory of india", the following shall be substituted, namely:-"no person-'30 (~) who is not domiciled in india; or (b) who is domiciled in india at the time of his departur, bu~ (i) intends to leave india as an emigrant; or (ii) intends to proceed to another country on a work 35 permit with the object of taking up any employment or other occupation in that country; or (iii) in respect of whom circumstances exist which in the opinion of an income-tax authority, render it neceary for him to obtain a certificate under thii section, 40 81 in section 230a of the income-tax act, in sub-section (1), for the words "fifty thousand rupees", the words "one lakh rupees" shall be substituted alnend· mom of section 230a 93 section 231 of the income-tax act shall be omitted omissioo of section 231 5 k in chapter xvii of the income-tax act, after section 234, the following heading and sections shall be inserted, namely:-iluiertion of new sectioil! 23m, 234b and ~4c  'f-intereat chargeable in certain caae810 interest for defaults in furnish ing re_ turn of income 234a (1) where the return of income for any assessment year under sub-section (1) or sub-section (4) of section 139, or in response to a notice under sub-section (1) of section 142, is furnished after the due date, or is not furnished, the assessee shall be liable to pay simple interest at the rate of two per cent for every month or part of a month comprised in the period commencing on the date immediately following the due date, and,-15 (a) where the return is furnished after the due date, ending on the date of furnishing of the return; or (b) where no return has been furnished, ending on the date of completion of the assessment under section 144, on the amount of the tax on the total income as determined on ra-20 gular assessment as reduced by the advance tax, if any, paid and any tax deducted at source explanat'on i-in thi!:~ section, "due date" means the date specified in sub-section (1) of section 139 as applicable in the case of the assessee 25 explarvat"on 2-1n this sub-se~tion and sub-section (3), "tax on the total income as determined on regular assess!'t1ent" shall not include the additional income-tax, if any, payable under section 158b explanjati'lon 3-wnere, in relation to an a<;sessment yf'!ar, an assessment is made f'lr the first time under section 147, the assess-30 ment so made shan be regarded as a regular assessment for the purposes of this section (2) the interest payable under sub-section (1) shall be reduceri by the interest, if any, paid under section 140a towards the interest chargeable under this section 35 (3) where the return of income for any a's~essment veal' reo quired by a notice under section 148 issued after the completion of an assessment under sub-section (3) of section 143 or section 144 or section 147, is furnished after the expiry of the time allowed under such notice, or is not furnished, the assessee shall be liable to pw 40 simple interest a~ the rate of two per cent, for every mnn+h 0" part of a month comprised in the period commencing on the (l;:tv imm"-diately following the expiry of the time allowed as aforesaid ann--(a) where the return is furnished after the expiry of the time aforesaid, ending on the date of furnishing the return; or (b) where no return has' been furnished, ending on the date of completion of the re-assessment or re-computation under section 147, on the amount by which the tax on the total income determined on the basis of such re-assessment or re-computation exceeds the tax 5 on the total income determined on the basis ot the earlier assessment aforesaid -explanation-in this sub-section, "tax on the total income determined on the basis of the re-assessment or re-computation under section 147"' shall not include the additional income-tax, if 10 any, payable under section 158b (4) where as a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the settlement cornmis"lion under sub-settion (4) of section 245d, the amount of tax on which 15 interest was payable under sub-section (1) or sub-section (3) of this section has been jncrea~ ot reduced, as tl1e case may be, the interest shall be increased or reduced acc:jrdingly, and-(i) in a case where the interest is increase:i, the assessing offl-:er shall serve on the assessee a notice of demand in the 20 prescribed form specifying the sum payable and such notice of demand shall be deemed to be a notice un~er section 156 and the provisions of this act shall apply accordingly; (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded 25 (5) the provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of april, 1989 and subsequent assessment years inter-e!8t for defaults in pay· rrent of ad,-acce ~a'lt i ?mb (1) subiect to the other provisions of this section, where, in any fln::lncial 'vear, an assessee who is liable to pay advance hx 30 unde,!, section 209 has failed to pay such tax or, where tl-je advan~, tax paid 'by such aslessee under the prc'l\";'sions of section 210 js less thrn ninetv per cent of the assessed tax, the assessee shall be liable to pay simp!e interest at the rate of two per cent for every nonth or pnrt of a montl-j comprised in the period from the 1st d'-ly 35 i)f april next fonowing such flnan:ial year to the date of the i'e~lar assessment, on an am~'"'nt equal +(' the asflessed tax or fls ~he case may be, on the amount by which the advance tax paid as aforesaid falls short of the a:98es8ed tax explanation i-in this section, "assessed tax" means the tax 40 on the total income detennined on the hasis of the regular assessment, as reduced by the amount o~ tax derlnt>+ed at source in accordance with the' provisions of chapter xvll'b on any 1ncom'" which i;; flubjpct to such deduction and which is taken into account in computing ~uch total income 45 expla1liat'on 2-where in relation to an assessment year, an assessment is made for the jist time under section 147, the assessment so made shall be regarded as a regular assessment for the purposes of this section 5 explaf1)qt;~~n 3-in explanation 1 and in sub-section (3), "tax on the total income determined on the basis of the regular assess-ment" shall not include the additional income-tax, if any, payable under section 158b (2) where, before the date of com  letion of a regular aasessment, tax is paid by the assessee under section 140a or otherwile,-10 (i) interest shall be calculated in accordance with the foregoing provislons of this section up to the date on which the tax is so paid, and reduced by the interest, if any, paid under section 140a towards the interest chargeable under this section; 15 (ii) thereafter, interest shall be calculated at the rate aforesaid on the amount by which the tax so paid together with the advance tax paid falls short of the assessed tax 20 25 (3) where, as a result of an order of re-assessment or re-computation under section 147, the amount oii which interest was payable under sub-section (1) is increased, the assessee shall be liable to pay simple interest at the rate of two per cent for every month or part of a munth comprised in the pedod commencing on the day following the date of the regular assessment referred to in subsection (1) and ending on the date of the re-assessment or re-computation under section 147, on the amount by which the tax on the total income determined on the basis of the re-assessment or re-computation exceeds the tax on the total income determined on ilie basis of the regular assessment aforesaid 30 explanation-in this sub-section "tax on the total income determined 011 the basis of the re-assessment or re-computation under section 147" shall not include the additional income-tax, if any, payaole under section 158b 35 (4) where, as a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 164 or an order of the settlement commission under sub-se:!tion (4) of section 245d, the amount on which interest was payable under sub-section (1) or sub-section (3) has been increased or reduced, as \ the case may be, the interest shall be increased or reduced accordingly, and-40 (i) in a case where the interest is increased, the assessing officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable and such notice ot c1emand shall be deemed to be a notice under section 156 and the provisions of this act shall apply accordinglyi (u) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded (5) the provisions of this section shall apply in respect of u-sessments for the assessment year commencing on the 1st day of april, 1989 and subsequent assessment years s intereat for deferment of adv&nce tax 234c (1) where in any financial year, the advance tax paid by the assessee on his current income on or before the lsth day of sep:ember is less than twenty per cent of the tax due on the returned income or the amount of such advance tax paid on or before the l&til day of december is less than fifty per cent of the tax due 10 on the retumed income, then, the assessee shall be liable to pay simple interest at the rate of one and one-half per cent per month of the shortfall from for a period of three months on the amount of the shortfall from twenty per cent or, as the case may be, fifty per cent of the tax due on the returned income is explanation-in this section, "tax due on the returned income" means the tax chargeable on the total income declared in the return of income furnished by the assessee for the assessment year commencing on the 1st day of april immediately fallowing the financial year in which the advance tax is paid, as reduced by the amount 20 of tax deductible at source in accordance with the provisions of chapter xviib on any income which is subject to such deduction and which is taken into account in computing such total income (2) the provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of april, 25 1989 and subsequent assessment years' 95 to section 240 of the income-tax act, the following proviso shall be added, namely:-"provided that where,_ by the order aforesaid,-amendment of section 240 (a) an assessment is set aside or cancelled and an order of 30 fresh assessment is directed to be made, the refund, if any, shall become due only on the making of such fresh assessmentj (b) the assessment is annulled, the refund shall become due only of the amount, if any, of the tax paid in excess of the tax chargeable on the total income returned by the 35 assessee"  n in section 243 of the income-tax act, after sub-section (i), the following sub-section shall be inserted, namely:-amendment of section 243  (3) the provisions of this section shall not apply in relp8ct of any assessment for the assessment year commencing on the lit 40 day of april, 1989 or any subsequent assessment years" 97 in section 244 of the income-tax act, after sub-section (2), the following sub-section shall be inserted, namely:-amendment of rction 2"-"(3) the provisions of this section shall not apply in respect of any assessment for the assessment year commencing on the 1st day 45 at april, 1989 or any subsequent assessment yeara" k after section 244 of the income·tax act, the following section a tlall be inserted, namely:-ln8ertion of new section for section 244a interest on tefundi! s "244a (1) where, in pursuance of any order passed under'this act, refund of any amount becomes due to the assessee, he shall, subject to the provisions of this section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely:-10 (a) where the refund is out of any tax paid by way of advance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one and one-half per cent for every month or part of a month comprised in the period from the 1st day of april of the assessment year to the date on which the refund is granted: 15 provided that no interest shall be paya&:je if the amount of refund is less than ten per cent of the tax as detennined on regular assessment; (b) in any othel' case, such interest shall be calculated at the rate of one and one-half per cent for every month or part 20 of a month comprised in the period or periods from the date of, as tne case may be, dates of payment of the tax or penalty to the date on which the refund is granted explanaiion-for the purposes of this clause, "date of payment of tax or penalty" means the date on and from which the amount of 25 tax or penalty specified in the notice of demand issued under section 156 is paid in excess of such demand (2) if the proceedings 'resulting in the refund are delayed for reasons attributable to the assessee, whether wholly or in part, the period of the delay so attributable to him shall be excluded from 30 the period for which interest is payable, and where any questioll arises as to the period to be excluded, it shall be decided by the chief commissioner or commissioner whose decision thereon shall be final (3) where as a result of an or~ under section 147, or section 154 35 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the settlement commission under sub-section (4) of section 245d, the amount on which interest was payable under sub-section (1) has been increased or reduced, as the ;case may be, lthe interest shaill be increased or 40  reduced accordingly, and in a case where, the interest is reduced, the assessing officer '~all service on the ;assessee 'a notice of , , \ demand in the prescribed form specifying the amount of the excess interest paid and requiring him to pay such amount; and such notice of demand shall be deemed to be a notice under section 156 and the 45 provisions of this act shall apply accordineiy (4) the provisions of this section shall apply in -respect of assessments for the assessment year conunencing on the 1st day of april, l~, and subsequent assessment years", • in chapter xx of the income-tax act, for the sud-heading "ai-appeals to the appellate assistant commissioner and commissioner 5 (appeals)" and section 246, the following sub-heading and section shall be mbbtituted, namely:-amend, ment of sub_ headingand subltitu, tiod of new sections for sedtion 246 'ai-appeals or applications to the deputy commissioner (appeals) and commissioner (appeals) appeal_ able orders, 246 (l) subje~t ~to the provisions of sub-section (2), any usessee 10 aggrieved by any of the following orders of an assessing oftieer (other than the deputy commissioner) may appeal to the deputy commissioner (appeals) against such order-(4) an order against the assessee, where the assessee den1es 'his liability to be assessed under this act or any order of assess- 15 mem under sub-section (3) of section 143 or section 144, where the -assessee objects to the amount of income assessed, or to the amount of tax detennined, qr' to the amount of loss computed, or to the status under which he is assessed; (b) an order of assessment, re-assessment or re-computation 20 udder section 147 or section 150; (c) an order under section 154 or section 155 having the effect of enhancing the assessment or reducing a refund or an order refusing to allow the claim made by tlie assessee under either ,of the said sections; 25 (d) an order made under section 163 treating the assessee as the agent of a non-resident; (e) an order under sub-section (2) or sub-section (3) of section 170; (f) an order under section 171; 30 (g) anyorder under clause (b) of sud-section (1) or under sub-section (2) or sub-section (3) or sub-section (5) of se~tion 185 in respect of any assessment for the assessment year commencing on the lst day of april, 1988 or any earlier assessment year; (h) an order cancelling the registration of a firm under sub· 3s section (1) or under sub-section (2) of section 186 in respect of any assessment for the assessment year commencing on the 1st day 01 april, 1988 or any earlier assessment year; (i) an order under section 201; 40 (j) ~ order under section 216 in respect ot any assessment for the assessment year commencing on the 1st day of april 1987 or any earlier assessment year; , (k) an order under section 237; 5 (i) an order imposing a penalty under-(i) secti'on 221, or (ii) section 271, se('tion 271a, section 271b, section 271c section 271d, section 271e or section 272a-' , 10 (iii) sub-section (1) 'of section 271, section 272, section 272b or section 273, as they stood immediately before the 1st day of april, 1989, in respect of any assessment tor the assessment year commencing on the 1st day of april 1988 or -, any earher assessment years: (2) nothwithstanding anything contained in sub-section (1), any 15 assessee aggrieved by any of the following orders (whether made before or after the appointed day) may aj'lpeai to the commissioner (appeals) against such order-(a) an order spec;fted in sub-section (1) where such order is mad~ 20 bv the deoutv commissioner in exercise of the dowers or functions conferred on or assigned to him under section 120 or section 124~ ('b) an order specified in clauses (a) to (e) (both inclu",ive) and clauses (-n to (1) (both in'!lusive) of sub-section (l) made aga;nst the asse~se'e, being a company; 25 (e) an order of assessment made after the 30th dav of seotember, 1984 on the bac;i!:; of the directions issued by the deputy commissioner under section 144a; 154; (d) an order made by the deputy commissioner under section  (e) an orner imrjo~ing' a penalty under section 271b; 30 (f) an order made bv a deoutv commissioner or a deputy direeto~ imoomnej r pe'"laltv undet' section 272a: 35 (g) an order imposinl a penalty under clause (c) of sub-section (1) of section 271, as it stood immediately before the 1st day of april, 1989, in respect of any assessment for the a<:c;essment year commencing on the 1st day of april, ] 988 or any earlier assessment years, where such penalty has been imposed with the previous approval of the deputy commissioner under the proviso to clause (iii) of sub-section (1) of that section; 40 (h) an order made by an assessing officer (other than deputy commissioner) under the provisions of this act in the case of such person or classes of persons as the board may, having regard to the ~ nature of the cases the complexities involved and other relevant considerat;ons, direct (3) notwithstanding anything contained in sub-section (1), the board or the director general, or the chief commissioner or commissioner if so authorised by the board, may, by order in writing, transfer any appeal which is pending before a deputy commissioner (appeals) and any matter arising 'out of or connected with such appeal and which is so pending, to s the commissioner (appeals) if the board or, as the case may, be, the director general, be the chief commissioner or commissioner (at the request of the appellant or otherwise) is satisfied th3t it is necessary or expedient so to do having regard to the nature of the case, the complexities involved and other relevant considerations and the commissioner 10 (appeals) may proceed with such appeal or matters from the stage at which it was before it was so u'ansferred: provided that the appellant may demand that before proceeding further with the appeal or matter, the previous proceeding or any part thereof be re-opened or that he be reheard 15 explanatton-for the purposes of this section,-(a) "appointed day" means the 10th day of july, 1978, being the day appointed under section 39 of the finance' (no2) act 1977; (b) "status" means the category under which the assessee :s a"sessed as "individual" "hindu undivided family" and so on 20 246a (1) where, before furnishing a return of income under section 139 or, as the case may be, sub-section (1) of section 142 for an assessment year, any question arises as to whether,-application by the asfiessee in certain caaes (a) any income is inc!udible or not in computin'g the total income (hereafter in this section refci"!"ed to as the disputed income), or 25 (b) any deduction, allowrnce or other relief is admissible or not in computing the total income (hereafter in this section referred to as the disputed d~duction), the assessee shall, after furnishing such return, make an application under sub-section (2): 30 provided that the assessee,-(i) shall include in such return the disputed income and shall not claim the disputed deduction; and (ii) shall also pay thirty per cent of the tax due on the dis, puted income and in respect 'of the amount of disputed deduction 35 (2) the application under sub-section (1) may be made within thirty days of furnishing the aforesaid return to the deputy commissioner (appeals) or, as the case may be to the commissioner (appea!s) (3) for the purposes of disposing of an application under sub-section (1), the deputy commissioner (appeals) or, as the case may be, the commiilsioner (appeals) may-40 (a) conduct such inquiry, or call for such books of accounts other , documents or information which he deems necessary; or (l;l) direct the assessing officer concerned to conduct luch in· quiry and furnish the report thereon, and thereafter decide the question raised in the application and pass such orders thereon as he thinks fit s (4) the provision relating to filing of appeals under this act shall, so far as may be, apply to the making of an application under this section as if such application were an appeal, 100 section 247 'of the income-tax act shall be omitted omissiod of section 247 101 for section 267 of the income-tax act, the following section shall 10 be substituted, namely:-substitutiqn of new section for section 267 amendment of assessment oil appeal 15 "267 where as the result of an appeal under section 246 or section 253, any change is made in the assessment of a body of individuals or  an association of persons or a new assessment of a body of individuals or an association of persons is ordered to be made, the deputy commissioner (appeals) or the (appeal!') appellate tribunal, as the ease may be, shall pass an order authorising the assessing officer either to amend the assessment made or any member of the body or association or make a fresh assessment on any member of the body or association" 20 102 in section 268 of the income-tax act, the words "or an application" shall be omitted amendmeat of sectipn 268 103 in section 26955 of the income-tax act,-(a) for the words "ten thousand rupees", the words "twenty thousand rupees" shall be substituted; amend· ment of section 26'ss 25 (b) after the proviso and before the explanation, the following proviso shall be inserted, namely:-30  iiprovided further that the provisions of this section shad not apply to any loan or deposit where the person from whom the loan cr deposit is taken or accepted and the person by wh"m the loan or deposit is taken or accepted are both having agricultural income and neither of them has any income chargeable to tax under this act" 104 in section 269t of the income-tax act,-(4) 'in sub-section (2),-amendment of section 269t 3s (i) after the words "no firm", the words "or other person" shall be inserted; (ii) for the words "ten thousand rupees", the words "twenty thousand rupees" shall be substituted; (b) in the explanation, for clause (ii), the fonowing clause shall be substituted, namely:-'(ii) "deposit" means any deposit of money which is repayable after notice or repayable after a period and, in tlie cue of a person other than a company, includes deposit of any s nature' omission 105 section 270 of the income-tax act shall be omitted of -etlon 2'10 substi-106_ for section 271 'of the income-tax act, the followini section tutlon shall be substituted, namely:-of new section for section 271 failure to comply with notices "271 if the assessing offieer,in th~ course of any proceeding! 10 under this act, is satisfied that any penon has failed to eomply with a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or with a direction issued under sub-section (2a) of section 142, the aueisillg officer may direct that such person shall pay, by way of penalty, a sum which shall not be less thsd 15 one thousand rupees but which may extend to twenty-five tbousand rupees for each such failure" amendmento! seetiod 271a 107 in section 271a of the income-tax act, for the words "a sum which shall not be less than ten per cent but which shall not exceed fifty per cent of the amount of tax, if any, which would have been avmded it the 20 income returned by such person had been accepted as the correct income", the words "a sum which shall not be less than two thousand rupees but which may extend to one hundred thousand rupees" shall be substituted 108 after section 271b of the income-tax act, the following sections shall be inserted, namely:-25 insertion of new sections 2'11c, 271d and 271& "271c if any person fails to deduct the whole or any part of the tax as required by or under the provisions of chapter xvii-b, he shall be liable to pay, by way of penalty, a sum equal to the amount of the tax which he failed to deduct as aforesaid penalty for failure to deduct tax at source 271d if a person takes or accepts any loan or deposit in 30 contravention of the provisions of seetion 269ss, he shad be liablct to pay by way of penalty, a sum equal to the amount of the loan or deposit so taken or accepted penalty for farure to comply with the p~ovi-110lil of section 26988 2711e if a person repays any depoeit referred to in ~n 269t otherwise than in accordance with the provisions of that section, he shall be liable to pay, by way of penalty, a sum equal to the amount of the deposit so repaid" penalty for failure to comply with the provi· siona of section 269t lot section 272 of the income-tax act, shall be omitted 5 omission of section 272 110 for section 272a ot'the income-tax act, the following section substi·· shall be substituted, namely:-tution of new section for section 272a '272a (1) if any person,-10 (a) being legally bound to state the truth of any matter touching the subject of his assessment, refuses to answer any question put to him by an income-tax authority in the exercise of its powers under this act; or (b) refuses to sign any statement made by him in the course of any proceedings under this act, which an income-tax authorlty may legally require him to sign; qr' 15 {c) to whom a summons is issued under sub-section (1) of sectien 181 either to attend to give evidence or produce hoaks penalty for fai!ure to answer questions, sign statement furnish informatica returns or state medts, allow inspectiodl, ot account or other documents at a certain place and time etc omits to attend or produce books of account or documents at the place or time; or 20 (d) tails to comply with the provisions of section 189a, he shall pay, by way of penalty, a sum which shall not be less than five hundred rupees but which may extend to ten thousand rupees for each such default or failure i 25 (2) if any person fails-(0) to comply with a notice issued under sub-section (6) of section 94; or i i (b) to give the no1;ice of discontinuance of his business or !profession as required by sub-section (3) of section 176; or 30 (c) to furnish in due time any of the returns, statements or particulars mentioned in section 133 or section 206 or section _a or section 206b or section 285b; or 35 (d) to allow inspection of any register referred to' in section 13' or of any entry in such register or to allow copies of such register or of anyenir¥ therein to be taken; or ! e) to furnish: the return of income which ~ is raquired to funrlsh under sub-section (4a) ot s~tion 139 or to fumiab it within the time allowed and in the manner required udder that :sub-secuoj1j or i (f) to deliver or oause to be deu~ed in due time a copy of the declaration mentioned in section 197aj or' , (g) to furnish a certificate as required by section 203j or s (h) to deduct and pay tax as required by sub-section (z) of section 226; i he shall pay, by way of penalty, a sum which ihall not be leal than one hundred rupees, but which may extend to two hundred rupees, fol' every day during which the failure continues 10 (3) any penalty imposable under su~section (1) or su~od (2) shall be imposed-' ' (a) in a case where the contravention, failure or default in respect of which such penalty is imposable occul's in the course of any proceeding before an income-tax authority not lower in is rank than a deputy director or a deputy commissioner, by such income-tax authqrity; (b) in a case failing under clause (f) qf sub-section (2), by the chief commissioner or commissionerjand (c) in any other case, by the deputy director or the deputy 20 commissioner (4) no order under this section shall be passed by any incometax authority referred to in sub-section (3) unless the person on whom the penalty is proposed to be mposed is given an opportunity of being heard in the matter by such authority 25 explanation-in this section, "income-tax authority" includes a director general, director, deputy director and a assistant director while exercising the powers vested in a court ·tinder the code of civil procedure, 190& when trying a suit in respect of the matter 5 ot 1908 specified in sub-section (1) of section 131' 30 111 section 272b of the income-tax act shall be omitted  omiuion of eection 2'12b- 11z in section 273 of the income-tax act, after su~·sectron (2), the following sub-section shall be inserted, namely:~' amend· ment of aecdojl 2'l1 "(3) the provisionlof this section shad apply to and in relation to any assessment fen- the assessmentyear· commencing on the lit 35 day of april, 1988, or any earlier assess~ent 'year, anq·r:eferences in this section to' the other provisions of this ,act shall' ~ canatnled u ~feredces to those provisions as for the time being in force and applicable to the relevant assessment year" 113 in section 273a of the income-tax act, after sub:'~ion (5), 40 the following bub-section shad' be inserted, namely:-amend· ment of aec:dojl mao  (6) the provisions of this s~ctton  ish~iapply ~o: and in 1elaticm to any assessment for the assessmeik year commencing on the lit ': : 'day-of april, 1988, or any f'arlierassessmeht year, and references in this section to the other provisions of this act shall be construed as references to those provisions as for the time being in force and ,! 'applicable to the relevant assessment year" ' amendment of section 273b 5 114 in section 273b of the income-tax act, for the words, figures, brackets and letters "section 270, clause (a) or clause (b) of sub-section (1) of section ~1; section 271a, section 271b, sub-section (2) of section 172a, sub-section (1) of section 272aa, sub-section (1) of section 272b", the words, figures, letters and brackets "section 271, section 271a, sec-10 tion 271b, section 271c, section 271d, section 271e, clause (e) or clause (d) of sub-section (1) or sub-section (2) of section 272a, sub-section (1) of section 272aa" shall be substituted 115 in section 274 of the incom'e-tax act,-,-1'5 amendmentol section 2'74 (a) after sub-section (1), the following sub-section shall be inserted, namely: - ,j (2) no order imposing a penalty under this chapter shall be made-(a) by the income-tax officer, where the penalty exceeds ten thousand rupees; ! 20 (b) by the assistant commissioner, where the penalty exceeds twenty thousand rupees, except with the prior approval of the deputy commissioner"; (b) for sub-section (3), the following sub-section shall be substituted, namely:-f 25 "(3) an income-tax authority on making an order under this chapter imposing a penalty, unless he is himself the assessing officer, shall forthwith send a copy of such order to the ~sessing oftlcer" 'lut in section 275 of the income-tax act, for clauses (a) and (b) amendment ot 30 excluding the explanation, the following clauses shall be substitutecf, section :'4amely: -, 275 co (a) in a case where the relevant assessment or other order i the subject-matter of an appeal to the deputy commissioner (appeals) or the commissioner (appea]s) under sectiltl 246 or the 35 appellate tribunal under section 253, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of the commissioner (appeals) or, as the case may be, the appellate tri-40 bunal is received by the chief commissioner or commissioner whichever period expires later; 45 , (b) in a case where the relevant assessment or other order is the subject-matter of revision under section 263, after the expiry of six months from the end of the month in which such order of revision is passed~ ,  ' (c) in any othercaae, after the expiry of the 1baacla1 'j8i1' ld waidl ,the proceedings, in the ceiie'8e of which actian ior tbeimpolitioa of penalty has been mitiateq, are oompleted"()r six ,manthl from the end of the numth in which aetiqll for imposition qf peil81tj is initiated, whichever period expires later" 5 it7 after section 275a of tlte lnciime-tax ai!t, ,1ihe followidg section shall be inserted, namely:-insertioa of new sectioil 276 "276 whoever fraudulently removes, ccmceals, tnmfers or ilelivers to any persou a~y property or any intseattbeteia, lntending thereby to prevent that property or interest therein bom beinglo taken in execution of a certificate under the provisions of the second schedule shall be punishable with rigorous imprisonment for a term which may extend to two years and shall also be liable to ftne" removfll, conceal· ment, transfer or deli· very of property to thwart tax recovery 118 for section 276b of the income-tax act, the following section ahall be substituted, namely:-is substituti()n of new section for section 276b failure to pay the tax de8uetedat source "276b if a person fails to pay to the' credit of 1he central gov· ernment, the tax deducted at source by him as'jequired by or udder the provisions of chapter xvii,b, he shall be punishable -with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine" 20 11t sections 2'161}dand 276e of the income-tax act shall be omitted omission of lections 2760d and 276ft '120 in~ction278aa ,of the 'lncome'tax act, tor th~ words, figures and letters "sedion ~~, ~ion 276dl? qr sectton2ruz;", 1heworda, figures and letter "or section 216b," shall be substituted, , " ~: amend· mentof section 278aa ul - after iifttien,21m af the ineome-tax aet, the following section 8bau be inserted, namely:-insertion ot aew  etion 293b u293b where, under any provislon of this a-et the approval of 5 ! the central govemment or the board is required to be obtained before a specified date, it shall be open to the central government or, al the case may be, the board to condone, for sufficient cause, any delay in obtaining such approval" | power             | of                        ||-------------------|---------------------------|| central           |                           || govern·           |                           || mentor            |                           || board             |                           || to                |                           || condone           |                           || delays            |                           || in ob-            |                           || tunin            |                           || approvel         |                           || lu               |                           || for               | section                   || 296               |                           || of the lacome-tax |                           || act,              |                           || ,the              | following section         || substl           |                           || eall              | be substituted, namely: - || tutiod            |                           |10 "296 the central government shall cause every rule made 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 or | of      ||---------|| section || for     || section || 296    || rules   || to      || be      || laid    || before  || parlia || ment   |15 20 i more successive sessions, and if, before the expiry of the session immediately following the- session or the s101cces8ive sessions afore-mid, both houses agftein making any modification in the rule or both houses agree that the rule should not be made the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule" 123 in section 298 of the income-tax act, after sub-section (2), the following sub-sections shall be added with effect from the 1st day of aptil, 1983, namely:-amendment of section 298 2s "(3) if any difficulty arisf's in giving effeet to the provis'ons of this act as amended by the direct tn laws (amendment) act, 1987, the central government may bv order do' anything not incon!!istent with such provisions for the purpose of removing the difficulty: provided that no' such omer sball be made after the expiration· of tmae yean from, the 1st day of april, 1988 30 (4) every order made under sub-section (3) shall be laid before each house of parliamentf' 1m in the second sc~dule to the ineome-tax act,-amend~ ment of the second schedule 35 (1) for the words and ftl!ures "see section 222" occurrinlt under the headinll, the words and figures "see sections 222 and 271;" shall be substituted; (a) in rule 1, for clause (4), the following clause &hau, be lub-8tltuted, namely: -;:,: '(a) "certificate", except in rules 7, 44, 65 and sub·rule (2) of rule 66, means the certificate drawn up by the tax recovery officer under section 222 in respect of any assessee referred to s in that section;'; (3) in rule 2, for the words "when a certificate has been received by the tax recovery officer from the income·tax officer", the words "when a certificate has been drawn up by the tax recovery oftlcert, mall be substituted; 10 (4) for rule 8, the following rule shall be substituted, namely:-"8 (1) whenever assets are realised by sale or otherwise in execution of a certificate, the proceeds shall be disposed of in the following manner, namely: _ 1 (a) they shall first be adjusted towards the amount 15 due under the certificate in execution of which the assets were realised and the co'sts incurred in the course of such execution; (b) if there remains a balance after the adjustment referred to in clause (a), the same shall be utilised for 20 satisfaction of any other amount recoverable from the assessee under this act which may be due on the date on which the assets were realised; and (c) the balance, if any remaining after the adjustments under clauses (a) and (b) shall be paid to the defaulter 2s (2) if the defaulter disputes any adjustment under clause (b) of sub-rule (1) the tax recovery officer shall determine the dispute"; (5) in rule 9-(i) for the words "income-tax officer", the words c~tax 30 recovery officer" shall be substituted; (ii) the words "duly filed under this act", shall be omitted (6) in rule 14, for the words "income-tax omcer",the words "tax recovery officer" shall be substituted; (7) for rule 19a, the following rule shall be substituted, namely:-35 "19a a tax recovery officer may, with 'the previous ap· proval of the deputy commiss-ioner, entrust any of his functions, as the tax recovery' officer to any other officer lower than him in rank (not being lower in rank than an inspector of income· tax) and such officer shall, in relation to the functions so 40 entrusted to him, be deemed to be a tax recovery officer, ~'i entrustment ofcertajo function by tax recovery oftleer (8) in rule 25, in sub-rule (1), fur the words "and the income tax officer shall bear such sum as the tax recovery officer shall require in order to defray the cost of such arrangements",' the words "and he shall have power to defray the ~st of such arrangemtmts,t 4s shall be substituted; (9) in rule 27, for the worda "income-tax oidcer" wherever they occur, the words "tax recovery officer" shall be substituted; (10) in rule 31, for the words "income-tax officer" occurring in the proviso, the words "tax recovery officer" shall be substituted; 5 (11) in rule 47, for the words iidirect that such coins or note, or a part thereof sufficient to satisfy the certificate be paid over to the income-tax officer", the words and figure iidirect that such coins or notes shall be credited to the central government and the amount so credited shall be dealt with in the manner specified in rule 8" 10 shall be substituted; (12) in rule 59, after sub-rule (2), the following sub-rule shall be inserted, namely:-ii (3) wher@ the income-tax offtcer referred to in sub-rule (1) is declared to be the purchaser of the property at any sub-is sequent sale, nothing contained in rule 57 shall apply to the case and the amount of the purchase price shall be adjusted towards the aiil()unt specifted in the certificate"; (13) in rule 60, in sub-rule (1), in clause (a) the worda "for paymrnt to the income-tax officer" shall be omitted; 20 (14) in rule 81, for the words "income-tax officer", the worda "such income-tax offtcer as may be authorised by the chief commissi<-ner or commissioner in this behalf" shall be substituted; (ts) in rule' 73, in sub-rule (1), in clauses (a) and (0) for the v'ords "the receipt of the certificate in the office of the tax 2s recovery officer", the words "the drawing up of the certificate by shall give the defaulter" shall be substituted; (16) in rule 74 for the wurds lithe tax recovery officer shall procef'\d to hear the income-tax offtcer and take all such evidence as may be produced by him in support of execution by arrest, and 30 shall then give the defaulter", the words "the tax recovery officer shall rive the defaulter" shall be substituted; i (17) in rule 77, in sub-rule (1) ,-(a) for clause (ii) of the provisq, the following clause shall be substituted namely:-3s ii (ii) on the request of the tax recovery ofbcer on any ground other than the grounds mentioned in rules 78 and 79-"; (b) the second proviso shall be omitted; (18) in rules 82·, 8'3 and 87, for the words "tax recovery commissioner", the words "chief commissioner or commissioner" shall be substituted; (19) in rule 85 for the words "if at any time after the issue of the certificate by the incometax officer to the tax recovery officer", the words clif at any time after the certiftcate is drawn up by the tax recovery oftlcer" shall be substituted; i (20) in rule 86,-(c) for sub-rule (1), the following lub-rule shall be 1ub-,tituted, namely:-"(1, an appeal from any original order palfsed by the tax recoverv oiftcer under tbis schedule, not being an 5 order which -is conclusive, shall lie to the chfef comm  moner or commissioner"; (b) for sub-rule (4), the following sub-rule shall be sub-8tituted, namely:-ii (4) notwithstanding anything contained in sub-rule 10 (1), where a chief commissioner or commissioner is authorised to exercise powers as such in respeet of any area, then, all appeals against the orders passed before the date of melt authorisation by any tax recovery offtcerauthorlsed to exercise powers as such in respect of that area, or an area is which is in('luded in that area, shall lie to such chief commissioner or commissioner"; (~l) rule 89 shall be omitted; ceatiau·nee of certain pendinl proceed-- ings and power to remove duilc~­ties (z?) in n11e 90 in sub-rule (1) for the words "tncome-tn ofticer" the words "tax recovery officer" shall be substituted; 20 (n) in rule 92, for the words ictax recovery commfs:rloners", tn two places where they occur the words "chief commissioners, commissioners" shall be substituted; (!4) after rule ~ tht' followitl~ rule- shan be inserted namely:-"94 all procf"edings for the re('overy of tax pending imme- 2s dfatelv before thp ('omin!! into force of the amendments to this schedule by the nirect tax yj!!\ws (amendment) act, 1987 shan be continued un~pr this schedule as amended by that act from the stage they h1'ld reached and for this purpose every certfflcate issued ov the income-tax officer under section 222 before 36 such amendment shan be deemed to be a certificate drawn ul' by the tax recovery officer unde'!" that section after such amendment anli if any difficulty arises in continuing the said proceedings the board may issue (whether bv way of modification not llft'ecting the !mbstllnce of' anv rule in this schedule 3s or otherwise) ~neral or !;pecial orders which appear to it to be necessary or expedient for the purpose of removing the dlfftculty" 1 15 in the income·tax act tlfter the ninth schedule the fo11owing &-hedule shall he inserted, namely:--0 insertion f tenth sclledule  'the tenth schedule rsee section 3 (5)] mootf'tca'l'ions subjf'ct to which thf provisions of this act saall aj'1'ly jlf cases wherf the previous rear in relation to the: as,c;essment year commencing on the 1st april 1989, r'p:ffrr'ftl to in section 45 3 (2), exceeds twflvf monthsdeftftt i;oa 1 in this schedule "tr:msltional previous year" means the period recbmed as the previous year for the assessment year commencing on the 1st day of april, 1989, in the manner specified in iub-section (2) of section 3 and, in a case where the proviso ta that sub-section applies, the longer or, as the case may be, the longest of the periods reckoned in the manner laid down in the said provi6o 5 2 in a case where the transitional previous year is longer than twelve months, the provisions of this act and the finance act of the relevant year shall apply subject to the modifications specified in rules 3, 4, 5 and 6 of this srhedule special provisions in a caae where the trmjbitional previous year is lodeer than twelve months modifications per· taining to monetary hmits, etc 10 3 the provu~lons of this act specified in column (1) of the table below shall be subject to the modification that the reference therein to the amount or amounts specified in the corresponding entry in column (2) of the said table, shall be construed as a reference to the said amount or amounts as increased by multiplying each such amount by a fraction of which the numerator is the number of months in the transitional previous year and the denominator is twelve: 15 20 provided that for the purposes of this rule and rules 5 and 8, where the transitional previous year includes a part of a month, then, if such part is fifteen days or more, it shall be increased to one complete month and if such part is less than fifteen days, it shall be ignored amount (2) provision of the act (1) rs 2s section iou) section 16 section ~z)(ii)  section 37 aa)  section 44aa(02)(i) and (iii) 30 section 44a8 - section 48(02) section 80c(i) 35 section 8oc{j)(d) section 8oc(4) 40 section 80f(z)(b) section 80l(z) 45 5,000 10,000 3,600 10,000 25,000 and 2, so, ()()() 40,00,000 and 10,00,000 10,000 6,000, 9,000 and 12,000 10,000 60,000 and 40,000 so,(loo 7,000 3,000 2,000 15,000 50,000 section 80l(z)-lst proviso  section 80l(1) -2nd proviso section 80u stltiod 139a mod1~· ('st1on ln aection& 4 where the transitronal previous year comprises a period of eighteen months or more, then, subo-section (1) ot teetion 6 shall be subject to the modification that references therein to the periods of one hundred and eighty-two da)'s and ninety days shall be construed as reie-rences, res-pecuve\)', to the -penods of two hundred and s seventy-three days and one hundred and thirt!