Family Courts Act

November 30, 2014

Section 1. Short title, extent and commencement.

14th September 1984]

An Act to provide for the establishment of Family Court with a view to promote conciliation in, and secure speedy settlement of disputes relating to marriage and, family affairs and for matters connected therewith.

Be it enacted by Parliament in the Thirty-fifty year of the Republic of India as follows:

(1) This Act may be called the Family Courts Act, 1984.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different States.

Section 2. Definitions.

In this Act, unless the context otherwise requires, -

(a) “Judge” means the Judge or, as the case may be, the Principal Judge. Additional Principal Judge or other Judge of a Family Court;

(b) “Notification” means a notification published in the Official Gazette;

(c) “Prescribed” means prescribed by rules made under this Act;

(d) “Family Court” means a Family Court established under Section 3;

(e) All other words and expressions used but not defined in this Act and defined in the Code of Civil Procedure, 1908 (5 of 1908) shall have the meanings respectively assigned to them in that Code.

Section 3. Establishment of Family Courts.

(1) For the purpose of exercising the jurisdiction and powers conferred on a Family Court by this Act, the State Government, alter consultation with the High Court, and by notification. -

(a) Shall, as soon as may be after the commencement of this Act, establish for every area in the State comprising a city or town whose population exceeds one million, a Family Court;

(b) May establish Family Courts for such other areas in the State as it may deem necessary.

(2) The State Government shall, after consultation with the High Court, specify, by notification, the local limits of the area to which the jurisdiction of a Family Court shall extend and may, at any time, increase, reduce or alter such limits.

Section 4. Appointment of Judges.

(1) The State Government may, with the concurrence of the High Court, appoint one or more persons to be the Judge or Judges of’ a Family Court. (2) When a Family Court consists of more than one Judge, -

(a) Each of the Judges may exercise all or any of the powers conferred on the Court by this Act or any other law for the time being in force;

(b) The State Government may, with the concurrence of the High Court, appoint any of the Judges to be the Principal Judges and any other Judge to be the Additional Principal Judge;

(c) The Principal Judge may, from time to time, make such arrangements as he may deem fit for the distribution of the business of the Court among the various Judges thereof,

(d) The Additional Principal Judge may exercise the powers of the Principal Judge in the event of any vacancy in the office of the Principal Judge or when the Principal Judge is unable to discharge his functions owing to absence, illness or any other cause.

(3) A person shall not be qualified for appointment as a Judge unless he-

(a) Has for at least seven years held a judicial office in India or the office of a member of a tribunal or any post under the Union or a State requiring special knowledge of law; or

(b) Has for at least seven years been an advocate of a High Court or of two or more such Courts in succession; or

(c) Possesses such other qualifications as the Central Government may with the concurrence of the Chief Justice of India, prescribe.

(4) In selecting persons for appointment as Judges, -

(a) Every endeavour shall be made to ensure that persons committed to the need to protect and preserve the institution of marriage and to promote the welfare of children and qualified by reason of their experience and expertise to promote the settlement of disputes by conciliation and counseling are selected; and

(b) Preference shall be given to women.

(5) No person shall be appointed as, or hold the office of, a Judge of a Family Court after he has attained the age of sixty-two years.

(6) The salary or honorarium and other allowances payable to, and the other terms and conditions of service of a Judge shall be as the State Government may, in consultation with the High Court, prescribe.

Section 5. Association of social welfare agencies, etc.

The State Government may, in consultation with the High Court, provide, by rules, for the association, in such manner and for such purposes and subject to such conditions as may be specified in the rules, with a Family Court of-

(a) Institutions or organisations engaged in social welfare or the representatives thereof,

(b) Persons professionally engaged in promoting the welfare of the family;

(c) Persons working in the field of social welfare; and

(d) Any other person whose association with a Family Court would enable it to exercise its jurisdiction more effectively in accordance with the purposes of this Act.

Section 6. Counsellors, officers and other employees of Family Courts.

(1) The State Government shall in consultation with the High Court, determine the number and categories of counsellors, officers and other employees required to assist a Family Court in the discharge of its functions and provide the Family Court with such Counsellors, officers and other employees as it may think fit.

(2) The terms and conditions of association of the counsellors and the terms and conditions of service of the officers and other employees, referred to in Sub-section (1), shall be such as may be specified by rules made by the State Government.

Section 7. Jurisdiction.

(1) Subject to the other provisions of this Act, a Family Court shall. -

(a) Have and exercise all the jurisdiction exercisable by any district court or any subordinate civil court under any law for the time being in force in respect of suits and proceeding of the nature referred to in the explanation; and

(b) Be deemed, for the purposes of exercising such jurisdiction under such law to be a district court or, as the case may be, such subordinate civil court for the area to which the jurisdiction of the Family Court extends.

Explanation. – The suits and proceedings referred to in this sub-section are suits and proceedings of the following nature, namely:

(a) A suit or proceeding between the parties to a marriage for a decree of nullity of marriage declaring the marriage to be null and void or, as the case may be, annulling the marriage) or restitution of conjugal rights or judicial separation or dissolution of marriage;

(b) A suit or proceeding for a declaration as to the validity of a marriage or a, to the matrimonial status of any person;

(c) A suit or proceeding between the parties to a marriage with respect to the property of the parties or of either of them;

(d) A suit or proceeding for all order or injunctions in circumstances arising out of a marital relationship;

(e) A suit or proceeding for a declaration as to the legitimacy of any person;

(f) A suit or proceeding for maintenance,

(g) A suit or proceeding in relation to the guardianship of the person or the custody or, or access to, any minor.

(2) Subject to the other provisions of this Act, a Family Court shall also have all exercise-

(a) The jurisdiction exercisable by a Magistrate of the First Class under Chapter IX (relating to order for maintenance of wife. children and parents) of the Code of Criminal Procedure, 1973 (2 of 1974); and

(b). Such other jurisdictions as may be conferred on it by any other enactment.

8. Exclusion of jurisdiction and pending proceedings.

Where a Family Court has been established for any area:-

(a) No district court or any subordinate civil court referred to in subsection (1) of Section 7 shall, in relation to such area, have or exercise any jurisdiction in respect, of any suit or proceeding of the nature referred to in the explanation to that sub-section; (b) No magistrate shall, in relation to such area, have or exercise any jurisdiction or power under Chapter IX of the Code of Criminal Procedure, 1973 (2 of 1974);

(c) Every suit or proceeding of the nature referred to in the explanation to, sub-section (1) of Section 7 and every proceeding under Chapter IX of the Code of Criminal Procedure, 1973 (2 of 1974), -

(i) Which is pending immediately before the establishment of such Family Court before any district court or subordinate court referred to in that sub-section or, as the case may be before any magistrate under the said Code; and

(ii) Which would have been required to he instituted or taken before such Family Court if, before the date on which such suit or proceeding was instituted or taken, this Act had conic into force and such Family Court had been established,

Shall stand transferred to such Family Court on the date on which it is established.

Section 9. Duty of Family Court to make efforts for settlement.

(1) In every suit or proceeding, endeavour shall be made by the Family Court in the first instance where it is possible to do so consistent with the nature and circumstances of the case, to assist and persuade the parties in arriving at a settlement in respect of the subject-matter of the suit or proceeding and for this purpose a Family Court may, subject to any rules made by the High Court, follow such procedure as it may deem fit.

(2) If, in any suit or proceeding, at any stage, it appears to the Family Court that there is a reasonable possibility of a settlement between the parties, the Family (stiff may adjourn the proceedings for such period as it think fit to enable attempts to be Inside to effect such a settlement.

(3) The power conferred by sub-section (2) shall be in addition to, and not in derogation of any other power of the Family Court to adjourn the proceedings.

Section 10. Procedure generally.

(1) Subject to the other provisions of this Act and the rules, the provisions of the Code of Civil Procedure, 1908 (5 of 1908) and of any other law for the time being in force shall apply to the suits and proceedings [other than the proceedings under Chapter IX of the Code of Criminal Procedure, 1973 (2 of 1974)] before a Family Court and for the purposes of the said provisions of the Code, a Family Court shall be deemed to be a civil court and shall have all the powers of such court. (2) Subject to the other provisions of this Act and the rules, the provisions of the Code of Criminal Procedure, 1973 (2 of 1974) or the rules made thereunder, shall apply to the proceedings under Chapter IX of that Code before a Family Court. (3) Nothing in sub-section (1) or subsection (2) shall prevent a Family Court front laying down its own procedure with a view to arrive at a settlement in respect of the subject-matter of the suit or proceedings or at the truth of the facts alleged by one party and denied by the other.

Section 11. Proceedings to be held in Camera.

Every suit or proceedings to which this Act applies, the proceedings may be held in camera if the Family Court so desires and shall be so held if either party so desires.

Section 12. Assistance of medical and welfare experts.

In every suit or proceedings, it shall be open to a Family Court to secure the services of a medical expert or such person (preferably a woman where available), whether related to the parties or not, including a person professionally engaged in promoting the welfare of the family as the Court may think fit, for the purposes of assisting the Family Court in discharging the functions imposed by this Act.

Section 13. Right to legal representation.

Notwithstanding anything contained in any law, no party to a suit or proceeding before a Family Court shall he entitled, as of right, to be represented by a legal practitioner: Provided that if the Family Court considers it necessary in the interest of justice, it may seek the assistance of a legal expert as amicus curiae

Section 14. Application of Indian Evidence Act, 1872.

A Family Court may receive as evidence any report, statement, documents, information or matter that may, in its opinion, assist it to deal effectually with a dispute, whether or not the same would be otherwise relevant or admissible under the Indian Evidence Act, 1872 (1 of 1872).

Section 15. Record of oral evidence.

In suits or proceedings before a Family Court, it shall not be necessary to record the evidence of witnesses at length, but the Judge, as the examination of each witness proceeds, shall, record or cause to be recorded a memorandum of the substance of what the witness deposes, and such memorandum Shall be signed by the witness and the Judge and shall form part of the record.

Section 16. Evidence of formal character on affidavit.

(1) The evidence of any person where such evidence is of a formal character, may be given by affidavit and may, subject to all just exceptions, be read in evidence in any suit or proceeding before a Family Court. (2) The Family Court may, if it thinks fit, and shall, on the application of any of the parties to the suit or proceeding summon and examine any such person as to the facts contained in his affidavit.

Section 17. Judgement.

Judgement of a Family Court shall contain a concise statement of the case, the point for determination, the decision thereon and the reasons for such decision.

Section 18. Execution of decrees and orders.

(1) A decree or all order [other than an order under Chapter IX of the Code of Criminal Procedure, 1973 (2 of 1974)], passed by a Family Court shall have the same force and effect as a decree or order of a civil court and shall be executed in the same manner as is prescribed by the Code of Civil Procedure, 1908 (5 of 1908) for the execution of decrees and orders.

(2) An order passed by a Family Court under Chapter IX of the Code of Criminal Procedure, 1973 (2 of 1974) shall be executed in the manner prescribed for the execution of such order by that Code.

(3) A decree or order may be executed either by the Family Court which passed it or by the other Family Court or ordinary civil court to which it is sent for execution.

Section 19. Appeal.

Chapter V 

1[APPEALS AND REVISIONS]

1 Substituted by Act. No. 59 of 1991

(1) Save as provided in subsection (2) and notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or in the Code of Criminal Procedure, 1973 (2 of 1974) or in any other law, an appeal shall lie from every judgment or order, not being an interlocutory order, of a Family Court to the High Court both on facts and on law.

(2) No appeal shall lie from a decree or order passed by the Family Court with the consent of the parties 1[or from an order passed under Chapter IX of the Code of Criminal Procedure, 1973 (2 of 1974). Provided that nothing in this sub-section shall apply to any appeal pending before a High Court or any order passed under Chapter IX of the Code of Criminal Procedure 1973 (2 of 1974) before the commencement of the Family Courts (Amendment) Act 1991].

(3) Every appeal under this section shall be preferred within a period of thirty days from the date of the judgment or order of a Family Court. 2[(4) The High Court may, of its own motion or otherwise, call for and examine the record of any proceeding in which the Family Court situate within its jurisdiction passed an order under Chapter IX of the Code of Criminal Procedure, 1973 for the purpose of satisfying itself as to the correctness, legality or propriety of the order, not being ail interlocutory order, and, as to the regularity of such proceeding.

(5) Except as aforesaid, no appeal or revision shall lie to any Court from any judgment, order or decree of a Family Court.

(6) An appeal preferred under sub-section (1) shall be heard by a Bench consisting of two or more Judges.

1 Inserted by Act. No. 59 of 1991

2. Sub-sec (4) inserted and original sub-section (4) & (5) re-numbered as (5) & (6) by Act No. 59 of 1991

Section 20. Act to have overriding effect.

The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.

Section 21. Power of High Court to make rules.

(1) The High Court may, by notification in the Official Gazette, make such rules as it may deem necessary for carrying out the purposes of this Act. (2) 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) Normal working hours of Family Courts and holding of sittings of Family Courts on holidays and outside normal working hours;

(b) Holding of sittings of Family Courts at places other than their ordinary places of sitting;

(c) Efforts which may be made by, and the procedure which may be followed by a Family Court for assisting and persuading parties to arrive at a settlement.

Section 22. Power of the Central Government to make rules.

(1) The Central Government may, with the concurrence of the Chief Justice of India, by notification, make rules prescribing the other qualifications for appointment of a Judge referred to in clause (c) of subsection (3) of Section 4.

(2) Every rule made under this Act by the Central Government shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making it any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the else may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

Section 23. Power of the State Government to make rules.

(1) The State Government may, after consultation with the High Court, by notification, make rules for carrying out the purposes of this Act.

