Section 174 - Substitution of new sections for sections 17 and 17A - Direct Tax Laws (Amendment) Act, 1987

174. Substitution of new sections for sections 17 and 17A. For sections 17 and 17A of the Gift-tax Act, the following sections shall be substituted, namely :- 17. Penalty for failure to comply with notices. (1) If the Assessing Officer, in the course of any proceedings under this Act, is satisfied that any person has failed to comply with the notice under sub-section (2) or sub-section (4) of section 15, the Assessing Officer may, by order in writing, direct that such person shall pay, by way of penalty, a sum which shall not be less than one thousand rupees but which may extend to twenty-five thousand rupees for each such failure: Provided that- (a) no penalty shall be imposable under this section if the person proves that there was reasonable cause for the failure referred to in this sub-section; (b) no order imposing a penalty under this section shall be made- (i) by the Income-tax Officer, where the penalty exceeds ten thousand rupees; (ii) by the Assistant Commissioner, where the penalty exceeds twenty thousand rupees, except with the prior approval of the Deputy Commissioner. (2) No order shall be made under sub-section (1) unless the person concerned has been heard or has been given a reasonable opportunity of being heard. (3) No order imposing a penalty under sub-section (1) shall be passed after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later. Explanation .- In computing the period of limitation for the purposes of this section, - (i) the time taken in giving an opportunity to the assessee to be re-heard under the proviso to section 38; and (ii) any period during which a proceeding under this section for the levy of the penalty is stayed by an order or injunction of any court, shall be excluded. 17A. Penalty for failure to answer questions sign statements, furnish informations, allow inspection, etc. (1) If a person, - (a) being legally bound to state the truth of any matter touching the subject of his assessment, refuses to answer any question put to him by a gift-tax authority in the exercise of his powers under this Act; or (b) refuses to sign any statement made by him in the course of any proceedings under this Act, which a gift-tax authority may legally require him to sign; or (c) to whom a summons is issued under sub-section (1) of section 36, either to attend to give evidence or produce books of account or other documents at a certain place and time, omits to attend or produce the books of account or documents at the place and time, he shall pay, by way of penalty, a sum which shall not be less than five hundred rupees but which may extend to ten thousand rupees for each such default or failure: Provided that no penalty shall be imposable under clause (c) if the person proves that there was reasonable cause for the said failure. (2) If a person fails to furnish in due time any statement or information which such person is bound to furnish to the Assessing Officer under section 37, he shall pay, by way of penalty, a sum which shall not be less than one hundred rupees but which may extend to two hundred rupees for every day during which the failure continues: Provided that no penalty shall be imposable under this sub-section if the person proves that there was reasonable cause for the. said failure. (3) Any penalty imposable under sub-section (1) or sub- section (2) shall be imposed- (a) in a case where the contravention, failure or default in respect of which such penalty is imposable occurs in the course of any proceeding before a gift-tax authority not lower in rank than a Deputy Director or a Deputy Commissioner, by such gift-tax authority; (b) in any other case, by the Deputy Director or the Deputy Commissioner. (4) No order under this section shall be passed by any gift-tax authority referred to in sub-section (3) unless the person on whom penalty is proposed to be imposed has been heard or has been given a reasonable opportunity of being heard in the matter by such authority. Explanation .- In this section, gift-tax authority includes a Director General, Director, Deputy Director, Assistant Director or Valuation Officer while exercising the powers vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the matters specified in sub-section (1) of section 36. .