Income Tax Act

Official PDF pages 396–400

SOURCE PDF PAGE 396
( b )   the period commencing from the date on which a first of the reference
for exchange of information (made by an authority competent under an
agreement referred to in section 159) is made and ending with the date
on which such information requested is last received by the jurisdictional
Principal Commissioner or Commissioner or one year, whichever is less;
or
( c )   the time taken in reopening the whole or any part of the proceeding
or giving an opportunity to the assessee to be re-heard under section
244(2); or
( d )   the period commencing from the date on which the Assessing Officer
directs the assessee to get his accounts audited or inventory valued under
section 268(5), and—
( i )   ending with the last date on which the assessee is required to furnish
a report of such audit or inventory valuation under that sub-section;
or
( ii )   where such direction is challenged before a court, ending with the
date on which the certified copy of the order setting aside such
direction is received by the jurisdictional Principal Commissioner
or Commissioner; or
( e )   the period commencing from the date on which the Assessing Officer
makes a reference to the Valuation Officer under section 269(1) and
ending with the date on which the report of the Valuation Officer is
received by the Assessing Officer; or
( f )   the period commencing from the date on which the Assessing Officer
intimates the Central Government or the prescribed authority, the con -
travention of the provisions of Schedule III (Table: Sl. No. 23, 24 or 25)
as referred to in section 270(11)( i ) and ending with the date on which
the copy of the order withdrawing the approval or rescinding the noti -
fication, under those clauses is received by the Assessing Officer; or
( g )   the period commencing from the date on which the Assessing Officer
makes a reference to the Principal Commissioner or Commissioner as
per section 270(13) and ending with the date on which the copy of the
order under section 351(2)( ii )( A ) or ( B ), is received by the Assessing
Officer; or
( h )   the period commencing from the date on which a reference for declara -
tion of an arrangement to be an impermissible avoidance arrangement is
received by the jurisdictional Principal Commissioner or Commissioner
under section 274(1) and ending on the date on which a direction under
sub-section (3) or (6) or an order under sub-section (5) of the said section
is received by the Assessing Officer; or
( i )   the period commencing from the date on which an application is made
before the Board for Advance Rulings under section 383(1) and ending
with the date on which the order rejecting the application is received

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by the jurisdictional Principal Commissioner or Commissioner under
section 384(5); or
( j )   the period commencing from the date on which an application is made
before the Board for Advance Rulings under section 383(1) and ending
with the date on which the advance ruling pronounced by it is received
by the jurisdictional Principal Commissioner or Commissioner under
section 384(8).
(8) Where immediately after the exclusion of the period referred to in sub-section
(3) or (7), the remaining period of limitation referred to in sub-section (1) or (5)
available to the Assessing Officer for completion of assessment under section 294 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.
(9) Where after extension of the period referred to in sub-section (8), the period of
limitation for making an order of assessment or reassessment, expires before the
end of a month, such period shall be extended to the end of such month.
Certain interests and penalties not to be levied or imposed.
297.   Interest under section 423, 424 or 425 or penalty under section 439 shall
not be levied or imposed upon the assessee for the undisclosed income
assessed or reassessed for the block period.
Levy of interest and penalty in certain cases.   [ S. 158BFA of the 1961 Act ]
298.   (1) Where the return of undisclosed income as required under a notice under
section 294(1)( a ), is not furnished within the period specified in such notice,
or is not furnished, then,—
( a )   the assessee shall be liable to pay simple interest at the rate of 1.5%
of the tax on undisclosed income determined under clause ( c ) of said
sub-section;
( b )   the interest in clause ( a ) shall be paid for every month or part of a month
comprised in the period commencing on the day immediately following
the expiry of the time specified in said notice, and ending on the date of
completion of assessment under clause ( c ) of said sub-section.
(2) The Assessing Officer or the Commissioner (Appeals) in the course of any pro -
ceedings under this Part, may direct that the person shall pay by way of penalty
a sum which shall be equal to 50% of tax so leviable in respect of the undisclosed
income determined by the Assessing Officer under section 294(1)( c ).
(3) The order imposing penalty under this section or section 444(1) or 450 or 451
or 453 shall not be made for the block period in respect of a person, if—
( a )   such person has furnished a return under section 294(1)( a );
( b )   the tax payable on the basis of such return has been paid or, if the assets
seized consist of money, the assessee offers the money so seized to be
adjusted against the tax payable;
( c )   evidence of tax paid is furnished along with the return; and
( d )   an appeal is not filed against the assessment of that part of income which
is shown in the return.