-tive day' modijf 1'&7/jpa /0     /"t'~,,1' (7/   deprcc'ia'  tion '111ow ancp                   5 w1jere the assessee's im:ome under the head                                                                                                           "proli~ and        fl/af if puuomr p? ,o?ou;:gpn'~ fijr 9 ,pebpd 0/ ~                                                                                                              modtbi or     more is ln~/ut7'm m 0/5- /pt:i/ /htvm~ a7? a71!' j7zz:1opa&' prnl1lll    year the allowance under clause (ii) of sub-section (/) of 6ectfon 10  32 in' respect of depreciation of buildings, machinery, plant or fur-niture calculated in the manner stated therein, shall be mcreued by multiplying it by a fraction of which the numerator is the num-ber of months in the transitional previous year and the denominator is twelve                                                                                                                        ' 15 modifi-cation in respect of rate of tax       6 the tax chargeable on the total income of the transitional pi'&-vious year shall be calculated at the average rate of tax on                                                                                                    the amount obtained by multiplying such total income by a fraction of which the numerator is twelve and the denominato;r is the number of months in the transitional previous year, as if the resultant 20 amount were the total income                                                       power of board to grant relief       7 the board may, if it ('onsiders it desirable or expedient 10 to do for avoiding genuine hardship, by                                                                           general or special order, grant appropriate relief' in any case                                                                     or class of cases where the transitional previous year is longer than twelve monthl'                                                                                                                       25 in~e of hard-ship     126 the following amendments (being amendments of a consequen-tial nature) shall be made in the irjcome-tax act, save as otherwlle provided, with effect from the 1st day of april, 1989, namely:-conse-quential amend· ments      (1) in section 2, clause (3) shall be omitted with effect from the 1st day of april, 1988;                                                                                           30      (2) in section                           10, in clause                                              (51), in sub-clause (iiia) t in the explanation,                     for                             the                                     words,                                                  brackets                                                                 and figures "the explanation to clause (iii) of sub-section (5) of section 11", the words, brackets and figures "clause                                                    (ii) of the explanation to rlause (viia) of sul-section (1) of section 36" shall be substituted;                                                                                           35      (3)             in section                            loa,                                    after sub-section                                                              (7) and before the expzanation, the following sub-section shall be inserted, namely:-     " (8) references in this section to any other provision of this act which· has been amended or omitted by the direct tax laws (amendment)                               act,                                       19s7                                                shall, notwithstanding such 40 amendment or omission, be construed, for the purposes of thtj section, as if such amendment or omission had not been made"j (4) in section 29, for the words, figures and letter "aeetiodi 3() to 43a", the words, figures and letter "sections 30 to 43b" shall be substituted;                                                                                                            45 (5) in section 32, in sub-section (2), the brackets and words " (or, if the assessee is a registered firm or an wlregistered firm assessed as a registered firm, in the assessment of its partners) , shall be omitted; "5 (6) in section 4o-a, in sub-section (2), in clause (a), the proviso shall be omitted; (7) in section 41, after sub-section (5), the following subsection shall be inserted, namely:-10 "(6) references in sub-section (3) to any other provision of this act which has been amended or omitted by the direct tax laws (amendment) act, 1987 shall, notwithstanding such amendment or omission, be construed, for the purposes of that sub-section, as if such amendment or omission had not been made"; is (8) in section 43a, in sub-section (1), for the words, brackets, figures and letter "in clause (iv) of sub-section (1) of section 35 or in sectioq 35a", the words, figures and letter "in section 3tia" snail be substituted; 20 (9) in section 44, for the words, figures and letter "sections 28 to 43a", the words figures and letter "sections 28 to 438" shall be substituted; 2s (10) in section 80 , for the words, brackets and figures "within the time allowed under sub-section (1) of section 139 or within such further time as may be allowed by the income-tax ojllcer,", the words, brackets and figures "in accordance with the provisions of sub-section (3) of section 1~9" shall be substituted; (11) in section 800,-30 (a) in sub-section (5), in clause (v), the words, brackets and figures "or is an institution approved by the central goy ernment for the purposes of clauae (23) of sectipn 10," shall be otditted;  (b) expla1t4tion4 shall be omitted; (12) in section 80hha, in the explanation, for clause (4) the following clause shall be substituted, namely:- '(a) "rural area" means any area other than-35 40 (i) an area whjch is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last ',>recf'ding censua cf which the relevant figures have been published before· the ftrst day of the previoui ymi'; or (it) ar area witlrin such diltauce, not being mcte lbaa uteen kilometres from the local limit 0 01 any municipality cr tantollment board referred to in lub-clause (ii, as the central government may having relard to the stage of cievelopdlf:nt uf such area (includtng the ex-5 telu of, ~lnd scope for, urbanisation of such area) and otheo reievant collsidelations specify in this behalf by notification in the official gazt!tte;'; (13) in section 132, in sub-section (1), in the proviso and in subsection (la), the words and figures "notwithstanding anything con- 10 taided in section 121", shall be omitted with effect from the 1st day of apru, 1988; (14) in section 132b, in sub-section (1), in clause (iii), for the words "tbe income-tax oftlcer", wherever they occur the words "the assessinl ufficer or, u the erie may be, tax recovery o1iicer" shall 15 be substitl&ted; (15) in section 133a, in sub-section (6) for the words, brackets and figures "sub-section (1) and (2) of section 131", the words, brackets 8lld figures "sub-s,ection (1) of section 131" shall be sub-8tituted; 20 (16) in section 139, in sub-section (8), in clause (b), after the word o and figures "section 264", the words, brackets, figures and letter "or an order of the settlement commission lulder sub-section (4) of bection 246d" shall be inserted; (11) in seclion 144a,-25 (0) in sub-sect;oa (1), the brackets anei fi&ure "(1)" shall be omitted; (b) sub-section (2) shall be omitted; (13) in section 174,-(4) ill sub-aectiod (4),-30 (i) for the words, brackets ad figures "u a return under sub-hct1od (2) of section 138", the wol'da, brackets and figures "as a return under clauie (i) of suhection (1) of section 142" shall be substituted; (ii) for the worda, brackets anei figures "a dotice ihued 35 wlder sub-section (2) of section 139", the words, brackets and figures "a notice issued under clause (i) of lub-section (1) of section 142" shall be substituted; (b) in sub-section (6), for the words, brackets and figures "sub-lection (2) of section 139 or sub-section (1) of', wherever 40 they oceur, the words, brac:ketll and figures "clause (i) of subaecbod (1) of section 142 or" shall be substituted; (19) in section 176-(4) in aub-section (5), for the words, brackets and figures udder sub-lection (2) of section 139", wherever they occur, the 45 words, brackets and figures "under clause (i) of sub-lec:tion (1) of ii!cium 142" iha11 be lubstituted;  , (rb) in sub-section (7) for the words, brackets and sgares "sub-section (2) of section 139 or sub-section (1) of", wherever they occur, the words, brackets and fi~s "clause (i) of sub-eection (1) of section 142 or" shall be substituted; 5 (20) in section 199, the brackets, words, ftguresand letter "(~-eluding a provisional assessment under section 141a), if any," shall be omitted; (21) in section 219, the proviso shall be omitted; (22) section 234 mall be omitted: 10 (23) in section 253 in sub-section (1), in clause (a), after the wom and ftgures "section 154" the word figures and letter "section 246a-shall be inserted; (24) in section 276cc for the words brackets and figures "8ubsectron (2) of section 139" the words, brackets and ft~es "clause 15 (i) of sub-sectlon (1) of section 142" shan be substituted; (25) in section 279 in sub-section (3) for the words brackets and letters "clauses (a), (b), (e) (d) and (e)" the words brackets and letters "c11\uses (a) to (g)" shall be substituted with ~ect from the 1st day of april 1988: 20 (26) in section 288, in sub-section (4), in clause c'jl, the words, brackets and figures "clauses (i) and (ii) of sub-section (1) or' shan be omitted; (27) in the first schedule in tille 5 in clause (al for the words, figures and letter "sections 30 to 43a to the words, ftgures and letter "sections 30 to 43b" shall be substituted; (28) in the third !=khedule for the word!; "income-tax officer", the words "assessing officer or tax recovery officer" shall be substituted f  -    chapi'er m amendments to the wealth-tax act, 1957 3027 of 1957 127 in the wealth-tax act ]957 (hereafter in this chapter referred to as the weolth-tax act) save as othprw1c;", expressejv provided in this act and unless the context ntherwi!;e rpf11lires refprence tn anv authorftv specified in column (1) of the tahle h010w l;hllll be suh~tltuted with 35 effect 'from the 1 st day of april 1988 hv references to the authority or  authorities specified in the correspondin~ ('ntry in column (2) of the said table, and sucll consequential change, as the rules of grammar may require; shallalao be made: -__---__------------------------------------------------------------  director of inspection director-general or director s deputy director of inspection deputy director assistant director of jnspection assistant director commissioner or commissioner of wealth-tax chief commissioner or commis!lioner 10 tnq,ecting a!!!;itrtant'commi!l!:ioner or in~ing deputy commi!lsioner a!:!:istant commissioner of wealth-tax ap'tl"'llete assi!:tant commissioner, de])uty "commi~!lioner (appeals, assessing officer wealth-taxofticcr inspector of wealth-tax inspector of !ncome-tax; -------------------- provided tb'tt notbin!! contained in thi'l !lef'tion "halt aodlv to the 15 references to "commissioner" occurrin~ in sections 220, 24 and 25 128 in section 8 of the wealth-tax act,-amadli"ent cd mctiog2 (i) clause (a) shall be omitted; (li) clause (ca) shall be re-lette1'e~ as clause (em and befote that clause as so re-lettered the following clause shall be fngerted 20 namely:-i '(ca) "asse!'!llinll officer" means the a!!si~l'lnt commi!lsioner or the tncome-tax officer who is vested with the relevrnt iu'ri!'!~~(!­tion by virtue of directions or orders issued under sub-seetfon (1\ or sub-section (2) of section 120 or any other p,,,vision of the 25 income-tax act which applv for the put'1)()ses of wel!tth-tax under section 8 of this act, and also the oetrutv commis~oner won", is directed under clause (b) of sub-section (4) of the said seetfon 120 to exercise or perfonn all or any of the nowers anti fund'fol'" conferred on 'or assigned to the assessing oft\cer under that act:': 30 (iii) clauses (g), (gg) (hb), (k) m and (in) shan be omitted: (i1') for clause (h), the following clause shall be substituted, namely:-i '(h) "companv" shall have the meanin~ assigned to it ift clause (17) of section 2 ,of the income-tax act;'; 35 (v) after clause (7b) the following clause shall be inserted namely:-i  - , c (ie) "maximum mar~nal ·rate·' means the rate of wealt1t-tas' applieable in relation to the highest slab of wealth, in the cue af an individual as specified in part i of schedule 1;·; 040 (vi) in clause (q), clause (i) of the proviso shall be omitted; (vii) for clause (8), the following clause shall be substi4-uted, namely:-s '(8) the expressions "chief comm;9s1nner" "director-general", "commissioner", "commissioner (appeals)", "director", "deputy commissioner", "depu,ty commissioner (appeals)", "assistant commissioner", "income-tax officer", "inspector of incometax" and "tax recovery officer" shall have the meanings resnectively assigned to them under section 2 of the income-tax act' amend· ment of section 3 10 129 in section 3 of the wealth-tax a('t for the wl')rds "subject to the other provisions contained in this act", the words and brackets "subject to the other provisions (including provisions for the levy of additional wealth-tax) contained in this act" shall be substituted 130 in section 5 of the wealth-tax act, with effect from the 1st day is of april, 1988,-amendment of iection 5 (i) in sub-section (1), after clause (xxiv), the following clause shall be inserted, namely:-"(xriva) units of a muttual fund specified under clause (23d) of section 10 of the income-tax act;"; 20 (it) in bub-section (ia), after the brackets figures "(xxiv)", the brackets, figures and letter "(xxiva)" shall be inserted 131 for sections 8, 9, 10 and 11 of the wealth-tax act, the follow;ng se<:tions shall be substituted, namely,-c;ubstitution of new sections for icctions 8, 9, 10 and 11 25 wealth-tal authoritiel and their jurisdiction 30 "8 the income-tax authorities specified in section 116 of the income-tax act shall be the wealth-tax authorities for the purposes of this act and every such authority sha~l exercise the powers and perform the iunctions of a wealth-tax authority under this act in respect of any individual, hindu undivided family or company, and for this purpose his jurisdiction under this act shall be the same as he has under the income-tax act by virtue of orde-s or "lirecti"ns is<:ued u"der section 120 of that act (including orders or directions assigning concurrent jurisdiction) or under any o~her provision of that act 3s explanation-for the purposes of this section, the wealth-tax authority having jurisdiction in relat"oo to a person wh'1 is not an assessee within the meaning of the income-tax act shall be the wealthtax authority having jurisdiction in respect of the area in which that person resides 40 9 section 118 of the income-tax act and any nothication issued thereunder shall apply in rela:ion to the cont-ol of wealth-tax au·herities as they apply in relation to the control of the c'1rresponding income-tax authorities, excep+ to the extent to which :he board may, by notification in the offici a! gazette, otherwise direct in respect of any wealth-tax authority instruc· tions to subordinate authorities 10 (1) the board may, from time to time, issue such orders, instructions and directions to other wealth-tax authorities as it may deem fit for the proper administration of this act, and such authorities and all other persons employed in the execution of this act shall observe and follow such orders, instructions and directions of the board:' 5 provided that no such orders, instructions or directions shall be lssued-(4) so as to require any wealth-tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or 10 (b) so as to interfere with the discretion of the deputy commissioner (appeals) or commissioner (appeals) in the exercise of his appellate functions  (2) without prejudice to the generality of the foregoing power,-(a) the board may, if it considers it necessary or expedient 15 so to do, for the purpose of proper and efficient management of the work of assessment and collection of revenue, issue, from time to time (whether by way of relaxation of any of the provisions of sections 16, 17, 18 and 35 or otherwise), general or special orders in respect of any class of cases, setting forth directions or instruc- 20 tions (not being preiudidal to assessees) as to the guidelines, principles or procedures to be followed by other wealth-tax authorities in the work relating to assessment or collection of revenue or the initiatinn of procee-tin~ fot' the imposition of penalties and any such order may, if the board is of opinion that it is necessary 25 in the public interest so to do, be published and circulated in the prescribed manner for general information; (b) the board may, if it considers it desirable or expedient so to do for avoiding ~nuine hardship in any case or class of cases, by ,:teneral or special (')i'd~r authori~p ~nv wealth-tax authority, 30 not beinl! a deputv commi!';gioner (anne~l!';) or commissioner (anoe::tls), to admit rn apnlicatio1'1 nr c'lr;m f," anv exemption deduction :refunti or any other relief' 111"1tier thi~ act after the expirv of the neriod s~ifipd bv 0'1' li"d~r this act for makin~ such application or daim !'lnd deal with the same on merits in 3s accordance with law 11 (1) the provisions of sections 124 and 127 of the income-tax act shall so far as may be, annlv for the puroo!'le!; of this act as they apply for the purposes of the y"come-tax act, subject to the modifications specified in sub-section (2) 40 jurisdiction of assessing officers 8dd power to transfer c3iei (2) the modifications referred to in sub-section (n shall be the following, namely:-(a) in section 124 of the income-tax act,-(i) in sub-section (3), references to the provisinns of the income-tax act shall be constnled as references to the corres- 45 pondfng provisions of the wealth-tax act; (ii) sub-section (5) shall be omitted: 5 (b) in section 127 of the income-tax act, in the explanation below sub-section (5), references to proceedings under the incometax act shall be construed as including references to proceedings under the wealth-tax act" 132 sections 8a, 8aa, sb, 9a, loa, lla, llaa, llb, 12 and 13 of the omlssiod wealth-tax act shall be omitted of sections 8a8aa hb9a loa lla llaa,l1b 12 and 13 133 in section 14 of the wealth-tax act,-amend ment of ie::-tion 14 (a) for sub-sections (1) and (2), the following sub-sections shall be  substituted, namely:-10 '(1) every person, if his net wealth or the net wealth of any other person in respect of which he is assessable under this act on the valuation date exceeded the maximum amount which is not chargeable to wealth-tax, shall, on or before the due date, furnish 15 a return of his net wealth or the net wealth of such other person as on that valuation date in the prescribed form and verified in the prescribed manner setting forth particulars of such net wealth and such other particulars as may be prescribed expzanation-in this sub-section, "due date" in relation to 20 an assessee under this act shall be the same date as that applicable to an assessee under the income-tax act under the explanation to sub-section (1) of section 139 of the income-tax act (2) notwithstanding anything contained in any other provision of this act, a return of net wealth which shows the net 25 wealth below the maximum amount which is not chargeable to tax shall be deemed never to have been furnished: provided that this sub-section shall not apply to a return furnished in response to a notice under section 17'; (b) sub-section (3) shall be omitted 30 134 for section 15 of the wealth-tax act, the following section shall be substituted, namely:-substitution of new section for sec tion 15 return after due dale and amendment of return 35 "15 if any person has not furnished a return within the time allowed under sub-section (1) of section 14 or under a notice issued under clause (i) of sub-section (4) of section 16, or having furnished a ;return discovers any omission or wrong statement therein, he may furnish a retnrn or a revised return, as the case may be, at any time before the expiry of one year tram the end of the relevant assessment year or before the completion of the all8llment, whichever i earlier: provided that-(a) where such return or revised return relates to the asses-sment year commencing on the 19t day of april, 1987, or any earlier assessment year, it may be furnished at any time up to 5 and inclusive of the 31st day of march, 1990 or before the completion of the assessment, whichever is earlier; (b) where such return or revised return relates to the assessment year commencing o~ the 1st day of april, 1988, it may be furnished at any time up to and inclusive of the 31st 1'" day of march, 1991 or before the completion of the assessment, whichever is earlier"  135 in section 15a of the wealth-tax act,-amend meat lectioa ua (i) for clause (a), the following clause shall be sub8t1tuted, name1y:-"(a) in the case of an individual,-15 (i) by the individual himself; (ii) where he is absent from india, by the individual himself or by some person duly authorised by him in this behalf; (iii) where he is me'!ltally incapacitated from attending to his affairs, by his guardian or any other person competent 20 to act on his behalf; and (iv) where, for any other reason, it is not possible for the individual to sign the return, by any person duly authorised by him in this behalf: prclvided that in a case referred to in sub-clause (;i) or sub- 2s clause (iv), the person signing the return holds a valid power of attorney from the individual to do so, which shall be attached to the return;"; (ii) to clause (c), the following provisos shall be added, namely:-"provided that where the company is not resident in india, 30 the return may be signed and verifted by a person who· holds - valid power of attorney £rom such company to do so, which shall be attached to the return: provided further that,-(a) where the company is being wound up, whether under the orders of the court or otherwise, or where any person baa been appo1nted as the reeeiver of any assets of the company, the return shall be signed and verified by the liquidator referred to in sub-section (1) of section 178 of the income-tax act; (b) where the management of the company has been taken 40 over by the central government or any st~te government under any law, the return of the company shall be signed and verified by the principal officer thereof" 136 for section 15b of the wealth-tax act, the following section shall substlbe substituted, namely: -tutioa of new section for section 158 sell assessment s 10 "15b (1) where any tax is payable on the basis of any retum furnished under section 14 or section 15 q1" in response to a notice under clause (i) of sub-section (4) of section 16 or under section 17, after taking into account the amount of tax, if any, already paid under any provision of this act, the assessee shall be liable to pay such tax, together with interest payable under any provision of this act fq1" any delay in flll'llishing the return, before furnishing the return and the return shall be accompanied by proof of payment of such tax and interest explanation-where the amount paid by the assessee under this bub-section falls short of the aggregate of the tax and interest as aforesaid, the amount so paid shall first be adjusted towards the interest 15 payable as aforesaid and the balance, if any, shall be adjusted towards  the tax payable (2) after the regular assessment under section 16 has been made, any amount paid under sub-section (l) shall be deemed to have been paid towards such regular assessment 20 (3) if any assessee fails to pay the whole or any part of such tax 01' interest or both in accordance with the provisions of sub-section (1), he shall, without prejudice to any other consequences which he may incur, be deemed to b~ an assessee in default in respect of the tax or interest or both remainmg unpaid and all the provisions of th1s 25 act shall apply accordingly" 137 section 15c of the wealth-tax act shall be omitted omission of section lsc 138 for section 16 of the wealth-tax act, the following section shall be substituted, namely:-subltitutioa of new ~ for section 16 a- mont go "16 (1) (a) where a return has been made under section 14 or section 15 or in response to a notice under clause (i) of suj>section (4),-(i) if any tax or interest is found due on the basis of such return after adjustment of any amount paid by way of tax or interest, an intimation shall be sent to the assessee specifying 35 the sum so payable, and such intimation shall be deemed to be a notice issued under section 30 and all the provisions of this act shall apply accordingly; and (ii) if any refund is due on the basis of such return, it shall be granted to the assessee: provided that in computing the tax or interest payable by, or :refundable to, the assessee, the loll 0 wing adjustments shall be made in ti1e net wealth declared in the return, namely:-(i) 8l1y aritizmetkal errors in the return, accounts or documents accompanying it shall be rectified; 5 (ii) any exemption or deduction, which, on the basis of the information available in such return accounts or documents, is , pritn4 facie admissible but which is not claimed or made in the return, shall be allowed; (riii) any exemption or deduction claimed or made in the j 0 return, whicii, on the basis of the information available in such return, accounts or documents, is prima facie inadmissible, shall be disallowed; i  (b) where as a result of an order made under section 17 or secti~n 23 or section 24 or section 25 or section 27 or section 29 or section 35 or any order of the wealth-tax settlement commission under sub-section 15 (4) of section 22-d relating to any earlier assessment year and passed subsequent to the filing of the return referred to in clause (a), there is any variation in the exemption or deduction claimed or made in the return, and as a result of which,-20 (i) if any tax or interest is found due, an intimation shall be sent to the assess~ specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under section 30 and all the provisions of this act shall apply accordingly, and 25 (ii) if any refund is due, it shall be granted to the assessee: provided that an intimation for any tax or interest due under this clause shall not be sent after the expiry of four years from the, end of the financial year in which any such order was passed (2) in a case referred to in sub-section (1), if the assessing offi cer considers it necessary or expedient to €nsure that the assessee has 30 not understated the net wealth or has not under-paid the tax in any manner, he shall serve on the assessee a notice requiring him, oil a date to be specified therein, either to attend at the office of the ,auess ing officer or to produce, or cause- to be produced there, any evidence on which the assessee may rely in support of the return: 35 provided that no notice under this sub-section shall be served on the assessee after the expiry of the financial year in which the return is furnished or the expiry of six months from the end of the month in which the return is furnished, whichever is later (3) on the day specified in the notice issued under sub-section 40 (2) or as soon afterwards as may be, after hearing such evidence lui the assessee may produce and such other evidence as the assessing officer may require on specified points, and after taking into at:-count all relevant material which he has gathered, the assessing officer shall, by order in writing, assess the net wealth of the asses- 45 see ,and determine the sum payable by him on the basis of such as  ment 5 (4) for the purposes of making an assessment under this act the assessing officer may serve, on any person who has made a return under section 14 or section 15 or in whose case the time allowed under sub-section (1) of section 14 for furnishing the return has expired, a ngtice requiring him, on a date to be specified therein,-10 (i) where such person has not made a return before the end of the relevant assessment year to furnish a return of his net wealth or the net wealth of any other person in respect of which he is assessable under this act on the valuation date, in the prescribed form and verified in the prescribed manner, setting forth the particulars of such net wealth and such other particulars as may be prescribed, or (ii) to produce or cause-to be produced such accounts, re· cords or other documents as the assessing officer may require 15 (5) if any person,-(a) fails to make the return required under sub-section (1) of section 14 and has not made a return or a revised return under section 15, or (b) fails to comply with all the terms of a notice issul"d 20 under sub-section (2) or sub-section (4), the assessing officer, after taking into account, all relevant material which he has gathered, shall, after giving such person an op rortunity of being heard, estimate the net wealth to the best of hia judgment and determine the sum payable by the person on the basis 25 of such assessment: provided that such opportunity shan be given by the assessing officer by serving a notice calling upon the person to show cauae, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgment: 30 provided further that it shall not be necessary to give such opportunity in a case where a notice under sub-seetion (4) has been issued prior to the making of the assessment unc!er this sub-sectign" 139 in section 17 of the wealth-tax act-, amend· moat of ioc> tioil 17 ca) for sub-section (1), the fol1owin~ sub-sections shall be substituted, namely:-35 40 ii (1) if the assessing officer, for reasons to be recorded by him in writing, is of the opinion that the net wealth chargeahle to tax in respect of which any person is assessable under thi! act has escaped assessment for any assessment vear (whether by reason of under_assessment or assessment at too low a rate or otherwise), he may, subject to the other provisions of tht 1ile!ction and section 17a, serve on such person a notice requiring him to fumish within such period, not being less than thirty days, as may be specified in the notice, a retum in the prescribed form and verified in the prescribed manner setting forth the net wealth in respect of which such person is ast;essable 81 5 on the valuation date mentioned in the notice, along with such other particulars as may be required by the notice, and may proceed to assess or reassess such net wealth and also an, other net wealth chargeab1e to tax in respect of which such person is assessable, which has escaped assessment and which comes to his notice subsequently in the course of the proceed- 10 ings under this section for the assessment year concerned (hereafter in this section referred to as the relevant assessment year), and the provisions of this act shall, so far as may be, apply as if the return were a return required to be furnished under 15 section 14: provided that where an assessment under sub-section (3) of section 16 or this section has been made for the re~evant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any net wealth chargeable to tax has escaped assessment 20 for such assessment year by reason of the failure on the part of the assessee to make a return under section 14 or section 15 or in response to a notice issued under sub-section (4) of section 16 or this section or to disclose fuby and truly all material facts necessary for his a~sessment for that assessment year ' 25 erpla1tatio1t-production before the assessing officer of account books or other evidence from which material evidence could with due diligence have been discovered by the assessing officer will not necessarily amount to disclosure within the meaning of the foregoing proviso 30 (ia) no notice under sub-section (1) shall be issued for the relevant assessment year,-3s (a) in a case where an assessment under sub-section (3) of section 16 or sub-section (1) of this section has been made for such assessment year,- (i) if four years have elapsed from the en1 of the relevant assessment vear, unless the case fal1s under subclause (ii) or sub-clause (iii); (ii) if four years, but not more than seven years, have elapsed from the end of the relevant assessment 40 year, unless the net wealth chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees flve lakhs or more for that year; (iii) if seven years, but not more than ten years, have elapsed from the end of the relevant assessment year, 4s unless the net wealth chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees ten lakhs or more for that year;  (b) in any other case,-(i) if four years have elapsed from the end of the relevant assessment year, unless the case falla under subclause (ii) or sub-clauae (iii); 5 (ii) if four years, but not more than seven years, have elapsed from the end of the relevant assessment year, unless the net wealth chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees two lakhs and fifty thousand or more far that year; 10 (iii) if seven years, but not more than ten years, have elapsed from the end of the relevant assessment year, unless the net wealth chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees five lakhs or more for that year 15 explanation-for the purposes of sub-section (1) and subsection (la), the following shall al~ be deemed to be cases where net wealth chargeable to tax has escaped assessment, namely:-(a) where no return of net wealth has been furnished by the assessee althou~h his net wealth or the net wealth of 20 any other person in respect of which he is assessable under this act on the valuation date exceeded the maximum amount which is not charge:lble to wealth-tax; (b) where a return of net wealth has been furnished by the assessee but no assessment has been made and it is noticed 25 by the assessing officer that the assessee has understated the net wealth or has claimed excessive exemption or deduction in the return (1b) (a) in a case where an assessment under sub-section (3) of section 16 or sub-section (1) of this section has been 'made 30 for the re1evant assessment year, no notice shall be issued under sub-section (1) except by an assessing officer of the rank of assistant commissioner or deputy commissioner: provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued un-3s less the chief commissioner or commissioner is satisfied, on the reasons recorded by the assessing offieer aforesaid, that it is a fit case for the issue of such notice, (b) in a case other than a case falling under clause (a), no notice shall be issued under sub-section (1) by an assessing 40 officer, who is below the rank of deputy commissioner, aftei the expiry of four years from the end of the relevant assessment year, unless the deputy commissioner is satisfied, on th~ reasons recorded by such assessing officer, that it is a fit case for the issue of such notice"; (b) in sub-section (2), in the opening par$aph, the words &lot by a court in any proceedings under any other law" shall be added at the end 140 in section 17a of the wealth-tax act,-ammcl meat of iocdod 17a (4) for sub-sections (1) and (2), the following sub-sections shall 5 be substituted, namely:-"(1) no order of assessment shall be made under section 16 at any time after the expiry of two years from the end of the assessment year in which the net wealth was first assessable: provided that where the net wealth was first assessable in 10 the assessment year commencing on the 1st day of april, 1985, or the 1st day of april, 1986, such assessment may be made on or before the 31st day of march, 1990 (2) no order of assessment or reassessment shall be made under section 17 after the expiry of two years from the end of the is financial year in which the notice under sub-section (1) of that section was served: provided that,-(i) where the notice under clause (4) of sub-section (1) of section 17 was served during the financial year com- 20 mencing on the 1st day of april, 1985, or the 1st day of april, 1986 such assessment or reassessment may be com· pleted on or before the 31st day of march, 1990; (ii) where the notice under clause (b) of sub-section (1) of section 17 relates to the assessment for the assessment 25 year commencing on the ] 9t day of april, 1985, or the 1st day of april, 1986, such assessment or reassessment may be completed on or before the 31st day of march, 1990 or the expiry of two years from the end of the financial year in which such notice was served, whichever is later 30 explanation-references to section 17 in the proviso shall be construed as references to that section as it stood before amendment by the direct tax laws (amendment) act, 1987"; (b) in sub-section (3) ,-(i) for the words "four years", the words "two years" shad 35 be substituted;  (ii) the following proviso shall be inserted at the end, namely:-"provided that where the order setting aside or cancelling an assessment was passed during the financial year 40 commcndng on the 1st day of april, 1985, or the 1st day of april, 1986, the order (if fresh assessment mny be made on or before the 31st day of march, 1990" 141 mter section 17a of the wealth-tax act, the following section hall be inserted, namely:-ln8ertlod of new iection 11s 5 interest for de· faults in furnishing return of net wealth '17b (1) where the retum of net wealth for any assessment year under sub-section (1) of section 14 or section 15, or in response to a notice under clause (i) of sub-section (4) of section 16, is furnished after the due date, or is not furnished, the ,assessee shall be liable to pay simple interest at the rate of two per cent for every month or part of a month comprised in the period commencing on the date immediately following the due date, and,-10 (ei) wh~e the return is furnished after the due date, ending _ the date of furniahing of the return, or (b) where no return has been furnished, ending on the date of completion of the assessment under sub-section (5) of section 16, liltit 15 on the amount of tax payable on the net wealth as determined on regular assessment ; !i! ezpzelnation l-in this section, "due date" means the date specified in sub-section (1) of section 14 as applicable in the case of the assessee 20 e~lanation 2-in this sub-section and sub-section (3), "tax payable on the net wealth as determined on regular assessment" shall not include the additional wealth-tax, if any, payable under section lsd explanation 3-where, in relation to an assessment year, ad assessment is made for the first time under section 17, the assessment so made shall be regarded as a regular assessment for the purposes of this section (2) the interest payable under sub-section (1) shall be reduced by the interest, if any, paid under section 15b towards the interest chargeable under this section 30 35 (3) where the return of net wealth for any assessment year, / required by a notice under sub-section (1), of section 17 issued after the completion of an assessment under sub-section (3) or sub-section (5) of section 16 or section 17, is furnished after the expiry of the time allowed under such notice, or is not furnished, the assessee shall be liable to pay simple interest at the rate of two per cent for every month or part of a month comprised in the period commencing on the day immediately following the expiry of the time allowed as aforesaid, and,-40 (a) where the return is furnished after the expiry of the time aforesaid, ending on the date of furnishing the return; or (b) where no return has been furnished, ending on the date of completion of the reassessment under section 17, on the amount by which the tax on the net wealth determined 011 45 the basis of such reassessment exceeds the tax on the net wealth as determined on the buis of the earlier amel8!nent aforesaid explanatio7t-in this sub-se~tion, "tax on the net wealth determined on the basis of the r~assessment under section 1'7" shan not include the additional wealth-tax, if any, payable under section isd (4) where, as a result of anei'ciler under section 23 or section 24 or ection 25 or section 27 or section 29 or section 35 or any order 5 of the wealth-tax settlement commissione under sub-section (4) -of section 22d, the amount of tax on which interest was payable under this section has been increased or reduced, as the case may be, the intere5t shall beidcreased or red1llced accordingly, and,-(i) in a case where the interest is increased, the assessing 10 oftlcer shall serve on the assessee a notice of demand in the prescribed form speeifying the sum payable,and web notice of demand shall be deemed to be a notice under section 30 and the provisions of this act shall apply accordingly, and (ii) in a case where the interest is reduced, the excea is interest paid, if aqy, s,1aal1 be i'8funded (5) the provisions of this section shan apply in tellpect of assessments for the asses$ment year commencing on the 1st day of april, 1989 and subsequent assessment years' 142 for sections 18 and 18a of the wealth-tax act, the following 20 sections shall be substituted, namely:-substitution of new sections for teetiodi 18 bd4 18a penalty for failure to comply with noticea '18(1) if the a88esmg '()fficer, in 'the course of any proceedings under this act, -is satisfted that any person has failed to comply with the notice under sulhlection (2) or sub-section (4) of section 16, the assessing officer may, by order in writing, direct that such person 25 shall p~y, by way of penalty, a sum which shall not be less than one thousand rupees but which may extend to twenty~five thousand rupees for each such failure: hovided that-(a) no penalty shall beimposable under this section, if the 30 person proves that there was reasonable cause for the failure referred to in this sub-section; (b) no order imposing a -penalty under this section shall be made-(i) by the income-tax officer, where the pemalty ~ceeds 35 ten thousand rupees; (ii) by the asaistant commissioner, whepe the penalty exceeds twenty thousand rupees, except with the prior approval of the deputy commissioner ('> !no order shall be made under sub-section (1) unless the 40 penon concerned has been heard, or has been given a reasonab~ opportunity of being imaard (8) no order impaling a penalty udder sub-jection (i) shall be passed after the expiry of the financial year in which the proceedinp, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in 5 whirh action for imposition of penalty is initiated, whichever period expires later explanation-in computing the period of limitation for the purposes of this section,-(i) any period during which the immunity granted under 10 section 22h remained in force; (ii) the time taken in giving an opportunity to tbe assessee to be re-heard under the proviso to section 39; and (iii) any period during which a proceeding under this section for the levy of penalty is stayed by an order or injunction '15 of any court, lhall be ezcluded 18a (1) if any person,-20 (a) being legally baand to state the truth of any matter touching the subject of his assessment, refuses to answer any question put to him by a wealth-tax authority in the exercise of his powers under this act; or (b) refuses to sign any statement made by him in the course of any proceedings under this act, which a wealth-tax authority may legally require him to sign; or 25 peultj tor failure to adlwer qua tiodl, ii  statementa, fwid1ib information, allow inspec:-tions eic (c) to whom a summons is issued under sub-section (1) of section 37 either to attend to give evidence or produce books of account or other documents at a certain place and time, omits to attend or produce the books of account or documents at the place and time, 30 he shall i¥ly, by way of penalty, a sum which shall not be less than five hundred rupees but which may extend to ten thousand rupees for each such default or failure: provided that no penalty shall be imposable under clause (c) if the person proves that there was reasonable cause for the said failure 35 (2) if a person fails to furnish in due time anyatatement or information which such person is bound to furnish to the assessing officer under section 38, he shall pay, by way of penalty, a sum which shall not be less than one hundred rupees but which may extend to two hundred rupees for every day during which the failure continues: 40 provided that no penalty shall be imposable under this sub-section if the person proves that there was reuonable cause for the said failure (3) any penalty imposable under sub-section (1) or sub-section ,(2) shall be imposed-4s (a) in a case where the contravention, failure or default in respect of which such penalty is imposable occurs in the couiw of any proceeding before a wealth-tax authority not lower in rank  tlum a deputy director or a deputy commissioner, by suoh wealth-tax authority; (b) in any other case, by the deputy director or the deputy commissioner 5 (4) no order under this section shall be passed by any wealth·  tax authority referred to in sub-section (3) unless the person on whom the penalty is proposed to be imposed has been heard, or has been given a reasonable opportunity of being heard in the matter, by such 10 authority ' i,; '!t ezplanation-in this section, "wealth-tax authority" includes a director general, director, deputy director, 'assistant director and a valuation offi::er while exercising the powers vested in a court under the code of civil procedure, 1908, when trying a suit in respect 'of 1901 of the matters specified in sub-section (1) of section 37' is 143 in the wealth_tax act, after section l8c the following chapter iha1l be inserted, namely:~  ''chap1'er !vb charge of additional wealth-tax in catain casbb18d (1) where, in the case of any person, the net wealth 20 determined in the regular assessment for any assessment year (hereafter in this section referred to as assessed net wealth) exceeds the net wealth declared in the return of net wealth furnished by such person for that assessment year (hereafter in this section referred to as returned net wealth) by any amount, the assessing 2s officer shall make an order in writing that such person shall, apart from the sum determined as payable by him on the basis of the asst!&sment under section 16, be liable to pay, by way of additional wealth-tax in respect of the said assessment year, as sum calculat- '" ed on such excess amount at the rate of three per cent 30 (2) for the purposes of sub-section (1) ,-(a) where such person has furnished two or more returns of net wealth for the same assessment year, the net wealth declared in the return furnished last before the tervice of a not1ca udder sub-section (2) of section 16 on such person shall be treated u 3s the returned net wealth; (b) where such person fails to furnish the return of net wealth in respect of any assessment year and the assessment for that year is made under sub-section (5) of section 16, the returned net wealth shahl! be taken to be nil; 40 (c) where such person faus to fumish a return of net wealth for any assessment year under section 14 or section 15, but furnishes such return after he is served with a notice under section 17, the returned net wealth be taken to be "n : ••• 1· " (3) where, as a result of an order under aection 17 or hction 28 4s ' or section 24 or section 25 or section 27 or section 29 or section 35 or any order of the wealth-tax settlement commission under sub-section (4) of section 220, the amount on which the additional wealth-tax is payable under sub-section (1) has been increased or reduced, as the case may be, the additional wealth-tax shall be increased or reduced accordingly, and,-5 (i) in a case where the additional wealth-tax is inc=reased the assessing 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 a notice under section 30 and the provisions of this act shall apply accordingly; i () (ii) in a case where the additional wealth-tax is reduced, the excess amount paid, if any, shall be refunded (4) the chief commissioner or commissioner may, in his discretion, whether on his own motion or otherwise, waive or reduce the amount of additional wealth-tax payable under sub-section (1) i i by any person, if he is satisfied that the whole or, as the case may be, any part of the excess amount referred to in that sub-section is attributable to any amount added or disallowed in computing the assessed net wealth, as a result of the rejection 6f any explanation (by way of interpretation of any provision of this act or otherwise) 20 offered by such person, if such explanation is bona fide and all the facts relating to the same and material to the computation of the assessed net wealth have been dis::loscd by him: provided that-(i) where an appeal before the deputy commissioner 25 (appeals) or commissioner (appeals) or the appellate tribunal has also been filed by the assessee against the order of assessment, the petition for waiver or reduction of the amount of additional wealth-tax can be filed by the assessee only after the decision on such appeal; 30 (ii) the petition for waiver or reduction of the amount of additional wealth-tax shall be accompanied by a fee of one hundred rupees (5) where in the course of a search under section 37a, the assessee is found to be the owner of any money, bullion, jewellery 35 or other valuable article or thing (hereinaft~r referred to as assets) and the assessee claims that such assets represent or form part of his net wealth-(a) on any valuation date falling before the date of the search, but the return in respect of the net wealth on such date 40 has not been furnished before the date of the search or where such return has been furnished before the said date, such assets have not been declared in such return; or (b) on any valuation date falling on or after the date of the search, 45 then, notwithstanding that such assets are declared by him in any return of net wealth furnished on or after the date of the search, the value of such assets shall not, for the purposes of liability to the additional wealth-tax under sub-section (1), be treated as forming part of the returned net wealth, unless-50 (i) such assets are recorded-(a) in a case falling under ~li)usei, (4), before the date of the search; and ' (b) in a case falling udder clauie (b), ad or before· the date of the search, in the books of account, if any, maintained by him or such assets are otherwise disclosed to the chief conuni5sioner or commissioner before the said date; or (ii) the assessee, ill the course of the searcb, makei a state-meat under sub-section (4) of section 37a that any mooey, bul-jio!3, jewejlery or other valuable article or thing found in his pas' session or under his control forms part of his net wealth whicb has not been disclosed so far in his return of net wealth to be 10 furnished before the expiry of the time specifi~ in sub-section (1) 'of section 14, and also specifies in the statement the manner in which such net wealth has been acquired and pays the tax together with interest, if any, in respect fo such net wealth (6) the additional wealth-tax payable under this section shall 15 not be idcluded in the amo\lnt of tax payable on the net wealth a's determined or regular assessment, for the purposes of section 17b"  l~ in section 21a of the wealth-tax act,amend· medl of iectiod 2ja (ii) in clause (i), for the words, brackets and figures "any person referred to in sub-section (3) of section 13 of the income-tax act", the 30 words "any interested person," shall be substituted; (b) in clause (ii), for the words, brackets and figures "any person referred to in sub-section (3) of section 13 of the said act, or", the wg!'ds "any interested person," shan be substituted; (c) clause (iii) shall be omitted; 25 (d) in the first proviso, for the words, brackets and figures "any pers~ ,referred to in sub-section (3) of section 13 of the income-tax act", the words "any interested person" shall be substituted; (e) in the second proviso,-(i) for the 'words, brackets and figures "any person referred 30 to in sub-section (3) of section 13 of the income-tax act has a substantial interest as provided in explanation 3 to that section", the words, figures, brackets and letter "any interested person baa a substantial interest as provided in explanation 3 below subseetion (4) of section 80f of the income-tax act" shall be substi- 35 tutectj (it) for the words, brackets and figure "any person referred to in the aforesaid sub-section (3) ", the words "any interested person" shall be substituted; (f) in the third proviso,-40 (i) for clause (0), the following clause shall be substituted 1i8mely:-- (a) in the case of any trust or institution of national importance notified under clause (d) of sub-section (1) of section 80f of the income-tax act,-4s (i) the provisions of clause (i) and clause (ii) shall aot apply; uid (ti) the other provisions of this section shall applj with the modification that for the words "at the maximum marginal rate", the words and figures "at the rates specified in part i of schedule i in the case of an individual" shall be substituted; '; s (ti) in clause (b), for the words, brackets and figures "claumi (i) to (iii)", the words, brackets and figures "clauses (i) and (ii)" shall be substituted; (g) in the explanation, for clauses (a) and (aa), the followinr 10 clauses shall be substituted, namely:-'(a) the expression "interested person" shall have the meaning assigned to it in clause (a) of explanation 1 below sub-section (4) of section 80f of the income-tax act; (ab) any part of the property or income of a trust shall be ' u deemed to have been used or applied for the benefit of any interested person in every case in which it can be so deemed to have been used or applied within the meaning of clause (e) of sub-section (3) of section 80f of the income-tax act at any time during the period of twelve months ending with the relevant 20 valuation date;' i ajded6 mentof mctioa 2laa 145 in section 21aa of the wealth-tax act, in sub-section (1), for the portion beginning with the words "purposes of this act" and ending with the words "beneficial to the revenue", the words "purposes of this act and at the maximum marginal rate" shall be substituted 146 in section 23 of the wealth-tax act,-2s (a) in sub-section (1),-ameddmentot aection 23 (i) for clause (d), the following clause shall be substituted, namely:-30  (d) objecting to any penalty imposed by the assessing officer under section 18 as it stood immediately before the 1st day of april, 1989 or under section 18, as amended by the direct tax laws (amendment) act 1987; "; (ii) clause (i) shall be omitted; (b) in sub-section (1a) for clauses (b), (c) and (d), the fol-3s lowing clauses shall be substituted, namely:-h(b) objecting to any penalty imposed under clause (e) of sub-section '(1) of section 18 as it stood immediately before the 1st day of april, 1989 in respect of any assessment year commencing on the 1st day of april 1988 or any earlier 040 assessment year where such penalty has been imposed with the previous approval of the deputy commissioner under sub-section (3) of that section; or (c) objecting to any/ assessment or order referred to clause (a) to (h) (both inclusive) of suh-section (1), where 9ueh ulessment or order has been made by the deputy commissionet" in exercise of the powers or functions conferred on or assigned to him under section 8 or section 11; or (b) objecting to any penalty imposed ,by the deputy director or