4 [(1) If the Assessing Officer 5 [has reasons to believe] that the taxable gifts in respect of which any person is assessable under this Act, (whether made by him or by any other person) have escaped assessment for any assessment year (whether by reason of under-assessment
1. Ins. by Act 3 of 1989, s. 83 (w.e.f. 1-4-1989).
2. Ins. by Act 36 of 1989, s. 32 (w.e.f. 1-4-1989).
3. Ins. by Act 49 of 1991, s. 86 (w.e.f. 1-10-1991).
4. Subs. by Act 4 of 1988, s. 171, for sub-section (1) (w.e.f. 1-4-1989).
5. Subs. by Act 3 of 1989, s. 84, for “for reasons to be recorded by him in writing, is of the opinion” (w.e.f. 1-4-1989).
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22 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, 1 *** as may be specified 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 year mentioned in the notice, in respect of which he is assessable, along with such other particulars as may be required by the notice, and may proceed to assess or re-assess such gifts and also any other taxable gifts in respect of which such person is assessable, which have escaped assessment and which come to his notice subsequently in the course of the proceedings 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 under section 13 :
Provided that where an assessment under sub-section (3) of section 15 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 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 section 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 :
2 [Provided further that the Assessing Officer shall, before issuing any notice under this sub-section, record his reasons for doing so.]
Explanation.—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.
(1A) No notice under sub-section (1) shall be issued for the relevant assessment year,—
(a) in a case where an assessment under sub-section (3) of section 15 or sub-section (1) of this section has been made for such assessment 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);
(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;
(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 is likely to amount to rupees one lakh 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 falls under sub-clause (ii) or sub-clause (iii) ;
(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 twenty-five thousand or more for that year ;
1. The words “not being less than thirty days” omitted by the Act 32 of 2003, s. 101, (w.e.f. 1-4-1989).
2. Ins. by Act 3 of 1989, s. 84 (w.e.f. 1-4-1989).
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(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 is likely to amount to rupees fifty thousand or more for that year.
Explanation.—For the purposes of sub-section (1) and sub-section (1A), the following shall also be deemed to be cases where taxable gifts chargeable to tax have escaped assessment, namely :—
(a) where no return of taxable gifts has been furnished by the assessee although the taxable gifts made by him or the taxable gifts made by any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to gift-tax;
(b) where return of taxable gifts has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the amount or value of the taxable gifts or has claimed excessive exemption or deduction in the return.
(1B) (a) In a case where an assessment under sub-section (3) of section 15 or sub-section (1) of this section has been made for the relevant assessment year, no notice shall be issued under sub-section (1) 1 [by an Assessing Officer, who is below the rank of 2 [Assistant Commissioner or Deputy Commissioner], unless the 3 [Joint Commissioner] is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the issue of such notice] :
Provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued 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 Officer, who is below the rank of 3 [Joint Commissioner], after the expiry of four years from the end of the relevant assessment year, unless the 3 [Joint Commissioner], is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice.]
(2) Nothing contained in this section limiting the time within which any proceedings for assessment or reassessment may be commenced shall apply to an assessment or reassessment to be made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 22, section 23, section 24, section 26 or section 28 4 [or by a court in any proceedings under any other law].
5 [16A. Time limit for completion of assessment and re-assessment. — 6 [(1) No order of assessment shall be made under section 15 at any time after the expiry of 7 [two years] from the end of the assessment year in which the gifts were first assessable :
8 [Provided that,—
(a) where the gifts were first assessable in the assessment year commencing on the 1st day of April, 1987, or any earlier assessment year, such assessment may be made on or before the 31st day of March, 1991;
(b) where the gifts were first assessable in the assessment year commencing on the 1st day of April, 1988, such assessment may be made on or before the 31st day of March, 1992.]
1. Subs. by Act 12 of 1990, s. 61, for “except by an Assessing Officer of the rank of Assistant Commissioner or Deputy Commissioner” (w.e.f. 1-4-1990).
