Clause - - Notes on clauses, Schedules, Memorandum - DIRECT TAXES CODE, 2010

Notes on clauses

The Code seeks to consolidate and amend the law relating to direct taxes.

Chapter I deals with Preliminary.

Clause 1 provides the short title, extent and commencement of the Code. The clause provides that the Direct Taxes Code, 2010, extends to the whole of India. It also provides that unless otherwise specified, the Code shall come into force on the 1st April, 2012.

Part A of the Code relates to Income-tax.

Chapter II provides for basis of charge.

Clause 2 provides for liability to pay and charge of income-tax. It provides that every person shall be liable to pay income-tax in respect of his total income of the financial year in accordance with the provisions of the Code. "Total income" and "person" have been defined in clause 314 of the Code.

Clause 2 also provides that subject to the provisions of the Code, income-tax, including additional income-tax, shall be charged in respect of the total income of a financial year of every person. The clause provides that where the income-tax is to be charged in respect of the income of a period other than the financial year, the income-tax shall be charged accordingly. Such income-tax shall be charged at the rate specified in the First Schedule in the manner provided therein. The income-tax shall be deducted or collected at source or paid in advance in respect of the income chargeable to tax in accordance with the provisions of the Code. The chargeability of income-tax for any financial year shall be determined in accordance with the provisions of this Code as they stand on the 1st April of that financial year.

Clause 3 deals with the scope of total income. It provides that subject to the provisions of the Code, the total income of any financial year of a person, who is a resident, shall include all income from whatever source derived which—

         (a) accrues, or is deemed to accrue, to him in India during the year;

         (b) accrues to him outside India during the year;

         (c) is received, or is deemed to be received, by him, or on his behalf, in India during the year; or

         (d) is received by him, or on his behalf, outside India during the year.

The said clause also provides that subject to the provisions of the Code, the total income of any financial year of a person, who is a non-resident, shall include all income from whatever source derived which—

        (a) accrues, or is deemed to accrue, to him in India during the year; or

        (b) is received, or is deemed to be received, by him, or on his behalf, in India during the year.

Any income which accrues to a resident outside India during the year, or is received outside India during the year by, or on behalf of, such resident, shall be included in the total income of the resident, whether or not such income has been charged to tax outside India.

Clause 4 provides for residence in India. It provides that an individual shall be resident in India in any financial year, if he is in India—

        (a) for a period, or periods, amounting in all to one hundred and eighty-two days, or more, in that year; or

        (b) for a period, or periods, amounting in all to—

          (i) sixty days, or more, in that year; and

          (ii) three hundred and sixty-five days, or more, within the four years immediately preceding that year.

The above shall, however, not apply in respect of an individual who is—

       (a) a citizen of India and who leaves India in that year as a member of the crew of an Indian ship; or

       (b) a citizen of India and who leaves India in that year for the purposes of employment outside India.

The clause further provides that a company shall be resident in India in any financial year, if—

       (a) it is an Indian company; or

       (b) its place of effective management, at any time in the year, is situated in India.

The said clause also provides that every other person shall be resident in India in any financial year, if the place of control and management of its affairs at any time in the year is situated wholly or partly in India.

For this purpose, "Indian company" and "place of effective management" have been defined in clause 314 of the Code.

Clause 5 relates to income which is deemed to accrue in India. Income shall be deemed to accrue in India, if it accrues, whether directly or indirectly, through or from:

      (a) any business connection in India;

      (b) any property in India;

      (c) any asset or source of income in India; or

      (d) the transfer, of a capital asset situate in India.

The said clause also provides that in addition to the above, the following income shall be deemed to accrue in India—

      (a) income from employment, if it is for service rendered in India or for service rendered outside India by a citizen of India and the income is receivable from the Government; or the rest or leave period preceding or succeeding the period of service rendered in India and forms part of the service contract of employment;

      (b) any dividend paid by a domestic company outside India;

      (c) any insurance premium including re-insurance premium accrued from or payable by any resident or non-resident in respect of insurance covering any risk in India;

      (d) interest accrued from or payable by any resident or the Government;

      (e) interest accrued from or payable by any non-resident, if the interest is in respect of any debt incurred and used for the purposes of a business carried on by the non-resident in India or for earning any income from any source in India;

      (f) royalty accrued from or payable by any resident or the Government;

      (g) royalty accrued from or payable by a non-resident, if the royalty is for the purposes of a business carried on by the non-resident in India; or for earning any income from any source in India;

      (h) fees for technical services accrued from or payable by any resident or the Government;

      (i) fees for technical services accrued from or payable by any non-resident, in respect of services utilised for the purposes of a business carried on by the non-resident in India or for earning any income from any source in India;

      (j) transportation charges accrued from or payable by any resident or the Government;

      (k) transportation charges accrued from or payable by any non-resident, if the transportation charges are in respect of the carriage to, or from, a place in India.

The said clause also provides that in the case of a non-resident, income deemed to accrue in India shall not include the following—

      (a) any income accruing through, or from, operations which are confined to the purchase of goods in India for the purposes of export out of India;

      (b) interest accrued from or payable by a resident on any debt incurred and used for the purposes of a business carried on by the resident outside India or for earning any income from any source outside India;

      (c) royalty accrued from or payable by a resident for the purposes of a business carried on by the resident outside India or for earning any income from any source outside India;

     (d) royalty consisting of lump sum consideration accrued from or payment made by a resident for the transfer of any rights (including the granting of a licence) in respect of computer software supplied by the non-resident manufacturer, along with a computer or computer-based equipment, under any scheme approved under the Policy on Computer Software Export, Software Development and Training, 1986;

     (e) fees for technical services, accrued from or payable by a resident, in respect of services utilised for the purposes of a business carried on by the resident outside India; or for earning any income from any source outside India;

     (f) transportation charges for the carriage by aircraft or ship, accrued from or payable by any resident, if the transportation charges are in respect of the carriage from a place outside India to another place outside India, except where the airport or port of origin of departure of such carriage is in India.

     (g) income from transfer, outside India, of any share of interest in a foreign company, unless at any time in the twelve months preceding transfer, the fair market value of the assets in India owned, directly or indirectly, by the company represent at least fifty per cent of the fair market value of all assets owned by the company;

     (h) interest accrued from, or payable by, non-resident as referred to in sub-item (ii) of item (e) of sub-clause (2), if such interest has not been claimed by the nonresident as a deduction from his tax base chargeable in India.

The clause also provides that in the case of a business of which all the operations are not carried out in India, the income of the business deemed to accrue in India shall be only such part of the income as is reasonably attributable to the operations carried out in India.

The clause also provides that income (other than income from employment and any dividend paid by an Indian company outside India) shall be deemed to accrue in India, whether or not,—

    (a) the payment is made in India;

    (b) the services are rendered in India;

    (c) the non-resident has a residence or place of business or any business connection in India; or

    (d) the income has accrued in India.

The clause further provides that where the income of a non-resident, in respect of transfer, outside India, of any share or interest in a foreign company, is deemed to accrue in India under clause (d) of sub-section (1), it shall be computed in accordance with the formula 'A*B/C', where A denotes income from the transfer computed in accordance with provisions of this Code as if the transfer was effected in India; B denotes fair market value of the assets in India, owned, directly or indirectly, by the company; and C denotes fair market value of all assets owned by the company.

"Business connection", "royalty", "fees from technical services" and "transportation charges" have been defined in clause 314 of the Code.

Clause 6 provides that the following income shall be deemed to be received in the financial year, namely:—

   (a) any contribution made by an employer in the financial year to the account of an employee under a pension fund;

   (b) any contribution made by an employer in the financial year to the account of an employee in any other fund; and

   (c) the annual accretion in the financial year to the balance at the credit of any employee in a fund referred to in item (b) to the extent it exceeds the limit as may be prescribed.

Clause 7 relates to dividend income. Clause 7 provides that any dividend declared, distributed or paid by a company shall be deemed to be the income of the financial year in which it is so declared, distributed or paid. It also provides that any interim dividend shall be deemed to be the income of the financial year in which the amount of such dividend is unconditionally made available by the company to the member who is entitled to it.

For this purpose, clause 314 of the Code defines "dividend".

Clause 8 provides that the total income of a person being a transferor, shall include the income of any other person if such income accrues to any other person by virtue of a transfer, without transfer of the asset from which the income accrues; or the income accrues to any other person by virtue of a revocable transfer of an asset.

However, such income shall not be included in the total income of the transferor in a case where any income accrues from an asset transferred to any trust or any other person, if the transfer is not revocable during the lifetime of the beneficiary of the trust or during the lifetime of such other person.

The clause further provides that a transfer shall be deemed to be revocable if it contains any provision for the re-transfer, directly or indirectly, of the whole or any part of the income or assets to the transferor or it, in any way, gives the transferor a right to re-assume power, directly or indirectly, over the whole or any part of the income or assets. For the purpose of this clause, a transfer shall include any settlement, trust, covenant, agreement or arrangement.

Clause 9 provides that the total income of any individual shall, inter alia, include all income accruing directly or indirectly—

       (i) to the spouse, by way of salary, commission, fees or any other form of remuneration, whether in cash or in kind, from a concern in which the individual has a substantial interest;

       (ii) from assets transferred, directly or indirectly, to the spouse by the individual, otherwise than for adequate consideration, or in connection with an agreement to live apart;

       (iii) from assets transferred, directly or indirectly, to the son's wife by the individual, otherwise than for adequate consideration; or

       (iv) from assets transferred, directly or indirectly, to any other person by the individual otherwise than for adequate consideration, to the extent to which the income from such assets is for the immediate or deferred benefit of the spouse or son's wife.

The income referred to in sub-clause (i) above shall be included in the total income of the spouse whose total income is higher. The said clause also provides that the total income of any individual will not include any income accruing to the spouse where the spouse possesses technical or professional qualifications and the income is solely attributable to the application of the technical or professional knowledge and experience of the spouse. The said clause further provides that the Board may prescribe the method for determining the income referred to in sub-clauses (ii) and (iii) above.

The said clause further provides that the total income of any individual shall also include all income accruing to a minor child (other than a minor child being a person with disability or person with severe disability) of the individual. Such income shall be included in the total income of the parent who is the guardian of the minor child or the parent whose total income is higher, if both the parents are guardians of the child. Where any such income is once included in the total income of a parent, such income arising in the succeeding year shall not be included in the total income of the other parent, unless the Assessing Officer considers it necessary to do so, after giving an opportunity of being heard, to do so after giving an apportunity of being heard to that other parent. The clause provides that the total income of any individual shall not include all income accruing to a minor child on account of any manual work done by the child or activity involving application of the skill, talent or specialised knowledge and experience of the child.

The clause also provides that the total income of an individual shall include all income derived from any converted property or part thereof as a member of a Hindu undivided family or which is received by the spouse or minor child upon partition of the said family. In the said clause, "property" has been defined to include any interest in property whether movable or immovable, the sale proceeds of such property in whichever form and where the property is converted into any other form of property by any method, such other property. "Converted property" has been defined in clause 314 of the Code.

Clause 10 provides that the total income of a financial year of a person shall not include the income enumerated in the Sixth Schedule.

Clause 11 provides that the persons enumerated in the Seventh Schedule shall not be liable to income-tax under this Code for any financial year, subject to the fulfillment of conditions specified in the said Schedule.

Chapter III deals with computation of total income. Sub-chapter I relates to general provisions.

Clause 12 provides that the total income shall be computed in accordance with the provisions of the Chapter. It also clarifies that unless otherwise provided in the Code, reference to any accrual, receipt, expenditure, withdrawal, asset or liability shall be construed to be in relation to the financial year in respect of which, and the person in respect of whom, the income is computed.

Clause 13 relates to classification of sources of income. It provides that for the purposes of computation of total income of any person for any financial year, income from all sources shall be classified as follows:

        A.— Income from ordinary sources.

        B.— Income from special sources.

Clause 14 deals with computation of income from ordinary sources. It provides that the income from any source, other than a special source, shall be computed under the class "income from ordinary sources" and such income shall be classified under the following heads of income, namely:—

       A.— Income from employment.

       B.— Income from house property.

       C.— Income from business.

       D.— Capital gains.

       E.— Income from residuary sources.

Clause 15 deals with computation of income from special sources. It provides that every income listed in column (3) of the Table in Part III of the First Schedule shall be the income from a special source of the person specified in column (2) of the said Table. It further provides that the income from any special source shall be computed under the class "income from special sources" in accordance with the provisions of the Ninth Schedule. It also provides that in case the income is attributable to the permanent establishment of a nonresident in India, the income shall not be considered as income from a special source;

Clause 16 deals with the apportionment of income between spouses governed by the system of community of property under the Portuguese Civil Code of 1860 as in force in the State of Goa and in the Union territories of Dadra and Nagar Haveli and Daman and Diu. The said clause provides that the income of the husband and wife, governed by the communiao dos bens, from ordinary sources under each head of income (other than the head "Income from employment") and from special sources shall be apportioned equally between the spouses. The income so apportioned shall be included separately in the total income of the spouses. The clause further provides that the income under the head "Income from employment" shall be included in the total income of the spouse who has actually earned it.

Clause 17 deals with avoidance of double taxation. It provides that subject to the provisions of the Code, any income which is included in the total income of a person for any financial year shall not be so included again in the total income of such person for the same or any other financial year. It also provides that any income which is includible in the total income of any person shall not be included in the total income of any other person, except where for the purpose of protecting the interest of the revenue, it is necessary to do so.

Clause 18 provides that in computing the total income of a person for any financial year, the following expenditure shall not be allowed as a deduction, namely:—

       (a) any expenditure attributable to income which is not included in the total income under the Sixth Schedule, determined in accordance with such method as may be prescribed;

       (b) any expenditure attributable to any income from special sources;

       (c) any expenditure which has been allowed as a deduction in any other financial year;

       (d) any expenditure incurred for an activity which is an offence or which is not permissible by law;

       (e) any provision made for any liability, if it remains unascertained by the end of the financial year; and

       (f) any unexplained expenditure referred to in item (q) of sub-clause (2) of clause 58.

The said clause also provides that any amount allowed as a deduction under any provision of the Code shall not be allowed as a deduction under any other provision of the Code. The provisions of this clause shall apply notwithstanding anything contained in any other provisions of Chapter III.

Clause 19 provides that any amount on which tax is deductible at source under Chapter XIII during the financial year shall not be allowed as a deduction in computing the total income if,—

       (a) the tax has not been deducted during the financial year; or

       (b) the tax, after such deduction, has not been paid on or before the due date specified in sub-clause (1) of clause 144.

The said clause also provides that a deduction shall be allowed to the person in respect of such amount in any subsequent financial year, if—

       (a) tax has been deducted during the financial year, but paid in such subsequent year after the due date specified in sub-clause (1) of clause 144; or

       (b) tax has been deducted and paid in such subsequent financial year.

Sub-chapter II relates to heads of income. Part A of sub-chapter II deals with income from employment.

Clause 20 provides that the income of a person from employment shall be computed under the head "Income from employment".

Clause 21 provides for computation of income from employment. The income computed under the head "Income from employment" shall be the gross salary as reduced by the aggregate amount of the deductions referred to in clause 23.

Clause 22 deals with the scope of gross salary. The gross salary shall be the amount of salary due, paid, or allowed, whichever is earlier, to a person in the financial year by or on behalf of his employer or former employer. "Salary" has been defined in clause 314. It inter alia includes "perquisites" and "profits in lieu of, or in addition to, salary", which have also been defined in clause 314.

Clause 23 provides that the deductions from the gross salary for computation of income from employment to the extent included in the gross salary shall be the following, namely:—

      (a) any sum paid by the employee on account of a tax on employment within the meaning of clause (2) of article 276 of the Constitution;

      (b) any allowance or benefit granted by an employer for journey by an employee between his residence and office or any other place of work, to such extent as may be prescribed;

      (c) any allowance or benefit granted by an employer to an employee to meet expenses wholly, necessarily and exclusively in the performance of the duties of an office or employment of profit, as may be prescribed, to the extent such expenses are actually incurred for that purpose and to meet personal expenses, considering the place of parting or nature of duties or place of residence, subject to such conditions an limits as may be prescribed;

      (d) any amount of contribution made by an employer in the financial year to the account of an employee under an approved pension fund notified by the Central Government, to the extent it does not exceed ten per cent. of the salary of the employee;

      (e) any amount of contribution made by an employer in the financial year to the account of an employee in an approved superannuation fund;

      (f) any amount of contribution by an employer, in the financial year, to an account of an employee in an approved provident fund to the extent it does not exceed twelve per cent. of the salary of the employee;

      (g) any amount of interest credited, in the financial year, on the balance to the credit of an employee in an approved fund to the extent it does not exceed the amount of interest payable at the rate notified by the Central Government;

      (h) any allowance provided by an employer to meet the expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the employee, to such extent as may be prescribed.

The said clause provides that for the purposes of (d), (f) and (h) above, salary means basic salary and includes dearness allowance, if the terms of employment so provide.

Part B of sub-chapter II relates to income from house property.

Clause 24 provides that the income from letting of any house property owned by any person shall be computed under the head "income from house property". The said clause further provides that the income from any house property shall be computed under this head notwithstanding that the letting, if any, of the property is in the nature of trade, commerce or business. Where the house property is owned by two or more persons having definite and ascertainable shares, the clause provides that the income from such house property shall be computed separately for each such person. Accordingly, in a case where the shares of the owners of such house property are not definite and ascertainable, such persons shall be assessed as an association of persons in respect of such property. The clause also provides that the above provisions shall not apply,—

       (a) to the house prperty, or any portion of the house property which is used by the person as a hospital, hotel, special Economic Zone, convention centre or cold storage and the income from which is computed under the head "Income from business";

       (b) to a house property which is not ready for use during the financial year.

For this purpose, "house property" and "owner" have been defined in clause 314.

Clause 25 provides for computation of income from house property. The income from house property shall be the gross rent as reduced by the aggregate amount of the deductions referred to in clause 27.

Clause 26 deals with the scope of gross rent. The gross rent in respect of a house property or any part of the property shall be the amount of rent received or receivable, directly or indirectly, for the financial year or part thereof, for which such property is let out. The said clause also provides that where such property was vacant during any part of the financial year, the gross rent shall be the amount of rent received or receivable for such part of the financial year for which the house was not vacant.

Clause 27 provides that the deductions from gross rent for computation of income from house property shall be the following, namely:—

      (a) the amount of taxes levied by a local authority in respect of such property, to the extent the amount is actually paid by him during the financial year;

      (b) a sum equal to twenty per cent. of the gross rent determined under clause 26 towards repair and maintenance of such property;

      (c) the amount of any interest on loan taken for the purposes of acquisition, construction, repair or renovation of the property or on loan taken for the purpose of repayment of the said loan. The interest which pertains to the period prior to the financial year in which the house property has been acquired or constructed shall be allowed as deduction in five equal instalments beginning from such financial year. Such interest shall be reduced by any part thereof which has been allowed as deduction under any other provision of the Code.

Clause 28 provides that the amount of rent received in advance shall be included in the gross rent of the financial year to which the rent relates.

Clause 29 provides that income in respect of the rent received in arrears in a financial year shall be computed under the head "Income from house property", whether or not the person continues to be owner of the property in that year. The said clause also provides that the amount of rent referred to above shall be included in the gross rent under clause 26 for that financial year

Clause 14 of the Code seeks to provide that the "income from the ordinary sources" shall be computed under following heads of income:

       A.— Income from employment

       B.—Income from house property

       C.—Income from business

       D.—Capital gains

       E.—Income from residuary source.

Accordingly, Clause 30 seeks to provide that income from any business carried on by the person at any time during a financial year shall be computed under the head "Income from business". The income of distinct and separate business which is specified in clause 31 shall be computed separately. The said clause also provides that any income from a business after its discontinuance shall be deemed to be the income of the recipient in the year of receipt and shall, accordingly, be computed under the head "Income from business".

Clause 31 seeks to provide that a business shall be distinct and separate from another business if there is no interlacing or inter-dependence between the businesses. It further provides that a business shall be deemed to be distinct and separate from another business, if—

    (a) one unit of the business is processing, producing, manufacturing or trading the same goods as in the other unit of the business and the first-mentioned unit is located physically apart from the other unit;

    (b) one unit of the business is processing, producing or manufacturing the same goods as in the other unit of the business and the first mentioned unit utilizes raw material or manufacturing process, which is different from the raw material or the manufacturing process of the other unit;

    (c) separate books of account are maintained or capable of being maintained, for any business; or

    (d) it is a business in respect of which profits are determined under sub-clause (2) of clause 32.

The said clause also provides that a speculative business shall also be deemed to be distinct and separate from any other business or any other speculative business.

Clause 32 provides that the income computed under the head "Income from business" shall be the profits from the business. The profits from the business of insurance shall be computed in accordance with the Eighth Schedule. The profits from the business of operating a qualifying ship shall be computed in accordance with the Tenth Schedule. The profits from the business of mineral oil or natural gas shall be computed in accordance with the Eleventh Schedule. The profits from the business of developing or aporating from a special economic zone or profits from the business of manufacture or production, or providing of services, by a unit in special economic zone shall be computed in accordance with the Twelfth Schedule. The profits from the business of generation and distribution of power, development of infrastructure facility, cold chain facility, running a hospital, laying and operating a cross country natural gas or crude or petroleum oil pipeline network shall be computed in accordance with the Thirteenth Schedule.

The profits from any business not referred to above shall be the gross earnings from the business as reduced by the amount of business expenditure incurred by the person.

Clause 33 seeks to provide that the gross earnings from the business not covered by the Eighth, Tenth, Eleventh, Twelfth and the Thirteenth Schedule, shall be the aggregate of the following, namely:—

        (i) the amount of any accrual or receipt from, or in connection with, the business;

        (ii) the value of any benefit or perquisite, whether convertible into money or not, accrued or received from, or in connection with, the business;

        (iii) the value of the inventory of the business, as on the close of the financial year; and

        (iv) any amount received from a business after its discontinuance.

         (i) any consideration, accrued or received under a non-compete agreement;

         (ii) any amount or value of any benefit, whether convertible into money or not, accrued to, or received by a person, being a trade, professional or similar association, in respect of specific services performed for its members;

The said clause provides that the accruals or receipts referred to above shall, inter-alia, include—

         (iii) any consideration on sale of a licence, not being a business capital asset, obtained in connection with the business;

         (iv) any consideration on transfer of a right or benefit accrued or received under any scheme framed by the Government, local authority or a corporation established under any law for the time being in force;

          (v) the amount of cash assistance, subsidy or grant received from any person or the Government for, or in connection with, the business other than an amount to meet any portion of the cost of any business capital asset;

          (vi) the amount of any remission, drawback or refund of any tax, duty or cess (not being a tax under this Code), received or receivable;

          (vii) the amount of remuneration (including salary, bonus and commission) or any interest accrued to, or received by, a participant of an unincorporated body from such body;

          (viii) any sum received under a Keyman insurance policy including the sum allocated by way of bonus on such policy;

          (ix) the amount of profit on transfer, demolition or destruction of any business capital asset (other than a business capital asset used for scientific research and development) computed in accordance with the provisions of clause 42;

          (x) any consideration received or receivable on transfer of carbon credits;

          (xi) the amount of remission or cessation of any liability by way of loan, deposit, advance or credit;

          (xii) any amount accrued to or received on account of the cessation or forfeiture of any agreement entered in the course of the business; and

          (xiii) any interest accrued to, or received by, a person being a financial institution, etc.

However, the gross earnings from business shall not include any dividend, any interest other than interest accrued to, or received by, a person being a financial institution, any income from letting of house property which is included under the head "income from house property" and any income from the transfer of an investment asset.

Clause 34, inter alia, provides that the amount of business expenditure shall be aggregate of the operating expenditure, finance charges and capital allowances.

Clause 35, inter alia, provides that the amount of operating expenditure for the purposes of clause 34 shall be the aggregate of —

     (a) the amount of expenditure specified in sub-clause (2), if it is laid out or expended, wholly and exclusively, for the purposes of the business and fulfills specified conditions;

     (b) the value of inventory of the business, as at the beginning of the financial year;

     (c) loss of inventory, or money, on account of theft, robbery, fraud or embezzlement, occurring in the course of the business, if the inventory, or the money, is written off in the books of account;

    (d) any amount credited to the provision for bad and doubtful debts account, not exceeding one per cent. of the aggregate average advances computed in the prescribed manner, if the person is a financial institution, the amount is charged to the profit and loss account for the financial year in accordance with the prudential norms of the Reserve Bank of India in this regard, and the amount of trade debt or part thereof written off as irrecoverable in the books of the person is debited to the provision for bad and doubtful debts account;

    (e) the debit balance, if any, on the last day of the financial year, in the provision for bad and doubtful debts account made under clause (c), if the balance has been transferred to the profit and loss account of the financial year;

    (f) trade debt or part thereof, if the person is not a financial institution, and the amount is written off as irrecoverable in the books of the person; and

    (g) payment to a creditor during the financial year in discharge of any remitted or ceased liability which has been included in the gross earnings of any financial year under sub-clause (2) of clause 33.

Sub-clause (2) of the said clause, inter alia, provides that the following expenditure if laid out or expended, wholly and exclusively, for the purposes of the business shall be allowed,—

       (i) purchase of raw material, stores, spares and consumables, or stock-intrade;

       (ii) rent paid for any premises if it is occupied and used by the person;

       (iii) current repairs to buildings if it is occupied and used by the person;

       (iv) land revenue, local rates or municipal taxes in respect of premises occupied and used by the person;

       (v) current repair of parts, of machinery, plant or furniture used by the person;

       (vi) current maintenance or repairs of computer software or hardware;

       (vii) salary or wages of employees;

       (viii) sales promotion including advertisement and publicity;

       (ix) use of hotel or boarding and lodging facilities;

       (x) legal services;

       (xi) entertainment and provision of hospitality, etc.

The said clause further provides that any expenditure, being in the nature of, or on account of personal expenses, capital expenditure including expenditure in respect of which capital allowance is allowable under clause 37, finance charges, any unascertained liability of the person, remuneration payable to any participant other than a working participant, any expenditure incurred on advertisement in any souvenir, brochure, tract, pamphlet or the like published by a political party, any tax, interest or penalty payable under this Code, any amount paid which is eligible for relief of tax under section 207 any dividend declared or distributed or paid and any amount of contributions by an employr during the financial year to an approved superannuation fund on account of an employee to the extent it exceeds one lakh rupees shall not be allowed as operating expenditure.

Clause 36 provides the determination of finance charges in relation to business expenditure which shall be aggregate of the operating expenditure, permitted finance charges and capital allowances.

Clause 36 provides that the amount of finance charges for the purposes of clause 34 shall be—

    (a) the amount of interest paid on any capital borrowed or debt incurred;

    (b) the amount of interest paid to trade creditors;

    (c) the amount of interest paid to any participant to the extent prescribed which is in acordance with the agreement of formation of unincorporated body and relates to the period following year the date of such agreement;

    (d) the amount of any charge or fee paid in respect of any credit facility which has not been utilised;

    (e) the amount of any incidental financial charges;

    (f) the proportionate amount of discount or premium payable on any bond or debenture issued by the person, calculated in the manner as may be prescribed.

Sub-clause (2) of clause 36, inter alia, provides that the amount of finance charges shall not include any amount paid in respect of capital borrowed or debt incurred for acquisition of a capital asset, incidental financial charges for issue of convertible debentures, bonds or share capital and any amount of interest referred to in section 23 of the Micro, Small and Medium Enterprises Development Act, 2006.

Sub-clause (3) of the said clause provides that the amount of interest on any capital borrowed or debt incurred, which is payable to any financial institution, shall be allowed as a deduction in the financial year in which the amount is actually paid or in the financial year in which the liability has accrued, whichever is later.

Sub-clause (4) of the said clause provides that any interest referred to in sub-clause (3) which has been converted into a loan or borrowing shall not be deemed to have been actually paid for the purposes of that sub-clause.

Sub-clause (5) of the said clause provides that, "capital borrowed" shall include recurring subscriptions received periodically from shareholders, or subscribers, in a mutual benefit finance company, which fulfils such conditions as may be prescribed.

Clause 34 provides that the amount of business expenditure shall be aggregate of the operating expenditure, finance charges and capital allowances. Clause 37 seeks to provide that the amount of capital allowances shall be the aggregate of the amount in respect of depreciation of business capital assets, initial depreciation of business capital assets, terminal allowance, scientific research and development allowance and deferred revenue expenditure allowance.

The said clause further provides that the depreciation, initial depreciation or terminal allowance shall be allowed in respect of any business capital asset if the asset is owned, wholly or partly, by the person, and used for the purposes of the business of the person. However, the condition of ownership, whether whole or in part, shall not apply in the case of a business capital asset being a capital expenditure on any building which is held by the person under a lease or other right of occupancy. A business capital asset shall be deemed to be owned by the person if he is a lessee in terms of a financial lease.

The said clause also provides that the amount of deferred revenue expenditure allowance referred to above shall be as specified and computed in accordance with the Twenty-second Schedule.

Clause 37 provides that the amount of capital allowances shall be the aggregate of the amount in respect of depreciation of business capital assets, initial depreciation of business capital assets, terminal allowance, scientific research and development allowance and deferred revenue expenditure allowance.

Clause 38, inter alia, seeks to provide that the amount of depreciation of business capital assets shall be the aggregate of the following, namely:—

    (a) such percentage of the adjusted value of any block of assets as specified in clause 45 read with the Fifteenth Schedule, in respect of all the business capital assets forming part of the relevant block of assets specified therein; and

    (b) nil, in respect of any other business capital asset not forming part of any block of assets specified in the Fifteenth Schedule.

The said clause further provides that the deduction under this clause in respect of such asset shall be restricted to fifty per cent. if the asset is acquired by the person during the financial year, and is used for the purposes of business for a period of less than one hundred and eighty days in the relevant financial year.

Clause 38 provides that the depreciation in respect of any business capital asset shall, notwithstanding anything contained in any other provisions of the Code, not be deemed to have been actually allowed, if the asset does not form part of any block of assets specified in the Fifteenth Schedule or the expenditure incurred for acquiring the asset has been allowed as a deduction under any provision of this Code.

Clause 39 seeks to provide that in addition to depreciation, an initial depreciation of business capital assets shall be allowed to the person if he is engaged in the business of manufacture or production of any article or thing, the asset is a new asset (other than any office appliance) not used either within or outside India by any other person before its installation by the person and the whole of the actual cost of the asset is not allowed as a deduction (whether by way of depreciation or otherwise) in computing the income under the head "Income from business" of any other financial year.

The said clause further provides that the initial depreciation referred shall be an amount equal to twenty per cent. of the actual cost of the asset and it shall be allowed in the financial year in which the asset is used for the first time for the purposes of the business of the person. The deduction under this clause shall be restricted to fifty per cent of the allowable sum, if the asset is used for the purposes of business for a period of less than one hundred and eighty days in the relevant financial year.

Clause 40 seeks to provide that terminal allowance shall be allowed in respect of a block of asset, if the block of assets has ceased to exist by reason of being demolished, destroyed, discarded or transferred during the financial year and the percentage specified in the Fifteenth Schedule for computing depreciation in respect of the block of assets is zero.

The terminal allowance shall be aggregate of the written down value of the block of asset at the beginning of the financial year and the actual cost of any asset falling within that block, acquired during the financial year, as reduced by the amount accrued or received in respect of the assets which are demolished, destroyed, discarded or transferred during the financial year together with the value of the carcass or the scrap, if any.

The said clause further provides that the terminal allowance shall be treated as "nil", if the net result of the computation is negative.

Clause 41 seeks to provide that a company shall be allowed a deduction equal to two hundred per cent. of the expenditure (not being expenditure in the nature of cost of any land or building) incurred on creating and maintaining an in-house facility for scientific research and development and carrying out scientific research and development in the in-house facility.

The deduction under this clause shall be allowed, if the company creates and maintains an in-house facility for carrying out scientific research and development, the research facility is approved by the Central Government on the basis of recommendation of the prescribed authority and the company enters into an agreement with the prescribed authority for co-operation in the research and development facility and for audit of the accounts of such facility.

The said clause further provides that in case of business re-organisation the approval granted to a predecessor shall be deemed to have been granted to the successor if the approval is transferred to the successor.

The said clause also provides that the deduction under this clause shall not be allowed to a company, if the expenditure is incurred in the course of its business which is in the nature of scientific research and development.

The Board may for the purposes of this clause, prescribe the nature of business, conditions and manner as may be considered necessary for grant of approval.

Clause 42 provides for the method of computation of profit on transfer of a business capital asset in case of amount, which forms part of a block of assets specified in the fifteenth schedule. It provides that the amount of profit where such capital asset is transferred, discarded, destroyed or destructed shall, be the amount accrued or received in respect of such asset together with the amount of scrap value, if any, as reduced by the amount of written down value of the block of assets at the beginning of the financial year together with the actual cost of any asset falling within that block of assets and acquired during the financial year and in case of any asset not falling in the block of assets the consideration received on transfer less actual cost will be the profit.

The said clause further provides that if the net result of the computation is negative, the profit shall be treated as "nil".

Clause 43 provides for computation of deduction on account of capital allowance in a case where business reorganisation has taken place during the financial year. The amount of deduction allowable to the predecessor shall be determined in accordance with the formula—

         A x B/C

         Where

         A = the amount of deduction allowable as if the business reorganisation had not taken place;

         B = the number of days comprised in the period beginning with the first day of the financial year and ending on the day immediately preceding the date of business reorganisation;

         C = the total number of days in the financial year in which the business reorganisation has taken place.

The said clause further provides that the the amount of deduction to the successor shall be determined in accordance with the formula —

         A x B/C

         Where

         A = the amount of deduction allowable as if the business reorganisation had not taken place;

         B= the number of days comprised in the period beginning with the date of business reorganisation and ending on the last day of the financial year; and

         C = the total number of days in the financial year in which the business reorganisation has taken place.

Clause 44 seeks to provide the meaning of actual cost for the purposes of computation of income under the head 'income from business'. The said clause, inter alia,provides that the actual cost of a business asset to the person shall be computed in accordance with the formula—

         A-[B+(C xA)/D]

         Where

          A = cost of the business asset to the person including the interest paid on the capital borrowed for acquiring the asset if such interest is relatable to the period before the asset is put to use;

          B = the amount of additional duty leviable under section 3 of the Customs Tariff Act, 1975 or the amount of duty of excise, in respect of which a claim of credit has been made and allowed under the Central Excise Rules, 1944;

          C = the amount of subsidy, grant or reimbursement (by whatever name called) received by the assessee, directly or indirectly, from the Central Government, State Government, any authority established under any law for the time being inforce or by any other person in respect of, or with reference to, any asset including the relevant asset;

          D = cost of all the assets in respect of or with reference to which the amount 'C' is so received.

The said clause further provides that irrespective of the methodology provided above, the Assessing Officer may determine, with the prior approval of the Joint Commissioner, the actual cost if the assets were, at any time before the date of acquisition by the person, business assets and the Assessing Officer is satisfied that the main purpose of the transfer of the assets to the person was to reduce the income-tax liability by claiming depreciation with reference to an enhanced cost.