(2) In particular and without prejudice to the generality of the provisions of subsection (1) such rules may provide for all or any of the following matters, namely: -

(a) The salary or honorarium and other allowances payable to, and the other terms and conditions of Judges under subsection (6) of Section 4;

(b) The terms and conditions of association of counselors and the terms and conditions of service of the officers and other employees referred to in See section 6;

(c) Payment of fees and expenses (including travelling expenses) of medical and other experts and other persons referred to in Section 13 out of the revenues of the State Government and the scales of such fees and expenses;

(d) Payment of fees and expenses to legal practitioners appointed under Section 13 as amicus and curiae out of the revenues of the State Government and the scales of such fees and expenses;

(e) Any other matter which is required to be, or may be, prescribed or provided for by rules.

(3) Every rule made by State Government under this Act shall be laid as soon as may be after it is made, before the State Legislature.

Consumer Protection Act

November 30, 2014

CHAPTER I: PRELIMINARY

Section 1. Short title, extent, commencement and applications

(1) This Act may be called the Consumer Protection Act, 1986.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall come into force on such date as the Central Government may, by notification, appoint and different dates may be appointed for different States and for different provisions of this Act.

(4) Save as otherwise expressly provided by the Central Government by notifications, this Act shall apply to all goods and services.

Section 2. Definitions

(1) In this Act, unless the context otherwise requires,-

1[(a) “appropriate laboratory” means a laboratory or organisation-

(i) recognised by the Central Government;

(ii) recognised by a State Government, subject to such guidelines as may be prescribed by the Central Government in this behalf; or

(iii) any such laboratory or organisation established by or under any law for the time-being in force, which is maintained, financed or aided by the Central Government or a State Government for carrying out analysis or test of any goods with a view to determining whether such goods suffer from any defect;

2[(aa) “branch office” means-

(i) any establishment described as a branch by the opposite party, or

(ii) any establishment carrying on either the same or substantially the same activity as that carried on by the head office of the establishment;

(b) “complainant” means-

(i) a consumer; or

(ii) any voluntary consumer association registered under the Companies Act, 1956 (1 of 1956), or under any other law for the time being in force; or

(iii) the Central Government or any State Government,

2[(iv) one or more consumers, where there are numerous consumers having the same interest;] who or which makes a complaint;

(c) “complaint” means any allegation in writing made by a complainant that-

1[(i) an unfair trade practice or a restrictive trade practice has been adopted by any trader;]

(ii) 1[the goods bought by him or agreed to be bought by him] suffer from one or more defect;

(iii) 1[the services hired or availed of or agreed to be hired or availed of by him] suffer from deficiency in any respect;

(iv) a trader has charged for the goods mentioned in the complaint a price in excess of the price fixed by or under any law for the time being in force or displayed on the goods or any package containing such goods;

2[(v) goods which will be hazardous to life and safety when used, are being offered for sale to the public in contravention of the provisions of any law for the time being in force requiring traders to display information in regard to the contents, manner and effect of use of such goods. with a view to obtaining any relief provided by or under this Act;

(d) “consumer” means any person who-

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) 1[hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who 1[hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payments, when such services are availed of with the approval of the first-mentioned person;

2[Explanation: For the purposes of sub-clause (i), “commercial purpose” does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;]

(e) “consumer dispute” means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint;

(f) “defect” means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law for the time being in force or 2[under any contract, express or] implied, or as is claimed by the trader in any manner whatsoever in relation to any goods;

(g) “deficiency” means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service;

(h) “District Forum” means a Consumer Disputes Redressal Forum established under clause (a) of section 9;

(i) “goods” means goods as defined in the Sale of Goods Act, 1930 (3 of 1930);

(j) “manufacturer” means a person who-

(i) makes or manufactures any goods or parts thereof; or

(ii) does not make or manufacture any goods but assembles parts thereof made or manufactured by others and claims the end product to be goods manufactured by himself; or

(iii) puts or causes to be put his own mark on any goods made or manufactured by any other manufacturer and claims such goods to be goods made or manufactured by himself.

Explanation : Where a manufacturer despatches any goods or part thereof to any branch office maintained by him, such branch office shall not be deemed to be the manufacturer even though the parts so despatched to it are assembled at such branch office and are sold or distributed from such branch office.

2[(jj) “member” includes the President and a member of the National Commission or a State Commission or a District Forum, as the case may be;]

(k) “National Commission” means the National Consumer Disputes Redressal Commission established under clause (c) of section 9;

(l) “notification” means a notification published in the Official Gazette;

(m) “person” includes-

(i) a firm whether registered or not;

(ii) a Hindu undivided family;

(iii) a co-operative society;

(iv) every other association of persons whether registered under the Societies Registration Act, 1860 (22 of 1860) or not;

(n) “prescribed” means prescribed by rules made by the State Government, or as the case may be, by the Central Government under this Act;

2[(nn) “restrictive trade practice” means any trade practice which requires a consumer to buy, hire or avail of any goods or, as the case may be, services as a condition precedent for buying, hiring or availing of other goods or services;]

(o) “service” means service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, 6[housing construction], entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;

(p) “State Commission” means a Consumer Disputes Redressal Commission established in a State under clause (b) of section 9;

(q) “trader” in relation to any goods means a person who sells or distributes any goods for sale and includes the manufacturer thereof, and where such goods are sold or distributed in package form, includes the packer thereof;

2[(r) “unfair trade practice” means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely,-

(1) the practice of making any statement, whether orally or in writing or by visible representation which,-

(i) falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;

(ii) falsely represents that the services are of a particular standard, quality or grade;

(iii) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;

(iv) represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;

(v) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;

(vi) makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;

(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof: PROVIDED that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;

(viii) makes to the public a representation in a form that purports to be-

(i) a warranty or guarantee of a product or of any goods or services; or

(ii) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out;

(ix) materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;

(x) gives false or misleading facts disparaging the goods, services or trade of another person.

Explanation: For the purposes of clause (1), a statement that is-

(a) expressed on an article offered or displayed for sale, or on its wrapper or container; or

(b) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale; or

(c) contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatsoever made available to a member of the public, shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained;

(2) permits the publication of any advertisement whether in any newspaper or otherwise, for the sale of supply at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement;.

Explanation: For the purposes of clause (2), “bargaining price” means-

(a) a price that is stated in any advertisement to be a bargain price, by reference to an ordinary price or otherwise, or

(b) a price that a person who reads, hears or sees the advertisement, would reasonably understand to be a bargain price having regard to the prices at which the product advertised or like products are ordinarily sold;

(3) permits-

(a) the offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole;

(b) the conduct of any contest, lottery, games of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;

(4) permits the sale or supply of goods intended to be used, or are of a kind likely to be used, by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, constructions, finishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods;

(5) permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale or to provide any service, if such-hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services.

(2) Any reference in this Act to any other Act or provision thereof which is not in force in any area to which this Act applies shall be construed to have a reference to the corresponding Act or provision thereof in force in such area.

Section 3. Act not in derogation of any other law

The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.

CHAPTER II: CONSUMER PROTECTION COUNCILS

Section 4. The Central Consumer Protection Council

(1) The Central Government may, by notification, establish with effect from such date as it may specify in such notification, a council to be known as the Central Consumer Protection Council (hereinafter referred to as the Central Council).

(2) The Central Council shall consist of the following members, namely,-

(a) the Minister in charge of 1[consumer affairs] in the Central Government, who shall be its Chairman, and

(b) such number of other official or non-official members representing such interests as may be prescribed.

Section 5. Procedure for meetings of the Central Council

(1) The Central Council shall meet as and when necessary, but 1[at least one meeting] of the council shall be held every year.

(2) The Central Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed.

Section 6. Objects of the Central Council

The objects of the Central Council shall be to promote and protect the rights of the consumers such as-

(a) the right to be protected against the marketing of goods 2[and services] which are hazardous to life and property;

(b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods 1[or services, as the case may be], so as to protect the consumer against unfair trade practices;

(c) the right to be assured, wherever possible, access to a variety of goods and services at competitive prices;

(d) the right to be heard and to be assured that consumers’ interests will receive due

consideration at appropriate forums;

(e) the right to seek redressal against unfair trade practices 1[or restrictive trade practices] or unscrupulous exploitation of consumers; and

(f) the right to consumer education.

Section 7. The State Consumer Protection Councils

(1) The State Government may, by notification, establish with effect from such date as it may specify in such notification, a council to be known as the Consumer Protection Council (hereinafter referred to as the State Council).

1[(2) The State Council shall consist of the following members, namely,-

(a) the Minister in-charge of consumer affairs in the State Government who shall be its Chairman;

(b) such number of other official or non-official members representing such interests as may be prescribed by the State Government.

(3) The State Council shall meet as and when necessary but not less than two meetings shall be held every year.

(4) The State Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed by the State Government.

Section 8. Objects of the State Council

The objects of every State Council shall be to promote and protect within the State the rights of the consumers laid down in clauses (a) to (f) of section 6.

CHAPTER III: CONSUMER DISPUTES REDRESSAL AGENCIES

Section 9. Establishment of Consumer Disputes Redressal Agencies

There shall be established for the purposes of this Act, the following agencies, namely,-

(a) a Consumer Disputes Redressal Forum to be known as the “District Forum” established by the State Government 3[* * *] in each district of the State by notification:

2[PROVIDED that the State Government may, if it deems fit, establish more than one District Forum in a district;

(b) a Consumer Disputes Redressal Commission to be known as the “State Commission” established by the State Government 3[* * *] in the State by notification; and

(c) a National Consumer Disputes Redressal Commission established by the Central Government by notification.

Section 10. Composition of the District Forum

1[(1) Each District Forum shall consist of-

(a) a person who is, or has been, or is qualified to be a District Judge, who shall be its President;

(b) two other members, who shall be persons of ability, integrity and standing, and have adequate knowledge or experience of, or have shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a woman.

2[(1A) Every appointment under sub-section (1) shall be made by the State Government on the recommendation of a selection committee consisting of the following, namely,-

(i) the President of the State Commission-Chairman,

(ii) Secretary, Law Department of the State-Member,

(iii) Secretary in-charge of the Department dealing with consumer affairs in the State-Member.

(2) Every member of the District Forum shall hold office for a term of five years or up to the age of

65 years, whichever is earlier, and shall not be eligible for re-appointment: PROVIDED that a member may resign his office in writing under his hand addressed to the State

Government and on such resignation being accepted, his office shall become vacant and may be filled by the appointment of a person possessing any of the qualifications mentioned in subsection

(1) in relation to the category of the member who has resigned.

(3) The salary or honorarium and other allowances payable to, and the other terms and

conditions of service of the members of the District Forum shall be such as may be prescribed by the State Government.

Section 11. Jurisdiction of the District Forum

(1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed 1[does not exceed rupees five lakhs].

(2) A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction-

(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or 1[carries on business, or has a branch office or] personally works for gain; or

(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or 1[carries on business or has a branch office, or personally works for gain: PROVIDED that in such case either the permission of the District Forum is given, or the opposite parties who do not reside, or 1[carry on business or have a branch office, or personally work for gain, as the case may be, acquiesce in such institution; or

(c) the cause of action, wholly or in part, arises.

1[12. Manner in which complaint shall be made

A complaint in relation to any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided, may be filed with a District Forum, by-

(a) the consumer to whom such goods are sold or delivered or agreed to be sold or delivered or such service provided or agreed to be provided;

(b) any recognised consumers association whether the consumer to whom the goods sold or delivered or service provided or agreed to be provided is a member of such association or not; or

(c) one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Forum, on behalf of, or for the benefit of, all consumers so interested; or

(d) the Central or the State Government.

Section 13. Procedure on receipt of complaint

(1) The District Forum shall, on receipt of a complaint, if it relates to any goods-

(a) refer a copy of the complaint to the opposite party mentioned in the complaint directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the District Forum;

(b) where the opposite party on receipt of a complaint referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Forum, the District Forum shall proceed to settle the consumer dispute in the manner specified in clauses (c) to (g);

(c) where the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, the District Forum shall obtain a sample of the goods from the complainant, seal it and authenticate it in the manner prescribed and refer the sample so sealed to the appropriate laboratory along with a direction that such laboratory make an analysis with a view to finding out whether such goods suffer from any defect alleged in the complaint or suffer from any other defect and to report its findings thereon to the District Forum within a period of forty-five days of the receipt of the reference or within such extended period as may be granted by the District Forum;

(d) before any sample of the goods is referred to any appropriate laboratory under clause (c), the District Forum may require the complainant to deposit to the credit of the Forum such fees as may be specified, for payment to the appropriate laboratory for carrying out the necessary analysis or test in relation to the goods in question;

(e) the District Forum shall remit the amount deposited to its credit under clause (d) to the appropriate laboratory to enable it to carry out the analysis or test mentioned in clause (c) and on receipt of the report from the appropriate laboratory, the District Forum shall forward a copy of the report along with such remarks as the District Forum may feel appropriate to the opposite party;

(f) if any of the parties disputes the correctness of the findings of the appropriate laboratory, or disputes the correctness of the methods of analysis or test adopted by the appropriate laboratory, the District Forum shall require the opposite party or the complainant to submit in writing his objections in regard to the report made by the appropriate laboratory;

(g) the District Forum shall thereafter give a reasonable opportunity to the complainant as well as the opposite party of being heard as to the correctness or otherwise of the report made by the appropriate laboratory and also as to the objection made in relation thereto under clause (f) and issue an appropriate order under section 14.

(2) The District Forum shall, if the complaint received by it under section 12 relates to goods in respect of which the procedure specified in sub-section (1) cannot be followed, or if the complaint relates to any services,-

(a) refer a copy of such complaint to the opposite party directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the District Forum;

(b) where the opposite party, on receipt of a copy of the complaint, referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Forum, the District Forum shall proceed to settle the consumer dispute,-

(i) on the basis of evidence brought to its notice by the complainant and the opposite party, where the opposite party denies or disputes the allegation contained in the complaint, or

(ii) on the basis of evidence brought to its notice by the complainant where the opposite party omits or fails to take any action to represent his case within the time given by the Forum.

