CHAPTER XV
LIABILITY
IN SPECIAL CASES
A.—Legal representatives
159. (1)
Where a person dies, his legal representative shall be liable to pay any sum
which the deceased would have been liable to pay if he had not died, in the
like manner and to the same extent as the deceased.
(2) For the
purpose of making an assessment (including an assessment, reassessment or recomputation under section 147) of the income of the deceased and for the
purpose of levying any sum in the hands of the legal representative in
accordance with the provisions of sub-section (1),—
(a) any proceeding taken against the deceased before his death
shall be deemed to have been taken against the legal representative and may be
continued against the legal representative from the stage at which it stood on
the date of the death of the deceased;
(b) any proceeding which could have been
taken against the deceased if he had survived, may be taken against the legal
representative; and
(c) all the provisions of this Act shall
apply accordingly.
(3) The
legal representative of the deceased shall, for the purposes of this Act, be
deemed to be an assessee.
(4) Every
legal representative shall be personally liable for any tax payable by him in
his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or
parts with any assets of the estate of the deceased, which are in, or may come
into, his possession, but such liability shall be limited to the value of the
asset so charged, disposed of or parted with.
(5) The
provisions of sub-section (2) of section 161, section 162, and section
167, shall, so far as may be and to the
extent to which they are not inconsistent with the provisions of this section,
apply in relation to a legal representative.
(6) The
liability of a legal representative under this section shall, subject to the
provisions of sub-section (4) and sub-section (5), be limited to the extent to
which the estate is capable of meeting the liability.
B.—Representative assessees - General provisions
160. (1)
For the purposes of this Act, “representative assessee”
means—
(i) in respect of the
income of a non-resident specified in [***] sub-section (1) of section 9, the
agent of the non-resident, including a person who is treated as an agent under section
163;
(ii) in respect of the income of a minor, lunatic or idiot, the
guardian or manager who is entitled to receive or is in receipt of such income
on behalf of such minor, lunatic or idiot;
(iii) in respect of income which the Court of
Wards, the Administrator- General, the Official Trustee or any receiver or
manager (including any person, whatever his designation, who in fact manages
property on behalf of another) appointed by or under any order of a court,
receives or is entitled to receive, on behalf or for the benefit of any person,
such Court of Wards, Administrator-General, Official Trustee, receiver or
manager;
(iv) in respect of income which a trustee appointed under a trust
declared by a duly executed instrument in writing whether testamentary or
otherwise [including any wakf deed which is valid
under the Mussalman Wakf
Validating Act, 1913 (6 of 1913),] receives or is entitled to receive on behalf
or for the benefit of any person, such trustee or trustees;
[(v) in respect of income which a trustee
appointed under an oral trust receives or is entitled to receive on behalf or
for the benefit of any person, such trustee or trustees.
Explanation
1.—A trust which is not
declared by a duly executed instrument in writing [including any wakf deed which is valid under the Mussalman
Wakf Validating Act, 1913 (6 of 1913),] shall be
deemed, for the purposes of clause (iv), to be a trust declared by a
duly executed instrument in writing if a statement in writing, signed by the
trustee or trustees, setting out the purpose or purposes of the trust,
particulars as to the trustee or trustees, the beneficiary or beneficiaries and
the trust property, is forwarded to the [Assessing] Officer,—
(i) where the trust has
been declared before the 1st day of June, 1981, within a period of three months
from that day; and
(ii) in any other case, within three
months from the date of declaration of the trust.
Explanation
2.—For the purposes of clause
(v), “oral trust” means a trust which is not declared by a duly executed
instrument in writing [including any wakf deed which
is valid under the Mussalman Wakf
Validating Act, 1913 (6 of 1913),] and which is not deemed under Explanation
1 to be a trust declared by a duly executed instrument in writing.]
(2) Every
representative assessee shall be deemed to be an assessee for the purposes of this Act.
Liability of representative assessee.
161. (1) Every
representative assessee, as regards the income in
respect of which he is a representative assessee,
shall be subject to the same duties, responsibilities and liabilities as if the
income were income received by or accruing to or in favour
of him beneficially, and shall be liable to assessment in his own name in
respect of that income; but any such assessment shall be deemed to be made upon
him in his representative capacity only, and the tax shall, subject to the
other provisions contained in this Chapter, be levied upon and recovered from
him in like manner and to the same extent as it would be leviable
upon and recoverable from the person represented by him.
[(1A)
Notwithstanding anything contained in sub-section (1), where any income in
respect of which the person mentioned in clause (iv) of sub-section (1)
of section 160 is liable as representative assessee
consists of, or includes, profits and gains of business, tax shall be charged
on the whole of the income in respect of which such person is so liable at the
maximum marginal rate :
Provided that the provisions of this sub-section shall
not apply where such profits and gains are receivable under a trust declared by
any person by will exclusively for the benefit of any relative dependent on him
for support and maintenance, and such trust is the only trust so declared by
him.