2. Subs. by Act 21 of 1998, s. 76, for “Assistant Commissioner” (w.e.f. 1-10-1998).
3. Subs. by s. 76, ibid., for “Deputy Commissioner” (w.e.f. 1-10-1998).
4. Added by Act 4 of 1988, s. 171 (w.e.f. 1-4-1989).
5. Ins. by Act 41 of 1975, s. 112 (w.e.f. 1-10-1975).
6. Subs. by Act 4 of 1988, s. 172, for sub-section (1) and (2) (w.e.f. 1-4-1989).
7. Subs. by Act 13 of 1989, s. 31, for “one year” (w.e.f. 1-4-1989).
8. Subs. by s. 31, ibid., for the proviso (w.e.f. 1-4-1989).
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(2) No order of assessment or re-assessment shall be made under section 16 after the expiry 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,—
(i) where the notice under clause (a) of sub-section (1) of 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 re-assessment may be completed on or before the 31st day of March, 1990 ;
(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 re-assessment 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 stood before its amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988).]
(3) Notwithstanding anything contained in sub-sections (1) and (2), an order of fresh assessment in pursuance of an order passed on or after the 1st day of April, 1975, under section 22, section 23 or section 24, setting aside or cancelling an assessment, may be made at any time before the expiry of 1 [two years] from the end of the financial year in which the order under section 22 or section 23 is received by the 2 [Chief Commissioner or Commissioner] or, as the case may be, the order under section 24 is passed by the Commissioner :
3 [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.]
(4) The provisions of sub-sections (1) and (2) shall not apply to the assessment or re-assessment made on the assessee in consequence of, or to give effect to, any finding or direction contained in an order under section 22, section 23, section 24, section 26 or section 28 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act and such assessment or reassessment may, subject to the provisions of sub-section (3), be completed at any time.
Explanation 1.—In computing the period of limitation for the purposes of this section—
(i) the time taken in reopening the whole or any part of the proceeding or in giving an opportunity to the assessee to be reheard under the proviso to section 38, or
(ii) the period during which the assessment proceeding is stayed by an order or injunction of any court, shall be excluded:
4 [Provided that where immediately after the exclusion of the aforesaid time or period, the period of limitation referred to in sub-sections (1), (2) and (3) available to the Assessing Officer for making an order of assessment or re-assessment, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly.]
1. Subs. by Act 4 of 1988, s. 172, for “four years” (w.e.f. 1-4-1989).
2. Subs. by s. 161, ibid., for “Commissioner” (w.e.f. 1-4-1988).
3. The proviso ins. by s. 171, ibid. (w.e.f. 1-4-1989).
4. The proviso ins. by Act 49 of 1991, s. 87 (w.e.f. 27-9-1991).
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Explanation 2.—Where, by an order referred to in sub-section (4), any gift is excluded from the taxable gifts for an assessment year in respect of an assessee, then, an assessment of such gift for another assessment year shall, for the purposes of sub-section (2) of section 16 and this section, be deemed to be one made in consequence of, or to give effect to, any finding or direction contained in the said order.]
1 [16B. Interest for defaults in furnishing return of gifts. — (1) Where a return of gifts for any assessment year under sub-section (1) of section 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 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 1st day of July of the assessment year, and,—
(a) where the return is furnished after the 30th day of June 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 sub-section (5) of section 15, on the amount of tax payable on the taxable gifts as determined 2 [under sub-section (1) of section 15 or] on regular assessment.
3 [Explanation 1.—In this sub-section, “tax payable on the taxable gifts as determined under sub-section (1) of section 15” shall not include the additional gift-tax, if any, payable under section 15.]
Explanation 2.—Where in relation to an assessment year the assessment is made for the first time under section 16, the assessment so made shall be regarded as a regular assessment for the purposes of this section.
2 [Explanation 3.—In this sub-section, “tax payable on the taxable gifts as determined under sub-section (1) of section 15 or on regular assessment” shall, for the purposes of computing the interest payable under section 14B, be deemed to be tax payable on the taxable gifts as declared in the return.]
(2) The interest payable under sub-section (1) shall be reduced by the interest, if any, paid under section 14B towards the interest chargeable under this section.
(3) Where the return of gifts for any assessment year, required by a notice under sub-section (1) of section 16 issued 2 [after the determination of taxable gifts under sub-section (1) of section 15 or] after the completion of an assessment under sub-section (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 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,—
(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 under section 16, on the amount by which the tax on the taxable gifts determined on the basis of such re-assessment exceeds the tax on the taxable gifts as determined 2 [under sub-section (1) of section 15 or] on the basis of the earlier assessment aforesaid.