(3) No proceedings complying with the procedure laid down in sub-sections (1) and (2) shall be called in question in any court on the ground that the principles of natural justice have not been complied with.

(4) For the purposes of this section, the District Forum shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely,-

(i) the summoning and enforcing attendance of any defendant or witness and examining the witness on oath;

(ii) the discovery and production of any document or other material object producible as evidence;

(iii) the reception of evidence on affidavits;

(iv) the requisitioning of the report of the concerned analysis or test from the appropriate

laboratory or from any other relevant source;

(v) issuing of any commission for the examination of any witness; and

(vi) any other matter which may be prescribed.

(5) Every proceeding before the District Forum shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860), and the District Forum shall be deemed to be a civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).

2[(6) Where the complainant is a consumer referred to in sub-clause (iv) of clause (b) of subsection (1) of section 2, the provisions of Rule 8 of Order I of Schedule I to the Code of Civil Procedure, 1908 (5 of 1908) shall apply subject to the modification that every reference therein to a suit or decree shall be construed as a reference to a complaint or the order of the District Forum thereon.]

Section 14. Finding of the District Forum

(1) If, after the proceeding conducted under section 13, the District Forum is satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services are proved, it shall issue an order to the opposite party directing him to 1[do] one or more of the following things, namely,-

(a) to remove the defect pointed out by the appropriate laboratory from the goods in question;

(b) to replace the goods with new goods of similar description which shall be free from any defect;

(c) to return to the complainant the price, or, as the case may be, the charges paid by the complainant;

(d) to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party.

2[(e) to remove the defects or deficiencies in the services in question;

(f) to discontinue the unfair trade practice or the restrictive trade practice or not to repeat them;

(g) not to offer the hazardous goods for sale;

(h) to withdraw the hazardous goods from being offered for sale;

(i) to provide for adequate costs to parties.]

4[(2) Every proceeding referred to in sub-section (1) shall be conducted by the President of the District Forum and at least one member thereof sitting together:

PROVIDED that where the member, for any reason, is unable to conduct the proceeding till it is completed, the President and the other member shall conduct such proceeding de novo:

(2A) Every order made by the District Forum under sub-section (1) shall be signed by its

President and the member or members who conducted the proceedings:

PROVIDED that where the proceeding is conducted by the President and one member and they differ on any point or points, they shall state the point or points on which they differ and refer the same to the other member for hearing on such point or points and the opinion of the majority shall be the order of the District Forum.

(3) Subject to the foregoing provisions, the procedure relating to the conduct of the members of the District Forum, its sittings and other matters shall be such as may be prescribed by the State Government.

Section 15. Appeal

Any person aggrieved by an order made by the District Forum may prefer an appeal against such order to the State Commission within a period of thirty days from the date of the order, in such form and manner as may be prescribed:

PROVIDED that the State Commission may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not finding it within that period.

Section 16. Composition of the State Commission

(1) Each State Commission shall consist of-

(a) a person who is or has been a Judge of a High Court, appointed by the State Government, who shall be its President:

2[PROVIDED that no appointment under this clause shall be made except after consultation with the Chief Justice of the High Court.

(b) two other members, who shall be persons of ability, integrity and standing and have adequate knowledge or experience of, or have shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a woman:

2[PROVIDED that every appointment under this clause shall be made by the State Government on the recommendation of a selection committee consisting of the following, namely,-

(i) President of the State Commission-Chairman,

(ii) Secretary of the Law Department of the State-Member

(iii) Secretary in-charge of the department dealing with consumer affairs in the State-Member.]

(2) The salary or honorarium and other allowances payable to, and. the other terms and

conditions of service 3[* * *] of the members of the State Commission shall be such as may be prescribed by the State Government.

2[(3) Every member of the State Commission shall hold office for a term of five years or up to the age of sixty-seven years, whichever is earlier and shall not be eligible for re-appointment.

(4) Notwithstanding anything contained in sub-section (3), a person appointed as a President or as a member before the commencement of the Consumer Protection (Amendment) Act, 1993, shall continue to hold such office as President or member, as the case may be, till the completion of his term.

Section 17. Jurisdiction of the State Commission

Subject to the other provisions of this Act, the State Commission shall have jurisdiction-

(a) to entertain-

(i) complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees 1[five lakhs but does not exceed rupees twenty lakhs;] and

(ii) appeals against the orders of any District Forum within the State; and

(b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Forum within the State where it appears to the State Commission that such District Forum has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise on its jurisdiction illegally or with material irregularity.

Section 18. Procedure applicable to State Commission

1[The provisions of sections 12, 13 and 14 and the rules made thereunder] for the disposal of complaint by the Districts Forum shall, with such modification as may be necessary, be applicable to the disposal of disputes by the State Commission:

5[18A. Vacancy in the office of the President When the office of the President of the District Forum or of the State Commission, as the case may be, is vacant or when any such President is, by reason of absence or otherwise, unable to perform the duties of his office, the duties of the office shall be performed by such person, who is qualified to be appointed as President of the District Forum or, as the case may be, of the State

Commission, as the State Government may appoint for the purpose.]

Section 19. Appeals

Any person aggrieved by an order made by the State Commission in exercise of its powers conferred by sub-clause (i) of clause (a) of section 17 may prefer an appeal against such order to the National Commission within a period of thirty days from the date of the order in such form and manner as may be prescribed:

PROVIDED that the National Commission may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period.

Section 20. Composition of the National Commission

(1) The National Commission shall consist of-

(a) a person who is or has been a Judge of the Supreme Court, to be appointed by the Central Government, who shall be its President:

2[PROVIDED that no appointment under this clause shall be made except after consultation with the Chief Justice of India;]

(b) four other members who shall be persons of ability, integrity and standing and have adequate knowledge or experience of, or have shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a woman:

2[PROVIDED that every appointment under this clause shall be made by the Central Government on the recommendation of a selection committee consisting of the following, namely,-

(a) a person who is a Judge of the Supreme Court, to be nominated by the Chief Justice of India- Chairman,

(b) the Secretary in the Department of Legal Affairs in the Government of India-Member.]

(2) The salary or honorarium and other allowances payable to and the other terms and conditions of service 3[* * *] of the members of the National Commission shall be such as may be prescribed by the Central Government.

2[(3) Every member of the National Commission shall hold office for a term of five years or up to the age of seventy years, whichever is earlier and shall not be eligible for re-appointment.

(4) Notwithstanding anything contained in sub-section (3), a person appointed as a President or as a member before the commencement of the Consumer Protection (Amendment) Act, 1993, shall continue to hold such office as President or member, as the case may be, till the completion of his term.]

Section 21. Jurisdiction of the National Commission

Subject to the other provisions of this Act, the National Commission shall have jurisdiction-

(a) to entertain

(i) complaints where the value of the goods or services and cornpensation, if any, claimed exceeds rupees 1[twenty lakhs]; and

(ii) appeals against the orders of any State Commission; and

(b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.

Section 22. Power of and procedure applicable to the National Commission

The National Commission shall, in the disposal of any complaints or of any proceedings before it, have

(a) the powers of a civil court as specified in sub-sections (4), (5) and (6) of section 13;

(b) the power to issue an order to the opposite party directing him to do any one or more of the things referred to in clauses (a) to (i) of sub-section (1) of section 14, and follow such procedure as may be prescribed by the Central Government.

Section 23. Appeal

Any person, aggrieved by an order made by the National Commission in exercise of its powers conferred by sub-clause (i) of clause (a) of section 21, may prefer an appeal against such order to the Supreme Court within a period of thirty days from the date of the order: PROVIDED that the Supreme Court may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period.

Section 24. Finality of order

Every order of a District Forum, State Commission or the National Commission shall, if no appeal has been preferred against such order under the provisions of this Act, be final.

Section 24A. Limitation period

(1) The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.

(2) Notwithstanding anything contained in sub-section (1), a complaint may be entertained after the period specified in sub-section (1), if the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period:

PROVIDED that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay.

Section 24B. Administrative control

(1) The National Commission shall have administrative control over all the State Commissions in the following matters, namely,-

(i) calling for periodical returns regarding the institution, disposal, pendency of cases;

(ii) issuance of instructions regarding adoption of uniform procedure in the hearing of matters, prior service of copies of documents produced by one party to the opposite parties, furnishing of English translation of judgments written in any language, speedy grant of copies of documents;

(iii) generally overseeing the functioning of the State Commissions or the District Fora to ensure that the objects and purposes of the Act are best served without in any way interfering with their quasi-judicial freedom.

(2) The State Commission shall have administrative controls over all the District Fora within its jurisdiction in all matters referred to in sub-section (1).]

Section 25. Enforcement of orders by the Forum, the State Commission or the National

Commission

Every order made by the District Forum, the State Commission or the National Commission, may be enforced by the District Forum, the State Commission or the National Commission as the case may be, in the same manner as if it were a decree or order made by a court in a suit pending therein and it shall be lawful for the District Forum, the State Commission or the National Commission to send, in the event of its inability to execute it, such order to the court within the local limits of whose jurisdiction-

(a) in the case of an order against a company, the registered office of the company is situated, or

(b) in the case of an order against any other person, the place where the person concerned voluntarily resides or carries on business or personally works for gain, is situated, and thereupon, the court to which the order is so sent, shall execute the order as if it were a decree or order sent to it for execution.

Section 1[26. Dismissal of frivolous or vexatious complaints

Where a complaint instituted before the District Forum, the State Commission or, as the case may be, the National Commission, is found to be frivolous or vexatious, it shall, for reasons to be recorded in writing, dismiss the complaint and make an order that the complainant shall pay to the opposite party such cost, not exceeding ten thousand rupees, as may be specified in the order.

Section 27. Penalties

Where a trader or a person against whom a complaint is made 2[or the complainant] fails or omits to comply with any order made by the District Forum, the State Cornmission or the National Commission, as the case may be, such trader or person 2[or complainant] shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years, or with fine which shall not be less than two thousand rupees but which may extend to ten thousand rupees, or with both:

PROVIDED that the District Forum, the State Commission or the National Commission, as the case may be, may, if it is satisfied that the circumstances of any case so require, impose a sentence of imprisonment or fine, or both, for a term lesser than minimum term and the amount lesser than the minimum amount, specified in this section.

CHAPTER IV: MISCELLANEOUS

Section 28. Protection of action taken in good faith

No suit, prosecution or other legal proceedings shall lie against the members of the District Forum, the State Commissions or the National Commission or any officer or person acting under the direction of the District Forum, the State Commission or the National Commission for executing any order made by it or in respect of anything which is in good faith done or intended to be done by such member, officer or person under this Act or under any rule or order made thereunder.

Section 29. Power to remove difficulties

(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removing the difficulty:

PROVIDED that no such order shall be made after the expiry of a period of two years from the commencement of this Act.

(2) Every order made under this section shall, as soon as may be after it is made, be laid before each House of Parliament.

5[29A. Vacancies or defects in appointment not to invalidate orders No act or proceeding of the Districts Forum, the State Commission or the National Commission

shall be invalid by reason only of the existence of any vacancy amongst its members or any defect in the constitution thereof.]

Section 30. Power to make rules

(1) The Central Government may, by notification, make rules for carrying out the provisions contained in 2[clause (a) of sub-section (1) of section 2], clause (b) of sub-section (2) of section 4, sub-section (2) of section 5, clause (vi) of sub-section (4) of section 13, section 19, sub-section (2) of section 20 and section 22 of this Act.

(2) The State Government may, by notification, make rules for carrying out the provisions contained in 2[clause (b) of sub-section (2) and sub-section (4) of section 7], sub-section (3) of section 10, clause (c) of sub-section (1) of section 13, sub-section (3) of section 14, section 15 and sub-section (2) of section 16.

Section 31. Laying of rules

(1) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

(2) Every rule made by a State Government under this Act shall be laid as soon as may be after it is made, before the State Legislature.

Foot Notes

1 Substituted by Act No. 50 of 1993, w.e.f. 18th. June, 1993.
2 Inserted by Act No. 50 of 1993, w.e.f. 18th. June, 1993.
3 Omitted by Act No. 50 of 1993, w.e.f. 18th. June, 1993.
4 Substituted by Act No. 34 of 1991, w.e.f. 15th. June, 1991.
5 Inserted by Act No. 34 of 1991, w.e.f. 15th. June, 1991.

Wealth Tax Act

November 30, 2014

Section 1. Short title, extent and commencement.

[RECEIVED THE ASSENT OF THE PRESIDENT ON 12TH SEPTEMBER, 1957]

An Act to provide for the levy of wealth-tax.

BE it enacted by Parliament in the Eighth Year of the Republic of India as follows :-

(1) This Act may be called the Wealth-Tax Act, 1957.

(2) It extends to the whole of India .

(3) It shall be deemed to have come into force on the 1st day of April, 1957.