the deputy commissioner under section 18a"; 5 '(c) for sub-sections (lb), and (tc), the following sub-section shall be substituted, namely:-"(lb) notwithstanding anything contained in sub-section (1), the board or the director general or the chief commissio-, ner if so authorised by the board, may, by order ,in writing, 10 transfer any appeal which is pending before a deputy com_ missioner (appeals) and any matter arising out of or connected with such appeal and which i'3 so pending, to the commissioner (appeals) if the board or, as the 'case may be, the director general, the chief commissioner or commissioner 15 (at the request of the appel1ant or otherwise) is satisfied that it is necessary or expedient so to do having regard to the nature of the case, the complexities involved and other relevant considerations and the commissioner (appeals) may proceed with such apoeal or matter from the stage at which it was before it 20 was so transferred: provinf>n that the apoellant mav demand that before procepdin(!' further with the apneal or matter, the previous proc~itlp' or any part thereof be rc-open('d or that he be re_ heard;"; 2s "(b) in sub-section (2a), the proviso shall be' omitted 14'7 after snction 23 of the wealth-tax act, the following section shall be  inserted, namely:-"23a (1) where before furnishing a return of net wealth under sub-section (1) of section t~ or section 15 or sub-section (4) of 30 section 16 for any assessment year, any question arises as to whetber,-insertion of new iiection 23a applica· tion b7 the ui 1111 ia ewtala - (a) any wealth is includible or not in computing the net wealth (hereafter in this section referred to a~ the disputed wealth), or i (b) any exemdtion or deduction is admissible or not in com- 3s putin~ the net wealth (hereafter in this section referred to as the disputed deduction), the assessee shall, after furnishing such return, make an application under sub-section (2): ' i provided that the assessee, -(i) shall include in such return the disputed wealth and sball dot claim the disputed deduction; and (ii) shall also pay thirty per cent of the tax due on the disputed wealth and in respect· of the amount of disputed deduction :(1) the applieation under sub-section (2) may be made 1ritbtd thirty days of furnishing the aforesaid return, to the deputy commissioner (appeals) or, as the case may be, the commtsctoner (appeals) s (3) for the purpose of disposing of an application under subsection (1), the deputy commissioner (appeals) or, as the cue may be, the commissioner (appeals) may-(a) conduct such inquiry or call for such books of account other documents or information which he deems necessary: or 10 (b) direct the assessing officer to conduct such jnquiry and furnish the report thereon, and thereafter'decide the question raised in the apfication and pall such orders thereon as he thinks fit (4) t~ provisions relating to filing of appeals under this act 15 shall, so far as may be, apply to the making of an application under this section as if such application were an appeal" 14k in section 31 of the wealth-tax act,-amendment of (a) in sub-section (1) and the proviso to that sub-section, lor section 31 the words "thirty-five days", in the three places where they occur, 20 the words "thirty days" shall be substituted; (b) in sub-section (2) ,-(i) for the words, brackets and figure "fifteen per cedt per annum from the day commencing after the end of the pertod mentioned in sub-section (1) ", the words, brackets and figure 2s "one and one-half per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid" shall be substituted; 30 (ii) in the proviso, after the words and figures "or section 35", the words, brackets, figures and letter or any order of the wealth-tax settlement commission under sub-8ection (4) of section 22d" shall be inserted; (iii) after the proviso, the following proviso shall be in-3s serted, namely:-"provided further that in respect of any period commencing on or before the 31st day of march, 1989, and ending after that date, such interest shall, in respect of 10 much of such period as falls after that date, be calculawd 40 at the rate of one and one-half per cent for every month or part of a month" 149 in section 32 of the wealth-tax act,-(a) for the words "and to wealth-tax ofj1cer and commias1oner of wealth-tax instead of to income-tax of!lcer and commimioner of amend-dldt of iectiod u income-tax", the words "and to the corresponding wealth-tax  authorities instead of to the income-tax authorities specified therein" shall be substituted~ (b) for explanation ii, the following explanation shall be substituted, namely:-5 '~explanation h-the chief commissioner or commissioner and~he tax recovery officer referred to in the incometax act shall be deemed to be the corresponding wealth-tax authorities br the purpose of recovery of ~alth-tax and sulns imposed by way of penalty, fine and interest under this act" 10  150 in sectir;'\ 34a of the wealth-tax act,-(i) to -:;ection (1), the following proviso shall be added, namely:- amend-ment of section ma ,'provided that wher~, by the order aforesaid,-(a) an assessment is set aside or cancelled and an order is of fresh assessment 'is directed to be made, the refund, if any, shall becqme due only on the making of such fresh assessment; (b) the ass~s'sment is annulled" the refund shall become due only of the amount, if any, of the tax paid in excess 20 of the tax chargeable on the total income returned by the assessee "; i (ii) after sub-section (4), the following sub-sections shall be inserted, namely:-"(4a) the provisions of sub-sections (3), (3a) and (4) 2s shall not apply in respect of any assessment for the assessment year commencing on the 1st day of april, 1989, or any subsequent assessment year, (4b) (a) where, in pursuance of any order passed under i this act, the refund of any amount becomes due to the assessee 30 he shall, subject to the provisions of sub-section be entitled to receive, in addition to the said amount, simple interest thereon calculated at the rate of one and a half per cent for every month or part of a month comprised in the period or periods from the date or, as the case may be, dates of payment of the 35 tax m' penalty to the date on which the refund is granted explanation-for the purposes of this clause, "date of pay-'ment of the tax or penalty" means the date on and from which the amount of tax or penalty specified in the notice of demand issued under section 30 is paid in excess of such demand 40 (b) if the proceedings resulting in the refund are delayed for reasons attributable to the assessee, whether wholly or in part, period of the delay so attributable to him shall be excluded from the period for which interest is payable and where any question arises as to the period to be exicluded, it shall be 45 decided by the chief commissioner or commissioner whose decision thereon shall be final s 10 (c) where as a result of an order under section 17 or sec> tion 23 or section 24 or section 25 or section 27 or section 29 or section 35 or any order of the wealth-tax settlement commission under sub-section (4) of section 22d, the amount on which interest was payable uh~r clause (a) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and, in a case where the interest is reduced, the assessing officer shall serve on the assessee a notice of demand in the prescribed form specifying the amount of the excess interest paid and requiring him to pay such amount; and such notice of demand sh~ll be deemed i to be a notice under section 30 and the provisions of this act shall apply accordingly (d) the provisions of this sub-section shall apply in respect is of assessments for the assessment year commencing on the 1st day of april, 1989 and subsequent assessment years" 151 in section 35 of the wealth_tax act in sub-section (1) clause (aa) shall be renumbered as clause (aaa) and before clause (aaa) as 510 renumbered, the following clause shall be inserted, namely:-amendment of aection 35 20 "(aa) a wealth-tax authority may amend any intimation sent by it under sub-section (1) of section 16 or enhance or reduce the amount of refund granted by it under that sub-section " 152 in section 35k of the wealth-tax act,-ameuciment of (a)in sub-section (1), for the words "an assessment year", the section 25 words, figures and letters "the assessment year commencing on the 35k 1st day of april, 1988, or any earlier assessment year" shall be substitu~d; (b) in sub-section (2), for the words, figures and letters "any of the wealth-tax authorities specified in sections 8, 9, 9a, 10, loa 30 and 11", the words and brackets "any wealth-tax authority (not being an inspector of income-tax)" shall be substituted 153 in section 37 of the wealth_tax act-amendment of be section (a) after sub-section (1), the following sub-section shall inserw, namely:-37 35 "(la) if the director general or director or the authorised officer referred to in sub-section (1) of section 37a, before he takes action under clauses ,(i) to (vi) of that sub-section, hal reason to suspect that any net wealth has been concealed, or is likely to be concealed, by any person or class of persons within his jurisdiction, then, for the purposes of making any inquiry or inv'estigation relating thereto, it shall be competent for him to exercise the powers conferred under sub-section (1) on the wealth-tax authorities referred to in that flection, notwithstanding that no proceedings with resplect to such person or class of 41 persons are pending before him or any other wealth-tax authority "; (b) sub-section (2) shall be omitted; (c) in sub-section (3) ,-(i) after the words, brackets and figure "in sub-section (1) ", the words, brackets, figure and letter "or sub-section (la)" ~hall be inserted; (ii) in the proviso, after the words "valuation officer", s the words "or an assistant director" shall be inserted  154 in section 37a of the wealth-tax act,-(1) in sub-section (1) ,-amedci· meat of jection 37a (a) in clause (c), for the words "any articles or things including money", the words "any money, bullion, jewellery or 10 other valuable article or thing" shall be substituted;  (b) in clauses (a) and (b), for the words "or wealth-tax officer" the words "assistant commissioner or income-tax officer" shall be substituted; (c) in clauses (i) and (ii) , for the words "articles or things 15 including money", the words "money, bullion, jewellery or other valuable article or thing" shall be substituted; (d) for clause (iu) , the following clause shall be substituted, namely:-"(iv) seize any such books of account, other documents, 20 money, bullion, jewellery or other valuable article or thing found as a result of such search;"; (e) in clause (vi), for the words "any articles or things including money", the words "any money, bullion, jewellery or other valuable article or thing" shall be substituted; 2s <f> in the proviso, for the word and figures "section 10", the word and figure "section 8" shall be substituted; (g) after the proviso, the following proviso shall be inserted, namely:-"provided further that where it is not possible or prac- 30 tic able to take physical possession of any valuable article or thing and remove it to a safe place due to its volume, weight or other physical characteristics or due to its beidg afa dangerous nature, the authorised officer may serve an or~r on the owner or the person who is in immediate po  35 lession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such authorised officer and such action of the authorised officer shall be deemed to be seizure of such valuable article or thing under clause (iv) of this sub- 40 section "; (2) in sub-section (2) ,-(a) for the words "articles or things including money", the words "money, bullion, jewellery or other valuable article or thing" shall be substituted; 45 (b) for the word and figures "section 10", the word and ftiure "ection 8" shall be substituted; (3) after sub-section (3), the following sub-section shall be inserted, namely:- s "(3a) the authorised officer may, where it is not practicable to seize any books of account, other docum~nts, money, bullion, jewellery or other valuable article or thing, for reasons other than those mentioned in the second proviso to sub-section (1), serve an order on the owner or the person who is in immediate 10 possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permis!lion of such officer and such officer may take such steps as may be necessary for ensurin'g compliance with this sub-section explanation-for the removal of doubts, it is hereby dec-15 lared that serving of an order as aforesaid under this sub-section shah not be deemed to be seizure of such bo:>ks of account, other documents, money, bullion, jewellery or other valuable article or thing under clause (iv) of sub-section (1) "; (4) in sub-section (4), the following explanation shall be in-20 serted at the end, namely:-"explanation-for the removal of doubts, it is hereby deelared that the examination of any person under this sub-section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in 25 respect of matters relevant for the purposes of any investigation connected with any proceedings under this act "; (5) after sub-section (5), the following sub-sections shall be inserted, namely:-" (5a) where any money bullion, jewellery or other value 30 able article or thing (hereafter in this section and in sectt0d8 37b and 37c referred to as the assets) is seized under sub-section (1) or sub-section (2), the assessing officer, after affording a reasonable opportunity to the person conclerned of being heard and making such inquiry as may be prescribed, shall, within 35 one hundre:l and twenty days of the seizure make a'll' order, with the previous approval of the deputy commissioner,-(i) estimating the undisclosed net wealth in a summaty manner to the best of his judgment on the basis of such materials as are available with him; i (ii) calculating the amount of tax on the net wealth so estimated, in accordance with the provisions of this act; (iii) determining the amount of interest payable and the amount of any penalty imposable in accordance with the provisions of this act, as if the order had been the order of ~gular assessment; 45 (iv) specifying the amount that will be required to satisfy any existing liability' under this act in respect of which such person is in default or is deemed to be in default, and retain in his custody such assets or part thereof a are in his opinion sufficient to satisfy the aggregate of the amounts referred to in clauses (ii) , (iii) and (iv) and forthwith release the remaining portion, if any, of the assets to the person from whose custody they were seized~ 5 provided that where a person has paid or made satisfactory arrangements for payment of all the amounts referred to in clauses (ii), (iii) and (iv) or any part thereof, the assessing oftlcw may with the previous approval of the chief commissioner or commissioner release the assets or such part thereof as he may 10 deem fit in the circumstances of the case (sb) the assets retained under sub-section (sa) may be dealt with in accordance with the provision o'f section 37c (sc) if the assessing officer is satisfied that the seized assets or any part thereof were held by such person for or on behalf of 15 any other person, the assessing officer may proceed under subsection (sa) against such other person and all the provisions of this section shall apply accordingly"; (6) after sub-section (6), the following sub-section shall be in· -rted, namely:-_ 20 ii (6a) an order under sub-section (3a) shall not be in force for a period exceeding sixty days from the date of the order except where the authorised oftlcer, for reasons to be recorded in writing by him, extends the period of operation of the order beyond sixty days, after obtaining the approval of the chief com- 25 missioner or commissioner for such extension: provided that the chief commissioner or commissioner shan not approve the extension of the period for any period beyond the expiry of thirty days after the completion of the proceedings under this act in respect of the years for which the books of 30 account, other documents, money, bullion, jewellery or other valuable articles or things are relevant"; (7) after sub-section (9), the following sub-section shall be inserted namely:-ii (9a) if any person objects for any reason to an order made 35 under sub-section (sa), he may, within thirty days from the date of such order, make an application to the chief commissioner or commissioner stating therein the reasons for such objection and requesting for appropriate relief in the matter"; (8) for sub-section (10), the following sub-section shall be sub- 40 ltitl,lted, namely:-cc (10) on receipt of the application under bub-section (9) the board, or on receipt of the application under sub-section (9a) , the chief commissioner or commissioner, may, after giving the applicant an opportunity of being heard, pass such orders as it or 45 he thinks fit"; (9) after sub-section (12) the following explanations shall be inserted, namely:-"explanation 1-in computing the period referred to in subsection (5a) for the purposes of that sub-section, any period during 50 which any proceeding under this section is stayed by an order or injunction of any court shall be excluded e~lanation 2-in this section, the word "proceeding" mebdi any proceeding in respect of any year under this act which may '5 be pending on the date on which a search is authorised under this section or which may have been completed on or before such date and includes also proceedings under this act which may be commenced after such date 10 respect of any year' 15ls in section 37b of the wealth-tax act,-(a) in sub-section (1),-10 amend-imftt of retioa ml (i) in clause (e), for the words "any articles or things including money" the words "any assets" shall be substituted; (ii) for the words "or wealth-tax offtcer", the words " assistant commissioner or income-tax officer" shall be substitu is ted; (iii) for clauses (i) and (in, the words "to deliver such book of account, oth~ documents, or assets to the requisitioning omcer" shall be substituted; ('b) in sub-section (2), for clauses (i) and (ii), the following shall 20 be substituted, namely:-"the officer or authority referred to in clause (a) or clause (b) or clause (c), as the case may be, of that sub-section shall deliver the books of account, other documents, or assets to the requisitioning ofl'icer either forthwith or when such officer or 25 authority is of the opinion that it is no longer necessary to retain the same in his or its custody"; (c) for sub-section (3), the following sub-section shall be sub-tituted, namely:-c (3) where any books of account, other documents, or assets have been delivered to the requisitioning officer, 30 the provisions of sub-sections (5) to (12) (both inclusive) of section 37a and section 37c shall, so far as may be, apply as if such books of account, other documents, or assets had been seized under sub-section (1) of section 37a by the requisitioning officer from the custody of the person referred to in clause (a) 35 or clause (ib) or clause (c) of sub-section (1) of this section and as if for the words "the authorised officer" occurring in sub-sections (5) to (12) aforesaid, the words "the requisitioning officer" were substituted' 156 after section 37b of the wealth-tax act, the following section 40 ihall be inserted, namely:-insertion of new section, 37c  u37c (1) the assets retained under sub-section (5a) of section 37a may be dealt with in the following manner, namely:-application of retained   sets (i) the amount of the existing liabibty referred to in clause (iv) of the said sub-se~tjon &nd the amount <if the liabili~y dete~-mined on completion of the regular assessment or re-assessment for all the assessment years for which the net wealth referred to in clause (i) of that sub-section is assessable to tax (including any penalty levied or interest payable, in connection with such assessment or re-assessment) and in respect of which the assessee 5 is in default or is deemed to be in default may be recovered out of such 811setsj (ii) if the assets consist solely of money, or partly of money and partly of other assets, the assessing officer may apply such money in the discharge of the liabilities referred to in clause (i) 10 and the assessee shall be discharged of sueh 1iabi1ities to the extent of the money so applied; (iii) the assets other than money may alsy) be applied for the discharge of any such liability referred to in clause (i) as remains undischarged· and for this purpose such assets shall be deemed is to be under distraint as if such distraint was effected: by the assessing officer under authorisation from the chief commissid-ner or commissioner under sub-section (5) of section 226 of the income-tax act as made applicable to this act by section 32, and the assessing officer may recover the amount of such liabilities 20 by the sale of such assets and such sale shall be effected in the manner laid down in the third schedule to the incotrte:-tax act as made applicable to this act by section 32 (2) nothing contained in sub-section (1) shall preclude the recovery of the alnount of liabilities aforesaid by any other mode laid 25 down in this act (3) any assets or proceeds thereof which remain after the liabilities referred to in clause (i) of sub-section (1) are discharged shall be forthwith made over or paid to the persons from whose custody the assets were seized 30 (4) (a) the central government shall pay simple interest at the rate of fifteen per cent per annum on the amount by which the aggregate of the money retained under section 37a and of the proceeds, if any, of the assets sold towards the discharge of the existing liability referred to in clause (iv) of sub-section (5a) of that section 35 exceeds the aggregate of the amounts required to meet the liabilitiel referred to in clause (i) of sub-section (1) of this section (b) such interest shall run from the date immediatelyfollowin, the expiry of the period of six months from the date of the order under sub-section (5a) of section 37a to the date of the regular 40 aj:eessment or re-assessment referred to in clause (i) of sub-section (1) or, as the case may be, to the date of the las'!; of such' a8seslnrienu or re-assessments"  157 in seetion 38'of the wealth-ax act,-all'lend ment of toection 88 (a) for the words "where, fur the purposes of determining the 45 wealth-tax payable by any person", the words ''where, for th~ purpose8of this' act" shall be substitutedj  (b) for the words "the wealth-tax officer", in the first place where they occur, the words "any wealth-tax authority" and, in the second and third places where they occur, the words "such wealth-tax authority" shall be substituted; ~ \c) after the words "from any individual, company", the brackets and words "(including a banking company)" shall be msertea 158 in section 45 of the wealth-tax act, after clause (i) and the explanation thereto, the following clause shall be inserted, namely:-amenlj-mont of section 4' "(j) a mutual fund specified under clause (23d) of section 10 10 of the income-tax act" 159 after section 46a of" the wealth-tax act the following section inser_ shall be inserted with effect from the 1st day of april, 1988, namely: -tion 0 new section 4'1 "47 (1) if any difficulty arises in giving effect to the provisions of this act as amended by the direct tax laws (amendment) act }987, the central government may, by order, do anything not in-15 power to remove difficulties ~onsistent with such provisions for the purpose 0'£ removing the  difficulty:  , ~ " ' provided that no such order shall be made after the expiration of three years from the 1st day of april 1988 20 (2) every order made under sub-section (1) shall be laid before each house of parliament" 160 the 'following amendments (being amendments of a consequen-consetial nature) shall be made in the wealth-tax act with effect from the· quential 1st day of april 1989, namely: -:::~-25 (1) in section 5, in sub-section (1), in clause (i) for the proviso, the following proviso shall be substituted, namely:-"provided thai nothing contained in this clause shall app~y to any property, forming part of any business, not being a business, 30 (a) the income whereof qualifies for deduction under section 80f of the income-tax act; or (b) a business carried on by an institution, fund or trust referred to in clause (22) or clause (22a) or clause (23b) or clause (23c) of section 10 of that act;"; 35 (2) in section 24, in sub-section (1), after the word and fiiures "section 23", the words, figures and letter "or section 23a" shall be inserted; (3) in section 35, in sub-section (1),-(a) 'for clause (b), the following clause shall be substituted, 40 i namely:-"(b) the deputy director or deputy commissioner or director or commissioner or deputy commissioner (appe-i als) or commissioner (appeals) may amend any order pa  sed by him under section 18a;"; (b) for clauses (d) and (e), the following clauses shall be substituted, namely:-"(c) the deputy commissioner (appeals) or commissioner (appeals) may amend any order passed b1 him under section 23 or section 23a; s (d) the commissioner may amend any order passed by him under section 25; (e) the appellate tribunal may amend any order passed by it under section 24"  chapter iv· 10 amendments to the gift-tax act, 195811 of u8 161 in the gi'ft-tax act, 1958 (hereafter in this chapter referred to as the gift-tax act) substi· tution ot new utho· ritiel save as otherwise expressly provided in this act, and unless the context otherwise requires, reference to any authority specified in column 15 (1) of the table below shall be substituted with effect from the 1st day of april 1988 by references to the authority or authorities specified in the corresponding entry in column (2) of the said table, and such consequential changes as the rules of grammar may require, shall also be made;  20 table - - -- -  -__-----__----_  -  _-_  _--(1) (2) --director of inspection director general or director deputy director of inspection deputy director 25 assistant director of inspection assistant director commissioner or commissioner of chief commissioner or commissioner gift-tax 30 inspecting assistant commission  deputy commissioner inspecting assistant commissioner of gift-tax deputy commissioner (appeals) assessing officer apj>plate assistant commissioner gift-tax officer inspector of income-tax inspector of gift-tax ---~----------provided that nothing contained in this section shall apply to the '35 references to "commissioner" occurring in sections 23 and 24 i 162 in section 2 of the gift-tax act,-(a) clause (i) shall be omitted; amend_ mentol ectlon 2 (b) after clause (iii), the following clause shall be il188l'ted, namely:-40 5 10 '(iiia) "assessing officer" means the assistant commissioner or the income-tax officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under subsection (1) or sub-section (2) of section 120 or any other provision of the income-tax act which apply for the purposes of gift-tax under section 7 of this act, and also the deputy commissioner who is directed under clause (b) of sub-section (4) of the said section 120 to exercise or perform all or any of the powers and functions conferred on or assigned to the assessing officer under tha,t act;'; (c) clauses (vi), (via), (viia) , (xiii), (xv), (xvi), (xvia) and (xvii) shall be omitted; (d) for clause (vii), the following clause shall be substituted, namely:-15 '(vii) the expressions "company", "indian company" and "company in which the public are substantial1y interested" shall have the meanings respectively assigned 'to them under section 2 of the income-tax act;'; 2~ (e) for clause (xi), the following clause shall be substituted, namely:-- (xi) the expressions "firm", "partner" and "partnership" shall have the meanings respectively assigned to them under section 2 of the income-tax act'; (f) in c1au~ (xx) ,-25 (i) sub-clause (b) shall be omitted; (ii) in the first proviso, the words, brackets and letter "or sub-clause (b)" shall be omitted; (iii) the second proviso shall be omitted; (g) after clause (xxiv), the following clause shall be inserted 30 namely:-'(xxv) the expressions "chief commissioner", "director general", "commissioner", "commissioner (appeals", "director", "deputy commissioner", "deputy commissioner (appeals)" "assistant commissioner", "income-tax officer'~, "tax be-35 covery officer" and "inspector of income-tax" shall have the meanings respectively assigned to t~em under section 2 of the i income-tax act' amend_ mentol rctfoll i 163 in section 3 of the gift-tax act, in sub-section (2), for the words "subject to the other provisions contained in this act", the words and 40 brackets "subject to the other provisions (including provisions for the levy of additional gift-tax) contained in this act" shall be substituted i,~64for; ,sections 7, 8, 9 and 10 of the gi'£t-tax act, the following ~tipns ,saallbe &ubstituted, namely:-substitu tion of new sections for sections !7, 8,9 and 10 gift-tax authorities and their jurisdiction "7 the income-tax authorities specified in section 116 of the income-tax act shall be the gift-tax authorities for the purposes of this act and every such authority shall ejcercise the powers and 5 perform the functions of a gift-tax authority under this act in respect of any person within his jurisdiction, and for this purpose his jurisdiction under this act shall be the same as he has under the income-tax act by virtue of orders or directions issued under section 120 of that act (including orders or directions assigning con- 10 current jurisdiction) or under any other provision of that act explanation-for the purposes of this section, the gift-tax authority having jurisdiction in relation to a person who has no income assessable to income-tax under the income-tax act shall be the gift-tax authority having jurisdiction in respect of the area in 15 which that person resides control of gifttax athori· ties 8 section 118 of the income-tax act and any notification issued thereunder shall apply in relation to the control of gift-tax authorities as they apply in relation to the control of the corresponding ,income-tax authorities, except to the extent to which the board 20 may, by notification in the official gazette, otherwise direct in respect of any gift-tax authority instructiqns to subordinate authoriti- 9 (1) the board may, from time to time, issue such orders, instructions and directions to other gift-tax authorities as it may deem fit for the proper administration of this act, and such autho,ri- 25 ties ~nd all otherpersons employed in the execution of this act shall observe and follow such orders, instructions and directions of the board: ' provided that no such orders, instructions or directions shall be issued-30 (a) so as to require any gift-tax authority to make a part! cular assessment or to dispose of a particular case in a partl-, cular manner; or (b) so as to interfere with the discretion of the commissioner (appeals) or commissioner (appeals) deputy in the 35 e~ercise of his appellate functions i (2) without prejudice to the generality of the foregoing power,-,j (a) the board may, if it considers it necessary or expedient so to do, for the purpose of proper and efficient management of 40 ,the work of assessment and collectiod of revenue, issue, :from ,time to time (whether by way of relaxation of any of the provs-;sions of sections 15, 16, 1'1 and 34 or otherwise), general or 5 special orders in respect of any class of cases, setting forth c:lii-ections or instructions (not being prejudidal to assessees) as to the gui~elines, principles or procedw-es to be followed by other gift-tax authorities in the work relating to assessment or collection of revenue or the initiation of proceedings for the imposition of penalties and any such order may, if the board is of opinion that it is necessary in the public interest so to do, be published and circulated in the prescribed manner for general information; 10 15 (b) the board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise any gift-tax authority, not heing a d~puty commissioner (appeals) or commissioner (appeals) to admit an application or claim for any exemphon deduction, refund or any othe,r relief under this act after the e,?,piry of the period specified by or under this act for making such application or claim and deal with the same on merits in accordance with law 20 10 (1) the provisions of sections 124 and 127 of the income-tax act shall, so far as may be, apply for the purposes of this act as they apply for the purposes of the income-tax act mbject to the modifications specified in sub-section (2) (2) the modifications referred to in sub-section (1) shall be the following, namely:-juri8dict:on of assess_ ing officers and power to trans-25 ferca8~ (a) in section 124 of the income-tax act,-(i) in sub-section (3), references to the provisions of the income-tax act shall be construed as references to the corresponding provisions of the gift-tax act; (ii) sub-section (5) shall be omitted; 30 (b) in section 127 of the income-tax act, in the explanatioft below sub-section (5), references to proceedings under the income~tax act shall be construed as including references to proceedings under' the gift-tax act" 165 sections 7a 7aa, 7b 8a 9a 11, lla llaa, lib and 12 of the omis-35 gift-tax act shall be omitted sion of sectiona 7a,7aa, 7b, ba, 9a, 11, lla, lla,a 'llb and 12 166 in section 13 of the gift-tax act,-amendmentof section 13 (a) for sub-sections (1) and (2), the following sub-sections shall be substituted, namely:-40 "(1) every persbn who ~uring a previous year has made any taxable gifts, or is assessable in respect of the taxable gifta made by any other person under this act; which, in either case, exceeded the maximum amount not chargeable to gift-tax, shau, on or be'fore the 30th day of june of the corresponding assessment year, furnish a return of such gifts in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed (2) notwithstanding anything contained if} any other provision of this act, a return which shows the amount of taxable s gifts below the maximum amount which is not chargeable to tax shall be deemed never to have been furnished: provided that this sub-section shall not apply to a return furnished in response to a notice under section 16"; (b) sub-section (3) shall be omitted 10 substitu 167 for section 14 of the gift-tax act, the following section shall be tionof substituted, namely:-: new sec tion for lection 14 return after due date and amendmentol return "14 if any person has not furnished a return within the time allowed under sub-section (1) of section 13 or by a notice issued under clause (i) of sub-section (4) of section 15, or having furnished 15 a return discovers any omission or wrong statement therein, he may furnish a return or a revised return, as the case may be, at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier: 20 provided that-(a) where such return or revised return relates to the assessment year commencing on the 1st day of april, 1987, or any earlier assessment year, it may be furnished at any time up to and inclusive of the 31st day o'f march 1990 or before the com- 25 pletion of the assessment whichever is earlier; (b) where such return or revised return relates to the assessment year commencing on the 1st clay of april 1008, it may be furnished at any time upto and inclusive of the 31st day of march, 1991, or before the completion of the assessmenf, which- 30 ever is earlier" 168 in section 14a of the gift-tax act,-(i) for clause (a) the following clause shall be substituted, namely:-amendmento! section 14a, "(a) in the case of an individual,-35 (i) by the individual himself; (ii) where he is absent from india, by the individual himself or by some person duly authorised by him in this behalf; (iii) where he is mentally incapacitated from attendin, 40 to his aftairs, by his guardian or any other person compete~ to act on his behalf; and (i'v) where, for any other reason, it is not possible for the individual to sign the return, by any per~on duly authorlsed bv him in this behalf; 4s provided that in a case referred to in sub-clause (ii) or sub-clause (iv) , the person signing the return holds a valid power of attorney from the individual to do so, which shall be attached to the return;"; (ii) to clause (c), the following provisos shall be added aamely:-"provided that where the company is not resident in india, the return may be signed and verified by a person who holds a valid power of attorney from such company to do so, which shall 10 be ttaclled to the return: provided further that,-15 (4) where the company is  being wound up, whether under the orders of the court or otherwise, or where any person has been appointed as the receiver of any assets of the company, the return shall be signed and verified by the liquidator referred to in sub-section (1) of section 178 of the income-tax act; 20 (b) where the management of the company has been taken over by the central government or any state government under any law, the return of the company shall be signed and verified by the principal officer thereof" 169 after section 14a of the gift-tax act, the following section shall be inserted, namely:-insertion of new section 14b "14b (1) where any tax is payable on the basis of any return self-25 furnished under section 13 or under section 14 or in response to a  notice under clause (i) of sub-section (4) of section 15 or under ment section 16, after taking into account the amount of tax, if any, already paid under any provision of this act, the assessee shall be liable to pay such tax, together with interest payable under any 30 provision of this act for any delay in furnishing the return, before furnishing the return and the return shall be accompanied by proof of payment of such tax and interest explanation-where the amount paid by the assessee under this sub-rection falls short of the aggregate of the tax and interest as 35 aforesaid, the amount so paid shall first be adjusted towards the interest payablie as aforesaid and the balance, if any, shall be adjusted towards the tax payable (2) after the regular assessment under section 15 has been made, any amount paid under sub-section (1) shall be deemed to have 40 been paid towards such regular assessment (3) if any assessee faus to pay the whole or any part of such tax or interest or both in accordance with the provisions of sub-section (1), he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of 45 the tax or interest or both remaining unpaid and all the provisions  of this act shall apply accordingly", substitu-170 for section 15 of the gift-tax act, the following section shall tiono! be substituted, namely:-new section for section 15 asse98_ ment 'j5 (1) (a) where a return has been made under section 13 or section 14 or in response to a notice under clause (i) of sub-section (4),-5 (i) if any tax or interest is found due on the basis of such return after adjustment of any amount paid by way of tax or interest, an intimation shall be sent to the assessee specifying the sum so payable, and such intimation shall be deemed to he a notice issued under section 31 and all the provisions of this act 10 shall apply ac\1ordingly; and (ii) if any refund is due on the basis of such return, it shall be granted to the assessee: provided that in computing the tax or interest payable by, or refundable to the assessee, the following adjustments shall be 15 made in the return and as a ¢sult of which,-(i) any arithmetical errors in the return, accounts or documents accompanying it shall be rectified; (ii) any exemption or deduction which, on the basis of the information 2vailable in such return, accounts or docu- 20 ments" is prima facie admissible but which is not claimed or made in the return, shall be allowed; (iii) any exemption or deduction claimed or made in the return, which, on the basis of the information available in such return, accounts or documents, is prima facie inadmis- ?5 sible, shall be disallowed; (b) where as a result of an oroer made under section 16 or ipc-tion 22· or section 23 or section 24 or section \ 26 or section 28 or section 34 relating to any earlier assessment year and passed subseyuent to the filing of the return referred to in clause 30 (a), there is any variation in the exemption or deduction claimed or made in the return, and asa result of which,-(i) if any tax or interest is found due, an intimation ahall be sent to the assessee specifying the sum so payable, and 8u  h intimation shall be deemed to be a notice of demand issued under 35 section 31 and au the provisions of this act shall apply accordingly; and (ii) if any refund is due, it shall be granted to the assessee: provided that an intimation for any tax or interest due under this clause shall not be sent after the expiry of four years from the 40 end of the financial year in which any such order was passed (2) in a case referred to in sub-section (1), if the assessing officer co'1siders it necessary or expedient to ensure that the assessee has not o~itted to disclose any taxable gift or has not unde1'!tated ~  --~  the amount or value of any such gift or has not under-paid the tax in any manner he shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend at the office a! the assessing officer or to produce, or cause to be produced there, any s evicience on which the assessee may rely in support of the return: provided that no notice under this sub-section shall be served on the assessee after the expiry of the financial year in which the -return is furnished or on the expiry of six months from the end of the month in which the return is furnished, whichever is later 10 (3) on the date specified in the notice issued under sub-section (2) or, as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the assessing officer may require on specified points, and after taking into account all relevant material which he has gathered, the assessing officer 15 shall, by order in writing, assess the value of taxable gifts made by the assessee and determine the sum payable ljy him on the basis of su\!h assessment (4) for the purposes of making an assessment under this act, the assessing officer may serve, on any person who has made a re-20 turn under section 13 or section 14 or in whose case the time allowed under sub-section (1) of section 13 for furnishing the return has expired, a notice requiring him, on a date to be specified therein,-(i) where such person has not made a return before the end of the relevant assessment year, to furnish a return of the taxable 25 gifts made by him or of the taxable gifts made by any r)the'r person in respect of which he is assessable under this act during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed, or 30 (ii) to produce or cause to be produced such accounts, records or other documents as the assessing officer may require   (5) if any person,-(a) fails to make the return required under sub-section (1) of section 13 and has not made a return or a revised return under 35 section 14, or (b) fails to comply with all the terms of a notice issued under sub-section (2) or sub-section (4) , 40 the assessing officer after taking into account all relevant material which he has gathered, shall, after giving such person an opportunity of being heard, estimate the value of taxable gifts to the best of his judgment and determine the sum payable by such person on the basis of such assessment: 4s provided that such opportunity shall be given by the assessing officer by serving a notice calling upon the person to show calls'!, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgment: provided further that it shall not be necessary to give su~h 'jpportunity in a case where a notice under sub-section (4) has been issued prior to the making of the assessment under this sub-section (6) notwithstanding anything contained ij:) section 6, for the purpose of making an assessment under this act, the assessing 5 ufficer may refer the valuation of such property to t~ valuation oolcer,-(a) in a case where the value of the property as returned is in accordance with the estimate made by a registered valuer, if the assessing ~r is of opinion that the value so returned 10 is less than its fair market value; (b) in any other case, if the assessing officer is of opinion-(i) that the fair market value of the property exceeds the value of the property as returned by more than such percentage of the value of the property as returned or by 15 more than such amount as may be prescribed in this behalf; or (ii) that having regaxd to the nature of the property and other relevant circumstances, it is necessary so to do, and where any such reference is made, the provisions of sub-sections 20 (2) (3) (4), (5) and (6) of section 16a, clauses (00) and (i) of subsection (1) and sub-sections (3a) and (4) of section 23 sub-section (5) of section 24 section 34aa section 35 and section 37 of the wealth-tax act, 1957, shall, with the necessary modifications, apply in relation to such reference as they apply in relation to a reference 25 made by the assessing officer under sub-section (1) of section 16a of that act explanatlion-in this ~ulhiection, "valuation officer',' has the same meaning as in clause (r) of section 2 of the wealth-tax act, 1957' 30 27of1957  171  in section 16 of the gift-tax act,-(a) for sub-section (1), the following sub-sections shall be substituted, namely:-amendment of section 16, "(1) if the assessing officer, for reasons to be recorded by him in writing, is of the opinion that the taxable gifts in ?!spect of which any person is assessable under this act (whether made 35 by him or by any other person) have escaped assessment for any assessment year (whethe;r by reason of under-assessment or assessment at too low a rate or otherwise), he may, subject to the other provisions of this section and section 16a, serve on such person a notice requiring him to furnish within such period, not 40 being less than thirty days, as may be speci1ied in the notice, a return in the prescribed form and verified in the prescribed manner, setting forth the taxable gifts made by him or by such other person during the previous ye~r mentioned in the notice, in respect of which he is assessable, along with such other particulars 45 as may be required by the notice, and may proceed to assess or reassess such gifts and also any other taxable gifts in respect \if which such person is assessable, which have e::scaped assessment and which come to his notice subsequently in the course of the proceedings under this ~ction for the assessment year concerned 5, (hereafter in this section referred to as the relevant assessment year); and the provisions of this act shall, so far as may be, apply as if the return were a return required under section 13: provided that where an assessment under bub-sect1on (3) of section 15 or thii section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assesii-ment year, unless any taxable gift chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under se<!tion 13 or section 14 or in response to a notice issued under sub-section (4) of section 15 or this section or to disclose fully and truly all material facts necessary for his assessment for that assessment year expzanation-production before the assessing ofticer of a\!