Amendment of section 17.
110. In section 17 of the Wealth-tax Act, with effect from the 1st day of July, 2012,––
(a) in sub-section (1), after the second proviso, the following proviso shall be inserted and shall be deemed to have been inserted, namely:––
“Provided also that nothing contained in the first proviso shall apply in a case where any net wealth in relation to any asset (including financial interest in any entity) located outside India chargeable to tax, has escaped assessment for any assessment year:”;
(b) in sub-section (1A),––
(i) in clause (a), after the word, brackets and letter “clause (b)”, the words, brackets and letter “or clause (c)” shall be inserted;
(ii) after clause (b), the following clause shall be inserted, namely:––
“(c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the net wealth in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year .”;
(iii) in the Explanation, after clause (b), the following clause shall be inserted, namely:––
“(c) where a person is found to have any asset (including financial interest in any entity) located outside India.”;
(iv) the Explanation shall be numbered as Explanation 1 thereof, and after Explanation 1 as so numbered, the following Explanation shall be inserted, namely:––
“Explanation 2.––For the removal of doubts, it is hereby clarified that the provisions of this section, as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012.”.
Notes on Clauses:
Clause 110 of the Bill seeks to amend section 17 of the Wealth-tax Act relating to wealth escaping assessment.
The existing provisions of sub-section (1) of the aforesaid section 17 enable the Assessing Officer to assess or re-assess wealth which has escaped assessment for any assessment year, after recording reasons for doing so. It is further provided that once an assessment is reopened, any other wealth which has escaped assessment and which comes to the notice of the Assessing Officer subsequently in the course of the proceedings under this section, can also be included in the assessment.
The first proviso to the aforesaid sub-section provide that if an assessment has been made for the relevant assessment year under sub-section (3) of section 16 or this section, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless the wealth has escaped assessment due to the failure on the part of the assessee to file a return under section 14 or section 15 or in response to a notice issued under sub-section (4) of section 16 or this section or to disclose fully and truly all material facts necessary for his assessment.
It is proposed to insert a proviso to the aforesaid sub-section so as to provide that nothing contained in the first proviso shall apply in a case where any net wealth in relation to any asset (including financial interest in any entity) located outside India chargeable to tax, has escaped assessment for any assessment year.
These amendments will take effect from 1st July, 2012.
It is further proposed to amend sub-section (1A) of the aforesaid section so as to insert a new clause (c) to the aforesaid sub-section so as to provide that if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the net wealth in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year.
It is also proposed to amend the Explanation to the aforesaid sub-section so as to insert a clause which provides that where a person is found to have any asset (including financial interest in any entity) located outside India, it shall also be deemed to be a case where net wealth chargeable to tax has escaped assessment.
It is also proposed to insert a new Explanation 2 so as to provide that the provisions of the aforesaid section (as amended by the Finance Act, 2012) shall also be applicable for the assessment years beginning on or before the 1st day of April, 2012.
These amendments will take effect from 1st day of July, 2012.