Section 2. Definitions

In this Act, unless the context otherwise requires,—

¹[***]

²[(b) “Appellate Tribunal” means the Appellate Tribunal constituted under section 252 of the Income-tax Act;]

² [(c) “assessee” means a person by whom wealth-tax or any other sum of money is payable under this Act, and includes—

(i) every person in respect of whom any proceeding under this Act has been taken for the determination of wealth-tax payable by him or by any other person or the amount of refund due to him or such other person;

(ii) every person who is deemed to be an assessee under this Act;

(iii) every person who is deemed to be an assessee in default under this Act;]

³[(ca) “Assessing Officer” means the Deputy Commissioner of Income-tax or the Assistant Commissioner or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of the Income-tax Act which apply for the purposes of wealth-tax under section 8 of this Act and also the ⁴[Additional Commissioner or] ⁵[Additional Director or] Joint Commissioner who is directed under clause (b) of sub-section (4) of the said section 120 to exercise or perform all or any of the powers and functions conferred on or assigned to the Assessing Officer under that Act;]

⁶[cb)] “assessment” includes re-assessment;

⁷[(d) “assessment year” means the period of twelve months commencing on the 1st day of April every year;]

⁸[(e) “assets” includes property of every description, movable or immovable, but does not include,—

(1) in relation to the assessment year commencing on the 1st day of April, 1969, or any earlier assessment year—

(i) agricultural land and growing crops, grass or standing trees on such land;

(ii) any building owned or occupied by a cultivator of, or receiver of rent revenue out of, agricultural land:

Provided that the building is on or in the immediate vicinity of the land and is a building which the cultivator or the receiver of rent or revenue by reason of his connection with the land requires as a dwelling-house or a store-house or an outhouse;

(iii) animals;

(iv) a right to any annuity in any case where the terms and conditions relating thereto preclude the commutation of any portion thereof into a lump sum grant;

(v) any interest in property where the interest is available to an assessee for a period not exceeding six years from the date the interest vests in the assessee;

(2) in relation to the assessment year commencing on the 1st day of April, 1970, or any subsequent assessment year ⁹[but before the 1st day of April, 1993]—

(i) animals;

(ii) a right to ¹⁰[any annuity (not being an annuity purchased by the assessee or purchased by any other person in pursuance of a contract with the assessee)] in any case where the terms and conditions relating thereto preclude the commutation of any portion thereof into a lump sum grant;

(iii) any interest in property where the interest is available to an assessee for a period not exceeding six years from the date the interest vests in the assessee:]

¹¹[Provided that in relation to the assessment year commencing on the 1st day of April, 1981, ¹²[and the assessment year commencing on the 1st day of April, 1982], this sub-clause shall have effect subject to the modification that for item (i) thereof, the following item shall be substituted namely:—

(i) (a) agricultural land other than land comprised in any tea, coffee, rubber or cardamom plantation;

(b) any building owned or occupied by a cultivator of, or receiver of rent or revenue out of, agricultural land other than land comprised in any tea, coffee, rubber or cardamom plantation:

Provided that the building is on or in the immediate vicinity of the land and is a building which the cultivator or the receiver of the rent or revenue by reason of his connection with the land requires as a dwelling-house or a store-house or an outhouse;

(c) animals:]

¹³[Provided further that in relation to the assessment year commencing on the 1st day of April, 1983, or any subsequent assessment year, this sub-clause shall have effect subject to the modification that for item (i) thereof, the following item shall be substituted, namely:—

(i) (a) agricultural land and growing crops (including fruits on trees), grass or standing trees on such land;

(b) one building or one group of buildings owned or occupied by a cultivator of, or receiver of rent or revenue out of, agricultural land:

Provided that such building or group of buildings is on or in the immediate vicinity of the land and is a building which the cultivator or the receiver of rent or revenue by reason of his connection with the land requires as store-house or for keeping livestock;

(c) animals:]

¹⁴ [Provided also that] in relation to the State of Jammu and Kashmir, this sub-clause shall have effect subject to the modification that for the assets specified in ¹⁵[item (i)] of this sub-clause, the assets specified in ¹⁶[items (i) to (iii)] of sub-clause (1) shall be substituted and the other provisions of this Act shall be construed accordingly;]

¹⁷[(ea) “assets”, in relation to the assessment year commencing on the 1st day of April, 1993, or any subsequent assessment year, means—

¹⁸[(i) any building or land appurtenant thereto (hereinafter referred to as “house”), whether used for residential or commercial purposes or for the purpose of maintaining a guest house or otherwise including a farm house situated within twenty-five kilometres from local limits of any municipality (whether known as Municipality, Municipal Corportation or by any other name) or a Cantonment Board, but does not include—

(1) a house meant exclusively for residential purposes and which is allotted by a company to an employee or an officer or a director who is in whole-time employment, having a gross annual salary of less than five lakh rupees;

(2) any house for residential or commercial purposes which forms part of stok-in-trade;

(3) any house which the assessee may occupy for the purposes of any business or profession carried on by him;

(4) any residential property that has been let-out for a minimum period of three hundred days in the previous year;

(5) any property in the nature of commercial establishments or complexes;]

(ii) motor cars (other than those used by the assessee in the business of running them on hire or as stock-in-trade);

(iii) jewellery, bullion and furniture, utensils or any other article made wholly or partly of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals:

Provided that where any of the said assets is used by the assessee as stock-in-trade, such asset shall be deemed as excluded from the assets specified in this sub-clause;

(iv) yachts, boats and aircrafts (other than those used by the assessee for commercial purposes);

(v) urban land;

(vi) cash in hand, in excess of fifty thousand rupees, of individuals and Hindu undivided families and in the case of other persons any amount not recorded in the books of account.

¹⁹[ Explanation 1 ].—For the purposes of this clause,—

(a) “jewellery” includes—

(i) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stones and whether or not worked or sewn into any wearing apparel;

(ii) precious or semi-precious stones, whether or not set in any furniture, utensils or other article or worked or sewn into any wearing apparel;

(b) “urban land” means land situate—

(i) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the valuation date; or

(ii) in any area within such distance, not being more than eight kilometres from the local limits of any municipality or cantonment board referred to in sub-clause (i), 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 notification²⁰ in the Official Gazette, but does not include land on which construction of a building is not permissible under any law for the time being in force in the area in which such land is situated or the land occupied by any building which has been constructed with the approval of the appropriate authority or any unused land held by the assessee for industrial purposes for a period of two years from the date of its acquisition by him ²¹[or any land held by the assessee as stock-in-trade for a period of ten years from the date of its acquisition by him];]

²²[ Explanation 2 .—For the removal of doubts, it is hereby declared that “Jewellery” does not include the Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 notified by the Central Government.]

(f) “Board” means the ²³[Central Board of Direct Taxes constituted under the Central Board of Revenue Act, 1963 (54 of 1963)];

²⁴[***]

²⁵[***]

²⁶[(h) “company” shall have the meaning assigned to it in clause (17) of section 2 of the Income-tax Act, 1961, (43 of 1961);]

²⁷[(ha) “co-operative society” means a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies;]

²⁸[***]

(i) “executor” means an executor or administrator of the estate of a deceased person;

²⁹[(ia) “High Court”, in relation to the Union territories of Dadra and Nagar Haveli and Goa, Daman and Diu, means the High Court at Bombay;]

³⁰[(j) “Income-tax Act” means the Income-tax Act, 1961 (43 of 1961);]

³¹[***]

³²[(ka) “India” means the territory of India as referred to in article 1 of the Constitution, its territorial waters, seabed and subsoil underlying such waters, continental shelf, exclusive economic zone or any other maritime zone as referred to in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (80 of 1976), and the air space above its territory and territorial waters;]

³³[***]

³⁴[(lb) “legal representative” has the meaning assigned to it in clause (11) of section 2 of the Code of Civil Procedure, 1908 (5 of 1908);]

³⁵[(lc) “maximum marginal rate” means the rate of wealth-tax applicable in relation to the highest slab of wealth in the case of an individual as specified in Part I of Schedule I;]

³⁶ [(ld) “National Tax Tribunal” means the National Tax Tribunal established under section 3 of the National Tax Tribunal Act, 2005 (49 of 2005;]

(m) “net wealth” means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee ³⁷[on the valuation date which have been incurred in relation to the said assets];

(n) “prescribed” means prescribed by rules made under this Act;

(o) “principal officer”, used with reference to a company, means the secretary, manager, managing agent or managing director of the company, and includes any person connected with the management of the affairs of the company upon whom the ³⁸[Assessing Officer] has served a notice of his intention of treating him as the principal officer thereof;

³⁹[(oa) “public servant” has the same meaning as in section 21 of the Indian Penal Code (45 of 1860);]

⁴⁰[(oaa) “registered valuer” means a person registered as a valuer under section 34 AB;]

³⁹[(ob) “regular assessment” means the assessment made under ⁴¹[sub-section (3) or sub-section (5) of section 16];]

(p) “Ruler” means a Ruler as defined in clause (22) of Article 366 of the Constitution;

(q) “valuation date”, in relation to any year for which an assessment is to be made under this Act, means the last day of the previous year as defined in ⁴²[section 3] of the Income-tax Act if an assessment were to be made under that Act for that year:

⁴³[Provided that—

⁴⁴[***]

(ii) in the case of a person who is not an assessee within the meaning of the Income-tax Act, the valuation date for the purposes of this Act shall be the 31st day of March immediately preceding the assessment year;

(iii) where an assessment is made in pursuance of section 19A, the valuation date shall be the same valuation date as would have been adopted in respect of the net wealth of the deceased if he were alive;]

⁴⁵[(r) “Valuation Officer” means a person appointed as a Valuation Officer under section 12A, and includes a Regional Valuation Officer, a District Valuation Officer and an Assistant Valuation Officer;]

⁴⁶[(s) the expressions “Chief Commissioner, Director-General, Commissioner, Commissioner (Appeals), Director, Additional Director of Income-tax, Additional Commissioner of Income-tax, Joint Director, Joint Commissioner of Income-tax, Deputy Director, Deputy Commissioner, Assistant Commissioner, Assistant-Director, Income tax Officer, Inspector of Income-tax and Tax Recovery Officer shall have the meanings respectively assigned to them under section 2 of the Income-tax Act.]

——————————————–

1. Clause (a) omitted by Act 4 of 1988, sec. 128(i) as amended by Act 26 of 1988, sec. 88(e)(i) (w.e.f. 1-4-1988).

2. Subs. by Act 46 of 1964, sec. 2(a), for clauses (b), (c) and (d) (w.e.f. 1-4-1965).

3. Subs. by Act 21 of 1998, sec. 67(a), for clause (ca) (w.e.f. 1-10-1998). Earlier clause (ca) was inserted by Act 4 of 1988, sec. 128(ii) as amended by Act 26 of 1988, sec. 88(e)(ii) (w.e.f. 1-4-1988).

4. Ins. by Finance Act, 2007, sec. 83(a)(i) (w.r.e.f. 1-6-1994).

5. Ins. by Finance Act, 2007, sec. 83(a)(ii) (w.r.e.f. 1-10-1996).

6. Clause (ca) re-lettered as clause (cb) by Act 4 of 1988, sec. 128(ii) as amended by Act 26 of 1988, sec. 88(e)(i) (w.e.f. 1-4-1988). Earlier clause (ca) was inserted by Act 46 of 1964, 2 (w.e.f. 1-4-1965).

7. Subs. by Act 46 of 1964, sec. 2(a), for clauses (b), (c) and (d) (w.e.f. 1-4-1965).

8. Subs. by Act 14 of 1969, sec. 24(a), for clause (e) (w.r.e.f. 1-4-1969). Earlier clause (e) was amended by Act 46 of 1964, sec. 2(b) (w.e.f. 1-4-1965).

9. Ins. by Act 18 of 1992, sec. 89(a) (w.e.f. 1-4-1993).

10. Subs. by Act 20 of 1974, sec. 14(1)(a), for “any annuity” (w.e.f. 1-4-1975).

11. Subs. by Act 44 of 1980, sec. 36, for the proviso (w.e.f. 1-4-1981). Earlier the proviso was added by Act 19 of 1970, sec. 26(a) (w.r.e.f. 1-4-1969) and was amended by Act 20 of 1974, sec. 14(1)(b) (w.r.e.f. 1-4-1974).

12. Subs. by Act 14 of 1982, sec. 33(a), for “or any subsequent assessment year” (w.e.f. 1-4-1983).

13. Ins. by Act 14 of 1982, sec. 33(b) (w.e.f. 1-4-1983).

14. Subs. by Act 14 of 1982, sec. 33(b), for “Provided further that” (w.e.f. 1-4-1983).

15. Subs. by Act 20 of 1974, sec. 14(1)(b), for “items (i) to (iii)” (w.e.f. 1-4-1975).

16. Subs. by Act 20 of 1974, sec. 14(1)(b), for “items (i) to (v)” (w.e.f. 1-4-1975).

17. Ins. by Act 18 of 1922, sec. 89(b) (w.e.f. 1-4-1993).

18. Subs. by Act 21 of 1998, sec. 67 (b) (i), for sub-clause (i) (w.e.f. 1-4-1999). Earlier sub-clause (i) was substituted by Act 33 of 1996, sec. 56 (w.e.f. 1-4-1997).

19. Explanation re-numbered as Explanation 1 by Act 27 of 1999, sec. 91 (w.e.f. 1-4-2000).

20. See Notification No. S.O. 871(E), dated 9th November, 1993.

21. Subs. by Act 21 of 1998, sec. 67(b)(ii), for certain words (w.e.f. 1-4-1999). Earlier those words were inserted by Act 38 of 1993, sec. 38 (w.e.f. 1-4-1994) and were amended by Act 32 of 1994, sec. 51(i) (w.e.f. 1-4-1995).

22. Ins. by Act 27 of 1999, sec. 91 (w.e.f. 1-4-2000).

23. Subs. by Act 54 of 1963, sec. 5(1), for “Central Board of Revenue constituted under the Central Board of Revenue Act, 1924 (4 of 1924)” (w.e.f. 1-4-1964).

24. Clause (g) omitted by Act 4 of 1988, sec. 128(iii) as amended by Act 26 of 1988, sec. 88(e)(iii) (w.e.f. 1-4-1988).

25. Clause (gg) omitted by Act 4 of 1988, sec. 128(iii) as amended by Act 26 of 1988, sec. 88(e)(iii) (w.e.f. 1-4-1988). Earlier clause (gg) was inserted by Act 29 of 1977, sec. 39, Sch. V, Pt. II, Item 1 (w.e.f. 10-7-1978)

26. Subs. by Act 4 of 1988, sec. 128(iv), for clause (h) (w.e.f. 1-4-1989). Earlier clause (h) was substituted by Act 11 of 1958, sec. 14(a) (w.e.f. 28-4-1958) and was amended by Act 20 of 1967, sec. 34(a) (w.e.f. 1-4-1967) and was substituted by Act 25 of 1975, sec. 25 (w.r.e.f. 1-4-1975).