-20 count books or other evidence from which material evidence could with due diligen~ have been discovered by the assessing officer will not necessarily amount to disclosure within the meaning of the foregoing proviso (la) no notice under sub-section (1) shall be issued for the 25 relevant assessment y~ar,-(a) in a case where an assessment under sub-section (') of section 15 or sub-section (1) of this section has been made for such assessment year,-30 (i) if four years have elapsed from the end of the relevant assessment year, unless the case falls under sub-clause (ii) or sub-clause (iii); 36, (ii) if four years, but not more than seven years, have elapsed from the end of the relevant assessment year, unless the value of taxable gifts' chargeable to tax which have escaped assessment amounts to or is likely to amount to rupees fifty thousand or more for that year; 40 (iii) if seven years, but not more than ten years, have elapsed from the end of the relevant assessment year, ul)lless the value of taxable gifts chargeable to tax which have escaped assessment amounts to or is likely to amount to rupees one 1akh or more for that year; (b) in any other case,-4s (i) if four years have elapsed from the end of the relevant assessment year, unless the case falls under sub-clause (ii) or sub-clause (iii); (ii) if four years, but not more than seven yead, have elapsed from the end of the relevant assessment year, unless the value of taxable gifts chargeable to tax which have escaped assessment amounts "to or is likely to amount to rupees twenty-five 'thousand 01' 5 illore fo~ that year; (iii) if seven years, but not more than ten years, have elapsed from the end of the relevant assessment year, unless the value of taxable gifts chargeable to tax which have escaped assessment amounts to or i8 10 likely to amount to rupees fifty thousand or more for that year explanalion-·:for the purposes of sub-section (1) and subsection (la), che folluwing shall also be deemed to be cases where taxable gifts chargeable to tax have escaped assess- 15 ment, namely:-(a) where no return of taxable gifts has been furniahed: by the assessee although the taxable gifts made by him or the taxable guts made by any other person in respect ot which he is assessable under this act during the previous 20 year exceeded the maximum amount which is not chargeable to gift-tax; (b) where a return of taxable gifts has been furnilbed by the assessee uut no assessment has been made and it ta noticed by the assessing officer that the assessee has 25 understated the amount or value of the taxable gifts or has claimed excessive exemption or deduction in the return (1b) (a) in a ,ase where an assessment under sub-section (3) of section 15 clr sub-section (1) of this section has been 30 made for the relevant assessment year, no notice shall be issued under sub-section (1) except by an assessing officer of the rank of assistant commissioner or deputy commissioner: provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued 3s unless the chief commissioner or commissioner is satisfied, on the reasons recorded by the assessing officer aforesaid, that it is a fit case for the issue of such notice (b) in a case other than a case falling under clause (a), no notice shall be issued under sub-section (1) by an assessing 0fb- 40 cer, who is below the rank of deputy commissioner, after the expiry of four years from the end of the relevant assessment year, unless the deputy commissioner is satis1ied, on t,te reasons recorded by such assessing oftlcer, that it is a fit cae for the issue of such notice"; 4s (b) in sub-section (2), the words "or by a court in any proceedings under any other law" shall be added at ~ end 172 in section 16a of the gift-tax act-(a) for sub-sections (1) and (2), the following sub-sections shall be substituted, ~amely:-amendmentof section 16a 5 "(1) no order of assessment shall be made under section 15 at any time after the expiry of o'l1e year from the end of the assessment year in which the gifts were first assessable: 10 provided that where the gifts were first assessable in the assessment year commencing on the 1st day of april, 1985, or the 1st day of april, 1986 such assessment may be made on or before the 31st day of march, 1990 (2) no order of assessment or reassessment shall be made under section 16 after the ~xpiry of two years from the end of the financial year in which the notice under sub-section (1) of that section was served: provided that,-15 (i) where the notice under clause (a) of sub-section (1)o'f section 16 was served during the financial year commencing on the 1st day of april, 1985, or the 1st day of april, 1986 such assessment or reassessment may be completed on or before the 31st day of march, 1990; 20 2s (ii) where the notice under clause (b) of sub-section (1) of section 16 relates to the assessment for the assessment year commencing on the 1st day of april, 1985" or the 1st day of april, 1986 such assessment or reasessment may be completed on or before the 31st day of march, 1990, or the expiry of two years from the end of the financial year in which such notice was served, whichever is later explanation-references to section 16 in the proviso shall be construed as references to that section as it slood before its amendment by the direct tax laws (amendment) act, 1987"; 30 (b) in sub-section (3) ,-3s (i) for the words "four years", the words "two years" shall be substituted; (ii) the followirg proviso shall be inserted at ~ end, namely:-·'provided that where the order setting aside or cancelling the assessment was passed during the financial year commencing on the 1st day of april, 1985, or the 1st day of april, 1986, the order of fresh assessment may be made on or before the 31st day of march, 1990" 40 173 after section 16a of the gift-tax act, the following section shall be inserted, namely:-4s '16b (1) where a return of gifts for' any assessmen't year under sub-section (1) of sect:on 13 or section 14" or in response to a notice under clause (i) of sub-section (4) of section 15, is furnished after the 30th day of june of such year, or is not furnished, the assessee shall ,~ liable to pay simple interest at the rate of two per cent for every insertion of new aecuon 1eb interest for defaulb! in furnishingre turn of gifta month or part of a month comprised in the period commencing on the 1st day of july of the ass~ssment year, and,-(a) where the return is furnished after the 30th day of june ending on the daue of furnishing of the return; or (b) where no return has been furnished, ending on the date 5 of completion of the assessment under sub-section (5) of section 15, on the amount of tax payable on the taxable gifts as determined on regular assessment explttnation i-in this sub-section and sub-section (3), "tax 10 payable on the taxable gifts as determined on regular assessment" shall not include the additional gift-tax i'f any, payable under section 18b explanation 2-where in relation to an assessment year the as~essment is made for the first time under section 16, the assess- is ment so made shall be regarded as a regular assessment for the purposes of this section (2) the interest payable under sub-section (1) shall be reduced by the interest, if any, paid under section 14b towards the interest char~ble under this section 20 (3) where the return of gifts for any assessment year, required by a notice under sub-section (1) of section 16 issued after the completion of an assessment under sub-sec'tion (3) or sub-section (5) of section 15 or section 16, is furnished after the expiry of the time allowed under such notice, or is not furnished, the assessee shall be 25 liable to pay simple interest at the rate of two per cent for every month or part of a month comprised in the period commencing on the day immediately following the expiry of the time allowed as aforesaid, and,-i (a) where the return is furnished after the expiry of the 30 t~ aforesaid, ending on the date of furnishing the return; or   --(b) where no return has been furillshed, ending on the date of completion of the reassessment uuder section 16, on the amount by which the tax on the taxable gifts determined o1l the basis of such reassessment exceeds the tax on the taxable 3s gifts as determined on the basis of the earlier assessment aforesaid explanation-in this sub-section, "tax on the taxable ilf':s determined on the basis of the reassessment under section 16" shall not include the additional gift-tax, if any, payable under section 16b  (4) where, as a result of an order under section 22 or section 23 or section 24 or section 26 or section 28 or section 34 the amount of tax on which interest was payable under this section h~ been increaaecl ot reduced, al the cue may de, e interest ahad be increased or reduced accordingly, and;-(i) id a case where the interest is fd(:realsd, the asseuing s oftl~r shall serve on the assessee a notictt of demaad in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 31 and the provisions of this act shall apply accordingly, and (ii) in a case where the intereai is reduced, the excea interest paid, if any, shall be refunded it) (5) the provisions of this section shall apply tn respect of as"1essments for the assessment year commencing on the 1st day of april, 1989 and subsequent assessment years'  1'16 por sectiou 17 and 17a of the gift-tu act, the following substjtu ifctwl:ls shall be substituted, namely:-tion of new liections forseetiona it and17a is '17 (1) if the assessldg offtcer, 1d the course of any proceedinp penalty under this ac~, is satisfied that any person has failed to comply r~ wilh the notice under sub·section (2) or su~section (4) of section ~o ure 15, the as&essing otiicer may, by order in writing, dh'ect that such comply person shall pay, by way of penalty, a sum which shall not be less with ~o than one thousand rupees but which may extend to twenty·llve now thousand rupees for each such failure: provided that-(a) no penalty shall be imposable under this section if the persod ~ that there was reasonable cause for the failure 2s referred to in this sub-section; (b ) no order imposing a penalty under thia section shall be made-(i) by the income-tax oftlcer, where the penalty exceeds ten thousand rupees; 2s (ii) by the assistant commissioner, where 'the penalty exceeds twenty thousand rupees; except with the prior approval of the deputy commissioner (2) no order shall be made under subsection (1) unless the person concerned has been he~d or has been given at reasonable opportunity of being heard (3) no order imposing a penalty under sub·sect1on (1) shall be passed aftier the expiry of the ftnancial year in wbteh the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of thb month~jn which action for imposition of penalty is initiated, whichever period exp~ later e:rplanation-incomputing the period of limitation fo the purposes of this section,-(i) the time taken in giving an opportunity to the assessee 5 to be re-heard under the proviso to section 38; and (ii) any period during which a proceeding under this lection for the levy of the penalty is stayed by an order or iajunction of any court, shall be excluded 17a (1) if a person,-(0) being legally bound to state the truth of any matter touch1ng the· subject of his assessment, refuses to answer an, question put to him by a gift-tax authority in thie exerc1!e of his powers under this act; or (b) refuses to sign any statement made by him in the is course of any proceedings under this act, which a gift-tax authority may legally require him to sign; or penalty for failul'8 to answer questions, sign statementa, fumish informa_ tion, allow il1llpeetimw, etc (c) to whom a summons is issued under sub-section (1) of section 36, either to attend to give evidence or produce books of ~o aecount or other documents at a certain place and time, ~mits ~ attend or produce the books of account or docum~nts at the place and time, ' he shall pay, by way of ~nalty, a sum which shall not be less than five hundred rupees but which may extend to ten thousand ruppes 2s lor each such default or failure: provided· that no penalty shall be imposable under clause (r:) if the person proves that there was reasonable cause for the said failure (2) if a· person' fails to furnish in due time any statement or 30 information which such person is bound to furnish to the assessing officer under section 37, he shall pay, by way of penalty, iii sum which shall not be less than one hundred rupees but which may extend to two hundred rupees for every day during which the failu1'e continues: 35 provided that no pen~lty shall be hnposable under this subsection if the person proves that there was reasonable cause for the said failure (3) any penaltyimposable under sub-section (1) or subsection (2) shall be imposed-~ (a) in a case where the contravention, failure or default in respect of which' such ·penalty is imposable occurs in the cour~e of ally proceeding before a gifttax authority not lower in rank tnan a ikputy director or a deputy commissioner; by such gift- tax authority; ~~ ,  (b) in any other case, by the deputy director or uie j)epu commission8&' 5 (4) no order under this section shall be passed by any gift-tax: authority referred to in sub-section (3) unless the person on whom penalty is proposed to be, imposed has been heard or has been given a reasonable opportunity of being heard ir the matte~ by such' authority 10  lot 1801explanation-in this section, "gift-tax authority" includes a director general, director, deputy director, assistant director or valuation officer while exercising the powers vested in a court under the code of civil procedure, 1908, when trying a suit in respect of the matters specified in sub-section (1) of section 38' 175 in the gift-tax act after section 18a the following chapter shah inaerlie inserted, namely:-ti-etaew chapter ita  "chapter iva 15 charge of addi'nonal gil"m'ax in certain cas_addition'" gift-tax 25 18b (1) where, in the case of any person, the value of taxable gifts determined in the regular assessment for any assessment year (hereafter in this section referred to as assessed taxable tifts) exceeds the value of taxable gifts declared in the retum of taxable gifts furnished by such person for that assessment year (hereafter in this section referred to as returned taxable gifts) by any amount, the assessing officer, shall make an order in writing that such person shall, apart from the sum determined  payable by him on the basis of the- assessment under section 15, be liable to pay, by way of additional gift-tax, in respect of the said assessment year, a sum calculated on such excess amount at the rate of twenty per cent (2) for the purposes of sub-section (1) ,-30 (a) where such person has furnished two or more return of taxable gifts for the same assessment year, ~ value of taxable gifts declared in the return· furnished last before the service of a notice under sub-section (2) of section 15 on such person shall be treated as the returned taxable gifts; , , 35 (b) where such person fails to furnish the return of taxable gifts in resp,ect of any assessment year and the assessment for , that, year is made under ,sub-secti9n (5) of ,sec,tion 15, the returned taxable gifts shall be taken' to be nil; (c) where such person fails to furnish a return of taxable gifts for any assessment'year under section '13"or section 14, but furnishes such return after, he is served with a: notice under 8eetioi1 16, the returned taxable gifts shall be taken to be nil; (3) where, as a result of an order under secstion 16 or section 22 or section 23 or s«:tion 24 or section 26 or section 28 or section m, the amount on wbloh' tl1'e' 'addition81 "gift'tax'· is payable -is _chr l\lb4eetien (i) has been inet'ealed or rductd as the cue may be, the additional gift-tax shall be increahd gl' redueed accordingly, and,-(i) in a ease w~e the addltioftal gift-t8x is tn~, the asaessing offtcer shall serve on the assessee a notice gf deland s in the preic!ribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 31 and the provisions of this act shall apply accordingly; (it) in a case where the additional gift-tax is redttee&, the excess amount paid, if any, shall be refunded 10 (4) the chief commissioner or commiiisioner may, in his discretion, whether on his own motion or otherwise, waive or reduce the amount of additional gift-tax payable under lub-section (1) by any person, if he is satisfied that the whole or, -as the case may be, any part of the excess amount referred to in that sub-slection is is attributable to any amount added or disallowed in computing the assessed taxable gifts, as a reault of the rejection of any explanation (by way of interp~tation of any provision of this act or otherwise) offered by such person, if such explanation is bona fide and all the facts relating to the same and material to the computation of the 20 assessed taxable gifts have been disclosed by him: provided that,-(i) where an appeal before the deputy commissioner (appeals) or commissioner (appeals) or the appellate tribunal has also been jiled by the asjessee against the order of assess- 25 ment, the petition for waiver or reduction of the amount of additional gift-tax can be filed by the assessee only after the ciecision on such appeal; (ti) the petition for waiver or reduction of the amount of additional gift-tax shall be accompanied by a fee of one hundred 30 rupees (5) the additional gift-tax payable under this seetion shall not be included in the amount of tax payable on the taxable gifts as (letennined on regular assessment, for the purposes of section l6b" 176 in section 22 of the gift-tax act,-35 aiiiiddmeat of lktiod 22 (a) in sub-section (1),-(i) for clause (d), the following clause shall be substituted, namely:-"(d) objectm, to any pedalty imposed by the assessing officer under section 17 as it steed immemately 40 before the jt day of april, 1989 or antler lii!ietiol1 17 as amended by the direct tax laws (amendment) act, unw~";  (ii) clause (il~ -u be omitw:(b) in sub-section (la) , for claus_ (b), (c) ana (4), the following clauses shall be substituted, namely:-"(b) objecting to any assessment or order referred to ill clauses (a) to (g) (both inclusive) of sub-section (1), where luch asses~ment or order baa been made by the deputy commlssloner in exercise of the powers or functiodi con1erred on or assigned to him under section 7 or section 10; or 10 (c) objecting to any penalty imposed under clause (c) of of sub-section (1) of section 17 as it stood immediately before the 1st day of april, 1989 in respect of any assessment year commencing on the 1st day of april, 1988 or any earlier assessment year where such penalty has been imposed with the previous approval of the deputy commissioner under iubsection (c) of that sectionj or 15 (d) objecting to any penalty imposed" by the deputy director or the deputy commissioner under section 17aj"j (c) for sub-sections (lb) and (ie), the following sub-section shall be substituted, namely:-25 30  (lb) notwithstanding anything contained in sub-section  (1), the board or the director general or the chief commilsioner or the commissioner, if so authorised by the board, may, by order in writing, transfer any appeal which is pending before a deputy commissioner (appeals) and any matter arising out of or connected with such appeal and which is so pending, to the commissioner (appeals), if the board or, as the case may be, the director general, the chief commissioner or commissioner (at the request of the appellant or otherwise) is satisfied that 1t is necessary or expedient so to do having regard to the nature of the case, the complexities involved and other relevant considerations and the commissioner (appeals) may proceed with such appeal or matter from the stage at whicli it was before it was so transferred: provided that the appellant may demand that before pr~ ceeding further with the appeal or matter, the previous proceeding or any part thereof be reopened or that he be reheard"  35171 after section 22 of the gift-tax act, the followin, section ahall be inserted, namely: -, ~ alnew mctioil 2m appjica tionb,-the  , "22a (1) where before fumiahln, a return of taxable gifta under sub-section (1) of section 13 or section 14 or lu~tion (4) of section 15 for any assessment year, any question arises as to whether,-«(i) any amount is includible or not in computin, the amount of taxable gifts (hereafter in this section refe~ed to - ile clisputed amowlt) , or (b) any exelhption or deduotion 11 admialible or not in com putbtg taxable gifti (hareafter in thi8 nction reterred to  the disputed deduction), the,aai-ee'shall, after furnishing such return, make an· application under sub-section (z): provided that the assessee,-(i) shall include in such return the disputed amount and', shan not claim the disputed deduction; and s (ii) shall also pay thirty per cent of the tax due on the  disputed amount and in respect of the amount of disputed deduction (2) the application under sub-section (1) may be made within thirty days of furnishing the aforesaid return to the deputy com- 10 missioner (appeals) or, as the case may be, to the commissioner' (appeals) -, (3) for the purpose of disposing of an application under subsection (1), the deputy commissioner (appeals) or, as the case may be,· the commissioner (appeals) may-15 (a) conduct such inquiry or call for such books of account, other documents or information which he deems necessary: or (b) direct the assessing officer to conduct such inquiry and -~ the report thereon, and thereafter decide the question raised in the application and pass such orders theron as he thinks fit 2i omissioil of !!echo 23 (4) the provisions relating to filing of appeals under this act shall, so far as may be, apply to the making of an application under this section as if such application were an appeal"  178 in section 32 of the gift-tax act,-amen-ment fil sectia 32 (a) in sub-section (1), for the words "thirty-five days", wher-iver they occur, the words "thirty days" shall be substituted; (b) in sub-section (2),-(0 for the words, brackets and figure "fifteen per cent pel" annum from the day commencing after the end of the period 30 mentioned in sub-section (1) ", the words, brackets and figure "one and one-half per c,ent for every month or part of a montla comprised in the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid" shall be 35 substituted; (ii) after the proviso" the following proviso shall be inserted, ,' namely:- ;  (',  " ' ",:-',  ; -  "provided further that in respect of any period commencing on or before the 31st day of march, 1989 and end- 40 m, after that date, such interest shall, in respect of &0 much 01 'such 'period as falls after that date, be calculated at the ~ , -  1," 'rate of one ana one-half per cent for' every month or part  ot a month t, 171: in section 33 of the gift-tax act,-amend-jilent of section 33 (a) for the words "and to gift-tax ofllcer and commissioner of gift-tax instead of to income-tax officer and commissioner of iacome-lax", the words "and to the corresponding gift-tax authorities instead of to the income-tax authoriti~ specified therein" shall be substituted; (b) for exptanation ii, the following explanation shall be tlul)-stituted, namely:-"explanation n-the chief commissiodier or commissioner 10 and the tax !lecovery ofiicer referred to in the income-tax act shall be deemed to be the corresponding gift-tax authorities tor the purpose of recovery of gift-tax and sums imposed by way af penalty, fine and interest under this act" 18e in section 33a of the gift-tax act,-15 amendment of !tection 33a (i) to sub-section (1), the following proviso shall be added, amely:-"provided that where, by the order aforesaid,-20 (a) an assessment is set aside or cancelled and an order· of' fresh assessment is directed to be made, the refund, if any, shall become due only on the making of such fresh assessment; (b) the assessment is annulled, the refund shall bec9me due only of the amount, if any, of the tax paid in excess of the tax chargeable on the total income returned by the assessee"; 25 (ii) after sub-section (4), the following sub-sections shall be inserted, namely:-30 ii (fa) the provisions of sub-sections (3), (3a) and (4) shall not apply in respect of anya!;setlsment·for the as~ssment year commencing on the 1st day cf april, 1989, or any subsequent assessment year 35 (4b) (a) where, in pursuance of any order passed under this act, the refund of any amount becomes due to the assessee he shall, subject to the provisions of this sub-section, be entitled to receive, in addition to the said amount, simple interest thereon calculated at the rate of one and a half per cent for every month or part of a month comprised in the period or  periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted 45 explanation-for the purposes of this clause, "date of payment of the tax or penalty" means the date on and from which the amount of tax or penalty specified in the notict!! of demand issued under section 31 is paid in excess of luch demand , , (b) if the proceedings resulting in the refund are de~yed for reasons attributable to the assesbee,whether wholly or in part, period of the delay 90 attributable to him shall be excluded from the period for which interest it payable, and where any question arises as to the period to be excluded it shall be decided by the chief commissioner or commissioner whose decision thereon shall be final (0) where  a result of an order under section 16 or tec-s tion 22 or section 23 or section 24 or section 26 or section 28 or section 34 the amount on which the interest was pay~ able under clause (a) has been increased or reduced, as the case may be, interest shall be increased or reduced accordingly, and, ib a case where the interest is reduced, the auessing ofbcer 10 shall berve on the asle888e a notice of demand in the prescribed form specifying the amount of the excess interest paid and requiring him to pay such amount; and such notice of demand shall be deemed to be a notiee under section 31 and the provisions of this act shall apply accordingly 15 (d) the provisions of this sub-section shall apply in reapect of assessments for the assessment year commencing on the 1st day of april, 1989, and subsequent assessment years" 181 in section 34 of the gift-tax act, in sub-section (1), after clause (,,) the following clause shall be inserted, namely: -20 amedd· mentof aed1od m "(04) a gift-tax authority may amend any intimation sent by it under sub-section (1) of section 15 or enhance or reduce the , amount of refund granted by it under that sub-section" 182 in section 36 of the gift-fax act,-(a) after sub-section (1), the following sub-section shall be 2s inserted, namely:-amead· mentot 8ecttoll 38 "(1a) if the director general or director has reason to suspect that any gifts chargeable to tax under this act have been concealed, or are likely to be concealed by any person or class of persons within his jurmdiction, then, for the purposes 30 of making any inquiry or investigation relating thereto it shall be competent for him to exercise the powers conferred under sub-secti~n (1) on the gi~tax authorities refened to in that aub-section, notwithstanding that no proceedings with respect to such person or class of persons are pending before him or any 3s other gift-tax authority"; (b) bub-section (l) shall be omitted  113 in section s7 of the gift-to: act,amendmmt of eeetton 87 (a) for the words "where, for the purposes of determining the gtft-tax payable by any person, it appears necessary for the gift-tax 40 oftlcer to obtain any statement or information from any person,", the words "where, for the' purposes of this act, it appears necessary for any gif~tax authority to obtain any statement or information from any person or banking company," &hall be substituted; (b) for the words "the gift-tax ofbcert', in the second and 4s thlrd places where they occur, the words "such gift-tax authority" shall be substituted 184 in section 45 of the gift-tax act,-amend-(a) for the words u~ provisions of this act shall not apply ment of to gifts made by", the words "no tax shall be levied under this act section 45 in respect of gifts made by" shall be substituted; 5 (b) for clauses (a), (b), (c), (d) and (da), the following clauses shall be substituted, namely:':'-"(a) a company in which the public are substantially interested; (b) any company to an indian company in a scheme of 10 amalgamation;"; (c) for clause (e), the following clause shall be substituted, llamely:-< (e) any institution or fund, wnich is eligible for the deduc· tion under section 80f of the income-tax act"; i :; (d) for erplan4tidns 1, 2 and 3, the following explanations shall ce substituted, namely:-(expzan4tion 1-for the purposes of clause (b), the term "amalgamation" shall have the meaning assigned to it in clause (la) of section 2 of the income-tax act 10 explanation 2-for the removal of doubts, it is hereby declared that the exempti~ admissible under clause (e) in relation to gifts made by an institution or fund referred to in that clause shall not be denied merely on either or both of the following grounds, namely:-25 (i) that, subsequent to the gift, the institution or fund bas become ineligible to the deduction under section 80f of the income-tax act due to non-compliance with any of the provisions of that section; (ii) that the deduction under section 80f of the income-30 tax act is denied to the institution or fund in relation to any income arising to it from any investment referred to in clause (h) of sub-~ction (4) of that section where the aggregate of the funds invested by it in a concern referred to in the said clause (h) does not exceed five per cent of 35 the capital of that concern' 185 after section 46a of the gift-tax act, the following section shall inserbe i!1serted with effect from the 1st day of april, 1988, namely:-·tion of new section 47 power to remove ditticulties 40 "47 (1) if any difficulty arises in giving effect to the provisions of this act as amended by the direct tax laws (amendment) act, 1987, the central government may, by order, do anything not inconsistent with such provisions for the purpose of removing the diffict4ty: provided that no such order shall be made after the expiration of three years from the 1st day of april, 1988 (2) every order made under sub-section (1) shall be laid before each house of parliament" 186 the following amendments (being amendments ofconsequential nature) shall be made in the gift-tax act with effect from-the 1st day of april, 1989, namely:-5 consequential amendments (j) in section 19a,-(a) in sub-section (4),-(i) for the words, brackets and figures "a return under sub-section (2) of section 13", the words, brackets and figures "a return under section (i) of section 13" shall be 10 substituted; (ii) for the words, brackets and figures "as if the notice were a notice issued under sub-section (2) of section 13", the words, brackets and figures "as if the notice were a notice issued under clause (i) of sub-section (4) of section 15" 15 shall be substituted; (b) in sub-section (6), for the words, brackets and figures "sub-section (2) of section 13", at both the places where they occur, the words, brackets and figures tclause (i) of subsection (4) of section 15" shall be substituted; 20 (2) in section 23, in sub-section (1), after the word and figures "section 22", the words, figures and letter "or section 22a" shall be inserted; (3) in section 34, in sub-section (1),-for clauses (b), (c), (d) and (e), the following clauses shall be 25 suhstituted, namely:-"(b) the deputy director or deputy commissioner or director or commissioner or deputy commissioner (appeals) or commissioner (appeals) may amend any order passed by him under section 17a; 3~ (c) the deputy commissioner (appeals) or commissioner (appeals may amend any order passed by him under section 22 or section 22a; (d) the commissioner may amend any order passed by him under section 24; 3~ (e) the appellate tribunal may amend any order passed by it under section 23 or section 25"  chapter v amendments to the companies (profits) surtax act, 19647 of 1964 substitution of authorities 187 in the companies (prqfits) surtax act, 1964 (hereafter 40 in this chapter referred to as the surtax act) , save as otherwise expressly provided in this act, and unless the context othjerwise requires, reference to any authority specified in column (1) of the table below shall be sub,-stituted with effect from the 1st day of april, 1988 by references to the authority or authorit~ specified in the corresponding entry in column (2) of the said table, and such consequential changes as the rules of grammer may require, shall also be made (1) (2) s commissioner chief commissioner or commissioner deputy commissioner inspecting assistant commissioner 10 income-tax officer assessing officer iss for section 3 of the surtax act, the following section shall be substituted, with effect from the 1st day of april, 1988, namiely:-substitution of new section for section 3 "3 (1) the income-tax authorities specified in section 116 of tax the income-tax act shall be the authorities for the purposes of this authori-15 act and every such authority shall exercise the powers and perform ties the functions of a tax authority under this act in respect of any company, and for this purpose his jurisdiction under this act shall be the same as he has under the income-tax act by virtue of orders or directions issued under section 120 of that act (including orders 20 or directions assigning concurrent jurisdiction) or under any other provision of that act (2) the board may, from time to time, issue such orders, instructions and directions to other tax authorities as it may deem fit for the proper administration of this act, and such authorities 2s and all other persons employed in the execution of this act shall observe and follow such ord,ers, instructions and directions of the board: provided that no such orders, instructions or directions shall be issued-30 (a) so as to require any tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or (b) so as to interfere with the discretion of the commission~r (appeals) in the exercise of his appellate functions" 35 189 in section 18 of the surtax act,-amendmento! (a) for the figures, brackets letter and word "2 (43b) and section (44) ", the figures and brackets "2 (44):' shall be substituted; 18 (b) for the figures and le-tters "118, 125, 125a, 129, 130, 130a", the figures "116, 117, 118,119, 120, 129" shal1 be substituted with effect from the 1st day of april, 1988 the income-tax act, 1961 had become quite complex due to a serie:; of changes made over a period of twenty years it has also become essential to increase the cost of evasion for persons trying to evade paying their taxes in the light of the experience gained in the working of the act the government resolved to rewrite the direct tax laws accordingly, based on the recommendations of a committee, a discussion paper on simplification and rationalisation of direct taxes was laid before the parliament on 14-8-1986 in the light of the response received from members of parliament, economists, chambers of commerce and industry and individual taxpayers, amendments in the direct tax laws have been proposed 2 the main objectives of the bilj and the directional changes to achieve those objectives are as under:-(i) to simplify the law and procedures relating to direct taxes in keepil'lg with the policy of reposing trust in the taxpayers so as tf) encourage voluntary compliance it is, therefore, proposed to make a total shift from the concept of assessment of income to the concept of determination of additional tax or refund, as the case may be in view of the proposed amendments, no assessment order will generally be required to be passed once acknowledgment of return of income is issued however, if a retw"n of income is scrutinised, the process of investigation will be initiated with the same financial year or within a period of six months, from the date of filing the return, whichever is later;· (ii) to rationalise the sch~me of taxation of income and to ensure that the income earned during the same period by the same category of taxpayers is subjected to tax at the same rate, it is proposed to charge income-tax uniformly in a financial year in respect of the mcome of the preceding year ending 31st march which happens to be the accounting year followed by a large majority of taxpayers; (iii) to ensure as far as possible, taxatipn of real inc~me consistent with promoting economic and social objec~lve it is: theref posed to omit a large number of artificial deductions on ore, pro d' th one hand and the disallowance of business expen iture ac tually in:urredon 'the other the existing ceiling on allowance of ~e­muneration paid to the directors and employees of the ~ompanjes as also the expenses on the bonus are proposed to be revised;   (iv) to increase the cost of avoidance and provide effective  ' ed to' impose a mandadeterrence against evasion it is now propos 1 d tory additional tax upto the extent of 30 per cent of the concea e income in the event of any concenlment of income; (v) to make the tax law effective by preventing leakage of revenue through instrumentalities of numerous taxable entities it is now proposed to build disincentive for formaticn of trusts and associations of persons only as instruments of tax avoidance, by taxing these entities at the maximum marginal rate while taking care that the expenditure on charitable objects by trusts etc are encouraged further, the interest of smaller associations of persons has been protec£ed; (vi) to remove uncertainties in the matter of assessments by cutting down areas of subjective decisions of tax authorities, to ensure uniform treatment of persons similarly placed and to reduce litigation the existing provisions which give the assessing authorities discretionary powers to levy penalties as well as interest for the same default is now sought to be replaced by a system of mandatory interest to compensate the government for loss of revenue and also to deter the assessee from repeatedly committing the default; and (vii) to ensure ·uniformity to the extent possible in the provision  of the three direct tax laws to pave the way for enactment of a single direct taxes code the procedural provisi'ons and the provisions dealing with jurisdiction, interest, penalties and prosecutions in the wealthtax act and the gift-tax act 1\1"e proposed to be amended so as to bring them in line with the corresponding provisions in the income-tax act 3 the notes on clauses explain in detail the provisions of the bill 4 the bill seeks to achieve the above objects new delm; narayan dati' tiwari the 7th december, 1987 i clause 2 seeks to substitute or introduce new authoriti~ in the act consequent upon either the redesignation of these authorities in section 116 or the inclusion of new authorities in that section this clause will be effective from 1-4-1988 clause 3 seeks to amend section 2 of the at:t containing the defini-uons of various terms by omitting, inserting or amending certain definitions sub-clauses (1), (p), (q) and (s) seek to omit the following definitions,-(i) "inspecting assistant commissioner", consequent upon the redesignation of this authority as deputy commissioner  clause (27) (ii) "registered firm" and "unregistered firm", consequent upon the new provisions regarding taxation of firms whereby firms are no longer to be assessed as registered or unregistered firms   clauses (39) and (48) (iii) "tax recovery commissioner", consequent upon the abolition of this authority from the income-tax act   clause (43b) sub-clauses, (a), (b), (c), (d), (f), (h), 0) and (n) seek to insert the following definitions,-(i) "advance tax", a new definition which is only clarificatory  clause (1), the existing clauses (1) and (1a) to be renumbered as (la) and (1b) respectively, (ii) "assessing officer", a new definition of the term to be used in the act for the income-tax officer and the assistant commissioner performing the functions of an ass~ssing officer and also the deputy commissloner, if so empowered  clause (7a) (iii) "assistant commissioner", consequent upon the redesignation of "income-tax officer group 'a'" as assistant commissioner  clause (9a)' (iv) "chief commissioner", consequent -upon the introduction of this new authority in the act  clause (15a), the existing clause (15a) to be renumbered as (15b) (v) "deputy commissioner", consequent upon redesignation of "inspecting assistant commissioner" as deputy commissioner  clause (19a) (vi) "deputy commissioner (appeals)" consequent upon the redesignation of appellate assistant commissioner  clause (19b) (vii) "domestic company", consequent upon shifting of this definition from section 80b to this section  clause (22a) the existing clause (22a) to be renumbered as '" clause (22b) (viii) "foreign company", consequent upon shifting of this defini tion from section 80b to this section  clause (23a) (ix) "maxmum marginal rate" consequent upon shifting of this definition from section 164 to this section in a slightly modified form  clause (29c) sub-clauses (e), (g), (j), (k), (m), (0) and (r), seek to amend the following definitions,-(i) "commissioner", to exclude additional commissioner of income-tax from this definition  clause (16) (ii) "director of inspection", to be substituted by another clause to provide for the definition of "director general or director", which would include a deputy director or an assistant director  clause (21) (iii) "income", by making a consequelltial amendment in subclause {jia)  clause (24) (iv) "income-tax offi~er", by making an amendment of a consequential nature  clause (25) (v) "inspector of income-tax", by making an amendment of a consequential nature  cbause (28} (vi) "rate or rates in force" or "rates in force", to exclude i reference of section 80e consequent upon the deletion of that section and to make certain other consequential changes t'o substitute references to certain section  ,  clause (37a) (vii) "tax recovery officer", to provide that it will mean an income-tax officer' authorised by the commissioner to exercise the powers of a tax recovery officer  clause (44) clause 4 seeks to substitute section 3 of the act relating to previous year by a new section under the existing section 3, each assessee can have a previous year of his choice and also different previous year9 for separate sources of income an assessee may also change the previous year with the consent of the income-tax officer , the new section 3 provides for the financial year (year ending 31st march) as the uniform previous year for au the assessees and for all sources of income consequently  the provisions regarding change of the previous year will no long~r be necessary and do not find a place in the new section sub-eection (1) provides that "previous year" means the financial year immediately preceding the assessment year it also provides that in the case of a newly set up business or profession or a new source of income during the financial year, the previous year shall begin from the date of setting up or coming into existence of the new business, profession or new source of income and ending with the said financial year sub-section (2) provides that in the case of an assessee who has been having a previous year or years di1ferent from the financial year, the previous year relevant to the iiritial year of change (ie the transitional assessment year) will be for a period longer than 12 months sub-section (3), read with tenth schedule, provides transitory provisions to avoid hardship where the previous year for the transitional assessment year exceeds a period of 12 months cla~ 5 seeks to amend section 4 of the act relating to charge of income-tax, consequent upon the levy of additional income-tax in certain cases and also consequent upon the adoption of a uniform previous year for all assessees and for all sources of income c~ause 6 seeks to amend section 10 of the act relating to incomes net included in total income by deleting, withdrawing inserting or amending certain clauses of the section containing varions exemptions sub-clauses (k) and '(1) seek to withdraw the following exemptions: (i) income of approved sdentifi~ research association '  clause (21) (ii) income of an association or an institution established for control, supervision, regulation or encouragement of the games of cricket, hockey, football, tennis, ct,c as may be specified  clause (23) <iii) income of a notified fund or institution established for ·charitable purposes and income of a notified trust or institution wholly for public religious purposes or wholly for public religious and charitable purposes  ctause (23c) (iv) and (v) the exemptions being withdrawn as mentioned above, will be taken care of in a separate section 80f being inserted to deal with exemption ()f the income of public charitable and relig:ous trusts, or trusts or institutions of national importan;:e, which wll1 include philanthropic institutions or institutions for scientific research or for carrying out rural development programmes or programmes of conservation of natural resources sub-clause (a) seeks to insert,- (i) a new clause to clarify that a partner of a firm will be exempt from tax on his share in the firm's income explanation to this clause clarifies that for· purposes of this clause share of a partner in a firm ~hall be computed by dividing the taxable profits of the firm in the 9iljll~ proportion as the profit sharing ratio mentioned in the partnership deed   cla'use (2a) (u) a new clause to exempt the income of a mutual fund set up by a public sector bank or a public financial institution, as may be specified by the central government, by notification in the official gazette, and subject to certain conditions including the condition that at least 90 per cent of the annual income of the said fund shall be distributed to the unit-holders  clause (23d > sub-clauses (b), (c), (d), (e), (f), (g), (h), (i) and (j) seek to amend the provisions granting the following exemptions in the manner indicated below:-(1) bonds, receipts from which by way of interest or premium on redemption are intended to be exempt, are intended hereafter to be notified, as are the securities at present the names of various bonds in clause (4) are consequently being taken out also the provisions of clause (4a) , which exempt interest on a non-resident (external) account of an individual, who is a person resident outside india within the meaning of section 2 (q) of the foreign exchange regulation act, 1973 are being simplified and merged with clause (4)  '  clauses (4) & (4a) (ii) the exemption in respect of value of leave travel concession and pass~ge money presently available to citizens only is being extended to non-citizens also it is also being provided that the exemption will be limited to the amount actually spent the ceuing on the number of journeys for going to home town and also on the amount of exemption per head, is being provided in the rules on the lines of the ceilings in the case of the government servants   clause (5) , (iii) gratuity received from private employers is exempt from tax to the extent of the amount calculated at the rate of one-half month's salary for each year of completed service subject to the maximum of 20 months' salary or rs 36,000 whichever is less at present such calculation is to be made on the basis of the average salary of 3 preceding years the same is being amended to enable calculations on the basis of the average salary of preceding 10 months only also the maximum limit of exemption (rs36,000) is proposed not to be specified in this section, but is to be notified by the central government keeping in view the limit applicable to central government employees (presently rs 50,000) further the third and fourth provisos in this clause, having become superfluous are being omitted  clause (10) (iv) commutation of pension received from private employers is exempt to the extent mentioned in sub-clause (ii) of clause (loa) proviso to this sub-clause which applies to cases of employees retiring before 19-8-65 has become redundant and is being deleted  clause (loa) (v) cash equivalent of leave salary recei~ed from p~vate em: ployera is exempt from tax subject to a  maxnnum of six months salary or rs 30,000 whichever is less this maximum hmit of rs 30,000 is proposed not to be specified tn the section, but is to be notifted by the central government keeping in view the bmlt appltcable to central government employees further, the limit ot iix months is being raised to eight months and the third and fourth provisos to this clause, having become superfluous, are being deleted •• clause (10aa) (vi) compensation received by a workman under the indust-rial disputes act, 1947 or under any other act or award or contract of service or otherwise at the time of retirement is exempt from tax subject to a maximum of the compensation allowable under the industrial disputes act, 1947, or rs 50,000 whichever is less it is proposed that this maximum limit, instead of being mentioned in the section, is to be notified by the central government   clause (lob)  (vii) all specific allowances exempt from tax in computing income from salary are proposed to be notified and the existing clause is being substituted by a new clause for this purpose  clawe (14) (viii) all the securities, bonds, saving certificates and deposits, etc mentioned in sub-clauses (i), (ia), (ib), (ii) and (lia) of clause (15), incomes from which are intended to be exempt from tax, are to be notified and their mention in this clause is being taken out • clause (15) (ix) any payments made, whether in cash or in kind, in pursuance of awards or rewards instituted by the central government or state governments or approved by the central government are exempt under the provisions of the existing clauses (17a) , (l'7b) and (18), the provisions of these three clauses are being simplified by not mentioning the purposes of the awards or rewards in the clauses and by combining the three clauses into a single clause (17a)  clauses (17a), (17b) and (18) clause 7 seeks to omit sections 11, ]2, 12a and 13 of the act relating to exemption of income of charitable and religious trusts and institutions a separate section 8o-f is being inserted to deal with exemption of the income of public charitable and religious trusts or trusts or institutions of national importance which will include philanthropic institutions or, institutions for scientific research or for carryiflg out rural development programmes or programmes of conservation of natural resources or affore-~tion of waste land clause 9 seeks to amend section 26 of the act relating to income chargeable under the head "profits and gains of business or profession" as follows:-(1) to provide that any interest, salary, bonus, commission or remuneration, by whatever name called, received by a partner from the firm will be taxed under this head (u) to de10tte expl~ i, which refers· to profits from managing agency clause 10 seeks to delete the followini' sections of the act:-<i) section 35 relating to expenditure on scientific research,  deduction for payments to approved scientific research 8biociatiooe ia to be allowed under the amended section 80g and the in house __ penditure is to be allowed under section 37 (ii) section 35b relating to export markets development allowance, 35c relating to agncultural development allowance and 35cc relating to rural development allowance, as these incentive provisions are not applicable in respect of expenditure incurred after 28-2-1983, 28-2-1984 and 16-3-1985 respectively <iii) sections 35cca and 35ccb relating to expenditures by way of payments tc institutions carrying out rural development programmes or programmes for conservation of natural resources as such expenditures are to be taken care of by the amended section sog clause 11 seeks to amend section 36 of the act relating to certain deductions that are to be allowed in computing the income under the head "profits and gains of business and profession" sub-clause (a) seeks to' make the following amendments in various clauses of sub-section (1) of this section:-ci) clause (ii) allows deduction of any bonus or commission paid to an employee for services rendered the two provisos of this clause, which lay down certain ceilings on the bonus to be allowed as a deduction, are being deleted simultaneously, bonus payments are being covered by the provisions of section 43b, so that these are allowed on actual payment basis only (ii) clause (vii), which allows bad debts as a deduction, is being amended to provide that claim for a bad debt will be allowed in the year in which such a bad debt has been actually written off by the assessee (iii> clause (viia), which allows deduction to scheduled banks in respect of provisions for bad and doubtful debts relating to rural advances, is being amended consequent to: deletion of clause (viiia) referred to below, and deletion of section 11 from the act, so that definition of "scheduled bank" given therein be incorporated in the present clause itself sub-clause (b) seeks to make the following amendments in various clauses of sub-section (2) of this section, containing provisions regard-ing allowance of bad debts:-'(i) clause (i) is substituted by a new clause consequent upon amendment of clause (vii) of sub-section (1) relating to allowance of bad debts; (ii) clauses (iii) and (iu) , which provide for allowing deduction for a bad debt in an earlier or later previous year, if the ito is satisfied that the debt did not become bad in the year in which it was written 'off and claimed as such by an assessee, having become redundant, are to be withdrawn clau8e 12 seeks to delete section 39 of the act dealing with sharina of jdad'\ihla aaency commillion, is that provisiona of this section have beqome redundant colliequent upon the abolition of the managing a,-eney system long back clause 13 seeks to amend section 40 of the act relating 101 certain expenses which are not allowable deductions or which are allowed only subject to certain monetary ceiling sub-clause (i) makes an amendment in the opening portion of the section consequent upon the deletion of section 39 sub-clause <ii) substitutes two new clauses for the existing clause (b) of the section, which disallows payment of interest, salary, commission, etc, by the firm to its partners the new clause (b) provides that in the case of firms interest paid to partners, at the rate to be prescribed, having regard to the maximum l'ate of interest payable by a scheduled bank on its deposits, will be treated as allowable deduction payments of salary_ bonus, commission or remuneration, by whatever name called, made to whole-time working partners for services rendered will also be allowed as a deduction subject to the following limits:-- --------- --------------------,--~ buaidcli piofefirm lsiona] firm ,--------on the first ri, 50,000 of book profits or the