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(4) The provisions of sub-section (3) shall not apply where the undisclosed
income determined by the Assessing Officer is in excess of the income shown
in the return and in such cases the penalty shall be imposed on that portion of
undisclosed income determined, which is in excess of income shown in the return.
(5) The order imposing a penalty under sub-section (2) shall not be made—
( a )   unless an assessee has been given a reasonable opportunity of being
heard;
( b )   by the Deputy Commissioner or Assistant Commissioner or the Deputy
Director or Assistant Director, where penalty exceeds   `   200000 except with
the previous approval of the Additional Commissioner or the Additional
Director or the Joint Commissioner or the Joint Director;
( c )   in a case where the assessment is the subject-matter of an appeal under
section 357 or 362,—
( i )   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
( ii )   six months from the end of the financial year in which the order of
the Commissioner (Appeals) or the Appellate Tribunal is received
by the jurisdictional Principal Commissioner or Commissioner,
whichever period expires later;
( d )   in a case where the assessment is the subject-matter of revision under
section 377, after the expiry of six months from the end of the financial
year in which such order of revision is passed;
( e )   in any case other than those mentioned in clauses ( c ) and ( d ), after the
expiry of the financial year in which the proceedings, in the course of
which notice for the imposition of penalty has been issued, are completed,
or six months from the end of the financial year in which notice for
imposition of penalty is issued, whichever period expires later.
(6) In computing the period of limitation under this section, the following period
shall be excluded—
( a )   the time taken in giving an opportunity to the assessee to be re-heard
under section 244(2); or
( b )   the period commencing on the date on which stay on proceeding under
sub-section (2) was granted by an order or injunction of any court and
ending on the date on which certified copy of the order vacating the stay
was received by jurisdictional Principal Commissioner or Commissioner.
(7) Where immediately after the exclusion of the period referred to in sub-section
(6), the remaining period of limitation referred to in sub-section (5) available to
the Assessing Officer for making an order under sub-section (2) of this section 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.
(8) If after exclusion of the period referred to in sub-section (7), the remaining period
of limitation for making of an order for imposition of penalty expires before the
end of a month, such remaining period shall be extended to the end of such month.

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(9) An income-tax authority on making an order under sub-section (2) imposing
a penalty, unless he is himself an Assessing Officer, shall forthwith send a copy of
such order to the Assessing Officer.
Authority competent to make assessment of block period.
299.   (1) The order of assessment for the block period shall be passed by an
Assessing Officer not below the rank of a Deputy Commissioner or an Assistant
Commissioner or a Deputy Director or an Assistant Director.
(2) The order referred to in sub-section (1) shall be passed with the previous
approval of the Additional Commissioner or the Additional Director or the Joint
Commissioner or the Joint Director, in respect of search initiated or requisition
made on or after the commencement of this Act.
Application of other provisions of Act.
300.   Save as otherwise provided in this part, all other provisions of this Act shall
apply to assessment made under this part.
Interpretation.
301.   For the purposes of this Part—
( a )   “block period” means the aggregate of—
( i )   the period comprising six tax years preceding the tax year in which
the search was initiated or any requisition was made; and
( ii )   the period starting from the 1st April of the tax year in which search
was initiated or requisition was made and ending on the date of the
execution of the last of the authorisations for such search or such
requisition;
( b )   “requisition” means requisition of books of account, other documents
or any assets under section 248;
( c )   “search” means a search initiated under section 247;
( d )   “the last of the authorisations” shall be deemed to have been executed,—
( i )   in the case of search, on the conclusion of search as recorded in the
last   panchnama   drawn in relation to any person in whose case the
warrant of authorisation has been issued, irrespective of whether
or not any seizure is recorded in such   panchnama ;
( ii )   in the case of requisition, on the actual receipt of the books of
account or other documents or assets by the Authorised Officer;
( e )   “undisclosed income” includes any money, bullion, jewellery, virtual
digital asset or other valuable article or thing or any expenditure or any
income based on any entry in the books of account or other documents
or transactions, where such money, bullion, jewellery, virtual digital asset,
valuable article, thing, entry in the books of account or other document
or transaction represents wholly or partly income or property which has
not been or would not have been disclosed for the purposes of this Act,
or any expense, exemption, deduction or allowance claimed under this
Act which is found to be incorrect, in respect of the block period.

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CHAPTER XVII
SPECIAL PROVISIONS RELATING TO CERTAIN PERSONS
A.—Association of persons, firm, Hindu undivided family, etc.
1.—Legal representatives
Legal representative.
302.   (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 purposes of making an assessment (including an assessment, reassess -
ment or recomputation under section 279) of the income of the deceased and for
the purpose of levying any sum in the hands of the legal representative as per 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 be deemed to be an assessee for
the purposes of this Act.
(4) Subject to the provisions of sub-sections (5), (6) and (7), the liability of a legal
representative referred to in sub-section (1) shall be limited to the extent to which
the estate of the deceased is capable of meeting the liability.
(5) Every legal representative shall be personally liable for any tax payable by him
in his capacity as legal representative if, while such liability for tax remains undis -
charged, 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.
(6) The liability of a legal representative referred to in sub-section (5) shall be limited
to the value of the asset so charged, disposed of or parted with.
(7) The provisions of sections 304(2) and (5) and 305 shall, in 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.
2 .— Representative assessees — General provisions
Representative assessee.
303.   (1) For the purposes of this Act, “representative assessee” means—
( a )   in respect of the income of a non-resident specified in section 9, the
agent of the non-resident, including a person who is treated as an agent
under section 306;
( b )   in respect of the income of a minor or a person who is mentally ill or of
unsound mind, the guardian or manager who is entitled to receive or