The said clause also provides that the actual cost of the business asset to the person shall be the deemed written down value, if the asset is acquired by way of gift or inheritance, the asset is converted into a business asset in any financial year or the person is transferee holding company or a transferee subsidiary company. The deemed written down value of a business asset shall be the actual cost to the person or the previous owner, as the case may be, when he first acquired the asset as reduced by the aggregate amount of depreciation that would have been allowable to the person or the previous owner, as the case may be, for the preceding financial year as if the asset was the only asset in the relevant block of assets.

The said clause further provides that in the case of sale and buy back transaction in the business asset, the actual cost of a business asset shall be the actual price for which the asset is re-acquired by him or the deemed written down value, whichever is lower.

The said clause also provides that where a business capital asset is acquired by the person and subsequently it is transferred back to the transferor by way of lease, hire or otherwise, the actual cost of the asset in the hands of the person shall be the written down value of the asset in the hands of the transferor at the beginning of the financial year in which the acquisition of the asset by the person has taken place.

It is further provided that where the person is a non-resident and a business capital asset, having been acquired by him outside India, is brought by him to India, the actual cost of the asset for the person shall be the cost of acquisition of the asset by him, as reduced by an amount equal to the amount of depreciation which would have been allowable, had the asset been used in India for the purposes of the business of the person since the date of such acquisition.

The clause provides that the actual cost of an asset shall be treated as 'nil', if deduction in respect of the cost of the asset has been allowed or is allowable to the person under the Eleventh Schedule or the Twelfth Schedule or the Thirteenth Schedule, or deduction in respect of the cost of the asset has been allowed or is allowable under any of the aforesaid Schedules to any other person and the person has acquired or received the asset by any of the "special modes of acquisition".

The said clause also provides that the Board may, for the purposes of determining the actual cost of a business asset, prescribe any other cost which may be included in determining the actual cost and the method of determining the actual cost in the circumstances which are not provided for under the said clause. It is provided that in the said clause, deemed written down value of a business asset shall be the actual cost to the person or the previous owner, as the case may be, when he first acquired the asset as reduced by the aggregate amount of depreciation that would have been allowable to the person or the previous owner, as the case may be, for the preceding financial years as if the asset was the only asset in the relevant block of assets.

Clause 45 relates to the meaning of the written down value and adjusted value of assets. The said clause, inter alia, provides that the written down value of any block of assets at the beginning of the financial year shall be the written down value of the block of assets at the close of the immediately preceding financial year.

The written down value of the block of assets at the close of the immediately preceding financial year shall be the adjusted value of the block of assets in the immediately preceding financial year as reduced by the amount of capital allowance, if any, allowed under clause 37 during that year together with any expenditure incurred for acquiring the asset to the extent allowed as a deduction in the financial year under any provision of the Code.

The adjusted value of any block of assets for any financial year shall be computed in accordance with the formula—

          (A+B) - (C+D+E)

          Where

          A= the written down value of the block of assets at the beginning of the financial year;

          B = actual cost of any asset falling within the block, acquired during the financial year;

          C = moneys receivable in respect of any asset falling within the block, which is sold or discarded or destroyed or destructed during the financial year;

          D = amount of the scrap value, if any;

          E = the aggregate of the deemed written down value of the assets transferred by any of the modes referred to in sub-clause (3) of clause 44.

The said clause further provides that the adjusted value of any block of asset shall be "nil" if the amount (C+D+E) exceeds the amount (A+B).

The said clause also provides that the adjusted value of the block of assets, acquired by a successor in a business reorganisation, for the financial year in which the business reorganisation has taken place shall be the amount which would have been taken as the adjusted value of the block of assets as if the business reorganisation had not taken place.

The said clause also provides the formula for determining the written down value of the block of assets, acquired by a successor in a business reorganization, on the last day of the financial year in which the business reorganization has taken place as well as for computing the adjusted value of the block of assets where a block of assets comprises of any asset acquired in any financial year from a country outside India for the purposes of business and there is variation in liability in respect of acquisition of the asset after the date of such acquisition.

It has been provided in the said clause that the amount of liability of the person, expressed in Indian rupees at the time of making payment referred to above shall in a case where the person has entered into a forward contract, be computed with reference to the rate of exchange specified in such forward contract.

The said clause also provides that the Board may prescribe the method of determining the written down value or the adjusted written down value of the block of assets as on the first day of the first financial year, the method of determining the allocation of the written down value or the adjusted written down value of the assets between the different businesses carried on by the person and the method of determining the written down value or the adjusted written down value of the block of assets in the circumstances which are not provided for in the said clause.

Accordingly, Clause 46 provides that the income from the transfer of any investment asset shall be computed under the head "Capital gains". In addition to such income, the income under the head "Capital gains" shall also include—

     (a) income from the transfer referred to in item (d) or item (e) of sub-clause (1) of clause 47, if the parent company or its nominee ceases to hold the whole of the share capital of the subsidiary company or the investment asset is converted by the transferee into, or treated by it as, its business trading asset, before the expiry of a period of eight years from the date of such transfer;

     (b) the income from the transfer referred to in item (f) of sub-clause (1) of clause 47, if any of the conditions laid down in sub-clause (16) or sub-clause (74) of clause 314 is not complied with;

     (c) the income from the transfer referred to in item (j) or item (n) of sub-clause (1) of clause 47, if any of the conditions laid down in the said clauses is not complied with;

     (d) the amount of withdrawal referred to in sub-clause (4) of clause 55 to the extent of deduction allowed under sub-clause (2) thereof, if the condition laid down in the said sub-clause (4) is not complied with;

     (e) the amount of deposit referred to in sub-clause (5) of clause 55 to the extent of deduction allowed under sub-clause (2) thereof, if the condition laid down in the said sub-clause is not complied with.

     (f) the amount of deduction allowed under sub-section (1) of section 55, if any of the conditions specified in sub-section (6) of the section (55) is not complied with.

Clause 47 provides that the income from certain transfers shall not be treated as capital gains. It, inter alia, provides that the following transfers shall not be included in the computation of income under the head "Capital gains", namely:—

     (a) distribution of any investment asset on the total or partial partition of a Hindu undivided family;

     (b) gift, or transfer under an irrevocable trust, of any investment asset (other than sweat equity share);

     (c ) transfer of any investment asset under a will;

     (d) transfer of any investment asset by a company to its Indian subsidiary company, if the parent company or its nominees hold the whole of the share capital of such subsidiary and such subsidiary treats the asset as an investment asset;

     (e) transfer of any investment asset by a subsidiary company to the Indian holding company, if the whole of the share capital of the subsidiary company is held by such holding company or its nominees and the holding company treats the asset as an investment asset;

     (f) transfer of any investment asset by a predecessor to a successor Indian company in a scheme under a business reorganisation;

     (g) transfer of any investment asset by a private company or unlisted public company to a limited liability partnership or any transfer of a share held in the company by a shareholder as a result of conversion of the company into a limited liability partnership, subject to the fulfillment of the conditions specified therein;

     (h) transfer of shares of a predecessor co-operative bank by a shareholder under a scheme of business reorganisation, if the transfer is made in consideration of the allotment to the shareholder of shares in the successor co-operative bank;

     (i) transfer of any investment asset by a sole proprietary concern to a company, subject to the fulfillment of the conditions specified therein;

     (j) transfer of any work of art, archaeological, scientific or art collection, book, manuscript, drawing, painting, photograph or print, to the Government or a University or any public museum or institution of national importance or of renown throughout any State or States and notified by the Central Government;

     (k) transfer of any investment asset by a company to its shareholders on its liquidation;

     (l) transfer of any investment asset in a transaction of reverse mortgage under a scheme notified by the Central Government;

     (m) transfer of any beneficial interest in a security by a depository.

The said clause also defines "banking company", "banking institution", "private company", "public unlisted company" "depository" and "security".

Clause 48 provides that the financial year of taxability of the income from the transfer of an investment asset shall be the financial year in which the transfer takes place and income shall be taxable in the hands of the transferor. However, such income shall be deemed to be the income of the recipient in the following cases for the financial year specified below—

     (a) in the case of any money or asset received under an insurance from an insurer on account of damage or destruction of an insured asset, the financial year in which the money or asset is received;

     (b) in the case of any money or asset received by the participant on account of his retirement from a unincorporated body, the financial year in which the money or asset is received;

     (c) in respect of any money or asset received by the shareholder on account of liquidation or dissolution of a company as reduced by the amount assessed as dividend within the meaning of item (c) of sub-clause (81) of clause 314, the financial year in which the money or asset is received.

The said clause also provides that any consideration from transfer made by the depository or participant of any beneficial interest in a security shall be deemed to be the income of the beneficial owner of the financial year in which such transfer took place.

The said clause further provides that the amount referred to in item (d) of sub-clause (2) of clause 46 shall be the income of the financial year in which such amount is withdrawn and the amount referred to in item (e) of sub-clause (2) of clause 46 shall be the income of the third financial year immediately following the financial year in which the transfer of the original asset is effected. The amount referred to in item (f) of sub-clause (2) of clause 46 shall be the income of the financial year in which any condtions referred to in sub-clause (6) of clause 55 is not complied with.

The said clause also defines the term "beneficial owner".

Clause 49 relates to the computation of income from transfer of any investment asset. The income from the transfer of any investment asset during the financial year shall be the full value of the consideration accrued or received as a result of the transfer, as reduced by the aggregate amount of the deductions referred to in clause 51. The said clause further provides that for the purpose of such computation, where the investment asset is any beneficial interest in respect of securities referred to in item (d) of sub-clause (2) of clause 48, the cost of acquisition and the period of holding of such securities shall be determined on the basis of first-in-first-out method.

Clause 50 provides that the full value of the consideration shall be the amount received by, or accruing to, the transferor or the recipient, as the case may be, directly or indirectly, as a result of the transfer of the investment asset. The said clause also specifies as to what amount would constitute the full value of consideration in respect of transfers made under certain specific circumstances.

Clause 51 relates to deduction for cost of acquisition of an investment asset. Sub-clause (1) of the said clause provides that for the purpose of computation of income from transfer of an investment asset, the cost of acquisition of an investment asset, the cost of improvement of such asset and the amount of expenditure incurred wholly and exclusively in connection with the transfer of such asset, shall be allowed as deduction.

Sub-clause (2) of the said clause provides that in the case of an equity share in a company or a unit of an equity oriented fund, transferred at any time after one year from the end of the financial year in which such asset is acquired and such transaction is chargeable to securities transaction tax under Chapter VII of the Finance (No.2) Act, 2004, if the income computed after giving effect to sub-clause (1) is a positive income, a deduction amounting to hundred per cent. of the income so arrived at shall be allowed and if the income computed after giving effect to sub-clause (1) is a negative income, hundred per cent. of the income so arrived at shall be reduced from such income.

Sub-clause (3) of the said clause provides that if an investment asset, not being an equity share or a unit of an equity oriented fund referred to in sub-clause (2) or referred to in sub-clause (5) of clause (53) is transferred at any time after one year from the end of the financial year in which the asset is acquired by the persons, the following deductions shall be allowed for the purposes of computation of income from the transfer of such asset :—

         (i) the indexed cost of acquisition, if any, of the asset;

         (ii) the indexed cost of improvement, if any, of the asset;

         (iii) the amount of expenditure, if any, incurred wholly and exclusively in connection with the transfer of the asset; and

         (iv) the amount of relief for rollover of the asset, as determined under clause 55.

Clause 52 relates to indexed cost of acquisition or improvement. The indexed cost of acquisition of an investment asset referred to in sub-clause (3) of clause 51 for the purposes of computation of income from transfer of such asset shall be the amount determined in accordance with the formula specified in sub-clause (1) of the said clause.

The said clause further provides that the indexed cost of improvement of an investment asset referred to in sub-clause (3) of clause 51 shall be in accordance with the formula specified in sub-clause (2) of the said clause.

Clause 53 relates to cost of acquisition of an investment asset. It, inter alia, provides that the cost of acquisition of an investment asset, shall be—

    (a) the purchase price of the asset, or

    (b) at the option of the person, the fair market value of the asset on the first day of April, 2000, if the asset was acquired by the person before such date.

Sub-clause (2) of the said provides that the cost of acquisition of an investment asset specified in column (2) of the Seventeenth Schedule, acquired by the mode specified in column (3) of the said Schedule, shall be the cost specified in column (4) therein.

The said clause further provides that the cost of acquisition of an investment asset acquired by a person by any of the special modes of acquisition, shall be the cost at which the asset was acquired by the previous owner or at the option of the person, the fair market value of the asset on the 1st day of April, 2000, if the asset was acquired by the previous owner or the person before such date.

The said clause also provides that the cost of acquisition of an investment asset referred to in items (h), (i) or (j) of sub-clause (2) of clause 58 shall be the fair market value or the stamp duty value, as the case may be, which has been taken into account for the purposes of the said clauses.

The said clause further provides that the cost of acquisition of an investment asset being an undertaking or division of a business transferred by way of a slump sale referred to in sub-clause (267) of clause 314 shall be the net worth of such undertaking or division.

The said clause also provides that the cost of acquisition of an investment asset forming part of a bundle of investment assets acquired by any participant, on distribution of the asset to him on account of his retirement from any unincorporated body, shall be the amount determined in accordance with the formula specified therein.

Further the cost of acquisition of an investment asset shall be "nil", in relation to,—

    (a) an investment asset, where such asset has been acquired by self-generation;

    (b) the asset which is acquired by way of compulsory acquisition and the compensation or consideration for such acquisition is enhanced or further enhanced by any court, tribunal or other authority; or

    (c) the asset, where the cost of acquisition to the person or the previous owner, if any, cannot be determined or ascertained, for any reason.

The said clause also defines the terms "previous owner" and "net worth".

Clause 54 provides that the cost of improvement of an investment asset shall be any expenditure of a capital nature incurred in making any additions or alterations to the asset by the person or by the previous owner, if the asset is acquired by any special mode of acquisition referred to in sub-clause (237) of clause 314.

The said clause also provides that the cost of improvement of the investment asset, in a case where the asset became the property of the person or the previous owner before the first day of April, 2000, shall be any capital expenditure incurred for any addition or alteration to such asset on or after the first day of April, 2000.

The said clause further provides that the cost of improvement of an investment asset shall be "nil " in relation to—

    (a) an investment asset acquired by self-generation;

    (b) an investment asset being an undertaking or division transferred by way of a slump sale; or

    (c) any investment asset if the cost of improvement cannot be determined or ascertained, for any reason.

The said clause also provides that any expenditure deductible in computing the income under any other head of income shall not be taken into account while computing the cost of improvement.

Clause 55 relates to relief for rollover of investment asset. It provides that an individual or a Hindu undivided family shall be allowed a deduction, in respect of rollover of any original investment asset referred to in sub-clause (3) of clause 51, from the capital gain arising from the transfer of the asset. Such deduction shall be computed in accordance with the formula—

             A X (B+C+D)/E

             Where A = the amount of capital gains arising from the transfer of the original investment asset;

              B = the amount invested for purchase or construction of the new asset referred to in sub-clause (6) within a period of one year before the date of transfer of original investment asset;

              C = the amount invested for purchase or construction of the new asset referred to in sub-clause (6) by the end of the financial year in which the transfer of the original investment asset is effected or six months from the date of transfer, whichever is later;

              D = the amount deposited in an account in any bank by the end of the financial year in which the transfer of the original investment asset is effected or six months from the date of transfer, whichever is later, in accordance with the Capital Gains Deposit Scheme framed by the Central Government in this behalf;

              E = the net consideration received as a result of the transfer of the original investment asset.

The said clause further provides that such deduction shall not exceed the amount of capital gains arising from the transfer of the investment asset. Further, any amount withdrawn from an account under the Capital Gains Deposit Scheme shall be utilised within one month from the end of the month in which the amount is withdrawn, for the purposes of purchase or construction of the new asset. Also, the amount deposited in the account under the Capital Gains Deposit Scheme shall be utilised for the purposes of purchase or construction of the new asset within three years from the end of the financial year in which the transfer of the original asset is effected.

The said clause further provides that such deduction shall be allowed if—

    (a) the transferred investment asset (original investment asset) was an agricultural land during two years immediately preceding the year of transfer and the person, being an individual or Hindu undivided family, acquires one or more pieces of agricultural land at least one year before the beginning of the financial year in which the transfer of the asset took place subject to the condition that the new asset shall not be transferred within one year from the end of the financial year in which the new asset is acquired;

    (b) the transferred investment asset (original investment asset) was any asset acquired at least one year before the beginning of the financial year of transfer and the new investment asset is a residential house and the person does not own more than one residential house, other than the new investment asset on the date of transfer of the original asset subject to the condition that a new asset shall not be transferred which one year from the end of the financial year in which the new asset is acquired or constructed;

The said clause also defines the term "net consideration".

Clause 56 provides that the income of every kind falling under the clause "Income from ordinary sources", shall be computed under the head "Income from residuary sources". if it is not required to be included in computing the Income under any of the heads of Income specified in items A to D of section 14.

Clause 57 deals with computation of income from residuary sources. It provides that the income computed under the head "Income from residuary sources" shall be the gross residuary income as reduced by the amount of deductions referred to in clause 59.

Clause 58 deals with scope of gross residuary income. It provides that the gross residuary income shall include all accruals or receipts in the nature of income, which do not form part of income from special sources and income under any of the heads specified in items A to D of section 14. In addition to such income, gross residuary income shall, inter alia, include—

    (a) dividends (other than dividends in respect of which dividend distribution tax has been paid under clause 109);

    (b) interest (other than interest accrued to or received by financial institutions);

    (c) interest received on compensation or on enhanced compensation;

    (d) income from the activity of owning and maintaining horses for the purpose of horse race;

    (e) any amount received from employees as contributions to any fund set up for their welfare, if not included under the head "Income from business";

    (f) income from machinery, plant or furniture belonging to the person and let on hire, if not included under the head "Income from business";

    (g) any amount received under a Keyman insurance policy (including the sum allocated by way of bonus on such policy) if not included under the heads "Income from employment" or "Income from business";

    (h) the aggregate of any moneys and the value of any specified property, other than immovable property, received for inadequate consideration or without consideration by an individual or a Hindu undivided family;

    (i) the value of any immovable property received without consideration by an individual or a Hindu undivided family;

    (j) the value of any investment made by the person in the financial year to the extent for which he offers no explanation about the nature and source of the investments or offers an explanation but fails to substantiate it or such explanation offered by him is not satisfactory in the opinion of the Assessing Officer;

    (k) the value of any money, bullion, jewellery or other valuable article owned by the person to the extent for which he offers no explanation about the nature and source of acquisition of the same or offers an explanation but fails to substantiate it or such explanation is not satisfactory in the opinion of the Assessing Officer;

    (l) the amount of any expenditure incurred by the person in the financial year, if he offers no explanation about the source of such expenditure or offers an explanation but fails to substantiate it or such explanation is not satisfactory in the opinion of the Assessing Officer;

    (m) any amount of income of a controlled foreign company attributable to a resident in accordance with the Twentieth Schedule;

    (n) any amount received as advance, security deposit or otherwise from the long-term leasing or transfer of whole or part of or any interest in any investment asset;

    (o) any sum received as family pension. The said clause provides that the value of any property referred to in (h) or (i) above shall be the stamp duty value in the case of an immovable property as reduced by the amount

of consideration, if any, paid by the person and the fair market value in the case of any other property as reduced by the amount of consideration, if any, paid by the person.

The said clause further provides that the amount referred to in (h) above shall not include any amount received —

    (a) from any relative;

    (b) on the occasion of the marriage of the individual;

    (c) under a will or by way of inheritance;

    (d) in contemplation of death of the payer;

    (e) from any local authority; or

    (f) from any non-profit organisation.

Further, "relative" and "specified property" have been defined in the said clause.

Clause 59 provides for deductions from gross residuary income. The deductions for the purposes of computation of income from residuary sources shall be the aggregate of —

    (a) the amount of expenditure specified in sub-clause (2), if the expenditure (other than capital expenditure) is laid out or expended, wholly and exclusively, for the purposes of making or earning the gross residuary income and it fulfills the conditions specified therein; and

    (b) the amount of deductions specified in sub-clause (3) subject to the fulfilment of the conditions specified therein.

    (c) any amount received during the year as divident from a controlled foreign company as referred to in clause (u) of sub-section (2) of section 58, to the extend such amount has been included in the total income of the person in any preceding financial year in accordance with provisions of the said clause.

The said clause further provides certain monetary limits for allowable deduction in respect of certain income from residuary sources. It also inter alia provides that any amount relating to personal expenses and any amount of tax, interest or penalty paid under this Code or the Income-tax Act, 1961 or the Wealth Tax Act, 1957 as it stood before the commencement of this Code and any payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft subject to the conditions specified in the said clause shall not be allowed as a deduction. The said clause also defines the term "capital sum assured'' in relation to a life insurance policy.

Sub-chapter III of Chapter III deals with aggregation of income computed under various heads of income as provided under sub-chapter II.

Sub-chapter III of Chapter III deals with aggregation of income computed under various heads of income as provided under sub-chapter II.

Clause 60 seeks to provide the manner in which the income under each head of income is to be aggregated for a financial year so as to result in the income from any particular head of income for that financial year. Thus, the income for a financial year under each of the five heads of income would be determined in accordance with the provisions of this clause.

The said clause further provides for the computation of the income from capital gains, speculative business and income from the activity of owning and maintaining horses for the purpose of horse race in such a manner that any loss from such sources shall be set off only against positive income from such sources.

Clause 61 seeks to provide the manner in which the current income from ordinary sources for a year is to be computed. The classification of income as "Income from ordinary sources" and "Income from special sources" has been provided in clause 13 of the Code.

The said clause further provides that the current income of a financial year under each head of income is to be aggregated to arrive at the current income from ordinary sources.

This current income is to be further aggregated with the unabsorbed preceding year loss from ordinary sources to arrive at the gross total income from ordinary sources.

The said clause also provides that if the gross total income from ordinary sources so arrived at is negative then it shall be treated as nil and the absolute value of the negative income shall be the unabsorbed current loss from ordinary sources.

Clause 62 seeks to provide for the aggregation of income from special sources. The aggregate income from a special source in a financial year would be the current income from the special source for that financial year. The incomes from special sources are enumerated in Part III of the First Schedule to the Code.

The said clause further provides that the current income from the special source in a financial year shall be aggregated with the unabsorbed preceding year loss from the special source to arrive at the gross total income from the special source for that financial year.

The said clause also provides that if the gross total income from the special source so arrived at is negative then it shall be treated as nil and the absolute value of the negative income shall be the unabsorbed current loss from the special source for the financial year.

The said clause further provides that the gross total income from special source in respect of each special source shall be aggregated and the net result of the aggregation shall be the total income from special sources for the financial year.

Clause 63 seeks to provide the manner in which the total income of any person in a financial year is to be determined. For the sake of simplicity, the clause provides for the determination of total income by means of a mathematical formula. The clause provides that the total income of a person for a financial year is to be determined by adding the total income from ordinary sources with the total income from the special sources. The total income from ordinary sources shall, however, be reduced by the amount of deductions available to the person under sub-chapter IV of Chapter III before it is aggregated with the total income from special sources.

Clause 64 seeks to provide the manner in which income is to be aggregated in case of a business reorganisation or where a company is converted into a limited liability partnership. In such cases, the unabsorbed current loss from ordinary sources of the predecessor in the financial year in which the business reorganisation takes place, shall be treated as the unabsorbed preceding year loss from ordinary sources of the successor in business in that year and the provisions of clause 61 shall apply. Similarly, the unabsorbed current loss from special sources of the predecessor in the financial year in which the business reorganisation takes place, shall be treated as the unabsorbed preceding year loss from special sources of the successor in business in that year and the provisions of clause 62 shall apply.

Sub-clause (2) of the said clause provides that the benefit of taking over the loss of the predecessor by the successor shall not be available to the latter in a case of business reorganisation if it does not satisfy the test of continuity of business. Test of continuity of business has been defined in clause 314 of the Code as a set of conditions which the successor must fulfill to satisfy the test.

Sub-clause (2) further provides that the said benefit shall not be available to a successor in case of a business reorganisation if the predecessor is a sole proprietary concern or an incorporated body and the share holding of the sole proprietor ceases to be less than fifty per cent. of the total value of the shares of the successor company at any time during the period of five years immediately succeeding the financial year in which the business reorganisation takes place.

Sub-clause (3) of the said clause provides that the benefit of taking over the loss of the predecessor by the successor in a case of conversion of a company into a limited liability partnership shall not be available to the successor if any of the conditions, specified in item

(j) of sub-clause (1) of clause 47 of the Bill are not fulfilled.

Sub-clause (4) of the said clause provides that the total income of the financial year, in which the business reorganisation or the conversion took place, and all the subsequent financial years shall, notwithstanding anything in this Code, be rectified as if the provisions of this clause had never been given effect to in those financial years if the conditions specified therein are not fulfilled at any time during five financial years immediately succeeding the financial year in which the business reorganisation or conversion took place.

Clause 65 provides that in the event of a change in the constitution of an unincorporated body, due to death or retirement of a participant, the unabsorbed current loss from ordinary or special sources shall be reduced in proportion to the percentage of share holding of such deceased or retired participant for the financial year ending on the date of death or retirement of the participant.

The said clause further provides that such reduced loss shall be the unabsorbed preceding year loss of the unincorporated body for the financial year beginning on the date immediately following the date on which the death or retirement of the participant took place.

Clause 66 seeks to provide that a closely held company shall not be allowed to aggregate the unabsorbed preceding year loss from ordinary or special sources with the income of the current financial year unless it satisfies the test of continuity of ownership.

The said clause further provides that the closely-held company shall satisfy the test of continuity of ownership if the shares of the company beneficially held by persons, carrying not less than fifty-one per cent. of the voting power on the last day of the financial year immediately preceding the relevant financial year, are held by the same persons on the last day of the relevant financial year.

The said clause also provides that while calculating the percentage of voting power—

    (a) any change in the voting power in the relevant financial year due to the death of a shareholder or on account of transfer of shares by way of gift to any relative of the donor shareholder shall be ignored;

    (b) any change in the shareholding of an Indian company, which is a subsidiary of a foreign company, as a result of amalgamation or demerger of a foreign company, shall be ignored, if fifty-one per cent shareholders of the amalgamating or demerged foreign company continue to be the shareholders of the amalgamated or the resulting foreign company.

Clause 67 seeks to provide that aggregation of losses generated in a financial year shall not be allowed if the return of tax bases for the said year is not furnished by the due date. Thus, the losses generated in the current year shall not be taken into consideration for any purposes of the Code.

Sub-chapter IV of Chapter III of the Bill deals with tax incentives. Tax incentives are the deductions available to a person while computing his total income for a financial year.

Clause 68 provides that the deductions under this sub-chapter are available only in respect of "gross total income from ordinary sources" and the aggregate amount of such deductions shall not exceed the gross total income from ordinary sources.

The said clause further provides that any sum which qualifies for a deduction under this sub-chapter in any financial year, shall not qualify for deduction under any other provision of the Code for the same or any other financial year or in the case of any other person even if full deduction of the sum referred therein has not been allowed.

Clause 69 seeks to provide that a person, being an individual, shall be allowed a deduction of a maximum of one lakh rupees for savings made by him in respect of the amount paid or deposited by the person in a financial year, as his contribution to any approved fund to an account of the individual, spouse or any child of such individual.

Clause 70 seeks to provide that a person, being an individual or a Hindu undivided family, shall be allowed a deduction in respect of any sum paid or deposited during a financial year to effect, or keep in force, an insurance on the life of certain specified persons. The persons specified are the individual, his spouse and children and the members of a Hindu undivided family.

The said clause further provides that the insurance policy, to be eligible for this deduction, should be one where the amount of the annual premium payable should not exceed five per cent. of the capital sum assured in any year during the term of the policy.

Clause 71 seeks to provide that a person, being an individual or a Hindu undivided family, shall be allowed a deduction in respect of any sum paid during a financial year to effect, or to keep in force, an insurance on the health of certain specified persons. The persons specified are the individual, his spouse, dependant children and parents, and the members of a Hindu undivided family.

The said clause further provides that in the case of an individual, an additional deduction shall be allowed in respect of any contribution made to the Central Government Health Scheme.

The said clause also provides that the health insurance scheme should be framed by an insurer which is approved by the Insurance Regulatory and Development Authority.

Clause 72 seeks to provide a deduction to a person, being an individual or a Hindu undivided family, in respect of any sum paid during the financial year as tuition fee to any school, college, university or other educational institution situated within India for the purpose of full-time education of any two children of such individual or Hindu undivided family.

The said clause further provides that tuition fee shall not include any payment towards any development fee or donation or any payment of similar nature. It also clarifies that full-time education shall include education in a play school or pre-school.

Clause 73 seeks to provide a maximum limit on the amount of deduction available under clauses 70, 71 and 72. It lays down a ceiling of fifty thousand rupees on the amount of deduction available in respect of payments made for a life insurance policy, health insurance policy and education of children.

Clause 74 seeks to provide that a person, being an individual or a Hindu undivided family, shall be allowed a deduction in respect of an amount paid or payable by way of interest on loan taken for the purpose of acquisition, construction, repair or renovation of a house property in the financial year in which such property is acquired or constructed or any subsequent financial year, subject to certain conditions specified therein.

Sub-clause (2) of the said clause specifies the conditions by providing that the deduction shall be available if —

    (a) the house property is owned by the person and not let out during the financial year;

    (b) the acquisition or construction of the house property is completed within three years from the end of the financial year in which the loan was taken; and

    (c) the person obtains a certificate from the financial institution to whom the interest is paid or payable on the loan taken.

Sub-clause (3) of the said clause provides that the interest, which pertains to the period prior to the financial year in which the house property has been acquired or constructed, shall be allowed as deduction in five equal installments beginning from such financial year. For example, if the total amount of interest paid prior to the financial year in which the house property has been acquired or constructed is one lakh rupees, then, the person would be eligible for a deduction of twenty thousand rupees every year for five years starting from the year in which the house property is acquired or constructed.

Sub-clause (4) of the said clause provides that the interest for such prior period shall be reduced by any part thereof which has been already allowed as a deduction under any other provision of this Code.

Sub-clause (5) lays down the maximum limit of deduction that can be claimed under this clause. This limit has been specified as one lakh and fifty thousand rupees.

Clause 75 provides that a person being an individual, would be allowed a deduction of any amount of interest paid on a loan taken by him from any financial institution for financing the higher education of himself or of his relatives.

Sub-clause (2) of the said clause provides that the deduction shall be allowed for eight years beginning from the initial year of repayment of interest or till the interest is repaid in full, whichever is earlier.

Sub-clause (3) of the said clause provides the definitions of certain expressions used in the clause like, "financial institution", "higher education", etc. It clarifies that the term relative means the spouse and the child of the individual and also a student for whom the individual is the legal guardian.

Clause 76 provides that a person, being a resident individual or Hindu undivided family, shall be allowed a deduction in respect of any amount paid during the financial year for medical treatment of the prescribed disease or ailment of any specified person.

Sub-clause (2) of the said clause provides that the deduction available shall be a maximum of sixty thousand rupees in case the payment is made for a senior citizen and forty thousand rupees if the payment is made for any other person.

Sub-clause (3) of the said clause provides that the deduction allowable shall be reduced by the amount received, if any, under an insurance from an insurer, or reimbursed by an employer, for the medical treatment of the specified person.

Sub-clause (4) of the said clause provides that the deduction shall not be allowed unless the person obtains a certificate from a prescribed specialist working in a Government hospital.

Sub-clause (5) of the said clause defines the terms "specified person" and "Government hospital".

Clause 77 seeks to provide a deduction to a person, being a resident individual and having a disability, subject to certain conditions. The deduction shall be allowed if the person obtains a certificate from a medical authority in the prescribed form and manner and the certificate remains valid during the relevant financial year or part thereof.

The said clause further provides that the amount of deduction shall not exceed—

    (a) one lakh rupees, if he is a person with severe disability; and

    (b) fifty thousand rupees, if he is a person with disability.

Clause 78 seeks to provide a deduction to a person, being a resident individual or Hindu undivided family, in respect of —

    (a) any expenditure incurred during the financial year for the medical treatment, nursing or training and rehabilitation of a dependant person with disability; or

    (b) any amount paid or deposited during the financial year under a scheme framed by any insurer and approved by the Board in this behalf, for the maintenance of a dependant person with disability.

Sub-clause (2) of the said clause provides that the deduction available shall be one lakh rupees in case the dependant person is a person with severe disability and fifty thousand rupees if he is a person with disability.

Sub-clause (3) of the said clause provides that the deduction in respect of the payment under the insurance scheme referred to in sub-clause (1) shall be allowed only if the scheme referred to therein provides for payment of an annuity or a lump sum amount for the benefit of the dependant person with disability, in the event of the death of the individual or the member of the Hindu undivided family who subscribes to such scheme.

Sub-clause (4) of the said clause provides that the deduction under this clause shall be allowed only if the person claiming the deduction obtains a certificate from a medical authority in the prescribed form and manner and the certificate remains valid during the relevant financial year or part thereof.

Sub-clause (5) of the said clause provides that in the event of the dependant person with disability predeceasing the individual or the member of the Hindu undivided family who has subscribed to the insurance scheme referred to in sub-clause (1), any amount received by such individual or Hindu undivided family shall be deemed to be his or its income for the financial year in which the amount is received.

Sub-clause (6) of the said clause defines the term "dependant".

Clause 79 seeks to provide that a person shall be allowed a deduction of —

   (a) one hundred and seventy-five per cent. of the amount of money paid by him in the financial year as contribution or donation to any person specified in Part-I of the Sixteenth Schedule;

   (b) one hundred and twenty-five per cent. of the amount of money paid by him in the financial year as contribution or donation to any person specified in Part-II of the Sixteenth Schedule;

   (c) one hundred per cent. of the amount of money paid by him in the financial year as donation to any person specified in Part-III of the Sixteenth Schedule;

   (d) fifty per cent. of the aggregate amount of money paid by him in the financial year as donation to any person specified in Part-IV of the Sixteenth Schedule.

Parts I, II, III and IV of the Sixteenth Schedule to the Bill contain the names of the organisations/institutions/funds to which such contribution or donation is to be made so as to be eligible for the deduction under this clause.

Sub-clause (2) of the said clause provides that the aggregate of the amount of money paid to persons specified in Part IV of the Sixteenth Schedule shall be limited to ten per cent. of the gross total income from ordinary sources, if the aggregate exceeds ten per cent. of such gross total income from ordinary sources.

Sub-clause (3) of the said clause provides that the deduction under this clause shall not be allowed in respect of any amount of money paid to any person referred to in sub-clause (1) if the amount is utilized by such person (the donee) for any religious activity or for the benefit of any particular caste other than the Scheduled Castes or the Scheduled Tribes.

Sub-clause (4) of the said clause provides that the donation to any organisation/ institution/fund specified in Part IV of the Sixteenth Schedule shall be eligible for deduction under sub-clause (1) only if such organisation/institution/fund obtains the approval of the prescribed authority.

Sub-clause (5) of the said clause provides that deduction to a donor shall not be denied merely on the ground that, subsequent to the donation, the donee has ceased to be a non-profit organisation. Thus, this provision protects the donor in a situation where the donee may lose its status of being a non-profit organisation for any reason whatsoever.

Clause 80 seeks to provide that a person, being an individual and not in receipt of any house rent allowance, shall be allowed a deduction of any expenditure incurred by him in excess of ten per cent. of his gross total income from ordinary sources towards payment of rent in respect of any furnished or unfurnished accommodation occupied by him for his own residence.