firm 75% 90% so~ 65% 40%, 25% on the noxt lls, 50,000 ,  on tj e bllanoo of book pre-fitl _----_  -- -,----------it is also provided that only' that payment of salary, etc, to wholetime working partners cr interest to partners will be allowed as a deduction, which is authorised by and is in accordance with the terms of the partnership deed it is further provided that the terms of the partnership deed will not have retrospective effect in this respect a new explanation 1 to clause (b) gives the meaning of the terms "whole-time working partner", "book profits" and "scheduled bank" used in this clause a "whole-time working partner" means a partner of the firm who is in receipt of payments mentioned is this clause from the firm for services rendered to that firm and who is not in receipt of any similar payments from any other person "book profits" are defined to mean the profits computed in accordance with the parts ii & iii of schedule vi to the companies act, 1956, if and in so far as these provisions had been applicable to n firm, after making certain adjustments, as mentioned in the definition "scheduled bank" is defined to have the same meaning as in explanation to clause (viia) of su1:rsection (1) of section 38 explanation 2 and 3 are the same as the explanations } and 3 in the existing clause the new clause (ba) provides that any payment of interest, salary bonus, commission or remuneration, by whatever name called, made by an association of persons or body of individuals to a member will not be allowed as a deduction e~lanatio~s 1 to 3 to the new clause are the same as explanations 1 t~ 3 1~ the exlstmg clause (b) with the difference that while the explanat~ons in the exi~ting clause (b) deal with the treatment of interest paid by the firm to its partners and vice versa, the explanations in the new' clause (ba) deal with treatment of interest paid by the asseciation of persons or body of individuals to its members or vice ver,a ~ub~lause (iii) omits the following clauses of the section (i) clause (c), which lmposes a ceiling on remuneration to the directors and certain other persons of a company clause 14 seeks to amend section 40a of the act relating to expenses or payments not deductible in certain circumstances sub-clause (a) seeks to amend sub-section (3) of the section under the existing provisions, payment of a sum exceeding rs 2,500, if made otherwise than by a crossed cheque or crossed bank draft, is not allowed as a deduction this limit of rs 2,500 is being raised to rs 10,000 sub-clause (b) seeks to delete the fohowing 9ub-6ections:-(i) sub-section (5), which lays down monetary ceilings on payment of remuneration etc by an assessee to its employees (ii) sub-section (6), which lays down monetary ceilings on payment by an assessee to its former employees of fees for services rendered clau$e 15 seeks to amend section ·!3b of the act relating to allowability of certain expenses only actual payment sub-clauses (a) and (b) seek to insert a new clause (c) in the section to enlarge its scope by bringing bonus payments within its ambit so that deduction for bonus is allowed only in the year in which' it is actually paid sub-clause (c) seeks to amend the first proviso, inserted by the finance act, 1987, to make the proviso applicable to the new clause (c) inserted in the section, so that bonus payments will also be allowed if the payment in respect thereof is made before the due date of filing the return of income, and the evidence of :iuch payment is attached to such return, of income sub-clause (d) inserts an explanation 2 to the section to clarify that if deduction in respect of any bonus payment referred to in the new clauie (c) inserted in the section has already been allowed in the assessment year 1988-89 or any earlier assessment year on due basis, the deduction shall not be allowed again in the year in which the sum is actually paid clause 16 seeks to insert a new sectiot:l 54a in the income-tax act relating to relief of tax ,on capit~l gains on transfer of property held under trust for charitable or religious purposes or by certain institutions under the proposed sub-section (1) if an as8essee transfers any 10111 term capital asset of the nature specified in sub-section (2) giving rfse to capital gains and acquires during the previous yea:r in which the transfer took place or within a period of six months 81ter the close 01 such previous year another capital asse~ to be held for the same purposes as those for which the original asset was held, the entire capital gain shall be exempt, if the cost of the new asset is not less than the net consideration received if the cost of the new asset is less than the net consideration, the exemption shall be granted proportionately on the basis of inveatment of net consideration for acquiring the new asset the proviso to sub-section (1) provides the mode of determination of period of six months in a case where transfer of original asset is by way of compulsory acquisition and the amount of compensation is received after the expiry of the previous yea:r sub-section (2) specifies the type of charitable or religious trusts or institutions the capital gains arising from the transfer of properties of which is contemplated to be given relief under sub-section (1) sub-section (3) provides, that where the capital asset is a property held undetr trust created before the commencement of this act, in part only for charitable or religious purposes, then only that fraction of capital gain arising b-om transfer of such asset which represents the extent to which the income derived from the asset transferred was, prior to such transfer, applicable to charitable or religious purposes shall be exe~pt clause 17 seeks to amend, sub-section (1) of section 64 of the act dealing with the circumstances under which the income of the spouse, minor child, etc  is included in the income of the individual unde; the existing provisions of clauses (i) and (iii) of the subsection the share income of the spouse or the minor child from the firm is to be clubbed with the income of the other spouse or the parent the provisions of these clauses have become unnecessary in view of the new proposals for taxation of finns (see section 182-189) whereby the shares of partners in the income of the firm are not to be included in the partners' total incom~ sub-clauses (a) and (c), therefore, seek to delete clauses (1) and (iii) of this sub-section under the existing provision of clause (ii) of the sub-section, the income derived by the spouse by way of salary, commission, fees or any other form of remuneration from a concern in which the other spouse has substantial interest is clubbed with the income of the spouse a proviso to this clause, however, provides that the clause will not apply where the spouse possesses technical or professional qualifications and the income is attributable to the application of his or her technical or prolessional knowledge or experience sub-clause (b) substitutes a new proviso for the existing proviso to clause (ii) of the sub-section to pr(l~ride that the provisions of the said clause will not apply only if the incom~ arises to the spouse from a finn carrying on a profession as is referred to in sub-sectio~ (1) of section 44aa, and the spouse possesses any technical or professional qualifica: hon in the nature of a degree or diploma of a university within the meaning of clause (c) of the explanation below sub-section (2b) of lection 12a the extftin~ sub-clauses (tv), (v) and (vi) of tht" sub-seetion deal with club1:>inll of the income from assets transferred to the spouse, minor child or son's wife or minor child, with the income of the individual, transferring the assets, while sub-clauses (vii) and (viii) deal in a similar way with the assets transferred to any person or association of persons for the benefit of the spouse or minor child or son's wife or minor child sub-clauses (d) and (e) seek to make amendments of a consequential nature in clauses (iv) and (v) of the sub-section pursuant to the deletion of the clauses (i) and (iii) of the sub-section -sub-clause (e) and (f) further seek to omit the words "not being a married daughter", which qualifies the term "minor child" used in clauses (v) and (vii) of the sub-section, as the use of these words is unnecessary sub-clause (g) seeks to substitute a new explanation for the existing explanation 1 below the sub-section the amendments in the new e~ planation 1 are only of consequential nature pursuant to the deletion of clauses (d and (iii) of the sub-section 90 that the new explanation 1 refers to clause <ii) only, while the original explanation 1 referred to clauses (i), (ii) and (iii) sub-clause (h) seeks to omit explanations la and 2a below the sub-section, which refer to clauses (i) and (iii) of ,the sub-section, consequent to the omission of these clauses the existing explanation 3 below the sub-section applies to clauses (iv) and (v) of the sub-section only and clarifies that where the assets transferred by an individual to his spouse or his minor child are invested in any business, the income proportionate to the investment out of the transferred assets will be clubbed with the income of the transferor sub-clause (i) seeks to substitute a new explanaticm for the existing explanation 3 the new explanation applies to clause (vi) of the sub-section also relating to assets transferred by an individual to his son's wife or son's minor child and thus removes a lacuna in the existing provisions further the new explanation 3 excludes the clubbing of the income received from the firm, where the transferred assets are invellted by way of contribution of capital as a partner in a firm or for being admitted t() the benefit of partnership in a firm however, the interest received from the firm on such capital contribution is to be clubbed with the income of the transferor clause 18 seeks to substitute a new section for the existing section 67 of the act dealing with the method of computing a partner's shllre in the income of the firm since, as per new proposals for taxation of firms (see sections 182-189), a partner's share in the income of the firm is not to be included in his total income, the provisions of the existing section are no longer necessary and the existing section is being deleted however, the new section with sub-sections (1) to (3) and an explanation provides for the method of computing a member's share in the income of an association of persons or body of individuals, wherein the shares of the members are determinate in the same manner ils provided for in the existing section for computing partner's share in a firm the provisions of sub-section (4) of the original section, which dealt with the set off or carry forward of share of loss of a partner in a registered firm, do not find place in the new section, as there are no provisions in the act for set off or carry forward of the share of loss of a member in an association or body in his own assessment clause 19 seeks to delete, section 75, 76 and 77 of the act dealing with carry forward of losses of regi3tered firms, unregistered firms treatted as registered firms or unregistered firms or their partners, consequent upon the new provisions of taxation of firms being introduced whereby firms are no longer to be assessed as registered or unregistered and shares of the partners in the firms are also not to be assessed in their own hands clause 20 seeks to substitute, a new sub-section for the existing subsection (1) of section 78 relating to carry forward of losses in the case of change in constitution of a firm under the existing provisions of the sub-section, where a change has occurred in the constitution of the firm, the share of loss of the retiring or deceased partner is not allowed to be carried forward to be set off against the income of the firm after the change this sub-section also prohibits any partner from taking the benefit of any portion of the said loss which is not apportionable to him under section fr1 the new sub-section provides that where a change has occurred in the constitution of the firm, the share of loss of the out-going partnera shall not be carried forward to be set off against the income of the new firm it does not contain the latter part of the original sub-section relating to partners, as the same becomes redundant in view of the new proposals for taxation of firms (see sections 182 to 189) whereby the share of a partner in firm's income is not to be taxed in his hands clause 21 seeks to amend, section 80a of the act relating to deductions, mentioned in various sections of chapter via, to be made from the gross total income, in computing the total income of an assessee sub-section (3) of the section lays down that where deductions under certain sections are allowed in the cases of the firm, association of persons or body of individuals, the same deductions will not be allowed in the assessments of the partners or members in respect of shares from such firms, association of persons or body of individuals these provisions will no longer be necessary in the case of a finn and its partners in view of the new proposals for taxation of firms (see sections 182-189) whereby the shares of partners in the firm's income are not to be taxed in their hands therefore, under the proposed amendment f)f the sub-section reference to a firm and its partners is to be taken ut so that the sub-section applies only to the aslociation of peraons and body of individuals and their members clause 22 seeks to amend section 80b of the act, containing defini tions of certain terms for the purposes of chapter via the following clauses of this section ate to be deleted:-(i) clause (2), which defines "domestic company"; (ii) clause (4), which defines "foreign company" both these definitions are being shifted to section 2 (iii) clause (6), which defines "income" in relation to a handicapped individual  (iv) clause (8), which defines "relative" both these definitions are no longer necessary, as they we needed for the purposes of section sod, which already stands deleted from the act clause 23, 26 arid 28 seek to omit the following sections of chap~r vi-a of the act dealing with deductions to be made in computing total income:-(i) section 80e providing deduction in respect of payment for securing retirement annuities in cases of partners of registered professional firms, being r~dundant (ii) section 80gga providing deduction in respect of donations for scientific research, etc the deduction for such payment is being allowed under amended section bog (iii) section 80qq, providing deduction in respect of profits ~nd gains from the business of publication of books, being redundant clause 24 seeks to insert q new section 80f in chapter via of the income-tax act, providing for a unified scheme for taxation of charitable and religious trusts which will also be applicable to institutions of national importance including those involved in scientific research, rural development and conservation of natural resources accordingly, subsection (21) of section 10 and clauses (iv) and (v) of suh-section (23c) of section 10 and sections 11, 12, l2a, 13, 35, 35cc, 35cca and 35ccb of the act have been omitted section bog dealing with donations has been separately enlarged with the insertion of this new section, the gross total income of a charitable trust o;r institution will be computed in terms of section boa of the act and thereafter two special deductions will be allowed in accordance with the provisions of this section sub-section (1) specifies the categories of assessees to whom the new provisions will apply apart from persons who derive income from property held under trust for charitable or religious puposes in india, the new provisions will also apply to the trusts or institutions which are (i) set up for the benefit of indian citizens abroad; (ii) notified by the board to be of national importance; and (iii) for promotion of international welfare in which india is interested this enlarges the provisions of present sub-section (1) of section n sub-section (1) also specifies two special deductions from the total income of the previous year which is otherwise to be computed in the normal manner the voluntary contributions received bv such trusts, etc  will continue to be taxable on the same pattern as provided in the present section 12 by virtue of the enlarged definition of 'income' in subsection (24) of section 2 these deductions are (i) the amount actually spent by a trust or institution in tulftlment of its objects; and (ii) the amount accumulated by it in specified investments provided such, investments have been held by it for aueast a period of six: months ending on the due date of filing of the return of income these deductions are provided in lieu of the total exemption hitherto granted to such trusts, etc, and will also ~ke: care of accumulation of their income to a larger extent than provided presently under sub-sections (1), (2), (3a) and (5) of section 11 of the act, while taking away areas of discretion sub-section (2) provides that any trust which does not apply for registration in the prescribed manner will not be eligible for deductions specified in sub-section (1) the sub-section further provides that where the gross total income of a trust exceeds rs 50,000 (hitherto rs 25,000), its accounts must be audited and the return of income be accompanied by an audit report in the prescribed form these conditions already exist in the present section l2a of the act the sub-section also empowers the board to impose such other conditions as it thinks fit keeping in view the interests or quantum of the revenue, including the condition that a nominee of the board will be appointed on the board of trustees of the trust or the governing body of the institution sub-section (3) specifies the circumstances in which a trust, etc, will not be eligible for deductions under sub-section (1) t~se are analogous to the existing provisions of sub-section (1) of section 13 of the act where the deduction to a trust or institutions is denied under the circumstances that its jncome is deemed to have been used for providing any benefit, amenity or perquisite to any interested person in the trust, the chief commissioner or commissioner is empowered, on an applica_ tion by the trust or institution, to allow the deletion wholly or to such extent as he may deem fit having regard to the extent of the benefit, amenity or perquisite enjoyed by the interested person sub-section (4) provides for the circumstances in which income of a trust or institution shall be deemed to have been used for providing any benefit amenity or perquisite to any interested person provision of any such benefit or amenity will disentitle the trusts, etc, from the benefit of the two special deductions mentioned in sub-section (1) it also incorporates the existing provisions contained in sub-section (2) of section 13 sub-section (5) provides that where a specified investment held by a trust is realised, the amount so realised shall be deemed to be the income of the trust of the previous year in which the investment is realised or converted into cash this incorporates the principle of present sub-sections (ib) and (3) of section 11 sub-section (6) provides that if any income of a trust or institution is of such nature as to attract the provisions of sections 60-63 of the act, it will not be eligible for deduction under sub-section (1) this incorporates the existing condition in sub-section (1) of section 11 sub-section (7) deals with trusts or institutions carrying on or deriving income from bus~s and specifies special condition whicb are required to be satisfied by such trusts, etc, for grant of deduction under sub-  section (1) these conditions includ:e maintenance of accounts of the business on cash basis; prohibition of set off and catty fo~'1"d and set off of business losses; and ineligibility of certain kinds of business and expenditure this enlarges the area of present sub-sections (4) and (4a) of section 11  sub-section (8) empowers the board to delegate any power or authonty, conferred upon it under this section, on an officer not below the rank of commissioner th& delegation will be subject to such conditions and restrictions as the boa,rd may think fit to impose erplanation 1 defines certain' words and phrases for the purposes of this section, thus incorporating the provisions of sub-sections (3) and (4) of section 13 and explanoticm 1 to section 13 explanation 2 saves certain trusts from the purview of the provisions of clause (b) of sub-section (3) this is the counterpart of existing explanation 2 to section 13 explanation 3 seeks to incorporate the existing expulnation 3 to section 13, dealing with persons deemed to have a substantial interest in a concern clause 25 seeks to amend section 80g of the act relating to deduction in respect of donations to certain funds, charitable institutions, etc under the existing provisions of sub-section (1) of the section, the percentage of deductions is 50 per cent of the aggregate of donations made, except in the following two cases, where the deduction is equal to 100 p«l' cent of the sums donated: i (i) prime minister's national relief fund (ii) approved local bodies or organisations for promoting family planning the donations in respect of which deduction is to be allowed are mentioned in various clauses and sub-clauses of sub-section (2) for certain types of donations mentioned in sub-section (2), an upper limit is provided in sub-section (4) beyond which the donations do not qualify for deduction this up~ limit is rs, 5 lakhs or 10 per cent of the gross total income, whichever is less, a new section 80f has been inserted in chapter via (in lieu of the present sections 11 to 13 etc) to provide deductions· in respect of amounts applied or accumulated for charitable o~ religious purposes under clause (d) of 8ubsectlon (1) of this section, a trust or institution of national importance which is approved b! the board ~nd notified in the official gazette, also qualifies for· such deductions if the income is applied or accumulated for the purposes of the trust such trusts or institutions of national importance would include those engaged in rarrying out scientific research, rural development programmes or programmes of conservation of natural resources, etc it is proposed that donations to trusts or institutions of national im· portance carrying on activlties enumerated above, should also qualify for 100 per cent deauction '1'0 achieve th!s objective, the following amend· ments are proposed to be carried out in section 800:-(i) subctause (b) introduces two new sub-clauses (hid) and (hie) in clause (a) of sub-section (2) of the section to include in the list of eligible donetl, a rural development fund set up and notified by the central government in this behalf and also trusts or institutions of national importance referr~d to in clause (d) of sub-section (1) of section 80f which are carrying on the following activities:-(a) scientific research; (b) rural development programmes; (c) programmes for conservation of natural resources or of afforestation of wasteland (ii) sub-clause (a) amends clause' (i) of sub_section (1) of the section, dealing with 100 per cent deduction of the sums donated to include therein the new sub-clauses (iiid) and (hie) of clause (a) of sub-section (2) relating to donations to trusts or institutions of national importance mentioned in (i) above so that such donations will qualify for 100 per cent deduction sub-clause (c) seeks to substitute a new sub-section for the existing sub-section (4) of the section to withdraw the upper limit mentioned therein with reference to the absolute amount of rs 5 lakhs the result will be that most donations mentioned in this sub-section will now be subject to only one upper limit which is 10 per cent of the gross total income sub-clauses (d) and (e) seek to amend clause (i) of sub-section (5) and exp14nation 2 of the section consequent upon the deletion of sections 11 to 13 and their substitution by the provisions of a new section 80f and also the deletion of clause (23) of section 10 relating to exemption of the income of sports associations, etc further clause (23aa) relating to exemption of the income of regimental fund etc, of the armed forces is also included in clause! (i) of sub-section (5) of the section so that donations to such funds will also qualify for deduction equal to 50 per cent of the sums donated clause 27 :;:ecks to amend section sol of the act relating to deductions in respect of interest on certain securities dividends etc, by inserting clause (va) in sub-section (1) thereof the new clause allows deduction of income received in respect of units of a mutual fund specified under the newly inlerted clause (23d) of section 10 clause 29 seeks to substitute a new section for the existing section 86 relating to shares of partners in the income of the firm or the shares of members of an association of persons or body of individuals in the inco~ of the association or body the existirig section 86 co~sists of two clauses (iii) and (v) only clause (iii) provides for rebate on the share income of the partner ilf an unregistered firm in his own assessment, while clause (v) provide~ for a similar rebate in the case of a member of an association or body since as per new proposals regarding taxation of firms (see sections 182 to 189) the firms are no longer to be assessed as registered or unregistered and partners' shares in the income of the firm are n('lt to be included in their total income, the provisions of the existing clause (iii) of the section have become irrelevant and do not find a place - in the new section   the new section, therefore, deals only with the shares of members of an association of persons or body of individuals in the income of the association or body, and provides that income-tax shall not be payable in respect of such share, although it sllah form part of total income of the member proviso to the section lays down that where the association or body is taxed at the maximum marginal rate or any higher rate, the share of the member shall not be included in his total income at all it is further provided that where no income-tax is chargeable on the total income of the association or body, the share of a member therein shall be chargt!uhle to tax as part of his total income clause 30 seeks to substitute new sections 'for the following existing sections of the act:-(i) section 116 relating to classes of income-tax authorities; (ii) section 117 relating to appointment of income_tax authorities; and (iii) section 118 relating to control of income-tax authorities the new section 116 includes certain new authorities which are presently functioning and redesignates so~e of the existing authorities it also om!ts the authority "appellate assistant commissioner" from the act the income_tax authorities now mentioned in the new section are: , (a) the central board of direct taxes constituted under the central board of revenue act, 1963, (b) directors general of income-tax or chief commissioners of income-tax, (c) directors of income-tax or commissioners of income_tax or commissioners of income-tax (appeals), (d) deputy directors of income-tax or deputy commis3ioners of income-tax, or deputy commissioners of income-tax (appeals), (e) assistant directors of income-tax or assistant commissioners of income-tax, (f) income-tax officers, (g) tax recovery officers, (h) inspectors of income-tax the existing section 117 specifies elaborately the appointing authorities for the various authorities to be appointed under the act thid elaborate description is eliminated in the new section, in view of this matter being covered by other statutory rules sub-section (1) of the new section empowers the central government to appoint such persons as it thinks fit to be the income_tax authorities sub-section (2) empowers the central government to authorise the board a director general, a chief commissioner, a director or a commissioner to appoint income-tax authorities below the rank of assistant commissioner sub-section (3) empowers an income-tax authority authorised in this behalf by the board to appoint such executive or ministerial staff as may be necessary to assist it in the execution of its functions the existing section 118 spells out the control over income-tax authorities it describes in detail as to which income_tax authority will be subordinate to whom the new section, instead of mentioning the controlling authorities in detail, empowers the board to issue notification in the official gazette directing that any income-tax authority or authorities specified in the notification shall be subordinate to such other income-tax authority or authorities as may be specified in the notification • clause 31 seeks to amend section 119 of the act relating to instructions to subordinate authorities sub-clause (a) seeks to amend clause (b) of sub-section (2) of the section to empower the board to authorise any income-tax authority other than a deputy commissioner (appeals) or comm1ssioner (appeals) to admit a belated application or a claim for any exemption, deduction, refund, etc, instead of only the commissioner of income-tax or the income-tax officer, as at present sub-clause (b) seeks to omit sub_section (3), which enjoins upon the income-tax officer to observe and follow instructions issued by his superiors under whom he is post-ed the provisions of this sub-tjection are unnecessary in view of the provisions of the new section 118 clatlse 32 seeks to substitute a new section 120 relating to jurisdiction income_tax authorities under the existing provisions, the jurisdiction of various income_tax authorities are given in separate sections viz, 120, 121, 121a, 122, 123, 124 (1) and (2) and 128 in essence all these sections say that the incometax authorities will perform their functions in the area or cover the persons, etc, assigned to them by the board or the commissioner of income_tax, depending upon the rank of the income_tax authority sections 125, 125a, 126 130 and 130a provide for jurisdiction under special circumstances instead of mentioning the jurisdiction and powers of each incometax authority separately, it is proposed to combine the provisions of all these sections mentioned in the preceding paragraph in a new section 120 sub-section (1) provides that income-tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on or assigned to them by the board sub-section (2) empowers the board to delegate the authority t() authorise to any income-tax authority below it, eo as to enable it to issue orders in writing for the exercise of the powers and performance of the functions by the authorities subordinate to it sub  section (3) provides ,that the board or any other income-tax authority authorised by it, while issuing' directions referred to in subsections (1) and (2), may have regard to anyone or more of the following criteria:-(a) territorial area; (b) persons or classes of persom; (c) income or classes of income; and (d) cases or classes of cases· sub--section (4) empowers the board to issue general or special orders to: (a) authorise any director general or director to perform such functions of arjy other income_tax authority as may be assigned to him by the board; (b) empower the director general or chief commissioner or commissioner to issue orders in writing that the powers and functions assigned to an assessing officer in respect of any specified area or persons or classes of persons or incomes or classes of income or cases or classes of cases, shall be exercised or performed 'by any deputy commissioner sub_section (5) makes provision for conferring concurrent jurisdic_ tion on the assessing officers it provides that directios and orders referred to in sub-sections (1) and (2) may require, for the proper management of work, two or more assessing officers (whether or not of the same class) to perform functions concurrently where assessing officers performing concurrent functions are of different classes, the authority lower in rank among them shall exercise power and per· form functions as the higher authority amongst them may direct subsection (6) seeks to empower the board, notwithstanding anything contained in this section or section 124 to regulate matters concerning jurisdiction for purposes of furnishing of the return of income or the doing of any other thing under the act by issue of notification in the official gazette clause 33 seeks to delete sections 121, 121a, 122, 123, 125, 125a, 126, 2'8, 130 and 130a of the act dealing with jurisdiction of various incometax authorities, as the provisions of these sections have been combined in a single section 120 clause 34 seeks to substitute a new section 124 dealing with the jurisdiction of assessing officers in place of the original section relating to jurisdiction o~ the income-tax officers the provisions of sub-sections (1,) and (2) of the existing section 124 relating to jurisdiction of income-tax officers having been merged, along with other sections, in the new section 120, do not find place in the new section 124 the provisions of the existing sub-'sections (3) to (7), with appropriate amendments: are reproduced in sub-sections (1) to (5) of the new section 124 the amendments are:-(i) whenever there is a disagreement between two or more directors general or chief commissioners or commissioners regarding jurlsdiction of an assessing officer, the board or such directqrgeneral or chief commissioners or commissioners as may be authorised in this behalf by the board through a notification, will be competent to decide the iss~, instead of only the board, as at present (ii) the existing provisions for questioning the jurisdiction of an income-tax officer are that no person shall call in question his jurisdiction-(a) where a return of income under section 139 has been filed, after the expiry of one month from the date of flling of the return or after the completion of assessment, whichever is earl~r; (b) where no such return has been filed, after the expiry of th~ time allawed by a notice under section 139 (2) or 148 for making a return in view of the proposed new procedure of assessment, where issue of notice under section 139 (2) is dispensed with and completion of assessment in all cases is also not necessary (see amendment of section 139 and 143) it is now provided that no person shall be entitled to call in question the jurisdiction of an assessing officer:-(a) where a return of income under section 1'39(1) has been filed, after the expiry of one month from the: date of service of notice under section 142(1) or 143(2) or service of intimation under section 143 (1), or after the completion of assessment, whichever is earlier, i (b) where no such return has bleen filed after the expiry of the time allowed in a notice under section 142(1) or section 148 for making the return, or the date of hearing specified in a notice issued before passing an order under section 144, whichever is earlier clause 35 seeks to substitute a new section for the existing section 127 relating to power of transfer of cases· under the existing provisions of this section, the co~missioner or the board can transfer cases from one or more income-tax authorities to other income-tax authorities the commissioner can transfer a case from one officer to another provided both work under his jurisdiction the board too has similar power to transfer cases from one officer to vnother irrespective of the fact that the two officers are working under different commissioners even where the commissioners agree that the (ases can be transferred among their officers, the orders have to be passeci by the board the new section incorporates the provisions of the existing section with the following amendments:-  , (i) the powers of transfer of cases are given to the director general, chi~f commisssioner or commissioner instead of only to the commis&ioners; (ti) au cd be trmatarred betftin the aid i d omworking udder d1fterent directol"l general or chief commiallltona&1t or commluioders-(a) if the concerned directors· general or chief omuniasion  or commissioners agree, by the chief commissioner or commissioner from whose jurisdiction the case is to be tramtlened; (b) if the ooncerned directors general or chief commisaionertl or commissioners do not agree, by the board or any such director general, chief commissioner or commissioner as the 'boarcl may, by notification in the official gazette, authorise in this ~ , clgube 36 aeeks to amend section 131 ot the act relating to power of income_tax authorities regarding discovery, production of evifience, ete under the existing provisions, sub-section (1) gives the powe:c of a civl court to an income-tax: otrcer, the appellate assistllllt commissioner, inspecting assistant commissioner, commissioner (appeals) and the commissioner in certain matters like discovery and inspectton, enforcing attendance of any person and ~xamining him on oath, etc, in any proceeding! before them sub-section (la) extends these powers to an a slstant director of inspection, who generally deals with search and seizures under section 132 and enables him to exercise these power even when no proceedings are pending sub-clause (a) seeks to amend sub-section (ia) of the iliction ~ extend similar powers to the director-general or director and also to the authorised officer under sub-section (1) of section 132 before he takes search and seizure action mentioned in clauses (i) to (v) of that au b--section sub-clause (b) seeks to omit sub-section (2) of this section relatine to imposition of fine for non-compliance with the summons issued un~ der this section, consequent upon the inclusion of this penal provisio in section 272a dealing with miscellaneous penalties clause 37 seeks to amed section section 132 of the act relating to searck and seizure under the existing provislons of sub~ection (1) of this liection the authorised officer, who is conducting the aearch, may seize the books of account, documents, money, bullion, jewellery or' other valuable articles or things found during the search, if the same are unaccounted for sub-section (3) empowers the authorised officer to issue a prohibitory · order ot1 a person in control of such documents or valuable articles, ete, directing him not to remove, part with, or otherwise deal with them without his permission, it he finds ft not practicable to seize them · there is no time limit up to which such a prohibitory order can be lnforce sub-section (4) empowers the authorised officer to examine on oat "any person found to be in possesion or control of· any books· at account, - valuable articlu, etc, during the search he cannot however, examtne · au the persorn; present in the premisee at the time of the reqj'(!h, un1n1 they are in possession or oontrol of the d~cuments or valuables, eta • sub-section (5) provides that where any money valuable articles, etc, have been seized, the income-tax oftlcer haa to pass a summary order within 120 days of the seizure determining the extent of ~oncealed income, calculate the tax, penalty and interest thereon and appropriate the seized assets against the liability so determined or against any other existing liability of the assessee   sub-clauses (a) and (b) seek to make amendments of a consequential nature in sub-sections (1) and (la) of the section  sub-clause (c) seeks to add an expza:nation to sub-section (3) to clarify that a prohibitory order under this sub-section does not amount to seizure sub-clause (d) seeks to insert an explanation in sub-section (4) - to clarify that examination on oath mentioned therein need not be confined to the things etc, :found during the search but can also be for the purpose of general investigation sub-clause (e) seeks to insert a new sub-section (sa) to provide that a prohibitory order under sub-section (3) will not be operative for a period exceeding 60 days from the date of the order, unless the authorised officer records reasons in writing and obtains the approval of the commissioner to such extension it is further provided that the commissioner shall not approve the extension of the period beyond the expiry of 30 days after the completion of all the proceedings under the act in respect of the years for which the books of account, doc'uments, money, bullion, jewellery or other valuable articles or things are relevant sub-clause (f) seeks to make an amendment of consequential nature in explanation 1 at the end of the section clause 38 seeks to make an amendment of consequential nature in section 132a of the act relating to power to requisition books of account, etc, by substituting reference to "income-tax officer" with reference to "assistant commissioner or income-tax officer" clause 39 seeks to amend section 133 relating to power of the income· tax authorities to call for information sub-clause (a) seeks to amend clause (4) relating to furnishing of a statement of the names and addresses of all the persons to whom the assessee has paid in any year rent, interest, commission etc • exceeding rs 400 this limit is proposed to be raised to rs 1000 and the board is to be empowered to raise the monetary limit further through rules sub-clause (b) seeks to insert a proviso at the end of the section to provide that the director-general, chief commissioner, the director and the commissioner can also call for the information from any person (inch-ding a banking company) referred to in clause (6) of the section, which at present can be called for by the income-tax officer the inspecting assistant commissioner, appellate assistant commissioner or commissioner (appeals) only clauae 40 seeks to amend section 133a relating to power of survey f1f an income-tax authority the amendment is made in clause (a) of the explanation to this section to provide that instead of only the income-tax oftlcer, as at present, any income-tax authority mentioned in this section (which means an assistant commissioner, an assistant ·vir-~tor or an income-tax officer) can authorise income-tax inspectors to conduct survey clause 41 seeks to amend section 138 of the act relating to disclosure of information in respect of the assessees under the existing provisions, clause (a) of sub-section (1) of the section provides that the board or nny income-tax authority specified by the board may disclose information to other government agencies and to the authorities under the foreign exchange regulation act about any assessee in respect of any assessment made clause (b) of sub-section (1) of this section confers powers on the commissioner to disclose information to any person, who makes an application to him, in case of any assessee and in respect of any assessment made, if he is satisfied that it is in public interest to do so sub-clause (i) seeks to amend clause (a) of sub-section (1) of the section by removing the condition that the information to be passed on to the other government department must relate to an assessee and to a eompleted assessment instead, it is provided that any information reeeived or obtained by any income-tax authority in the performance of his flmctions under the act may be disclosed sub-clause (ii) seeks to amend clause (b) of sub-section (1) 80 as to empower the commissioner to disclose information relating to any asr-essee received or obtained by any income-tax authority in the performance of his functions under the act, whether an assessment has been eompleted or not  clause 42 seeks to amend section 139 relating to filing of retum of incomesub-clause (a) seeks to substitute a new sub-section for the existing l11b-section (1) which prescribes different time limits for filing of the return of income by assessees having in~ome from business and by those having income from sources other than business the existing dates are either 30th june or 31st july the new sub-section staggers further the dates for filing the returns by different classes of assessees the due dates now provided are as under:-(1) where the assessee is a company by 31st december | (2) where              | the                  | assessee is a person '    ||------------------------|----------------------|---------------------------|| other                  |                      |                           || than                   | a                    | company-                  || (i) who                |                      |                           || is                     |                      |                           || required               |                      |                           || to                     |                      |                           || get his                | by 31st              |                           || ~ber                   |                      |                           || accounts audited       | under                | the                       || come-tax act           |                      |                           || or                     |                      |                           || any                    | other law,           | or                        || in                     |                      |                           || the                    | case                 | of                        || (u)                    |                      |                           || deriving               | income               | from                      || business               |                      |                           || or                     | profession, who does |                           || not                    |                      |                           || fall                   |                      |                           || 'under item (i) above |                      |                           || (iii)                  |                      |                           || in                     | any other case      | by                        |proviao to the existing aub-eection (1), which allows diseretion to the lnoome-tax c>meer on an application made by the assessee, to extend the' ute for fuing the return of income, does not find place in the new sutt-; -:tioa codsequenuy the income-tal( otjicer will not have tdy power te extend the· dates of filing the returns, so that the dates mentioned above are mandatory sub-clause (b) seeks to omit sub-section (2) of the section dealin& with ~e issue of a notice by the income-tax otiicer callin, for the ~ turn ot income sub-clause (c) makes amendments')f consequential nature in su~ section (3) relating to furnishing of loss return by the assessee theile amendments are pursuant to the deletion of sub-section (2) of the section and the provision of staggered dates for filing the returns of mcolwl in the new sub-section (1), with the result that a loss return can - lie filed by the four due dates mentioned therein, depending upon the ,a1elory in which the cue falls sub-clause (d) seeks to substitute a new sub-section for the existing lub-sections (4) and (4a) under the existing sub-section (4) a return not filed by the due date can still be filed within two years from the end of the relevant assess-jil,cnt y~art if the assessment has not been completed the new lnb-sec~­tion provides that such a belated return can be filed within one year from the end of the relevant assessment year a proviso to the sub-section clarifies that in case the return relates to assessment year 1987a8 or _ earlier year, the reference to one year shall be construed as reference to two years from the end of the relevant assessment year the existing sub-section (4a) relates to filing of return by trusts or institutions for charitable or religious purposes, whose income is exempt under the provisions of sections 11 and 12 the new section meorporates amendments consequent upon the substitution of the provisions of sections 11-13 by a new section 8of_ sub-clause (e) seeks to subfd:i, tute a new sub-section for the existing sub-section (5) of the section relatins 10 filing of ~~ return the new sub-section provide8 that a revised "turn can also be filed within one year from the end of the relevant assessment year instead of two years at preeent a provilo to sub section clarifies that in case of a return relating to assessment year 1988-h9 or ildy etu'lier year, the reference to one year shall be construed a5 reference to two years from the end of the relevant assessment year sub-clause (f) seeks to make amendme"jlts til eonsequential nature in sub-sections (6) and (sa) pursuant to the deletion of sub-section (2) f the section sub-clause (g) seeks to omit sub-fteetion (7) of the 1iemicm, rs itt provisions have become redundant coftsequemt upon the deletion of subsection (2) of the sec,tion  sub-clause (b) seeks to ia&el't olause (e) in sub-tec&d (l) of the section dealing with charge of inte~ wr tllte illne of tetum 'nlis is - anninal clause and provides that provisio~ of the 0, ~~tion sball' apply only 1n pe~t of assessment year 1~8-89 or earlier assessment years thereafter the charge of interest for late ftl1ng of return is to be covered by the mandatory interest being provided in chapter xvn , sub-clause (i) seeks to make amendments in provi&, to su~ti~ (10) which are consequent to the amendments made in sub-section (3) ,f the section r~lating to returns of losses and in sub-section (4a) of the section relating to returns furnished by charitable or religious trusts, itc clause 43 seeks to amend section 139a of the act relating to the permanent account numbers as follows:-(1) reference in sub-sections (1) and (2) of the section to "any a~ounting year" is substituted by a reference to "any previous year" (ii) the board is also empowered to preseribe categories of documents on which the permanent account number is to be given (iii) the definition of the term "accounting year" liven in clause (a) of the explanation in the section is omitted clause 44 seeks to amend section 140 which specifies the persons by whom the return of income is to be signed and verifted under the existing provisions of clause (a) of the section, the retura of income, in the case of an individual, has to be signed by the individual himself unless he is absent from india or is mentally incapacitated from attending to his affair& sub-clause (i) seeks to substitute a new clause 'for the existing clause (a) of the section to extend this facility to cases where for any other reason it is not possible for the individual to sign the return in such a ease the return may be signed by any person duly authorised by such individual in this behalf the power-of-attorney from the individual is to be attached with the return under the existing provisions of clause (c) of the section, the return of income, in the case of a company, can normally be stilled and veriljt:'d by the managing director or any director of the company sub-clause (ii) seeks to add a proviso to this clause to provide that in the case of a non-resident company, return can be signed by a person holding valid power-of~attorney which is to be attached with the return a further proviso is added to the clause to provide that-(i) where the company is b~ng wound qp, the liquidator of the company