27. Ins. by Act 16 of 1972, sec. 44(a) (w.e.f. 1-4-1957).

28. Clause (hb) omitted by Act 4 of 1988, sec. 128 (iii) as amended by Act 26 of 1988, sec. 88(e)(iii) (w.e.f. 1-4-1988). Earlier clause (ha) was re-lettered as clause (hb) by Act 16 of 1972, sec. 44(b) (w.e.f. 1-4-1965).

29. Ins. by Act 3 of 1963, sec. 3 and Sch. (w.e.f. 1-4-1963).

30. Subs. by Act 46 of 1964, sec. 2(d), for clause (j) (w.e.f. 1-4-1965).

31. Clause (k) omitted by Act 4 of 1988, sec. 128(iii) as amended by Act 26 of 1988, sec. 88(e)(iii) (w.e.f. 1-4-1988).

32. Subs. by Finance Act, 2007, sec. 83(b), for clause (ka) (w.r.e.f. 25-8-1976). Earlier clause (ka) was inserted by Act 3 of 1963, sec. 3 and Sch. (w.e.f. 1-4-1963). Clause (ka), before substitution by Finance Act, 2007, stood as under: ‘(ka) “India” shall be deemed to include the Union territories of Dadra and Nagar Haveli, Goa, Daman and Diu, and Pondicherry— (i) as respects any period, for the purposes of section 6; and (ii) as respects any period included in the year ending with the valuation date, for the purpose of making any assessment for the assessment year commencing on the 1st day of April, 1963, or for any subsequent year;’.

33. Clauses (l) and (la) omitted by Act 4 of 1988, sec. 128(iii) as amended by Act 26 of 1988, sec. 88(e)(iii) (w.e.f. 1-4-1988). Earlier clause (la) was inserted by Act 46 of 1964, sec. 2(e) (w.e.f. 1-4-1965).

34. Ins. by Act 46 of 1964, sec. 2(e) (w.e.f. 1-4-1965).

35. Ins. by Act 4 of 1988, sec. 128(v) (w.e.f. 1-4-1989).

36. Ins. by Act 49 of 2005, sec. 30 and Sch.—Part II-1.

37. Subs. by Act 18 of 1992, sec. 89(c), for certain words (w.e.f. 1-4-1993). Earlier clause (m) was amended by Act 12 of 1959, sec. 20 (w.e.f. 28-12-1959), by Act 46 of 1964, sec. 2(f) (w.e.f. 1-4-1965), by Act 11 of 1987, sec. 75 (w.e.f. 1-4-1988) and by Act 3 of 1989, sec. 58 (w.e.f. 1-4-1989).

38. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

39. Ins. by Act 46 of 1964, sec. 2(g) (w.e.f. 1-4-1965).

40. Ins. by Act 45 of 1972, sec. 7(a) (w.e.f. 15-11-1972).

41. Subs. by Act 12 of 1990, sec. 51, for “section 16” (w.r.e.f. 1-4-1989).

42. Subs. by Act 46 of 1964, sec. 2(h)(i), for “clause (11) of section 2” (w.e.f. 1-4-1965).

43. Subs. by Act 46 of 1964, sec. 2(h)(ii), for the proviso (w.e.f. 1-4-1965).

44. Clause (i) omitted by Act 4 of 1988, sec. 128(vi) (w.e.f. 1-4-1989).

45. Subs. by Act 45 of 1972, sec. 7(b), for clause (r) (w.e.f. 15-11-1972).

46. Subs. by Act 21 of 1998, sec. 67(c), for clause (s) (w.e.f. 1-10-1998). Earlier clause (s) was amended by Act 46 of 1964, sec. 2(h)(iii) (w.e.f. 1-4-1965) and was substituted by Act 4 of 1988, sec. 128(vii) as amended by Act 26 of 1988, sec. 8(e)(iv) (w.e.f. 1-4-1988) and was amended by Act 32 of 1994, sec. 51(ii) (w.e.f. 1-4-1995).

Chapter II – Charge of Wealth-Tax and Assets subject to such charge

Section 3. Charge of wealth-tax.

¹[(1)] ² [Subject to the other provisions (including provisions for the levy of additional wealth-tax) contained in this Act], there shall be charged for every ³[assessment year] commencing on and from the first day of April, 1957 ⁴[but before the 1st day of April, 1993], a tax (hereinafter referred to as wealth-tax) in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company ⁵[at the rate or rates specified in Schedule I].

⁶[(2) Subject to the other provisions contained in this Act, there shall be charged for every assessment year commencing on and from the 1st day of April, 1993, wealth-tax in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company, at the rate of one per cent. of the amount by which the net wealth exceeds fifteen lakh rupees.]

——————————————–

1. Section 3 renumbered as sub-section (1) thereof by Act 18 of 1992, sec. 90 (w.e.f. 1-4-1993).

2. Subs. by Act 4 of 1988, sec. 129, for “Subject to the other provisions contained in this Act” (w.e.f. 1-4-1989).

3. Subs. by Act 46 of 1964, sec. 3, for “Financial year” (w.e.f. 1-4-1965).

4. Ins. by Act 18 of 1992, sec. 90(a) (w.e.f. 1-4-1993).

5. Subs. by Act 66 of 1976, sec. 27(1), for “at the rate or rates specified in the schedule” (w.e.f. 1-4-1977).

6. Ins. by Act 18 of 1992, sec. 90(b) (w.e.f. 1-4-1993).

Section 4. Net wealth to include certain assets.

(1) ¹[In computing the net wealth—

(a) of an individual, there shall be included, as belonging to that individual, the value of assets which on the valuation date are held—]

²[(i) by the spouse of such individual to whom such assets have been transferred by the individual, directly or indirectly, otherwise than for adequate consideration or in connection with an agreement to live apart, or

(ii) by a minor child, not being ³[a minor child suffering from any disability of the nature specified in section 80U of the Income-tax Act or] a married daughter, of such individual,⁴ [***], or

(iii) by a person or association of persons to whom such assets have been transferred by the individual ⁵[, directly or indirectly,] otherwise than for adequate consideration for the immediate or deferred benefit of the individual, his or her spouse ⁶[***], or]

(iv) by a person or association of persons to whom such assets have been transferred by the individual otherwise than under an irrevocable transfer, ⁷[or]

⁷[(v) by the son’s wife, ⁸[***] of such individual, to whom such assets have been transferred by the individual, directly or indirectly, on or after the 1st day of June, 1973, otherwise than for adequate consideration,] ⁹[or]

¹⁰[(vi) by a person or association of persons to whom such assets have been transferred by the individual, directly or indirectly, on or after the 1st day of June, 1973, otherwise than for adequate consideration for the immediate or deferred benefit of the son’s wife, ¹¹[***] of such individual or both,] whether the assets referred to in any of the sub-clauses aforesaid are held in the form in which they were transferred or otherwise:

¹²[Provided that where the transfer of such assets or any part thereof is either chargeable to gift-tax under the Gift-tax Act, 1958 (18 of 1958), or is not chargeable under section 5 of that Act, for any assessment year commencing ¹³[after the 31st day of March, 1964, but before the 1st day of April, 1972], the value of such assets or part thereof, as the case may be, shall not be included in computing the net wealth of the individual:]

¹⁴[Provided further that nothing contained in sub-clause (ii) shall apply in respect of such assets as have been acquired by the minor child out of his income referred to in the proviso to sub-section (1A) of section 64 of the Income-tax Act and which are held by him on the valuation date:

Provided also that where the assets held by a minor child are to be included in computing the net wealth of an individual, such assets shall be included,—

(a) where the marriage of his parents subsists, in the net wealth of that parent whose net wealth (excluding the assets of the minor child so includible under this sub-section) is greater; or

(b) where the marriage of his parents does not subsist, in the net wealth of that parent who maintains the minor child in the previous year as defined in section 3 of the Income-tax Act, and where any such assets are once included in the net wealth of either parent, any such assets shall not be included in the net wealth of the other parent in any succeeding year unless the Assessing Officer is satisfied, after giving that parent an opportunity of being heard, that it is necessary so to do.]

¹⁵[(b) of an assessee who is a partner in a firm or a member of an association of persons (not being a co-operative housing society), there shall be included, as belonging to that assessee, the value of his ¹⁶[interest in the assets of the firm] or association determined in the manner laid down in Schedule III:

¹⁷[Provided that where a minor is admitted to the benefits of partnership in a firm, the value of the interest of such minor in the firm, determined in the manner specified above, shall be included in the net wealth of the parent of the minor, so far as may be, in accordance with the provisions of the third proviso to clause(a).]]

¹⁸[(1A) Where, in the case of an individual being a member of a Hindu undivided family, any property having been the separate property of the individual has, at any time after the 31st day of December, 1969, been converted by the individual into property belonging to the family through the act of impressing such separate property with the character of property belonging to the family or throwing it ¹⁹[into the common stock of the family or been transferred by the individual, directly or indirectly, to the family otherwise than for adequate consideration (the property so converted or transferred being hereinafter referred to as the converted property)], then, notwithstanding anything contained in any other provision of this Act or in any other law for the time being in force, for the purpose of computing the net wealth of the individual under this Act for any assessment year commencing on or after the 1st day of April, 1972,—

(a) the individual shall be deemed to have transferred the converted property, through the family, to the members of the family for being held by them jointly;

(b) the converted property or any part thereof ²⁰[***] shall be deemed to be assets belonging to the individual and not to the family;

²¹[(c) where the converted property has been the subject-matter of a partition (whether partial or total) amongst the members of the family, the converted property or any part thereof which is received by the spouse ²²[***] of the individual on such partition shall be deemed to be assets transferred indirectly by the individual to the spouse ²²[***] and the provisions of sub-section (1) shall, so far as may be, apply accordingly:]

Provided that the property referred to in clause (b) or clause (c) shall, on being included in the net wealth of the individual be excluded from the net wealth of the family or, as the case may be, the spouse ²²[***] of the individual.

²³[***]

²⁴[***]

(4) Nothing contained in clause (a) of sub-section (1) shall apply to any such transfer as is referred to therein made by an individual before the 1st day of April, 1956, and the value of any assets so transferred shall not be included in the computation of his net wealth.

²⁵[(4A) Notwithstanding anything in sub-section (4), nothing contained in clause (a) of sub-section (1) shall apply to any such transfer as is referred to therein made before the 1st day of April, 1963, by an individual who but for the extension of this Act to the Union territories of Dadra and Nagar Haveli, Goa, Daman and Diu, and Pondicherry, would not have been an assessee, and the value of any assets so transferred shall not be included in the computation of his net wealth.]

(5) The value of any assets transferred under an irrevocable transfer shall be liable to be included in computing the net wealth of the transferor as and when the power to revoke arises to him.

²⁶[(5A) Where a gift of money from one person to another is made by means of entries in the books of account maintained by the person making the gift or by an individual or a Hindu undivided family or a firm or an association of persons or body of individuals with whom or which he has business or other relationship, the value of such gift shall be liable to be included in computing the net wealth of the person making the gift unless he proves to the satisfaction of the ²⁷[Assessing Officer] that the money has actually been delivered to the other person at the time the entries were made.]

²⁸[(6) For the purposes of this Act, the holder of an impartible estate shall be deemed to be the individual owner of all the properties comprised in the estate.]

²⁹[(7) Where the assessee is a member of a co-operative society, company or other association of persons and a building or part thereof is allotted or leased to him under a house building scheme of the society, company or association, as the case may be, the assessee shall, notwithstanding anything contained in this Act or any other law for the time being in force, be deemed to be the owner of such building or part and the value of such building or part shall be included in computing the net wealth of the assessee; and, in determining the value of such building or part, the value of any outstanding instalments of the amount payable under such scheme by the assessee to the society, company or association towards the cost of such building or part and the land appurtenant thereto shall, whether the amount so payable is described as such or in any other manner is such scheme, be deducted as a debt owed by him in relation to such building or part.]

³⁰[(8) A person—

(a) who is allowed to take or retain possession of any building or part thereof in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1982);

(b) who acquires any rights (excluding any rights by way of a lease from month to month or for a period not exceeding one year) in or with respect to any building or part thereof by virtue of any such transaction as is referred to in clause (f) of section 269UA of the Income-tax Act, shall be deemed to be the owner of that building or part thereof and the value of such building or part shall be included in computing the net wealth of such person.]

³¹[ Explanation. —For the purposes of this section,—

(a) the expression “transfer” includes any disposition settlement, trust, covenant, agreement or arrangement; ³²[***]]

³³[(aa) the expression “child” includes a step-child and an adopted child;]

(b) the expression “irrevocable transfer” includes a transfer of assets which, by the terms of the instrument effecting it, is not revocable for a period exceeding six years or during the lifetime of the transferee, and under which the transferor derives no direct or indirect benefit, but does not include a transfer of assets if such instrument—

(i) contains any provision for the re-transfer, directly or indirectly, of the whole or any part of the assets or income therefrom to the transferor, or

(ii) in any way gives the transferor a right to re-assume power, directly or indirectly, over the whole or any part of the assets or income therefrom;]³⁴[and]

³⁵[(c) the expression “property” includes any interest in any property, movable or immovable, the proceeds of sale thereof and any money or investment for the time being representing the proceeds of sale thereof and where the property is converted into any other property by any method, such other property ³⁶[***].

³⁷[***]

——————————————–

1. Subs. by Act 3 of 1989, sec. 59(a)(i), for certain words (w.e.f. 1-4-1989). Earlier sub-section (1) was amended by Act 46 of 1964, sec. 4(a) (w.e.f. 1-4-1965) and by Act 32 of 1971, sec. 31(a) (w.e.f. 1-4-1972).