The said clause further provides that the deduction shall be allowed up to a maximum limit of two thousand rupees per month and shall be subject to such other conditions as may be prescribed having regard to the area in which the accommodation is situated.

The said clause also provides that deduction under this clause shall not be available to a person if any residential accommodation is owned by him or by his spouse or minor child in the same place where he ordinarily resides or performs duties of his office or employment or carries on his business.

Clause 81 seeks to provide that a person shall be allowed a deduction in respect of any contribution made by him in a financial year to a political party or electoral trust.

The said clause further provides that the deduction shall not exceed five per cent. of the average of the net profit determined in accordance with the provisions of sections 349 and 350 of the Companies Act, 1956 during the three immediately preceding financial years, in the case of a company and five per cent. of the gross total income from ordinary sources, in any other case.

The clause also defines the term "contribution".

Clause 82 seeks to provide that a person, being an Investor Protection Fund, shall be allowed a deduction of the amount of contribution received from any recognised stock exchange, or recognised commodity exchange, and the members thereof if such amount is included in its gross total income from ordinary sources.

The said clause further provides that the deduction shall be allowed if the Investor Protection Fund is set up, either jointly or separately, by recognised stock exchanges or recognised commodity exchanges and such Investor Protection Fund is notified by the Central Government.

Clause 83 seeks to provide a deduction of up to three lakh rupees to a resident individual, who is an author, in respect of income earned by him as a lump sum consideration for the assignment or grant of any of his interest in the copyright of the book written by him or as a royalty or copyright fee in respect of the said book, if such income is included in his gross total income from ordinary sources.

The said clause further provides that the book should be of literary, artistic or scientific nature.

The said clause also provides that brochures, commentaries, diaries, guides, journals, magazines, newspapers, pamphlets and tracts, etc., shall not be eligible for deduction under this clause.

Clause 84 seeks to provide a deduction to a resident individual, who is a patentee, in respect of income earned by him by way of royalty in respect of a patent registered on or after the 1st day of April, 2003 under the Patents Act, 1970, if such income is included in his gross total income from ordinary sources.

The said clause further provides that the deduction under this clause shall be equal to the amount of royalty allowable under the terms and conditions of a licence settled by the Controller under the Patents Act, 1970, if a compulsory licence is granted in respect of any patent under that Act or three lakh rupees, whichever is lower.

The terms like, "patent", "patentee", "royalty", etc., have also been defined in the said clause.

Clause 85 seeks to provide that a primary co-operative society shall be eligible for a deduction of the entire amount of its income from the business of providing banking, or credit, facility to its members.

The said clause further provides that a primary cooperative society means a "primary agricultural credit society" within the meaning of Part V of the Banking Regulation Act, 1949 or a "primary co-operative agricultural and rural development bank" having its area of operation confined to a taluk and being mainly engaged in providing long-term credit for agricultural and rural development activities.

Clause 86 seeks to provide that a primary co-operative society shall be eligible for a deduction of the entire amount of its income from agriculture or agriculture-related activities. It shall also be eligible for a deduction of a maximum of one lakh rupees in respect of income derived by it from any other activity.

The said clause further provides the meaning of the terms "agriculture-related activities" and "primary co-operative society".

Clause 87 seeks to provide for the system and procedure of maintenance of accounts. Accordingly, the said clause provides that every person shall keep and maintain such books of account and other documents which would enable the Assessing Officer to compute his total income in accordance with the provisions of this Code. Any person carrying on legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration or any other notified profession or carrying on business shall keep and maintain such books of account if —

       (i) his income from the business exceeds two lakh rupees;

       (ii) his total turnover or, gross receipts as the case may be, in the business exceeds ten lakh rupees in any one of the three financial years immediately preceding the relevant financial year; or

       (iii) his income or, total turnover as the case may be, his in a case of a newly set up business in any financial year, is likely to exceed two lakh rupees or ten lakh rupees, respectively, during such financial year.

The said clause further provides that every person who has entered into an international transaction shall keep and maintain such information and documents in respect of such transactions, as may be prescribed.

The said clause also provides that the Board may prescribe the books of account other than those enumerated in the clause and also the period for which the books of account and other documents required to be kept and maintained under this clause shall be retained.

Clause 88 seeks to provide the method, manner and mechanism for audit of accounts and reporting of international transactions.

Accordingly, the said clause provides that every person, who is required to keep and maintain books of account under clause 87, shall get his accounts for the financial year audited if the gross receipts from the profession exceed twenty-five lakh rupees in the financial year or the total turnover or gross receipts of the business exceed one crore rupees in the financial year. The audit of the accounts shall be carried out by an accountant and the report of the audit should be obtained by the person before the due date in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed.

The said clause further provides that a person who has entered into an international transaction during a financial year shall furnish a report of such transaction to the Transfer Pricing Officer, on or before the due date, obtained from an accountant in the prescribed form duly signed and verified in the prescribed manner by such accountant.

Clause 89 relates to the method of accounting.

Sub-clause (1) of the said clause provides that the income chargeable under the head "Income from business" or "Income from residuary sources" shall, except as otherwise provided in the clause, be computed in accordance with either cash or mercantile system of accounting regularly employed by the person.

Sub-clause (2) of the said clause provides that the Central Government may from time to time notify the accounting standards to be followed by any class of persons or in respect of any class of income.

Sub-clause (3) of the said clause provides that the valuation of purchase of goods and inventory for the purposes of determining the income chargeable under the head "Income from business" shall be in accordance with the method of accounting regularly employed by the person and further adjusted to include the amount of any tax, duty, cess or fee actually paid or incurred by the person to bring the goods to the place of its location and condition as on the date of its valuation.

Sub-clause (4) of the said clause provides that the value of sale of goods for the purposes of determining the income chargeable under the head "Income from business" shall be determined in accordance with the method of accounting regularly employed by the person and further adjusted to include the amount of any tax, duty, cess or fee leviable on the sale of the goods.

Sub-clause (5) of the said clause provides that the interest on bad or doubtful debts of any financial institution shall be included in its total income of the financial year in which the interest is credited to the profit and loss account or is actually received, whichever is earlier.

Sub-clause (6) of the said clause provides that the interest received by a person on compensation or on an enhanced compensation shall be included in the total income of the financial year in which it is received.

Sub-clause (7) of the said clause defines the term "bad or doubtful debts".

Chapter IV deals with special provisions relating to the computation of total income of non-profit organisations.

Clause 90 provides that Chapter-IV shall be applicable to a non-profit organisation, other than any organisation of public importance, specified in the Seventh Schedule. It also provides that the Central Government may, subject to such conditions as may be considered necessary, notify a person as a non-profit organisation of public importance for the purpose of the Seventh Schedule.

For this purpose, a non-profit organisation has been defined in clause 314 to mean an organisation, by whatever name called, including a trust, if—

       (i) it is not established for the benefit of any particular caste or religious community;

       (ii) it does not provide any benefit for the members of any particular caste or religious community;

       (iii) it is established for the benefit of the general public or for the benefit of the Scheduled Castes, the Scheduled Tribes, backward classes, women or children;

       (iv) it is established for carrying on charitable activities;

       (v) it is not established for the benefit of any of its members;

       (vi) it actually carries on the charitable activities during the financial year;

       (vii) the actual beneficiaries of its activities are the general public, Scheduled Castes, the Scheduled Tribes, backward classes, women or children; and

       (viii) it is registered as such under clause 98.

Clause 91 provides that the total income of a non-profit organisation shall be computed in accordance with the provisions of Chapter IV.

Clause 92 provides for the computation of total income of a non-profit organisation. It provides that subject to the provisions of section 8, the total income of any non-profit organisation in relation to any charitable activity during the financial year shall be the gross receipts as reduced by the amount of outgoings, computed in accordance with the cash system of accounting. The said clause also provides that where the non-profit organisation is a company registered under section 25 of the Companies Act, 1956, such total income shall be computed in accordance with the mercantile system of accounting.

Clause 93 provides that the gross receipts of the non-profit organisation from any charitable activity shall be the aggregate of the following, namely:—

   (a) the amount of voluntary contributions received;

   (b) any rent received in respect of a property held by it consisting of any building or landappurtenant thereto;

   (c) the amount of income derived from any business carried on by it, if the business is incidental to any charitable activity so carried on;

   (d) income from transfer of any capital asset computed in accordance with the provisions of sections 46 to 54 (both inclusive) where the asset is not used for the purposes of any charitable activity or any business incidental to such charitable activity;

   (e) full value of the consideration received from the transfer of any business capital asset, other than the asset referred to clause (d);

   (f) the amount of income received from investment of its funds or assets; and

   (g) the amount of any incoming, realisation, proceeds, or subscription received from any source.

   (h) any amount, which was received in the last month of the immediately preceding financial year and was deposited in a specified deposit account as referred to sub-items (e) of clause 94.'

The said clause further provides that such gross receipts shall not include any loan taken during the financial year and voluntary contributions received with a specific direction that they shall form part of the corpus of the non-profit organisation.

Clause 94 provides that for the purpose of computation of the total income, the amount of outgoings during the financial year of a non-profit organisation shall be the aggregate of —

   (a) the amount paid for any expenditure incurred wholly and exclusively for earning or obtaining any receipts referred to in clause 92;

   (b) the amount paid for any expenditure, other than capital expenditure, incurred for the purposes of carrying out any charitable activity;

   (c) the amount paid for any capital expenditure for the purposes of any business, if the business is incidental to any charitable activity carried on by the non-profit organisation;

   (d) any amount applied outside India, if the amount is applied for an activity which tends to promote international welfare in which India is interested and the nonprofit organisation is notified by the Central Government in this behalf;

   (e) any amount which is received during the last month of the financial year and has been deposited on or before the last day of the financial year in a specified deposit aacount under such Deposit Account Scheme as may be prescribed; and

   (f) any amount accumulated or set apart for carrying on any charitable activity—

      (i) to the extent of fifteen per cent. of the total income (before giving effect to the provisions of this clause) or ten per cent. of the gross receipts, whichever is less; and

      (ii) invested or deposited in the modes specified in clause 95, for a period

not exceeding three years from the end of the financial year. Clause 95 stipulates that the modes of investing or depositing the money referred to in sub-clause (f) of clause 94. It also provides that the funds or the assets of the non-profit organisation (other than any assets forming part of its corpus as on the 1st day of June, 1973) shall be invested or held, at any time during the financial year, in any of the said modes.

Clause 96 provides that any amount referred to in sub-clause (f) of clause 94 shall be deemed to be the income of the non-profit organisation, if the amount is not utilised for the purpose for which it was accumulated or set apart during the period specified therein or the amount ceases to remain invested or deposited in any of the modes specified in clause 95.

The said clause further provides that for the purposes of this clause, the amount shall be deemed to be the income of the financial year immediately following the expiry of the specified period if the amount is not utilised during the financial year for the purpose for which it was accumulated or set apart, or in which the amount ceases to remain so invested or deposited in any of the specified modes.

Clause 97 relates to use or application of funds or assets for the benefit of an interested person. It provides that the funds or the assets of the non-profit organisation shall not be used or applied, directly or indirectly, for the benefit of an interested person. The said clause further provides that the funds or assets of the non-profit organisation shall be deemed to have been used or applied for the benefit of an interested person, if —

   (a) its funds or assets are lent to any interested person, for any period during the financial year without either adequate security or adequate interest or both;

   (b) its land, building or other asset is made available for the use of any interested person for any period during the financial year without charging adequate rent or other compensation;

   (c) any amount is paid by way of salary, allowance or otherwise during the financial year to any interested person for services rendered to the non-profit organisation and the amount so paid is in excess of what may be reasonably paid for such services;

   (d) the services of the non-profit organisation are made available to any interested person during the financial year without adequate remuneration or other compensation;

   (e) any share, security or other property is purchased by or on behalf of the nonprofit organisation from any interested person during the financial year for consideration which is more than adequate;

   (f) any share, security or other property is sold by or on behalf of the non-profit organisation to any interested person, during the financial year, for consideration which is less than adequate;

   (g) any fund or asset of the non-profit organisation are diverted during the financial year in favour of any interested person if the aggregate of the funds and value of assets exceeds one thousand rupees;

   (h) any funds of the non-profit organisation are, or continue to remain, invested for any period during the financial year in any concern in which any interested person has a substantial interest and such investment exceeds five per cent. of the capital of that concern.

The term "interested person" has been defined in clause 103.

Clause 98 provides the procedure for registration of a non-profit organisation. Any non-profit organisation which has been granted approval or registration under the Income tax Act, 1961, as it stood immediately before the commencement of this Code, will not be required to apply for registration under the Code, if it fulfils the prescribed conditions. Any other non-profit organisation shall make an application for its registration in the prescribed form and manner to the Commissioner.

The said clause also provides that on receipt of such application, the Commissioner shall call for such documents or information as he considers necessary in order to satisfy himself about the objects and genuineness of its activities and may make such further inquiries as may be required. Thereafter, the Commissioner shall, within a period of six months from the end of the month in which such application was received, pass an order in writing registering the non-profit organisation if he is satisfied about its objects and the genuineness of its activities or refusing to register it, if he is not so satisfied, after giving the organisation an opportunity of being heard.

The said clause further provides that the registration so granted shall be valid from the financial year in which the said application was made. However, where the Commissioner is satisfied that the activities of the non-profit organisation are not genuine or are not being carried out in accordance with its objects or are not being carried out in accordance with the any other law which is applicable to it or under which it is registered or approved, he shall pass an order in writing cancelling the registration or withdrawing the approval, after giving the organisation an opportunity of being heard.

Clause 99 provides that a non-profit organisation shall keep and maintain the prescribed books of account. It shall also maintain separate books of account in respect of business incidental to charitable activity. The said clause further provides that if the gross receipts referred to in clause 93 of the non-profit organisation in any financial year exceed five lakh rupees, it shall obtain an audit report from an accountant in the prescribed form before the due date of filing of the return of tax bases.

Clause 100 deals with anonymous donations received by a non-profit organisation. The said clause defines "anonymous donation" to mean any voluntary contribution, where a person receiving such contribution does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed. The said clause provides that where the total income of a non-profit organisation includes any anonymous donation, the income-tax payable shall be the aggregate of —

   (a) the amount of income-tax calculated at the rate of thirty per cent. on the aggregate of anonymous donations received in excess of five per cent. of the total donations received by it or one lakh rupees, whichever is higher, and

   (b) the amount of income-tax with which the organisation would have been chargeable on its balance income.

The said clause also provides that the above provisions shall apply even if the anonymous donation has been made with a specific direction that it shall form part of the corpus of the non-profit organisation. Besides, no outgoings shall be allowed in respect of any anonymous donation received.

Clause 101 deals with the consequences of conversion of a non-profit organisation. The clause provides that a non-profit organisation shall be liable to income-tax at the rate of thirty per cent. in respect of its net worth if—

   (a) it converts into any form of organisation which does not qualify as a nonprofit organisation;

   (b) it merges with any form of organisation which does not qualify as a nonprofit organisation;

   (c) it fails to transfer upon dissolution all its assets to any other non-profit organisation, within a period of three months from the end of the month in which the dissolution takes place.

The net worth of the non-profit organisation shall be computed as on the date of conversion or merger in a case falling under (a) or (b) above and the date of dissolution in a case falling under (c) above. "Net worth" has been defined in the said clause to mean the aggregate value of its total assets as reduced by its liabilities computed in accordance with such rules of valuation as may be prescribed.

Clause 102 provides that the provisions of Chapter IV shall not apply to any person who—

   (a) holds any business under trust, notwithstanding any specific direction that the business shall form part of the corpus of such person or that the income from the business shall be applied only for charitable activity;

   (b) fails to comply with the conditions specified in clause 96;

   (c) ceases to be a non-profit organisation at any time during the financial year, irrespective of registration granted under clause 97; or

   (d) carries on any business which is not incidental to charitable activity.

The said clause further provides that the non-profit organisation which ceases to be a non-profit organisation on account of conversion, merger or dissolution as referred to in sub-clause (1) of clause 101 shall be liable to income-tax in respect of its net worth in accordance with that section. The said clause also provides that the total income of any person falling under (a), (b), (c) or (d) above shall be computed in accordance with the other provisions of the Code.

Clause 103 provides the meaning of certain terms used in Chapter-IV. It defines "charitable activity" to mean the following activities carried out in India, namely:—

       (i) relief of the poor;

       (ii) advancement of education;

       (iii) medical relief;

       (iv) preservation of environment including watersheds, forests and wildlife;

       (v) preservation of monuments or places or objects of artistic or historic interest; or

       (vi) advancement of any other object of general public utility, not involving the carrying on of any activity in the nature of trade, commerce or business or any activity of rendering any service in relation thereto, for a cess, fee or any other consideration (irrespective of nature of use, application or retention of the income from such activity) and where the gross receipts during the financial year from such activity exceed ten lakh rupees.

The said clause also defines the phrases "business incidental to charitable activity" and "general public".

Clause 104 seeks to provide the method of computation of book profit in case of a company for the purposes of computation of the tax payable on such book profit.

The said clause provides that notwithstanding of anything in this Code, where the normal income-tax payable for a financial year by a company is less than the tax on book profit, then the book profit shall be deemed to be the total income of the company for such financial year and it shall be liable to income-tax on such total income at the rate specified in Paragraph A of the Second Schedule. This is essentially the concept of a Minimum Alternate Tax. The terms "normal income-tax" and "tax on book profit" used in this sub-clause have been defined in sub-clause (6) of the said clause. Paragraph A of the Second Schedule provides for a rate of tax of twenty per cent. on such deemed total income.

The clause further provides a formula for the calculation of the book profit. The formula's starting point is the net profit of the company computed in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956. The sub-clause provides for various adjustments to be made to the net profit to determine the book profit. The adjustments have the effect of both increasing and decreasing the net profit. The book profit would be higher than the net profit if the adjustments have a net positive impact and vice versa.

The said clause also provides that every company, to which this clause applies, shall obtain a report in the prescribed form from an accountant certifying that the book profit has been computed in accordance with the provisions of this clause.

Clause 105 relates to preparation of profit and loss account for computing book profit. The said clause seeks to provide the manner in which a company has to prepare its profit and loss account for the purposes of computation of its book profit under clause 104.

Accordingly, the clause provides that the profit and loss account of the company for a financial year shall be in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956. For the purposes of this clause, the accounting policies, the accounting standards adopted for preparing such accounts (including profit and loss account) and the method and rates adopted for calculating the depreciation shall be the same as have been adopted by the company for the purpose of preparing and laying of such accounts at its annual general meeting in accordance with the provisions of section 210 of the Companies Act, 1956.

The said clause further provides that where the company has adopted or adopts a financial year under the Companies Act, 1956, which is different from the financial year under this Code, then the accounting policies, the accounting standards adopted for preparing such accounts (including profit and loss account) and the method and rates adopted for calculating the depreciation shall correspond to the accounting policies, accounting standards and the method and rates for calculating the depreciation which have been adopted for preparing such accounts for such financial year or part of such financial year falling within the relevant financial year.

Clause 106 seeks to provide the manner in which tax credit for a financial year, arising due to payment of income-tax on book profit in such year, is to be calculated and carried forward and the manner in which such tax credit is to be allowed in succeeding years.

The said clause, inter alia, provides that the tax credit of a financial year to be allowed under this clause shall be the excess of tax on book profit over the normal income-tax. In other words, a tax credit would arise only in a year where the company pays income-tax on its book profit. Further, the amount of such tax credit shall be equal to the amount by which the income-tax on book profit exceeds the income-tax on income computed in accordance with the provisions of Part A of the Code (other than the provisions of this Chapter).

The clause also provides that no interest shall be payable on the tax credit allowed under this clause.

The clause further provides that the tax credit shall be allowed in a financial year in which the normal income-tax exceeds the tax on book profit and the credit shall be allowed to the extent of the excess of the normal income-tax over the tax on book profit. In other words, the credit shall be allowed only in respect of the amount of income-tax payable over and above the amount of income-tax that was payable on the book profit. For example, if the normal income-tax payable is one lakh rupees and the income-tax payable on book profit is sixty thousand rupees, then tax credit shall be allowed to the extent of forty thousand rupees only. The balance amount of sixty thousand rupees shall be carried forward for the remaining period.

The clause also provides that the tax credit determined under this clause shall be carried forward and allowed not beyond the fifteenth financial year immediately succeeding the financial year for which the tax credit becomes allowable.

Clause 107 provides that apart from the specific exclusions provided in this Chapter from the application of certain provisions of the Code, all other provisions of the Code shall apply to a company referred to in this Chapter.

Clause 108 seeks to provide that notwithstanding anything in this Code, any income received by a person out of investments made in a venture capital company or venture capital fund shall be chargeable to income-tax in the same manner as if it were the income received by such person had he made investments directly in the venture capital undertaking. In other words, this clause provides a pass through status to venture capital companies and funds and they would have no income-tax liability on any income received on account of investments made by them in any venture capital undertaking.

The said clause further provides that the venture capital company, the venture capital fund or the person responsible for making payment of the income on behalf of such company or fund shall furnish, within the prescribed time limit, a prescribed statement giving the details of the nature of the income paid during the financial year and other relevant details, to the person receiving such income and to the prescribed income-tax authority.

The said clause also provides that the income paid by the venture capital company and the venture capital fund shall be deemed to be of the same nature and in the same proportion in the hands of the person receiving such income as it had been received by the said company or the fund during the financial year.

The said clause also clarifies that the provisions of Part B (Tax on distributed profits of domestic companies) or Part C (Tax on distributed income of mutual funds or life insurers) of the Code shall not apply to the income paid by a venture capital company or venture capital fund.

Clause 109 is the only clause of Part B and Chapter VII of the Bill and deals with tax on distributed profits of domestic companies or dividend distribution tax. The said clause provides that every domestic company shall be liable to pay tax on the amount of dividend declared, distributed or paid (whether interim or otherwise) to its shareholders, whether out of current or accumulated profits. The dividend distribution tax shall be charged on the dividend declared, distributed or paid at the rate specified in Paragraph B of the Second Schedule to the Bill.

The said clause further provides that the dividend on which the tax is to be levied shall be reduced by the amount of dividend, if any, received by the domestic company during the financial year if —

        (i) such dividend is received from its subsidiary; and

        (ii) the subsidiary has paid tax under this clause on such dividend.

The said clause also provides that the the tax on dividend shall be paid to the credit of the Central Government within fourteen days from the date of declaration, distribution or payment of such dividend, whichever is earliest.

The clause also provides that the dividend distribution tax paid by the domestic company shall be treated as the final payment of tax in respect of the dividend declared, distributed or paid and no further credit shall be claimed by the domestic company or by any other person in respect of such tax. Further, no deduction on the amount of dividend charged to tax or the tax paid shall be allowed either to the company or to the shareholder.

The clause further provides that if the domestic company or the principal officer of such company fails to pay the whole or any part of the dividend distribution tax within a period of fourteen days then, it or he shall be deemed to be an assessee in default and also be liable to pay simple interest at the rate of one per cent. for every month or part thereof on the amount of such tax for the period of default.

The clause also defines the terms "subsidiary company" and "dividend".

Clause 110 is the only clause of Part C and Chapter VIII of the Bill and deals with tax on distributed income of mutual funds and insurance company. The said clause provides that every mutual fund shall be liable to pay tax on any amount of income distributed or paid to the unit holders of an equity oriented fund and every life insurer shall be liable to pay tax on any amount of income distributed or paid to the policy holders of an approved equity oriented life insurance scheme. The tax shall be charged on the distributed income at the rate specified in Paragraph C of the Second Schedule.

The said clause also provides that the tax on distributed income shall be paid to the credit of the Central Government within fourteen days from the date of distribution or payment of such income, whichever is earlier.

The clause further provides that the tax paid by the mutual fund or the life insurer on distributed income shall be treated as the final payment of tax in respect of such income and no further credit shall be claimed by either of them or by any other person in respect of the tax so paid. Besides, no deduction under any other provision of this Code shall be allowed to the mutual fund or the life insurer in respect of the distributed income charged to tax or the tax paid.

The said clause also provides that if the mutual fund or the life insurer or the person who is responsible for making payment of distributed income on its behalf fails to pay the whole or any part of the tax on distributed income within a period of fourteen days, then, it or he shall be deemed to be an assessee in default and shall also be liable to pay simple interest at the rate of one per cent. for every month on the amount of such tax for the period of default.

The terms "equity oriented fund" and "approved equity oriented life insurance scheme" have also been defined in the said clause.

Clause 111 is the only clause of Part D and Chapter IX of the Bill and deals with tax on branch profits of a foreign company. The said clause provides that every foreign company shall be liable to branch profits tax in respect of branch profits of a financial year and such tax shall be charged at the rate specified in Paragraph IV of the Second Schedule. This tax shall be in addition to any income-tax payable by the said foreign company.

The clause further provides that the branch profits shall be the income attributable, directly or indirectly, to the permanent establishment or to an immovable property situated in India and included in the total income of the foreign company for the financial year, as reduced by the amount of income-tax payable on such attributable income.

The said clause also provides that the liability to branch profits tax shall be discharged by payment of pre-paid taxes and the tax charged under this clause shall be collected after allowing credit for such pre-paid taxes, if any, in accordance with the provisions of the Code.

Clause 112 provides that every person, other than a non-profit organisation, shall be liable to pay wealth-tax on his net wealth as on the valuation date of a financial year and such wealth-tax shall be charged at the rate specified in Paragraph V of the Second Schedule in the manner provided therein.

The said clause further provides that the liability to wealth-tax shall be discharged by payment of pre-paid taxes and the wealth-tax charged under this clause shall be collected after allowing credit for such pre-paid taxes, if any, in accordance with the provisions of this Code.

Clause 113 provides the manner in which the net wealth is to be computed. For the sake of simplicity, the manner has been expressed as a formula. The formula provides that the net wealth shall be the aggregate value of all the specified assets of the person on the date of valuation as reduced by the aggregate value of all the debts owed by the person, which have been incurred in relation to the specified assets.

The said clause further provides a detailed list of all the specified assets and also lists out certain assets that shall not be treated as specified assets for the purposes of this clause.

It also lists the categories of houses which shall be excluded from the specified asset, being "house".

The clause also provides that the value of any specified asset, other than cash, shall be determined in such manner as may be prescribed and clarifies that the term "valuation date" means the 31st day of March in every financial year.

Clause 114 provides that if the specified assets are held by certain relatives, such as spouse or minor child, associates or associated entities of a person, then they shall be deemed to be belonging to such person if they fulfill certain conditions specified therein and shall be charged to wealth-tax in his hands.

The said clause further provides that if a minor child holds a specified asset which has been acquired from his own income, it shall not be deemed to be belonging to his parent or parents.

Clause 115 relates to disallowance of expenditure having regard to fair market value and seeks to provide that a person shall not be allowed a deduction under the Code in respect of any expenditure, whether capital or revenue in nature, which is considered by the Assessing Officer to be excessive or unreasonable if the payment in respect of the expenditure has been made to any associated person and it is excessive, or unreasonable, having regard to—

        (i) the fair market value of the goods, services or facilities for which the payment is made;

        (ii) the legitimate needs of the business of the person; or

        (iii) the benefit derived by, or accruing to, the person from such payment.

Clause 116 seeks to provide that the amount of any income, or expense, arising from an international transaction shall be determined having regard to the arm's length price. The term "arm's length price" has been defined in clause 124 and means a price which is applied in a transaction between unrelated persons in uncontrolled, unrelated or independent conditions.

The said clause further provides that the allocation or apportionment of, or any contribution to, any cost or expense incurred in connection with a benefit, service or facility provided to any associated enterprise shall be determined having regard to the arm's length price of such benefit, service or facility if—

   (a) two or more associated enterprises have entered into a mutual agreement or arrangement for the allocation or apportionment of, or any contribution to, such cost or expense; and

   (b) the benefit, service or facility provided to any one or more associated enterprises involves an international transaction.

The clause also provides that its provisions shall not apply in a case where the determination of any income or allocation of any expense has the effect of reducing the income chargeable to tax, or increasing the loss computed, on the basis of entries made in the books of account for the financial year in which the international transaction was entered.

Clause 117 relates to determination of arm's length price. The said clause seeks to provide that the arm's length price in relation to an international transaction shall be determined in accordance with the most appropriate method out of all the prescribed methods. The most appropriate method shall be determined having regard to the nature of transaction, class of transaction, class of associated enterprises or functions performed by such enterprises or such other relevant factors as may be prescribed.

The said clause further provides that the arm's length price shall be the price determined by the most appropriate method if only one price is determined by such method or the arithmetical mean of the prices determined by the most appropriate method if more than one price is determined by such method. Further, the price at which the international transaction has actually been undertaken shall be deemed to be the arm's length price if the variation between the arm's length price and the actual price does not exceed five per cent. of the latter.

The clause also provides that no deduction under Sub-chapter IV of Chapter III (tax incentives) shall be allowed in respect of the amount of income by which the total income of the person is enhanced after computation of income under this clause.

The said clause further provides that the determination of arm's length price shall be subject to the prescribed safe harbour rules.

Clause 118 seeks to provide that the Central Board of Direct Taxes, with the approval of the Central Government, may enter into an advance pricing agreement with any person, specifying therein the manner in which arm's length price is to be determined in relation to an international transaction to be entered into by that person.

The said clause further provides that the arm's length price of any international transaction, in respect of which the advance pricing agreement has been entered into, shall be determined in accordance with such advance pricing agreement. The advance pricing agreement shall be valid for a period as specified in the agreement but shall not exceed five consecutive financial years.

The said clause also provides that the advance pricing agreement entered into shall be binding only on the person in whose case, and only in respect of the transaction in relation to which, the agreement has been entered into. It shall be binding on the Commissioner and the income-tax authorities subordinate to him only in respect of the said person and the said transaction. However, the agreement shall not be binding if there is any amendment to the Code which has a bearing on it.

The clause also provides that the Board may declare an agreement to be void ab initio if it has been obtained by the person by fraud or misrepresentation of facts.

Clause 119 relates to avoidance of income-tax by transactions resulting in transfer of income to non-residents and seeks to provide that the total income of a person shall include all income accruing to any non-resident, if—

   (a) the income accrues by virtue of a transfer of any asset by the person to the non-resident;

   (b) the person acquires any rights by virtue of which he has power to enjoy such income or is entitled to receive, or has received, any capital sum, the payment of which is in any way connected with the transfer; and

   (c) the income would have been included in the total income of the person, had the transfer not taken place.

The said clause further provides that to determine whether a person has power to enjoy the income, the substantial result and effect of the transfer and all benefits which may at any time accrue to such person as a result of the transfer shall be taken into account.

The said clause also provides that this clause shall not apply if the person referred herein shows to the satisfaction of the Assessing Officer that the transfer and all associated operations were bona fide commercial transactions and were not designed for the purpose of avoiding any tax liability.

Clause 120 relates to avoidance of tax by sale and buy-back transaction in a security and provides that the total income of any person shall include any interest accruing from any security owned by any other person if the transaction relating to sale and buy back of the security has been undertaken by the other person, if the interest accrues to the other person as a result of such transaction and if the transfer had not taken place, the income would have been included in the total income of the first-mentioned person.

Clause 121 seeks to provide that the transaction relating to buy and sale back of security under clause 120 shall, in the case of the other person referred to therein, be ignored and shall not be taken into account if the interest accruing to the other person is not included in his total income by virtue of the provisions of that clause.

The said clause further provides that the loss, if any, arising to a person on account of any buy and sale back transaction in any security undertaken by him, shall be ignored for the purposes of computing his total income, if any other income accruing to the person on such security is not included in his total income and the loss shall be ignored to the extent it does not exceed the amount of any other income referred to therein.

Clause 122 provides that the income accruing from a debt instrument, transferred by a person at any time during the financial year, shall not be less than the amount of broken-period income from the instrument. The term "broken-period income" has been defined in clause 124.

Clause 123 seeks to provide that any arrangement entered into by a person may be declared as an impermissible avoidance arrangement and the consequences, under this Code, of such arrangement may be determined by—

   (a) disregarding, combining or re-characterising any step in the arrangement;

   (b) treating the arrangement as if it had not been entered into or carried out or in such other manner as in the circumstances of the case, the Commissioner deems appropriate for the prevention or reduction of the relevant tax benefit;

   (c) disregarding any accommodating party or treating any accommodating party and any other party as one and the same person;

   (d) deeming persons who are connected persons in relation to each other to be one and the same person;

   (e) re-allocating, amongst the parties to the arrangement, any accrual, or receipt, of a capital or revenue nature or any expenditure, deduction, relief or rebate; or

   (f) re-characterising any equity into debt or vice versa, any accrual, or receipt, of a capital or revenue nature, or any expenditure, deduction, relief or rebate .

The clause further provides that the above provisions may be applied in the alternative for, or in addition to, any other basis for determination of tax liability and they shall apply in accordance with such guidelines as may be prescribed.

Clause 124 seeks to define various terms used in Chapter XI such as "accommodating party", "arm's length price", "asset", "associated enterprise",

"impermissible avoidance arrangement", "international transaction", "round trip financing", "safe harbour", "tax benefit", etc.

Clause 125 relates to presumption of the purpose for which an arrangement is entered into and seeks to provide that an arrangement shall be presumed to have been entered into, or carried out, for the main purpose of obtaining a tax benefit unless the person obtaining the tax benefit proves that obtaining such benefit was not the main purpose of the arrangement.

The term "arrangement" has been defined in clause 124.

Clause 126 seeks to provide for the classes of income-tax authorities for the purpose of the Code. The income-tax authorities provided in the clause are—

   (a) The Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963,

   (b) Chief Commissioners of Income-tax or Directors-General of Income-tax,

   (c) Commissioners of Income-tax or Directors of Income-tax or Commissioners of Income-tax (Appeals),

   (d) Additional Commissioners of Income-tax or Additional Directors of Income-tax,

   (e) Joint Commissioners of Income-tax or Joint Directors of Income-tax,

   (f) Deputy Commissioners of Income-tax or Deputy Directors of Income-tax,

   (g) Assistant Commissioners of Income-tax or Assistant Directors of Income-tax,

   (h) Income-tax Officers,

   (i) Tax Recovery Officers,

   (j) Inspectors of Income-tax.

Clause 127 relates to appointment and control of income-tax authorities listed in clause 126.

The said clause provides that the Central Government may appoint such persons as it thinks fit to be income-tax authorities. Subject to the rules and orders of the Central Government regulating the conditions of service of persons in public services and posts, the Central Government may also authorise the Board, or a Director-General, a Chief Commissioner or a Director or a Commissioner to appoint income-tax authorities below the rank of an Assistant Commissioner.

Further an income-tax authority authorised in this behalf by the Board may appoint such executive or ministerial staff as may be necessary to assist it in the execution of its functions.

The said clause also provides that the Board may direct by way of notification that any income-tax authority will be subordinate to the other.

Clause 128 relating to power of higher authorities, seeks to provide that any income-tax authority, above the rank of Assessing Officer, shall have all the powers that an Assessing Officer has in relation to the making of inquiries.

Clause 129 relates to powers of the Board to issue instructions.

The said clause seeks to provide that the Board may, from time to time, issue such orders, instructions, directions or circulars to other income-tax authorities as it may consider expedient or necessary for the proper administration of the provisions of the Code.