under liquidation ihall sip and verify the return; and (ii) where the man~t of t~ company hlul been taken 0  by the central dr state government, the principal ofticer shell sign and verify the return i suboclulie(iii) seeks to idaert a new claw (c:ld) in the se,ctio:o to provide that the chief executive, cliftoer of a pouucal party hferre4 to  in sub-section (om) of section 139 shall be the person com~tent "" sip and verify the retul'b of 11ich a political party clause 45 seeks to amend section 140a relating to payment of selfassessment tax under the '~~xisting provisions of sub-section (1) of the section the assessee is required to pay tax on the basis of return after taking into account taxes already paid, at the tim& of filing the return sub-clause (a) seeks to amend the sub-section to make it mandatory for a person also to pay interest payable up to the date of filing the return along with self-assessment tax the interest is to be paid for non-payment or short payment of advance tax, deferment of payment of advance tax and late filing of return an explanation is inserted to clarify that where the assessee pays only part of the amount due at the time of filing the return, such payment will first be adjuited towards interest, and balance if any, will  ' be adjusted towards self-assessment tax sub-clause (b) seeks to substitute a new sub_section (3) to provide that if any assessee has not paid the self-assessment tax: and interest in full before filing the return, he shall be deemed to be an assessee in default the existing sub-section (3) of the section which provides for levy of penalty for non-payment of self-assessment tax, is being omitted clauses 46, 51 and 53 seeks to omit the following sections of the act: (1) section 141a relating to provisional assessment for refund, consequent upon the new scheme of assessment (see amendment of section 143) (2) section 144b dealing with reference to inspecting assistant commissioner in certain cases, as its provisions are already withdrawn after 30-9-1984 (3) section 146 relating to reopening of a best judgment assessment at the instance of the assessee, as this provision has already ceased to be in forre after 30-9-1984-clause 47 seeks to amend section 142 of the act relating to enquiry before assessment sub-clause (a) seeks to amend sub-section (1) of the section to exclude reference to sub-section (2) of section 139, consequent upon the deletion of that section, so that notice under this section can be issued if the assessee has not filed return of income by the due date under sub-section (1) of section 139 sub-clause (b) seeks to insert a new clause in sub-section (1), which provides for power to call for return of income, where it hu dot been filed voluntaruy before the end: of the ~t assessment ! year clause, 0!8 seeks to substitute a new section for the existing section loq relating to procedure for asseamnent under the existing provisions of the section, after a return of income has been filed, the income-t~x officer may make an assessment under bub-section (1) without requiring the presence of the assessee or production by him of any evidence in support of the return where the assessee objects to such an assessment or where the income-tax officer i" of the opinion that the assessment so made is incorrect or incomplete, or in a case where the income-tax officer does not complete the assessment under sub-section (1), but wants to make an enquiry, a notice under sub-section (2) may be issued to the assessee requiring him to produce evidence in support of his return after considering the material and evidence produced by the assessee and after making necessary enquiries, the income-'tax ofticer makes the assessment under subsection (3) of the /section this section is proposed to be completely recast to provide for a new scheme of assessment wherein the requirement of passing an assessment order in all cases where returns are filed is dispensed wtth clause (a) of sub-section (1) of the new section provides that where a return has been filed under section 139 or under sub-section (1) of iiection 142-(i) if any tax or interest is found due on the basis of such return, an intimation shall be sent to the assessee specifying the sum so payable and such intimation, shall be deemed to be a notice of demand issued under section 156; and (ii) if any refund is due on the basis of such return, it shall be granted to the assessee a proviso to the aforesaid clause allows department to make certain adjustments in the returned income or loss clause (b) of sub-section (1) of the new section provides that where as a result of any of the appellate, revisionary or settlement order mentioned in the clause relating to any earlier assessment year and passed subsequent to the filing of the return referred to in clause (ii), there is any variation in the carry forward loss deduction" etc, claimed in the return, then,-(i) if any tax or interest is found due, an intimation shall be sent to the assessee specifying the sum so payable, and (ii) if any refund is due, it shall be granted to the assessee however, an intimation for any tax or interest due under this clause shall not be sent after the expiry of four years from the end of the financial year in which any such order was passed sub-section "(2) of the new section provides that when the assessing officer considers it necessary or expedient to verify the correctness or completeness of the return, to ensure that the income has not been understated or the loss declared is not excessive, or the tax has not been underpaid, be shall serve on the assessee a notice: either to attend hit oftice or to produce on a date specified any evtdence on which the assessee may rely in iupport of the return a pi'oviio to the 'ulhecuozl provktea that iuch a notloe s!1 be eervecl 'on the aue~ only during the rtnanelal year 18 which the return is  rued or within six rnonths from the date of filing the return, whldlever is later sub~section (3) provides that after hearint suclt evidence as the aaelsee may produce in response to notice under sub-section (2) ara such other evidence 8 the 8s8euing officer may require on 8peaiftet1 points and after takin, inio account all relevant material which the assessing officer has gathered he 8hall pass an assessment order in wri- tins determining the total ine9me or 108111 of the asa8l8ee and the auld payable by him on the basis of such uses&ment order clause 49 seeks to amend section 144 of the act relating to best jud,-ment assessment made ex pane sub-clause (a) seeks to amend clause (a) of the section consequent upon deletion of sub-section (2) of section 139, to provide that a best judgement assessment can be made on assessee's failure to file a retura of income under sub-sectiod (1) of section 139 sub-clause (b) seeks to amend the section to provide that - beltt judgement assessment shall be made only after giving the assessee 8r  ~pportunity of being heard sub-clause (c) seeks to delete the words "or refundable to the assessee" so that a refund may not· be granted under this seetion sub-clause (d) seeks to insert two provisos in the section to provide that such opportunity shall be giwn by issue of a notice to the assessee to show cause why the assessment should not be completed to the best of judgment it is further provided that such an opportunity will not be necessary where a notice under sub-section (1) of section 142 has already been issued clause 50 seeks to amend section 144a of the act relating to the power of the inspecting assistant commissioner to issue directions in certain cases: by deleting sub-section (2) of the section, consequent upon the deletion of sub-section (3) of section 119 referred to in this sub-section clause 52 seeks to amend section 145 of the act relating to method: of accounting to be emp~oyed in respect of income under the head "profits and gains of business of profession" or "income from other sources" under the proposed amendment a second proviso is being inserted in sub-aection (1) of the section to provide for taxation of any income by way of interest on securities on accrual basis in a ease where no method of aceountin, is regularly employed by the assessee czauae 54 seeks to substitute new sections for the existing sectiodj r147 and 148 relating to income escaping asaessment and is1u8 of notice ~n auch escjpement qf 1nco~e cul1a¥t '(al c:jf the existidg section empowers the income;tax oftleet tn assess or re~assess the i,dceme 8&c8ping assessment, ~ ~e hu reuod to believe that income has escaped assessment and such escapelrieut has oc(:urred on account of either a$sessee's, omission or faijnj'~: to file! a return of income or failure· to disclolie fully and 4"uly au iq&twial facts necessary for his assessment fo1' that year clause (b) eq1pqwers the income-tax ofticer to reopen an ass~ssment, notwithstanding  the fact that there is no omission or failure, as mentioned in clause (a) on the part of the assessee, if he has, in consequence of information in  his possession, reason to believ~ that income chargeable to tax hasoscaped ci::sessment i under the propo::>ed amendment, separate provisions contained iri the existing clause::> (a) and (b) of the section are to be simplifieq and merged into a singe provision enabling th~ assessing officer to' assess or re-assess income which has escaped assess,ment fo~ any assc¥iilent year, after recolding reasons for doing so the existing requirements of having "reason to believe" or "information in possession" are dis-i " pensed with it is further provicied in the new section that once an assessment is reopened, ~ny other income which has escaped assessment and which comes to ',he notic(: of the asessing officer subseq~nuy in the course of the proceeding under this section, can also be included ill the assessment ' a proviso to the nen sub-section provides that if an assessment has ltlen made for the relevant ass-:ssment year under sub-secuon ,(3) of ~ection 143 or this sectlon, no a ~ tion shall be taken under t¥i '~ection aiter the expiry of four years 'from the end of the :t'elevant assessment year, unless the income has esca~d assessment due to the ~~, on the part of the assessee to flk a return under section 139 or 142{l) or 148 or to disclose fully and truly all material facts nece~az:y ~or his assessment explanation 1 to the new section, which clarifies the meaning of the term "disclosure", is the sail¥! as explanation 2 in the existing section explanation 2 to the new section clarifies that the following shall also be deemed to be cases of income escaping assessment:-(i) where no return of income has been furnished by an asses" see, although his total income is above the taxable limit; (ii) where a return of income has been furnished but no asseu" ment has been made, and the assessee is found to have understand his income or claimed excessive loss, deduction; etc, in the retumj and (iii) where an assessment has been made, but income chargeab1e to tax has h:>en underassessed or assessed at too low a rate or any excessive lot,s or relief or depreciation allowance or any other allowance under the act has been allowed the existing provisions of sub-section (1) ~f section 1~ p~ovide that a notice issued under this section shall tentamount to a notice issued under 5ub-section (2) of section 139 the existing sub-section (2) provides that before issuing a no dee  under this section, the income-1)'ax omcer will record his reasons for domg so lii~ t~ ile'" s4!etiob 148, reference to sub-section (2) of section 130 is  i18iilovtki as that sub-section is being de~ted sub-sectien (2)· of tomi ~on is t-o be deleted, as the requirement of recording reasolifj is ii),corporated in section 147 itself the new section 148, therefore; provides that before making the assessment, reassessment or recomputation uftder &ecqolt; 147, the assessing omcer shall serve on the asse~, a notice nqulriaf !lim to furnish the return of income within such period, ilot beidg less than 30 days, as may be specified in the notice ci:4'11$e 55 seeks to amend section 149 of the act reiating to time untit' for issu:e of nottce under section 148 the- existing provisions of sub-section (1) of the section lays down tune limits depending upon whether the case falls under clause (4) or e1athle (b) of th~existing section 147 thus no notice for reopetl1ng an , assessment under section 148 is to be issued in a case falling under citluse- (b) after four years and in a case falling under clause (a) after eight years from the end of the relevant assessment year in a case falling under clause (a), where the income which has escaped assessment amounts to rs 50,000 or more in that year, the case can be reopened up to 16 years the existing pro\1isions of sub-section (1) of the section are being nbstahtially changed in view of the new procedure of assessment (see notes on amendment of section 143), and in the proposed amendment the time-limits ar~ to depend upon whether a case has been subject to sctu'tiny (by way of an assessment under section 143 (3) or section 147) or not and also the amount of income which has escaped assessment the new provisions in this respect are indicated in the following chart:--| beyond four years beyond    | -scvei'l                | yean    ||------------------------------|-------------------------|---------|| but up                       | to                      |         || seven years                  |                         |         || but                          | up                      |         || to                           |                         |         || tcn                          |                         |         || ~                            |                         |         || from the                     | end                     | of      || crus"                        |                         |         || of                           |                         |         || the                          |                         |         || e<:icvant assessment         | relevant                |         || ass~s8-                      |                         |         || year                         | ment                    | year    || ----------                   |                         |         || --------                   |                         |         ||                            |                         |         || -------                      |                         |         || in                           | cases subjeotecs        | to      || if                           |                         |         || the                          |                         |         || escaped in-                  |                         |         || tiny by way                  |                         |         || of                           | assessment come is jess | than    || under                        |                         |         || section                      |                         |         || 143(3)                       |                         |         || or                           | 50,000                  |         ||                             |                         |         || ,                          |                         |         |if tbo esoaped in-if the cscaped income is rs 50,000 come is rs 1,00,000 or more, but less or more than rs 1 jakb if the escaped income is ri 25,000 or more, but less than rs 50,000 an- eo:planation below t~ sub-section clarifies that for the purposes of this sub-section income escaping assessment shall have the same :neaning as explanation 2 of section 147 c14use 56 seeks to amend section 150 containing provisions for issue of a notice under section 148 without time limit in cases 'where assessment, reassessment or recomputation is in pursuance of an order of appeal, reference or revision under this act it is proposed to amend sub-section (1) of the section to empower me assessing officer to issue a notice under section 148 at any time to jive effect to any finding or direction contained in an order passed by a court in arty proceedings, which need not necessary be under 'the 1n::ome-tax act "clau,e 57 seeks to substitute a new section for the existing section 151 relating to sanctioning authorities for issue 'of notice ~d~r section 148 i i under ,the exis,ting provisions of this section, if notice under sectiod 14~ is to ,be issued after the expiry of four years from the end of the relevantassessrnent year, sanction of the commissioner is necessary, and after the expiry of 8 years from the end of the relevant assessment year, sanction of the board is necessary  in the proposed new section, the issuing or sanctioning authorities will demt1d upon whether the case has been subject to scrutiny by way of assessment under section 143 (3) or 147 or not ' suh-~ection (1) of the new section provides that where an  ment under sub-section (3) of section 143 or section 147 has been made for an assessment year, notice under section 148 can be issued for'dlat year only by an assistant commissioner or a deputy commissioner a pro~iso ,to this sub-section provides that after the expiry of , ~ from the end of the relevant assessment year, notice under section 148 can be issued only with the prior approval of the chief commissiooer or the commissioner sub-section (2) of the new section provides that in a case ~tw ut_ a case falling under sub-section (1), notice under section 148!ctq1 h!e issuea after the expiry of 4 years iromtheendof ,tbe reley  nt  m~nt year only by a deputy commissioner or with the approval of the deputy commissioner ckzuse 58 seeks to make an amendment of consequential natute iii lee-tion 152 containing certain provisions re~arding assessmw of esca,ped income, pursuant to the merger of clauses (a) and (b) of lection 147 clause 59 seeks to amend section 153 of the act relatigg ,\8 uut time ~,mits for completion of assessment and reassessment the existing sub-section (1) of the section,dea1!ing with complt~ of rf:isessment under section 143 or 144, -consists -of clauses {a) to ~, with clause (a) having three sub_clauses (i) to (iii) all othese c1au$ei e,x:cept sub-clallse (iii) of clause (a) are to be deleted for the reasons indicated below:-(1) provisions of sub-clauses (i) and (ii) of clause (a) relating to assessment years 1967-68 and 1968-69 which were tralil6itol'y ?rovisions at the time of their introduction by the finance~ 1968 have become redundant (2) provisions of c1al,lse (b), which provides eight ye~ t,ime limit for completion of assessments involving concealment of income be"" impractical and not actually used (3) provisions of clause (c) having become redunaant in view ~lf ijle curtailed time of one year from the end of the relevant a,sses,sment year allowed for filing returns of income under -subsf-ctions (4) and (5) of section 139 , (4) ,~ovisions of clause (d) having become redundant in view of the riew' procedure of assessment tliere,fore, sub-clause (a) seeks to substitute a new sub-section (1) ld the section which excludes the provisions of all the' above clauses and 14op-c]aqses the new sub-section (1) is thus much shorter and provides thrt an assessment order under section 143 or 144 shan be made within two years from the end of the assessment year in which the income was first assessable ' 'f"\ the,- existing sub-section of the section dealing with completion of aflc!essment, reassessment or recomputation under section 147, has two clauses (a) and (b) providin~ different time limits depending upon wbethtt the case falls under clause (a) or clause (h) of section 147 cbnsequent upon mer~r of clauses (a) and (b) of section 147 into i:; stngle' section sub-clause (b) seeks to amend sub-section (2) of section '153 by merging, clauses (a) and (b) of the sub-section and providin~ a uniform time limit of two vears from the end of the ft,n~cia1'year in which the notice under section 148 was served aptoviso to sub-section (2) makes an exception in cases where notice under section 148 has been served on or before 31-3-1987 in such cases the, assessment, reassessment or recomputation can be made by 31',3-1990 ,,'his is by way of a transitory provision to tide over the difficulti~s duhng the transitional period on switching over from the present f6tjt ,year limit to the new two year limit sub-clause (c) seeks to delet~ clause (iv) of explanation] to the ~ecli('ln which deals with time limit in a ca~e referred to the inspecting a!;sistrnt commissioner under section 144b, as that section itself is being ~eleted clause 60 seeks to amend section ]54 of the act relating to rectific~-_ tion of mistake apparent from record in ~ny order passed by an incomet'lx authority the amendment is made by substituting a, new sub-section (1) in the' section, which also empowers an income-tax authority to amend any intlm~tjon serttby it or enhance or reduce the amount of refund granted by it under sub-seclion (1) of section 143 ,  clause 61 seeks to amend section 1!)5 of the art relating to amendmenttof orders slib::c1ause (a) 'seeks to amend sub·sectlon (1) of the section, dealing wiel rectifications of a partner's share in firm's income, to withdraw its provisions after the assessment year ] 989-90, as the provisions of the st:b-seclion would become redundant consequent upon the new provisions of taxation of firms as a unit, (see amendment of sections ]82 to 189);" sub-clause (b) seeks to omit the following sub-sections:-r' ! ( trri (1) sub-section (3), relating to recomputation of income couse- ,,;-queot to tax payable by way 01 excess profits tax or business frofits tax, which ceased tqbe levied long back, and has become  redundant (2) sub-section (13), dealing with amendment of an assessment order by allowing the provision made for gratuity which was deposited in 'an approved fund subsequent to the passing of an assessment order, which has become redundant after 31st march 19111 "sub-clause (c) seeks to omit the followin'g sub-sections with eft'ect from 1-4-1992:-'(1) sub-section (5b) which deals with withdrawal of deduction tnr expenditure on scientific research originally allowed under subsection (2b) of section'35 and has become redundant in vi~w of the proposed omission of s('ction 35 (2) sub-section (6), which deals with allowability of a bad debt in an year' earlier than the year of write off and has become r~dundant in view of the proposal to allow bad debt in the year of write off (see amendment of section 36) (3) sub-section~ (7a) , (ra), (9a) flo) (b) and (lob) having become'redundant in view of the amendments to sections 54 54b, 54d and 54e made by the finance act 1987 (4) sub-sections (8) (9), (10) (a) and (ioc) having become  redundant in view of the new scheme of investment of capital gains introduced by the finance act 1987 clause 62 seek£ to amend section 15r of the act dealine: with intl ~ation of asse~sment of firm and npl)r'lrtionment of its income among the panners, by withdrawing the provisions of the section after the assess-olent year 1989-90, as the iprovisiom; of the section would' become redl:mdant in view of the proposc'd schem!' for taxation of firm,s whereby partners' shares in the income of the firm are not to be assess~d in their hands clause 63 seeks to insert a new chapter xivb ,containing section , 58b yelnting to levy of adchtjr'lnal income-tax in certain cases sub-section (1) of the section provides that on completion of r regular assessment' under section 143 or 144, apart from the sum determined as payable on the basis of such assessment an additional incnmetax at the rate of 30 per cent of the difference between the assessed income and the ~turned income, win be levied by the income-tax officer sub-section (2) through clauses (a) to (d), clarifies as to what win constitute returned income for the purposes of levy of additional inci}metax in different circumstances and how the anditional income-tax will be levied where the returned income is a loss the provisio'tls in brief are:-i (1) clause (a) provides that where there are two or more returns of income for the same assessment year, the income shown i~ the return filed last qefor'e the service of a notice of hearln~ under sub-section (2) of section 143 shan be tre,8t,ed as tnp re~med income; (it) clause (b) provides that where a bellt judgment alleament is completed  under section 144 for assessee's fau\u'e to ~ a return of income, the returned income will betaken at 'nil'ol' such higher total income in respect of which tax by way of aavdc, tax, deduction of tax at source and otherwise has been paid (iii) clause (c) makes similar provision, as in qlause ~), ill cases where the return of income is field under sectioil 148 (iv) clause (d) provides that where the retumeo mame is a loss, additional income-tax will be levied on a9ditions ,~, ,mich reduce the loss or convert it into income sub-section (3) provides that where as a result of an order under sections 147, 154, 155,250,254,260,262,263 or 284, or an o,rder of ~ttlement passed under sub-section (4) of section 2tw)d, the amount on ""l1ica the additional income-tax is payable is increased or reduced, the ~tional inome-tax shall also be increased- or decreased accordidgly sub-section (4) gives disccetion to the chief cod;l,liljl;sioner or the commissioner, whether 01'il bis own j;iflotion, or otberwise, to wai:ve or reduce the amount of additional income-taxpay~ble if be is ~aj;~fied that the difference between the returned income and the assessed income is due to bonafide difference of opinion and a1,l the facts relating to and material for computation of the assessed iucome qr 1015$ bad ~~ disclosed by the assessee a proviso to the sub-section provides:-(1) that where an appeal against t)le assessment order has been ftled by the assessee before the deputy commissioner (appeals) or commissioner (appeal), the petition for waiver or r~uction of &ciditional income-ta~ can be fij,ed orily after the decision on such appeal, (2) that the petit~on for waiver or reduction of additional income-tax sha)l be accompanied by a fee of ru~ one buddred sub-section (5) provides that where in the course of a search under section 132, the assessee is found to be the owner fa any ~y, ~on, jewellery or other valuable article or thing and the assessee c~jxui tb,at the assets referred to above have been acq~edby him by utiuau,g j»s income:-(a) for any previous year which has ended before the date of search but return of income for such year bas not d fumished before the said date, or where such return laasbeen iyj'mshed ~ the said date such income has not 'bean declared thel'eill, or , (b) for any previous year which is to end on or after the date of the search, --~,not-witb$tap4ing that stjch in~ome is c;le~lar~d by him in any retum of ~e fumiihed on or after th,e date ofsearc;h, s~,ch income shall not hi! ~rea!ecl as f~mil)g part of his returned ~eo~e for the purpoees of liability of the additional income-tax the aforesaid' in~ome ui, how'e~l' be treated as forming part cd the rettltned income in the following· situations:- (i) if such income is, or t¥ transactions resulting in such mcome are recorded: i (a)-in a case falling under clause (a), before the date of search, and (b}-in a case falling under clause (b) on or before the date of search,  in the books of accounts maintained by the assessee, or such ineotne is oth~rwise disclosed to the commissioner before the said date (it) the assessee in the coul'se of search makes a statement under sub·section (4) of section 132 that the assets found have been acquired out of his income which has not been disclosed 10 far in his return of· income to be furnished before the expiry of the time specified in sub-section (1) of section 139 and explains the source of such income and pays ~ tax together with interest,if any, in respect of such income, - sub-section (6)· clariftas that provisions regarding levy of interest under sub-section (1) of section 234a and under sub-section (2) of section 234b for defaults in· fumishing the retum of incoine or jn pa~'ent of advance tax, shall not be applicable to the additional income-tax cluure 64 seeks to amend section 164 of the act relating to the charge of tax where shai)es of beneficiaries are unknown sub-clause· (a) seeka to make amendments of consequential nature in 1i~section (1) of this section and in the first proviso to the sub-section sub-clause (b) seeks to del the followin:-(1) sub-sections (2) and (3) of this section which relate to taitidlioll' of trultl for charitable or· religious purposes, either wholly or in part, as these will be covered by new section 8o-f proposed to be inserted to deal with the incomes of public charitable or reugioua tnatl (2) ex1'la"(ttion 2 to the section, whieh giv~s the m~a~g of·~ term "1tuudmum· marginal rate" c!onsequent upon the shifting of this ddni'tion in i slilhtly modified form to section 2 t"latii'e il5· s~'ks to antend _ction 164a of the act :elating to charge of tax in the case of oral trusts, by the djeleting clause (1) of the ~~1ang­t1dn to this section, consequent upcm the shifting of ~e defin1t1on of "maximum marginal rate" to section 2, c14ues e6, 81, 68, 69,7(), 71 and 72 seek to insert new s~tions delete ee!rel of the existing ones or amend vari~s ex'lsting sectulds of the act (section 167a of chapter 'xv and sections 1112-189 of cilapter xvi) to introduce a new sys1!em of taxation of firms 'underthe existing provisio~ reg~ding taxation of lirms,,,the act makes a distlnction : ~ \vee:u a registered firmaud an urueglstered nrm there is an eabol'atc pl'oceuure 10 grant regi::>tratlon to the firms or to cancel thereglstration unae! c(;!,!'tam circumstances (sections lli4-hi9) a regll:it~red lll'm l::; ~axec1 ai; ra'les lowe,l' than the rates applicable to indi-vlq,uius ana m adoluon, ::;nart!s or pal'mel::> in the incolne of the firm are agam mcluaoo !11 th'-ll' :,ulal ~ll:;omes and tiixed in their hanus (section lb~) an wuegl::>lert:u iu'm is taxed on lts lola! lucome at the rates applicable to indlvlq~a1s, in clddition, shares of partneh'sin the income 01 the ilrm are mcilaled in iheu" toal lilcomes ior rate purposes only (sectwns 103 ilud ab (lll) j in th,e 'proposed, new scheme of taxation of firms, the existing procedure 111 grantini regisu:ation to the ju:zru; is to be dl::>pensed with however, ltwlll be oo!lgaoory for the fum to rile a certilleu copy 01 the lnstrument ":otpartnerstup aloni with the nrst return 01 mwme 'l'uus the distinction ,between a regjstered brm and an unreglsle~'t:d firm will be removed ,and all firms will ile tc4xed at the lllaxunum maj"gjllilj rate tlowever, payments by way of salary, etc, lllaue to whole-tune working partners and mterest to partners, which are not at present allowed as a deduction under the provisions of section 40 (b), will be treated as allowable deduc-tiojasubject to certain c;eilnw' lsee amenciinent of section 4o(b» with the taxation of tile fu'ms directly at the maximum marginal rate, the 'shares of the paj·tners iii the mcowe of the firm will not be included in their total income [see clause (2a) of sectlon loj also separate rate schedules provided tor t;;;xatlon of firms in sub-paragraphs i and ii of t"aragraph c of parts i and ui of the ;r'irst schedule  19 the finance act w:!l b<:o omitted 1d due course clause 66 seeks to chan~ the sub-heading "dd-association of pers0ns--special cases" ot chapter xv of the act to "dd-firms, associatwn of persons and body oj mddnu·uals" it further deletes the existing section i67a under the sub-heading ~1ating to charge of tax wher:e shares of members of an association of persons are unknown, and in its place 'introduces three new sections 167a, 16!7b and 167c the new section 167a provides that in the c~ ofa firm, tax shall be charged -at the maxunum ~gihal rate 'i, clause 67 seeks to omit the sub-heading "a-assessment of firms" ~d the fo~lowing sections of the act:-(i) section 182, which deals with assessment of registered firms, inclusion of partners' shares in the income of the firm in th~ own assessment and recovery from the registered firm of tax relating to a non-resident or resident partner in respect of his share in the firm (ii) section 183, which deals with assessment !)f unregistered firms cta'llse68 seeks to de1ete the sub-heading "b-registration of firms" and substitute two new sections' for the existing 'sections 184, iss'and 186 dealing with application for registration,  procedure for registration an~ cancellation of registration respectively  - " 1""', :'"" the new section 184 dealt with the circumstances under which a firm shall be assessed as s~ch sub-sections (1) to (3) provide that the partnership sholllci be evidenced by an instrument of partnership wherein the ~ndi~dual ~are9 of the partners are specified and a copy of the same, certified in wntlllg by all the partners, should be filed along with the first return of the firm which should also be signed by all the partners sub-sections (4) and (5) provide that where a finn is assessed in any assessment year, it shall continue to be assessed as such for subsequent years unless a change in the constitution of the finn takes place, in which case the firm shall furnish a certified copy of the revised instrument of partnership along with the return of income of the assessment year m which the change in the constitution has taken place sub-section (6) provides that where in the case of a firm a best judgment assessment is made under section 144, the assessing officer shall not assess the firm as such and thereupon it shall be assessed as an association of persons the new section 185 provides that if a firm does not comply with the provisions of section 184 for any assessment year, it shall be assessed as an association of persons for that assessment year clause 69 seeks to amend section 187 of the act relating to change in constitution of a firm by deleting the proviso to sub-section (1) of the section the existing proviso to the said sub-section provides, in the case of change in the constitution of the firm, for apportionment of the income of the firm amongst the partners and for recovery of tax assessed upon a partner from the new firm, if it cannot be recovered from the partner these provisions have become unnecessary in view of the new system of taxation of firms whereby a partner's share in the income of the finn is not to be included in his total income clause 70 seeks to in$':!rt a new section i88a in the act to deal with joint and several liability of partners for tax payable by the firm the new section lays down that every person who was, during the previous year, a partner of the firm, shall be jointly and severally liable along with the firm for the amount of tax, penalty or other sum payable by the firm for that year clause 71 seeks to amend section 189 of the act relating to assessment of a dissolved firm or a discontinued business, by deleting explanation to sub-section (3) as the provisions of this explanation hav',e become unnecessary in view of the deletion of section 182 clause 72 seeks to insert a new section 189a in chapter xvi of the act to provide that in respect of assessment of anv firm and of its partners for the assessment year 1988-89 or earlier years, the provisions of chapter xvi, as thevstood immedlatelv before the commencement of the direct tax laws (amendment) act, 1987, shall continue to apply clause 66 also introduces a new section 167b to provide for char~e of tax in the case of association of perso'l'ls or body of jndividual~ at thf'! maximum marginal rate under certain circumstances the provisions of the new section 167b coupled with the un;>visions of new section 86 and a new clause (ba) to ~ction 40 introdude a new scheme for taxa~ion of the msociation of persons and body of indhriduals (set, also s~~hoi\!\ 86 and 40 (ba)] under the existing provisions, association of persons and body of individuals are taxed at the rates applicable to individuals however, if the shares of the members of an association of persons are indeterminate or unknown, the association of persons is taxed at the maximum marginal rate (sect:on 167a) clause 103 seeks to delete the existing section 167 a and introduces a new section' 167b for taxation of certain association of persons and body of individuals the provisions of the new section 167b are:-(i) sub-sjection (1) provides that where the individual shares of the m~mbers of an association of persons or body of individuals in the whole or any part of the income of such an association or body are indeterminate or unknown, the tax shall be charged at the maximum marginal rate on the total income of the association or body (if) sub-section (2) provides that where in the case of an association of persons or body of individuals, the total income of any member, other than share from such association or body, exceeds the maximum amount which is not chargeab1e to tax in the case of an individual, the association or body shall be charged at the maximum marginal rate a proviso to sub-section (2) provides that if any member of an association or body is chargeable to tax at a rate higher than the maximum marginal rate, tax shall be charged on the total income of the association or body at such higher rate the explanation at the end of the new section 167b lays down as to when the shares of members in an association of persons or body of individuals shall be deemed to be indeterminate or unknown, and is the- same as the explanation in the existing section 167a (in the remainin~ cases of association of persons and body of individuals that is where none of the members has other income above the taxable limit and the shares of the members are determinate tax shall continue to be charged at the rates applicable to the individuals to~ther with such surcharge on tax ,as may be levied, in the relevant finance act) clause 73 seeks to amend section 194a of the act relating to deduction of tax at source from interest other than "interest on securities" a!4 per the existin~ provisions of clause (iv) of sub-section (3) of the section, tax is no~ to be deducted at source, from any income eredited or paid by a firm to a partner of the fi;rm since tax is now required to be deducted from payments by way of i~terest, salary, etc, made by the flr~1 to its partners (as :per the provisions of new section 194e being inserted), the said clause (iv) of sub-section (3) of the section is being omitted i ! -, j"'~"" claw;e 74 seeks to insert a new section 194e in the act to provide for r)leductkm of tax at source from interest salary, etc  paid by a firm to the partners' the pr(lvisions of tax deduction in the new section are on tho s:lme lines as in ;;petion i92 relating to deduction of tax at source from sfi!nries th~ new section consists of sub-sectiojls (1) to (4) which are analogous to existing sul>-sections (1) and (3) of section 192 and sul>-sections (2) and (2b) being newly inserted by the finance act, 1987 clause 75 seeks to substitu~, two new sections 196 and 196a in place of the existing section 196 of the act relating to non-deduction of tax on interest or dividends or other sums payable to government, reserve bank or qertain corporations the new section 196 is essentially the same as the existing section, excep~ that a new clause (iv) has been jnserted to provide ~ha~ no tax shall i~ deducted at source from any sum payable to a mutual fund specified under the newly inserted clause (23d) of section 10 the new section 196a provides that no tax shall be deducted at source by such mutual fund from any sums payable to its unit-holders c14use 76 seeks to substitute new sections 207 and 208 of the in~ome-tax act under the existing provisions, advance tax was not payable)n respect of capital gains and income of casual nature refert'ed to in; subclausie (ix) of clause (24) of section 2 of the act the new section 207 includes all items of income in the total income for chargeability of advance tax the new section 208 abolishes the various income limits applicable to different calegories of persons referred to in the existing provisions for being liable to pay advance tax and makes it obligatory to pay advance tax in every case where the advance tax payable is rs 1,500 or more clause 77 seeks to amend section 209 of the 'incommax act relatin'i to computa:ion of advance tax under the existing provisions of section 209 read with section 209a and section 212 of the act, an assessee has to pay advance tax in accordance with the statement of income ror estimate of advance· tax to be sent to the income-tax officer in tl¥ prescribed manner the amended section seeks to introduce a new scheme under which an assessee will be required to estimate his curnmt income and pay advance tax thereon without having to submit any estimate or statem£!nt o~ income to the i'lssessing authorities, except where a notice has been served on him under section 210 (3) or 210(4) sub-clause (a) seeks to insert a new sub-section (1) which! secures that where advance tax is payaple, the assessee shall himself compute the advance tax payable on his current income at the rates in force in the fij)ancial year and deposit the same wbfther or not he has been earlier asli/essed to tax or not where, however, he fails to do so and has been served with a notice under sub-section (3) or a revised notice under 8101»: section (4) of section 210 and has filed his own estimate in responae thereto, the advance tax payable shall pe computed in the like manner on the current income declared  in such estimate the new sub-section also provides for the computation  of advance tax by the assessing om~r' for the purpose of an order under li\lb-secuon (3) of section 210 of the act  which will be based brl the total income of the latest previous year for which asses!-ment has been made or the returned income in the return last filed whichever is higher and if the order of the assessing officer has been amended under sub-section ,(4) of section 210,' the computation will be in ref;pect of the total income subsequently returned or assessed which has been' made the basis of amendment by the assessing officer in all the cases the tax calculated at the rates in force in the financial year shall be reduced by the amount deductible at source out of the income which has been taken into account in the computation of current income , sub-clause (b) makes amendments in sub-section (2) which an consequential to the changes made in this section and in section 210 sub-clause (c) seeks to make amendment in the existing sub-section (3) in consequence of the provisions of sub-sections (3) and (4) of the substituted section 210 c14wte 78 seeks to omit section 209a of the income-tax act relating to the computation and payment of advance tax by an assessee as it has betome redundant in consequence of the insertion of new sub-section (1) in section 210 clause 79 seeks to insert a new section 210 'of the inoome-tax act dealing with payment of advance tax by the assessee of his own accord or in pursuance of orqer of the assessing officer sub-section (1) provides that any person who is liable to pay advance tax under section 208 shall suo moto compute and pay the specified instahnents of advance tax this provision is presently contained in section 209a with the difference that such a person is also liable to submit an estimate of current income and advan~ tax payable to the assessing officer sub-section (2) allows an assessee to revise the instalment of advance tax in accordance with his estimate of current income without any requirement of filing the revised estimate of advance tax subrsection (3) provides that where, despite the legal obligation cast upon him by sub-section (1), an assessee, who had earlier been assessed to income-tax, fails to pay advance tax, the assessing officer may pass an order requiring him to pay advance tax on his current year's income such an order, however, must be passed during the financial year but not la~r than the last date of february sub-section (4) provides for the amendment of the order passpd under sub-section (3) where subsequent to the making of inch ord~r or before the 1st day of march, a return of income in respect of any later year has been furnished or any assessment for any later year has been made at a higher figure sub-section (5) enables the assessee to furnish his own estimate of current income in order· to reduce the amount of advance tax determined by the assessing officer under sub-section (3) or sub-section (4) sub-section (6) provides that where the amount of advance tax on current income as per assessee's own estimate is likely to be higher than what has been determined under sub-section (3) or sub-section (4) or his own es~imate under sub-section (5) the assessee shall pay higher tax in accordance with his own calculation of advance tax pf,ause80 seeks to insert a new ¥etion 211 of the income-tax act dealing with the time by which instalment of advance tax are payable and the amount payable in each instalment the existing provisions of section 211 specify different due dates of instalments of advance tax dep,ending on whether the previous year ends on the 31st day of december or before with the amendment ift section 3 of the act providing that the financial year will be the previous year for all assessees and for all sources of income, the new section specifies uniform due dates of instalments for all assessees under the existing provisions advance tax is payable in equal instalments falling due on the specified dates which are dependent upon the previous year adopted by the assessee sub-section (1) now provides that up to 20 per cent, 50 per cjent and 100 per cent of the advance tax payable shall be paid by 15th september, 15th december and 15th march, respectively it has also been provided that any payment of advance tax made before 31st march shall also be treated as advance tax paid during the financial year sub-section (2) secures that where advance tax is payable by virtue of t~ notice of demand issued by the assessing officer, the whole or the appropriate part of the advance tax shall be payable in the remaining instalments - clause 81 seeks ,to omit section 212 dealing with estimate by assessee and section 213 dealing with deferment of instalment where income consists of commission receipts, as these provisions are not needed in the new scheme for payment of advance tax clause 82 seeks to amend section 214 of the income-tax act, relating to interest jayable by government sub-clause (a) seeks to amend sulb-~tion (la) to insert a reference to an order of the settlement commission under sub-section (4) of section :k5d sub-clause (b) seeks to insert a new sub-section (3) which makes the provisions of this section and sections 215, 216 and 217 inoperative in respect of the assessment year 1989-90 and onwards it a1s~ clarifies that references to these sections except sub-section (1a) of this section and sub-section (3) of section 215 for any earuer assessment y?ar will continue to be regulated by the old provisions the new provisions for payment of interest are contained in sections 234a, 2mb, 234c and 244a clia~ 83 seeks to amend sub-section  (3) of ~tion 215 on the lines of sub-set:tion (1a) of section 214, the difference bemg that under sec~on 214: the interest is payable by the government whereas unde~ section 215 interest is payable by the assesseje clgu8 84 seeks to substitute section 218 of the income-tax act relating eto the assessees deemed to be in default by a new prevision t 1 to change in the scheme for payment of advance tax as consequen la  contained in sections 210 and 211 clause 851 6100ks to amend section 220 of the income-tax act which spec1ftes as to when tax is payable and when an assessee is or is deemed in default sub-clause (a) seeks to amend sub-section or to j;equire that qle specified amount shall be paid within 30 days 'hithe~to 35 days) of the service of the notice under section 156 of the act sub-cla1jse (b) seeks to amend sub-section (2) by increasing interest payable by an assessee indefault from the existing rate of 15 per cent per annum to ii per cent for every month or a part of the month during which an assessee continues to be in default in reipect of any amount referred to in sub-section (1) the sub-clause also seeks to enlarge the ~cope of the proviso to sub-section (2) by including therein any reduction of the amount on which interest is payable by an order of the settlemept commission under  sub-section  (4) of section 245d further, sub-clause (b) seeks to add another proviso to the section to provide that where the duration of default includes both the period prior to the 1st of april ;1989 and also period subsequpnt to that date, the calculation of interest for the earlier period will be on the basis of the old- provisions and the calculation 'of interest for the subsequent period will be controlled by the new provisions clause 86 seeks to amend ¥ction 222 of the income-tax act relating to forwarding of certificate to the tax recovery officer sub-clause (a) seeks to amend sub-section (1) under the existing provisions, the income-tax officer is required to forward to the  tax recovery officer specifying the amount of arrears due from the assessee, and only then the tax recovery officer assumes jurisdiction in £he case the amended sub-section (1) dispenses with such a requirement under the new provisions, the tax recovery  officer will assume jurisdiction automatically by specifying the amount of arrears due from the assessee in a prescribed form sub-clause (b) seeks to insert a new sub-section (2) which incorporates the existing provisions, but with reference to the· tax recovery officer, in consequence of the amendment of sub-section (1) clause 87 seeks to insert new ~tions 223, 224 and 225 of the incometax act relating to the jurisdiction of tax recovery officers and validity, amendment, and stay of proceedings under certificate and withdrawal thereof the amended sections incorporate the existingp~ovisions, so,' however, as to give effect to the new sections 120 and 222 pf the act clause 88 seeks to amend section ·226 of'the income-tax act relatidl to the other modes of recovery sub-clause (a) seeks to sublltitute sub-section (1) by new sub-sectiqns (1)  and (la) the substituted sub-section (1) provides that tlw assessing officer may recover· the tax by anyone or more of the modes provided in this section w~re no certificate has been drawn up upder section 222 t sub-section (ta) provides similar powers to be exercilled by the tax re<:ov'~ry officer where a ·certiflcatehas been dj;'awn up under section'i2i, sub-clause (b) seeks to replace the words "income-tax officer" by the' words "assessing officer or tax recovery officer·' in sub-sections (2), (3); (4)' and (5) of this section in order to empoftr these authorities to exercise powers specified in these sub-sections clause 89 seeks'to omit section 228 of the income-tax act relating to recovery of indian tax in pakistan and pakistan tax in india clause 90 seeks to amend section 228a relating to recovery of tax in pursuance of agreements with foreign countries in consequence of amendment of section 222 of the act clause 91 seeks to amend sub-section (1) of section 230 of the income-tax act relating to tax clearance certificates