[***]
(2) Where
any person is, in respect of any income, assessable under this Chapter in the
capacity of a representative assessee, he shall not,
in respect of that income, be assessed under any other provision of this Act.
Right of representative assessee to recover tax paid.
162. (1)
Every representative assessee who, as such, pays any
sum under this Act, shall be entitled to recover the sum so paid from the
person on whose behalf it is paid, or to retain out of any moneys that may be
in his possession or may come to him in his representative capacity, an amount
equal to the sum so paid.
(2) Any representative
assessee, or any person who apprehends that he may be
assessed as a representative assessee, may retain out
of any money payable by him to the person on whose behalf he is liable to pay
tax (hereinafter in this section referred to as the principal), a sum equal to
his estimated liability under this Chapter, and in the event of any
disagreement between the principal and such representative assessee
or person as to the amount to be so retained, such representative assessee or person may secure from the [Assessing] Officer
a certificate stating the amount to be so retained pending final settlement of
the liability, and the certificate so obtained shall be his warrant for
retaining that amount.
(3) The
amount recoverable from such representative assessee
or person at the time of final settlement shall not exceed the amount specified
in such certificate, except to the extent to which such representative assessee or person may at such time have in his hands
additional assets of the principal.
C.—Representative assessees—Special cases
Who may be
regarded as agent.
163. (1)
For the purposes of this Act, “agent”, in relation to a non-resident, includes
any person in India—
(a) who is employed by or on behalf of
the non-resident; or
(b) who has any business connection with
the non-resident; or
(c) from or through whom the
non-resident is in receipt of any income, whether directly or indirectly; or
(d) who is the trustee of the
non-resident;
and includes also
any other person who, whether a resident or non-resident, has acquired by means
of a transfer, a capital asset in India :
Provided that a broker in India who, in respect of any
transactions, does not deal directly with or on behalf of a non-resident
principal but deals with or through a non-resident broker shall not be
deemed to be an agent under this section in respect of such transactions, if
the following conditions are fulfilled, namely:—
(i) the transactions are
carried on in the ordinary course of business through the first-mentioned
broker; and
(ii) the non-resident broker is carrying
on such transactions in the ordinary course of his business and not as a
principal.
[Explanation.—For the
purposes of this sub-section, the expression “business connection” shall have
the meaning assigned to it in Explanation 2 to clause (i) of sub-section (1) of section 9 of this Act.]
(2) No
person shall be treated as the agent of a non-resident unless he has had an
opportunity of being heard by the [Assessing] Officer as to his liability to be
treated as such.
[Charge of tax
where share of beneficiaries unknown.
164. (1) [Subject
to the provisions of sub-sections (2) and (3), where] any income in respect of
which the persons mentioned in clauses (iii) and (iv) of
sub-section (1) of section 160
are liable as representative assessees or any part thereof is not specifically
receivable on behalf or for the benefit of any one person or
where the individual shares of the persons on whose behalf or for whose benefit
such income or such part thereof is receivable are indeterminate or unknown
(such income, such part of the income and such persons being hereafter in this
section referred to as “relevant income”, “part of relevant income” and
“beneficiaries”, respectively), [tax shall be charged on the relevant income or
part of relevant income at the maximum marginal rate :]
Provided that in a case where—
[(i) none of the beneficiaries has any other
income chargeable under this Act exceeding the maximum amount not chargeable to
tax in the case of an [association of persons] or is a beneficiary
under any other trust; or]
(ii) the relevant income or part of
relevant income is receivable under [a trust declared by any person by will and
such trust is the only trust so declared by him]; or
(iii) the relevant income or part of relevant
income is receivable under a trust created before the 1st day of March, 1970,
by a non-testamentary instrument and the [Assessing] Officer is satisfied,
having regard to all the circumstances existing at the relevant time, that the
trust was created bona fide exclusively for the benefit of the relatives
of the settlor, or where the settlor
is a Hindu undivided family, exclusively for the benefit of the members of such
family, in circumstances where such relatives or members were mainly dependent
on the settlor for their support and maintenance; or
(iv) the relevant income is receivable by the trustees on behalf of
a provident fund, superannuation fund, gratuity fund, pension fund or any other
fund created bona fide by a person carrying on a business or profession
exclusively for the benefit of persons employed in such business or profession,
tax shall be
charged [on the relevant income or part of relevant income as if it] were the
total income of an [association of persons] :
[Provided
further that where any income in respect of which the person mentioned in
clause (iv) of sub-section (1) of section 160 is liable as representative assessee consists of, or includes, profits and gains of
business, the preceding proviso shall apply only if such profits and gains are
receivable under a trust declared by any person by will exclusively for the
benefit of any relative dependent on him for support and maintenance, and such
trust is the only trust so declared by him.]