The said clause further provides that the Board shall not exercise its powers so as to require any income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner, or require the Commissioner of Income-tax (Appeals) to dispose off any matter before it in a particular manner.

The said clause also empowers the Board to issue general or special orders in respect of—

   (a) any class of tax bases or class of cases, explaining the principles, specifying the guidelines or procedures to be followed by other income-tax authorities in the work relating to assessment or collection of revenue including charging of interest or the initiation of proceedings for the imposition of penalties;

   (b) any case or class of cases, for avoiding genuine hardship, authorising any income-tax authority (other than Commissioner of Income-tax (Appeals)) to admit any application or claim for any exemption, deduction, refund or any other relief under the Code after the expiry of the period specified by or under the Code for making the application or claim and deal with the same on merits in accordance with law;

   (c) any case or class of cases, relaxing any requirement or conditions contained in the Code in relation to grant of any relief , on fulfillment of certain conditions.

The said clause also provides that the orders, instructions, directions and circulars issued by the Board under this clause shall be binding on all other income-tax authorities and other persons employed in the execution of the provisions of the Code.

Clause 130 relates to the jurisdiction of income-tax authorities. The said clause seeks to provide that the income-tax authorities shall exercise its powers and performs its functions in accordance with the directions of the Board. The Board may in turn authorise any other income-tax authority to issue orders in writing for the exercise of the powers and performance of the functions by all or any of its other income-tax authorities who are subordinate to it.

The orders of jurisdiction shall be made having regard to territorial area, persons or classes of persons, incomes or classes of income or cases or classes of cases.

The said clause further provides that a higher income-tax authority can exercise the powers and perform the functions of the lower income-tax authority, if so directed by the Board.

The said clause also provides that the Assessing Officer being lower in rank shall follow the directions of the Assessing Officer being higher in rank, if two or more Assessing Officers of different class have been assigned concurrent jurisdiction.

Further any income-tax authority, being an authority higher in rank, can exercise the powers and perform the functions of the income-tax authority being an authority lower in rank, if so directed by the Board.

Clause 131 relates to jurisdiction of Assessing Officers. The said clause provide that the Assessing Officer having jurisdiction over an area shall, within the limits of such area, have jurisdiction in respect of any person carrying on a business if his principal place of business is situated within that area or any other person residing within the area. Any dispute in the matter shall be decided by the concerned Chief Commissioner. However, if the dispute relates to areas within the jurisdiction of different Chief Commissioners, it will be decided by consensus and if there is no agreement, by the Board or the Chief Commissioner so directed by it.

The said clause further provides that the jurisdiction of an Assessing Officer cannot be challenged after the specified time.

Clause 132 relates to power to transfer cases. The said clause seeks to provide that the Chief Commissioner or the Commissioner may order transfer of a case from one Assessing Officer to other Assessing Officer if both are subordinate to him. The Chief Commissioner may also order transfer cases from one Assessing Officer subordinate to him to another Assessing Officer subordinate to any other Chief Commissioner, if both Chief Commissioners are in agreement with such transfer. However, if both the Chief Commissioners are not in agreement with a transfer, the Board, or the Chief Commissioner as may be authorised by the Board, may transfer the case in certain circumstances.

The said clause also provides that the transfer of a case may be made at any stage of the proceedings, and it shall not be necessary to re-issue any notice already issued by the transferor Assessing Officer.

The said clause also seeks to define the expression "case" for the purposes of Chapter XII relating to Tax Administration and procedure.

Clause 133 relating to change of incumbent seeks to provide that the income-tax authority who succeeds another authority as a result of change in jurisdiction or for any other reason, shall continue the proceeding from the stage at which it was left by his predecessor. The assessee in such a case may be given, if so requested, an opportunity of being heard before passing any order under this Code in his case.

Clause 134 relating to powers regarding discovery and production of evidence, etc., seeks to provide that the prescribed income-tax authorities and the Dispute Resolution Panel shall, for the purposes of the Code, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 when trying a suit, in respect of the following matters—

   (a) discovery and inspection;

   (b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath;

   (c) compelling the production of books of account and other documents; and

   (d) issuing commissions.

The said clause further provides that for the purposes of making any inquiry or investigation, the prescribed income-tax authority shall be vested with the powers referred above, whether or not any proceeding is pending before it.

The said clause also provides that any prescribed income-tax authority may, subject to the rules made in this behalf, impound any books of account or other documents produced before it and retain them in its custody for such period as it thinks fit if such authority is of rank of Joint Commissioner and above. Any income-tax authority below the rank of Joint Commissioner shall not retain in his custody any impounded books or documents for a period exceeding thirty days without obtaining the approval of the Chief Commissioner or the Commissioner.

Clause 135 relates to search and seizure. It inter alia, provides that the Competent Investigating Authority may authorise any Authorised Officer to carry out search and seizure if the Competent Investigating Authority has, in consequence of information in his possession, reason to believe that,—

   (a) any person to whom a summons or notice was issued under the specified sections or the clauses of the Income-tax Act, 1961 or the Wealth-tax Act, 1957 or the Code, as the case may be, has omitted or failed to furnish the material as required by such summon or notice; or

   (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any material which will be useful for, or relevant to, any proceeding under the Income-tax Act, 1961, or the Wealth-tax Act, 1957, or under the Code; or

   (c) any person is in possession of any tax bases or property which has not been, or would not be, disclosed for the purposes of the Income-tax Act, 1961, or the Wealth-tax Act, 1957, or the Code.

The said clause also provides that the authorised officer may, while carrying out the search and seizure, enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that any material are kept, or break open the lock of any door, box, locker, safe, almirah etc., or search any person and seize any such material, not being stock-in-trade, found as a result of such search. He may also place marks of identification on any books of account or other documents and make a note or an inventory of any such material including stock in trade.

Sub-clause (3) of the said clause provides that the Competent Investigating Authority may exercise the powers of search and seizure over a person on whom he exercises jurisdiction.

The said clause also provides that the Authorised Officer may requisition the services of any police officer or of any officer of the Central Government to assist him and it shall be the duty of every such officer to comply with such requisition.

The said clause also provides that the Authorised Officer may serve an order on the owner or the person, who is in immediate possession or control of any material, that he shall not remove or part with it except with his prior permission, if the Authorised Officer considers that it is not possible or practicable to take physical possession of such material, not being stock-in-trade, to a safe place due to its volume, weight or other physical characteristics (including its dangerous nature) and such action of the authorised officer shall be deemed to be seizure.

The said clause also provides that the authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any material and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Income-tax Act, 1961, or the Wealth-tax Act, 1957, or under the Code, as the case may be. Further the provisions of the Code of Criminal Procedure, 1973, relating to search and seizure shall apply, so far as may be, to search and seizure under this clause.

Clause 136 relates to powers to requisition material taken into custody. The said clause seeks to provide that the Competent Investigating Authority may authorise any income-tax authority to require any officer or authority to deliver the material, which have been taken into custody by such officer or authority under any other law for the time being in force, to the Requisitioning Officer.

The said clause further provides that the authorisation could be issued in cases and circumstances similar to the ones as for search and seizure referred to in clause 135.

The said clause also provides that the officer or authority in whose custody the material exists, shall deliver the material to the Requisitioning Officer either forthwith or when such officer or authority is of the opinion that it is no longer necessary to retain the same in his or its custody.The provisions of clause 135 shall apply to this clause also.

Clause 137 relates to retention and release of books of account or documents seized or requisitioned. The said clause seeks to provide that the Authorised Officer or the Requisitioning Officer shall hand over the books of account or documents seized under clause 135 or delivered under clause 136, as the case may be, within a period of sixty days from the date on which the last of the authorisations for search was executed or the books of account were received, to the Assessing Officer having jurisdiction over the case.

However, the Authorised Officer or the Requisitioning Officer may allow the assessee to make copies or take extracts of the books of account or documents seized or requisitioned on his making an application. It is further provided that the assessing officers may retain the books of account or documents, seized or requisitioned, up to a period of thirty days from the date of assessment and beyond this period after obtaining the approval of the Chief Commissioner or the Commissioner. The retention, however, cannot be allowed beyond a period of thirty days from the date on which the proceedings under the Code are completed.

Clause 138 relating to delivery of material belonging to other persons, seeks to provide that the Assessing Officer, having jurisdiction over the person in whose case search and seizure was carried out under section 135, or requisition was made under section 136, shall hand over any material to the Assessing Officer having jurisdiction over another person, if he is satisfied that the material seized, or requisitioned, belongs to the other person.

Clause 139 relates to retention and application of seized or requisitioned assets. The said clause seeks to provide that the Assessing Officer may recover the amount of any liability existing till the date of search or requisition or determined after such date till the release of assets out of assets seized or requisitioned or by any other mode. It further provides that the Assessing Officer may recover the existing liability and release the remaining portion of the asset, if any, within a period of one hundred and twenty days from the date on which the last of the authorisations for search under clause 135 was executed, to the person from whose custody the assets were seized, on fulfillment of certain conditions.

Clause 140 relating to power to call for information seeks to provide that for the purposes of the Code, the Board may require —

   (a) any prescribed person to furnish information within such time and in such form and manner as may be prescribed; and

   (b) any prescribed income-tax authority to call for the prescribed information in such form and manner as may be prescribed.

The said clause further provides that any income-tax authority, not below the rank of an Income-tax Officer, may require any person, including a banking company or any officer thereof, to furnish any information as may be useful for, or relevant to any enquiry or proceeding, pending before him under this Code, in such form, manner and within such time as may be specified by him.

The said clause also provides that the expression ''person'' in this clause shall include a banking company or any officer thereof.

Clause 141 relates to power of survey. The said clause seeks to provide that the prescribed income-tax authority may within his jurisdiction enter, or authorise any other income-tax authority to enter, any place at which a business is carried out by a person, if he has reason to suspect that the person has not complied with the provisions of this Code. The income-tax authority shall enter any place of business referred to therein only after sunrise and before sunset, or during the hours at which such place is open for the conduct of business. The income-tax authority may, upon entering the place, inspect the books of account or documents available there and check or verify the cash, stock or other valuable article or thing found there.

The income-tax authority may place marks of identification on the books of account, documents or record inspected by him and take extracts, or copies, therefrom, impound any books of account, documents or record inspected by him, after recording the reasons for doing so, make an inventory of cash, stock or valuables and also examine on oath any person if his statement would be useful for, or relevant to, any proceeding under the Code.

The said clause also provides that the prescribed income-tax authority, for the purpose of verifying the expenditure made by the person in connection with any function, ceremony or event, after such function, ceremony or event, may require the person by whom such expenditure has been incurred or any other person who is likely to posess the information regarding such expenditure, to furnish such information which may be useful for, or relevant to, any proceeding under this Code and record the statements of the person or any other person in this behalf.

While exercising the power under this clause, the income-tax authority shall not remove any cash, stock or other valuable article or thing from such place.

Clause 142 relates to power to disclose information in respect of any person. This clause seeks to provide that the Board, or any person specified by it by an order in this behalf, may furnish any information in respect of an assessee to other person who is performing any functions under any law relating to the imposition of any tax, duty or cess, or dealings in foreign currency or a person who is performing any function under any other law and notified by the Central Government.

The said clause further provides that the Chief Commissioner or the Commissioner may furnish, or cause to be furnished, to any person any information relating to any assessee received or obtained by any income-tax authority in the performance of his functions under this Code, if—

   (a) the person makes an application to the Chief Commissioner or the Commissioner in the prescribed form; and

   (b) the Chief Commissioner or the Commissioner is satisfied that it is in the public interest so to do.

The said clause also provides that such decision of the Chief Commissioner or the Commissioner shall be final and shall not be called in question in any court of law.

Further, it is provided that the Central Government may direct by notified order that no information shall be furnished under sub-clauses (2) or (4) in respect of such matters relating to such class of assessees, or to such authorities, as may be specified in the order.

Clause 143 seeks to provide that any proceeding under the Code before an income-tax authority shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 and for the purposes of section 196 of the Indian Penal Code, 1860. Further, every income-tax authority shall be deemed to be a Civil Court for the purposes of section 195, but not for the purposes of Chapter XXVI of the Code of Criminal Procedure, 1973.

Clause 144 relates to self-reporting of tax bases. The clause, inter alia, provides that every person who is liable to pay income-tax under this Code or who intends to carry forward any loss shall furnish a return of tax bases on or before the due date to the Assessing Officer or the prescribed authority or agency.

The said clause further provides that a company resident in India, a mutual fund or a life insurer who distributes dividend or income, as the case may be, and is liable to pay tax on dividend or income distributed, is also required to file the return of tax bases on or before the due date.

The said clause also provides that in relation to net wealth, every person (other than a non-profit organisation) in whose case the net wealth exceeds the maximum amount which is not chargeable to wealth-tax is required to furnish the return of tax bases on or before the due date.

The said clause provides that the return of tax bases shall also be a return of tax bases of any other person of which such person is a representative assessee. The return of tax bases shall be furnished in the prescribed form and manner. The said clause also specifies the person who is required to sign and verify such return.

The said clause provides that if a person discovers any omission or any wrong statement in the return of tax bases furnished by him, he may revise such return at any time before the expiry of one year from the end of the financial year in which the return was due or before the completion of the assessment, whichever is earlier.

The said clause provides that any person who is otherwise not required to furnish a return of tax bases under the Code may furnish such return before the expiry of one year from the end of the financial year to which it pertains. It also provides that a person may furnish the return for any financial year at any time before the expiry of one year from the end of the financial year in which the return was due or before the completion of the assessment, whichever is earlier, if he has not furnished a return by the due date and no notice under clause 146 has been served on him.

Clause 145 relates to tax return preparers. The clause provide that the Board may frame a tax return preparer Scheme allowing a tax return preparer to prepare and furnish the return of tax bases of any specified class of persons.

Clause 146 relates to the issue of notice to furnish the return of tax bases. It provides that the Assessing Officer may serve on a person in whose case the due date of furnishing such return has expired, a notice requiring such person to furnish the return for the relevant financial year. Such notice may be issued within a period of twenty-one months from the end of the financial year in which the return was due. The said clause further provides that the person in receipt of such notice shall furnish the return in the prescribed form and manner within fourteen days from the date of such receipt.

Clause 147 relates to self-assessment tax. It provides that the assessee shall be liable to pay self-assessment tax before furnishing the return of tax bases. The amount paid as self-assessment tax for any financial year shall first be adjusted towards the interest payable under the Code and the balance shall be adjusted towards the tax payable. The said clause further provides that after a regular assessment has been made under clause 154 or clause 155, any amount paid as self-assessment tax shall be deemed to have been paid towards such assessment. The clause also provides that if any assessee fails to pay such self-assessment tax, he shall be deemed to be an asssessee in default and all the provisions of the Code shall apply accordingly.

Clause 148 provides that on receipt of any return of tax bases for any financial year, the Assessing Officer or any other authorised person shall issue an acknowledgement for receipt of the return.

Clause 149 relates to processing of returns. It provides that the Assessing Officer or any authorised person shall process the return received under clause 144 or clause 146. For this purpose, the tax and interest shall be computed on the basis of the tax bases, after making adjustments relating to any arithmetical error in the return or an incorrect claim apparent from the existence of any information in the return. The said clause further provides that the sum payable or refundable shall be determined after giving credit for taxes paid or relief allowable under clause 207.

The said clause also provides that the processing authority shall send intimation to the assessee specifying the sum payable by, or refundable, to him. The processing authority shall also send an intimation to the assessee where the loss declared in the return is adjusted, but no tax or interest is payable or refundable. The said clause also provides that the processing authority shall not send any intimation in respect of any sum payable, if the return is processed after the expiry of twelve months from the end of the financial year in which the return is furnished. It provides that the acknowledgement of the return shall be deemed to be the intimation where no sum is payable or refundable and where no adjustment has been made.

The said clause provides that the Board may make a scheme for centralised processing of returns for expeditious determination of the tax payable or refundable.

For this purpose, "return of tax bases" and "due date" have been defined in clause 314. In relation to adjustments, clause 149 defines "an incorrect claim apparent from the existence of any information in the return".

Clause 150 relates to notice for inquiry before assessment. It provides that the Assessing Officer may make an assessment on receipt of return under clause 144 or clause 146, if he considers it necessary or expedient to ensure that the assessee has not understated his tax bases or computed excessive loss or allowance or under-paid the tax in any manner. The said clause provides that the Assessing Officer shall serve on the assessee a notice requiring him, inter alia, to furnish necessary information and to produce evidence, accounts or documents (not relating to a period more than six years prior to the relevant financial year). Besides, the Assessing Officer may make necessary inquiry in order to obtain full information in respect of tax bases of any person for the relevant financial year.

The said clause also provides that no such notice shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished.

Clause 151 deals with special audit. It provides that the Assessing Officer may direct the assessee to get his accounts audited by an accountant, if he is of the opinion that considering the nature and complexity of the accounts and in the interests of revenue, it is necessary to do so. It further provides that the Assessing Officer shall not issue any such direction unless the assessee has been given an opportunity of being heard and prior approval of the Chief Commissioner or Commissioner has been obtained.

The said clause also provides that the accountant, who shall be nominated by the Chief Commissioner or Commissioner, shall furnish his report to the Assessing Officer and to the assessee, within the time allowed by the Assessing Officer, which shall not exceed one hundred and eighty days from the date on which the direction for audit of accounts is received by the assessee. It also provides that the remuneration of the accountant and other expenses of the audit shall be determined and paid in accordance with prescribed rules.

Clause 152 deals with determination of value of assets. It, inter alia, provides that for the purposes of assessment, the Assessing Officer may require a valuation officer to make and report to him an estimate of the value of any asset, property, investment or expenditure. The said clause provides specific powers to the valuation officer for this purpose, subject to the rules in this behalf.

The said clause also provides that after taking into account such evidence as the assessee may produce and the material in his possession or gathered by him, the valuation officer shall estimate the value of the asset, property, investment or expenditure, after giving an opportunity of being heard to the assessee, or to the best of his judgment if the assessee does not co-operate or comply with his direction.

The said clause further provides that the valuation officer shall furnish a copy of such estimate to the Assessing Officer and the assessee within a period of six months from the end of the month in which the reference was made.

Clause 153 deals with the determination of arm's length price. It, inter alia, provides that the Assessing Officer may, with the prior approval of the Commissioner, refer to the Transfer Pricing Officer, the computation of arm's length price under clause 117 in relation to any international transaction entered into by the assessee in any financial year. The said clause further provides that upon such reference, the Transfer Pricing Officer shall determine the arm's length price in relation to the international transaction in accordance with the provisions of clause 117 and shall send a report of his determination to the Assessing Officer and the assessee before the expiry of a period of forty-two months from the end of the financial year in which the international transaction is entered into.

Clause 154 deals with the determination of an impermissible avoidance agreement and consequences thereof. It provides that the Commissioner shall, for the purposes of clause 123, serve on the assessee a notice requiring him, inter alia, to produce any evidence or particulars in support of his claim that the provisions of clause 123 are not applicable to him. It further provides that after taking into account such particulars and evidence, the Commissioner shall pass an order, before the expiry of twelve months from the end of the month in which such notice is issued, declaring an arrangement as being an impermissible avoidance agreement or otherwise for the purposes of clause 123.

The said clause also provides that upon declaring an arrangement as an impermissible avoidance agreement, the Commissioner shall issue directions to the Assessing Officer to make necessary adjustments to the total income or tax liability and shall forward a copy of such order to the assessee and to the jurisdictional Commissioner of the other party to the arrangement for taking necessary action in accordance with the provisions of this clause.

Clause 155 relates to assessment. It provides that consequent to a notice issued under sub-clause (1) of clause 150, the Assessing Officer shall, by an order in writing, make an assessment of the tax bases of the assessee after taking into account the evidence furnished by the assessee, any report of audit under clause 151, any report of the valuation officer, any order of the Transfer Pricing Officer, any direction of the Commissioner under clause 154, any direction of the Joint Commissioner under clause 157 and the material in his possession, in respect of which an opportunity of being heard has been provided to the assessee.

The said clause further provides that on the basis of such assessment, the Assessing Officer shall determine the sum payable or refundable after adjusting the sum paid by, or refunded to, the assessee in pursuance of the intimation issued under sub-clause (2) of clause 149.

The said clause also provides that the Assessing Officer shall forward the draft order to the eligible assessee if he proposes to make any variation in the income or loss returned which is prejudicial to the interests of such assessee, who may within thirty days of receipt of the draft order, file his acceptance to the Assessing Officer or file his objections to such variations to the Dispute Resolution Panel and the Assessing Officer. Thereafter, the Assessing Officer shall complete the assessment on the basis of the draft order, if the assessee accepts it, or in conformity with the direction of the Dispute Resolution Panel within a period of one month from the end of the month in which such direction is received.

The said clause also defines the term "eligible assessee".

Clause 156 relates to best judgment assessment. It, inter alia, provides that the Assessing Officer shall make the assessment of the tax bases to the best of his judgment, if—

   (a) the assessee fails to furnish the return required under clause 144 or clause 146 or to comply with all the terms of a notice issued under sub-clause (1) of clause 150 or to comply with a direction issued under clause 151 or to make the return in response to notice under clause 159;

   (b) the assessee fails to regularly follow the accounting standards or the method of accounting laid down in clause 89; or

   (c) he is not satisfied about the correctness or completeness of the accounts of the assessee.

The said clause further provides that in making the assessment, the Assessing Officer shall take into account all relevant material which he has gathered or is available on record.

Clause 157 relates to directions for assessment by Joint Commissioner. It provides that a Joint Commissioner may, on a reference made to him by the Assessing Officer or on an application of an assessee or on his own motion, call for and examine the record of any proceeding in which an assessment is pending and issue such directions as he thinks fit for the guidance of the Assessing Officer so as to enable him to complete the assessment. The Joint Commissioner shall not issue any direction prejudicial to the assessee unless an opportunity of being heard is given to him. The said clause further provides that any such direction issued shall be binding on the Assessing Officer.

Clause 158 deals with directions for assessment by Dispute Resolution Panel. It, inter alia, provides that where any objection is received under sub-clause (5) of clause 155, the Dispute Resolution Panel may call for and examine the record of any proceeding relating to the draft order or make, or cause to be made, any such enquiry and issue directions for the guidance of the Assessing Officer, within a period of nine months from the end of the month in which the draft order is forwarded to the assessee.

The said clause further provides that the Dispute Resolution Panel may confirm, reduce or enhance the variations proposed in the draft order, but shall not set aside any proposed variation or issue any direction for further enquiry before passing of the assessment order. Besides, any difference of opinion among the members of the Dispute Resolution Panel on any issue shall be decided according to the opinion of the majority. The direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer.

Clause 159 deals with reopening of assessment. It, inter alia, provides that the Assessing Officer shall reopen a case for reassessment, for reasons recorded in writing, if he has reason to believe that any tax bases chargeable to tax have escaped assessment for the relevant financial year. The said clause lists the circumstances under which the tax bases chargeable to tax shall be deemed to have escaped assessment.

The said clause also provides that the notice for reopening of assessment shall be issued for the seven financial years immediately preceding the financial year in which the search and seizure has been carried out or the material has been requisitioned, and within a period of seven financial years from the end of the relevant financial year in any other case.

The said clause also provides that where an assessment has been made under clause 155 or clause 156 or under this clause, no such notice shall be issued by an Assessing Officer below the rank of Joint Commissioner—

      (i) within a period of four years from the end of the relevant financial year, unless the Joint Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for issue of such notice;

      (ii) after the expiry of a period of four years from the end of the relevant financial year, unless the Commissioner is so satisfied;

The said clause further provides that in any other case, no such notice shall be issued by an Assessing Officer below the rank of Joint Commissioner after the expiry of a period of four years from the end of the relevant financial year, unless the Joint Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for issue of such notice.

The said clause also provides that any assessment proceeding relating to any financial year falling within the abovementioned period of seven financial years shall abate, if it is pending on the date of the initiation of the search or on the date of requisitioning the material in the case of the person on whom search has been conducted or to whom such material pertains.

The said clause also provides that on receipt of a return in pursuance of the notice for re-opening of assessment, or after the expiry of the time specified therein for furnishing the return, the Assessing Officer shall, by an order in writing, make the re-assessment of the total income. It provides that in the re-assessment so made, the tax shall be chargeable at the rate or rates at which it would have been charged had the tax base not escaped assessment. The said clause also provides for certain circumstances under which re-assessment proceedings shall be dropped.

Clause 160 relates to approval for search assessment. It provides that no order of search assessment or re-assessment shall be passed by an Assessing Officer without the approval of the Joint Commissioner.

Clause 161 deals with rectification of mistake. It, inter alia, provides that an income-tax authority may amend any order passed or intimation issued by it in order to rectify any mistake apparent on the face of the record within a period of four years from the end of the financial year in which the order sought to be amended was passed.

The said clause also provides that the income-tax authority may make an amendment on its own motion or on an application made by the assessee or the Assessing Officer. It provides that such application shall be decided within a period of six months from the end of the month in which the application is received by it. It also provides that where the order has been decided in an appeal or revision, the power of the authority to so amend shall be restricted to matters not decided in appeal or revision.

Clause 162 relates to notice of demand. It provides that any sum payable in consequence of any order made or intimation issued under this Code shall be demanded by an income-tax authority by serving upon the assessee a notice of demand in the prescribed form and manner. It also provides that the intimation issued under sub-clause (2) of clause 149 shall be deemed to be the notice of demand for this purpose.

Clause 163 provides time limits for completion of assessment or re-assessment. It also provides that such time limit shall not apply in respect of assessment, re-assessment or recomputation to be made in consequence of, or to give effect to, any finding or direction contained in any order of specified appellate authorities or of any court in a proceeding otherwise than by way of appeal or reference under this Code.

The said clause also provides that in computing such period of limitation, certain specified time periods shall be excluded. It provides that the period of limitation available to the Assessing Officer for making an order of assessment, re-assessment or recomputation shall be extended to sixty days, if the period immediately after the exclusion of the specified time periods is less than sixty days.

Clause 164 seeks to provide that for the purposes of this Code, "representative assessee" in respect of an assessee means—

   (a) the agent of a non-resident, if the assessee is a non-resident;

   (b) the guardian, or manager, of a minor, lunatic or idiot, if the assessee is a minor, lunatic or idiot;

   (c) the Court of Wards, the Administrator-General, the Official Trustee, any receiver or manager (including any person who manages property on behalf of the assessee) appointed by, or under, any order of a court, if such person receives, or is entitled to receive, income on behalf, or for the benefit, of the assessee;

   (d) a trustee appointed under an oral trust, or a trust created under an instrument in writing and entitled to receive, income on behalf or for the benefit of any person, if the assessee is a trust;

   (e) the legal representative, or the executor, if the assessee dies;

   (f) a participant, or the legal representative of the deceased participant, in the case of dissolution of an unincorporated body; and

   (g) the liquidator appointed under section 448, or section 490, of the Companies Act, 1956 in the case of a company.

The said clause further provides as to who could be "agent" in relation to a nonresident and executor in relation to a deceased person.

Clause 165, inter alia, provides that every representative-assessee shall, in his representative capacity, be liable to assessment only in respect of the tax bases of the person represented by him.

The said clause further provides that every representative-assessee shall be subject to the same duties, responsibilities and liabilities as if the tax bases accrued to him and the taxes shall be levied upon him in the manner as it would have been leviable upon the principal.

The said clause also provides that any proceeding initiated, or which could have been initiated, before the death or dissolution of the principal or the appointment of the liquidator, shall be deemed to have been taken against, or can be initiated in case of, the representative assessee.

Clause 166 provides that nothing in the Sub-chapter shall prevent the direct assessment of the principal or the recovery of any sum payable under this Code from the principal.

Clause 167 seeks to provide that the Assessing Officer shall have the same remedy against all property of any kind vested in any representative-assessee as he would have against the property of the principal.

Clause 168 relates to assessment in the event of business reorganisation and provides the manner in which the predecessor and the successor in a business reorganisation shall be assessed.

The said clause provides that the predecessor shall be assessed in respect of the income for the period beginning with the first day of the financial year and ending on the day immediately preceding the date of business reorganisation and the successor shall be assessed in respect of the income for the period beginning with the date of business reorganisation and ending on the last day of the financial year.

The said clause further provides that any proceeding taken against the predecessor shall be deemed to have been taken against the successor and may be continued against the successor from the stage at which it stood on the date of the business reorganisation.

Clause 169 relates to assessment of a Hindu undivided family after its partition and provides that such a family shall be deemed to continue as such except where a finding of partition has been given under this clause in respect of the Hindu undivided family.

The said clause provides that the Assessing Officer, after making necessary inquiries, 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. The clause clarifies that no claim of partial partition of a family shall be inquired into or recognised as a partition. Further, all provisions of the Code as they applied to the Hindu undivided family prior to its total partition, shall continue to apply till the date on which the total partition of such family has taken place.

The clause further provides that in case of a partial partition of a Hindu undivided family, the family shall continue to be assessed under this Code as if no partial partition had taken place and the liability of that family or its members shall remain the same.

The clause also seeks to define the terms "partition" and "partial partition".

Clause 170 relates to assessment of the income of a non-resident from the occasional business of operation of ships and provides that such assessment shall be made in accordance with the provisions contained therein.

The said clause, inter alia, provides that the master of a ship belonging to, or chartered by, a non-resident shall, before the departure of the ship, furnish to the Assessing Officer a return of the full amount of transportation charges accrued to, or received by, the owner or charterer, since the last arrival of the ship in that port.

The clause further provides that on receipt of the return, the Assessing Officer shall assess the income in accordance with serial number 7 of the Table under paragraph 1 of the Fourteenth Schedule and the tax determined shall be payable by the master of the ship or any other person authorised by him. Further, a port clearance shall be granted to the ship after the tax has been duly paid or satisfactory arrangements have been made for the payment.

The clause also provides that the assessment of the income for the relevant financial year of the owner, or charterer, of the ship can also be made, at his option, in accordance with the other provisions of the Code.

Clause 171 seeks to provide that the tax bases of an individual for part of a financial year may be chargeable to tax in that financial year, if it appears to the Assessing Officer that the individual may leave India during or shortly after the expiry of the financial year and has no intention of returning to India.

The said clause further provides that the Assessing Officer may require the individual to furnish the return of tax bases for the purposes of assessment and may estimate the tax bases of the individual for part of a financial year if it cannot be readily determined in accordance with the Code. Further, the tax payable on the tax bases computed under this clause shall be in addition to the tax, if any, payable under any other provision of the Code.

Clause 172 provides that where it appears to the Assessing Officer that an unincorporated body formed for a particular event or purpose in a financial year is likely to be dissolved in the financial year or shortly thereafter, then he may charge to tax in that financial year the tax bases of the unincorporated body for the period beginning from the first day of the financial year to the likely date of its dissolution. Further, the provisions of clause 171 shall apply to any proceeding under this clause as they apply in the case of a person leaving India.

Clause 173 provides that where it appears to the Assessing Officer that any person is likely to charge, sell, transfer, dispose of or otherwise part with any of his assets, in any financial year, with a view to avoiding payment of any liability under this Code, then he may charge to tax in that financial year the tax bases of such person for the period beginning from the first day of the financial year to the date when the Assessing Officer commences proceedings under this clause. Further, the provisions of clause 171 shall apply to any proceeding under this clause as they apply in the case of a person leaving India.

Clause 174 relates to discontinued business and provides that where any business is discontinued in any financial year, the Assessing Officer may charge to tax in that financial year the tax bases of such business for the period beginning from the first day of the financial year to the date on which the business has been discontinued.

The said clause further provides that any person discontinuing any business shall give notice of the discontinuance to the Assessing Officer within a period of fifteen days from such discontinuance.

The clause also provides that the Assessing Officer may require the person whose business has been discontinued to furnish the return of tax bases and, upon receipt of the return or after the expiry of the notice period to file such return, he shall proceed to make the assessment in accordance with the provisions of the Code. Further, the tax payable on the tax bases computed under this clause shall be in addition to the tax, if any, payable under any other provision of the Code.

Clause 175 relates to assessment of an unincorporated body in case of change in its constitution and provides that the Assessing Officer shall, in such a case, make a single assessment in respect of the entire financial year in which the change has occurred. A change is said to have taken place if existing participants move out or new participants are admitted or all the participants continue with a change in their respective shares or in the shares of some of them.

The said clause further provides that its provisions shall not apply if the change in constitution is on account of the death of a participant or the retirement of all the participants.

Clause 176 seeks to provide that the Assessing Officer shall make separate assessments on any two unincorporated bodies, if—

   (a) one unincorporated body succeeds another unincorporated body; and

   (b) the succession is by virtue of retirement of all participants in the unincorporated body or death of any of the participants.

The said clause also provides that the separate assessments shall be made in accordance with the provisions of clause 168 as if the unincorporated body, succeeding the other unincorporated body, is the successor and the unincorporated body being succeeded is the predecessor.

Clause 177 provides that the Assessing Officer shall assess every return filed by a deductor or collector as if it were a return of tax bases. Further, where a person has failed to file such return, the Assessing Officer shall issue a notice to the person requiring him to furnish the return within the time specified therein. All the other provisions of this Code shall apply as if the return referred to herein were a return of tax bases.

Clause 178 relates to appeals before the Commissioner (Appeals) and provides that an assessee may prefer an appeal to the Commissioner (Appeals) where he is aggrieved by an order passed by any income-tax authority below the rank of the Commissioner as specified in the Twenty-first Schedule to the Code or by an intimation issued under clause 149.

The said clause further provides that the assessee may also prefer an appeal where an application filed by him under clause 161 has not been disposed of by the Assessing Officer within a period of six months from the date of filing of the application or where he is required to bear the liability in respect of the tax deductible on the income payable to a non-resident under any agreement or other arrangement and he claims that no tax was deductible by him on such income and he has deposited the tax to the credit of the Central Government.

Clause 179 provides the manner in which appeals are to be preferred before the Commissioner (Appeals). The appeal by an assessee shall be preferred within the specified time limit and should be in the prescribed form and accompanied by the prescribed fee.

The clause further provides that the Commissioner (Appeals) may admit an appeal after the expiry of the specified time if he is satisfied that the appellant had sufficient cause for not preferring it within that time and the delay in preferring the appeal does not exceed a period of one year.

Clause 180 relates to the procedure to be followed in case of an appeal before the Commissioner (Appeals). It, inter alia, provides that the Commissioner (Appeals) may, before disposing of any appeal, make such inquiry as he thinks fit or direct the Assessing Officer to do so. He may also allow the appellant to go into any new ground of appeal if he is satisfied that the omission was not wilful or unreasonable.

Clause 181 relates to the powers of the Commissioner (Appeals) and, inter alia, provides that, in case of an appeal before him, he shall have the power to confirm, reduce, enhance or annul an assessment or to confirm or cancel a penalty or enhance or reduce it.

The said clause further provides that the Commissioner (Appeals) may consider and decide any matter which was not considered by the Assessing Officer.

Clause 182 relates to the constitution of the Appellate Tribunal and provides that the Central Government shall constitute an Appellate Tribunal consisting of a President and as many judicial and accountant members, as it thinks fit, to exercise the powers and discharge the functions conferred on the Appellate Tribunal by this Code.

The said clause also provides as to who shall be eligible to be the President, a Vice-president, a judicial member or an accountant member of the Appellate Tribunal.