4 * * * * *
1. Ins. by Act 4 of 1988, s. 173 (w.e.f. 1-4-1989).
2. Ins. by Act 3 of 1989, s. 85 (w.e.f. 1-4-1989).
3. Subs. by s. 85, ibid., for Explanation 1 (w.e.f. 1-4-1989).
4. The Explanation omitted by s. 85, ibid, (w.e.f. 1-4-1989).
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(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 has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and,—
(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 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 interest is reduced, the excess interest paid, if any, shall be refunded.
(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.]
1 [17. Penalty for failure to furnish returns, to comply with notices and concealment of gifts, etc.— (1) If the 2 [Assessing Officer], 3 [Deputy Commissioner (Appeals)], 4 [Commissioner (Appeals),] 5 [Chief Commissioner or Commissioner] or Appellate Tribunal, in the course of any proceedings under this Act, is satisfied that any person— 6 * * * * *
(b) has 7 *** failed to comply with a notice under sub-section (2) or sub-section (4) of section 15;
or
(c) has concealed the particulars of any gift or deliberately furnished inaccurate particulars thereof, he or it may, by order in writing, direct that such person shall pay by way of penalty— 8 * * * * * 9 [(ii) in the cases referred to in clause (b), in addition to the amount of gift-tax payable by him, a sum which shall not be less than one thousand rupees, but which may extend to twenty-five thousand rupees for each such failure;]
(iii) in the cases referred to in clause (c), in addition to any gift-tax payable by him, a sum which shall not be less than twenty per cent. but which shall not exceed one and half times the amount of the tax, if any, which would have been avoided if the return made by such person had been accepted as correct:
10 [Provided that in the cases referred to in clause (b), no penalty shall be imposable if the person proves that there was a reasonable cause for the failure referred to in that clause.]
11 [Explanation.—Where any adjustment is made in the taxable gifts declared in the return under the proviso to clause (a) of sub-section (1) of section 15 and additional gift-tax charged under that section, the provisions of this sub-section shall not apply in relation to the adjustments so made.]
1. Subs. by Act 53 of 1962, s. 14, for Section 17 (w.e.f. 1-4-1963).
2. Subs. by Act 4 of 1988, s. 161, for “Gift-tax Officer” (w.e.f. 1-4-1988).
3. Subs. by s. 161, ibid., for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988).
4. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).
5. Subs. by Act 4 of 1988, s. 161, for “Commissioner” (w.e.f. 1-4-1988).
6. Clause (a) omitted by Act 3 of 1989, s. 86 (w.e.f. 1-4-1989).
7. The words “without reasonable cause” omitted by Act 46 of 1986, s. 40 (w.e.f. 10-9-1986).
8. Clause (i) omitted by Act 3 of 1989, s. 86 (w.e.f. 1-4-1989).
9. Subs. by s. 86, ibid., for clause (ii) (w.e.f. 1-4-1989).
10. Subs. by s. 86, ibid., for the proviso (w.e.f. 1-4-1989).
11. Ins. by s. 86, ibid. (w.e.f. 1-4-1989).
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(2) No order imposing a penalty under sub-section (1) shall be made unless the assessee has been heard or has been given a reasonable opportunity of being heard.
1 [(3) No order imposing a penalty under sub-section (1) shall be made,—
(i) by the Income-tax Officer, where the penalty exceeds ten thousand rupees;
(ii) by the 2 [Assistant Commissioner or Deputy Commissioner] where the penalty exceeds twenty thousand rupees, except with the prior approval of the 3 [Joint Commissioner.]
(4) A 4 [Deputy Commissioner (Appeals)], 5 [a Commissioner (Appeals), a 6 [Chief Commissioner or Commissioner] or the Appellate Tribunal] on making an order under this section imposing a penalty, shall forthwith send a copy of the same to the 7 [Assessing Officer].]
8 [(5) No order imposing a penalty under this section shall be passed—
(i) in a case where the assessment to which the proceedings for imposition of penalty relate is the subject-matter of an appeal to the Deputy Commissioner (Appeals) or Commissioner (Appeals) under section 22 or an appeal to the Appellate Tribunal under sub-section (2) of section 23, 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 Deputy Commissioner (Appeals) or the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Chief Commissioner or Commissioner, whichever is later;
(ii) in a case where the relevant assessment is the subject-matter of revision under sub-section (2) of section 24, after the expiry of six months from the end of the month in which such order of revision is passed;
(iii) in any other case, 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 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) the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 38; and
(ii) any period during which a proceeding under this section for the levy of penalty is stayed by an order or injunction of any court, shall be excluded.