[(2) In the
case of relevant income which is derived from property held under trust wholly
for charitable or religious purposes, [or which is of the nature referred to in
sub-clause (iia) of clause (24) of section
2,] [or which is of the nature referred
to in sub-section (4A) of section 11,] tax shall be charged on so much of the relevant income as is not
exempt under section 11 [or section
12], as if the relevant income not so
exempt were the income of an association of persons :
[Provided
that in a case where the whole or any part of the relevant income is not exempt
under section 11 or section
12 by virtue of the provisions contained
in clause (c) or clause (d) of sub-section (1) of section
13, tax shall be charged on the relevant
income or part of relevant income at the maximum marginal rate.]]
[(3) In a
case where the relevant income is derived from property held under trust in
part only for charitable or religious purposes [or is of the nature referred to
in sub-clause (iia) of clause (24) of section
2] [or is of the nature referred to in
sub-section (4A) of section 11,]
and either the relevant income applicable to purposes other than charitable or
religious purposes (or any part thereof) [is not specifically receivable on
behalf or for the benefit of any one person or the individual shares of the
beneficiaries in the income so applicable are indeterminate or unknown, the tax
chargeable on the relevant income shall be the aggregate of—
(a) the tax which would be chargeable on that part of the
relevant income which is applicable to charitable or religious purposes (as
reduced by the income, if any, which is exempt under section 11) as if such
part (or such part as so reduced) were the total income of an association of
persons; and
(b) the tax on that part of the relevant income which is
applicable to purposes other than charitable or religious purposes, and which
is either not specifically receivable on behalf or for the benefit of any one
person or in respect of which the shares of the beneficiaries are indeterminate
or unknown, at the maximum marginal rate :]
Provided that in a case where—
[(i) none of the beneficiaries in respect of
the part of the relevant income which is not applicable to charitable or
religious purposes has any other income chargeable under this Act exceeding the
maximum amount not chargeable to tax in the case of an association of persons
or is a beneficiary under any other trust; or]
(ii) the relevant income is receivable
under [a trust declared by any person by will and such trust is the only trust
so declared by him]; or
(iii) the relevant income is receivable under a
trust created before the 1st day of March, 1970, by a non-testamentary
instrument and the [Assessing] Officer is satisfied, having regard to all the circumstan-ces existing at the relevant time, that the
trust, to the extent it is not for charitable or religious purposes, was
created bona fide exclusively for the benefit of the relatives of the settlor, or where the settlor is
a Hindu undivided family, exclusively for the benefit of the members of such
family, in circumstances where such relatives or members were mainly dependent
on the settlor for their support and maintenance,
tax shall be
charged [on the relevant income] as if the relevant income (as reduced by the
income, if any, which is exempt under section 11) were the total income of an association of persons :]
[Provided
further that where the relevant income consists of, or includes, profits
and gains of business, the preceding proviso shall apply only if the income is
receivable under a trust declared by any person by will exclusively for the
benefit of any relative dependent on him for support and maintenance, and such
trust is the only trust so declared by him :
Provided
also that in a case where the
whole or any part of the relevant income is not exempt under section 11 or section 12 by virtue of the provisions contained in clause (c) or clause (d)
of sub-section (1) of section 13,
tax shall be charged on the relevant income or part of relevant income at the
maximum marginal rate.]]
[Explanation
1.—For the purposes of this section,—
(i) any income in respect of which the persons
mentioned in clause (iii) and clause (iv) of sub-section (1) of section
160 are liable as representative assessee or any part
thereof shall be deemed as being not specifically receivable on behalf or for
the benefit of any one person unless the person on whose behalf or for whose
benefit such income or such part thereof is receivable during the previous year
is expressly stated in the order of the court or the instrument of trust or wakf deed, as the case may be, and is identifiable as such
on the date of such order, instrument or deed ;
(ii) the individual shares of the persons on whose behalf or for
whose benefit such income or such part thereof is received shall be deemed to
be indeterminate or unknown unless the individual shares of the persons on
whose behalf or for whose benefit such income or such part thereof is
receivable, are expressly stated in the order of the court or the instrument of
trust or wakf deed, as the case may be, and are
ascertainable as such on the date of such order, instrument or deed.
Explanation
2.— [Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.]
[Charge of tax in case of oral trust.
164A. Where a
trustee receives or is entitled to receive any income on behalf or for the
benefit of any person under an oral trust, then, notwithstanding anything
contained in any other provision of this Act, tax shall be charged on such
income at the maximum marginal rate.
Explanation.—For the purposes of
this section,—
(i) [***]
(ii) “oral trust” shall have the meaning
assigned to it in Explanation 2 below sub-section (1) of section 160.]
Case where part of trust income is chargeable.
165. Where
part only of the income of a trust is chargeable under this Act, that proportion
only of the income receivable by a beneficiary from the trust which the part so
chargeable bears to the whole income of the trust shall be deemed to have been
derived from that part.
D.—Representative assessees - Miscellaneous provisions
Direct assessment or recovery not barred.