Clause 183 seeks to provide that an assessee may prefer an appeal to the Appellate Tribunal if he is aggrieved by any of the orders specified therein. Similarly, the Commissioner may, if he is not satisfied with the order passed by the Commissioner (Appeals), direct the Assessing Officer to prefer an appeal to the Appellate Tribunal against such order.

The said clause further provides that no appeal shall lie to the Appellate Tribunal against the order of the Commissioner (Appeals) or Commissioner in the case of a public sector company.

The clause also provides that every appeal shall be preferred within the time period specified therein and allows the respondent to file a memorandum of cross-objection against any part of the order of the Commissioner (Appeals). The Appellate Tribunal may admit an appeal, or a memorandum of cross-objection, after the expiry of the period specified if it is satisfied that the appellant had sufficient cause for not preferring it within that time and the delay in filing the appeal does not exceed a period of one year.

Clause 184 relates to an order of stay of demand by the Appellate Tribunal. The said clause inter alia provides that the Tribunal may grant a stay of demand to the assessee for a period of one hundred and eighty days in the first instance and extended up to a maximum period of three hundred and sixty-five days and endeavour to dispose of the appeal in such time.

Clause 185 deals with the orders of the Appellate Tribunal and, inter alia, provides that the Tribunal may, after hearing both parties, pass such orders as it thinks fit. It shall also have the power to rectify any mistake apparent on the face of the record within the period of four years from the date of such order and, accordingly, amend any order passed by it.

Clause 186 deals with constitution of Benches and procedure of the Appellate Tribunal. The said clause seeks to provide that the powers and functions of the Tribunal may be exercised and discharged by its Benches constituted by the President from among the members. Each Bench shall consist of one judicial member and one accountant member. The President may constitute a Special Bench consisting of three or more members, one of whom shall necessarily be a judicial member and one an accountant member. If on any point the members of a Bench differ in opinion, it shall be decided according to the opinion of the majority.

The said clause further provides that any proceeding before the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of section 192 and section 228 and for the purpose of section 196 of the Indian Penal Code. The Appellate Tribunal shall also have powers to regulate its own procedure and procedure of Benches.

Clause 187 deals with appeals to the High Court and seeks to provide that an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal, if the High Court is satisfied that the case involves a substantial question of law.

The said clause further provides that the Chief Commissioner or the Commissioner or an assessee may file an appeal to the High Court within the specified period and in the specified form. The High Court may admit an appeal after the expiry of the specified period if it is satisfied that there was sufficient cause for not filing the appeal within that period.

The said clause also provides that the High Court may exercise its power to hear the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question of law, and shall decide the question of law so formulated and deliver such judgment as it deems fit. Effect to such order shall be given by the Assessing Officer on the basis of a certified copy of the judgment.

The said clause also provides that the provisions of the Code of Civil Procedure, 1908, relating to appeals to the High Court shall apply in the case of appeals under this clause.

Clause 188 provides that an appeal filed before the High Court to be heard by a Bench of not less than two Judges of the High Court and shall be decided in accordance with the opinion of such Judges or of the majority of such Judges.

Clause 189 deals with appeals before the Supreme Court and provides that an appeal shall lie to the Supreme Court from any judgment of the High Court delivered under clause 187 which the High Court certifities to be a fit case for appeal to the Supreme Court.

Clause 190 relates to hearing before the Supreme Court and seeks to provide that the provisions of the Code of Civil Procedure, 1908, relating to appeals to the Supreme Court shall apply in the case of appeals under section 189 as they apply in the case of appeals from decrees of a High Court.

The said clause also provides that where the judgment of the High Court is varied or reversed in the appeal, effect shall be given to the order of the Supreme Court in the manner provided in section 187.

Clause 191 deals with revision of orders prejudicial to revenue and, inter alia, seeks to provide that the Commissioner may revise any order passed by any income-tax authority subordinate to him after examining all available records, hearing the assessee and making such inquiries as he considers necessary if he is satisfied that the order sought to be revised is erroneous in so far as it is prejudicial to the interests of the revenue.

The said clause also provides that the revision order may have the effect of enhancing or modifying the assessment but shall not be an order cancelling the assessment and directing a fresh assessment. Further, the power of the Commissioner for revising an order shall not extend to certain orders specified therein. Besides, no order shall be made after the expiry of a period of two years from the end of the financial year in which the order sought to be revised was passed.

The said clause also provides that an order passed by an income-tax authority shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if it falls in any of the specified categories of orders. It also provides that an order shall not be considered to be erroneous in so far as it is prejudicial to the interests of the revenue if the order has been made by holding a view sustainable in law and the Commissioner is not in agreement due to the existence of another view sustainable in law.

The clause also defines the expression ''record''.

Clause 192 seeks to provide that the Commissioner may revise any order passed by an income-tax authority subordinate to him, other than an order to which clause 191 applies, after examining all available records. However, such revision order shall not be prejudicial to the assessee.

The said clause further provides that the power of the Commissioner for revising an order shall not extend to such orders as specified therein.

This clause also provides that the assessee should make an application for revision of any order within the specified time, accompanied by the prescribed fee. Further, the revision order shall not be passed after the expiry of a period of one year from the end of the financial year in which such application is made or a period of one year from the date of the order sought to be revised if the Commissioner revises the order suo motu.

Chapter XIII of the Code deals with the provisions relating to collection and recovery. Part A of this Chapter deals with deduction at source.

Clause 193 relates to deduction or collection of tax at source or advance payment. The clause seeks to provide that the tax on any income shall be payable by deduction or collection at source or by advance payment, as the case may be, in accordance with the provisions of this Chapter, notwithstanding that the regular assessment in respect of such income is to be made in a later financial year.

Sub-clause (2) of the said clause is an overriding provision stipulating that nothing in this clause shall prejudice the charge of tax on such income under the provisions of sub-clause (2) of clause 2.

Clause 194 relating to direct payment seeks to provide that the tax on income has to be paid directly by the person if there is no provision under this Chapter for deduction or collection of income-tax at the time of payment or income-tax has not been deducted or collected in accordance with the provisions of this Chapter.

Sub-clause (2) of the said clause provides that any person who is required to deduct or collect any sum in accordance with the provisions of the Code does not deduct or collect, or after so deducting or collecting fails to pay the whole or any part of the tax required to be collected or deducted under the Code, and where the assessee has also failed to pay such tax directly, then, such person shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of such tax.

Clause 195 relating to liability to deduct tax at source seeks to provide that any person responsible for making a specified payment shall, at the time of payment, deduct income-tax therefrom at the appropriate rate. The clause further provides that the specified payment and the appropriate rate shall be such as are listed in the Third Schedule in the case of a resident deductee and in Fourth Schedule in the case of a non-resident deductee.

The said clause further provides that in the case of a non-resident deductee, where a rate in respect of such specified payment has been provided in the relevant agreement entered into by the Central Government under clause 291, the appropriate rate shall be lower of the Scheduled rate or the rate provided in such agreement.

The said clause also provides that if the deductee is required to obtain permanent account number and does not furnish such number to the deductor, deduction of tax at source in such case shall be at the rate of twenty per cent. or at the rate specified in the said clause, whichever is higher.

Clause 196 relating to payment of income and deduction of tax, inter alia, provides that deduction at source shall have to be made at the earliest point of the making of payment in cash, by issue of a cheque or draft, by credit to any account, whether called suspense account or by any other name, or by any other prescribed mode.

The clause further provides that where the payment is wholly or partly in kind, the deductor should ensure the payment of tax deductible at source before making the payment. It is further provided that where the payment is to be taxed under the head "Income from employment" or is in nature of interest, the deductor can adjust the amount of deduction to offset any deficiency or excess of previous deduction or non-deduction during the financial year. The said clause further enjoins the deductor to take into account any other income from employment and tax deducted thereon of the deductee from any other employer and also the tax relief for arrears or advance receipts.

The said clause also provides that in a case where the tax payable on any payment is to be borne by the deductor in pursuance of an agreement or arrangement, the payment has to be grossed up to such amount as would, after deduction of tax thereon at the appropriate rate, be equal to the net amount payable under such agreement or arrangement.

Clause 197 seeks to empower the Assessing Officer to give a certificate for lower or no deduction of tax to the deductee where the deductee is a resident or to the deductor where the deductee is a non-resident, if the Assessing Officer is satisfied that the total income of the deductee justifies deduction of tax at a lower or nil rate. Accordingly, the clause provides that deduction shall be made in accordance with the certificate, until such certificate is cancelled by the Assessing Officer or the expiry of the validity of the certificate, whichever is earlier.

Clause 198 relating to obligations of deductor, seeks to provide that every deductor shall pay the sum deducted to the credit of the Central Government within the prescribed time and manner, furnish a certificate to the deductee and also deliver a return of tax deduction in the manner provided in clause 199.

Clause 199 relates to payments to resident without deduction of tax. The said clause seeks to provide that every deductor, being a financial institution or cooperative society or any other notified deductor, shall deliver, or cause to be delivered, a return in respect of payment of interest to residents without deduction of tax. The clause further empowers the Board inter alia to provide for the period of such return, its form, manner of verification, time in which it is to be filed, medium of filing.

Clause 200 seeks to provide for the cases in which no deduction of tax shall be made. It, inter alia, provides that in the case of resident deductee, no deduction of tax shall be made if —

   (a) any payment, other than salary, is made by an individual or a Hindu undivided family who is not required to get its accounts audited for the financial year immediately preceding the financial year in which the payment is made;

   (b) any interest payable on any security,—

      (i) of the Central Government or a State Government; or

      (ii) issued by a company, if such security is in dematerialized form and is listed on a recognised stock exchange in India;

   (c) any interest on certain debenture payable to an individual, if the aggregate amount payable during the financial year does not exceed five thousand rupees;

   (d) any interest on certain time deposits with a bank or a housing-finance public company, if the aggregate amount payable by the branch of the bank or company during the financial year, does not exceed ten thousand rupees;

   (e) any interest payable to any banking company, co-operative bank, financial corporation established by or under a Central or State or Provincial Act, insurer, mutual fund or any notified institution, association or body;

   (f)any interest payable by a firm to a partner of the firm;

   (g) any amount payable on maturity, or redemption, of a zero coupon bond;

   (h) any payment for carriage of goods by road transport if the payee furnishes his Permanent Account Number to the payer;

    (i) any payment to a contractor in respect of works contract, service contract, advertising, broadcasting and telecasting, supply of labour for carrying out any works, or service, contract or carriage of goods or passengers by any mode of transport, other than by railways, if —

       (i) the amount of any payment during the financial year does not exceed thirty thousand rupees; and

       (ii) the aggregate amount of the payments during the financial year does not exceed seventy-five thousand rupees;

    (j) any payment of rent, if the aggregate amount of the payments during the financial year does not exceed one lakh eighty thousand rupees;

    (k) any payment of compensation on compulsory acquisition of immovable property, if the aggregate amount of the payments during the financial year does not exceed two lakh rupees;

Further, in the case of a non-resident deductee, being a foreign institutional investor, deduction shall not be made on any payment made to it as a consideration for sale of securities listed on a recognised stock exchange.

Clause 201 relating to credit for tax deducted, seeks to provide that for the purposes of computing total income of a deductee, the sum deducted on payments made to him shall be deemed to be his income received. Further the clause seeks to provide that the sums which have been deducted and paid to the Central Government, shall be treated as a payment of tax on behalf of the deductee. The clause further seeks to empower the Board to prescribe the procedure for giving credit to the deductee, the financial year for which such credit may be given and any other matter connected therewith.

Clause 202, seeks to inter alia provide that any person, being a seller, lessor or licensor, who is responsible for collecting any amount on account of—

   (a) sale of alcoholic liquor for human consumption, tendu leaves, timber obtained under a forest lease or otherwise, any other forest produce not being timber or tendu leaves, or scrap; or

   (b) granting of lease or licence or contract or transfer of any right or interest, either in whole or in part, for a parking lot or toll plaza or for mining or quarrying,

shall collect three per cent. of such sum as income-tax.

The said clause further provides that the collection should be made at the earliest of the time when the the payment is received in cash, by way of a cheque or draft, by debit to any account, whether called "suspense account" or by any other name or by any other prescribed mode. It is further provided that the sum so collected has to be paid to the credit of the Central Government within prescribed time and manner. The person responsible for collecting any amount is also required to furnish to the buyer, lessee or licensee, a certificate of tax collection within prescribed time, and to file a return of tax collected at source in the form and manner as prescribed by the Board.

Clause 203 relating to credit for tax collected seeks to provide that all sums collected from a collectee and paid to the credit of the Central Government shall be deemed to be a payment of tax on behalf of the person from whom such amount has been collected. The clause further seeks to empower the Board to prescribe the procedure for giving credit to the collectee, the financial year for which such credit may be given and any other matter connected therewith.

Clause 204 relates to interpretations under the Sub-chapter A and B. For this purpose the said clause, inter alia, defines the terms "broadcasting and telecasting", "professional or technical services", "service contract", "work", "buyer", "lessee", "licensee", "lessor", "licensor", "scrap" and "seller".

Clause 205 relates to the liability to pay advance tax. The said clause seeks to provide that every person shall be liable to pay advance-tax during any financial year if the amount of advance income-tax payable by him exceeds ten thousand rupees. For ascertaining the liability to pay advance-tax, the tax on estimated total income is reduced by the tax deductible or collectible at source and the amount of any tax credit available under clause 207.

The said clause further provides that persons other than companies are liable to pay advance income-tax, in three instalments i.e. on or before 15th September, 15th December and 15th March. Amount payable by these three dates should amount to 30 per cent., 60 per cent. and 100 per cent of the advance-tax payable. Similarly for a company, there are four instalments, the dates being on or before 15th June, 15th September, 15th December and 15th March. The corresponding percentages in the case of a company are 15 per cent., 45 per cent, 75 per cent and 100 per cent. It is further provided that any amount of advance income-tax paid after 15th March but before the expiry of the financial year shall be treated as advance income-tax paid during the financial year.

The said clause also empowers the Assessing Officer to issue an order to an assessee (not after last date of February of the financial year) to pay advance income-tax in such instalments as specified in the order, if in the opinion of the Officer, the assessee is liable to pay such amounts as advance income-tax. However, the assessee may still pay the advance tax in accordance with his estimation after filing such estimation to the assessing officer.

Clause 206 seeks to provide that the Assessing Officer shall grant relief in the prescribed manner to a person if he is in receipt in any financial year of any arrears, or advance, of salary or family pension relating to any other financial year. An application is required to be made to avail of such relief. Such relief, however, would not be allowed in respect of any compensation received towards retrenchment, voluntary retirement or termination of service.

Clause 207 relates to foreign tax credit allowable to an assessee, being a resident in India in any financial year on income which is taxed in India as well as outside India.

The said clause further provides that where the assessee is required to pay Indian income-tax in respect of an income which has been taxed in any specified territory or other country with which India has an agreement under clause 291, the foreign tax credit shall be allowed in accordance with the agreement entered into with such specified territory or country. Where there is no such agreement, the tax credit shall be determined at the Indian rate of tax or the rate of tax of the other country, whichever is lower. The credit, in either case shall not exceed the Indian income-tax payable in respect of income which is taxed outside India and the Indian income-tax payable on total income of the assessee.

Clause 208 of the Bill seeks to provide that wealth-tax referred to in clause 112 shall be payable by the due date of filing of the return of tax-bases.

Clause 209 relates to interest for default in furnishing return of tax-bases and it, inter alia, provides that for default in furnishing return of tax bases, the assessee shall be liable to pay simple interest at the rate of one per cent. per month, in specified circumstances.

This clause further provides the method of computation of the period for which the interest shall be payable, the amount on which the interest shall be chargeable etc. The interest shall be increased or reduced, in accordance with the variation in the amount of tax on which interest was payable under this clause.

Clause 210 relates to interest for default in payment of advance income-tax. The circumstances specified in which this interest is chargeable are where the assessee is liable to pay advance income-tax and has failed to pay such tax, or where the advance income-tax paid by such assessee is less than ninety per cent. of the assessed tax.

This clause further provides the method of computation of the period for, and the amount on, which the interest is chargeable. The interest is payable at the rate of one per cent. per month. The interest shall be increased or reduced, in accordance with the variation in the amount of tax on which interest was payable under this clause.

Clause 211 relates to interest for deferment of advance income-tax. The clause seeks to provide that where an assessee who is liable to pay advance income-tax has failed to pay such tax or has paid lesser advance tax before the due dates as specified, he shall be liable to pay simple interest at the rate of one per cent. per month for a period of three months.

The said clause also specifies the manner in which the interest has to be calculated. The interest shall not be payable on any shortfall in the advance income-tax payable on account of under-estimation or failure to estimate the amount of capital gains and income of the nature listed at serial number 4 in the Table in Part III of the First Schedule.

Clause 212 relating to interest on excess refund, seeks to provide that an assessee shall be liable to pay simple interest at the rate of one-half per cent. per month on the excess amount of refund granted to him in specified circumstances and for the period as mentioned in this clause.

Clause 213 relating to interest payable on demand raised seeks to provide that an assessee shall be liable to pay simple interest at the rate of one per cent. per month for the delay in payment of any demand after the expiry of the notice period for such payment.

Clause 214 relates to interest for failure to deduct or pay tax. The said clause seeks to provide that where any person who is required to deduct or collect any tax in accordance with the provisions of the Code, does not deduct or collect the whole or any part of the tax, or after deduction or collection fails to pay the tax, he shall be liable to pay simple interest —

   (a) at the rate of one per cent. per month on the amount of such tax for the period from the date on which such tax was deductible or collectible to the date on which such tax is deducted or collected, as the case may be; and

   (b) at the rate of one and one-half per cent. per month on the amount of such tax for the period from the date on which such tax was deducted or collected, as the case may be, to the date on which such tax is paid.

Clause 215, inter alia, provides that an assessee shall be entitled to a refund of the excess of any amount paid by him for any financial year over the amount with which he is liable under the Code. However, where an assessment is set aside or cancelled or an order of

fresh assessment is directed to be made in an appeal, etc., he shall be entitled to the refund only on the making of the fresh assessment.

Clause 216 relates to interest on refunds. The said clause seeks to provide that assessee shall be entitled to receive simple interest at the rate of one-half per cent. per month on any amount refundable to him under clause 215 in respect of any financial year for the period specified in the said clause.

The said clause further provides that no interest shall be payable if the amount of refund is less than ten per cent. of the tax determined under clause 149 or on regular assessment. The specified period shall not include the period of delay attributable to the assessee.

The said clause also provides that an assessee shall be entitled to receive simple interest at the rate of one-half per cent. per month on the amount of interest receivable by him under this clause for the period from the date of grant of refund to the date of actual payment of such interest, if such interest is not paid to him along with the refund.

Clause 217 seeks to provide for persons who shall be entitled to claim refund in certain special cases like on account of death, incapacity, insolvency, liquidation, etc., of the person entitled to claim the refund in first place.

Clause 218 relating to recovery by Assessing Officer seeks to provide that any amount specified as payable in a notice of demand, otherwise than by way of advance tax, shall be paid within thirty days of the service of the notice, to the credit of the Central Government. This period, however, can be reduced with the previous approval of the Joint Commissioner if the Assessing Officer has reason to believe that full period shall be detrimental to the interest of revenue.

The said clause further provides that the Assessing Officer can extend the time for payment, or allow payment by instalments during the pendency of appeal with the Commissioner (Appeals) on such conditions as he thinks fit. On default in payment of instalments, the assessee shall be deemed to be an assessee in default in respect of the whole of the amount outstanding. The recovery in such cases may be made by any of the modes provided in clause 220.

The said clause also provides that the assessing officer shall cease to exercise power for recovery of any amount after the Tax Recovery Officer is vested with the powers to recover the tax arrear.

Clause 219 relating to recovery by Tax Recovery Officer seeks to provide that such officer may draw up under his signature a statement of tax arrears (certificate) and shall proceed to recover from the assessee the amount specified in the certificate by one, or more, of the modes referred to in clause 220 or in the Fifth Schedule.

Clause 220 seeks inter alia to provide for the modes of recovery for the Assessing Officer or the Tax Recovery Officer. The recovery of tax arrears can be made through employer, debtor or by applying to the court which has custody over the money belonging to the assessee.

Clause 221, inter alia, seeks to provide as to who shall be the Tax Recovery Officer competent to take action under clause 219. Such Tax Recovery Officer shall be the one within whose jurisdiction the assessee carries on his business or the principal place of the business of the assessee is situate or the assessee resides or any movable or immovable property of the assessee is situate or who has been assigned jurisdiction under clause 130.

The said clause also provides that if the Tax Recovery Officer competent to take action under clause 219 is not able to recover the tax arrears, he may send a certificate to the other Tax Recovery Officer in whose jurisdiction the assessee resides or has property and then such Tax Recovery Officer shall assume jurisdiction for recovery of tax arrears.

Clause 222 seeks to provide that the amount of tax arrears due from a non-resident may be recovered from any asset of the non-resident, wherever located or from any amount payable by any person to the non-resident.

Clause 223 relates to recovery in the case of a company in liquidation. The said clause, inter alia, provides that the liquidator shall inform the concerned Assessing Officer of his appointment within a period of thirty days and thereafter, the Assessing Officer shall intimate to the liquidator, within a period of three months the amount sufficient to provide for any tax arrears or any amount which is likely to become payable thereafter by the company. The liquidator shall not part with any of the assets of the company, or the properties, in his custody until he has been intimated by the Assessing Officer. The amount so intimated shall be the first charge on the assets of the company remaining after payment of the workmen's dues and debts due to secured creditors to the extent specified.

Clause 224 relating to liability of manager of a company, seeks to provide that every person being a manager at any time during the financial year shall be jointly and severally liable for the payment of any amount due under the Code in respect of the company for the financial year, if the amount cannot be recovered from the company. These provisions shall not apply, if the manager proves that non-recovery cannot be attributed to any neglect, misfeasance or breach of duty on his part in relation to the affairs of the company. The provisions of this section shall prevail over anything to the contrary contained in the Companies Act, 1956.

Clause 225 relates to joint and several liability of participants. It seeks to hold every person, being a participant in an unincorporated body at any time during the financial year, or the representative assessee of the deceased participant, jointly and severally liable, along with the unincorporated body, for payment of any amount payable by the unincorporated body under the Code.

The said clause further provides that in case of a limited liability partnership, these provisions shall not apply, if the partner proves that non-recovery cannot be attributed to any neglect, misfeasance or breach of duty on his part in relation to the affairs of the partnership.

Clause 226 seeks to provide that if the recovery of tax in any area has been entrusted to a State Government under clause (1) of article 258 of the Constitution, the State Government may direct that the recovery shall be made in the same manner and by the same person as the recovery of municipal tax or local rate.

Clause 227 relates to recovery of tax in pursuance of agreements with foreign countries or specified territory and inter alia provides for procedure to be followed by the Board and the Tax Recovery Officer for recovery of tax in this regard.

Clause 228 relating to tax clearance certificate in certain cases, seeks to provide that no person shall leave the territory of India unless he furnishes to the notified authority an undertaking to the effect that he has made satisfactory arrangement for discharging his tax liability, if any, in respect of any income or wealth liable to tax in India. Such person shall be one who is not domiciled in India, who has come to India in connection with a business or employment, and who has income derived from any source in India.

The said clause further provides that every person, who is domiciled in India at the time of his departure from India, shall furnish to the notified authority prescribed particulars and obtain a certificate that he has no liability, if in the opinion of the Assessing Officer it is necessary to do so. The Central Government may notify the classes of persons to whom the above provisions shall not apply.

The said clause also provides that the owner or charterer of any ship, or aircraft, shall be personally liable (and also deemed to be an assessee in default in respect of the liability) to pay the whole, or any part, of the amount payable under the Code by any person required to obtain a no objection certificate if the person leaves India without obtaining the certificate.

Clause 229 relates to recovery by suit not with any other law. The said clause seeks to provide that the several modes of recovery specified in this Chapter shall not affect in any way any other law for the time being in force relating to the recovery of debts due to Government, or the right of the Government to institute a suit for the recovery of the tax arrears from the assessee.

Clause 230 deals with penalty for under-reporting of tax bases. It provides that a person shall be liable to a penalty, if he has under reported the tax bases for any financial year, of a sum which shall not be less than, but which shall not exceed two times, the amount of tax payable in respect of the amount of tax bases under reported for the financial year.

The said clause provides that the amount of tax bases under reported shall be the aggregate amount of the addition or disallowance made by the Assessing Officer, the Commissioner or the Commissioner (Appeals), as the case may be. It lists the circumstances under which a person shall be considered to have under reported the tax bases as well as the circumstances under which he shall not be so considered. The said clause, inter alia, provides that no addition or disallowance shall form the basis for imposition of penalty, if it has been the basis of imposition of penalty in the case of the person for the same or any other financial year.

The said clause also provides that the penalty shall be imposed by the Assessing Officer, Commissioner or Commissioner (Appeals), as the case may be.

Clause 231 relates to penalty where search has been initiated. It provides that a person shall be liable to a penalty in respect of the undisclosed tax bases for the specified financial year, if a search and seizure has been conducted under clause 135 in his case. Such penalty shall be imposed by the Assessing Officer. It also provides the quantum of penalty imposable in such case.

The said clause defines the terms "undisclosed tax bases" and "specified financial year".

Clause 232 relates to penalty for other defaults. It provides that a person shall be liable to a penalty if he has, without reasonable cause, committed the defaults that have been listed therein. The said clause also provides the quantum of penalty imposable for different defaults.

Clause 233 deals with the procedure for imposition of penalties. It provides that the specified income-tax authority shall issue a notice within the stipulated time period to any assessee requiring him to show cause why the penalty should not be imposed on him. It further provides that no order imposing a penalty under this Chapter shall be made unless the assessee has been given an opportunity of being heard. The said clause also lays down the procedure for approval of an order imposing penalty by the Joint Commissioner.

Clause 234 provides the time limits for passing the penalty orders. It also provides that in computing such period of limitation, certain specified time periods shall be excluded.

Clause 235 provides that the provisions of Chapter XV shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force relating to prosecution for offences.

Clause 236 deals with contravention of any restraint order. It provides that whoever contravenes any restraint order referred to in sub-clause (7) of clause 135 shall be punishable with rigorous imprisonment and with fine. The said clause also provides the term and quantum of such punishment.

Clause 237 provides that if a person who is required to afford the authorised officer the necessary facility to inspect the books of account or other documents under item (d) of

sub- clause (2) of clause 135, fails to afford such facility, he shall be punishable with rigorous imprisonment and with fine. The said clause also provides the term and quantum of such punishment.

Clause 238 deals with removal, concealment, transfer or delivery of property to thwart tax recovery. It provides that whoever fraudulently removes, conceals, transfers or delivers to any person, any property or any interest therein, with the intention of preventing such property or interest therein from being taken in execution of a certificate under the provisions of the Fifth Schedule shall be punishable with rigorous imprisonment and with fine. The said clause also provides the term and quantum of such punishment.

Clause 239 provides that if a person fails to give information as required by sub-clause (1) of clause 223 or fails to set aside the amount as required by sub-clause (3) of that clause or parts with any of the assets of the company or the properties in his custody in contravention of the provisions of the said sub-clause (3), he shall be punishable with rigorous imprisonment and with fine. The said clause provides the term and quantum of such punishment. It also provides that no person shall be punishable for any such failure to pay tax deducted or collected, if he proves that there was reasonable cause for the same.

Clause 240 deals with failure to pay the tax deducted or collected at source or to pay the dividend or income distribution tax under the provisions of this Code. It provides that if a person fails to pay such tax to the credit of the Central Government, he shall be punishable with rigorous imprisonment and with fine. The said clause provides the term and quantum of such punishment. It also provides that no person shall be punishable for any such failure, if he proves that there was reasonable cause for the same.

Clause 241 provides that if a person wilfully attempts in any manner to evade any tax, penalty or interest chargeable or imposable under this Code, he shall be punishable with rigorous imprisonment and with fine. It provides that such punishment shall be without prejudice to any penalty that may be imposable on him under any other provision of this Code. The said clause also provides for separate term and quantum of such punishment in respect of a case where the amount sought to be evaded exceeds one lakh rupees and other cases where it does not.

The said clause also provides that if a person wilfully attempts in any manner to evade the payment of any tax, penalty or interest under this Code, he shall be punishable with rigorous imprisonment and shall in the discretion of the court also be liable to fine. It provides that such punishment shall be without prejudice to any penalty that may be imposable on him under any other provision of this Code. The said clause provides the term of such punishment.

The said clause defines the phrase "wilful attempt to evade".

Clause 242 deals with failure to furnish return of tax bases. It provides that if a person wilfully fails to furnish in due time the return of tax bases under sub-clause (1) of clause 144 or in response to a notice under clause 146 or clause 159, he shall be punishable with rigorous imprisonment and with fine. The said clause also provides for separate term and quantum of such punishment in respect of a case where the amount sought to be evaded exceeds one lakh rupees and other cases where it does not.

The said clause also provides that a person shall not be so proceeded against for failure to furnish in due time the return of tax bases under certain specified circumstances.

Clause 243 provides that if a person wilfully fails to produce, or cause to be produced, the accounts and documents on or before the specified date as required by any notice served on him under sub-clause (2) of clause 150, he shall be punishable with rigorous imprisonment or with fine or with both. The said clause provides the term and quantum of such punishment.

Clause 244 provides that if a person wilfully fails to comply with a direction issued to him under sub-clause (1) of clause 151, he shall be punishable with rigorous imprisonment or with fine or with both. The said clause provides the term and quantum of such punishment.

Clause 245 provides that if a person makes a statement in any verification under this Code or under any rule made thereunder or delivers an account or statement which is false and which he either knows or believes to be false, or does not believe to be true, he shall be punishable with rigorous imprisonment and with fine. The said clause also provides for separate term and quantum of such punishment in respect of a case where the amount sought to be evaded exceeds one lakh rupees and other cases where it does not.

Clause 246 deals with wilful falsification of books of account or documents by any person in order to enable any other person to evade any tax or interest or penalty chargeable and imposable under this Code. It provides that such person shall be punishable with rigorous imprisonment and with fine. The said clause also provides that for establishing the charge under this clause, it shall not be necessary to prove that the other person has actually evaded such tax, penalty or interest.

Clause 247 provides that if a person abets or induces in any manner another person to make and deliver an account, statement or declaration relating to any tax bases chargeable to tax which is false and which he either knows to be false or does not believe to be true or to commit an offence under sub-clause (1) of clause 241, he shall be punishable with rigorous imprisonment and with fine. The said clause also provides for separate term and quantum of such punishment in respect of a case where the amount sought to be evaded exceeds one lakh rupees and other cases where it does not.

Clause 248 deals with offences by companies. In respect of any such offence, it provides that the company as well as every person who, at the time the offence was committed, was in charge of and was responsible for the conduct of the business of the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. However, the said clause also provides that any such person shall not be so liable if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of the offence.

The said clause provides that where an offence under this Code has been committed by a company and it is proved that the offence has been committed with the consent or connivance of or is attributable to any neglect on the part of any director, manager, secretary or other officer of the company, such person shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

The said clause also provides that where an offence under this Code has been committed by a company and the punishment for such offence is imprisonment and fine, then the company shall be punished with fine and every person referred to in the preceding paragraphs shall be liable to be proceeded against and punished in accordance with the provisions of this Code.

The said clause defines the terms "company" and "director".

Clause 249 deals with proof of entries in records or documents. It provides that entries in the records or other documents which are in the custody of an income-tax authority shall be admitted in evidence in any proceeding for the prosecution of any person for an offence under this Chapter. The said clause further provides that the entries may be proved by the production of the records or other documents (containing such entries) which are in the custody of the income-tax authority or by the production of a copy of the entries certified by that authority under its signature as true copy of the original entries.

Clause 250 deals with presumption as to assets, books of account, etc., in certain cases. It provides that where during the course of any search made under clause 135, any material has been found in the possession or control of any person and such material is tendered by the prosecution in evidence against such person, or against such person and the person referred to in clause 247 for an offence under this Code, the provisions of clause 311 shall accordingly apply in relation to such material.

The said clause also provides that where any material taken into custody from the possession or control of any person, is delivered to the requisitioning officer under clause 136 and such material is tendered by the prosecution in evidence against such person, or against such person and the person referred to in clause 247 for an offence under this Code, the provisions of clause 311 shall accordingly apply in relation to such material.

Clause 251 relates to presumption as to culpable mental state. It provides that in any prosecution for any offence under this Code which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state. However, the said clause also provides that it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution.

The said clause provides that a fact is said to be proved only when the court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability.

The said clause defines the term "culpable mental state".

Clause 252, inter alia, provides that no person shall be proceeded against for an offence under clauses 236 to 247, except with the previous sanction of the Commissioner or Commissioner (Appeals), as the case may be.

The said clause further provides that the Chief Commissioner may issue such instructions or directions to such Commissioner or Commissioner (Appeals) as he may think fit for institution of proceedings under this clause. It also provides that the Chief Commissioner may compound any offence under this Chapter under the prescribed circumstances and for the prescribed amount, either before or after the institution of proceedings. However, an offence in relation to which a punishment has been awarded by a court shall not be compounded.

Clause 253 deals with punishment for second and subsequent offences. It provides that if any person convicted of an offence under clauses 240, 241, 242, 243, 245, 246 and 247 is again convicted of an offence under any of the said provisions, he shall be punishable for the second and every subsequent offence with rigorous imprisonment and with fine. The said clause provides the term of such punishment.

Clause 254 provides that any offence punishable under this Chapter shall be deemed to be non-cognizable within the meaning of the Code of Criminal Procedure, 1973, notwithstanding anything contained in that Code.

Clause 255 deals with disclosure of information by public servants. It provides that if a public servant furnishes any information or produces any document in contravention of the provisions of clause 142, he shall be punishable with imprisonment and with fine. It also provides the term of such punishment.

The said clause provides that no prosecution shall be instituted under this clause except with the previous sanction of the Central Government. It also provides that such sanction may be accorded only after giving the public servant an opportunity of being heard.

Chapter XVI of the Code deals with advanced rulings and disputes resolutions.

Clause 256 relates to the scope of ruling and dispute resolution available with the Authority for Advance Rulings and Dispute Resolution. The said clause provides that an applicant or an appellant may seek a ruling or, as the case may be, a resolution of dispute on matters specified therein. The applicant or appellant, as the case may be, who may seek an advance ruling could be a non-resident, a resident any class of residents as notified by the Central Government a public sector company or a Commissioner.

Clause 257 relates to the constitution of the Authority for Advance Rulings and Dispute Resolution. The said clause, inter alia, provides that the Central Government shall constitute an Authority for Advance Rulings and Dispute Resolution for the purposes of pronouncing an advance ruling and resolution of dispute and such Authority shall consist of a Chairperson and such number of Vice-chairpersons and legal and revenue members as the Central Government may deem fit.

The said clause further provides that a Bench shall consist of the Chairperson or the Vice-chairperson and one legal member and one revenue member. The principal Bench of the Authority shall be located at Delhi and other Benches of the Authority shall be located at such places as deemed fit by the Central Government.

Clause 258 relates to the procedure of the Authority in dealing with advance ruling and, inter alia, provides that an applicant may make an application for seeking an advance ruling in the prescribed form and accompanied by the prescribed fees.

The said clause further provides that the Authority may, after examining the application and the records called for, either allow or reject the application by an order in writing. The Authority shall not allow the application in the circumstances as specified therein.