2. Subs. by Act 46 of 1964, sec. 4(a)(ii)(A), for sub-clauses (i), (ii) and (iii) (w.e.f. 1-4-1965).

3. Ins. by Act 32 of 1994, sec. 52 (w.e.f. 1-4-1995).

4. Certain words omitted by Act 18 of 1992, sec. 91(a)(i)(1) (w.e.f. 1-4-1993).

5. Ins. by Act 41 of 1975, sec. 82(i)(a) (w.e.f. 1-4-1976).

6. The words “or minor child (not being a married daughter) or both” omitted by Act 18 of 1992, sec. 91(a)(i)(2) (w.e.f. 1-4-1993).

7. Ins. by Act 41 of 1975, sec. 82(i)(b) (w.e.f. 1-4-1976).

8. The words “or the son’s minor child” omitted by Act 18 of 1992, sec. 91(a)(i)(3) (w.e.f. 1-4-1993).

9. Ins. by Act 67 of 1984, sec. 53(a) (w.e.f. 1-4-1985).

10. Ins. by Act 67 of 1984, sec. 53(b) (w.e.f. 1-4-1985).

11. The words “or the son’s minor child” omitted by Act 18 of 1992, sec. 9(a)(i)(4) (w.e.f. 1-4-1993).

12. Ins. by Act 46 of 1964, sec. 4(a)(ii)(B) (w.e.f. 1-4-1965).

13. Subs. by Act 32 of 1971, sec. 31(a)(i), for “after the 31st day of March, 1964” (w.e.f. 1-4-1972).

14. Ins. by Act 18 of 1992, sec. 91(a)(i)(5) (w.e.f. 1-4-1993).

15. Subs. by Act 3 of 1989, sec. 59(a)(ii), for clause (b) (w.e.f. 1-4-1989).

16. Subs. by Act 18 of 1992, sec. 91(a)(ii)(1), for “interest in the firm” (w.e.f. 1-4-1993).

17. Subs. by Act 18 of 1992, sec. 91(a)(ii)(2), for the proviso (w.e.f. 1-4-1993).

18. Ins. by Act 32 of 1971, sec. 31(b) (w.e.f. 1-4-1972).

19. Subs. by Act 21 of 1979, sec. 23(a), for “into the common stock of the family (such property being hereinafter referred to as the converted property)” (w.e.f. 1-4-1980).

20. Certain words omitted by Act 41 of 1975, sec. 82(ii)(a) (w.e.f. 1-4-1976).

21. Subs. by Act 41 of 1975, sec. 82(ii)(b), for clause (c) (w.e.f. 1-4-1976).

22. The words “or minor child” omitted by Act 18 of 1992, sec. 91(b) (w.e.f. 1-4-1993).

23. Sub-section (2) omitted by Act 3 of 1989, sec. 59(b) (w.e.f. 1-4-1989).

24. Sub-section (3) omitted by Act 18 of 1992, sec. 91(c) (w.e.f. 1-4-1993). Earlier sub-section (3) was substituted by Act 25 of 1975, sec. 26 (w.r.e.f. 1-4-1975) and was amended by Act 21 of 1978, sec. 23(b) (w.e.f. 1-4-1980).

25. Ins. by the Taxation Laws (Extension to Union Territories ) Regulation, 1963, sec. 3 and Sch. (w.e.f. 1-4-1963).

26. Ins. by Act 41 of 1975, sec. 82(iii) (w.e.f. 1-4-1976).

27. Subs. by Act 4 of 1988, sec. 127 for “Wealth-tax Officer” (w.e.f. 1-4-1988).

28. Subs. by Act 46 of 1964, sec. 4(b), for Explanation (w.e.f. 1-4-1965).

29. Subs. by Act 33 of 1996, sec. 57, for sub-section (7) (w.e.f. 1-4-1997). Earlier sub-section (7) was inserted by Act 32 of 1971, sec. 31(c) (w.e.f. 1-4-1972).

30. Sub-sections (7) and (8) subs. by Act 33 of 1996, sec. 57, for sub-section (7) (w.e.f. 1-4-1997).

31. Subs. by Act 46 of 1964, sec. 4(b), for Explanation (w.e.f. 1-4-1965).

32. The word “and” omitted by Act 32 of 1971, sec. 31(d)(i) (w.e.f. 1-4-1972).

33. Ins. by Act 41 of 1975, sec. 82(iv)(a) (w.e.f. 1-4-1976).

34. Ins. by Act 41 of 1975, sec. 82(iv)(b) (w.e.f. 1-4-1976).

35. Ins. by Act 32 of 1971, sec. 31(d)(ii) (w.e.f. 1-4-1972).

36. The word “and” omitted by Act 41 of 1975, sec. 82(iv)(c) (w.e.f. 1-4-1976).

37. Clause (d) omitted by Act 41 of 1975, sec. 82(iv)(d) (w.e.f. 1-4-1976). Earlier clause (d) was inserted by Act 32 of 1971, sec. 31(d)(ii) (w.e.f. 1-4-1972).

Section 5. Exemptions in respect of certain assets.

¹[²[***] Wealth-tax shall not be payable by an assessee in respect of the following assets]; and such assets shall not be included in the net wealth of the assessee—

(i) any property held by him under trust or other legal obligation for any public purpose of a charitable or religious nature in India :

³[Provided that nothing contained in this clause shall apply to any property forming part of any business, not being a business referred to in clause (a) or clause (b) of sub-section (4A) of section 11 of the Income-tax Act in respect of which separate books of account are maintained or a business carried on by an institution fund or trust referred to in ⁴[***] clause (23B) or clause (23C) of section 10 of the Act;]

(ii) the interest of the assessee in the coparcenary property of any Hindu undivided family of which he is a member;

(iii) ⁵[any one building in the occupation of a Ruler, being a building which immediately before the commencement of the Constitution (Twenty-sixth Amendment) Act, 1971, was his official residence by virtue of a declaration by the Central Government] under paragraph 13 of the Merged States (Taxation Concessions) Order, 1949, or paragraph 15 of the Part B States (Taxation Concessions) Order, 1950;

⁶[***]

⁷[(iv)] jewellery in the possession of any Ruler, not being his personal property, which has been recognised before the commencement of this Act by the Central Government as his heirloom or, where no such recognition exists, which the Board may, subject to any rules that may be made by the Central Government in this behalf, recognise as his heirloom at the time of his first assessment to wealth-tax under this Act:

⁸[Provided that in the case of jewellery recognised by the Central Government as aforesaid, such recognition shall be subject to the following conditions, namely:—

(i) that the jewellery shall be permanently kept in India and shall not be removed outside India except for a purpose and period approved by the Board;

(ii) that reasonable steps shall be taken for keeping the jewellery substantially in its original shape;

(iii) that reasonable facilities shall be allowed to any officer of Government authorised by the Board in this behalf to examine the jewellery as and when necessary; and

(iv) that if any of the conditions hereinbefore specified is not being duly fulfilled, the Board may, for reasons to be recorded in writing, withdraw the recognition retrospectively with effect from the date of commencement of clause (b) of section 5 of the Rulers of Indian States (Abolition of Privileges) Act, 1972 (54 of 1972), and in such a case, wealth-tax shall become payable by the Ruler for all the assessment years after such commencement for which the jewellery was exempted on account of the recognition.

Explanation. —For the purposes of clause (iv) of the foregoing proviso, the fair market value of any jewellery on the date of the withdrawal of the recognition in respect thereof shall be deemed to be the fair market value of such jewellery on each successive valuation date relevant for the assessment years referred to in the said provison:

Provided further that the aggregate amount of wealth tax payable in respect of any jewellery under clause (iv) of the foregoing proviso for all the assessment years referred to therein shall not in any case exceed fifty per cent. of its fair market value on the valuation date relevant for the assessment year in which recognition was withdrawn;]⁹[***]

¹⁰[(v)] in the case of an assessee, being a person of Indian origin ¹¹ [or a citizen of India (hereafter in this clause referred to as such person)] who was ordinarily residing in a foreign country and who, on leaving such country, has returned to India with the intention of permanently residing therein, moneys and the value of assets brought by him into India and the value of the assets acquired by him out of such moneys ¹²[within one year immediately preceding the date of his return and at any time thereafter]:

Provided that this exemption shall apply only for a period of seven successive assessment year commencing with the assessment year next following the date on which such person returned to India .

¹³[ Explanation 1].—A person shall be deemed to be of Indian origin if he, or either of his parents or any of his grandparents, was born is undivided India ].

¹⁴[ Explanation 2.—For the removal of doubts, it is hereby declared that moneys standing to the credit of such person in a Non-resident (External) Account, in any bank in India in accordance with the Foreign Exchange Regulation Act, 1973 (46 of 1973) and any rules made thereunder, on the date of his return to India, shall be deemed to be moneys brought by him into India on that date.]

¹⁵[***]

¹⁶[(vi) one house or part of a house or a plot of land belonging to an individual or a Hindu undivided family:

Provided that wealth-tax shall not be payable by an assessee in respect of an asset being a plot of land comprising an area of five hundred square metres or less.]

¹⁷[***]

——————————————–

1. The words “Subject to the provisions of sub-section (1A), wealth-tax shall not be payable by an assessee in respect of the following assets” subs. by Act 19 of 1970, sec. 26(b)(i)(1), for “Wealth-tax shall not be payable by an assessee in respect of the following assets” (w.e.f. 1-4-1971).

2. The words “(1) Subject to the provisions of sub-section (1A)” omitted by Act 18 of 1992, sec. 92(a)(i) (w.e.f. 1-4-1993).

3. Added by Act 32 of 1985, sec. 37(a)(i) (w.e.f. 1-4-1986). The said proviso was substituted by Act 4 of 1988, sec. 160(1) (w.e.f. 1-4-1989) and the proviso so substituted by Act 4 of 1988 was omitted by Act 3 of 1989, sec. 95(r) (w.e.f. 1-4-1989).

4. The words “clause (22) or clause (22A) or” omitted by Act 21 of 1998, sec. 68(a) (w.e.f. 1-4-1999).

5. Subs. by Act 54 of 1972, sec. 5(a), for certain words (w.e.f. 9-9-1972).

6. Clauses (iv) to (xiii) omitted by Act 18 of 1992, sec. 92(a)(ii) (w.e.f. 1-4-1993). Earlier these clauses were amended by Act 14 of 1969, sec. 24(b) (w.r.e.f. 1-4-1969), by Act 19 of 1970, sec. 26(b)(i)(2) and (3) (w.r.e.f. 1-4-1971), by Act 42 of 1970, sec. 59 (w.r.e.f. 1-4-1965), by Act 32 of 1971, sec. 32(a)(i), (ii) and (iii) (w.e.f. 1-4-1972), by Act 20 of 1974, sec. 14(2)(a)(i), (ii) and (iii) (w.r.e.f. 1-4-1974), by Act 25 of 1975, sec. 27(a)(i) and (ii) (w.r.e.f. 1-4-1975), by Act 41 of 1975, sec. 83 (w.e.f. 1-4-1976), by Act 66 of 1976, sec. 27(2)(a) and (b) (w.e.f. 1-4-1977) and (w.e.f. 1-4-1975), by Act 24 of 1982, sec. 34(a)(i) and (ii) (w.e.f. 1-4-1983), by Act 11 of 1983, sec. 41(a) (w.e.f. 1-4-1984) and by Act 21 of 1984, sec. 34(a)(i)(1) (w.e.f. 1-4-1985).

7. Clause (xiv) re-numbered as clause (iv) by Act 18 of 1992, sec. 92(a)(ii) (w.e.f. 1-4-1993).

8. Ins. by Act 54 of 1972, sec. 5(b) (w.e.f. 9-9-1972).

9. Clauses (xv) to (xxxii) omitted by Act 18 of 1992, sec. 92(a)(ii) (w.e.f. 1-4-1993). Earlier these clauses were amended by Act 11 of 1958, sec. 14(b) (w.e.f. 28-4-1958), by Act 13 of 1960, sec. 14 (w.r.e.f. 1-4-1960), by Act 20 of 1962, sec. 12(1) (w.r.e.f. 1-4-1962), by Act 54 of 1962, sec. 5(1) (w.e.f. 13-12-1962), by Act 13 of 1963, sec. 21 (w.r.e.f. 1-4-1963), by Act 46 of 1964, sec. 5 (w.e.f. 1-4-1965), by Act 10 of 1965, sec. 70(1) (w.e.f. 11-5-1965), by Act 15 of 1965, sec. 20 (w.e.f. 11-9-1965), by Act 19 of 1968, sec. 32 (w.r.e.f. 1-4-1968), by Act 19 of 1970, sec. 26(b)(i)(4) and (5) (w.r.e.f. 1-4-1971), by Act 32 of 1971, sec. 32(a)(iv) (w.e.f. 1-4-1972), by Act 16 of 1972, sec. 45(a) (w.r.e.f. 1-4-1972) and 1-4-1973, by Act 25 of 1975, sec. 27(a)(iii), (iv) and (v) (w.r.e.f. 1-4-1973), by Act 66 of 1976, sec. 27(2)(c) and (d) (w.e.f. 1-4-1977), by Act 14 of 1982, sec. 34(a)(v) (w.e.f. 1-4-1983), by Act 11 of 1983, sec. 41(b) (w.e.f. 1-4-1984), by Act 21 of 1984, sec. 34(a)(i)(2) and (3) (w.e.f. 1-4-1984), by Act 37 of 1984, sec. 54(a)(i) (w.e.f. 1-9-1985), by Act 23 of 1986, sec. 40(a)(i) (w.r.e.f. 1-4-1986), by Act 11 of 1987, sec. 76 (w.e.f. 1-4-1986), by Act 4 of 1988, sec. 130(i) (w.e.f. 1-4-1988), by Act 26 of 1988, sec. 55(a) (w.r.e.f. 1-4-1988), by Act 3 of 1989, sec. 60(a) (w.e.f. 1-4-1989), by Act 13 of 1989, sec. 27(a) (w.r.e.f. 1-4-1989), by Act 12 of 1990, sec. 52 (w.e.f. 1-4-1991) and by Act 49 of 1991, sec. 73(a) (w.r.e.f. 1-4-1984) and sec. 73(b) (w.e.f. 1-10-1991).