166.Nothing in the foregoing sections in this Chapter
shall prevent either the direct assessment of the person on whose behalf or for
whose benefit income therein referred to is receivable, or the recovery from
such person of the tax payable in respect of such income.
Remedies against property in cases of representative assessees.
167. The [Assessing]
Officer shall have the same remedies against all property of any kind vested in
or under the control or management of any representative assessee
as he would have against the property of any person liable to pay any tax, and
in as full and ample a manner, whether the demand is raised against the
representative assessee or against the beneficiary
direct.
[DD.—Firms, association of persons and body of
individuals]
[Charge of tax in the case of a firm.
167A. In the
case of a firm which is assessable as a firm, tax shall be charged on its total
income at the [rate as specified in the Finance Act of the relevant year].]
[Charge of tax where shares of members in
association of persons or body of individuals unknown, etc.
167B. (1) Where the individual shares of the
members of an association of persons or body of individuals (other than a
company or a co-operative society or a society registered under the Societies
Registration Act, 1860 (21 of 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 association or body at the maximum marginal rate :
Provided that, where the total income of any member of
such association or body 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.
(2) Where,
in the case of an association of persons or body of individuals as aforesaid
[not being a case falling under sub-section (1)],—
(i) 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 that member under
the Finance Act of the relevant year, tax shall be charged on the total income
of the association or body at the maximum marginal rate;
(ii) any member or members thereof is or are chargeable to tax at
a rate or rates which is or are higher than the maximum marginal rate, tax
shall be charged on that portion or portions of the total income of the
association or body which is or are relatable to the share or shares of such
member or members at such higher rate or rates, as the case may be, and the
balance of the total income of the association or body shall be taxed at the
maximum marginal rate.
Explanation.—For the purposes of this section, the
individual shares of the members of an association of persons or body of
individuals in the whole or any part of the income of such association or body
shall be deemed to be indeterminate or unknown if such shares (in relation to
the whole or any part of such income) are indeterminate or unknown on the date
of formation of such association or body or at any time thereafter.]
E.—Executors
168. (1)
Subject as hereinafter provided, the income of the estate of a deceased person
shall be chargeable to tax in the hands of the executor,—
(a) if there is only one executor, then,
as if the executor were an individual; or
(b) if there are more executors than
one, then, as if the executors were an association of persons;
and for the
purposes of this Act, the executor shall be deemed to be resident or
non-resident according as the deceased person was a resident or non-resident
during the previous year in which his death took place.
(2) The
assessment of an executor under this section shall be made separately from any
assessment that may be made on him in respect of his own income.
(3) Separate
assessments shall be made under this section on the total income of each
completed previous year or part thereof as is included in the period from the
date of the death to the date of complete distribution to the beneficiaries of
the estate according to their several interests.
(4) In
computing the total income of any previous year under this section, any income
of the estate of that previous year distributed to, or applied to the benefit of,
any specific legatee of the estate during that previous year shall be excluded;
but the income so excluded shall be included in the total income of the
previous year of such specific legatee.
Explanation.—In this section,
“executor” includes an administrator or other person administering the estate
of a deceased person.
Right of executor to recover tax paid.
169. The
provisions of section 162 shall, so far as may be, apply in the case of an
executor in respect of tax paid or payable by him as they apply in the case of
a representative assessee.
F.—Succession to business or profession
Succession to business otherwise than on
death.
170. (1)
Where a person carrying on any business or profession (such person hereinafter
in this section being referred to as the predecessor) has been succeeded
therein by any other person (hereinafter in this section referred to as the
successor) who continues to carry on that business or profession,—
(a) the predecessor shall be assessed in
respect of the income of the previous year in which the succession took place
up to the date of succession;
(b) the successor shall be assessed in
respect of the income of the previous year after the date of succession.
(2)
Notwithstanding anything contained in sub-section (1), when the predecessor
cannot be found, the assessment of the income of the previous year in which the
succession took place up to the date of succession and of the previous year
preceding that year shall be made on the successor in like manner and to the
same extent as it would have been made on the predecessor, and all the
provisions of this Act shall, so far as may be, apply accordingly.
(3) When any
sum payable under this section in respect of the income of such business or
profession for the previous year in which the succession took place up to the
date of succession or for the previous year preceding that year, assessed on
the predecessor, cannot be recovered from him, the [Assessing] Officer shall
record a finding to that effect and the sum payable by the predecessor shall
thereafter be payable by and recoverable from the successor, and the successor
shall be entitled to recover from the predecessor any sum so paid.
(4) Where
any business or profession carried on by a Hindu undivided family is succeeded
to, and simultaneously with the succession or after the succession there has
been a partition of the joint family property between the members or groups of
members, the tax due in respect of the income of the business or profession
succeeded to, up to the date of succession, shall be assessed and recovered in
the manner provided in section 171,
but without prejudice to the provisions of this section.
