Amendment of section 245C.
87. In section 245C of the Income-tax Act, in sub-section (1), in the proviso, in the Explanation, in clause (b), for the words “at any time during the previous year”, at both the places where they occur, the words “on the date of search” shall respectively be substituted with effect from the 1st day of July, 2012.
Notes on Clauses:
Clause 87 of the Bill seeks to amend section 245C of the Income-tax Act relating to application for settlement of cases.
The existing provisions of clause (ia) of the proviso to sub-section (1) of the aforesaid section 245C provide that no application shall be made unless, in a case where the applicant is related to the person referred to in clause (i) who has filed an application; and the proceedings for assessment or reassessment for any of the assessment years referred to in clause (b) of sub-section (1) of section 153A or clause (b) of sub-section (1) of section 153B in case of the applicant, being a person referred to in section 153A or section 153C, have been initiated, the additional amount of income-tax payable on the income disclosed in the application exceeds ten lakh rupees.
The Explanation to the aforesaid clause defines the expressions “applicant in relation to the specified person” and “substantial interest” for the purposes of the said clause.
Clause (b) of the said Explanation provides that a person shall be deemed to have a substantial interest in a business or profession, if -
(A) in a case where the business or profession is carried on by a company, such person is at any time during the previous year, the beneficial owner of shares (not being share entitled to a fixed rate of dividend, whether with or without a right to participate in profits) carrying not less than twenty per cent. Of the voting power; and
(B) in any other case, such person is, at any time during the previous year beneficially entitled to not less than twenty per cent. of the profits of such business or profession.
It is proposed to amend the aforesaid clause (b) so as to provide that the person shall be deemed to have substantial interest, if such person is beneficial owner on the date of search.
This amendment will take effect from 1st July, 2012.