The said clause also provides that where an application is allowed, the Authority shall pronounce its advance ruling on the question specified in the application after examining all relevant material and after hearing the applicant and the Commissioner.

Clause 259 seeks to provide that no income-tax authority, or the Appellate Tribunal, shall proceed to decide any issue in respect of which an application has been made by a person falling within the class of persons notified under clause 256.

Clause 260 provides that the advance ruling pronounced by the Authority shall be binding only on the applicant in whose case, and in respect of the transaction in relation to which, the ruling has been pronounced. It shall also be binding on the Commissioner, and the income-tax authorities subordinate to him, in respect of the applicant and the said transaction.

The said clause further provides that the advance ruling shall not be binding if there is a change in law, or fact, on the basis of which the advance ruling has been pronounced.

Clause 261 seeks to provide that the Authority may declare an advance ruling to be void ab initio if it finds that the ruling has been obtained by the applicant by fraud or misrepresentation of facts and in such case, all the provisions of the Code shall apply to the applicant as if such advance ruling had never been made.

Clause 262 relates to the procedure for dispute resolution. The said clause, inter alia, provides that a public sector company or Commissioner may file an appeal against the orders referred to in clause 256 for seeking resolution of a dispute and such appeal shall be preferred within the specified period. Further, it allows the respondent to file a memorandum of cross-objection against any part of the order of the Commissioner (Appeals).

The said clause also provides that the Authority may admit an appeal, or a memorandum of cross-objection, after the expiry of the period specified in specified circumstances. The clause further provides that the orders passed by the Authority shall be final and binding on both the parties.

Clause 263 relates to an order of stay of demand by the Authority. The said clause provides that the Authority may grant a stay of demand to the public sector company for a period of one hundred and eighty days in the first instance and may extend such stay, on an application being made by the public sector company, to a maximum of three hundred and sixty-five days, if it is satisfied that the delay in disposing of the appeal is not attributable to the company.

Clause 264 seeks to provide that the Authority shall have the power to rectify any mistake apparent from the record and may, accordingly, amend any order passed by it under clause 262. However, no such order shall be passed after a period of four years from the date on which the order sought to be amended was made.

Clause 265 provides that the Authority shall have all the powers of a civil court under the Code of Civil Procedure, 1908 as are referred to in clause 134 of this Code and shall be deemed to be a civil court for the purposes of section 195 of the Code of Criminal Procedure, 1973.

The said clause further provides that every proceeding before the Authority shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code, and for the purposes of section 196 of the said Code.

Clause 266 provides that the Authority shall have the powers to regulate its own procedure in all matters pertaining to it.

Clause 267 defines certain terms that have been used in the Chapter, such as "advance ruling", "appellant", "application", "Authority", "Chairperson", etc.

Clause 268 seeks to provide that the Central Government will constitute an Income-tax Settlement Commission for the settlement of cases, consisting of a Chairperson and as many Vice-Chairpersons and other members as the Government deems fit who shall function within the Department of the Central Government dealing with direct taxes. These persons would be appointed from amongst the officers of the Indian Revenue Service who have served for at least 28 years in the service, including at least 5 years in the rank of Commissioner or above.

Clause 269 relates to jurisdiction and powers of the Settlement Commission. The said clause seeks to provide that a Bench of the Commission would be presided over by the Chairperson or a Vice-Chairperson, and would consist of two other members. However, if third member is unable to discharge his functions or in case of vacancy, the Bench may function with only two members. The Bench headed by the Chairperson will be the principal Bench and other Benches will be called Additional Benches. The Chairperson may, for the disposal of any particular case, constitute a Special Bench consisting of more than three Members. These Benches would sit at the notified places except a Special Bench which will sit at a place to be fixed by the Chairperson.

Clause 270 seeks to provide that if there is vacancy in the office of Chairperson or if he is not in a position to discharge his duties, the notified Vice-Chairperson shall act as the Chairperson.

Clause 271 seeks to provides for power of Chairperson to transfer cases from one Bench to another which can be done on the application of the assessee or the Chief Commissioner or Commissioner or on his own motion, after recording the reasons.

Clause 272 seeks to provide that the Benches shall take decision by majority and on equal division, will make a reference to the Chairperson. The clause further seeks to provide the procedure to be adopted subsequently.

Clause 273 relates to application for settlement of cases. The said clause, inter-alia, provides that the application should contain full and true disclosure of income or wealth, its manner of deriving and the additional amount of tax payable, etc. The application can be made only after furnishing return of tax bases and payment of income-tax or wealth-tax on income or wealth disclosed in the application. The clause further seeks to provide that the additional tax should be a minimum of fifty lakh rupees in a case of search or requisitioning of material and ten lakh rupees in any other case, for making the application. An application once made cannot be withdrawn.

Clause 274 seeks to provide working for calculating the additional amount of income-tax.

Clause 275 relates to admission of application. The said clause seeks to provide that the Settlement Commission would issue notice of hearing to applicant within ten days and after hearing him, within a period of twenty days will reject or allow his application. However, if no such order is passed, the application shall be deemed to be allowed. The said clause further provides that the Commission shall call for the report of the Commissioner within forty-five days of the making of application and within a period of fifteen days of the said report may declare an application as invalid on the basis of such report.

Clause 276 relates to further inquiry into the case. For this purpose the Commission is empowered to call for records from the Commissioner, direct him to make further enquiries, submit reports, etc.

Clause 277 relates to order of settlement. Such order shall provide for the terms of settlement including any demand by way of tax, penalty, etc. The settlement will be avoid if later it is found that it was obtained by fraud or misrepresentation. The order is to be passed within a period of eighteen months from the end of the month in which the application was made. The order may also cover any other matter relating to the case not covered by the application.

Clause 278 relates to payment of tax on settlement and specifies the time limit for payment of tax in pursuance of the order of the Settlement Commission under section 277, circumstances of its extension, etc. It also provides that simple interest at the rate of fifteen per cent. per annum shall be payable on any default from the date of the expiry of period of thirty days of the receipt of the order of Settlement Commission under clause 277.

Clause 279 relates to power of Settlement Commission to order provisional attachment to protect revenue and, inter alia, provides for time limits for which such attachments shall be effective.

Clause 280 relates to revival of proceedings before Assessing Officer. The said clause provides that if the order passed by the Settlement Commission becomes void in the circumstances where it was obtained by fraud or misrepresentation, the proceedings before the Assessing Officer with respect to the matters covered by the settlement shall be deemed to have been revived from the stage at which the application was admitted by the Settlement Commission and the Assessing Officer will get twenty-one months from the end of the financial year in which the order becomes void, to frame the assessment.

Clause 281 relates to powers of Settlement Commission after admission. The said clause seeks to provide that the Commission would have powers as are vested in an income-tax authority. It also provides the time period up to which the Settlement Commission will have current jurisdiction with the assessing officer and thereafter exclusive jurisdiction.

Clause 282 relates to inspection and furnishing of reports. The said clause empowers the Commission to provide copies of reports submitted before it, on payment of prescribed fee.

Clause 283 relates to power of Settlement Commission to grant immunity. The said clause seeks to provide that the Commission may, subject to certain conditions, grant immunity from penalty and prosecution with respect to the case covered by the Settlement. The immunity can be withdrawn in the circumstances specified.

Clause 284 relates to abatement of proceeding before Settlement Commission. The said clause seeks to provide that the proceedings before the Settlement Commission shall abate if the application has not been allowed or declared as invalid or the order has not been passed within the time specified. In such circumstances, the Assessing Officer will pass order as if no application has been made. The time taken in proceedings before the Commission would be excluded for assessment purposes and the material available before the Commission can be used by the assessing officer in proceedings before him.

Clause 285 relates to credit for tax paid in case of abatement of proceedings. The said clause seeks to provide that in a case of abatement, the Assessing Officer shall allow the credit for the tax and interest paid on or before the date of making the application before the Settlement Commission or during the pendency of the case before the Commission.

Clause 286 relates to recovery of sums due under order of settlement. The said clause seeks to provide that the jurisdictional Assessing Officer may recover any sum specified in an order of settlement and any penalty for default in making payment of such sum may be imposed and recovered in accordance with the provisions of Chapter XIII.

Clause 287 relates to order of settlement to be conclusive. The said clause seeks to provide that every order of Settlement will be conclusive on the matters stated therein.

Clause 288 relates to bar on subsequent application. The said clause seeks to provide the circumstances when a person shall not be entitled to file subsequent application before the Settlement Commission and the exceptions in this regard.

Clause 289 seeks to provide that any proceeding before the Settlement Commission shall be a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196 of the Indian Penal Code.

Clause 290 seeks to provide certain interpretations relevant for Chapter XV.

Part—H and Chapter XVIII of the Code deal with general provisions.

Clause 291 relates to agreement with specified territory or foreign countries. The said clause seeks to provide that the Central Government may enter into an agreement with the Government of any country or specified territory for the granting of relief or avoidance of double taxation, for exchange of information for the prevention of evasion or avoidance of income-tax or wealth-tax, for tax recovery, etc. Where for such agreements, the other country has designated certain associations, the clause provides that any specified association in India may enter into such agreement with the specified association of the specified territory outside India and the Central Government will notify the agreement for adopting it.

The said clause further provides that where such an agreement has been entered into, then the provisions of this Code will apply to the assessee to whom the agreement is applicable, if such provisions are more beneficial to him except for provisions regarding General Anti Avoidance Rule, levy of Branch Profit Tax and Control Foreign Company Rules which will apply, whether or not such provisions are beneficial to him.

Clause 292 relates to permanent account number. The said clause, inter alia, provides that every person fulfilling prescribed requirements has to apply for the allotment of a permanent account number which shall be allotted to him. Any other person may also apply for such allotment. The number is required to be quoted in prescribed transactions. The Board has been empowered to prescribe rules with regard to form of application, the categories of transactions, and the income-tax authority authorized to receive such application etc.

Clause 293 relates to tax account number. The number is required to be obtained by a deductor or collector of tax at source and has to be quoted in prescribed transactions or documents.

Clause 294 relates to mode of acceptance or repayment of certain loans or deposits. The said clause provides that loans or deposits with aggregate amount in a financial year exceeding fifty thousand rupees, shall not be accepted or repaid otherwise than by an account payee cheque or bank draft. The clause will not apply to any loan or deposit taken or accepted from, the Government, any banking company, post office savings bank or cooperative bank and other listed entities.

Clause 295 relates to obligation to furnish annual information return. The said clause seeks to provide that every person responsible for registering or maintaining books of account or other documents containing a record of any specified financial transaction would be furnish an annual information return in respect of such specified financial transaction. Such persons, inter alia, are Registrar or Sub-Registrar appointed under Registration Act, 1908, the registering authority empowered to register motor vehicles, the Post Master General, the Collector, the recognised stock exchange, a depository, etc.

The said clause further provides that "specified financial transaction" will mean a transaction of purchase, sale of property, a transaction by way of an investment made or an expenditure incurred, etc. The return is required to be furnished for transactions above a specified limit.

The said clause also provides the time and manner of filing of such return, the circumstances in which it would be treated as defective, etc.

Clause 296 relates to certain transfers to be void. The said clause seeks to provide that a transfer of asset or creation of charge on it during the pendency of any proceeding under the Code or after completion shall be void as against any claim in respect of any sum payable unless made for adequate consideration and without knowledge of the pendency of such proceeding or of any such sum payable by the person or with the previous permission of the Assessing Officer. However, the provisions of this clause shall not apply to transfer of any business trading asset.

Clause 297 relates to provisional attachment to protect revenue in certain cases. The said clause seeks to provide that the Assessing Officer can provisionally attach any property belonging to the assessee to protect interest of revenue, with prior approval of the Chief Commissioner or Commissioner. The said clause further provides for time limits for which such attachments would be effective.

Clause 298 relates to service of notice generally. The said clause seeks to provide for the manner of service of any notice, summons, requisition, order, etc., made under the Code.

Clause 299 relates to authentication of notices and other documents. The said clause seeks to provide the manner of authentication of a notice or any other document issued or served for the purposes of the Code.

Clause 300 relates to notice deemed to be valid in certain circumstances. The said clause seeks to provide that a notice would be deemed to be duly served if the person has appeared in any proceeding or co-operated in any inquiry relating to an assessment. The provision will not apply if the person has raised the objection before the completion of the assessment.

Clause 301 relates to service of notice when family is disrupted or unincorporated body is dissolved. The said clause seeks to provide that in such cases, the notice can be served on the last manager of the Hindu Undivided Family or its adult member in specified circumstances and on a participant of an unincorporated body before its dissolution.

Clause 302 relates to publication of information respecting assessees in certain cases. The said clause seeks to empower the Central Government to publish in public interest particulars like name, etc., relating to any proceeding or prosecution. Certain exceptions have been provided in case of penalty.

Clause 303 relates to appearance by registered valuer in certain matters. The said clause seeks to provide that an assessee entitled or required to attend before any income-tax authority or the Appellate Tribunal, in connection with valuation of any asset, may attend through a registered valuer except where he is required to attend personally.

Clause 304 relates to appearance by authorised representative. The said clause, inter alia, seeks to provide that an assessee entitled or required to attend before any income-tax authority or the Appellate Tribunal, in connection with any proceeding under the Code, may attend through an authorised representative except where he is required to attend personally.

The said clause further seeks to provide meaning of "authorised representative" and person not qualified to represent an assessee.

Clause 305 relates to rounding off of tax bases, tax, etc. It provides for rounding off of tax-bases to the nearest multiple of hundred rupees and amount payable or receivable by an assessee to the nearest multiple of ten rupees.

Clause 306 relates to indemnity. The said clause seeks to provide that every person deducting, retaining, or paying any tax in pursuance of the Code in respect of income belonging to another person is indemnified for the deduction, retention, or payment thereof.

Clause 307 relates to power to tender immunity from prosecution. The said clause seeks to empower the Central Government to tender immunity to any person from prosecution and the imposition of penalty on fulfilment of certain conditions. The immunity can also be withdrawn also in specified circumstances like concealment of particulars for obtaining immunity, giving of false evidence, etc.

Clause 308 relates to cognizance of offences. The said clause seeks to provide that no court inferior to that of a metropolitan magistrate or a magistrate of the First Class will try any offence under the Code.

Clause 309 seeks to provide that the provisions of section 360 of the Code of Criminal Procedure, 1973, or the Probation of Offenders Act, 1958, shall apply to a person convicted of an offence under this Code, unless the person is of eighteen years of age or more.

Clause 310 relates to return of tax bases, etc., not to be invalid on certain grounds. The said clause seeks to provide that no return of tax-bases, assessment, notice, summons, etc., shall be invalid merely by reason of any mistake, defect or omission if in substance and effect it is in conformity with the intent and purpose of the Code.

Clause 311 relates to presumption as to material found. The said clause seeks to provide that where any material is found in the possession or control of any person during search or survey, it shall be presumed that the material belongs to such person, the contents of the material, being books of account and other documents, are true, etc. Presumption as regards search will also apply to a case of requisition under provisions of clause 136.

Clause 312 relates to bar of suits in civil courts. The said clause seeks to provide that no suit shall be brought in any civil court to set aside, or modify, any proceeding taken or order made under the Code and that no prosecution, suit or other proceeding shall lie against the Government, or any officer of the Government, for anything in good faith done, or intended to be done, under the Code.

Clause 313 seeks to provide power to rescind to the Central Government or the Board or an income-tax authority regarding any notification or order, or approval or registration in respect of an assessee. The power shall be exercised after recording reasons in writing and giving the assessee a reasonable opportunity of showing cause against the proposed rescindment.

Clause 314 deals with interpretations. The said clause provides definitions of terms used in this Code and which have not been separately provided in the respective Chapters. Certain definitions correspond to the definitions provided in the Income-tax Act, 1961 as it stood before the commencement of this Code. Other definitions are new and have been provided for the first time in this Code.

Clause 315 provides the rule of construction for interpreting the provisions of this Code. It provides that a reference to any income or to the result of any computation shall be construed as a reference to both the negative and positive variation of the income or the result. The said clause further provides that any direction for aggregation of two or more items expressed as amounts shall be construed also to include a direction for aggregation of negative and positive amounts in all their combinations. The said clause also provides that the value of any variable in a formula shall be deemed to be nil, if the value of such variable is indeterminable or unascertainable.

Clause 316 relates to power to make rules and seeks to empower the Board to notify rules for the purposes of the Code subject to the control of the Central Government.

The said clause seeks to provide power in general terms as well as in specific matters mentioned therein like the ascertainment and determination of any class of income, the manner of arriving at the income in case of agriculture, a person residing outside India, the

form and manner in which any document, application, claim, return or information may be made or furnished, the fee that may be payable, the authority to be prescribed for any of the purposes of the Code, the procedure of giving effect to the terms of any agreement for avoidance of double taxation etc.

The clause further seeks to provide that the power to make rules will include the power to give retrospective effect, from a date not earlier than the date of commencement of the Code. However, no retrospective effect will be given to any rule so as to prejudicially affect the interests of the assessees.

Clause 317 relates to rules, scheme and certain notifications to be placed before Parliament. The said clause seeks to provide that every rule and scheme made and notification issued under this Code shall be laid before each House of Parliament within time as specified and that if both Houses agree in making any modification or annulment, the rule, scheme or notification will be modified to that extent so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule, scheme or notification.

Clause 318 relates to repeal and savings. The said clause seeks to repeal the Income-tax Act, 1961 and the Wealth-tax Act, 1957.

The said clause further provides for savings of certain specified proceedings, agreements, appointments, orders, declaration, etc., under the Acts sought to be repealed.

The said clause, inter alia, provides for saving of certain deductions like the deduction under section 80-IA, section 80-IAB, section 80-IB, section 80-IC, section 80-ID, section 80-IE or section 80JJA or section 80JJAA of the Income-tax Act, 1961 if the assessee is eligible for such deduction for the assessment year beginning on the 1st day of April, 2012 and subject to certain conditions.

Clause 319 relates to power to remove difficulties. The said clause seeks to empower the Central Government for the purpose of removing any difficulty which arises in giving effect to the provisions of the Code.

SCHEDULES

The First Schedule of the Code seeks to provide various rates for calculating income-tax payable on total income. The Schedule is divided into three Parts. Part I provides rates of income-tax on total income from sources other than a special source. The income of a society, other than a co-operative society, unincorporated body, local authority, and a company is proposed to be taxed at a flat rate whereas, tax slabs have been provided for individual, cooperative society, Hindu undivided family and artificial juridical person. Further, for resident individuals, different slabs have been provided for women tax-payers and senior citizens as relief is proposed to be provided to themvis-à-vis other resident tax-payers. The Schedule also provides for a flat rate of tax for a non-profit organisation after a threshold limit.

Part II of the Schedule seeks to provide the method of aggregation of agricultural income for rate purposes in a case where the person to whom Part I is applicable, has net agricultural income during a year exceeding 5000 rupees, and total income exceeds the threshold limit.

Part III seeks to provide rates of taxation if the person has income from any special source. The rates listed pertain to a non-resident or where the person, whether resident or non-resident, has income by way of lottery, crossword puzzle, race, including horse race or card game or any other game or gambling or betting.

The Second Schedule seeks to provide rates of other taxes, namely, tax on book profit, tax on distributed profits (dividend) of a domestic company tax on distributed income-tax on branch profits and tax on net wealth.

The Third Schedule seeks to provide a list of specified payments and the appropriate rates on which deduction of tax at source is required to be made in the case of a resident deductee.

The Fourth Schedule seeks to provide a list of specified payments and the appropriate rates on which deduction of tax at source is required to be made in the case of a nonresident deductee.

Clause 219, inter alia, provides that the Tax Recovery Officer shall proceed to recover from the defaulter, the amount specified in the certificate of tax arrears by the modes referred to in the Fifth Schedule.

Accordingly, the Fifth Schedule provides the procedure for recovery of tax. It corresponds to the Second Schedule of the Income-tax Act, 1961, as it stood before the commencement of this Code.

Part I of the Schedule contains general provisions of the procedure for recovery of tax. It provides the manner of execution of a certificate by the Tax Recovery Officer and the various modes of realisation of the amounts mentioned in the certificate. It further provides that in discharging his duties, the Tax Recovery Officer may seek assistance of the police. Part II of the Schedule provides the procedure for attachment and sale of movable property. Part III thereof provides the procedure for attachment and sale of immovable property. Part IV thereof contains the procedure for distraint and sale of movable property. It provides that such distraint and sale shall be made in the same manner as attachment and sale of any movable property attachable by actual seizure.

Part V of the Fifth Schedule relates to the appointment of receiver for business and for immovable property. It provides that the receiver shall have such powers as may be necessary for the proper management of the property and realisation of the profits or rents thereof. Part VI thereof provides the procedure for arrest and detention of the defaulter for certain acts committed by such defaulter which impede recovery of tax arrears.

Part VII of the Fifth Schedule contains miscellaneous provisions for recovery of tax relating to evidence, appeals, review etc. It also provides that the Board is empowered to make any rules for regulating the procedure under this Schedule.

Clause 10 of this Code provides that the total income for a financial year of a person shall not include certain specified incomes.

Accordingly, the Sixth Schedule of the Code lists such income. In certain cases, such income is exempt subject to the fulfilment of the conditions stipulated therein. In other cases, the income is exempt without any conditions. The Schedule also provides for notification of income in certain cases by the Central Government for this purpose.

Clause 11 of this Code provides that certain persons shall not be liable to income-tax for any financial year.

Accordingly, the Seventh Schedule of the Code enumerates such persons. In certain cases, the Schedule provides that the persons shall not be so liable to income-tax, subject to the fulfilment of conditions stipulated therein. In other cases, the entity shall be completely exempt from tax without any conditions.

Sub-clause (2) of clause 32 of this Code, inter alia, provides that the income from the business of insurance is to be computed in accordance with the Eighth Schedule.

Accordingly, the Eighth Schedule seeks to provide that the profits of the business of life insurance shall be the profit determined in the Shareholders' Account (Non-Technical Account) in accordance with the Insurance Act, 1938 as increased and reduced by items specified in the said Schedule. Similarly, it is provided that the profits of the business of insurance other than life insurance shall be the profits disclosed in the annual accounts, copies of which are required to be furnished under the Insurance Act, 1938, to the Controller of Insurance as increased and reduced by items specified in the said Schedule. The profits of business of insurance will be the aggregate of the aforesaid amounts. The said Schedule further provides that the loss from any business of insurance shall be allowed to be set off from the profits of the same business of the succeeding years. The Schedule also seeks to define certain terms relevant to the Schedule.

Sub-clause (2) of clause 15 provides that the income from any special source shall be computed under the class "Income from special sources" in accordance with the provisions of the Ninth Schedule.

Accordingly, the Ninth Schedule provides for the computation of income accrued or received from any special source. It further provides that income from special source shall be presumed to have been computed after giving effect to loss, allowance or deduction under this Code. It also provides that the amount of common costs attributable to any special source which are presumed to have been allowed shall be determined in the prescribed manner.

Sub-clause (2) of clause 32 of this Code, inter alia, provides that the profits from the business of operating a qualifying ship shall be computed in accordance with the provisions contained in the Tenth Schedule.

Accordingly, the Tenth Schedule provides that the profits of the business of operating a qualifying ship for a financial year shall be determined in accordance with the formula specified therein. It further provides that the computation of such profits shall be presumed to have been made after giving effect to loss, allowance or deduction under this Code. It also provides that the amount of common costs attributable to such business shall be determined in the prescribed manner.

The said Schedule further provides that the Board may make rules for the purpose of computation of income from the business of operating a qualifying ship. It also defines various terms for the purpose of computation of such income.

Sub-clause (2) of clause 32, inter alia, provides that the profits from the business of mineral oil or natural gas shall be computed in accordance with the provisions contained in the Eleventh Schedule.

Accordingly, the Eleventh Schedule provides that the profits of the business of mineral oil or natural gas for a financial year shall be the gross income from such business as reduced by the amount of the business expenditure incurred by the assessee wholly and exclusively for the purpose of such business. It further provides that the computation of such profits shall be presumed to have been given after giving effect to loss, allowance or deduction under this Code. It also provides that the amount of common costs attributable to such business shall be determined in the prescribed manner. The circumstances under which the provisions of this Schedule shall apply have also been specified therein. It also defines various terms for the purpose of computation of such profits.

Sub-clause (2) of clause 32, inter alia, provides that the profits from the business of developing a Special Economic Zone or manufacture or production of article or things or providing of any service by a unit established in a Special Economic Zone shall be computed in accordance with the provisions contained in the Twelfth Schedule.

Accordingly, the Twelfth Schedule provides that the profits of the business of developing or operating from a Special Economic Zone or manufacture or production of article or things or providing of any service by a unit established in a Special Economic Zone for a financial year shall be the gross income from such business as reduced by the amount of the business expenditure incurred by the assessee wholly and exclusively for the purpose of such business. It further provides that the computation of such profits shall be presumed to have been made after giving effect to loss, allowance or deduction under this Code. It also provides that the amount of common costs attributable to such business shall be determined in the prescribed manner. The circumstances under which the provisions of this Schedule shall apply have also been specified therein.

Sub-clause (2) of clause 32, inter alia, provides that the profits from the business specified in paragraph 1 of the Thirteenth Schedule shall be computed in accordance with the provisions contained in the said Schedule.

Accordingly, the Thirteenth Schedule provides the list of such specified businesses. The provisions of this Schedule shall apply to the said specified businesses which fulfil the prescribed conditions and are notified by the Central Government.

The said Schedule further provides that the profits of every specified business shall be computed separately. The profits of any specified business shall be the gross income from such business as reduced by the amount of the business expenditure incurred by the assessee wholly and exclusively for the purpose of such business. It further provides that the computation of such profits shall be presumed to have been made after giving effect to loss, allowance or deduction under this Code. It also provides that the amount of common costs attributable to such business shall be determined in the prescribed manner. The circumstances under which the provisions of this Schedule shall apply have also been specified therein.

Sub-clause (2) of clause 32, inter alia, provides that the profits from the business listed in Fourteenth Schedule where income is determined on presumptive basis shall be computed in accordance with the provisions contained in the said Schedule.

Accordingly, the Fourteenth Schedule provides the list of such businesses. It provides that the income from such business carried on by the assessee at any time during the financial year shall be the amount specified therein and subject to the conditions specified therein.

The said Schedule further provides that the computation of such income shall be presumed to have been made after giving effect to loss, allowance or deduction under this Code. It also provides that the amount of common costs attributable to such business shall be determined in the prescribed manner. The circumstances under which the provisions of this Schedule shall not apply have also been specified therein.

The Fifteenth Schedule relates to depreciation. Depreciation of business capital assets is one of the capital allowances allowed under clause 37 of the Code. The manner of calculation of depreciation of business capital assets is provided in clause 38 of the Code. The said clause makes a reference to Fifteenth Schedule. In respect of any block of assets , the depreciation is to be allowed at the percentages specified against such block of assets in the Table given in the said Schedule on the adjusted value or written down value of such block of assets, as the case may be, as are used for the purposes of the business of the person at any time during the financial year. The said Table broadly divides business capital assets, into twelve classes of assets. These are building, furniture and fittings, vehicles, aeroplanes, rails, ships, books, machinery and plant, scientific research assets, family planning asset, animals and intangible assets. Depreciation shall not be allowed, in respect of any other business capital asset not forming part of any block of assets specified in the Fifteenth Schedule. The said Schedule further provides that no depreciation shall be allowed in respect of any machinery or plant, if the actual cost thereof is allowed as a deduction in one or more years. It is also provided that the depreciation shall be one hundred per cent. of the adjusted written down value of the block of assets, being intangible assets, if the adjusted value or written down value of the block of assets is one lakh rupees or less. The Schedule also seeks to provide list of various items included in the assets listed in the table in the Schedule.

Clause 79 of this Code provides that a person shall be allowed a deduction of a specified sum of the amount of money paid by him in the financial year as contribution or donation to any person specified in the Sixteenth Schedule.

Accordingly, the Sixteenth Schedule provides the list of such persons. Parts I, II, III and IV thereof enumerate the entities in respect of whom contributions or donations are eligible for deduction of one hundred and seventy-five per cent., one hundred and twenty-five per cent., one hundred per cent. and fifty per cent, respectively.

Sub-clause (3) of clause 53 of this Code, inter alia, provides that the cost of acquisition of an investment asset specified in the Seventeenth Schedule and acquired by the specified mode shall be the cost specified in the said Schedule.

Accordingly, the Seventeenth Schedule provides the method of determination of the cost of acquisition of investment asset being shares or certain rights which have been acquired by the various modes specified therein.

Sub-clause (160) of clause 314 of this Code defines "mineral" as including a group of associated minerals specified in the Eighteenth Schedule.

Accordingly, Part I and Part II of the Eighteenth Schedule respectively provide the list of such minerals and group of associated minerals.

The Nineteenth Schedule to the Bill deals with three types of funds, i.e., approved provident fund, approved superannuation fund and approved gratuity fund and seeks to provide the guidelines that would govern their approval and functioning. The said Schedule has three parts. Part I deals with approved provident funds, Part II with approved superannuation funds and Part III with approved gratuity funds.

Part I relating to approved provident funds, provides that the Commissioner shall accord or withdraw approval to a provident fund and the conditions, upon the satisfaction of which he will accord approval to such fund, have been specified. In certain circumstances, the conditions can also be relaxed. This Part also provides that certain funds established under a scheme of other specified Acts will be deemed to be approved if notified in this behalf.

The said Part also provides that contribution by an employer in excess of twelve per cent. of the salary or one lakh rupees, whichever is less, and interest credited in excess of the rate of interest prescribed by the Central Government for this purpose, shall be deemed to be the income of the concerned employee and shall be liable to income-tax. Besides, an employee will be entitled to a deduction in computation of his income in respect of his contribution to his account, subject to a specified limit.

Part II of the Schedule relates to approved superannuation funds. As in case of provident funds, the Commissioner shall accord or withdraw approval to a superannuation fund. The conditions, upon the satisfaction of which an approval shall be accorded by the Commissioner, have also been specified.

The said Part further provides as to when the contribution by an employer shall be deemed to be the income of an employer and also for deduction of tax on contributions paid to an employee. It also provides that deduction from the pay of, and contributions on behalf of, employees is to be included in the return to be filed by the employer. The Part also specifies the liability of trustees on cessation of approval given to a superannuation fund and provides for the particulars to be furnished in respect of such funds.

Part III of the Schedule relates to approved gratuity funds. As in case of provident funds, the Commissioner shall accord or withdraw approval to a gratuity fund. The conditions, upon the satisfaction of which an approval shall be accorded by the Commissioner, have also been specified. Further, it has also been provided as to when the contribution by an employer shall be deemed to be the income of an employer. It also specifies the liability of trustees on cessation of approval given to a gratuity fund and provides for the particulars to be furnished in respect of such funds.

In the Nineteenth Schedule, for all three Parts, it has also been provided that an aggrieved employer may file an appeal before the Central Board of Direct Taxes within sixty days from the date of the Commissioner's order of not according an approval to a fund or of withdrawal of approval. Further, the Board may make rules for the smooth regulation of the funds. Besides, some relevant terms like ''employer", "employee", "contribution", "balance to the credit of an employee", "annual accretion", etc. have been defined.

The Twentieth Schedule provides the method and manner for computation of income attributable to a Controlled Foreign Company, which shall be included in the total income of an assessee, who is resident in India, for a financial year, in accordance with clause 58. The said Schedule, for the sake of simplicity, has provided formulae for the determination of the amount of income attributable to a Controlled Foreign Company and for the specified income of such a company.

The said Schedule has also defined certain terms like "Controlled Foreign Company", "territory with a lower rate of taxation" and "associated enterprise".

Clause 178 provides that an assessee may prefer an appeal to the Commissioner (Appeals) where he is aggrieved by an order passed by an income-tax authority below the rank of Commissioner, as specified in the Twenty-first Schedule. Accordingly, the Schedule provides a list of orders that are appealable before the Commissioner (Appeals).

Clause 37 of this Code, inter alia, provides that one of the items of capital allowances viz. deferred revenue expenditure allowance shall be such proportion of the expenditure as specified and computed in accordance with the Twenty-second Schedule. Accordingly, the said Schedule seeks to provide the items of deferred revenue expenditure on which deferred revenue expenditure allowance would be available for a financial year. The items provided, inter alia, are non-compete fee, premium for obtaining any asset on lease or rent, amount paid to an employee in connection with his voluntary retirement, expenditure incurred by an Indian company, any loss on account of forfeiture of any agreement entered in the course of the business and prescribed preliminary expenditure incurred before the commencement of the business, or in connection with the extension of the business, or in connection with the setting up of new business.

FINANCIAL MEMORANDUM

This Bill seeks to replace the Indian Income-tax Act, 1961 and the Wealth Tax Act, 1957 and thus no additional expenditure of significance, apart from what is being spent on the administration of these Acts, is contemplated by reason merely of the passing of this Bill.

MEMORANDUM REGARDING DELEGATED LEGISLATION

1. Clause 6 of the Bill provides that the following income shall be deemed to be received in the financial year—

    (a) any contribution made by any employer, in the financial year, to the account of an employee under a pension fund;

    (b) any contribution made by any employer, in the financial year, to the account of an employee in any other fund;

    (c) the annual accretion, in the financial year, to the balance at the credit of any employee in a fund referred to in clause (b) to the extent it exceeds the limit as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make the rules in this regard for the purposes of this clause.

2. Clause 9 of the Bill provides that the total income of any individual shall include, besides other income, all income which accrues, directly or indirectly from assets transferred, directly or indirectly, to the spouse by the individual, otherwise than for adequate consideration, or in connection with an agreement to live apart; and from assets transferred, directly or indirectly, to the son's wife by the individual, otherwise than for adequate consideration. It has been further provided that the Board may prescribe the method for determining the income referred to above.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

3. Clause 18 of the Bill provides that in computing the total income of a person for any financial year, any expenditure attributable to income which is not included in the total income under the Sixth Schedule, and determined in accordance with such method as may be prescribed, shall not be allowed as a deduction.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

4. Clause 23 of the Bill provides for the deductions from the gross salary for computation of income from employment. These deductions include - any allowance or benefit granted by an employer for journey by an employee between his residence and office or any other place of work, to such extent as may be prescribed; any allowance or benefit granted by an employer to an employee to meet expenses wholly, necessarily and exclusively in the performance of the duties of an office or employment of profit, as may be prescribed, to the extent such expenses are actually incurred for that purpose, and to meet personal expenses, considering the place of posting or nature of duties or place of residence, subject to such conditions and limits as may be prescribed; any amount of interest credited, in the financial year, on the balance to the credit of an employee in an approved fund to the extent it does not exceed the amount of interest payable at the rate notified by the Central Government; any allowance provided by an employer to meet the expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the employee, to such extent as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make the rules and notify the "rate of interest" in this regard for the purposes of this clause.

5. Clause 33 of the Bill provides that the gross earnings referred to in clause 32 shall also include any payment or aggregate of payments made to a person in a day, in respect of an expenditure incurred during the financial year or in respect of a liability incurred and allowed as a deduction in any preceding financial year, which has been made otherwise than by an account payee cheque drawn on a bank or by an account payee bank draft; exceeds a sum of thirty-five thousand rupees if the payment is made to transporter for

carriage of goods by road, or a sum of twenty thousand rupees in any other case; and has not been made in such cases and in such circumstances as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make the rules in this regard for the purposes of this clause.