10. Clause (xxxiii) re-numbered as clause (v) by Act 18 of 1992, sec. 92(a)(ii) (w.e.f. 1-4-1993). Earlier clauses (xxxiii) and (xxxiv) were inserted by Act 66 of 1976, sec. 27(3)(a) (w.e.f. 1-4-1977), and clause (xxxiii) was amended by Act 67 of 1984, sec. 54(a)(ii) (w.e.f. 1-4-1985) and by Act 23 of 1986, sec. 40(a)(ii) (w.r.e.f. 1-4-1986).

11. Ins. by Act 67 of 1984, sec. 54(a)(ii) (w.r.e.f. 1-4-1977).

12. Ins. by Act 23 of 1986, sec. 40(a)(ii)(A) (w.e.f. 1-4-1987).

13. Explanation re-numbered as Explanation 1 by Act 23 of 1986, sec. 40(a)(ii)(B) (w.r.e.f. 1-4-1977).

14. Ins. by Act 23 of 1986, sec. 40(a)(ii)(B) (w.r.e.f. 1-4-1977).

15. Clause (xxxiv) omitted by Act 18 of 1992, sec. 92(a)(ii) (w.e.f. 1-4-1993).

16. Subs. by Act 21 of 1998, sec. 68(b), for clause (vi) (w.e.f. 1-4-1999). Earlier clause (vi) was inserted by Act 38 of 1993, sec. 39 (w.e.f. 1-4-1994).

17. Sub-sections (1A) to (4) omitted by Act 18 of 1992, sec. 92(b) (w.e.f. 1-4-1993). Earlier sub-section (3) was amended by Act 13 of 1963, sec. 21(2) (w.r.e.f. 1-4-1963), sub-section (1A) was inserted by Act 19 of 1970, sec. 26(b)(ii) and sub-section (3) was amended by sec. 26(b)(iii) (w.e.f. 1-4-1971) and was amended by Act 32 of 1971, sec. 32(b) (w.r.e.f. 1-4-1972), by Act 16 of 1972, sec. 45(b) (w.e.f. 1-4-1973), sub-section (3) was amended by Act 16 of 1972, sec. 45(c) (w.e.f. 1-4-1973), by Act 20 of 1974, sec. 14(2)(b) (w.r.e.f. 1-4-1974), by Act 25 of 1975, sec. 27(b) and (c) (w.r.e.f. 1-4-1975), by Act 14 of 1982, sec. 34(b) and (c) (w.e.f. 1-4-1983), by Act 21 of 1984, sec. 34(a)(ii) and (iii) (w.e.f. 1-4-1985), by Act 67 of 1984, sec. 54(b) and (c) (w.e.f. 1-4-1985), by Act 32 of 1985, sec. 37(b) and (c) (w.e.f. 1-4-1986), by Act 23 of 1986, sec. 40(b) (w.r.e.f. 1-4-1986), by Act 4 of 1988, sec. 130(ii) (w.e.f. 1-4-1988), by Act 26 of 1988, sec. 55(b) and (c) (w.r.e.f. 1-4-1988), by Act 3 of 1989, sec. 60(b) and (c) (w.e.f. 1-4-1989) and by Act 13 of 1989, sec. 27(b) (w.e.f. 1-4-1990).

Section 6. Exclusion of assets and debts outside India.

¹[In computing the net wealth of an individual who is not a citizen of India or of an individual] or a Hindu undivided family not resident in India or resident but not ordinarily resident in India, or of a company not resident in India during the year ending on the valuation date—

(i) the value of the assets and debts located outside India ; and

(ii) the value of the assets in India represented by any loans or debts owing to the assessee in any case where the interest, if any, payable on such loans or debts is not to be included in the total income of the assessee under ²[section 10] of the Income-tax Act; shall not be taken into account.

Explanation 1.—An individual or a Hindu undivided family shall be deemed to be not resident in India or resident but not ordinarily resident in India during the year ending on the valuation date if in respect of that year the individual or the Hindu undivided family, as the case may be, is not resident in India or resident but not ordinarily resident in India within the meaning of the Income-tax Act.

³[ Explanation 1A.—Where in the case of an individual the value of an asset in India is represented by any debt owing to him, being any moneys to his credit in a Non-resident (External) Account, the interest payable on which is not to be included in his total income under ⁴ [sub-clause (ii) of clause (4)] of section 10 of the Income-tax Act, the provisions of this section shall, in relation to such asset, apply subject to the modification that the reference in this section to an individual not resident in India shall be construed as a reference to a person resident outside India as defined in clause (q) of section 2 of the Foreign Exchange Regulation Act, 1973 (46 of 1973).]

Explanation 2.—A company shall be deemed to be resident in India during the year ending on the valuation date, if—

(a) it is a company formed and registered under the Companies Act, 1956 (1 of 1956), or is an existing company within the meaning of that Act; or

(b) during that year the control and management of its affairs is situated wholly in India .

——————————————–

1. Subs. by Act 11 of 1958, sec. 14(c), for “In computing the net wealth of an individual” (w.r.e.f. 1-4-1957).

2. Subs. by Act 46 of 1964, sec. 6, for “sub-section (3) of section 4” (w.e.f. 1-4-1965)

3. Ins. by Act 14 of 1982, sec. 35 (w.r.e.f. 1-4-1982).

4. Subs. by Act 3 of 1989, sec. 61, for “clause (4A)” (w.e.f. 1-4-1989).

Section 7. Value of assets how to be determined.

¹[7. Value of assets how to be determined. —(1) Subject to the provisions of sub-section (2), the value of any asset, other than cash, for the purposes of this Act shall be its value as on the valuation date determined in the manner laid down in Schedule III.

(2) The value of a house belonging to the assessee and exclusively used by him for residential purposes throughout the period of twelve months immediately preceding the valuation date, may, at the option of the assessee, be taken to be the value determined in the manner laid down in Schedule III as on the valuation date next following the date on which he became the owner of the house or the valuation date relevant to the assessment year commencing on the Ist day of April, 1971, whichever valuation date is later.

²[***]

Explanation .—For the purposes of this sub-section,—

(i) where the house has been constructed by the assessee, he shall be deemed to have become the owner thereof on the date on which the construction of such house was completed:

(ii) “house” includes a part of a house being an independent residential unit.]

——————————————–

1. Subs. by Act 3 of 1989, sec. 62, for section 7 (w.e.f. 1-4-1989). Earlier section 7 was amended by Act 46 of 1964, sec. 7 (w.e.f. 1-4-1965), by Act 45 of 1972, sec. 8 (w.e.f. 1-1-1973) and by Act 66 of 1976, sec. 27(3) (w.r.e.f. 1-4-1976).

2. Proviso omitted by Act 18 of 1992, sec. 93 (w.e.f. 1-4-1993).

Chapter III – Wealth-Tax Authorities

Section 8. Wealth-tax authorities and their jurisdiction

¹[8. Wealth-tax authorities and their jurisdiction .—The income-tax authorities specified in section 116 of the Income-tax Act shall be the wealth-tax authorities for the purposes of this Act and every such authority shall exercise the powers and perform the functions of a wealth-tax authority under this Act in respect of any individual, Hindu undivided family or company, and for this purpose his jurisdiction under this Act shall be the same as he has under the Income-tax Act by virtue of orders or directions issued under section 120 of that Act (including orders or directions assigning concurrent jurisdiction) or under any other provision of that Act.

Explanation. —For the purposes of this section, the wealth-tax authority having jurisdiction in relation to a person who is not an assessee within the meaning of the Income-tax Act shall be the wealth-tax authority having jurisdiction in respect of the area in which that person resides.]

——————————————–

1. Subs. by Act 4 of 1988, sec. 131, for section 8 (w.e.f. 1-4-1988). Earlier section 8 was amended by Act 20 of 1967, sec. 34(b) (w.r.e.f. 1-4-1967) and by Act 41 of 1975, sec. 84 (w.e.f. 1-4-1976).

Section 8 A. Powers of Commissioner respecting specified areas, cases, persons, etc.

¹[8A. Powers of Commissioner respecting specified areas, cases, persons, etc.—[Rep. by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), sec. 132 (w.e.f. 1-4-1988).]]

——————————————–

1. Sections 8A was earlier inserted by Act 46 of 1964, sec. 9 (w.e.f. 1-4-1965), and was amended by Act 20 of 1967, sec. 34(c) (w.r.e.f. 1-4-1967) and was substituted by Act 67 of 1984, sec. 55 (w.e.f. 1-10-1984).

Section 8 AA. Concurrent jurisdiction of Inspecting Assistant Commissioner and Wealth-tax Officer.

¹[8AA. Concurrent jurisdiction of Inspecting Assistant Commissioner and Wealth-tax Officer.—[Rep. by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), sec. 132 (w.e.f. 1-4-1988).]]

——————————————–

1. Section 8AA was earlier inserted by Act 41 of 1975, sec. 85 (w.e.f. 1-10-1975)

Section 8 B. Power to transfer cases.

¹[8B. Power to transfer cases.—[Rep. by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), sec. 132 (w.e.f. 1-4-1988).]]

——————————————–

1. Section 8B was earlier inserted by Act 20 of 1967, sec. 34 (c) (w.r.e.f. 1-4-1967).

Section 9. Control of wealth-tax authorities.

¹[9. Control of wealth-tax authorities.—Section 118 of the Income-tax Act and any notification issued thereunder shall apply in relation to the control of wealth-tax authorities as they apply in relation to the control of the corresponding income-tax authorities, except to the extent to which the Board may, by notification in the Official Gazette, otherwise direct in respect of any wealth-tax authority.]

——————————————–

1. Subs. by Act 4 of 1988, sec. 131, for sections 9 and 10 (w.e.f. 1-4-1988).

Section 9 A. Commissioner of wealth-tax (Appeals).

¹[9A. Commissioner of wealth-tax (Appeals).—[Rep. by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), sec. 132 (w.e.f. 1-4-1988).]]

——————————————–

1. Section 9A was earlier inserted by Act 29 of 1977, sec. 39 and Sch. V (w.e.f. 10-7-1978).

Section 10. Instructions to subordinate authorities.

¹[10. Instructions to subordinate authorities. —(1) The Board may, from time to time, issue such orders, instructions and directions to other wealth-tax authorities as it may deem fit for the proper administration of this Act, and such authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board:

Provided that no such orders, instructions or directions shall be issued—

(a) so as to require any wealth-tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or

(b) so as to interfere with the discretion of the Deputy Commissioner (Appeals) or Commissioner (Appeals) in the exercise of his appellate functions.

(2) Without prejudice to the generality of the foregoing power,—

(a) the Board may, if it considers it necessary or expedient so to do, for the purpose of proper and efficient management of the work of assessment and collection of revenue, issue, from time to time (whether by way of relaxation of any of the provisions of sections ²[14, 15, 16, 17, 17B], 18 and 35 or otherwise), general or special orders in respect of any class of cases, setting forth directions or instructions (not being prejudicial to assessees) as to the guidelines, principles or procedures to be followed by other wealth-tax authorities in the work relating to assessment or collection of revenue or the initiation of proceedings for the imposition of penalties and any such order may, if the Board is of opinion that it is necessary in the public interest so to do, be published and circulated in the prescribed manner for general information;

(b) the Board may, if it considers it desireable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise any wealth-tax authority not being a Deputy Commissioner (Appeals) or Commissioner (Appeals), to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law.]

——————————————–

1. Subs. by Act 4 of 1988, sec. 131, for sections 9 and 10 (w.e.f. 1-4-1988).

2. Subs. by Act 12 of 1990, sec. 53, for “16, 17” (w.r.e.f. 1-4-1990).

Section 10A. Directors of Inspection.

¹[10A. Directors of Inspection.—[Rep. by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), sec. 132 (w.e.f. 1-4-1988).]]

——————————————–

1. Section 10A was earlier inserted by Act 46 of 1964, sec. 10 (w.e.f. 1-4-1965).

Section 11. Jurisdiction of Assessing Officers and power to transfer cases.

¹[11. Jurisdiction of Assessing Officers and power to transfer cases. —(1) The provisions of sections 124 and 127 of the Income-tax Act shall, so far as may be, apply for the purposes of this Act as they apply for the purposes of the Income-tax Act, subject to the modifications specified in sub-section (2).

(2) The modifications referred to in sub-section (1) shall be the following, namely:—

(a) in section 124 of the Income-tax Act,—

(i) in sub-section (3), references to the provisions of the Income-tax Act shall be construed as references to the corresponding provisions of the Wealth-tax Act;

(ii) sub-section (5) shall be omitted:

(b) in section 127 of the Income-tax Act, in the Explanation below sub-section 2[(4)], references to proceedings under the Income-tax Act shall be construed as including references to proceedings under the Wealth-tax Act.]

——————————————–

1. Subs. by Act 4 of 1988, sec. 131, for section 11 (w.e.f. 1-4-1988).

2. Subs. by Act 3 of 1989, sec. 63, for “(5)” (w.r.e.f. 1-4-1988).

Section 11 A. Inspector of Wealth-tax.

¹[11A. Inspector of Wealth-tax. —[ Rep. by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), sec. 132 (w.e.f. 1-4-1988). ]]

——————————————–

1. Sections 11A and 12 were earlier substituted by Act 46 of 1964, sec. 11, for section 12 (w.e.f. 1-4-1965) and section 11A was substituted by Act 20 of 1967, sec. 35(f) (w.e.f. 1-4-1967).

Section 11 AA. Commissioner Competent to perform any function or functions.

