13. Return of gifts. — 1
[(1) Every person who during a previous year has made any taxable gifts, or
is assessable in respect of the taxable gifts made by any other person under this Act, which, in either case,
exceeded the maximum amount not chargeable to gift-tax, shall, on or before 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 in any other provision of this Act, a return which shows the
amount of taxable 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.]
2
* * * * *
3
[14. Return after due date and amendment of return. — 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 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 :
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 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 on the 1st day
of April, 1988, it may be furnished at any time up to and inclusive of the 31st day of March, 1991, or
before the completion of the assessment, whichever is earlier.]
4
[14A. Return by whom to be signed. — The return made under section 13 or section 14 shall be
signed and verified—
5
[(a) in the case of an individual,—
(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 attending to his affairs, by his guardian or any
other person competent 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 :
1. Subs. by Act 4 of 1988, s. 166, for sub-sections (1) and (2) (w.e.f. 1-4-1989).
2. Sub-section (3) omitted by s. 166, ibid. (w.e.f. 1-4-1989).
3. Subs. by s. 167, ibid., for section 14 (w.e.f. 1-4-1989).
4. Ins. by Act 53 of 1962, s. 11 (w.e.f. 1-4-1963).
5. Subs. by Act 4 of 1988, s. 168, for clause (a) (w.e.f. 1-4-1989).
17
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 ;]
(b) in the case of a Hindu undivided family, by the karta, and, where the karta is absent from
India or is mentally incapacitated from attending to his affairs, by any other adult member of such
family ;
1
[(c) in the case of a company, by the managing director thereof or where for any unavoidable
reason such managing director is not able to sign and verify the return, or where there is no managing
director, by any director thereof :
2
[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 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 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 ;
(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 ;]
(d) in the case of a firm, by the managing partner thereof or where for any unavoidable
reason such managing partner is not able to sign and verify the return, or where there is no
managing partner as such, by any partner thereof, not being a minor ;]
(e) in the case of any other association, by any member of the association or the principal
officer thereof ; and
(f) in the case of any other person, by that person, or by some person competent to act on his
behalf.]
3
[14B. Self-assessment. — (1) Where any tax is payable on the basis of any return 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 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 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-section falls short of the
aggregate of the tax and interest as aforesaid, the amount so paid shall first be adjusted towards the
interest payable 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 been paid towards such regular assessment.
(3) If any assessee fails 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
1. Subs. by Act 41 of 1975, s. 111, for clauses (c) and (d) (w.e.f. 1-4-1976).
2. The provisos added by Act 4 of 1988, s. 168 (w.e.f. 1-4-1989).
3. Ins. by s. 169, ibid. (w.e.f. 1-4-1989).
18
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.]
1
[(4) The provisions of this section shall apply in respect of assessment for the assessment year
commencing on the 1st day of April, 1989 and subsequent assessment years.]
2
[15. Assessment. — (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),—
(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 be a notice issued under section 31 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
following adjustments shall be made in the taxable gifts declared in the return, namely :—
(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 available in such
return, accounts or documents 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 inadmissible, shall be
disallowed:
3
[Provided further that where adjustments are made under the first proviso, an intimation shall be sent
to the assessee, notwithstanding that no tax or interest is found due from him after making the said
adjustments:]
4
[ 5
[Provided also] that an intimation for any tax or interest due under this clause shall not be sent
after the expiry of two years from the end of the assessment year in which the gifts were first assessable.]
(b) Where as a result of an order made under 3
[sub-section (3) or sub-section (5) of this section or]
section 16 or section 22 or section 23 or section 24 or section 26 or section 28 or section 34 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,—
(i) if any tax or interest 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 31 and all 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 end of the financial year in which any such order was passed.
1. Ins. by Act 36 of 1989, s. 31 (w.e.f. 1-4-1989).
2. Subs. by Act 4 of 1988, s. 170, for section 15 (w.e.f. 1-4-1989).
3. Ins. by Act 36 of 1989, s. 32 (w.e.f. 1-4-1989).
4. Ins. by Act 3 of 1989, s. 83 (w.e.f. 1-4-1989).
5. Subs. by Act 36 of 1989, s. 32, for “provided further” (w.e.f. 1-4-1989).
19
1
[(1A) (a) Where in the case of any person, the taxable gift, as a result of the adjustments made under
2
[the first proviso] to clause (a) of sub-section (1), exceeds the taxable gift declared in the return by any
amount, the Assessing Officer shall,—
(i) further increase the amount of tax payable under sub-section (1) by an additional gift-tax
calculated at the rate of twenty per cent. of the tax payable on such excess amount and specify the
additional gift-tax in the intimation to be sent under sub-clause (i) of clause (a) of sub-section (1);
(ii) where any refund is due under sub-section (1), reduce the amount of such refund by an
amount equivalent to the additional gift-tax calculated under sub-clause (i).
(b) 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 on which additional gift-tax is payable under clause (a) has been
increased or reduced, as the case may be, the additional gift-tax shall be increased or reduced accordingly,
and,—
(i) in a case where the additional gift-tax is increased, the Assessing Officer shall serve on the
assessee a notice of demand under section 31;
(ii) in a case where the additional gift-tax is reduced, the excess amount paid, if any, shall be
refunded.