6. Clause 35 of the Bill specifies the operating expenditure with respect to business expenditure and includes remuneration to any working participant or partner to the extent prescribed which it is in accordance with the agreement of the unincorporated body or the Limited Liability Partnership, as the case may be, association and relates to the period falling after the date of such agreement; contribution by a person, being an employer, to an approved fund subject to such limits and conditions, as may be prescribed and to the extent the amount is actually paid;

7. Clause 35 further specifies the deductions for the purpose of determination of operating expenditure, which include contribution by the person, being an employer, to an approved fund subject to such limits and conditions, as may be prescribed and to the extent the amount is actually paid; as well as, any amount credited to the provision for bad and doubtful debts account, no exceeding one per cent. of the aggregate average advances computed in the prescribed manner if the person is a financial institution or a non-banking finance company as may be notified.

Accordingly, it is proposed to empower the Central Government to make rules and issue notifications in this regard for the purposes of this clause.

8. Clause 36 of the Bill specifies the finance charges with respect to business expenditure and includes the amount of interest paid to any participant to the extent prescribed which it is in accordance with the agreement of formation of unincorporated body and relates to the period falling after the date of such agreement; the proportionate amount of discount or premium payable on any bond or debenture issued by the person, calculated in the manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

9. Clause 37 of the Bill provides deduction of an amount in accordance with such deposit scheme in respect of the person carrying on business of growing and manufacturing tea or coffee or rubber in India, as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make the rules in this regard.

10. Clause 41 of the Bill provides that a company shall be allowed a deduction equal to two hundred per cent. of the expenditure (not being expenditure in the nature of cost of any land or building) incurred on creating and maintaining an in-house facility for scientific research and development; and carrying out scientific research and development in the inhouse facility, if—

    (a) the company creates and maintains an in-house facility for carrying out scientific research and development;

    (b) the research facility is approved by the Central Government on the basis of recommendation of the prescribed authority; and

    (c) the company enters into an agreement with the prescribed authority for co-operation in the research and development facility and for audit of the accounts maintained for such facility.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

11. Clause 41 of the Bill further provides that for the purposes of granting approval to a research facility for claiming deduction for scientific research and development allowance, the Board may prescribe the nature of business, conditions and manner as may be considered necessary for grant of such approval.

12. Accordingly, it is proposed to empower the Board to make rules in this regard for the pu12. rposes of this clause.

13. Clause 44 of the Bill provides that the Board may, for the purposes of determining the actual cost of a business Capital asset, prescribe- (a) any other cost which may be included in determining the actual cost; and (b) the method of determining the actual cost in the circumstances which are not provided for in this section.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

14. Clause 45 of the Bill provides that the Board may prescribe-(a) the method of determining the allocation of the written down value or the adjusted written down value of the assets between the different businesses carried on by the person; and (b) the method of determining the written down value or the adjusted written down value of the block of assets in the circumstances which are not provided for in this section.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

15. Clause 47 of the Bill provides that the income from the transfer of any work of art, archaeological, scientific or art collection, book, manuscript, drawing, painting, photograph or print, to the Government or a University or any public museum or institution of national importance or of renown throughout any State or States and notified by the Central Government, shall not be included in the computation of income under the head "Capital gains".

Accordingly, it is proposed to empower the Central Government to issue notification(s) in this regard for the purposes of this clause.

16. Clause 47 further provides that the transfer of any investment asset in a transaction of reverse mortgage under a scheme notified by the Central Government shall not be included in the computation of income under the head "Capital gains".

Accordingly, it is proposed to empower the Central Government to frame the scheme in this regard for the purposes of this clause.

17. Clause 58 of the Bill provides that the gross residuary income shall inter alia include any payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, if it has not been incurred in such cases and under such circumstances, as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

18. Clause 59 of the Bill provides that for the purposes of computation of income from residuary sources, any payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, if it has not been incurred in such cases and under such circumstances, as may be prescribed, shall not be allowed as a deduction.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

19. Clause 69 of the Bill provides that a person, being an individual, shall be allowed a deduction for savings in respect of the aggregate of the sums specified in the said clause as does not exceed to the extent of one lakh rupees paid or deposited by the person in a

financial year. The specified sums include any sum as a contribution to any provident fund set up and notified by the Central Government where such contribution is to an account of the individual, spouse or any child of such individual; any sum to effect or keep in force a contract for any annuity plan of any insurer as approved by the Board in accordance with the prescribed guidelines; any sum as a contribution to a pension scheme, approved and notified by the Board in accordance with the prescribed guidelines.

Accordingly, it is proposed to empower the Board to issue notification in this regard for the purposes of this clause.

20. Clause 75 of the Bill provides that a person, being an individual, shall be allowed a deduction in respect of any amount paid by him in the financial year by way of interest on loan taken by him from any financial institution for the purpose of- (a) pursuing his higher education; or (b) higher education of his relatives. For the purposes of this clause, "financial institution" means a banking company or any other financial institution which the Central Government may, by notification, specify in this behalf.

Accordingly, it is proposed to empower the Central Government to issue notification in this regard for the purposes of this clause.

21. Clause 76 of the Bill provides that a person, being resident individual of Hindu undivided family, shall be allowed a deduction in respect of any amount paid during the financial year for medical treatment of the prescribed disease or ailment of any specified person. This deduction shall not be allowed unless the person obtains a certificate in the prescribed form from a prescribed specialist working in a Government hospital.

According, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

22. Clause 77 of the Bill provides that a person, being resident individual, shall be allowed a deduction of one lakh rupees, if he is a person with severe disability; and of fifty thousand rupees, if he is a person with disability. This deduduction shall be allowed if the person obtains a certificate from a medical authority in the prescribed form and manner and the certificate remains valid during the relevant financial year or part thereof.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

23. Clause 78 of the Bill provides that the deduction under this clause shall be allowed if the person, claiming a deduction under this section, obtains a certificate from a medical authority in such form and manner as may be prescribed and the certificate remains valid during the relevant financial year or part thereof.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

24. Clause 79 of the Bill provides that the donation to any person specified in Part IV of the Sixteenth Schedule shall be eligible for deduction under sub-clause (1), if the donee obtains the approval of the prescribed authority in accordance with the procedure and subject to such conditions, as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the nominee of this clause.

25. Clause 80 of the Bill provides that a person, being an individual and not in receipt of any house rent allowance, shall be allowed a deduction of any expenditure incurred by him in excess of ten per cent. of his gross total income from ordinary sources towards payment of rent in respect of any furnished or unfurnished accommodation occupied by him for his own residence. This deduction shall be allowed up to a maximum of two thousand rupees per month and shall be subject to such other conditions as may be prescribed having regard to the area or place in which the accommodation is situated.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

26. Clause 82 of the Bill provides for a deduction of income of Investor Protection Fund, if the Fund is notified by the Central Government.

Accordingly, it is proposed to empower the Central Government to issue notification in this regard for the purposes of this clause.

27. Clause 87 of the Bill provides that every person who has entered into an international transaction shall keep and maintain such information and document in respect thereof, as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

28. Clause 87 of the Bill further provides that any person carrying on legal, medical, engineering, architectural profession or profession of accountancy, technical consultancy, interior decoration or any other profession as is notified by the Board, shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income in accordance with the provisions of the Code.

Accordingly, it is proposed to empower the Board to issue notifications in this regard for the purposes of this clause.

29. Clause 87 of the Bill further provides that in respect of the maintenance of accounts, the bills or receipts issued to any person shall contain the name, address and such other particulars as may be prescribed.

Accordingly, it is proposed to empoer the Central Government to make rules in this regard for the purposes of thi clause.

30. Clause 87 of the Bill further provide that the Board may, having regard to the nature of the business carried on by any class of persons, prescribe- (a) any other books of account and documents to be kept and maintained; (b) the particulars to be contained in the books of account and documents; and (c) the form and the manner in, and the place at, which the books of account and other documents shall be kept and maintained. The Board may, also prescribe the period for which the books of account and other documents required to be kept and maintained under this section shall be retained.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

31. Clause 88 of the Bill provides that every person, who is required to keep and maintain books of account under clause 87 shall get his accounts for the financial year audited. The report of this audit shall be obtained in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed. A person shall be deemed to have complied with the provisions of this clause if the person gets the accounts of his business audited as required by, or under, any other law for the time being in force, before the due date; and obtains by the due date the report of the audit as required under such other law and a further report by an accountant in the form prescribed under this clause. Further, a person who has entered into an international transaction shall furnish a report of the international transaction entered into during the financial year to the Transfer Pricing Officer on or before the due date. This report shall be obtained from an accountant in the prescribed form duly signed and verified in the prescribed manner by such accountant.

Accordingly, it is proposed to empower the Central Government to make rules and forms in this regard for the purposes of this clause.

32.Clause 89 of the Bill provides that the income chargeable under the head "Income from business" or "Income from residuary sources" shall, except as otherwise provided in this section, be computed in accordance with either cash or mercantile system of accounting regularly employed by the person. The Central Government may from time to time notify accounting standards to be followed by any class of persons or in respect of any class of income.

Accordingly, it is proposed to empower the Central Government to make rules and issue notifications in this regard for the purposes of this clause.

33. Clause 89 of the Bill further specifies that for the purposes of this clause, "bad or doubtful debts" shall be such debts as may be prescribed, having regard to the guidelines issued by the Reserve Bank of India or the National Housing Bank, as the case may be, in relation to such debts.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

34. Clause 90 of the Bill provides that the Central Government may, subject to such conditions as may be considered necessary, notify a person as a non-profit organisation of public importance for the purpose of the Seventh Schedule.

Accordingly, it is proposed to empower the Central Government to issue notifications in this regard for the purposes of this clause.

35. Clause 94 of the Bill provides that the amount of outgoings during the financial year for the purpose of computation of the total income shall include any amount applied outside India, if - (i) the amount is applied for an activity which tends to promote international welfare in which India is interested; and (ii) the non-profit organisation is notified by the Central Government in this behalf.

Accordingly, it is proposed to empower the Central Government to issue notifications in this regard for the purposes of this clause.

36. Clause 94 of the Bill further provides that the amount of outgoings during the financial year for the purpose of computation of the total income shall be the aggregate of the amounts specified therein. These amounts include any amount accumulated or set apart for carrying on any charitable activity- (i) to the extent of fifteen per cent. of the total income (before giving effect to the provisions of this clause) or ten per cent. of the gross receipts, whichever is less; and (ii) invested or deposited in the modes specified in clause 95, for a period not exceeding three years from the end of the financial year. The modes of investing or depositing the money in such activity include any other mode of investment or deposit as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of clause 95.

37. Clause 98 of the Bill provides that a non-profit organisation shall make an application for its registration in the prescribed form and manner to the Commissioner. These provisions shall not apply to any non-profit organisation which has been granted approval or registration under the Income Tax Act, 1961 before the commencement of the Code, if the organisation fulfils such conditions as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules and forms in this regard for the purposes of this clause.

38. Clause 99 of the Bill provides that the non-profit organisation shall keep and maintain such books of accounts, in the manner as may be prescribed. Further, the nonprofit organisation shall obtain a report of audit in the prescribed form from an accountant before the due date of filing of the return of tax bases , if the gross receipts referred to in clause 93 in any financial year exceed five lakh rupees.

Accordingly, it is proposed to empower the Central Government to make rules and forms in this regard for the purposes of this clause.

39. Clause 100 of the Bill defines "anyonmous donation for the purpose of he said clause to mean any voluntary contribution, where a person receiving such contribution does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

40. Clause 101 of the Bill provides that a non-profit organisation shall be liable to income-tax at the rate of thirty per cent. in respect of its net worth subject to the conditions

specified in the said clause. "Net worth" of the non-profit organisation has been defined to mean the aggregate value of the total assets of the non-profit organisation a reduced by the liabilities of such organisation computed in accordance with such rules of valuation as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

41. Clause 104 of the Bill provides that every company to which this clause in respect of computation of book profit applies, shall obtain a report in such form as may be prescribed from an accountant certifying that the book profit has been computed in accordance with the provisions of this clause.

Accordingly, it is proposed to empower the Central Government to make rules and issue forms in this regard for the purposes of this clause.

42. Clause 108 of the Bill provides that the venture capital company, the venture capital fund or the person responsible for making payment of the income on behalf of such company or fund shall furnish, within such time as may be prescribed, to the person receiving such income and to the prescribed income-tax authority, a statement in the prescribed form and manner, giving details of the nature of the income paid during the financial year and such other relevant details as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for th purposes of this clause.

43. Clause 110 of the Bill provides that every life insurer shall be liable to pay tax on any amount of income, computed in the manner prescribed, distributed or paid to the policy holders of an approved equity oriented life insurance scheme.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

44. Clause 110 of the Bill further to provide that in this clause "approved equity oriented life insurance scheme" means—

        (i) a life insurance scheme where more than sixty-five per cent. of the total premia received under such scheme are invested by way of equity shares in domestic companies; and

        (ii) such scheme is approved by the Board in accordance with such guidelines as may be prescribed.

Accordingly, it is proposed to empower the Board to frame the guideline in this regard for the purposes of this clause.

45. Clause 113 of the Bill provide that in relation to computation of net wealth for the purposes of targeability of wealth-tax, the value of any specified asset, other than cash, referred to in the said clause, shall be determined in such manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

46. Clause 117 of the Bill provides that the arm's length price in relation to an international transaction shall be determined in accordance with any of the methods as may be prescribed, being the most appropriate method; the most appropriate method shall be determined having regard to the nature of transaction, class of transaction, class of associated enterprises or functions performed by such enterprises or such other relevant factors as may be prescribed; and the most appropriate method determined as above shall be applied for determination of arm's length price in such manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

47. Clause 116 of the Bill further provides that the determination of arm's length price shall be subject to safe harbour rules, as may be prescribed in this behalf.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

48. Clause 118 of the Bill provides that the Board may, by notification, frame a Scheme for advance pricing agreement in respect of an international transaction.

Accordingly, it is proposed to empower the Board to frame the scheme in this regard for the purposes of this clause.

49. Clause 123 of the Bill provides that the provisions in respect of general anti-avoidance rule shall apply in accordance with such guidelines as may be prescribed.

Accordingly, it is proposed to empower the Central Government to frame the guidelines in this regard for the purposes of this clause.

50. Clause 124 of the Bill provides that for the purposes of the Chapter on "Special Provisions Relating ToAvoidance Of Tax", two enterprises shall be deemed to be associated enterprises at any time during the financial year, if they are associated with each other by virtue of the conditions specified in the said clause. These conditions include - 'any specific or distinct location of either of the enterprises as may be prescribed'; 'any other relationship of mutual interest, existing between the two enterprises, as may be prescribed'.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purpose of this clause.

51. Clause 127 of the Bill further provides that the Board may, by notification, direct that any income-tax authority or thorities specified in the n ification shall be subordinate to such other income-tax authority or authorities as may be specified in such notification.

Accordingly, it is proposed to empower the Board to issue notification in this regard for the purposes of this clause.

52. Clause 133 of the Bill provides in relation to retention and application of seized assets, the Assessing Officer shall release, within the time and subject to such conditions prescribed, to the person from whose custody the assets were seized, any asset or proceeds thereof, which remains after the liabilities referred to in the said clause are discharged.

Accordingly, it proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

53. Clause 135 of the Bill provides that in relation to search and seizure, the Board may make rules —

   (a) to provide for the procedure to be followed by the Authorised Officer —

      (i) for obtaining ingress into any building, place, vessel, vehicle or aircraft to be searched where free ingress thereto is not available; and

      (ii) for ensuring safe custody of any material seized; and

   (b) any other matter in relation to search and seizure under this clause.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

54. Clause 140 of the Bill provides that for the purposes of the Direct Taxes Code, the Board may, notwithstanding anything contained in any other law for the time being in force, require —

   (a) any prescribed person to furnish such information within such time and in such form and manner as may be prescribed; and

   (b) any prescribed income-tax authority to call for such information in such form and manner as may be prescribed.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

55. Clause 142 of the Bill provides that the Chief Commissioner or the Commissioner may furnish, or cause to be furnished, to any person any information relating to any assessee received or obtained by any income-tax authority in the performance of his functions under this Code, if the person makes an application to the Chief Commissioner or the Commissioner in the prescribed form; and the Chief Commissioner or the Commissioner is satisfied that it is in the public interest so to do.

Accordingly, it is proposed to empower the Central Government to issue the form in this regard for the purposes of this clause.

56. Clause 142 of the Bill further provides that the Board, or any person specified by it by an order in this behalf, may furnish, or cause to be furnished, any information in respect of an assessee to any other person performing any functions under any other law as the Central Government may, if in its opinion it is necessary so to do in the public interest specify by notification in this half.

Accordingly, it is proposed to empower the Central Government issue notification in this regard for the purposes of this clause.

57. Clause 144 of the Bill provides that every person shall furnish a return of tax bases on or before the due date to the Assessing Officer or such other authority or agency as may be prescribed.

Accordingly, is proposed to empower the Central Government to make rules in this regard for the rposes of this clause.

58. Clause 144 of the Bill further provides that the person required to furnish a return of tax bases in relation to income shall also include; besides those enumerated in the said clause, any class or classes of persons as may be prescirbed.

Accordingly, it is proposed to empower the Central Government to make rules/issue notification in this regard for the purposes of this clause.

59. Clause 144 of the Bill further provides that the return of tax bases shall be furnished in such form, verified in the manner and setting forth such particulars, as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

60. Clause 145 of the Bill provides that the Board may, without prejudice to the provisions of frame a Tax Return Preparer Scheme so as to allow a Tax Return Preparer to prepare and furnish the return of tax bases of any specified class of persons, in accordance with the Scheme.

Accordingly, it is proposed to empower the Board to frame the Tax Return Preparer Scheme in this regard for the purposes of this clause.

61. Clause 149 of the Bill provides that the Board may make a scheme for centralised processing of returns for expeditious determination of the tax payable by, or the refund due to, the assessee.

Accordingly, it is proposed to empower the Board to frame the scheme in this regard for the purposes of this clause.

62. Clause 151 of the Bill provides that the Asessing Officer may direct the assessee to get his accounts audited by an accountant, if, at any stage of the proceding, he is of the opinion that, having regard to the nature and complexity of the accounts of the assessee and the interests of revenue, it is necessary to do so. The accountant shall furnish the report of the audit in such form, duly signed and verified by him, and setting forth such particulars as may be prescribed and such other particulars as the Assessing Officer may require.

Accordingly it is proposed to empower the Central Government to make rules/forms in this regard for the purposes of this clause.

63. Clause 154 of the Bill further provides that the remuneration of the accountant and other expenses the special audit shall be determined and paid by the Chief Commissioner or Commissioner in accordance with such guidelines as may be prescribed. Accordingly, it is proposed to empower the Central in accordance Government to frame the rules this regard for the purposes of this clause.

64. Clause 155 of the Bill provides that for the purpose of assessment, "eligible assessee" includes any class or classes of persons as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

65. Clause 159 of the Bill provides that for reopening a case, the Assessing Officers all serve on the assessee a notice requiring him to furnish, within a period of thirty days, a return of tax bases for any financial year, in such form, verified in the manner and setting forth such other particulars as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules/forms in this regard for the purposes of this clause.

66. Clause 162 of the Bill provides that any sum payable in consequence of any order made, or intimation issued, under this Code shall be demanded by an income-tax authority by serving upon the assessee a notice of demand in such form and manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules/forms in this regard for the purposes of this clause.

67. Clause 179 of the Bill provides that every appeal under clause 178 to Commissioner (Appeals) shall be in such form and verified in such manner and accompanied by a fee as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules/forms in this regard for the purposes of this clause.

68. Clause 182 of the Bill provides that an appeal or the memorandum of cross-objection to the Appellate Tribunal shall be in such form and be verified in such manner as may be prescribed. The appeal by an assessee shall be accompanied by such fees as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules/forms in this regard for the purposes of this clause.

69. Clause 184 of the Bill provides that an assessee may make an application to the Appellate Tribunal for stay of demand in relating to the appeal preferred by him under 183 and such application shall be accompanied by such fees as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

70. Clause 192 of the Bill provides that every application by an assessee for revision of any order passed by an authority subordinate to the Commissioner, other than an order to which section 190 applies, shall be accompanied by such fees as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

71. Clause 196 of the Bill provides that for the purposes of the liability to deduct tax at source, the specified payment shall be deemed to have been made, if the payment has been made in cach; by issue of a cheque or draft; by credit to any account, whether called 'suspense accout' or by any other name; or by any other mode as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

72. Clause 196 the Bill further provides that for the purposes of making any deduction of tax from the payment liable to be taxed under the head "Income from employment", the deductor shall take into account the specified particulars, if any, furnished by the deductee in such form and manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules/forms in this regard for the purposes of this clause.

73. Clause 197 of the Bill provides that the deductee may make an application, in such form and manner, as may be prescribed, to the Assessing Officer seeking a certificate for deduction of income-tax at a lower rate or, as the case may be, no deduction of income-tax from payments to be received by him. Further, the deductor may make an application, in such form and manner as may be prescribed, to the Assessing Officer seeking a certificate for deduction of income-tax at a lower rate or, as the case may be, no deduction of income-tax from payments to be made by him to a non-resident deductee.

Accordingly, it is proposed to empower the Central Government to make rules/forms in this regard for the purposes of this clause.

74. Clause 197 of the Bill further provides that the Board may prescribe the circumstances and the cases in which an application may be made for the grant of the certificate for lower or no deduction of tax and the conditions subject to which such certificate may be granted and provide for all other matters connected therewith.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

75. Clause 198 of the Bill provides that every deductor shall pay the sum deducted to the credit of the Central Government with such time and manner as may be prescribed. Further, every deductor shall furnish to the deductee a certificate to the effect that tax has been deducted within such time and containing such particulars as may be prescribed.

Accordingly, it is proposed to empower the Central Goernment to make rules in this regard for the purposes of this clause.

76. Clause 199 of the Bill provides that the Central Government may, by notification in the official Gazette, require any deductor to deliver, or cause to be delivered, a return in respect of any payment without deduction of tax.

Accordingly, it is proposed to empower the Central Government to issue notifications in this regard for the purposes of this clause.

77. Clause 199 of the Bill further provides that the Board shall, in respect of the return of tax-deduction and the return under this clause, prescribe the following:

     (a) the period in respect of which the return is to be furnished;

     (b) the form of the return and the particulars therein;

     (c) the manner of verification of the return;

     (d) the time by, and the medium in, which the return is to be delivered;

     (e) the income-tax authority, or any other person, authorised to receive the return; and

     (f) any other matters connected therewith.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

78. Clause 200 of the Bill provides that no tax shall be deducted at source, where the payee is a resident, from any interest payable to any institution, association or body, or class of institutions, associations or bodies, which the Central Government may, for reasons to be recorded in writing, notify in this behalf. Further, the same shall also apply for any interest payable in respect of deposits under any scheme framed by the Central Government and notified by it in this behalf.

Accordingly, it is proposed to empower the Central Government to issue notifications and make scheme in this regard for the purposes of this clause.

79. Clause 201 of the Bill provides that for the purposes of giving credit in respect of tax deducted, the Board may prescribe —

      (a) the procedure for giving credit to the deductee, or any other person;

      (b) the financial year for which such credit may be given; and

      (c) any other matter connected therewith.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

80. Clause 201 of the Bill provides that for the purposes of tax collection at source, the collection of an amount shall be deemed to have been made, if the amount has been received in cash; by way of a cheque or draft; by debit to any account, whether called "suspense account" or by any other mode as may be prescribed, whichever is earlier.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

81. Clause 202 of the Bill further provides that any person collecting any amount in the form of tax collected at source shall pay the sum so collected to the credit of the Central Government within such time and manner as may be prescribed. Also, every person responsible for collecting any amount the form of tax collected at source shall furnish to the buyer, lessee or licensee a certificate of tax collection within such time as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

82. Clause 202 of the Bill further provides that the Board shall prescribe the following in respect of the return of tax collection:—

     (a) the period in respect of which the return is to be furnished;

     (b) the form of the return and the particulars therein;

     (c) the manner of verification of the return;

     (d) the time by, and the medium in, which the return is to be delivered;

     (e) the income-tax authority, or any other person, authorised to receive the return; and

     (f) any other matter connected therewith.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

83. Clause 203 of the Bill provides that for the purpose of giving credit in respect of tax collected, the Board may prescribe —

    (a) the procedure for giving credit to the collectee, or any other person;

    (b) the financial year for which such credit may be given; and

    (c) any other matter connected therewith.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

84. Clause 204 of the Bill provides that for the purposes of the Chapter on "Collection at Source", 'professional or technical services' means services rendered by a person in the course of carrying on legal, medical, engineering, architectural or accountancy profession, technical consultancy, interior decoration or any other profession as notified by the Board.

Accordingly, it is proposed to empower the Board to make rules/issue notifications in this regard for the purposes of this clause.

85. Clause 205 of the Bill provides that where in the opinion of the Assessing Officer may, any person is liable to pay advance income-tax, he may by an order in writing - require such person to pay advance income-tax calculated in such manner as may be prescribed; and issue to such person a notice of demand under section 168 specifying the instalments

in which such tax is to be paid. Further, the person, who has been served with such an order, may file an estimation, in such form as may be prescribed, to the Assessing Officer, if in his estimation, the advance tax payable by him is lower than the amount specified in the said order, and pay the advance tax in accordance with his estimation on or before the due dates specified in this section.

Accordingly, it is proposed to empower the Central Government to make rules and forms in this regard for the purposes of this clause.

86. Clause 206 of the Bill provides that the Assessing Officer shall, on an application made to him by any person, grant such relief as may be prescribed, if the person is in receipt in any financial year of any arrears, or advance, of salary or family pension relating to any other financial year.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

87. Clause 207 of the Bill provides that the Central Government may, for the relief or avoidance of double taxation, prescribe,—

     (a) the method for computing the amount of credit;

     (b) the manner of claiming credit; and

     (c) such other particulars as may be considered necessary.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

88. Clause 210 of the Bill provides that in relation to interest for default in furnishing return of tax-bases, the Assessing Officer shall serve on the assessee a notice of demand, in such form as may be prescribed, specifying the sum payable on account of increase in the interest payable as a result of modification in the assessed income on account of any rectification, revision or appellate order under the Code, and such notice shall be deemed to be a notice under section 168.

Accordingly, it is proposed to empower the Central Government to issue the forms in this regard for the purposes of this clause.

89. Clause 210 of the Bill provides that in relation to interest for defaults in payment of advance income-tax, the Assessing Officer shall serve on the assessee a notice of demand in such form as may be prescribed specifying the sum payable on account of increase in the interest on account of any rectification, revision or appellate order under the Code and such notice shall be deemed to be a notice under section 168 and the provisions of this Code shall apply accordingly.

Accordingly, it is proposed to empower the Central Government to issue the forms in this regard for the purposes of this clause.

90. Clause 215 of the Bill provides that an assessee shall be entitled to a refund of the excess of any amount paid by him or on his behalf, or treated as paid by him or on his behalf, for any financial year over the amount with which he is liable under the Code, and every claim for refund shall be made within such time and such form and manner, as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

91. Clause 216 of the Bill provides that in relation to interest on refunds, the Assessing Officer shall serve on the assessee a notice of demand in such form as may be prescribed specifying the amount of excess interest paid to him where interest is reduced in accordance with the variation in the amount on which the interest was payable as a result of any rectification, revision or appellate order under the Code, and such notice shall be deemed to be a notice under section 161.

Accordingly, it is proposed to empower the Central Government to issue the forms in this regard for the purposes of this clause.

92. Clause 218 of the Bill provides that any amount specified as payable in a notice of demand, otherwise than by way of advance tax, shall be paid within thirty days of the service of the notice, to the credit of the Central Government in such manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

93. Clause 219 of the Bill provides that the Tax Recovery Officer may draw up under his signature a statement of tax arrears of an assessee in default referred to in sub-section (3) or sub-section (4) of section 213, in the prescribed form.

Accordingly, it is proposed to empower the Central Government to issue the forms in this regard for the purposes of this clause.

94. Clause 220 of the Bill provides that the Assessing Officer or the Tax Recovery Officer may require the employer of the assessee to deduct from any payment to the assessee such amount as is sufficient to meet the tax arrear from the assessee. Upon such requisition, the employer shall comply with the requisition and shall pay the sum so deducted to the credit of the Central Government in the prescribed manner.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

95. Clause 220 of the Bill further provides that the Assessing Officer or the Tax Recovery Officer may, by notice in writing, require any debtor of the assessee to pay such amount, not exceeding the amount of debt, as is sufficient to meet the tax arrear of the assessee. Upon receipt of such notice, the debtor shall comply with the requisition and shall pay the sum to the credit of the Central Government in such manner as may be prescribed within the time (not being before the debt becomes due to the assessee) specified in the notice.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

96. Clause 221 of the Bill provides that the Tax Recovery Officer, may send a certificate, in such manner as may be prescribed, specifying the tax arrear to be recovered, to another Tax Recovery Officer within whose jurisdiction the assessee resides or has property, if the first-mentioned Tax Recovery Officer is not able to recover the entire amount by sale of the property, movable or immovable, within his jurisdiction; or is of the opinion that, for the purpose of expediting, or securing, the recovery of the whole, or any part, of the amount under this chapter, it is necessary so to do.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

97. Clause 228 of the Bill provides that every person, who is domiciled in India at the time of his departure from India, shall furnish to the notified authority such particulars as may be prescribed; and obtain a certificate from the notified authority that he has no liability, if in the opinion of the Assessing Officer it is necessary for such person to obtain such certificate.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

98. Clause 228 of the Bill further provides that no person shall leave the territory of India unless he furnishes to such authority, as may be notified, an undertaking to the effect that he has made satisfactory arrangement for discharging his tax liability, if any, in respect of any income or wealth liable to tax in India.

Accordingly, it is proposed to empower the Central Government to notify the authority in this regard for the purposes of this clause.

99. Clause 228 of the Bill further provides direct Board may having regard to the interesting revenue may prescribe—

      (a) the circumstances

      (b) the form and manner in which the under taking is so be furnished and

      (c) any other manner connected therewith accordingly it is proposed to empower the poorer to make rules and issue forms in this regard for purposes of this clause.

100. Clause 252 of the Bill provides that the Chief Commissioner may compound, either before or after the institution of proceedings, any offence under Chapter XV, under the circumstances and for the amount, as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

101. Clause 256 of the Bill provides that an applicant or appellant, being any class of residents as notified by Central Government in the Official Gazette in this behalf, may seek a ruling or, as the case may be, a resolution of dispute on matters concerning a determination in respect of an issue relating to computation of tax bases is pending before any income-tax authority, or the Appellate Tribunal, and such determination shall include the determination of any question of law or of fact relating to such computation of tax bases specified in the application.

Accordingly, it is proposed to empower the Central Government to make rules and issue notifications in this regard for the purposes of this clause.

102. Clause 257 of the Bill provides that in respect of the Authority for Advanced Rulings and Dispute Resolution, the salaries and allowances payable to, and the terms and conditions of service of, the Members shall be such as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

103. Clause 258 of the Bill provides that in respect of the procedure for advance ruling, the application shall be made in such form and manner as may be prescribed, and be accompanied by such fees as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

104. Clause 258 of the Bill further provides that in respect of the procedure for advance ruling, a copy of the advance ruling pronounced by the Authority, duly signed by the Members and certified in such manner as may be prescribed shall be sent to the applicant and to the Commissioner, as soon as may be, after such pronouncement.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

105. Clause 262 of the Bill provides that in respect of the procedure for dispute resolution, the appeal, or the memorandum of cross objections, shall be in such form and manner and be verified in such manner as may be prescribed. Further, the appeal by the public sector company shall be accompanied by such fees as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

106. Clause 263 of the Bill provides that a public sector company may make an application to the Authority for Advanced Rulings and Dispute Resolution for stay of demand relating to the appeal preferred by it under section 256 and such application shall be accompanied by such fees as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

107. Clause 269 of the Bill provides that the principal Bench and the additional Benches of the Settlement Commission shall ordinarily sit at such places as the Central Government may, by notification in the Official Gazette, specify.

Accordingly, it is proposed to empower the Central Government to issue notifications in this regard for the purposes of this clause.

108. Clause 270 of the Bill provides that in respect of the Settlement Commission, the Vice-Chairperson or, as the case may be, one of the Vice-Chairperson as the Central Government may, by notification in the Official Gazette, authorise in this behalf, shall act as the Chairperson.

Accordingly, it is proposed to empower the Central Government to issue notifications in this regard for the purposes of this clause.

109. Clause 273 of the Bill provides that an assessee may, at any stage of a case relating to him, make an application to the Settlement Commission in such form and manner as may be prescribed, to have the case settled. Such application shall contain, besides the specified particulars, such other particulars as may be prescribed.

It has also been provided that every application made to the Settlement Commission shall be accompanied by such fees as may be prescribed. Further, the assessee shall, on the date on which he makes such an application to the Settlement Commission, also intimate the Assessing Officer in such manner as may be prescribed, of having made such application to the Settlement Commission.

Accordingly, it is proposed to empower the Central Government to make rules and forms in this regard for the purposes of this clause.

110. Clause 282 of the Bill provides that no person shall be entitled to inspect, or obtain copies of, any reports made by any income-tax authority to the Settlement Commission; but the Settlement Commission may, in its discretion, furnish copies thereof to any such person on an application made to it in this behalf and on payment of such fee as may be prescribed. Further, for the purpose of enabling any person whose case is under consideration to rebut any evidence brought on record against him in any such report, the Settlement Commission shall, on an application made in this behalf, and on the payment of such fee as may be prescribed, furnish such person with a certified copy of any such report or part thereof relevant for the purpose.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

111. Clause 291 of the Bill provides that in respect of any agreement with foreign countries or specified territory, the Central Government may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreements.

Accordingly, it is proposed to empower the Central Government to issue notifications in this regard for the purposes of this clause.

112. Clause 291 of the Bill further provides that in respect of any agreement with foreign countries or specified territory, a person shall not be entitled to claim relief under the provisions of the agreement unless a certificate of his being a resident in the other country or specified territory is obtained by him from the tax authority of that country or specified territory, in the prescribed form.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

113. Clause 292 of the Bill provides that every person who fulfils such conditions and requirements as may be prescribed shall make an application for the allotment of a permanent account number and the applicant shall be allotted a permanent account number. Further, a permanent account number may, having regard to the nature of transactions as may be prescribed, be allotted to any other person, whether or not an application is made by him.

Also, any person who has been allotted a permanent account number shall quote the number in the transactions, or documents, as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

114. Clause 292 of the Bill further provides that the Board shall prescribe the following in respect of the permanent account number:

       (a) the form and the manner in which an application may be made for the allotment of a permanent account number and the particulars which such application shall contain;

       (b) the income-tax authority, or any other person, authorised to receive the application or allot the permanent account number;

       (c) the categories of transactions in relation to which Permanent Account Numbers shall be quoted by every person in the documents pertaining to such transactions;

       (d) the categories of documents in which such numbers shall be quoted by every person;

       (e) class, or classes, of persons to whom the provisions of this section shall not apply;

       (f) the form and the manner in which the person who has not been allotted a Permanent Account Number shall make his declaration;

       (g) the manner in which the Permanent Account Number shall be quoted in respect of the categories of transactions referred to in clause (c); and any other matters connected therewith.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

115. Clause 293 of the Bill provides that any person who has been allotted a tax account number shall quote the number in the transactions, or documents, as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

116. Clause 294 of the Bill provides that no person shall accept from, or repay to, any other person any loan or deposit otherwise than by an account payee cheque or bank draft, if the aggregate amount of such loan or deposit in a financial year exceeds fifty thousand rupees. However, these provisions shall not apply to any loan or deposit taken or accepted from, or by such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify.