Explanation.—For the purposes of
this section, “income” includes any gain accruing from the transfer, in any
manner whatsoever, of the business or profession as a result of the succession.
G.—Partition
Assessment after partition of a Hindu
undivided family.
171. (1)
A Hindu family hitherto assessed as undivided shall be deemed for the purposes
of this Act to continue to be a Hindu undivided family, except where and in so
far as a finding of partition has been given under this section in respect of
the Hindu undivided family.
(2) Where,
at the time of making an assessment under section 143 or section 144, it is claimed by or on behalf of any member of a Hindu family assessed
as undivided that a partition, whether total or partial, has taken place among
the members of such family, the [Assessing] Officer shall make an inquiry thereinto after giving notice of the inquiry to all the
members of the family.
(3) On the
completion of the inquiry, the [Assessing] Officer shall record a finding as to
whether there has been a total or partial partition of the joint family
property, and, if there has been such a partition, the date on which it has
taken place.
(4) Where a
finding of total or partial partition has been recorded by the [Assessing]
Officer under this section, and the partition took place during the previous
year,—
(a) the total income of the joint family in respect of the period
up to the date of partition shall be assessed as if no partition had taken
place; and
(b) each member or group of members shall,
in addition to any tax for which he or it may be separately liable and
notwithstanding anything contained in clause (2) of section 10, be jointly
and severally liable for the tax on the income so assessed.
(5) Where a
finding of total or partial partition has been recorded by the [Assessing]
Officer under this section, and the partition took place after the expiry of
the previous year, the total income of the previous year of the joint family
shall be assessed as if no partition had taken place; and the provisions of
clause (b) of sub-section (4) shall, so far as may be, apply to the
case.
(6)
Notwithstanding anything contained in this section, if the [Assessing] Officer
finds after completion of the assessment of a Hindu undivided family that the
family has already effected a partition, whether total or partial, the [Assessing]
Officer shall proceed to recover the tax from every person who was a member of
the family before the partition, and every such person shall be jointly and
severally liable for the tax on the income so assessed.
(7) For the
purposes of this section, the several liability of any member or group of
members thereunder shall be computed according to the
portion of the joint family property allotted to him or it at the partition,
whether total or partial.
(8) The
provisions of this section shall, so far as may be, apply in relation to the
levy and collection of any penalty, interest, fine or other sum in respect of
any period up to date of the partition, whether total or partial, of a Hindu
undivided family as they apply in relation to the levy and collection of tax in
respect of any such period.
(9)
Notwithstanding anything contained in the foregoing provisions of this section,
where a partial partition has taken place after the 31st day of December, 1978,
among the members of a Hindu undivided family hitherto assessed as undivided,—
(a) no claim that such partial partition has taken place shall be
inquired into under sub-section (2) and no finding shall be recorded under
sub-section (3) that such partial partition had taken place and any finding
recorded under sub-section (3) to that effect whether before or after the 18th
day of June, 1980, being the date of introduction of the Finance (No. 2) Bill,
1980, shall be null and void;
(b) such family shall continue to be
liable to be assessed under this Act as if no such partial partition had taken
place;
(c) each member or group of members of such family immediately
before such partial partition and the family shall be jointly and severally
liable for any tax, penalty, interest, fine or other sum payable under this Act
by the family in respect of any period, whether before or after such partial
partition;
(d) the several liability of any member
or group of members aforesaid shall be computed according to the portion of the
joint family property allotted to him or it at such partial partition,
and the provisions
of this Act shall apply accordingly.]
Explanation.—In this section,—
(a) “partition” means—
(i) where the property admits of a physical
division, a physical division of the property, but a physical division of the
income without a physical division of the property producing the income shall
not be deemed to be a partition; or
(ii) where the property does not admit of a
physical division, then such division as the property admits of, but a mere
severance of status shall not be deemed to be a partition;
(b) “partial partition” means a
partition which is partial as regards the persons constituting the Hindu
undivided family, or the properties belonging to the Hindu undivided family, or
both.
H.—Profits of non-residents from occasional shipping
business
Shipping business of non-residents.
172. (1) The provisions of this section shall,
notwithstanding anything contained in the other provisions of this Act, apply
for the purpose of the levy and recovery of tax in the case of any ship,
belonging to or chartered by a non-resident, which carries passengers,
livestock, mail or goods shipped at a port in India [***].
(2) Where
such a ship carries passengers, livestock, mail or goods shipped at a port in
India, [seven and a half] per cent of the amount paid or payable on account of
such carriage to the owner or the charterer or to any
person on his behalf, whether that amount is paid or payable in or out of
India, shall be deemed to be income accruing in India to the owner or charterer on account of such carriage.