under the existing provisions, those persons who are not do~iciled in india or those among the indian domiciles who, in the opinion of an income-tax authority" have no intention o'f returning to india, require tax clearance certificate the amendment to sub-section (1) limits its s('ope by making it applicable only to such indian domiciles who are leaving the country as an emigrant or for employment or other occupation abroad, etc clause 92 seeks to amend sub-section (1) of section 230a relating ~o the issue of a certificate by the assessing officer for registration of transfer of immovable property hitherto, such a certificate was required for properties valued at more than rs 50,000 the amended sub-section liberalises the provision and requires production of sllch a certificate for properties valued at rs 1 lakh or more clause 93 seeks to delete section 231 relating to' the period for - commencing recovery proceedings, as the provisions are no longer necessary cldu  e 94 seeks to inse-t in chap-ter xvi of the income-tax act a new  sub-chapter "f intetest chargeable' in certain cases", setting out threie new sections, 234a, 234b and 234c the new sub-chapter brings together these new' sections dealing with mandatory charge of interest for specified defaults the new section 234a provides for charge of interest for defaults in tumishing return ('of income accordingly, the existing provisions of sub-section  (8) of section 139 have been omitted section 234b provides for charge of interest for defaults in payment of advance tax and section 234c deals with charge of-interest for deferment of an instalment of advance tax the existing corresponding sections 215, 216 and 217 have been omitted also sections 140a(3) , 271(1) (a) and 273 dealing with penalty in such cases are omitted sub-section (1) of new section 234a incorpora~ in principle the provisions of the existing clause (a) of sub-section (8) of sedion 139 of the act by providing that where a return of incom~ has been furnished after the due date or it has not been furnished at all, the assessee shall pa~ interest which will be computed in the manner specified in the subsection the existin~ rate of interest of 15 per cent per annum of the tax determined (as reduced by any advance tax, paid or tax deducted ~t  source) has been increased to 2 per cent for every month o,r part of the  m~nth of default sub-section (1) omits' the existing proviso to clause , '(~')' of sub-section (8) of section i39 and thereby abolishes any provision for ;reduction or waiver of the interest payable under this sub-section ezpzaaation 1 clarifies that the "due date" for filini of a return of income is the date specified in sub-section (1) of eouon 138 accordinjl1 the "specified date" mentioned in the existing e:rp14n4tion 1 ot iubsection (8) of seetion 138 hal been abolished explanation 2 alarifies that for the purposes of computing interest under this 'section, additional income-tax payable under new section 1mb shall not be included in the amount of tax on total income referred to in suheetion (1) explanation 3 incorporates existing explanation 2 to clause (a) of subsection (8) of section 139 of the act sub-section (2) provides for adjustment of any amount already paid towards interest by an assessee under section 140a of the act sub-section (3) provides for charge and mode of computation of interest where during the course of a reassessment proceeding the return of income is filed belatedly or no return is filed the explanation to this sub-section is analogous to explanation 2 to sub-section (1) sub-section (4) incorporates the existing provisions ot clause (b) of sub-section (8) of section 139 of the act providing for automatic revision of the amount of interest where the amount of tax is varied as a result of revision, appeal or rectification or settlement sub-section (5) provides that this section will apply to all assessments in respect of assessment years 1989-90 and onwards section 2mb incorporates the existing provisions of section 215 and section 217 with the difference that the new -provisions make the charging of interest mandatory the existing provisions provide for waiver or reduction of interest under rules prescribed in this regard th nevi section does not have any such provision sub-section (1) provides for the mode of computation of interest on any default in payment of advance tax under section 208 read with section 210 under the existing provisions, the interest is to be charged at the rate of 15 per cent per annum the new sub-section provides for charging of interest at the rate o'f 2 per cent for every month or for part of a month for the period starting from 1st of april of the following financial year to the date of regular assessment on an amount equal to the assessed tax as reduced by the amount of advance tax, if the advance tax paid falls short of 90 per cent of the assessed tax erpi~anation 1 defines "asse~sed tax" with reference to which the interest under this section is to be computed explanation 2 clarifies that for the purposes of this section, an assessment made fot' the first time under section 147 shall be deemed to be regular assessment : e:rolanatwn 3 excludes any additionfil income-tax payable under new section l&8b from the amount with refc-rence to which interest under this section is to be computed sub-section (2) provides fot' the mode of computation of interest wbere an assessee paid any talc; \lnder section 140a before the date of ;regular asselllpdent  sub-section (3) provides for charge and mode ot computatioll of interest where in a re-assessment proceeding the total income determined exceeds total income assessed in regular assessment ~zanation to this sub-section is analogous to explanation 3 of sub-section (1) sub-section (4) is analogous to sub-section (4) of new section 2ma sub-section (5) provides that this section shall apply to all assessments for the assessment year 1989-90 and onwards sub-section (1) of new section 234c provides for eharge and mode of computation of interest where there has been deferment of instalments of advance tax the sub-section is patterned on the existing provisions of section 216 the' rate of interest, however, has been increased from 15 per cent per annum to 1! per cent per month expla1mtion , this section defines "tax due on the returned income" with reference to which illterest is to be coinpu~d under sub-section (1) sub-section (2) provides that this section shall apply to all assessments for the assessment year 1989-90 and onwards clause 95 amends section 240 of the act relating to refund on appeal, etc, by inserting a proviso to secure that where an assessment is set aside with the direction to make it afresh, any refund will become due only after the fresh assessment is made the proviso also secures that where an assessment is annulled the tax on retumed income will not be refunded clause 96 seeks to insert sub-section (3) in section 243 of the act relating to interest on delayed refunds the sub-section provides that the section will not apply to any assessment for the assessment year 1989-90 ,and o'i1wards this is consequential to the insertion of new section '244a clause 97 seeks to insert sub-section (3) in section 244 of the act relating to interest on refunds where no claim is needed the new sub-' section provides that the section will not apply to any assessment for the assessment year 1989-90 and onwards this is consequential to the insertion of new section 244a clause 98 seeks to insert a new section 244a in the act providing for payment of interest on refunds 'under the existing provisions of sections 243 and 244, interest i~ payable where refund is not -granted within 3 months of the end of the month in which the assessment or, as the case mav be claim for refund is made further interest is also payable ~re a~y refund ari~es due to any excess payment of tax or penalty the new provisions abolish any need for rnakin~ claim for refund and specify that interest shall be payable on refund of tax or penalty for the periods specified in the section the rate of interest has bee'l'l also increased from the existing rate of 15 per cent per annum to it per cent for every month or a part of a month of the delay in the grant of refund clause (a) of sub-section (1) provides that where the refund is of any advance tax or tax deducted at source, the interest shall be payable for the period starting from the first day of assessment year to the date of the grant of refund no interest shall however, be payable it the excess payment is less than 10 per cei1t of the tax determined o~ regula: 15~es!lll\flllt  clause (b) of sub-section (1) provides that where refund 11 of -other than advance tax or tax deducted at source, the interest shall be paid for the period starting from the date of payment of such tax, or penalty up to the date on which the refund is granted it is also clarified by way of an explanation that "date of payment of tax or penalty" mean the' date on and from which the amount of tax or penalty speclfied in the notice of demand is paid in excess of such demand subsection (2) is analogous to the existing provisions of exp14nation to sub-sectio'n (1) and sub-section (2) of section 243 the new sub-section secures that for the purpose of computing the period of delay under subseetion (1) any delay in proceedings (including assessment proceedings) attributable to the assessee shall be excluded sub-section (3) provides for automatic revision of interest on refund where the refund has been increased or reduced on re-assessment, appeal, revtsion, rectiftcation or by an order of the settlement commission under sub-section (4) of section 245d sub-section (4) provides that the new section shall apply to the assessmett year 1989-90 and onwards, cl4me 99 seeks to a~ndsub-heading "n' of chapter xx and to substitute the existing section ~ of the act relating to appealable orders by two new sections 246 and 246a the sub-heading, "a-appeals to the appellate assistant commissioner and commissioner (appeals)" is changed to "appeals or applications to the deputy commissioner (appeals) and commissioner (appeals) " this is consequent upon change of designation of the appellate assistant commissioner to deputy commissloner (appeals) and insertion of a new section 246a empowering the assessee to appeal np'l1inst the disputed income or deduction included by him in the return of income by way of an application before the deputy comm:~~i('!'er (appeals) or commissioner (appeals) the existing su~~ection (1) of section 246, consisting of clause!; (a) to (0) specifles o1"ders a,ninst which the asressee may appeal to t~ appeuate assistant commis·donf>t' '1'h" new ~ub-section (1) consisting of clauses (a) to (1) speclfl~ th~ orders of an asse:lsin~ officer (other than a deputv commissi&ner) iu~'pinst ~hl"b - a'!lsessee may appeal to the dentt~eommiml'tmet (a~ls) some of thesie clauses correspond to the existing clauses of subsection (1) of section 2ftj some clauses h~ve be~ omitted some new a'opt'  il~lha,~ also been provid('d '11'l~er the now cja'tse"l'l details are given below:  , -, ' ,-,- (a\' -  (4)' new clauses corresj)oadiag old ciuaea (e) (b) (c) (i) w (j) (h) (k) (i) (i) (i) (oa) (k) (ii) (o)(ia) (lxi)  (i)(ii) (oxiii) (ilia) clauses which have been omitted old ioiauso rcason (b) 131 (d) omislion oc tewon 146 ~o)(i) and (ii) <>million of levy or penalty in seelio l40a iuld omillion ur ~n 270 (o)(iv) omission or aec:tion 272 in addition to the above, sub-clause (ii) of clause (1) provides appeal against orders under section 271b (for which there was no appeal earlier) and newly inserted sections 271c, 271d and 271e and also the subatituted, section 272a sub-clause (iii) of clause (1) incorporates the appeals against the orders under sections 271 (1), 272, 272b and 273 these appeals have been allowed ~nly in reapect of any assessment for assessment year 1988-89 or earlier in consequence of barring the applicability of these sections after assessment year 1988-89 the existing sub-section (2) of this section, consisting of claus~ (a) to (i) specifies the orders against which the assessee may appeal to the commissioner (appeals) the new sub-sec~ion (2) also $peci~ the appellable orders to the commissioner (appeals), but con~ts of cl~s <a) to (h) some of the existing clauses have been omitteq t~e new cllfljm8 and corresponding old clauses are given below:-new clauses corresponding old claul:'_ (a) (b) (b) (a> (c) (d) (d) (ft) (e) (~> (f) (gg) (g) (h) (h) (i) sub-sec lions (3) and (4) of the existing seclon, which relate to pe~  ding appeal~_before the appointed uate, have become redundant and, therefore, do not find a place in the new ::iectlon however, sub-sectlon (5) of the existing section, which empow~rs the board to transfer any pending appeals from the appellate assistdnt commissioner to the commissioner (appeals) under certain circumstances, has been amplified to empower the board to authorise certain income tax authorities to transfer cases, and included as sub-section (3) an explanation at the end of the new section defines the terms "appointed day" and "status" for the purposes of the section the newly inserted section 246a is reaardin& the application b)' the assessee before the deputy commissiorer (appeals) or commissioner (appeals) in certain cases this section provides that in the case of a disputed income or deduction to be included by the assessee in a return of income under section 139 or under sub-section (1) of section 142, shall make an application before, the authorities mentioned above, within 30 days of furnishing the return provicjed he shall include in such return the disputed income and shall not claim the disputed deduction and also shall pay 30 per cent of ilie tax due on the disputed income and in respect of the amount of disputed deduction this section further provides that the deputy commissioner (appeals) or commissioner (appeals), as the case may be, may decide the question raised in the application and pass the necessary orders after either conducting the enquiry himself or asking the assessing officer to conduct the enquiry and furnish the report thereon - lastly, this section provides that the provisions relating to filing of appea1 under this act shall apply to the making of an application under this section as if such application were an appeal clause 100 seeks to omit section ~47 of the act dealing with appeal by partners consequent upon change in procedure for assessment of firm and partners clause 101 seeks to substitute a new section for the existing section 267 of the act in order to provide that where as a result of an appea~ under section 246 or section 253, any change is made in the assessment of a body of individuals 'or an association of persons or a new assessment of a 'body of individuals or an association of persons is ordered to be made, the commissioner (appeals) or the appellate tribunal, as the case may be, shall pals an order authorising the assessing officer either to amend the assessment made on any member of the body or association or make a fresh assessment on any member of the body or association clause 102 seeks to amend section 268 of the income-tax act relating to exchldon of time taken for obtaining copy in computing the period of limitation for appeal clause 103 seeks t~ amend section 269ss of the income-tax act relating to the mode of taking or accepting certain loans and deposits sub-clause (a) seeks to increase the monetary limit for application of this section from the existing sum of rs 10,000 to rs 20,000 sub-clause (b) seeks to insert the second proviso to save those cases from the operation of the section wnen: oo~n we pel'sons ulvolved in the tranaal!tion derive income only from agnculture or neither of them hu any income chargeable to tax ulluer the act, clause 104 seeks to amend section 26!h' of the income-tax act specifyina the mode of repayment of certain deposlti_  sub-clause (a) seeks to amend suo-section (2) the existina prov!-slons apply to companies {includmg lhe banking compaiues), co-opet'ative societies and firms only 'fhc amendment expancls toe scope ot tbe section by covering all persons sub-clause (a) also seeks to increue the monetal'y limit for app1jcation ot the section from the existing awn of rs 10000 to rs 20,000 sub-clause (b) seeks to a1jlend clause (il) of lhe existing explanation 'ihe amended clause (il) of the explanation expands the definition of the word "deposit" by including, in the case of any person other than a company, deposit of any nature clause 105 seeks to onht sec~hm ~'io 01 the lncome-tax act relating to imposiu(in of penalty on fa!1ure lo furnish information regarding securities, etc these provisions h<tve now been incorporated in the new section 272a of the act ~ -clause loti seeks to insert a !lew section 271 of the act under the existing provisions, penalty is leviable for (i) failure to furnish return as reqwred by the existing clause (u) of sub-section (1); (ii) failure to comply with notices as specified by the existing clause (b) of sub-section (1); , and (iii) concealment of income, etc, under the exist!ng clause (c) of subsection (1) 'fhe new section omits ij<malty lor failure to fw'nish return and for concealment of income, etc, as these defaults will attract automatic charge of interest and levy of additional tax under new sections 234a and 158b, respectively the new section incorporates the provisions of the existing clause (b) of sub-section (1) of section ~71 to enable the assessing officer to impose penalty where he is satistied that the assessee has failed to comply with notices under section 142 and section 143 of the act under the existing provisions, penalty is computed with reference to the amount of tax which would have ueen avoided whereas new provisions provide for minimum penalty ot one thousand rupees which may extend to the maxi mum amount of twenty-tive lhousanti rupees for each such failure the existing sub-section (2), dealing with penalty leviable on a registered firm by treating it as unregistered firm and also the existing ,ub· section (4), levying penalty on a partner who under-states his share in a firm are omitted as these have become inil'uctuous under new scheme for taxation of firms the existing sub-section (3) has been omitted in consequence of omission of the existing clause (a) of sub-section, (1) clause 107 seeks to amend section 271a of the income-tax act relating to penalty for failure to maintain or retain boo~s ~f accou~t~, etc, as required by section 44aa of the act, under t~e existing provlslons, t~e penalty: is computed with reference to' tax which would ha~~ been avol c:led if the returned income had been accepted the new provlslons p~ bu'b-seclions (j) and (~) of the existing sect~on, which relate to pe~· ding appeal~_ before the appointed uste, have become redundanl and, therefore, do not find a place in the new ~ect1on however, sub-section (5) of the existing ~ection, which empowers the board to transfer any pending appeals from the appellate assistint commissioner to the commlssioner (appeals) under certain circumstances, has been amplified to empower the board to authorise certain income tax authorities to transfer cases, and included as sub-section (3) an explanation at the end of the new section defines the terms "appointed day" and "status" for the purposes of the section the newly inserted section 246a is reaardina the application b1 the assessee before the deputy commissioner (appeals) or commissioner (appeals) in certain cases this section provides that in the case of a disputed income or deduction to be included by the assessee in a return of income under sectiod 139 or under sub-section (1) of section 142, shall make an application before, the authorities mentioned above, within 30 days of furnishing the return provicjed he shall include in such return the disputed income and shall not claim the disputed deduction and also shall pay 30 per cent of the tax due on the disputed income and in respect of the amount of disputed deduction this section further provides that the deputy commissioner (appeals) or commissioner (appeals), as the case may be, may decide the question raised in the application and pass the necessary orders after either conducting the enquiry himself or asking the assessing officer to conduct the enquiry and furnish the report thereon ' lastly, this section provides that the provisions relating to filing of apped under this act shall apply to the making of an application under this section as if such application were an appeal clause 100 seeks to omit section 247 of the act dealing with appeal by partners consequent upon change in procedure for assessment of firm and partners clause 101 seeks to substitute a new section for the existing section 2f17 of the act in order to provide that where as a result of an appeal under section 246 or section 253, any change is made in the assessment of a body of individuals or an association of persons or a new assessment of a -body of individuals or an association of persons is ordered to be made, the commissioner (appeals) or the appellate tribunal, as the case may be, slujl pass an order authorising the assessing officer either to amend the assessment made on any member of the body or association or make a fresh assessment on any member of the body or association clause 102 seeks to amend section· 268 of the income-tax act relating to excludon of time taken for obtaining copy in computing the period of limitation for appeal clause 103 seeks to amend section 26955 of the ,income-tax act relating to the mode of taking or accepting certain loans and deposits sub-clause (a) seeks to increase the monetary limit for application of this sectton from the existing fum of bs 10,000 to rs 20,000 sub-clause (b) seeks to insert the second proviso to save those cases from the operation of the section wilt:rt! ooh the persons !dvolved in the transaction denve income only from agnculture or neither of them has any income chargeable to tax unuer the act clawe 104 seeks to amend section 2691' of the income-tax act spedfyina the mode 01 rt:payment of certain deposit!;  suh-clause (a) seeks to amend suo-section (2) the existin& provi-slons apply to companies (includmg ~he banking companies), co--opet"ative societies and firms only l'hc amendment expanw tne scope of the section by covering all persons sub-clause (a) also seeks to increue the monetal'y limit for appllcation ot the section from the exiating sum of rs 10000 to rs 20000 sub-clause (b) seeks to cu,lend clause (il) of lhe existing explanation the amended clause (il) of the explanut1on expands the definition of the word "deposit" by including, in the case of any person other ulan a company, deposit of any nature clause 105 seeks to omit sectiull :t;u 01 the income-tax act relating to impositiun of penalty on idllure to furnish informatioa regarding securities, etc these provlsiow; lwve now been incorporated in the new section 272a of the act clawe 106 seeks to insert a new section 271 of the act under the existing provisions penalty is leviable for (i) fmlure to furnish return as required by the existing clause (a) of sub-section (1); (ii) failure to comply with notices as specified by the existmg clause (b) of sub-section (1); - and (iii) concealment of income etc, under the existlng clause (c) of subsection (1) the new section omits penalty lor failure to furnish return and for concealment of income, etc, as these defaults will attract automatic charge of interest and levy of addilional tax under new sections 234a and 158b, respectively the new section incorporates the provisions of the existing clause (b) of sub-section (1) of sectlon 271 to enable the assessing officer to impose penalty where he is satisfied that the assessee has failed to comply with notices under section 142 and section 143 of the act under the existing 'provisiors, penalty is computed with reference to the amount of tax which would have ueen avoided whereas new provisions provide for minimum penalty ot one thousand rupees which may extend to the maxi mum amount of twenty-live lhuus811d rupees for each such failure the existing sub-section (2), dealing with penalty leviable on a registered firm by treating it as unregistered firm and also the existing lub· section (4), levying penalty on a partner who under-states his share in a firm are omitted as these have become infructuous under new scheme for taxation of firms the existing sub-secti'on (3) has been omitted in consequence of omission of the existing clause (a) of sub-section (1) clause 107 seeks to amend section 271a of the income-tax act relating to penalty for failure to maintain or retain boo~ ~f accou~t~, etc, as required by section 44aa of the act under the existing provlslons, the penalty is computed with reference to tax which would ha~~ been avoided if the returned income had been accepted the new provlslons provide for a iilllllmum penalty of rs 2,000 extending up to a maximum of & one lakh clause 108 seeks to insert new sections ~71c, 271d and ~71e in the act ,j ••••• __ i~ new section 2'ilc pl'ovitles 101' iruposjlion of penalty un any pet'son who fails to deduct tax at source ill coml'avent~olj 01 tilt: pl'ovisiod$ of chapter xvllb of the act the penalty 5 01 a sum equal to the ampuut of tax which should have been deducted at source the existjdg provl&ions do not pl'ovide fol' any penalty in such cases the penalty under the new pluvlsions is in substltutlon of provlsions of prosecution for sued defaults as provided ill the ex1sling section 276b and will bl: in addition to the charge of interest unuer ;,ecuoll ~ol 01 the act new section 27ld provides for levy of penalty wllere any person takes any loan or deposi,t in contl'avt!ntiun 01 the pl'u~lsionsof section 269ss tbe amount 01 penalty is 01 a fut!d sum equal to the funount 01 loan or deposlt so taken, 'l'he new provl~loru; are iii suostltutioij of ~he provisions for prosecution as provided in the existing section 27tidlj,  new section 271e provides for imposition of penalty on a person l'e_ payjng any deposit in contravention of the provisions of section 2691' the penalty is of a sum equal to the amount of the deposit so repaid, 'l'he provislons of the new section are in substitution of the provisio~ for prosecution as provided in the existlllg section 276e clause 109 seeks to omit section 272 of the lncome-tax act relating to penalty for failure by any pel'son to give notice of discontinuance of his busmess or profession the section has become infructuous as these provisions have been incorporated in clause (b) '01 sub'section (2) of section 272a clause 110 seeks to substitute a new section for section 272a of the income-tax act relating to penalty for failure to answer questions, sign statements, allow inspections, etc, new sub-aection (1) secures minimum pt!nalty of five hundred rupees extending up to the maximum of ten thousand rupees for each of the default or failure enumerated in clauses (a), (b), (c) and (d) of the subsection the exisung provisions do not specify minimum penalty and the maximum is limited to one thousand rupees clause (a) of the sub_section dealing with refusal to answer any question before the income_tax authority, incorporates the provisions of the edsting clause (a) clauie (b) of the sub-section, dealing with refusal to sign statement, incorporates the provisions of the existing clause (b) clause (c) of the sub_section, dealing with noil-compliance of summons issued under sub_section (1) of section 131, incorporates the existing provisions of subj;ection (2) of section 131 clauae (d) of the sllb_section incorporates the substance of the exist ing section 2728, whereby any person who fails to apply talr allotment of perrid&dent account numler under section 139a shall be liable to pay ~ty sumectjon (2) brings together at one place various existing proviaions dealing with the defaults now enumerated in claures  <a) to (h) of the sub-section whereas the existing sections provide for different modes of computation of ilenalty for different defaults, the new sub-lection according uniform treatll)ent by providing for a minimum penalty of one hundred rupees extending to the maximum of two hundred rupees for every day of any of the specified defaults clause (a) of the sub-section, dealing with failure to furnish information regarding securities, etc, incorporates the provisions of existing section 270 clause (b) of the sub-section, dealing with failure to give notice of discontinuance of bu8iness or profeslion, incorporates the provisions of existing section 272 qause (c) of the suh-!lection dealing with failure to furnish certain returns and statements incorporates the provisions of clause (a) of subsection (2) of the existing section 272a clause (d) of the sub-section dealing with failure to allow inspection of registers, etc  incorporates the provisions of clause (b) of sub-section (2) of the existing section 272a clause (e) of the sub-section dealing with failure of a representative siiessee in respect of the income of a charitable trust, etc, to furnish return of income, incorporates the provisions of sub-clause (a) of clause (i) of sub-section (1) of the existing section 271 clause (f) of the sub-section dealing with failure to deliver to the - commissioner copy of the dec1aration furnished by the payee under section 197a incorporate!'! the provisions of clause (ba) of sub-sect~on (2) of the existing section 272a clause (u) of the sub-~pction dealinjr with failure to furnish certificate for tax dedurted at source as reauired by section 208 incorporates the provisions of clause (c) of snb-section (2) of the existing ~ection 2'72a clause '(h) of thl:" suh-sp('tinn d"'alin~ "oith failure to deduct ta-x: from salary in accord'!nce with th~ odf'r of the lncome-t::tx officer under sub-section (2) of sectinn 226 ;ncornorates the provisionl; of clause (d) of sub-section (2) of the enstinj! p,ec'tion 272a sub-sectinn(3) ~ner'iflf'<: thl'1t for +he d"f;:mjt cnmmitted under subsections (1) and (2) of the s("ction the penaltv ('an bf' imno<:ed by an income-tax lluthoritv net j()wer ;n rank than a deputy director 01" l! deputv commissioner sub-s('ction (4) in('o':'norlllt,<: th, f"x;~tinll provisions p,'rantin~ hearin~ hefore any nenaltv i~ imposed under this secuon the l':r'dlanaticm je; cotl!'leql1f'ntial to th amf'ndment of sec'tinn 131 of the act enal,lina the' director general, etc  to exercise the powers under that section clause 111 seeks to mnit section 27''8 of the al"t relating to penal tv for faitu!", to apply for allotment of pennanent account number in consequence of itlll 'neorool'8tion in clause (d) of sub  section 'en of ~ection 272a clause 112 seeks to amend section 273 of the act relatine lo penalty for furnishing false estimate of, or failure to pay advance tax, by inserting a ilew sub-section (3) the new sub-section bars applicability of the existing section to any assessment for the assessment year 198990 and onwards this is consequential io the' insertion of new section 2mb pr~'viding fer levy of interest on non-payment of advance tax czause 113 seeks to amend "lect1on 273a of the act relating to power of the commissioner to reduce or waive penalty, etc, in certain cases the rcw sub-section (6) secures that this section shall not ~'1?ly in  respect of assessment year 1989·90 and onwards this is consequential to the amendment of sections 139, 215 217, 271, 273 clause 114 seeks to amend section 273b of the act which provides that certain penalties will not be imposed on proof by the assessee regarding the existence of reasonable cause for the defaults the amendment is consequential to the omission, substitution or insertion of certain sections in chapter xxi clause 115 seeks to amend section 274 of the act relating to procedure for imposing penalty un~er chapter xxi of the act sub-clause (a) seeks to insert a new sub-section (2) to secure that where the jl"eome-tax officer or the as~istant commissioner imposfi!! penalty exceeding rupees ten thousand or twenty thousand, respectively, he must obtain the previous approval of the deputy commissioner sub-clause (b) seeks to substitute a new sub-section (3) to secure that an income-tax authority unless he is himself the assessing ofticer will send a copy of the penalty order to the assessing officer the new - sub-section incorporates the existing provisions with changes necessitated by the substitution of "assessing ()fficer" for 'income-tax officer' clause 116 seeks to amend section 27!1 of the income-tax act relating to limitation on passing order imposing penalty under the existing provisions any order imposing penalty under chapter xxi must be passed with;n two vears from the end of the financial year in which the assessment orrier was pn<;sed or within six months from the end of the month in which th~ ordero£ apoellate authority is received by the commissioner, whichever t'c'ri"d exnires l~ter clause (a) restricts the limitation p!'riod by providin~ that the order imposing penalty must be passed before the expiry of the financial year in whiclol the proceedin~ which r!ave rise to penalty proceed{n~ are completed; or within six montho:: from the end of the month in which the order of the first appellate authoritv is ti"ceived by the chief commissioner or commissioner whichever period expires later clause '(b) extends the limitation sperffl"d in clause (8) wliere the assessment orde-r etc, is' the' sub;pct mntter of revision bv the chief com· missioner or commissioner under section 263 tn such a case the limitation for passing penalty order is extended hv six month<; trom the end of i:he month in whirh the order is passed  clause (c) incorporates the provlsions of the existhg clause (b) however, the limitation for passing penalty order where no appeal is filed is reduced· from two years from the end of·the financial year lothe end of the financial year itself in which assessment order etc; is palmed  or six months from the end of the month in which plenalty proceedings where initiated, whichever is later clause 117 seeks to insert a new section 276, which makes fraudulent removal and transfer, etc, of property by any person to thwart tax rec0very, a punishable offence the punishment specified is rigorous imprlsonment extendin~ to two years in addition to fine clause· us seeks to substitute a new section for section 276b relating to prosecution for the offence of failure to deduct or pay tax under subseclfon' (9) of section 80e or chapter xvit-b of the income-tax' act; under the existing provisions, the failure to 'deduct tax at source a~d also the failure to deposit tax so deducted is a punishable offence the smehded provi!':ionc; exclude the failure to deduct tax under section 80e or chapter xvtt-b from the plmriew of the section a~ section 80e is proposed to bl' emitted ann the failure to deduct tax under chapter ~vli-:b is punishable under the new seetien 271c the section 27613, now, will covpr only {'poses where tax dpr1ucted under the provisions of c'hap~r xv'tt~b is tort paid to the credlt of the central govemment6'" the punishment for the offence has been made uniform b, ~g rf~nrt'lu~ im';"j,;sonment for at least three months extendin~ to seven~· years and with fine accordinl!lv the existtn~ l)rovisions; whic}l'tll'nvide " f('t: diffel'ent te'rms i"\f imnt'isonment for the two cate~orles of offenders - depend;nq ('in whe'+her or not the tax involved is above one- ti't11'idri!d thousa,d rupees, are omitted clause 119 5eeks to omit sectit'n 27rdd and section 276e relating to contravention of th~ prov;~ions of section 269ss and section 269t, res-· peetivel, such contraventions· will attract imposition of penalty as pro-  vided in section 272a clause ·120 !leeks to ~mend section 278aaof the act nrovidin~ ~hat where a reagbnabl~ cause for the' failure is proved'eumshment need not be imposed for !'lpe~ifi€'d offenc'es this amendment is consequential to the omission of section 276dd and section 276e clause 121 seeks to insert· a new section 293b of the ~ct to enable the central c"revemmpnt or the> 'ro"l'd to ('ondone delay where their approvnl ('ol1'd not be obta~ned within a specifted time clause 122 seek~ to sub~titut~ 1'1 new section for section 296 of the act' relatin~ to plarinl! of rules etr  bpfore parliament rrhe amendment is consequential to the omission of suh-clause (iv) of clausp (23c) of section 10 clause 12'3 sef'ks to amend !=;e~tion ?98 of the act relrtitl~ to powers of the central govprt1ment to t'f'mov(~ ~ifficu1tles by rrldin~ two new sub-sections (3) and (4) to the section th  b_  "",ti'on (~, ~mnc'wpl's the central government tn remoye" e new s11 "'~-• , 'ttl ·aot ~\dy difftc1l1tiec; that may rtt'j<:(' i" "'vin~ efre'ct to tht> ~rovi!':hl1'ic; 0  ,eo  as amended nv the dir('ct t~x t,awc; (amendment) act hi87 bv orde1\ which shall not be inconsistent with such provisions and w'hich shall be pused before the 1st day of april 1991 the new sub-section (4) requires every order passed under sub-section (3) to be laid befure each house of parliament clause 124 seeks to amend the second schedule to the income-tax act dealing with the procedure for recovery of tax the existing requirement t'lf issue of tax recovery certificates by the income-tax officer to the tax recovery officer has been replaced by the requirement of drawing a -c'statement of arrears" by the tax recovery ·officer for proceleding with the recovery of dues from the assessees the tax recovf'!ry officer will himself be able to exercise tbe functions which were hitherto performed by the lneome-tax officer only in the proees!j of reeovery sub-clause (1) seeks to substitute in the heading of the second schedule, for the words and figures "see section 222", the words and fl'gures "see sections 222 and 276" consequent upon the insertion of a new section 276 in the income-tax act to provide penalties for fraudulent removal, concealment, transfer or delivery of property to thwart the recovery proeeedfngs hitherto provided in rule 89 of the sclie<lule whlcn stands omitted " 't""""~ suti-elause (2) seeks to define the term "certificate" in l'lause (a)" of rule t' 10 88 to mean as the certificate drawn up by the tax recovery offi· cer under seetfon 222 in respect of any assessee referred to in that section however, this definition will not apply to this term appearing in rules '7, 44, 85 and sub-rttle (2) of rnle 88 sub-elause (3) seeks to amend role 2 ttl substitute reference to "certificate received" by the certificate drawn up ~u1i-elattse '(4) seeks tl'l mbtrtitute a new rule 8 in place of the eyisting rule relating to disposal of proceeds of execution sub-rule (1) nf this rule provides the followin~ order in whfcli the proceeds of assets realised by c;;a1e or otherwise in execution of a certificate shan be approprlated:-i --~ - ~, '(a) the amount due under the certificate and the cost ineurred in the cout'le of iluch execution: '(b) any other amount reco~~erable from the as9~sef> under this :act the balance after the adiulrtmpnt under clause!'; (a) and (h) is to be refunded to ihe' ~pfau1ters this is the present order also  ~ly _!h!,;"pr~: cedure is simplified sub-role (2) of this rule provides that if the defaulter dimute!l any adjustment under dause (b) of sub-rule '(1), the tax recovery offlc~r shall dett':'nrine the disputes as at present suti-clauses (5) (i) o(t!) (9) (1(\) and (22) seek ro substitute the woms "rneome-tax officer" by the word" '''y'b recovery ofacel'" whe~ they appear in the rules 9 14 27 31 ~prtmso) and 90 respectively consequent to tlie int'ome-tax officers ceasma: to p"icpl'clse functions in respect ~f recovery after the statement of arrears is drawn by the t~x recovery officer clause 5lu) makes other consequential amendments in rule 9 sub-clause (7) seeks to substitute new rule 19a in place of the exist·, ing one relating to entrustment of certain functions by the tax recovery  ~cer the s~bstituted rule provides that a tax recovery officer may with the previous approval of deputy commissioner, entrust any of his functions as tax recovery officer to any other officer lower than him in rank not below the rank of an inspector of income-tax it also provides that such officer shall be deemed to be a "tax recovery officer" in relation to functions so entrusted to him references to officers of the state governments have been deleted sub-clause (8) seeks to amend sub-rule (1) of rule 25 providing for management of agricultural produce under attachment to provide that instead of l'equiring the income-tax officer to defray the cost of arrangements, the tax recovery officer shall have power to defray such cost sub-clause (11) seeks to amend rule 47 dealing with payment of currency dotes or coins attached to provide that instead of making payment of such coins and currency notes to the income·tax officer, the tax recovery officer shall credit the same to the central government sub-clause (12) seeks to insert a new sub-rule (3) in rule 59"pro\tiding that where the income-tax officer referred to in sub-rule (1) is declared w be the purchaser at any subsequent sale, he shall not have to jeposit 25 per cent of the amount of purchase money to the offtcer conducting the sale as provided under rule 57 of the schedule it also provides that the amount of the purchase price shall be adjusted towards the amount - 5pecified in the certificate sub-clause (13) seeks to amend rule 60 dealing with setting aside the ale of immovable property on deposit of dues by omitting the requirement of making payment of such deposit to the income-tax officer sub-clause (14) seeks to substitute in rule ~1 the words "incoznetax ()ftlcer" by the words "such income-tax ofticer as may be authorised by the chief commissioner or commissioner in this behalf," to enable any authorised income-tax ofticer to apply for setting aside the sale of immovable property sub-clause (15) seeks to amend rule 73 by omitting the reqiiiement of l'eceipt of certificate in the office of the rr:ax rec~very officer ~n clauses (a) and (b) of sub-section (1) and substituting, mstead, drawmlz uj) of the certificate by the tax recovery officer sub-clause (16) seeks to amend rule 74 for omitting the requirement of hearlrig the income-tax officer before giving the defaulter an opportunity of showing cause why he should not be committed to civil prison, the amendment is consequential to the scheme under whlch the tax ~very (jfticer will act on his own under the exclumve jurisdiction vested in him subclause (17) seeks to amend rule 77 consequent to the omission of the provisions dealing with iss~e of certificate (see amendment to ection 222) and to the amendment in recove~ procedure whereby tas d_ ~~very oftlcer will be taking action on his own under the reeovwf , juridiction vested in him   sub-clause (18) seeks to iubstitute the words "tax recovery commis lioner" in rules 82, b3 and 87 by the words "chief commissioner or commissioner" consequent upon the omission of the definition of "tax recovery commissioner" in clause (43b) of section 2 of the income-tax act sub-clause (19) seeks to amend rule 85 consequent to the omission of the requirement of issue of certificates by the income-tax officer (see amendment to section 222) sub-clause (20) seeks to substitute sub-rules (1) and (4) of rule 86 dealing with appeals against the order passed by the tax recovery omcer the substituted sub-rule (l)provi~s that an appeal from any original order passed by the tax recovery officer under this schedule, not being an order which is conclusive, shall lie to the chief commisli<mer or commissioner the substituted sub-rule (4) provides that notwithstanding anything contained in sub-rule (1), where a chief commissioner or commissioner is authorised to exercise powers as such in respect of any area, then, all appeals against the order passed before the date of such authorisation by any tax recovery officer authorised to exercise power as such in respect of that area, or an area which is included in that area, shall lie to such chief commissioner or commissioner the above amendments are consequent upon amendment in the recovery procedure and omission of definition of "tax recovery commissioner" in clause (43b) of section 2 of the income-tax act this rule further enables the board to remove difficul ties by issue of general or special orders provided such orders do not affect the substance of any rule sub-clause (21) seeks to omit rule 89 providing for penalties for re-  moval, concealment, transfer or delivery of property to thwart recovery; consequent upon the provision in this regard being made in a new section 276 in the income-tax act sub-clause (23) seeks to substitute the 'words "tax recovery commissioners" in rule 92 in two places where they occur by the worda "chief commissioners commissioners" consequent upon the omission of the definition of ''tax recovery commissioner" in clause (43b) of section 2 of the income-tax act sub-clause (24) seeks to insert a new rule 94 to provide for continuance of all pending recovery proceedings under this schedule before cominjir into force of the amendment to this schedule by the direct tax lawl (anlenciment) act from the stage they had reached it also provides ~hat every certificate issued by the income-tax officer under section 222 before such amendment shall be deemed to be a certificate drawn up'by the tax recovery officer under that section after such amendment it empowers the board to issue general or special orders in case of difficult) regarding the continuity of the pending recovery proceeding clause 125 seeks to insert tenth schedule to the act provide special provisions applicable in cases where the previous year in relation to the assessment year commencing on the 1st day of aprn,198~ (called as the ~tlonal previous year), referred to in sub-section (2) of section :i, exceeds a period of twelve months aule 1 of ~ schedule provides the de1inition of the term, "·ti'm! tional previous year" to mean the previous year for the assessment year commencing on the 1st day of april, 1989, which will be determined in accordance with sub-section (2) of section 3 rule 2 provides that where the transitional previous year is longer than twelve months, the provisions of this act and the· finance act of the relevant year shall apply subject to the modifications specified in rules 3, 4, i) and 6 the schedule rule 3 provides that the monetary limits mentioned in various sections 01 the act, which are enumerated in a table given in the rule, will be proportionately increased, during the extended transitional previous year a proviso to the rule provides that for the purposes of this rule and rules 5 and· 6, where the transitional previous year consists of a part of a month, then if such part is fifteen days or more, it shall be mcreased td one complete month, and if such part is less than fifteen days, it shau be ignored rule 4 provides that where the transitional previous year consists of a period of eighteen months or more, then the number of days specitled m sub-section (1) of section 6 fo,r determining the residential status of an individual, namely 182 days and 90 days shall be increased to 273 days and 135 days, respectively rule 5 provides that where in a transitional previous year asgebsee'a income under the head, "profits and gains of business or profenion" is included in the total income for a period of thirteen months ·or  more,tfte ciepreciationallowance under clause (ii) of sub-section (1) of section 32 - will be proportionately increased rule 6 provides that tax will be payable on the total income of the transitional previous year at the average rate of tax applicable to the proportionate income of twelve months rule 7 empowers the board, where the transitional previous yeu is lqer than twelve months, to remove genuine hardship, by general or special order, by granting appropriate relief in any case or class  of c:aaea clause 126 seeks to make certain amendments of a conaequenual nature in different provisions of the act  amendments to the wealth-tax act, 1957clause 127 seeks to substitute or introduce new authorities in the act consequent upon either the redesignation of these authorities or the inclusion of new authority in section 116 of the income-tax act, so as to have one common nomenclature for the authorities under all the thriee acts, viz income-tax act, wealth-tax act and gift-tax act this clause will be effective from ll1-1988 clause 128 seeks to amend section 2 of the· wealth-tax act containing the definition of various tenns by deleting, inserting or amending certain da8nitiods sub-clause (i) seeks to omit ctause (a) consequmt upon tbe~8iig­nation of "appellate assistant commissioner" as an authority sub-clause (ii), by inserting clause (ca), seeb to define "msessin' ofbcer" on the same lines as in clause (7a) of section 2 of the income-tax act the existing clause (ca) has been relettered as clause (cb) sub-clause (iii) seeks to omit the following definitions consequent upon insertion of new section 8 of the wealth-tax act which provides for wealth-tax authorities as specified in section 116 of the income-tax act: (i) "commissioner" [clause (g)]; (li) "commissioner (appeals)" [clause (gg)]; (iii) "director of inspection" [clause (hb)]; (iv) "income-tax offict!r" [clause (k)]; (v) "inspecting assistant commissioner of wealth-tax" [claum (1) ]; (vi) "inspector of wealth-tax, [clause (la)] sub-clause (iv) seeks to substitute t~ existing clause (h) by a new clause in' order to define the word "company" so as to have the meanma assigned to it in clause (17) of section 2 of the income-tax act sub-clause (v) seeks by inserting new clause (ic) to define the term "maximum marginal rate"  sub-clause (vi) seeks to omit clause (i) of the proviso to clause (q) consequent upon the amendment of section 3 of the income-tax act by which financial year has been taken as the uniform previous year for au the assessees for different sources of income sub-clause (vii) seeks to substitute the existing clause (s) by a new clause the expressions "chief commissioner", "director general", "commissioner", "commissioner (appeals) ", "director", "deputy commissioner," "deputy commissioner (appeals) ", "assistant commissioner", "inrome-tax officer", "inspector of income-tax act" and "tax recovery officer" under this act shall have the same meaning respectively awgned to them under section 2 of the income-tax act clause 129 seeks to amend section 3 of the wealth-tax act relating to charge of wealth-tax constequent upon the levy of additional wealth·tax in certain cases in chapter ivb clause 130 seeks to amend section 5 of the act dealing with exemp-tions in respect of certain assets sub-clause (i) seeks to provide exemption in respect of unit of a mutual fund specified under clause (23d) of section ut at the incometax act sulhection (it) seeks to amend sub-aeetlon (ta), to make amend· menta of a consequntial nature ct414me 131 leeu to illbltit1lte aections 8, 8, 10 and 11 in place of existing ones as under:-(i) section 8 relating to wealth-tax authorities and their jurisciiction; (ii) section 9 relating to control of wealth-tax authorities; (iii) section 10 relating to instructions to subordinate authorities; and (iv) section 11 relating to jurisdiction