Accordingly, it is proposed to empower the Central Government to issue notifications in this regard for the purposes of this clause.

117. Clause 295 of the Bill provides that every person responsible for registering or maintaining books of account or other documents containing a record of any specified financial transaction, under any law for the time being in force, shall furnish an annual information return, in respect of such specified financial transaction. Such person will also include a designated person in the case of an office of Government.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

118. Clause 295 of the Bill further provides that the annual information return in respect of the specified financial transactions shall be furnished to such authority, in such form and manner (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any computer readable media) and within such time as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

119. Clause 295 of the Bill further provides that for the purposes of furnishing the annual information return, "specified financial transaction" shall include any other transaction as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

120. Clause 295 of the Bill further provides that the annual information return in respect of the financial transactions shall be furnished if the aggregate value of each such transaction in any financial year exceeds the amount as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

121. Clause 295 of the Bill further provides that the prescribed income-tax authority may, if he considers that the annual information return furnished is defective, intimate the defect to the person who has furnished such return and give him an opportunity of rectifying the defect within a period of one month from the service of such intimation. Further, the prescribed income-tax authority shall treat the annual information return as invalid if such defect is not removed within the time allowed, and the provisions of the Code shall apply as if such person had failed to furnish the annual information return.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

122. Clause 295 of the Bill further provides that if a person who is required to furnish an annual information return under the said clause has not furnished the same within the prescribed time, the prescribed income-tax authority may serve upon such person a notice requiring him to furnish such return within a period not exceeding sixty days from the date of service of the notice and such person shall furnish the annual information return within the time specified in the notice.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

123. Clause 304 of the Bill provides that any assessee who is entitled, or required, to attend before any income-tax authority, or the Appellate Tribunal, in connection with any proceeding under this Code, may attend through an authorised representative. An "authorised representative" means a person authorised by the assessee in writing to appear on his behalf, including any person who has acquired such educational qualifications as may be prescribed for this purpose.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

124. Clause 304 of the Bill further provides that a person, not being a legal practitioner or an accountant, who is found guilty of misconduct in connection with any income-tax proceedings by the prescribed authority, shall not be qualified to represent an assessee as his authorised representative.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

125. Clause 305 of the Bill provides that the method of rounding off of the amount of tax bases to the nearest multiple of hundred rupees, and any amount payable, or receivable, by the assessee, to the nearest multiple of ten rupees under the provisions of the Code shall be such as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

126. Sub-clause (18) of clause 314 of the Bill defines "approved fund" to also mean a provident fund, superannuation fund, gratuity fund, pension fund, or any other fund, as approved by the Board in accordance with the scheme framed and prescribed by the Central Government in this behalf;

Accordingly, it is proposed to empower the Central Government to frame the scheme in this regard for the purposes of this clause.

127. Sub-clause (31) of clause 314 of the Bill defines "backward classes" to mean such classes of citizens, other than the Scheduled Castes and the Scheduled Tribes, as may be notified, from time to time, by the Central Government or any State Government.

Accordingly, it is proposed to empower the Central Government and the State Governments to issue notifications in this regard for the purposes of this clause.

128. Sub-clause (34) of clause 314 of the Bill defines "Board" to mean the Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 and notified by the Central Government for the purposes of this Code.

Accordingly, it is proposed to empower the Central Government to issue notification in this regard for the purposes of this clause.

129. Sub-clause (36) of clause 314 of the Bill defines "broken-period income" to mean the income for the period commencing from the date on which the debt instrument is acquired by the person or the beginning of the financial year, whichever is later, and ending on the date on which the security is sold, and calculated in such manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

130. Sub-clause (55) of clause 314 of the Bill defines "Competent Investigating Authority" to mean any income-tax authority not below the rank of Joint Commissioner prescribed as such.

Accordingly, it is proposed to empower the Central Government to notify/make rules in this regard for the purposes of this clause.

131. Sub-clause (57) of clause 314 of the Bill defines "computer software" to mean any computer programme recorded on any disc, tape, perforated media or other information storage device; or any customised electronic data or any product or service of similar nature, as may be notified by the Board.

Accordingly, it is proposed to empower the Board to issue notification in this regard for the purposes of this clause.

132. Sub-clause (63) of clause 314 of the Bill defines "Cost Inflation Index" in relation to a financial year as the index as the Central Government may specify by Notification, having regard to seventy-five per cent. of the average rise in the consumer price index for non-urban manual employees for the immediately preceding financial year.

Accordingly, it is proposed to empower the Central Government to notify the "index" in this regard for the purposes of this clause.

133. Sub-clause (74) of clause 314 of the Bill provides that the transfer, in relation to "demerger", shall be in accordance with such other conditions as may be notified by the Central Government having regard to the necessity to ensure that the transfer is for genuine business purposes. It is further provided that the splitting up or the reconstruction of any authority or a body constituted or established under a Central, State or Provincial Act, or a local authority or a public sector company to form a resulting company, shall be in accordance with the conditions as may be notified by the Central Government.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

134. Sub-clause (86) of clause 314 of the Bill defines "due date" in relation to any other return, other than the return of tax bases, to mean such date as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

135. Sub-clause (87) of clause 314 of the Bill defines "electoral trust" to mean a trust so approved by the Board in accordance with the scheme made in this regard by the Central Government.

Accordingly, it is proposed to empower the Central Government to make the scheme in this regard for the purposes of this clause.

136. Sub-clause (93) of clause 314 of the Bill defines "fair market value", in relation to an asset, to mean the price determined in such manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

137. Sub-clause (112) of clause 314 of the Bill defines "head office expenditure" to mean executive and general administration expenditure incurred by the assessee outside India, including expenditure incurred in respect of, in addition to the matters specified therein, such other matters connected with administration as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

138. Sub-clause (159) of Clause 314 of the Bill defines "medical authority" as - (i) the medical authority referred to in clause (p) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995; or (ii) such other medical authority as may be notified by the Central Government for this purpose.

Accordingly, it is proposed to empower the Central Government to notify the "medical authority" in this regard for the purposes of this clause.

139. Sub-clause (166) of clause 314 of the Bill defines "net worth" in relation to an undertaking or division transferred under slump sale, to mean the value determined in such manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

140. Sub-clause (191) of clause 314 of the Bill provides that the value of the perquisites defined therein shall be computed in such manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in respect of the manner of computation of the value of perquisites for the purposes of this clause.

141. Sub-clause (211) of clause 314 of the Bill defines "recognised stock exchange" to mean a recognised stock exchange as referred to in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 and which fulfils such conditions as may be prescribed and notified by the Central Government for this purpose.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

142. Sub-clause (213) of clause 314 of the Bill defines "registered valuer" to mean a person registered as such by the Board for determining the value of any asset in accordance with the procedure as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

143. Sub-clause (239) of clause 314 of the Bill defines "specified association" to mean any institution, association or body, whether incorporated or not, functioning under any law for the time being in force in India or the laws of the specified territory outside India and notified as such by the Central Government.

Accordingly, it is proposed to empower the Central Government to issue notification in this regard for the purposes of this clause.

144. Sub-clause (241) of clause 314 of the Bill defines "specified knowledge-based industry or service" to mean any other industry or service, other than those specified therein, as may be notified by the Central Government.

Accordingly, it is proposed to empower the Central Government to issue notification in this regard for the purposes of this clause.

145. Sub-clause (242) of clause 314 of the Bill defines "specified territory" to mean any area outside India and notified as such by the Central Government.

Accordingly, it is proposed to empower the Central Government to issue notification in this regard for the purposes of this clause.

146. Sub-clause (250) of clause 314 of the Bill defines "State Pooled Finance Entity" to mean such entity which is set up in accordance with the guidelines for the Pooled Finance Development Scheme notified by the Central Government.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

147. Sub-clause (259) of clause 314 of the Bill defines "Tax Recovery Officer" to mean any Income-tax Officer who may be authorised by the Chief Commissioner or the Commissioner, by general or special order in writing to exercise the powers of a Tax Recovery Officer to exercise or perform such powers and functions which are conferred on, or assigned to, an Assessing Officer as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

148. Sub-clause (260) of clause 314 of the Bill provides that "test of continuity of business" stands satisfied, in case of a successor, if he, in addition to fulfiling the conditions specified therein, fulfils such other conditions as may be prescribed to ensure the revival of the business of the predecessor or to ensure that the business reorganisation is for genuine business purpose.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

149. Sub-clause (284) of clause 314 of the Bill defines "urban area" as an area within such distance from the local limits of any municipality or cantonment board referred to in item (a), as the Central Government may having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification.

Accordingly, it is proposed to empower the Central Government to issue notification in this regard for the purposes of this clause.

150. Sub-clause (289) of clause 314 of the Bill provides that "value of sweat equity shares" shall be the value of the sweat equity shares on the date on which the option is exercised by the assessee, determined in accordance with the method as may be prescribed, as reduced by the amount actually paid by, or recovered from, the assessee in respect of such shares.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

151. Sub-clause (290) of clause 314 of the Bill defines "venture capital company" to mean a company,—

        (a) which has been granted a certificate of registration as a venture capital company under the Securities and Exchange Board of India Act, 1992; and

        (b) which fulfils all other conditions as may be prescribed in this behalf.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

152. Sub-clause (291) of clause 314 of the Bill defines "venture capital fund" to mean a fund,—

        (a) which has been granted a certificate of registration as a venture capital fund under the Securities and Exchange Board of India Act, 1992; and

        (b) which fulfils all other conditions as may be prescribed in this behalf.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

153. Sub-clause (292) of clause 314 of the Bill defines "venture capital undertaking" to mean such domestic company whose shares are not listed in a recognised stock exchange in India and which is engaged in the business of—

        (a) nanotechnology;

        (b) information technology relating to hardware and software development;

        (c) seed research and development;

        (d) bio-technology;

        (e) research and development of new chemical entities in the pharmaceutical sector;

        (f) production of bio-fuels;

        (g) dairy or poultry;

        (h) building and operating composite hotel-cum-convention centre with seating capacity of more than three thousand;

        (i) development of infrastructure facility; or

        (j) any other business as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

154. Sub-clause (297) of clause 314 of the Bill defines "zero coupon bond" to mean a bond issued by any company, fund or scheduled bank in accordance with a scheme notified by the Central Government; in respect of which no payment and benefit is received or receivable before maturity or redemption from the company, fund or scheduled bank; and which the Central Government may, by notification, specify in this behalf.

Accordingly, it is proposed to empower the Central Government to frame and notify the scheme in this regard for the purposes of this clause.

155. Sub-clause 316 of the Bill provides that the Board may, subject to the control of the Central Government, make rules for the whole or any part of India for carrying out the purposes of this Code. It has been further provided that in particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters namely:—

        (a) the ascertainment and determination of any class of income;

        (b) the manner in which and the procedure by which the income shall be arrived at, in the case of—

           (i) agriculture income;

           (ii) a person residing outside India;

           (iii) a person whose total income includes income referred to in section 8;

       (c) the determination of the amount of expenditure allowable under this Code in such manner, to such extent, and on such basis and conditions, as appears to the Board to be proper and reasonable;

       (d) the methods by which an estimate of any income liable to tax, or expenditure liable to deduction, may be made, if such income or expenditure cannot be definitely ascertained, or can be ascertained only with an amount of trouble and expense to the assessee which in the opinion of the Board is unreasonable;

       (e) the form and manner in which any document, application, claim, return or information may be made or furnished and the fees that may be levied in respect of any document, application or claim;

       (f) the class or classes of persons who shall be required to furnish any document, application, claim, return or information in electronic form;

       (g) the form and manner in which a document, application, claim, return or information may be furnished electronically;

       (h) the document, statement, receipt, certificate or report which, regardless of anything to the contrary contained in this Code, may not be furnished along with the return but shall be produced before the Assessing Officer on demand;

        (i) the computer resource or the electronic record to which a document, application, claim, return or information may be transmitted electronically;

        (j) the manner in which any document, application, claim, return or information required to be filed under this Code may be verified;

        (k) the authority, agency or organisation who may receive any application, claim, return or information on behalf of the Board or the Department;

        (l) the procedure to be followed in calculating interest payable by assessees or interest payable by Government to assessees under any provision of this Code, including the rounding off of the period for which such interest is to be calculated in cases where such period includes a fraction of a month, and specifying the circumstances in which and the extent to which petty amounts of interest payable by assessees may be ignored;

       (m) the form and manner in which any appeal or cross-objection may be filed under this Code and the manner in which intimation of any such order as is referred to in clause (d) of sub-section (3) of section 184 may be served;

       (n) the circumstances in which, the conditions subject to which and the manner in which, the Commissioner (Appeals) may permit an appellant to produce evidence which he did not produce or which he was not allowed to produce before the Assessing Officer;

       (o) the fee payable in respect of any appeal, application, reference or ruling;

       (p) the maintenance of a register of persons referred to in section 270, other than legal practitioners or accountants, practicing before income-tax authorities and for the constitution of and the procedure to be followed by the authority referred to in sub-section (4) of that section;

       (q) the issue of certificate verifying the payment of tax by assessees;

       (r) the authority to be prescribed for any of the purposes of this Code;

       (s) the procedure for giving effect to the terms of any agreement for the granting of relief in respect of double taxation or for the avoidance of double taxation which may be entered into by the Central Government under this Code; and

       (t) any other matter which by this Code is to be, or may be, prescribed.

The aforesaid clause also provides that any order made, proceeding initiated or conducted, or liability or obligation discharged, in accordance with the Rules framed under this section shall be deemed to be duly made, initiated, conducted or discharged, in accordance with the provisions of the Code. It has also been provided that the power to make rules conferred by this clause shall include the power to give retrospective effect, from a date not earlier than the date of commencement of the Code, to the rules or any of them and, unless the contrary is permitted, no retrospective effect shall be given to any rule so as to prejudicially affect the interests of assessees.

Accordingly, it is proposed to empower the Board to make rules and notifications in this regard for the purposes of this clause.

156. Paragraph 93 of the Fifth Schedule of the Bill provides that the Board may prescribe the form to be used for any order, notice, warrant, or certificate to be issued under the Fifth Schedule.

Accordingly, it is proposed to empower the Board to prescribed forms in this regard for the purposes of this clause.

157. Paragraph 4 of the Sixth Schedule of the Bill provides that the amount of family pension received by the widow or children or nominated heirs, as the case may be, of a member of the armed forces (including para-military forces) of the Union, if the death of such member has occurred in the course of operational duties, in such circumstances and subject to such conditions, as may be prescribed.

Accordingly, it is proposed to empower the Central Government to frame the scheme and make rules in this regard for the purposes of this clause.

158. Paragraph 5 of the Sixth Schedule of the Bill provides that income not included any income arising to a foreign company, as the Central Government may, by notification, specify in this behalf, by way of royalty or fees for technical services received in pursuance of an agreement entered into with the Government for providing services in or outside India in projects connected with security of India.

Accordingly, it is proposed to empower the Central Government to issue notification in this regard for the purposes of this clause.

159. Paragraph 6 of the Sixth Schedule of the Bill provides that income not included in the total income shall also comprise any income of the European Economic Community (established by the Treaty of Rome of 25th March, 1957), derived in India by way of interest, dividends or capital gains from investments made out of its funds under such scheme as the Central Government may, specify in this behalf.

Accordingly, it is proposed to empower the Central Government to frame the scheme and issue notification in this regard for the purposes of this clause.

160. Paragraph 10 of the Sixth Schedule of the Bill provides that income not included in the total income shall also comprise any income, the nature and extent, accruing to a body or authority which is notified by the Central Government in this behalf if such body or authority—

        (a) has been established or constituted or appointed under—

           (i) a treaty or an agreement entered into by the Central Government with two or more countries; or

           (ii) a convention signed by the Central Government; and

        (b) is not established, constituted or appointed for the purposes of profit.

Accordingly, it is proposed to empower the Central Government to issue notification in this regard for the purposes of this clause.

161. Paragraph 12 of the Sixth Schedule of the Bill provides that income not included in the total income shall also comprise any payment from a provident fund to which the Provident Funds Act, 1925, applies or from any other provident fund set up by the Central Government and notified by it in this behalf.

Accordingly, it is proposed to empower the Central Government to issue notification in this regard for the purposes of this clause.

162. Paragraph 27 item (a) of the Sixth Schedule of the Bill provides that income not included in the total income shall also comprise any amount received by way of pension by an individual, who had been in the service of the Central Government or State Government and has been awarded "Param Vir Chakra" or "Maha Vir Chakra" or "Vir Chakra" or such other gallantry award as the Central Government may, by notification, specify in this behalf.

Accordingly, it is proposed to empower the Central Government to issue notification in this regard for the purposes of this clause.

163. Paragraph 31 of the Sixth Schedule of the Bill provides that income not included in the total income shall also comprise any amount of interest on bonds issued by a local authority or by a State Pooled Finance Entity as a public sector company and specified by the Central Government by notification.

Accordingly, it is proposed to empower the Central Government to make rules and issue notification in this regard for the purposes of this clause.

164. Paragraph 34 of the Sixth Schedule of the Bill provides that income not included in the total income shall also comprise any income and amount thereof notified by the Central Government accruing to any person from any international sporting event held in India, if such event is approved by the international body regulating the international sport relating to such event; has participation of more than two countries; and is notified by the Central Government for the purposes of this paragraph.

Accordingly, it is proposed to empower the Central Government to issue notification in this regard for the purposes of this clause.

165. Paragraph 41 of the Sixth Schedule of the Bill provides that income not included in the total income shall also comprise any payment received by any employee, from one or more employers, as the cash equivalent of the leave salary in respect of the period of earned leave at this credit at the time of this retirement, to the extent the aggregate of such amount does not exceed the limit as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

166. Paragraph 42 of the Sixth Schedule of the Bill provides that income not included in the total income shall also comprise any payment received by any employee, from one or more employers, by way of gratuity on his retirement, or on his becoming incapacitated prior to such retirement, or on termination of his employment; or any gratuity received by the family on the death of the employee, to the extent the aggregate of such amount does not exceed the limit as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

167. Paragraph 43 of the Sixth Schedule of the Bill provides that income not included in the total income shall also comprise any amount received by any employee, from one or

more employers, in connection with his voluntary retirement or termination of his service or voluntary separation under any scheme framed for this purpose in accordance with such rules as may be prescribed, to the extent the aggregate of such amount does not exceed the limit as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

168. Paragraph 47 of the Sixth Schedule of the Bill provides that income not included in the total income shall also comprise income of a co-operative society from such activities and to such extent as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

169. Paragraph 22 of the Seventh Schedule of the Bill provides that any electoral trust so approved by the Board in accordance with the scheme made in this regard by the Central Government, shall not be liable to income-tax, if ninety five per cent. of the aggregate of all voluntary contributions received by it during the financial year and the surplus, if any, brought forward from any preceding financial year is distributed to political parties.

Accordingly, it is proposed to empower the Central Government to frame the scheme in this regard for the purposes of this clause.

170. Paragraph 24 of the Seventh Schedule of the Bill provides that any corporation established by the Central or State Government for promoting the interests of the members of a minority community notified as such by the Central Government, shall not be liable to income-tax.

Accordingly, it is proposed to empower the Central Government to issue notification in this regard for the purposes of this clause.

171. Paragraphs 3 and 4 of the Eighth Schedule of the Bill provides that the profits of the business of insurance other than life insurance shall be the profits disclosed in the annual accounts, copies of which are required to be furnished under the Insurance Act, 1938, to the Controller of Insurance. Such profits shall also be decreased by such amount carried over to a reserve for unexpired risks as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

166. Paragraph 11 of the Eighth Schedule of the Bill provides that the amount of common costs (including depreciation) attributable to the business of insurance shall be determined in such manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

172. Paragraph 6 of the Ninth Schedule of the Bill provides that the amount of common costs (including depreciation) attributable to the special source and presumed to have been allowed under paragraph 4 thereof shall be determined in such manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

173. Paragraph 7 of the Tenth Schedule of the Bill provides that the amount of common costs (including depreciation) attributable to the business of operating a qualifying ship and any other business shall be determined in such manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

174. Paragraph 13 of the Tenth Schedule of the Bill provides that the Board may make rules for the purposes of computation of income from the business of operating a qualifying ship in respect of the following:—

        (a) method and time for opting into the tonnage income scheme and the period for, and circumstances under, which the option shall remain in force;

        (b) circumstances under which a company may be excluded from the tonnage income scheme;

        (c) such other conditions for applicability of tonnage income scheme having regard to the need for generating internal accruals for acquiring new ships and training of crews;

        (d) limits for charters of tonnage;

        (e) prevention of abuse of the tonnage income scheme, having regard to the need to ensure that no transaction or arrangement results, or but for the rules prescribed hereunder, would have resulted in a tax advantage being obtained for—

           (i) a person other than a qualifying shipping company; or

           (ii) a qualifying shipping company in respect of its activities other than its business of operating a qualifying ship;

        (f) valuation of goods or services where these are transferred between the business of operating a qualifying ship and any other business carried on by a qualifying shipping company;

       (g) determination of arm's length price of the business transactions if the arrangement of transactions results in abuse of the tonnage income scheme.

It is proposed to empower the Board to make rules in this regard for the purposes of this clause.

176. Paragraph 16 of the Tenth Schedule of the Bill further provides that the 'deemed tonnage' in a case where an arrangement has been entered into by the qualifying company for purchase of slots, slot charter or sharing of a qualifying ship, calculated in such manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

177. Paragraph 3 of the Eleventh Schedule of the Bill provides that for the purpose of computing the profits of the business of mineral oil or natural gas, the amount of business expenditure shall be the aggregate of the amounts specified therein, payment to Site Restoration Account maintained in State Bank of India in accordance with the Scheme as may be prescribed.

Accordingly, it is proposed to empower the Central Government to frame the Scheme in this regard for the purposes of this clause.

178. Paragraph 6 of the Eleventh Schedule of the Bill provides that the amount of common costs including depreciation attributable to the business of mineral oil or natural gas and any other business shall be determined in such manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

179. Paragraph 7 of the Twelfth Schedule of the Bill provides that the amount of common costs (including depreciation) attributable to the specified business referred to that Schedule shall be determined in such manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

180. Paragraph 1 of the Thirteenth Schedule of the Bill provides that the provisions of that Schedule shall apply to the specified businesses enumerated therein which fulfil the prescribed conditions and are notified by the Central Government in the Official Gazette.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

181. Paragraphs 1, item (j) of the Thirteenth Schedule of the Bill further provides that 'specified business' for the purposes of that Schedule shall, inter alia, include the business of developing and building a housing project under a scheme for slum redevelopment or rehabilitation framed by the Central Government or a State Government, as the case may be, and notified by the Board in this behalf in accordance with the guidelines as may be prescribed.

Accordingly, it is proposed to empower the Central Government and the State Governments to make the scheme and guidelines and the Board to issue notifications and prescribe rules in this regard for the purposes of this clause.

182. Paragraph 8 of the Thirteenth Schedule of the Bill provides that the amount of common costs including depreciation attributable to the specified business and any other business referred to in that Schedule shall be determined in such manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

183. Paragraph 9 of the Thirteenth Schedule of the Bill provides that the provisions of that Schedule shall apply to the business referred to in paragraph (1) therein, which fulfils the conditions specified therein along with any other condition as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

184. Item (ii) and (iii) of paragraph 9 of the Thirteenth Schedule of the Bill provides that the provisions of that Schedule shall apply to the specified business of laying and operating a cross country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of the network, which fulfils the condition that it has been approved by the Petroleum and Natural Gas Regulatory Board established under sub-clause (1) of clause 3 of the Petroleum and Natural Gas Regulatory Board Act, 2006 and notified by the Central Government in the Official Gazette in this behalf.

Accordingly, it is proposed to empower the Central Government to issue notification in this regard for the purposes of this clause.

185. Paragraph 5 of the Fourteenth Schedule of the Bill provides that the amount of common costs (including depreciation) attributable to the business specified in column 2 of the Table in paragraph 1 and presumed to have been allowed under Paragraph 3 shall be determined in the prescribed manner.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

186. Part I of the Sixteenth Schedule of the Bill specifies the contributions or donations eligible for one hundred seventy-five per cent. deduction. This includes any research association or National Laboratory or university, college or other institution if it is engaged in carrying on scientific research and development; and such association, university, college or other institution is approved in this behalf subject to conditions and in accordance with such guidelines and manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

187. Part II of the Sixteenth Schedule of the Bill specifies the contributions or donations eligible for one hundred twenty-five per cent. deduction. This includes any research association or a university, college or other institution if it is engaged in carrying on statistical

research or research in social science; and such association, university, college or other institution is approved in this behalf subject to conditions and in accordance with such guidelines and as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

188. Part III of the Sixteenth Schedule of the Bill specifies the contributions or donations eligible for one hundred per cent. deduction. This includes any University or educational institution of national eminence as may be approved by the prescribed authority in this behalf; the Government or any such local authority, institution or association as may be approved in this behalf by the Central Government, to be utilised for the purpose of promoting family planning; the Indian Olympic Association or to any other association or institution established in India, as the Central Government may, having regard to the prescribed guidelines, by notification, specify in this behalf for— (a) the development of infrastructure for sports and games; or (b) the sponsorship of sports and games, in India and where the sum is paid by an assessee, being a company; a rural development fund set up and notified by the Central Government; the National Urban Poverty Eradication Fund set up and notified by the Central Government.

Accordingly, it is proposed to empower the Central Government to make rules and issue notifications in this regard for the purposes of this clause.

189. Part D of the Sixteenth Schedule of the Bill specifies the contributions or donations eligible for fifty per cent. deduction. This includes a temple, mosque, gurdwara, church or any other place as is notified by the Central Government to be of historic, archaeological or artistic importance or to be a place of public worship of renown throughout a State or States, to be utilised for the renovation or repair of such temple, mosque, gurdwara, church or other place.

Accordingly, it is proposed to empower the Central Government to issue notification in this regard for the purposes of this clause.

190. Paragraph 3 of Part-I of the Nineteenth Schedule of the Bill provides that in order that a provident fund may receive and retain approval, it shall, subject to the provisions of Paragraph 5, satisfy the conditions set out thereunder and any other conditions which the Board may, by rules, specify. It further provides that the Board may by rules specify the conditions and restrictions in respect of portion of balence to the credit of employees payable to him.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

191. Paragraph 4 of Part-I of the Nineteenth Schedule of the Bill further provides that where approval is accorded to a provident fund with existing balances, an account shall be made of the fund up to the day immediately preceding the day on which the approval takes effect, showing the balance to the credit of each employee on such day, and containing such further particulars as the Board may prescribe.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

192. Paragraph 6 of Part-I of the Nineteenth Schedule of the Bill provides that that portion of the annual accretion in any financial year to the balance at the credit of an employee participating in an approved provident fund as consists of - (a) contributions made by the employer in excess of twelve percent of the salary of the employee or one lakh rupees, whichever is less; and (b) interest credited on the balance to the credit of the employee in so far as it is allowed at a rate exceeding such rate as may be fixed by the Central Government in this behalf by notification, shall be deemed to have been received by the employee in that financial year and shall be included in total income for that financial year, and shall be liable to income-tax.

Accordingly, it is proposed to empower the Central Government to fix the rate and issue notification in this regard for the purposes of this clause.

193. Paragraph 11 of Part-I of the Nineteenth Schedule of the Bill provides that the accounts of an approved provident fund shall be maintained by the trustees of the fund and shall be in such form and for such periods, and shall contain such particulars, as the Board may prescribe. It is further provided that the accounts shall be open to inspection at all reasonable times by income-tax authorities, and the trustees shall furnish to the Assessing Officer such abstracts thereof as the Board may prescribe.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

194. Paragraph 13 of Part-I of the Nineteenth Schedule of the Bill provides that an employer objecting to an order of the Commissioner refusing to approve or an order withdrawing approval from a provident fund, may appeal, within sixty days of such order, to the Board. The Appeal shall be in such form and shall be verified in such manner and shall be subject to the payment of such fee as the Board may prescribe.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

195. Paragraph 15 of Part-I of the Nineteenth Schedule of the Bill provides that in addition to any power conferred by that Part, the Board may make rules—

       (a) prescribing the statements and other information to be submitted along with an application for approval;

       (b) limiting the contributions to an approved provident fund by employees of a company who are shareholders in the company;

       (c) regulating the investment or deposit or the moneys of an approved provident fund;

       (d) providing for the assessment by way of penalty of any consideration received by an employee for an assignment of, or creation of a charge upon, his beneficial interest in an approved provident fund;

       (e) determining the extend to and the manner in which exemption from payment of tax may be granted in respect of contributions and interest credited to the individual accounts of employees in a provident fund from which approval has been withdrawn; and

       (f) generally, to carry out the purposes of this part and to secure such further control over the approval of provident funds and the administration of approved provident funds as it may deem requisite.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

196. Paragraph 3 of Part-II of the Nineteenth Schedule of the Bill provides that in order that a superannuation fund may receive and retain approval, it shall satisfy the conditions set out therein and any other conditions which the Board may, by rules, prescribe.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

197. Paragraph 6 of Part-II of the Nineteenth Schedule of the Bill provides that where any contributions made by an employer, including interest on contributions, if any, are paid to any employee during his lifetime, in circumstances other than those referred to in paragraph (13 of the Sixth Schedule, tax on the amounts so paid shall be deducted at the average rate of tax at which the employee was liable to tax during the preceding three years or during the period, if less than three years, when he was a member of the fund, and shall be paid by the trustees to the credit of the central government within the prescribed time and in such manner as the Board may direct.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

198. Paragraph 8 of Part-II of the Nineteenth Schedule of the Bill provides that an employer objecting to an order of the Commissioner refusing to accord approval to a superannuation fund of an order withdrawing such approval may appeal, within sixty days of such order, to the Board. The appeal shall be in such form and shall be verified in such manner and shall be subject to the payment of such fee as may be prescribed.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

199. Paragraph 10 of Part-II of the Nineteenth Schedule of the Bill provides that in addition to any power conferred by that Part, the Board may make rules—

        (a) prescribing the statements and other information to be submitted along with an application for approval;

        (b) prescribing the returns, statements, particulars, or information which the Assessing Officer may require from the trustees of an approved superannuation fund or from the employer;

        (c) limiting the ordinary annual contribution and any other contributions to an approved superannuation fund by an employer;

        (d) regulating the investment or deposit of the moneys of an approved superannuation fund;

        (e) providing for the assessment by way of penalty of any consideration received by an employee for any assignment of, or creation of a charge upon, his beneficial interest in an approved superannuation fund;

        (f) determining the extent to , and the manner in , which exemption from payment of tax may be granted in respect of any payment made from a superannuation fund from which approval has been withdrawn;

       (g) providing for the withdrawal for approval in the case of a fund which ceases to satisfy the requirements of this Part or of the rules made thereunder; and

       (h) generally, to carry out the purposes of this Part and to secure such further control over the approval of superannuation funds and the administration of approved superannuation funds as it may deem requisite.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

200. Paragraph 7 of Part-III of the Nineteenth Schedule of the Bill, inter alia, provides that in order that a gratuity fund may receive and retain approval, it shall satisfy the conditions set out below and any other conditions which the Board may, by rules, prescribe—

        (a) the fund shall be a fund established under an irrevocable trust in connection with a trade or undertaking carried on in India, and not less than ninety per cent. of the employees shall be employed in India;

        (b) the fund shall have for its sole purpose the provision of gratuity to employees in the trade or undertaking on their retirement at or after a specified age or on their becoming incapacitated prior to such retirement or on termination of their employment after a minimum period of service specified in the rules of the fund on to the widows, children or dependants of such employees on their death;

        (c) the employer in the trade or undertaking shall be a contributor to the fund; and

        (d) all benefits granted by the fund shall be payable only in India.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

201. Paragraph 9 of Part-III of the Nineteenth Schedule of the Bill provides that an employer objecting to an order of the Commissioner refusing to accord approval to a gratuity fund or an order withdrawing such approval may appeal, within sixty days of such order, to the Board. The appeal shall be in such form and shall be verified in such manner and shall be subject to the payment of such fee as may be prescribed.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

202. Paragraph 9 of Part-III of the Nineteenth Schedule of the Bill provides that in addition to any power conferred by that Part, the Board may make rules—

        (a) prescribing the statements and other information to be submitted along with an application for approval;

        (b) limiting the ordinary annual and other contributions of an employer to the fund;

        (c) regulating the investment or deposit of the moneys of an approved gratuity fund;

        (d) providing for the assessment by way of penalty of any consideration received by an employee for any assignment of, or creation of a charge upon, his beneficial interest in an approved gratuity fund;

        (e) providing for the withdrawal for approval in the case of a fund which ceases to satisfy the requirements of this part or of the rules made thereunder;

        (f) generally, to carry out the purposes of this Part and to secure such further control over the approval of gratuity funds and the administration of gratuity funds as it may deem requisite.

Accordingly, it is proposed to empower the Board to make rules in this regard for the purposes of this clause.

203. Paragraph 7 of the Twentieth Schedule of the Bill provides that a resident assessee shall furnish the details of its investment and interest in any entity outside India in such form and manner as may be prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

204. Paragraph 22 of the Twentieth Schedule of the Bill provides that an order under the Tenth Schedule in relation to a qualifying shipping company's application for opting for tonnage tax scheme, passed by an authority as may be prescribed, shall be an appealable order before Commissioner (Appeals).

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

205. Paragraph 3 of the Twenty-Second Schedule, inter alia, provides that the deferred revenue expenditure allowance shall be allowable for ten consecutive financial years, the first such financial year of allowability being the year in which such amount is actually paid, in case of expenditure incurred by a person resident in India wholly and exclusively on any operations relating to prospecting for any mineral or the development of a mine or other natural deposit of any mineral, to the extent prescribed.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

206. Paragraph 3 of the Twenty Second Schedule further provides that in the case of expenditure incurred by a person resident in India wholly and exclusively on any operations relating to prospecting for any mineral or the development of a mine or other natural deposit of any mineral, to the extent as may be prescribed, the deferred revenue expenditure allowance shall be allowable for ten consecutive financial years, the first such financial year of allowability being the year in which such amount is actually paid. Further, the deferred revenue expenditure allowance shall be allowable for six consecutive financial years, the first such financial year of allowability being the year of commencement of the business or extension of the business or setting up of new business, as the case may be, in case of any preliminary expenditure incurred—

        (a) before the commencement of the business; or

        (b) in connection with the extension of the business; or

        (c) in connection with the setting up of new business,

which shall be such as may be prescribed having regard to capital employed in the business and cost of the project.

Accordingly, it is proposed to empower the Central Government to make rules in this regard for the purposes of this clause.

207. The rules and scheme made and notification issued under the proposed legislation shall be required to be laid before the Parliament.

208. The matters in respect of which rules or scheme may be made or notifications issue are matters of procedure and administrative detail and it is not practicable to provide for them in the Bill itself. The delegation of legislative power is, therefore, of a normal character.