(3) Before
the departure from any port in India of any such ship, the master of the ship
shall prepare and furnish to the [Assessing] Officer a return of the full
amount paid or payable to the owner or charterer or
any person on his behalf, on account of the carriage of all passengers,
livestock, mail or goods shipped at that port since the last arrival of the
ship thereat:
Provided that where the [Assessing] Officer is
satisfied that it is not possible for the master of the ship to furnish the
return required by this sub-section before the departure of the ship from the
port and provided the master of the ship has made satisfactory arrangements for
the filing of the return and payment of the tax by any other person on his
behalf, the [Assessing] Officer may, if the return is filed within thirty days
of the departure of the ship, deem the filing of the return by the person so authorised by the master as sufficient compliance with this
sub-section.
(4) On
receipt of the return, the [Assessing] Officer shall assess the income referred
to in sub-section (2) and determine the sum payable as tax thereon at the rate
or rates [in force] applicable to the total income of a company which has not
made the arrangements referred to in section 194 and such sum shall be payable
by the master of the ship.
(5) For the
purpose of determining the tax payable under sub-section (4), the [Assessing]
Officer may call for such accounts or documents as he may require.
(6) A port
clearance shall not be granted to the ship until the Collector of Customs, or
other officer duly authorised to grant the same, is
satisfied that the tax assessable under this section has been duly paid or that
satisfactory arrangements have been made for the payment thereof.
(7) Nothing
in this section shall be deemed to prevent the owner or charterer
of a ship from claiming before the expiry of the assessment year relevant to
the previous year in which the date of departure of the ship from the Indian
port falls, that an assessment be made of his total income of the previous year
and the tax payable on the basis thereof be determined in accordance with the
other provisions of this Act, and if he so claims, any payment made under this
section in respect of the passengers, livestock, mail or goods shipped at
Indian ports during that previous year shall be treated as a payment in advance
of the tax leviable for that assessment year, and the
difference between the sum so paid and the amount of tax found payable by him
on such assessment shall be paid by him or refunded to him, as the case may be.
[(8) For the
purposes of this section, the amount referred to in sub-section (2) shall
include the amount paid or payable by way of demurrage charge or handling
charge or any other amount of similar nature.]
I.—Recovery of tax in respect of non-residents
Recovery of tax in respect of non-resident from his assets.
173. Without
prejudice to the provisions of sub-section (1) of section 161 or of section 167,
where the person entitled to the income referred to in clause (i) of sub-section (1) of section 9 is a
non-resident, the tax chargeable thereon, whether in his name or in the name of
his agent who is liable as a representative assessee,
may be recovered by deduction under any of the provisions of Chapter XVII-B and
any arrears of tax may be recovered also in accordance with the provisions of
this Act from any assets of the non-resident which are, or may at any time
come, within India.
J.—Persons leaving India
Assessment of persons leaving India.
174. (1)
Notwithstanding anything contained in section 4, when it appears to the [Assessing]
Officer that any individual may leave India during the current assessment year
or shortly after its expiry and that he has no present intention of returning
to India, the total income of such individual for the period from the expiry of
the previous year for that assessment year up to the probable date of his
departure from India shall be chargeable to tax in that assessment year.
(2) The
total income of each completed previous year or part of any previous year
included in such period shall be chargeable to tax at the rate or rates in
force in that assessment year, and separate assessments shall be made in
respect of each such completed previous year or part of any previous year.
(3) The [Assessing]
Officer may estimate the income of such individual for such period or any part
thereof, where it cannot be readily determined in the manner provided in this
Act.
(4) For the
purpose of making an assessment under sub-section (1), the [Assessing] Officer
may serve a notice upon such individual requiring him to furnish within such
time, not being less than seven days, as may be specified in the notice, a
return in the same form and verified in the same manner [as a return under
clause (i) of sub-section (1) of section 142],
setting forth his total income for each completed previous year comprised in
the period referred to in sub-section (1) and his estimated total income for
any part of the previous year comprised in that period; and the provisions of
this Act shall, so far as may be, and subject to the provisions of this
section, apply as if the notice were a [notice issued under clause (i) of sub-section (1) of section 142].
(5) The tax
chargeable under this section shall be in addition to the tax, if any,
chargeable under any other provision of this Act.
(6) Where the
provisions of sub-section (1) are applicable, any notice issued by the [Assessing]
Officer under [clause (i) of sub-section (1)
of section 142 or] section 148 in respect of any tax chargeable under any other
provision of this Act may, notwithstanding anything contained in [clause (i) of sub-section (1) of section 142 or] section 148,
as the case may be, require the furnishing of the return by such individual
within such period, not being less than seven days, as the [Assessing] Officer
may think proper.
[JA.—Association of persons
or body of individuals or artificial juridical person formed for a
particular event or purpose
174A. Notwithstanding anything contained in section 4, where it appears to the
Assessing Officer that any association of persons or a body of individuals or
an artificial juridical person, formed or established or incorporated for a
particular event or purpose is likely to be dissolved in the assessment year in
which such association of persons or a body of individuals or an artificial
juridical person was formed or established or incorporated or immediately after
such assessment year, the total income of such association or body or juridical
person for the period from the expiry of the previous year for that assessment
year up to the date of its dissolution shall be chargeable to tax in that
assessment year, and the provisions of sub-sections (2) to (6) of section 174 shall,
so far as may be, apply to any proceedings in the case of any such person as
they apply in the case of persons leaving India.]
