Income Tax Act

Official PDF pages 411–415

SOURCE PDF PAGE 411
( 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.
8. —Profits of non-residents from occasional shipping business
Shipping business of non-residents.
316.   (1) Irrespective of anything in the other provisions of this Act, the provisions
of this section shall apply for the purpose of 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,—
( a )   7.5% of the amount paid or payable on account of such carriage shall
be deemed to be income accruing in India to the owner or charterer on
account of such carriage, whether that amount is paid or payable in or
out of India; and
( b )   the amount referred to in clause ( a ) shall include the amount paid or
payable by way of demurrage charge or handling charge or any other
amount of similar nature.
(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 person as mentioned in sub-section (2) or any person on his
behalf on account of such carriage shipped at that port since the last arrival of the
ship thereat.
(4) The requirement of furnishing the return as per sub-section (3) shall be deemed
to have been complied with, if—
( a )   the Assessing Officer is satisfied that—
( i )   it is not possible for the master of the ship to furnish the return
before the departure of the ship from the port; and
( ii )   the master of the ship has made satisfactory arrangements for filing
of the return and payment of tax by any other person on his behalf;
and
( b )   the return is filed within thirty days of the departure of the ship by any
person so authorised by the master.
(5) On receipt of the return, the Assessing Officer shall—
( a )   assess the income referred to in sub-section (2); and
( b )   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 393(1) (Table: Sl. No. 7) and such
sum shall be payable by the master of the ship.

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(6) No order assessing the income and determining the sum of tax payable thereon
shall be made under sub-section (5) after the expiry of nine months from the end
of the tax year in which the return under sub-section (3) is furnished.
(7) For the purposes of determining the tax payable under sub-section (5), the
Assessing Officer may call for such accounts or documents as he may require.
(8) A port clearance shall not be granted to the ship until the Commissioner 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.
(9) Nothing in this section shall prevent the owner or charterer of a ship from claim -
ing, before the end of the year following the tax year in which the date of departure
of the ship from Indian port falls, that an assessment be made of his total income
of the tax year as per other provisions of this Act, and tax payable be determined
on the basis of such assessment.
(10) In a case falling under sub-section (9), any payment made under this section
during the tax year, if so claimed, shall be treated as—
( a )   tax paid in advance with respect to that year and adjusted against tax
payable by such person; and
( b )   the difference between the sum so paid and the amount of tax found so
payable by him on such assessment shall be paid by him or refunded to
him.
9.   — Persons leaving India
Assessment of persons leaving India.
317.   (1) Irrespective of anything contained in section 4, when it appears to the
Assessing Officer that any individual may leave India during the current tax
year or shortly after its expiry, with no present intention of returning to India, the
total income of such individual for the period beginning from the first day of that
current tax year up to the probable date of departure from India (referred to as
specified period in this section) shall be chargeable to tax in that current tax year.
(2) The total income of each completed tax year or part of any tax year included in
the specified period shall be chargeable to tax at the rate or rates in force in that
tax year, and separate assessments shall be made in respect of each such completed
tax year or part of any tax year.
(3) The Assessing Officer may estimate the income of such individual for such
specified period or any part thereof, where it cannot be readily determined in the
manner provided in this Act.
(4) For the purposes 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 specified in the notice, a return in
the same form and verified in the same manner as a return under section 268(1),
setting forth his—

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( a )   total income for each completed tax year comprised in such specified
period referred to therein; and
( b )   estimated total income for any part of the tax year comprised in such
specified 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 section 268(1).
(5) Irrespective of anything contained in section 268(1) or 280, where the provisions
of sub-section (1) are applicable, the Assessing Officer may issue any notice under
section 268(1) or 280, requiring the furnishing of the return by such individual in
respect of any tax chargeable under any other provisions of this Act, within such
period, not being less than seven days, as the Assessing Officer may think proper.
(6) The tax chargeable under this section shall be in addition to the tax, if any,
chargeable under any other provisions of this Act.
10. —Association of persons or body of individuals or artificial
juridical person formed for a particular event or purpose
Assessment of association of persons or body of individuals or artificial juridical
person formed for a particular event or purpose.
318.   (1) Irrespective of anything contained in section 4, where it appears
to the Assessing Officer that any association of persons or a body of individ -
uals or an artificial juridical person, formed or established or incorporated for a
particular event or purpose in a tax year is likely to be dissolved in the same year
or immediately after such year, the total income of such association or body or
juridical person for the period beginning from the first day of that tax year up to
the date of its dissolution shall be chargeable to tax in that tax year.
(2) For the purpose of sub-section (1), the provisions of section 317(2) to (6) 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.
11. —Persons trying to alienate their assets
Assessment of persons likely to transfer property to avoid tax.
319.   (1) Irrespective of anything contained in section 4, where it appears to the
Assessing Officer during any current tax 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 beginning from the first day of that current
tax year up to the date when the Assessing Officer commences proceedings under
this section shall be chargeable to tax in the current tax year.
(2) For the purpose of sub-section (1), the provisions of section 317(2) to (6) 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.

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12. —Discontinuance of business, or dissolution
Discontinued business.
320.   (1) Irrespective of anything contained in section 4, where any business or
profession is discontinued in any tax year, the income of the period beginning
from the first day of that tax year up to the date of such discontinuance may, at the
discretion of the Assessing Officer, be charged to tax in that tax year.
(2) The total income of each completed tax year or part of any tax year included in
such period shall be chargeable to tax at the rate or rates in force in that tax year,
and separate assessments shall be made in respect of each such completed tax year
or part of any tax year.
(3) Any person discontinuing any business or profession shall give to the Assessing
Officer notice of such discontinuance within fifteen days thereof.
(4) 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.
(5) 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 profes -
sion, 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 said person, had it been received
before such discontinuance.
(6) 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 section 268(1) and the provisions of this Act shall, so far as may be, apply
accordingly as if the notice were a notice issued under section 268(1).
(7) Irrespective of anything contained in section 268 or 280, where the provisions
of sub-section (1) are applicable, the Assessing Officer may issue any notice under
section 268 or 280, requiring the furnishing of the return by the person whose in -
come is to be assessed in respect of any tax chargeable under any other provisions
of this Act, within such period, not being less than seven days, as the Assessing
Officer may think proper.
(8) The tax chargeable under this section shall be in addition to the tax, if any,
chargeable under any other provision of this Act.
Association dissolved or business discontinued.
321.   (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

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any other sum chargeable under any provision of this Act shall apply, so far as may
be, to such assessment.
(2) Regardless of the generality of sub-section (1), if the Assessing Officer or the
Joint Commissioner (Appeals) 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 as per 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 a tax 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 section 302(4).
Company in liquidation.
322.   (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, (herein
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 Principal Chief Commissioner or Chief
Commissioner or Principal 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.