(6) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1989 (3 of 1989) shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in
1. Subs. by Act 3 of 1989, s. 86, for sub-section (3) (w.e.f. 1-4-1989).
2. Subs. by Act 21 of 1998, s. 76, for “Assistant Commissioner” (w.e.f. 1-10-1998).
3. Subs. by s. 76, ibid., for “Deputy Commissioner” (w.e.f. 1-10-1998).
4. Subs. by Act 4 of 1988, s. 161 for “An Appellate Assistant Commissioner” (w.e.f. 1-4-1988).
5. Subs. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).
6. Subs. by Act 4 of 1988, s. 161 for “Commissioner” (w.e.f. 1-4-1988).
7. Subs. by s. 161, ibid., “Gift-tax Officer” (w.e.f. 1-4-1988).
8. Ins. by Act 3 of 1989, s. 86 (w.e.f. 1-4-1989).
28 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.]
1 [17A. Penalty for failure to answer questions, sign statements, furnish information, allow inspections, etc. — (1) If a person,—
(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 a gift-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 gift-tax authority may legally require him to sign; or
(c) to whom a summons is issued under sub-section (1) of section 36, 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, 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 :
Provided that no penalty shall be imposable under clause (c) 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 information which such person is bound to furnish to the Assessing Officer under section 37, 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 :
Provided that no penalty shall be imposable under this sub-section if the person proves that there was reasonable cause for the said failure.
(3) Any penalty imposable under sub-section (1) or sub-section (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 course of any proceeding before a gift-tax authority not lower in rank than a 2 [Joint Director] or a 3 [Joint Commissioner], by such gift-tax authority;
(b) in any other case, by the 2 [Joint Director] or the 3 [Joint Commissioner].
(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 in the matter by such authority.
Explanation.—In this section, “gift-tax authority” includes a Director General, Director, 2 [Joint Director], 4 [Assistant Director or Deputy Director] or Valuation Officer while exercising the powers vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the matters specified in sub-section (1) of section 36.]
5 [18. Rebate on advance payments. — If a person making a taxable gift pays into the treasury within fifteen days of his making the gift any part of the amount of tax due on the gift calculated at rates
1. Subs. by Act 3 of 1989, s. 87, for section 17A (w.e.f. 1-4-1989).
2. Subs. by Act 21 of 1998, s. 76, for “Deputy Director” (w.e.f. 1-10-1998).
3. Subs. by s. 76, ibid., for “Deputy Commissioner” (w.e.f. 1-10-1998).
4. Subs. by s. 76, ibid., for “Assistant Director” (w.e.f. 1-10-1998).
5. Subs. by Act 41 of 1975, s. 115, for section 18 (w.e.f. 1-4-1976).
29 specified in the Schedule 1 [or at the rate specified in sub-section (2) of section 3], he shall, at the time of assessment under section 15, be given credit—
(i) for the amount so paid; and
(ii) for a sum equal to one-ninth of the amount so paid, so however, that such sum shall in no case exceed one-tenth of the tax due on the gift.
Explanation.—If a person makes more than one taxable gift in the course of a previous year, the amount of tax due on any one of such gifts shall be the difference between the total amount of tax due on the aggregate value of all the taxable gifts so far made, including the taxable gift in respect of which tax has to be paid, calculated at the rates specified in the Schedule or, as the case may be 2 [at the rate specified in sub-section (2) of section 3], and the total amount of tax on the aggregate value of all the gifts made during that year, excluding the taxable gift in respect of which tax has to be paid, calculated at the rates specified in the Schedule or, as the case may be, 2 [at the rate specified in sub-section (2) of section 3].]
3 [18A. Credit for stamp duty paid on instrument of gift. — Where any stamp duty has been paid under any law relating to stamp duty in force in any State on an instrument of gift of property, the assessee shall be entitled to a deduction from the gift-tax payable by him of an amount equal to the stamp duty so paid or one-half of the gift-tax payable, before making the deduction under this section, whichever is less.]
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CHAPTER V LIABILITY TO ASSESSMENT IN SPECIAL CASES