K.—Persons trying to alienate their assets
Assessment of persons likely to transfer property to avoid tax.
175. Notwithstanding
anything contained in section 4, if it appears to the [Assessing] Officer
during any current assessment year that any person is likely to charge, sell,
transfer, dispose of or otherwise part with any of his assets with a view to
avoiding payment of any liability under the provisions of this Act, the total
income of such person for the period from the expiry of the previous year for
that assessment year to the date when the [Assessing] Officer commences proceedings
under this section shall be chargeable to tax in that assessment year, and the
provisions of sub-sections (2), (3), (4), (5) and (6) of section 174 shall, so
far as may be, apply to any proceedings in the case of any such person as they
apply in the case of persons leaving India.
L.—Discontinuance of business, or
dissolution
176. (1) Notwithstanding anything contained in section
4, where any business or profession is
discontinued in any assessment year, the income of the period from the expiry
of the previous year for that assessment year up to the date of such
discontinuance may, at the discretion of the [Assessing] Officer, be charged to
tax in that assessment year.
(2) The
total income of each completed previous year or part of any previous year included
in such period shall be chargeable to tax at the rate or rates in force in that
assessment year, and separate assessments shall be made in respect of each such
completed previous year or part of any previous year.
(3) Any
person discontinuing any business or profession shall give to the [Assessing]
Officer notice of such discontinuance within fifteen days thereof.
[(3A) Where
any business is discontinued in any year, any sum received after the
discontinuance shall be deemed to be the income of the recipient and charged to
tax accordingly in the year of receipt, if such sum would have been included in
the total income of the person who carried on the business had such sum been
received before such discontinuance.]
(4) Where
any profession is discontinued in any year on account of the cessation of the
profession by, or the retirement or death of, the person carrying on the
profession, any sum received after the discontinuance shall be deemed to be the
income of the recipient and charged to tax accordingly in the year of receipt,
if such sum would have been included in the total income of the aforesaid
person had it been received before such discontinuance.
(5) Where an
assessment is to be made under the provisions of this section, the [Assessing]
Officer may serve on the person whose income is to be assessed or, in the case
of a firm, on any person who was a partner of such firm at the time of its
discontinuance or, in the case of a company, on the principal officer thereof,
a notice containing all or any of the requirements which may be included in a
notice under [clause (i) of sub-section (1) of
section 142] and the provisions
of this Act shall, so far as may be, apply accordingly as if the notice were a
notice issued under [clause (i) of sub-section (1) of section 142].
(6) The tax
chargeable under this section shall be in addition to the tax, if any,
chargeable under any other provision of this Act.
(7) Where
the provisions of sub-section (1) are applicable, any notice issued by the [Assessing]
Officer under [clause (i) of sub-section (1)
of section 142 or] section
148 in respect of any tax chargeable
under any other provisions of this Act may, notwithstanding anything contained
in [clause (i) of sub-section (1) of section
142 or] section 148, as the case may be, require the furnishing
of the return by the person to whom the aforesaid notices are issued within
such period, not being less than seven days, as the [Assessing] Officer may
think proper.
Association dissolved or business discontinued.
177. (1)
Where any business or profession carried on by an association of persons has
been discontinued or where an association of persons is dissolved, the [Assessing]
Officer shall make an assessment of the total income of the association of
persons as if no such discontinuance or dissolution had taken place, and all
the provisions of this Act, including the provisions relating to the levy of a
penalty or any other sum chargeable under any provision of this Act shall
apply, so far as may be, to such assessment.
(2) Without
prejudice to the generality of the foregoing sub-section, if the [Assessing]
Officer or the [* * *] [Commissioner (Appeals)] in the course of any
proceeding under this Act in respect of any such association of persons as is
referred to in that sub-section is satisfied that the association of persons
was guilty of any of the acts specified in Chapter XXI, he may impose or direct
the imposition of a penalty in accordance with the provisions of that Chapter.
(3) Every
person who was at the time of such discontinuance or dissolution a member of
the association of persons, and the legal representative of any such person who
is deceased, shall be jointly and severally liable for the amount of tax,
penalty or other sum payable, and all the provisions of this Act, so far as may
be, shall apply to any such assessment or imposition of penalty or other sum.
(4) Where such
discontinuance or dissolution takes place after any proceedings in respect of
an assessment year have commenced, the proceedings may be continued against the
persons referred to in sub-section (3) from the stage at which the proceedings
stood at the time of such discontinuance or dissolution, and all the provisions
of this Act shall, so far as may be, apply accordingly.
(5) Nothing
in this section shall affect the provisions of sub-section (6) of section 159.