of assessing offtcers and power to transfer cases <a) the provisions of new sections 8, 9 and 10 have been inserted so as 'to bring them on the same lines as sections 116, 118, 119 and 120 of the income-tax act (b) the new section 11 makes applicable the provisions of sections 124 and 127 of the income-tax act to the wealth-tax act these are, howevjer, subject to following:-(1) references to provisions of income-tax act in subsection (3) of section 124 to be construed as references to corresponding provisions of wealth-tax act; (ii) sub-section (5) of section 124 not 'to apply to wealth-tax act; (iii) in explanation below sub-section (5) of 3ectiod 127 references to proceedings under the income-tax act to qe construed as including references to proceedings unde:- the wealth-'tax act cla~ 132 seeks to delete sections 8a, 8aa, 8b, 9a, loa, lla, 11aa, ub, 12 and 13 of the act dealing with jurisdiction, control and instructions to subordinate authorities as the provisions of these sec~tons have been incorporated in the new sections 8, 9, 10 and 11 of the a:ct clause 133 seeks to amend section 14 of the act relating to return of wealth 1 sub-clause (a) seeks :0 substitute sub-sections (1) and (2) of the section as under:-(i) the provision of sub-section (1) relatin~ to filing of wealth-tnx return have been brought on the lines of sub-sectil)n (1) of section 139 of the income-tax act relating to filing of incomje--tax returns explanation to sub~ection (1) provides that due date of mingo the wealth-tax return will /be the same as 1n the case of ftling of income-tax r,leturns (ll) sub-section (2) provides that return showing net wealth less thaa the maximum amount not chargeable to tax shall be treated as never to have been fumishecl unlea· the liuile  ftleii in response to a notice under section 17 of the act· "2 sub-clause (b) seeks to delete sub·section (3) of the section relating to discretion of wealth-tax officer to extend the date for the delivery of the' return under this section c~use 134 seeks to substitute a new section for section 15 relating to furnishing of return after due date and amendment of the retum the provisions of this section have been brought on the unes of ml>-aection (4) (jf section 139 of the income-tax aet proviso to this section, however, provides that-(a) for assessments pertaining to assessment year 198'7-88 or earlier years, the return or revised return can be filed by 31-3-1990 or before the completion of assessment, whichever is earlier; (b) for assessments pertaining to assessment year 1988-89, the return or revised return can be filed by 31-3-1991 or before the completion of assess~t, whichever is earlier clause 135 seeks to amend section 15a of the wealth-tax act which specifies the persons by whom the return of wealth is to be signed and verified i sub-clauses (i) and (ii) of this clause seek to amend clauses (a) and (c) of this section on the lines 'of claw;es (a) and (c) of section 140 of the income-1ax act,  clause 136 seeks to substitute a new section for section 15b of the act relating to payment of self-assessment tax the provisions of this section are on the lines of corresponding pr~ vtstons of ~ection 140a of the income-tax act clause 137 seeks to omit section 15c of the act reblinglo provisional aslmlment consequent upon the new scheme of assessment (1ause 138 seeks to substitute a new section for the existing section 18 relating t(l procedure for assessment provisions of this section have been brought on the line! of incometh alrt as under:-(1) sub·sections (1), (2) and (3) correspond to section 143 of the income·tax act; (ii) sub-section (4) corresponds to sub-section (1) to section 142 of the income-tax act with the exception of clause (m) and proviso; providing for the power of assessing offtcers to ask for a fotal wealth statement; : act (iii) sub-section (5) corresponds to section 144 of the income-tax i  , cla1l8e 139 seeks to amend section 17 relating to wealth escaping assessment 1 sub-rlause (a) of this clause seeks to substitute sub-section (1) with ne~ ~ub-sections (1), (ia) and (lb) so as to bring the provisions for initiatmg p~oceedings in cases of wealth escaping assessment, time limit and sanctioning authorities for such initiations broadly on the same lines as in the corresponding provisions of the income-tax act this is, however, subject to the following:-(a) in the case of scrutinised assessments references to escaped income of rs 50,000 and rs 1 lakh are to be changed to wealth escaping assessment of rs 5 lakhs and rs 10 lakhs respectively; (b) in the case of others, references to escaped income of bs 25',000 and rs 50,000 are to tie changed to wealth escaping assessments of rs 25 lakhs and rs 5 lakhs respectively 2 sub-clause (b) of this clause seeks to amend sub-section (2) so as to bring the provisions on the lines of the provisions in seetion 150 of the incomp-tax act clause 140 seeks to amend section 17a relating to time limit lor completion of assessment and re-assessment the objeet of the proposed amendment is to bring the provisiont of this section broadly on the same lines as in the corresponding provuloll under the income-tax act sub-clau~e (a) of this clause seeks to subs'titute the existing sublectlons (1) and (2) with new sub-sections the provit:ions of sub-section (1) are on the same lines as the corresponding provisions of sub-section (1) of section 153 of the inoome tax act except that a proviso has been added to provide that the tim limit to complete assessment for the assessment years 1985-86 and 1986-87 will be on or before 31st march, 1990  the provision of sub-section (2) are on the same'iilles as the corresponding provisions of sub-section (2) of section 153 (excluding pro-i viso) of tncome-tax act except that a proviso has been added to provide-(1) that where the notice under section 17 (1) (a) was served during the financial year 1985-86 or 1986-87 the time limit to complete such assessment or re-assessment shall be on or before 31, march, 1990; (li) that where the notice under section 17(1) (b) relat8 tn the assessment for the assessment year 1985-861 or 1986-87, such assessment or re-a~sessmetlt may be completed on or before the 31st march 1990 or the expiry of two years from the end of financial yef'r i~ which such notice was served whichever is later an explanation has been added to clarifv that reference to seetiod 17 in the above proviso shall be construed as reference to that section as it stood biefor~ amendment by this bill sub-clause (b) of this clause seeks to amend sub-section (3)-(i) by substituting the words "four years" by utwo years" to bring the time limit for completing the set aside or cancelled '~bs­ment at par with those of income-tax act; (ii) by inserting the proviso the time limit to complete the set aside or cancelled assessment has been provided as on or befote 31st march, 1990 if such setting aside or cancellation of the order wad· made during financial year 1985-86 or 1986-87 clause 141 seeks to insert a new section 17b to provide for charging f)f interest for ~faults in furnishing return of net wealth 'ihe provisions of this section are on the lines of corresponding pro visions of section 234a of income-tax act clause 142 seeks to substitute new section 18 and 18a as under:-(i) section 18 deals with the levy of penalty for failure to comply with notices; (ii) section 18a deals with the levy of penalty for failure to answer questions, sign statements, furnish information, au"w inspections, etc sub-section (1) of section 18 seeks to provide that for non-compliance' of notices under section 16(2) or 16 (4), the assessing officer is empowered to levy a penalty which will not be less than rupees one thoasan& and may extend to rupees twenty five thoulwld for each eluch failure or default proviso (a) to this sub-section provides that penalty hall not be impossbleunder this section if the person proves that the non-comp- hance of notices was becau!le of r:epsonable cause proviso (b) to this sub-section requires the assistant commissioner and the income-tax officer to seek the previous approval of deputy commt, sioner before levying penalty exceeding rupees twenty thousand inth case of an assistant  c"'mm~ssionerand rs 10,000 in the ca~ of an income-tax officer sub-section (~ provides that a reasonable opportunity of being heard "hall be given to the assesc:ee before levy of penalty sub-section (3) provides that penalty referred to in sub-section (1) can be levied before the end of the financial ye'\r in whi ~h the proceedtnlr' in the course of which action for imposition of penalty has been initiated are completed, or six months from the end of the month in which ,action fnr imposition of penalty is initiated, whichever is later explanation to this sub-section seeks to clarify that in computing the period of limitation for the purpose of thi9 section the following period/time ·shall be exduded:-(i) any period during which the immunity granted b1 the settlement commission under section 22h rtlmains in force; (if) the time taken in giving an opportunity to be re-heat'd under proviso to section 39; (iii) the period during which the proceeding under this section for levy of penalty is stayed by ::in order or injunction of any court plovwona of bub-section (i) of section 18a are on the aame uo iii $uie of sub-section (l) of aectlon 27'ja read with section 2738· of _ ij1co~tax act provisions of sub-section (2) are on the loame lines as those ot thecoltesponding provlsions of suo-section (2) of section 272a of the inco~­tu act provisions of sub-sections (3), (4) and explanation are on the ~ lines as those of sub-sections (3) i (4) and expzanation of section 272a of the income-tax act clause 143 seeks to insert a new chapter ivb containing section 18d relating tv levy of additional wealth-tax in certain cases 1 sub--section (1) of this se::tion is on the lines of the provisions of su~tion (1) of section lsbb of the income-tax act with' the followina duference:--, ~~-- the rate of additional wealth-tax to be levied under sub-section (1) is 3 per cent as against 30 per cent uilder t~ act 2 (i) clause (a) of sub-section (2) is on the same lines as the corresponding provisions of section 15bb of the income-tax act (ii) clause (b) and clause (c) provide that the return of net wealth shall be taken to be nil for the purpose of this section if ~ flssei" see fails to furnish the return of net wealth in respect of any assessment year j,eading to completion of assessment under section 16(5) i or if the person fails to furnish the return of net wealth under section 14 or section - 15 but furnishes the same after he is served with a notice under sfe!ction 17 3 the provisions of sub-sections (3) i (4), (5) and (6) of this section are on the same lines as those of sub-sections (3) i (4) i (5) and (6) of section 158b of the income-tax act clause 144 seeks to amend section 21a of the wealth-tax act dealing \jti-tb assessment in cases of diversion ,of property, or of income from pro~ty, held under trust for public chantable or religjoll8 purposes the amendment is proposed consequent upon dieletion of sections 11, '12 and 13 of the income-tax act in their present form and the 8ubltitu  tion of a new scheme under new seotion 80f for the assessment of public charitable and religious trust, philanthropic institutions and institutiuds of national importance sub-clauses (a), (b) and (d) of this clause seek to substitute wurda, brackets and figures--"any person referred to in sub-section (3) of section 13 ci: the income-tax act" ap~aring in clauses (i), (ii) and first proviso te the existing section by the words "any interested person" sub-clause (c) of this clause sejeks to omit the clause (iii) of the existing section sub-clause (e) (i) of this clause seks to seeks to substitute the wo~ds, brackets and figures "any person referred to in sub-section (3) of section 13 of the income-tax act has a substantial interest as provided in explanation s to that section" appearing in the second proviso to the fdstidi section, by the words, figures, brackets and letter "any interested pelljod has substantial interest as provided in explanation 3 below sub-section, (4) of section 80f of the income-tax act"   sub-clause (e) (ii) of this clause seeks to substitute the worda, i>rackets and figure "any person referred to in the aforesaid sub-section (3)" appearing in the second proviso to the existine section by the words "any interested pfrson" i sub-clause (f) (i) of this clause seeks to substitute the clause (a) of the third proviso of the existing section by a new clause providing'tbat:-(i) the provisions of clauses (i) and (ii) shall not apply in the case of any trust or institution of national importance notified under clause (d) of sub-section (1) of section80f of the income-tax act; and :  i (ii) the other provisions of thjs section shall apply to such trust or institution with the modification that for the words "at the maximum marginal rate", the words and figures "the rates specified in part 1 of schedule i in the case of an individual" shall be substituted sub-clause (f) (ii) of this clause seeks to substitute the words, brackets and figures "clauses (i) to (iii) in clause (b) of the existing section by the 'words, brackets and figures "clauses (i) and (ii) " c(l1lsequent upon omission of the clause (iii) from the section sub-clause (g) of this clause seeks to substitule the clauses (a) and (aa) in the explanation to the existing section by new clauses (a) and, (ab) in order to clarify:-(i) that the expression "interested person" shall have the meaning assigned to it in clause (a) of explanation 1 below sub-section (4) of section 801  of the income-tax act [clause (a)] \ (ii) that any part of the property or income of a trust shall be deemed to have been used or applied for the benefit of any intererted person in every case in which it can be so deemed to have been used or applied within the meaning of clause (c) of sub-st!ction (3) of section 80f of the income-tax act at any time durini the period of twelve months ending with the relevant valuation date [clawe (ab)] ; ~ the: above amendments are in consequence of the omission of sections 11 tf' 13 of the income-tax act and recasting them in section 80f of the incarre-tax act; and the omission of the term" maximum marginal rate" from this section with a view to ~fine the term for the purpose of the wealth-tax act in clause (lc) of section 2 of the act   clause 145 seeks to amend section 21aa of the act dealing with the assessment when assets are held by certain association of penon • the amendment made regarding charging of tax at the maximum marginal rate  clause 146 seeks to amend section 23 of the act ~ung to first ~ , _ i~ub-clause (a) (i) seeks to substitute clause (d) of sub-section (1) so as to provide that an appeal can be tiled to the qeputy commjssioner (appeals) against any penalty imposed by the assessing officer under section 16 as it stood immediately before 1-4-1969 or that aection as amended by this bill sub-c1ause (a) (ii) seeks to omit clause (i) of sub-section (1) consequent upon the omission of sub-section (2) of section 37 of the aot sub-section (b) sjeeks to amend sub-section (la) relating to filing of appeals to t¥ commissioner (appeals) so as to substitute the existing clauses (b), (c) and (d) by new clauses new clause (b) provides that any person objecting to any penalty imposed under existing section 18 (1) (c) in respect of any assessment yfai" commencing on 1-4-1986 or any earlier assessment year where such penalty has been imposed with the previous approval of the ~puty commissioner \mder sub-section (3) of that section may appeal to the commissioner (appeals) the changes made in new clauses (c) and (d) are of consequential nature in view of th,e revised sections 8, 11 and 18a sub-clause (c) seeks to substitute existing sub-sections (lb) and (1c) by sub-section (1b) the provisions of existing sub-section (lb) which had served tbair purpose have not been included in t~ revised provisions the revised sub-section (1b empowers the central board of direct taxes or certain - income-tax authorities authorised by it to transfer any appeal which is ptending before a deputy commissioner (appeals) add any matter arising out of or connected with such appeal and which is 80 pending, to the commissioner (appeals) sub-clause (d) seeks to omit the proviso to sub-section (2a) so as to take away the discretion of the deputy commissionjer (appeals) and commissioner (appeals) to exempt the assessee from depositing the tax od the net ~alth before admitting the appeal -clause 147 seeks to insert a new section 23a dealing with the appuca· tion by the assessee to the deputy commissioner (appeals) or commfl sioner (appeals) in certain cases  i provisions of this section are on the same lines as those of aection 2t«i& of the income-tax act cla,", 148 seeks to amend section 31 of the act dealing with  the circumstances when tax, etc, are payable and when assessee deemed iii default t the proposed amendment seeks to bring the provisions of this sed10n on the lines of section 220 of the income-tax act ' clause 149 seeks to amend section 32 of the act ~g with mode of recovery   ', : sub·culus8·(i1) at tbia clauie &eeks to substitute tile worda "ana to wealth-tax o1ficer and commisiloner of wealth·tax instead 01 to ~ tax ofi:icer and commissloner of lncometax" by the words "and to the oeorresponding wea!th·tax authorities instead of to the income-tall! iluttlorlty specified therein" , ;:mj)~u8e, 'b) of this clause seeks to substitute the exllwl& ,b;:z:pi4, tjon ii with the following h:,rplant&tion:-',:e~""tion 11-1'he c~f commissioner or coilllilis&ioner and  la reoovefy oibcer relerred to in tile jncome 'l'u act sb-u be deemed to be correspondmg wealtn-tax autiloriues for the purpose of recovery of wea1th~tax and sums imposed by way of penalty, fine and· interest under this act",  clause 150 see" to amend section 34a dealing with refundssub-clause (i) seeks to iru;en a proviso at the t!nd of suo-liection (1) so as to brmg the provislons of tlus sub-sections on the same lines as those of section ~4u 01 the income-tax act sub-clause (ii) seeks to insert sub-sections (4a) and (4b) after suosection (4) the inserted sub-~ction (4a) provides that the provisions of ,su~tiqu (3), (3a) and (4) of this section dealmg with payment of interest by government on delayed and withheld refunds shall not be ap--plicable in respect of any assessment for the assessment year 1988-89 or later, thui is because a new scheme of payment of mterest in such cases bas been provided in the newly in~ted sub-section (4h) which is on the same lmcii as the corresponding provisions in sub-section (4a) of section 244 of the 1ll(:odle-tax act which shall be applicable for this purpose for ' aale&sment year 1989-90 or later clause 151 seeks to am,end section 35 of the act dealing with recti· ncation of mistakes -by thi  ~engment the wealth tax authority has been ~mpowered to ~d the intimation sent or revise the refund granted under sub section (1) of section 16 of the act ,·c,~~e 15~ seeks to amend ~ction 35k ,providing for bar on prosecu-~ ~d inadmissibility of evidence in certain circumstanqes on the lines of section 279(la) of the inco~-tax act  clause 153 seeks to amend s,ection 37 of the act dealing with powers 'of the 'wealth-tax authorities regarding discovery, production of evidence, etc ; f~"' ,  sub-clwae \a) of this clause seeks to insert sub-section (ia) after ~on (1) tc) provide that the director general or dirt!otor or the authorised officer referred to in sub-section (1) of section :i7a, bsre he takes action under clauses (i) to (vi) of that section has reason to suspect that any net wealth has beeil ~aled, or is liuly to be concealed by any person or class of persons-within his jurisdiction, then for the pur-'~'~f'lj)f m_akin&~y enquiry or investigation relating thereto it shall be competent for him to exercise the powers conferred under 8uh1gection (1) on the wealth-tax authorities referr:ed to in that section, notwithrodtng that 110 proeeedings with respect to such personsorclul of lp  are pending before him or any other wealth  tu authority sub-clause (b) of this clause seeks to omit sub-section (2) dealing with the power to levy penalty for non-compliance of summons issued under this section this power has now been provided in a newly iiullil'ted section 18a &jbclause (c)(i) of this section seeks to insert the words, brackett,· figure and letter "or sub-section (ia)" after the words, brackets and ~ "in eub-6ection (1) " consequent upon the insertion of the new subsection (la) as mentioned above sub-clause (c) (ii) seeks to insert in the provbo'the words "or an assistant director" after the words "valuation officer" with the aforesaid amendment the provisions of section 37 have been brought on the same lines as those of the amended section 131 of the income-tax act except the following:-(a) in sub-section (1) the powers to summon, etc, have ,also been conferred on valuation officer and appellate tribunal (b) in proviso to sub-section (3) of this section valuation officer til also an authority other than those mentioned in corresponding pro-¥ilion of the income-tax act clause 154 seeks to amend section 37a of the act dealing with powersof search and seizure the provisions of this section are broadly on the lines of the simdar 1)rovisions of section 132 of the income-tax act cla",e 155 seeks to amend section 37b of this am dealing with power to requisition books of account, etc this section has been amended so as to bring it on the lines of section 132a of the the income-tax act clause 156 seeks to insert a new section 37c dealing with application of retained assets on the lines of section 132b of the income-tax act clause 157 seeks ta amend section 38 of the act relating to power of the wea'lth-tax officer to call for information, return and statement sub-clause (a) seeks to substitute the word, "wherefor the purposes of determining the wealth-tax payable bv any person" thll words "where for the purposes of this act" so as to enlarl5e the scope of thp provisions for any purpose of this act suh-clause (b) seeks to substitute tho words "the wealth-tax of!tcer" by the words "an v wealth-tax authoritv" in the filist ,place and "such wealth-tax authority" in the second and third' "la~e s0 as to enlarge the scope of the power under this section for other wealth-tax authoritie~ also  --i clauae 158 seeks to amend s,ection 461 of the act which provides for cases in which no tax is leviable clause (j) is being inserted to provide that no tax shall be leviable tmder the act in respect of the net wealth of a mutual'fund specified under clause (230) of section 10 of the income-tax act clllube 159 seeks to insert a new aection 47 in the act so as to empower the central government to make an order 'for removing any diftlculty which may arise in giving effect to the provisions of the act as amended by this bill it is also being provided that no such order shall be made by the central government after the expiration of three years from 1-4-1988 and that every order made under this section shall be laid before each house of parliament clause 160 seekb to make certain amendments of a consequential nature in different provisions of the act,  amendments to the gift-tax act, 1958clause 161 seeks to substitute or introduce new authorities in the act consequent upon either the ~esignation of these authorities or the inclusion of new authority in section 116 of the income-tax act so as to have one common nomenclature for the authorities under all the three acts (viz, income-tax act, wealth-tax act and gift-tax act), this clause will be effective from 1-4-1988 clause 162 seeks to amend section 2 of the act relating to "deftnitions" of various expressions sub-clause (a) seeks to omit clause (i) consequent upon the redesignation of "appellate assistant commissioner" as an authority, sub-clause (b) seeks to insert a new clause (iiia) after clause (ui) 80 as to bring the definition of "assp!';sinq nfficer" on the lines of definition of this term in clause (7a) of section 2 of the incometax act, subclattae (c) seeks to omit the following deflnwons:-(a) (1) commissioner (clause vi) (ti) commissioner (appeals) (clause via) (ill) director of inspection  (clause viia) (iv) gift-tax officer (clause xiii) (v) income_tax officer (clause xv) (vi) inspecting assistant commissioner of gift-tax (clause xvi) (vu) inspector of gift-tax (clau"ie rna) consequent upon insertion of new section 7 in the gift-tax act which provides for gift-tu: authorities as specified in uection 116 of incom~tax act;  (b) ·'partner" as defined in clause (xvii) consequent upon it inclusion in substituted clause (xi) sub·clause (d) seeks b substitute clause (vii) by a new clause so as to bring the definitions at "company", "indian company" and "company in which public are substantially interested" on the same llnes as in section 2 of the income-tax act subclause (e) seeks to substitute clause (xi) by a new clause so u to bring the definitions of "finn", "partner" and "partnership" on the same lines as under section 2 of the income-tax act sub-clause (f) seeks to omit--(!) sub_clause (b) of clause (xx) defining the term "preyious year" consequent upon the amendment in section 3 of the incometax act; (ii) the words, brackets and letters "or sub-clause (b) , in the ftrst proviso consequent upon the deletion of sub-clause (b) of clause (xx); (iii) the second proviso, consequent upon the amendment in seet~on 3 of the income-tax act sub-clause (g) seeks to insert a new clause (xxv) providing that the expressions "chief commissioner", "directorgenoral", '·commisrlo 'ner", "commissioner (appeals)", "director ", "deputy commissi  mer", "deputy commissioner (appeals) ", "assistant commissioner", "income-tax officer" "tax recoverv officer" flnd "inspector of incometax" shall have the meanings respectively assigned to tbem under section 2 of the income-tax act clause 163 seeks to amend section 3 of the act relating to charge of gift-tax, consequent upon levy of additional gift-tax (see new section 18b);  clause 164 seeks to substitute new sections 7, 8, 9, and 10 in place of exi£ting ones as under:-(i) section 7 relating to gift_tax authorities and their jurisdic~ tion' ' (in section 8 relating to control of gift-tax authorities; (iii) section 9 relating to instructions to subordinate authorities; and (iv) section 10 relating to jurisdiction of assessing officers and pawer to trancjfer cases (a) the provisions of new sections 7 8 and 9 have been inserted so as to brin~ them on the same lines as sections, 116, 118, 119 and 120 of the income-tax act (b)  the new section 10 makes applicable the provisions of sections 124 und 127 of tbe income-tax act to the gift-tax act, with suitable modifications as required by special features of this act clause 165 seeks to delete sections 7a, 7aa, 7b, 8a,' 9a, 11, ha, 11m, ub and 12 of the act dealing with jurisdiction, control and instructions to subordinate authorities 88 the provisions of tilese sections have been incorporated in the new sections 7, 8, 9 and 10 of the  act c14use '166 seeks to amend section 13 of the gift-tax act ~lating to return of gifts sub-clause (a) seeks to substitute sulrsections (1) and (2) of the section by new sub-sedions so as to provide that:-(i) the return in respect of taxabie gifts exceeding theiilr-dmum amount not chargeable to gift-tax shall he filed on or 'before 30th june· of the assessment ,ear corresponding to the previous year in which the gift was made [sub-section (1)] (ii) a return showing amount of taxable gifts below the maximum amount which is not chargeable to tax shall 1:>e deemed never to have been furnished [sub-section (2) ] sub-c1ause (b) seeks to om~t sub-section (3) relating to discretion of gift-tax officer to extend the date for the delivery of the return under this section cla~e 167 seeks to substitute a new section for section 14 relating to furnishing of return after due date and amendment of thc return the provisions of th~s section have been brought on the line; of sub-section (4) of section 139 of the income-tax act proviso to this section however, provides that-(a) for assessments pertaining to assessment year 1987-88 or earlier years, the return or revised return can be filed by 31-3-1990 or before the completion of assessment, whichever is earlier; (b) for assessments pertaining to assessment ye~ 19ss-ag, the return of revised return can be filed by 31-3-1991 or before the completion of assessment, wb:ehever is earlier clause 168 seeks to amend section 14a of the act which s~ tics the persons by whom the return of gift is to be signed and verified <;ub_clauses (i) and (ii) of this clause seek to amend clauses (a) and (c) of this section on the lines of clauses (a) and (c) of section 140 of the income-tax act clause 169 seeks to insert a new, section 14b of the act relating to payment of self-assessment tax the provisions otthis section are on the lines of corresponding provisions of section 140a of the income-tax act clause 170 seeks to substitute a new section for the e~ting section 15 relatingtq procedure for ~nt provisiol'l8 of sub-seetions (1) to (5) have been brought on the lines of the' corresponding provisions of section 143 of the income tax act ano section 16 of the wealth-tax act sub-section (6) seeks to provide that an assessing officel' may refer the valuation of any property transferred by way of gift to the valuation ofllcer the provision is on the lines of section 16a of the wealth tax act and makes the relevant sections of wealth-tax act applicable in relation to such references as they apply in relation to references made unc:ler the wealth-tax act e-rptanatiml to this sub-section seleks to clarify that the "valuation officer" has the same meaning as in clause (4) of section 2 of the wealth-tax act clause 171 seeks, to amend section 16 relating to gift escaping assessment 'l'he object vf the amendment is to bring the provisions of this aection broadly on the same lines as in the corresponding provisions under the income-tax act clause 172' seeks to amend section 16a relating to time-limit for completion of assessment and re-assessment, the object of the proposed amendment is to bring the provisions of this section on the same lines as in the corresponding provisions under the wealth-tax act clause 173 seeks to insert new section 16b in the act to provide for charging of intele~t for defaults in furnishing return of gifts - the provisions of this section are on the lines of the corresponding provisions 01 section 234a of the income-tax act and section 17b of the wealth-tax act clause 174 seeks to substitute new sections 17 and 17a as under:-(i) section 17 deals with the levy of penalty for failure to comply with notices; (ii) section 17a deals with the levy of penalty for failure to answer questions, sign statements, furnish information, allow inspections, etc provisions of the sections 17 and 17 a are on the lines of the corresponding sections 18 and 18a of the wealth·tax act and sections 271 a~d 272a of' the income-tax act clause 175 seeks to insert a new chapter iva containing section 18b relating to levy of additional gift tax in certain cases   this section is on the lines of the provisions of sub-section (1) , of section 158b of the income-tax act with the difference that- the rate of additional gift-tax to be levied under sub-section (1) is 20 per cent as againts· 30· per cent under the income-tax act ' ciolu&'8 176 seeks to amend section 22 of the act relating to first appeal sub-section (a) (i) seeks to substitute clause (d) of sub-sec~o~ (1) so as ,to provide that an appeal can be filed to the deputy commissioner (appeals) against any penalty imposed by the assessing officer under se~~on i'i as it stood lmmelilately betore l-4-198~ or that section as amend eu by this bill sub-clause (a) (ii) seeks to omit clause (h) of sub-section (1) consequellt upon lhe onusslon of sub-section (2) of section 36 of the act sub-clause (b) seeks to amend sub-section (la) relating to filing of appeals to the commissioner (appeals) so as to substitute the existlng clauses (b), (c) and (d) by new clauses new clause (c) provides that any person object1og to any penalty imposed under existing section 17 (lj (c) in respect of any assessment year commencing on 1-4-1988 or any earlier asse&sment year where such penalty has been imposed with the previous approval of the deputy commissioner under sub-section (3) of that section may appeal to the commissioner (appeals) the changes mc:lde 10 new clauses (0) and (d) are of consequential nature in view of ~he revised secllona 7, 10 and 17a sub-clause (c) seeks to substitute existing sub-sections (ib) and (lc) by such-secuon (ib) the provisions of existing sub-section (lb) which had served their purpose nave not been incluaed in the revised provisions the revised suo-sectlon (1b) empowers the central board of direct taxes or certain income-tax autholmes authorised by it to transfer any appeal which is penwng bel ore a deputy commissioner (appeals) and any matter aris-ing out of or connecled whh such appeal and which is so pending, to the coiiulussloner (appeals) clame 177 seeks to insert a new section deall'1g with application by the assessee to the deputy commissioner (appeals) or commissioner {appeals) or, the appellate tribunal in certain cases provisions of this sec uon are on ~ same lmes as those of section 246a of the incometax act and section 23a of the wealth-tax act cla~ 178 seeks to amend section 32 of the act dealing with the recovery of tax, etc, on the lines of section 220 of the income-tax act clame 179 seeks to amend section '33 of the act dealing with mode of recovery the amendments are consequential to the provisions of section 7 providing that the income-tax authorities specified in section 116 01 the ,lncome-tax act shall also be the gut-tax authorities clause 180 seeks to amend section 33a of the act dealing with refunds '1 he provisions are on the same lmes as those of section 34a of me wealth-tax act clause 181 seeks to amend section 34 of the act dealing with rectification of mistakes the amendment is on the same lines as in section 35 of the wealth-tax act by this amendment, the iift-tax authority has been empowered to amend any intimation sent or re~ the amount of refund - ••• clause 182 seeks to amend section 36 of the act relating to powers 01 gift-tax authorities including valuation officer regardihg discovery, production of evidence, etc, to bring the provisions on the lines of subsections (1) and (ia) of section 131 of the income-tax act the provision relating to levy of fine for non-compliance of summons by gift-tax authorities has been omitted consequent upon power to levy penalty for non-compliance of swiullons being provided in section 17a clause 183 seeks to amend section 37 of the act relating· to power of the gift-tax officer to call for information and statement sub-clause (a) se:eks to enlarge the scope of this section so as to enable the authorities to obtain statement or information for any plll'-pose of the act and also from a banking company sub· clause (b) seeks to vest such powers to gift-tax authoritiej in place of gift-tax officer under the present provisions clause 184 seeks to amend section 45 of the dealing with certain cases where the provisions of this act do not apply sub· clause (a) seeks to substitute the words "the provisions ot this act shah not apply to gifts made by" by the words "no tax hall be levied in this act in respect of gifts made by" sub-clause (b) seeks to substitute existing clauses (a), (b), (c), (d) and (dil) by the following new clauses (a) and (b), viz (0) a company in which the public are substantially interested; (b) any company to an indian company in a scheme of amalgamation suj:·clause (c) seeks to substitute a new clause (~) for the existing elause consequent upon insertion of new section 80f in the income-tax act relating to charitable trusts sub-clause (d) seeks to substitute new explanations 1 and 2 in pla~ of existing explanations 1, 2 and 3 explanation 1 seeks to clarify that the term "amalgamation" referred to in clause (b) shall have the meaning assigned to ii ill section 2 (ia) of the income-tax act explanation 2 seeks to clarify that exemption admissible under clause (e) in relation to gifts mentioned therein shall not be denied merely on either or both of the following grounds:-(i) that subsequent to the gift the institution or fund hal become ineli~ble to the \deduction under section &of of the income-tax act due to non compliance with any of the provisions of that section, (ii) that the deductions under section 80f of the income-tax act are denied to the institution or fund in relation to any income arising to it from any investment referred to in clauie (h) of lub-lection (4) of that section where the a~late of  fw)da id"&ted by it to a cqiscel'n referred to in the ibid eiauie tit) does dot ext::eed five pel" cent of the eapaal of that concern cl4we 1851 _ui to insert a new section 47 in the act so as to empower the central government to make an order for removing any diiboulty· wbioh -y arise in gi,ving' effeet to the provisions of the act as  diid: ay tftis biu i t is also beiftg provided that no such meier shall b- maca ~ ~e certral govepftmerrt after the expiration gf three years from 1-4-1988 and that every order made under this section shan be laid before each hquse of parliament clause 186 seeks to make certain amendments ot consequential nature in difterent provi:;ions of the act ~ to the ctnnpcmia (profru) sttrtc:r: act~ 1164 clame 187 seeks to substitute or introduce new authorities in the aet eodseq\leftt lji'on ei1her the re-designation of the authorities or the inclusion of the new authorities in seetion 116 of the income-tax act cfbuses 188 8j'ld 189 seek to amend secrtions 3 and 18 of the act to make certain amendments of consequential nature clause 14 of the bill aeeks to insert a aew 18etion 89f m the lnpometax act, 1961 providing for a new sme m taxatlqn f ebarit~ mtit,,-tiods clause 25 of the bill seeks to amend secuon 80g fer uowing daductiers in respect of pa~nts to a trust or institution 0£ natiqaal imlh)rtana:e whiehhas as its main object the undertaking of 8ciedtific ~ or carry· ing out at any rural development programme or carrying out of any prqgr8jlld)e of conservation of national resources or afforestation of wasteland these changes will require the setting up of a directora~ gener~ of tax exemptions this directorate will ensure uniform application of the provisions relating to the assessment of the charitable institlltions and will monitor the work in this regard of the ineome-tax omces all over india the notifications for exemptions etc, being presently issued by the central board of direct taxes win be issued by thisdlreetjo rate so that the board· does not get involved in thousands of new cases ~ the setting up of the said directorate will involve a recurring expen· diture of & 14179 lakhson pay and allowances of! officers and staff and other establishment expenses and a non-recurring expenditure of rs 41s2 laths onfurniture, staff cars, etc 3 the provisions of the :am will not involve any other expenditure of a recurring or nonorttcwrilli nature sub-clause (c) of clause 6 of the bill seeks to substitute the main paragraph of clause (5) of section· 10 of the income-tax act sub-clause (ii) of clause 13 of the bill seeks to substitute clause (b) of sedion 40 the provisions of clause (5) of section 10 and sub-clause (iv) of clause (b) of section 40 empower the central government to make rules for the matters specified in the said provisions clause 24 of the bill seeks to insert a new section 80f in chapter via of the income-tax act providing for a unified scheme for taxation of charitable and religious trusts which will also be applicable to institutions of national impo:rtance indluding those involved in scientiftc research, rural developments, conservation of natural resources' and afforestation of wasteland under the proviso to clause (iii) of sub~ection (1) of section 80f, the central board of direct taxes has been empowered to approve a scheme framed by an assessee for the purposes of applying any amount wholly and exclusively for the benefits of citizens of india abroad by the said assessee so that such amount qualifies for deduction under the said clause (iii) clause (c) of sub-section (1) also provides that the  deduction under that sub-section shall not be allowed unless the assessee fulfills certain conditions imposed by the central board of direct taxes such conditions may include a condition that the nominee of the board shall be appointed on the board of trustees of the thrust or governing body of the institution sub-section (8) of section 80f further empowers the central board of direct taxes to delegate its powers or authority under that section to income-tax authorities not below the rank of a ccmmissioner clause (iv) of sub-section (1) of aection 80f and clauses (a) and (b) of sub-section (2) of that section empower the central government to make rules in relation to matters specified in the said provisions clause (a) of sub-section (7) and sub-clause (i) (e) of clause (f) of that section empower the central government to make rules in relation to the matters specified therein c13use 32 of the bill seeks to substitute section 120 of the incometax act by a new section dealing with jurisdiction of the income-tax authorities the central· board of direct taxes is authorised to issue various types of directions to the income-tax authorities for the purposes of the section clause 42 of the bill seeks to amend section 139 of the income-tax act relating to filing of return of income sub-clause (a) seeks to substitute sub-section (1) of section 139 and sub-clause cd) seeks to substitute sub-sections (4) and (4a) 0'£ that section the provisions of sub-section (1) and sub-section (4a) as so substituted empower the central government to make rule in relation to the matters specified in the said provisions clause 47 of the bill seeks to amend section 142 of the income-tax acl relating to inqulfy before assessment sub-clause (b) seeks to insert a new clause (i) in sub-section (1) of section 142 the provisions of the said clause (i) empower the central government to make rules in relation to the matters specified therein clause 54 of the bill seeks to substitute new sections for the existing sections 147 and 148 of the income-tax act the provisions of secttion 148 as so substituted empower the central government to make rules in relation to the matters specified therein clause 74 of the bill seeks to insert a new section 194e providing for deduction of tax by a firm on the payment of interest, salary, bonus, commission or remuneration to partners the provisions of sub-sections (2) and (3) of section 194e empower the central government to make rules in relation to the matters speci~ed in those sub-sections clause 79 of the bill seeks to substitute a new section for section 210 of the income-tax act the provisions of sub-section (5) of section 210 empower the central government to make rules in relation to the matters specified therein clause 87 of the bill seeks to substitute new sections for sections 223, 224 and 225 of the income-tax act clause (b) of sub-section (2) of section 223 as so substituted empowers the central government to make rules in relation to the matters specified therein clause 94 of the bill seeks to insert new sections 234a and 234b in the income-tax act clause (i) of sub-section (4) of section 234a and clause (i) of sub-section (4) of section 2mb empower the central government to make rules in relation to the matters specified in the said clauses clause 98 of the bill seeks to insert a new section 244la in the income-tax act sub-section (3) of section 244a empowers the centital government to !jnake rules in ;relation to the matters specmed there in clause 123 of the bill seeks to amend section 298 of the income-tax act relating to power to remove difficulties so as to insert sub-sections (3) and (4) in that section under sub-section (3) as so inserted, the central government has been empowered to make orders to remove any difficulty which al"ises in giving effect tal the provisions of the income-tax act as amended by this bill it has been provided that no 'such order shall be made atiler the exjliration of three years from 1-4-19&8 and that every order so made shall be laid before each house of parliament clause 124 of the bill seeks to amend the second schedule to the income-tax act sub-clause (24) seeks to insert a new rule 94 in the said schedule to provide for the continuance of certain proceedings for the recovery of tax pending immediately before the coming into torce of the amendments to that schedule by the present bill the central board of direct taxes is being empowered to issue (whether by way of modification or otherwise, not affecting the substance, of any rule in the said schedule) general or special orders which appear to it to be necessary or expedient for the purpose of removing the difficulty arising in continuing the said proceedinij clause 125 of the bill seeks to insert the tenth schedule laying down allowances subject to which the provisions of the income-tax act will apply in cases where the previous year in relation to the assessment year commencing on 1-4-1989, referred to in section 3 (2), exceeds twfllve mon ths paragraph 7 of this schedule empowers the central board of direct taxes to grant relief for avoiding genuine hardship, by general or special order, in any case or classes of cases where the transitional previous year is longer than twelve months clause 131 of the bill seeks to substitute new sections 8 to 11 for certain existing sections in the wealth-tax act the provisions of new sections 9 and 10 relate to control of wealth tax authorities and instructions to be issued by the board to subordinate authorities these provisions are similar to the provisions of sections 118 and 120 of the income-tax act including the provisions relating to delegated legislation - clause 133 of the bill seeks to amend section 14 of the wealth-tax act sub-clause (a) seeks to substitute existing sub-sections (1) and (2) the provisions of sub-section (1) as so substituted empowers the central government to make rules in relation to the matters specified therein clause 138 of the bill seeks to substitute section 16 of the wealth-tax act clause (i) of sub-aection (4) of sectron 16 empowers the central government to make rules in relation to the matters specified therein clause 139 of the bill seeks to amend section 17 of the wealth-tax aci; sub-clause (a) seeks to substitute new sub-sections for sub-section (1) of section 17 the provisions of sub-section (1) as so substituted empower the central government to make rules in relation to matters specified therein clause 141 uf the bill seeks to insert a new section 17b in the wealthtax act clause (i) of sub-section (4) of section 17b empowers the central government to make rules in relation to the matters specified therein clause 143 seeks to insert a new chapter ivb consisting of section 180 in the wealth-tax act clause (i) 'of sul>-section (3) of section 18d elb-powen the central government to make rules in relation to the matters specified therein clause 150 seeks to amend section 34a of the wealth-tax act sub-clause (ii) seeks to substitute sub-sections (4a) and (4b) for the existing subsection (') clause (c) of the said sub-section (4b) empowers the central government to make rules in relation to the matters specified therein clause 159 of the bill seeks to insert new section 47 in the wealth-tax act, relating to power to remove difficulties the provisions of the said sfjctio~ empower the central government to make orders for remaving any difficulty which may arise in giving effect to the provisions of the wealth-tax act as amended by this bill it is also being provided that no such order shall be made after the expiration of three years from 1-4-1988 and that every such order shall be laid before each house of parliament clause 164 of the bill seeks to substitute new sections 7 to 10 for certain existing sections in the gift-tax act the provisions of new sections 8 and 9 relate to gift-tax authorities and instructions to be issued by the board to subordinate authorities these provisions are simhar to the provisions of sections 118 and 120 of the income-tax act including the provisions relating to delegated legislation clause 166 of the bill seeks to amend section 13 of the gift·tax act sub-clause (a) seeks to substitute sub-sections (1) and (2) the provisions of sub-section (1) as so substituted empower the central government to make rules in relation to the matters specifi€:d therein clause 170 of the bill seeks to substitute section 151 of the gift-tax aat· the provisions of clause (i) of sub-section (4) and clause (b) (i) of subsection (6) of section 15 empower the central government to make rules in relation to the matters specified in the said clauses clause 171 of the bill seeks to amend section 16 of the gift·tax act subclause (a) seeks to substitute new sub-sections (1), (la) and (1b) for the existing sub-section (1) the provisions of sub-section (1) as so substituted empower the central government to make rules in relation to the matters specuied therein clause 173 of the bill seeks to insert a new section 16b in the gift-tax act the provisions of clause (i) of ~ub'8ection (4) of section 16b empowers the central government to make rules in relation to the matters specified therein clause 175 of the bill seeks to insert a new chapter iv a consisting of section 18b in the gift-tax act the provisions of clause (i) of sub-section (3) of section 1sb empower the central government to make rules in relation to the matters specified therein clause 180 of the bill seeks to amend section 33a of the gift-tax act sub-clause (ii) seeks to substitute new sub-sections (4a) and (4b) for the existing sub-section (4) the provisions of clause (c) of the said sub-section (4b) empower the central government to make rules in relation to the matters specified therein clause 185 of the bill seeks tl) insert a new sectio~ 47 in the gift-tax act relating to power to remove difficulties the provislon9 ot the ~aid section empower the central government to make orde~ tor remov1d;g any dif8culty which may arisp in giving effect to the provisions of the gift-tax aet as amended by this bill it is also being provided that no such order shall be made after the expiration of three years from 1-4-1988 and that nary such order shall be laid before each house of parliament the matters in respect of which rules, orders or directions may be made in accordance with the aforesaid provisions are matters of procedure and administrative detail, and it is not practicable to provide for them in the said provisions the delegation of legislative power is, therefore, of a normal character bill further to amend the income-tax act, 1961, the wealth-tax act, 1957 tlae gift-tu act, 1958 and the companies (profits) surtax act, 196f - (shri narat/4n dgtt tiwari, minister of finance) , 