Explanation.—For the purposes of this sub-section, “tax payable on such excess amount” means the
difference between the tax on the taxable gift and the tax that would have been chargeable had such
taxable gift been reduced by the amount of adjustments.]
3
[(1B) Where an assessee furnishes a revised return under section 14 after the issue of an intimation,
or the grant of refund, if any, under sub-section (1) of this section, the provisions of sub-sections (1) and
(1A) of this section shall apply in relation to such revised return and—
(i) the intimation already sent for any gift-tax, additional gift-tax or interest shall be amended on
the basis of the said revised return and where any amount payable by way of gift-tax, additional
gift-tax or interest specified in the said intimation has already been paid by the assessee then, if any
such amendment has the effect of—
(a) enhancing the amount already paid, the intimation amended under this clause shall be
sent to the assessee specifying the excess amount payable by him and such intimation shall be
deemed to be a notice of demand issued under section 31 and all the provisions of this Act, shall
apply accordingly;
(b) reducing, the amount already paid, the excess amount paid shall be refunded to the
assessee;
(ii) the amount of the refund already granted shall be enhanced or reduced on the basis of the
said revised return and where the amount of refund already granted is—
(a) enhanced, only the excess amount of refund due to the assessee shall be paid to him;
(b) reduced, the excess amount so refunded shall be deemed to be the tax payable by the
assessee and an intimation shall be sent to the assessee specifying the amount so payable, and
such intimation shall be deemed to be a notice of demand issued under section 31 and all the
provisions of this Act, shall apply accordingly:
Provided that an assessee, who has furnished a revised return under section 14 after the service
upon him of the intimation under sub-section (1) of this section, shall be liable to pay additional
1. Ins. by Act 3 of 1989, s. 83 (w.e.f. 1-4-1989).
2. Subs. by Act 36 of 1989, s. 32, for “the proviso” (w.e.f. 1-4-1989).
3. Ins. by Act 12 of 1990, s. 60 (w.e.f. 1-4-1989).
20
gift-tax in relation to the adjustments made under the first proviso to clause (a) of sub-section (1) and
specified in the said intimation, whether or not he has made the said adjustments in the revised
return.]
(2)
1
[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) of this section, the Assessing Officer shall, if he] considers it necessary or
expedient to ensure that the assessee has not omitted to disclose any taxable gift or has not understated the
amount or value of any such gift or has not under-paid the tax in any manner, 2
[serve on the assessee] a
notice requiring him, on a date to be specified therein, either to attend at the office of the Assessing
Officer or to produce, or cause to be produced there, any evidence on which the assessee may rely in
support of the return :
3
[Provided that no notice under this sub-section shall be served on the assessee after the expiry of
twelve months from the end of the month in which the return is furnished.]
(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 shall, by order in writing, assess the value of taxable gifts made by the assessee and
determine the sum payable by him on the basis of such assessment.
(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 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 4
[within the time allowed under sub-section (1) of
section 13], to furnish a return of the taxable gifts made by him or of the taxable gifts made by any
other 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
(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 section 14, or
(b) fails to comply with all the terms of a notice issued 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 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 :
Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling
upon the person to show cause 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 such opportunity in a case where a notice under
sub-section (4) has been issued prior to the making of the assessment under this sub-section.
1. Subs. by Act 36 of 1989, s. 32, for “In a case referred to in sub-section (1), if the Assessing Officer” (w.e.f. 1-4-1989).
2. Subs. by s. 32, ibid., for “he shall serve on the assessee” (w.e.f. 1-4-1989).
3. Subs. by Act 49 of 1991, s. 86, for the proviso (w.e.f. 1-10-1991).
4. Subs. by Act 12 of 1990, s. 60, for “before the end of the relevant assessment year” (w.e.f. 1-4-1990).
21
(6) Notwithstanding anything contained in section 6, for the purpose of making an assessment under
this Act, 1
[where under the provisions of section 6 read with Schedule II, the fair market value of any
property transferred by way of gifts is to be taken into account in such assessment,] the Assessing Officer
may refer the valuation of such property to the Valuation Officer,—
(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 Officer is of opinion that the value so returned 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 more than such amount
as may be prescribed in this behalf; or
(ii) that having regard 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 (2), (3), (4), (5) and (6) of
section 16A, clauses (ha) and (i) of sub-section (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
(27 of 1957), shall, with the necessary modifications, apply in relation to such reference as they apply in
relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act.
Explanation.—In this sub-section, “Valuation Officer” has the same meaning as in clause (r) of
section 2 of the Wealth-tax Act, 1957 (27 of 1957).]
2
[(7) Where a regular assessment under sub-section (3) or sub-section (5) is made,—
(a) any tax or interest paid by the assessee under sub-section (1) shall be deemed to have been
paid towards such regular assessments;
(b) if no refund is due on regular assessment or the amount refunded under sub-section (1)
exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded
shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply
accordingly.
(8) The provisions of this section, except those of sub-section (6), as they stood immediately before
their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), 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 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.]
3
[Explanation.—An intimation sent to the assessee under sub-section (1) or sub-section (1B) shall be
deemed to be an order for the purposes of sub-section (1) of section 24.]
16. Gift escaping assessment. — 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).
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).
23
(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).
24
(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).
25
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).
26
(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).
27
(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.]