178. (1) Every person—
(a) who is the liquidator of any company
which is being wound up, whether under the orders of a court or otherwise ; or
(b) who has been appointed the receiver
of any assets of a company,
(hereinafter
referred to as the liquidator) shall, within thirty days after he has become
such liquidator, give notice of his appointment as such to the [Assessing] Officer who is entitled to assess
the income of the company.
(2) The [Assessing]
Officer shall, after making such inquiries or calling for such information as
he may deem fit, notify to the liquidator within three months from the date on
which he receives notice of the appointment of the liquidator the amount which,
in the opinion of the [Assessing] Officer, would be sufficient to provide for
any tax which is then, or is likely thereafter to become, payable by the
company.
[(3) The
liquidator—
(a) shall not, without the leave of the [Chief
Commissioner or Commissioner], part with any of the assets of the company or
the properties in his hands until he has been notified by the [Assessing]
Officer under sub-section (2) ; and
(b) on being so notified, shall set
aside an amount, equal to the amount notified and, until he so sets aside such
amount, shall not part with any of the assets of the company or the properties
in his hands :
Provided that nothing contained in this sub-section
shall debar the liquidator from parting with such assets or properties for the
purpose of the payment of the tax payable by the company or for making any payment
to secured creditors whose debts are entitled under law to priority of payment
over debts due to Government on the date of liquidation or for meeting such
costs and expenses of the winding up of the company as are in the opinion of
the [Chief Commissioner or Commissioner] reasonable.
(4) If the
liquidator fails to give the notice in accordance with sub-section (1) or fails
to set aside the amount as required by sub-section (3) or parts with any of the
assets of the company or the properties in his hands in contravention of the
provisions of that sub-section, he shall be personally liable for the payment
of the tax which the company would be liable to pay :
Provided that if the amount of any tax payable by the
company is notified under sub-section (2), the personal liability of the
liquidator under this sub-section shall be to the extent of such amount.]
(5) Where there
are more liquidators than one, the obligations and liabilities attached to the
liquidator under this section shall attach to all the liquidators jointly and
severally.
(6) The
provisions of this section shall have effect notwithstanding anything to the
contrary contained in any other law for the time being in force.
[M.—Private companies]
Liability of directors of private company in liquidation.
179. [(1)] Notwithstanding anything contained in
the Companies Act, 1956 (1 of 1956), [where any tax due from a private company
in respect of any income of any previous year or from any other company in
respect of any income of any previous year during which such other company was
a private company] cannot be recovered, then, every person who was a director
of the private company at any time during the relevant previous year shall be
jointly and severally liable for the payment of such tax unless he proves that
the non-recovery cannot be attributed to any gross neglect, misfeasance or
breach of duty on his part in relation to the affairs of the company.
[(2) Where a
private company is converted into a public company and the tax assessed in
respect of any income of any previous year during which such company was a
private company cannot be recovered, then, nothing contained in sub-section (1)
shall apply to any person who was a director of such private company in
relation to any tax due in respect of any income of such private company
assessable for any assessment year commencing before the 1st day of April,
1962.]
N.—Special provisions for certain kinds of income
Royalties or copyright fees for literary or artistic work.
180. Where
the time taken by the author of a literary or artistic work in the making
thereof is more than twelve months, the amount received or receivable by him
during any previous year on account of any lump sum consideration for the
assignment or grant of any of his interests in the copyright of that work or of
royalties or copyright fees (whether receivable in lump sum or otherwise), in
respect of that work, shall, if he so claims, be allocated for purposes of
assessment in such manner and to such period as may be prescribed :
[Provided that nothing contained in
this section shall apply in relation to the previous year relevant to the
assessment year commencing on or after the 1st day of April, 2000.]
Explanation.—For the purposes of this section, the
expression “author” includes a joint author, and the expression “lump sum”, in
regard to royalties or copyright fees, includes an advance payment on account
of such royalties or copyright fees which is not returnable.
180A. Where
the time taken by an individual, who is resident in India, for developing any know-how
is more than twelve months, he may elect that the gross amount of any lump sum
consideration received or receivable by him during the previous year [relevant
to the assessment year commencing on the 1st day of April, 2000 or earlier
assessment years] for allowing use of such know-how shall be treated for the
purposes of charging income-tax for that year and for each of the two
immediately preceding previous years as if one-third thereof were included in
his income chargeable to tax for each of those years respectively and if he so
elects, notwithstanding anything contained in any other provision of this Act,—
(a) such gross amount shall be so
treated, and
(b) the assessments for each of the two preceding previous years
shall, if made, be accordingly rectified under section 154, the period of four
years specified in sub-section (7) of that section being reckoned from the end
of the financial year in which the assessment relating to the previous year in
which the amount was received or receivable by such individual is made.
Explanation.—For the purposes of
this section, the expression “know-how” has the meaning assigned to it in section
35AB.]
[***]