¹[11AA. Commissioner Competent to perform any function or functions. —[ Rep. by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), sec. 132 (w.e.f. 1-4-1988). ]]

——————————————–

1. Section 11AA was earlier inserted by Act of 1970 sec. 26 (c) (w.r.e.f. 1-4-1970)

Section 11 B. Wealth-tax Officers Competent to perform any function or functions.

¹[11B. Wealth-tax Officers Competent to perform any function or functions. —[ Rep. by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), sec. 132 (w.e.f. 1-4-1988). ]]

——————————————–

1. Section 11B was earlier inserted by Act 20 of 1967, sec. 34(g) (w.e.f. 1-4-1967) and was amended by Act 41 of 1975, sec. 87 (w.e.f. 1-10-1975).

Section 12. Control of wealth-tax authorities.

¹[12. Control of wealth-tax authorities. —[ Rep. by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), sec. 132 (w.e.f. 1-4-1988). ]]

——————————————–

1. Sections 11A and 12 were earlier substituted by Act 46 of 1964, sec. 11, for section 12 (w.e.f. 1-4-1965) and section 11A was substituted by Act 20 of 1967, sec. 35(f) (w.e.f. 1-4-1967).

Section 12 A. Appointment of Valuation Officers.

¹[12A. Appointment of Valuation Officers. —(1) The Centeral Government may appoint as many Valuation Officers as it thinks fit.

(2) Subject to the rules and orders of the Centeral Government regulating the conditions of service of persons in public services and posts, a wealth-tax authority may appoint as many overseers, surveyors and assessors as may be necessary to assist the Valuation Officers in the performance of their functions.]

——————————————–

1. Ins. by Act 45 of 1972, sec. 9 (w.e.f. 15-11-1972).

Section 13. Wealth-tax authorities to follow orders, etc., of the Board.

¹[13. Wealth-tax authorities to follow orders, etc., of the Board. —[ Rep. by the Direct Tax Laws (Amendment) Act, 1987 (14 of 1988), sec. 132 (w.e.f. 1-4-1988). ]]

——————————————–

1. Earlier section 13 was amended by Act 46 of 1964, sec. 12 (w.e.f. 1-4-1965).

Section 13 A. Powers of [Director-General or Director], [Chief Commissioner or Commissioner] and [Joint Commissioner] to make enquiries.

¹[13A. Powers of ²[Director-General or Director], ³[Chief Commissioner or Commissioner] and ⁴[Joint Commissioner] to make enquiries. —The ²[Director-General or Director], the ⁵[Chief Commissioner or Commissioner] and the ⁶ [Joint Commissioner] shall be competent to make any enquiry under this Act, and for this purpose shall have all the powers that ⁷[an Assessing Officer] has under this Act in relation to the making of enquiries.]

——————————————–

1. Ins. by Act 46 of 1964, sec. 13 (w.e.f. 1-4-1965).

2. Subs. by Act 4 of 1988, sec. 127, for “Director of Inspection” (w.e.f. 1-4-1988).

3. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

4. Subs. by Act 4 of 1988, sec. 127, for “Inspecting Assistant Commissioner” (w.e.f. 1-4-1988).

5. Subs. by Act 4 of 1988, sec. 127, for “Commissioner of Wealth-tax” (w.e.f. 1-4-1988).

6. Subs. by Act 4 of 1988, sec. 127, for “Inspecting Assistant Commissioner of Wealth-tax” (w.e.f. 1-4-1988).

7. Subs. by Act 4 of 1988, sec. 127, for “a Wealth-tax Officer” (w.e.f. 1-4-1988).

Chapter IV – Assessment

Section 14. Return of Wealth.

¹[(1) Every person, if his net wealth or the net wealth of any other person in respect of which he is assessable under this Act on the valuation date exceeded the maximum amount which is not chargeable to wealth-tax, shall, on or before the due date, furnish a return of his net wealth or the net wealth of such other person as on that valuation date in the prescribed form and verified in the prescribed manner setting forth particulars of such net wealth and such other particulars as may be prescribed.

Explanation .—In this sub-section, “due date” in relation to an assessee under this Act shall be the same date as that applicable to an assessee under the Income-tax Act under the Explanation to sub-section (1) of section 139 of the Income-tax Act.

(2) Notwithstanding anything contained in any other provision of this Act, a return of net wealth which shows the net wealth below the maximum amount which is not chargeable to tax shall be deemed never to have been furnished:

Provided that this sub-section shall not apply to a return furnished in response to a notice under section 17.]

²[***]

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1. Subs. by Act 4 of 1988, sec. 133(a), for sub-sections (1) and (2) (w.e.f. 1-4-1989). Earlier sub-section (2) was amended by Act 58 of 1960, sec. 3 and Second Schedule (w.e.f. 26-12-1960), by Act 46 of 1964, sec. 14(b) (w.e.f. 1-4-1965) and sub-section (1) was substituted by Act 46 of 1964, sec. 14(a) (w.e.f. 1-4-1965).

2. Sub-section (3) omitted by Act 4 of 1988, sec. 133(b) (w.e.f. 1-4-1989).

The Wealth-Tax Act, 1957

[Section 15. Return after due date and amendment of return.

¹[15. Return after due date and amendment of return. —If any person has not furnished a return within the time allowed under sub-section (1) of section 14 or under a notice issued under clause (i) of sub-section (4) of section 16, or having furnished a return discovers any omission or wrong statement therein, he may furnish a return or a revised return, as the case may be, at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier:

Provided that—

(a) where such return or revised return relates to the assessment year commencing on the 1st day of April, 1987, or any earlier assessment year, it may be furnished at any time upto and inclusive of the 31st day of March, 1990, or before the completion of the assessement, whichever is earlier;

(b) where such return or revised return relates to the assessment year commencing on the 1st day of April, 1988, it may be furnished at any time upto and inclusive of the 31st day of March, 1991, or before the completion of the assessment, whichever is earlier.]

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1. Subs. by Act 4 of 1988, sec. 134, for section 15 (w.e.f. 1-4-1989).

Section 15 A. Return by whom to be signed.

¹[15A. Return by whom to be signed. —The return made under section 14 or section 15 shall be signed and verified—

²[(a) in the case of an individual,—

(i) by the individual himself;

(ii) where he is absent from India , by the individual himself or by some person duly authorised by him in this behalf;

(iii) where he is mentally incapacitated from attending to his affairs, by his guardian or any other person competent to act on his behalf; and

(iv) where, for any other reason, it is not possible for the individual to sign the return, by any person duly authorised by him in this behalf:

Provided that in a case referred to in sub-clause (ii) or sub-clause (iv), the person signing the return holds a valid power of attorney from the individual to do so, which shall be attached to the return;]

(b) in the case of a Hindu undivided family, by the karta, and, where the karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of such family; and

³[(c) in the case of a company, by the managing director thereof, or where for any unavoidable reason such managing director is not able to sign and verify the return or where there is no managing director, by any director thereof:]]

⁴[Provided that where the company is not resident in India, the return may be signed and verified by a person who holds a valid power of attorney from such company to do so, which shall be attached to the return:

Provided further that,—

(a) where the company is being wound up, whether under the orders of the court or otherwise, or where any person has been appointed as the receiver of any assets of the company, the return shall be signed and verified by the liquidator referred to in sub-section (1) of section 178 of the Income-tax Act;

(b) where the management of the company has been taken over by the Central Government or any State Government under any law, the return of the company shall be signed and verified by the principal officer thereof.]

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1. Ins. by Act 46 of 1964, sec. 15 (w.e.f. 1-4-1965).

2. Subs. by Act 4 of 1988, sec. 135(i), for clause (a) (w.e.f. 1-4-1989).

3. Subs. by Act 41 of 1975, sec. 88, for clause (c) (w.e.f. 1-4-1976).

4. Ins. by Act 4 of 1988, sec. 135(ii) (w.e.f. 1-4-1989).

Section 15 B. Self-assessment .

¹[15B. Self-assessment .—(1) Where any tax is payable on the basis of any return furnished under section 14 or section 15 or in response to a notice under clause (i) of sub-section (4) of section 16 or under section 17, after taking into account the amount of tax, if any, already paid under any provision of this Act, the assessee shall be liable to pay such tax, together with interest payable under any provision of this Act for any delay in furnishing the return, before furnishing the return and the return shall be accompanied by proof of payment of such tax and interest.

Explanation .—Where the amount paid by the assessee under this sub-section falls short of the aggregate of the tax and interest as aforesaid, the amount so paid shall first be adjusted towards the interest payable as aforesaid and the balance, if any, shall be adjusted towards the tax payable.

(2) After the regular assessment under section 16 has been made, any amount paid under sub-section (1) shall be deemed to have been paid towards such regular assessment.

(3) If any assessee fails to pay the whole or any part of such tax or interest or both in accordance with the provisions of sub-section (1), he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax or interest or both remaining unpaid and all the provisions of this Act shall apply accordingly.]

²[(4) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.]

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1. Subs. by Act 4 of 1988, sec. 136, for section 15B (w.e.f. 1-4-1989). Earlier section 15B was inserted by Act 46 of 1964, sec. 15 (w.e.f. 1-4-1965) and was amended by Act 42 of 1970, sec. 69 (w.e.f. 1-4-1971) and by Act 41 of 1975, sec. 89 (w.e.f. 1-4-1976).

2. Ins. by Act 36 of 1989, sec. 27 (w.r.e.f. 1-4-1989).

Section 15 C. Provisional Assessment.

¹[15C. Provisional Assessment. —[ Rep. by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), sec. 137 (w.e.f. 1-4-1989). ]]

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1. Section 15C was earlier inserted by Act 46 of 1964, sec. 15 (w.e.f. 1-4-1965).

Section 16. Assessment.

¹[16. Assessment. — ²[(1) Where a return has been made under section 14 or section 15 or in response to a notice under clause (i) of sub-section (4),—

(i) if any tax or interest is found due on the basis of such return, after adjustment of any amount paid by way of tax or interest, then, without prejudice to the provisions of sub-section (2), an intimation shall be sent to the assessee specifying the sum so payable and such intimation shall be deemed to be a notice of demand issued under section 30 and all the provisions of this Act shall apply accordingly; and

(ii) if any refund is due on the basis of such return, it shall be granted to the assessee and an intimation to this effect shall be sent to the assessee:

Provided that except as otherwise provided in this sub-section, the acknowledgement of the return shall be deemed to be intimation under this sub-section where either no sum is payable by the assessee or no refund is due to him:

Provided further that no intimation under this sub-section shall be sent after the expiry of two years from the end of the assessment year in which the net wealth was first assessable.]

³[***]

⁴[***]

(2) ⁵[Where a return has been made under section 14 or section 15, or in response to a notice under clause (i) of sub-section (4) of this section, the Assessing Officer shall, if he] considers it necessary or expedient to ensure that the assessee has not understated the net wealth or has not under-paid the tax in any manner ⁶[serve on the assessee] a notice requiring him, on a date to be specified therein, either to attend at the office of the Assessing Officer or to produce, or cause to be produced there, any evidence on which the assessee may rely in support of the return:

⁷[Provided that no notice under this sub-section shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished.]

(3) On the day specified in the notice issued under sub-section (2) or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by order in writing, assess the net wealth of the assessee and determine the sum payable by him on the basis of such assessment.

(4) For the purposes of making an assessment under this Act, the Assessing Officer may serve, on any person who has made a return under section 14 or section 15 or in whose case the time allowed under sub-section (1) of section 14 for furnishing the return has expired, a notice requiring him, on a date to be specified therein—

(i) where such person has not made a return ⁸[within the time allowed under sub-section (1) of section 14] to furnish a return of his net wealth or the net wealth of any other person in respect of which he is assessable under this Act on the valuation date, in the prescribed form and verified in the prescribed manner, setting forth the particulars of such net wealth and such other particulars as may be prescribed, or

(ii) to produce or cause to be produced such accounts, records or other documents as the Assessing Officer may require.

(5) If any person—

(a) fails to make the return required under sub-section (1) of section 14 and has not made a return or a revised return under section 15, or

(b) fails to comply with all the terms of a notice issued under sub-section (2) or sub-section (4), the Assessing Officer, after taking into account, all relevant material which he has gathered, shall, after giving such person an opportunity of being heard, estimate the net wealth to the best of his judgment and determine the sum payable by the person on the basis of such assessment:

Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling upon the person to show cause, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgment:

Provided further that it shall not be necessary to give such opportunity in a case where a notice under sub-section (4) has been issued prior to the making of the assessment under this sub-section.]

⁹[(6) Where a regular assessment under sub-section (3) or sub-section (5) is made—

(a) any tax or interest paid by the assessee under sub-section (1) shall be deemed to have been paid towards such regular assessment.

(b) if no refund is due on regular assessment or the amount refunded under sub-section (1) exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly.]

¹⁰[***]

¹¹[***]

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1. Subs. by Act 4 of 1988, sec. 138, for section 16 (w.e.f. 1-4-1989). Earlier section 16 was amended by Act 46 of 1964, sec. 16 (w.e.f. 1-4-1965).

2. Subs. by Act 27 of 1999, sec. 92(a), for sub-section (1) (w.r.e.f. 1-6-1999). Earlier sub-section (1) was amended by Act 3 of 1989, sec. 64(a) (w.e.f. 1-4-1989) and by Act 36 of 1989, sec. 28(a) and (b) (w.r.e.f. 1-4-1989).

3. Sub-section (1A) omitted by Act 27 of 1999, sec. 92(b) (w.e.f. 1-6-1999). Earlier sub-section (1A) was inserted by Act 3 of 1989, sec. 64(b) (w.e.f. 1-4-1989).

4. Sub-section (1B) omitted by Act 27 of 1999, sec. 92(c) (w.e.f. 1-6-1999). Earlier sub-section (1B) was inserted by Act 12 of 1990, sec.

54(a) (w.r.e.f. 1-4-1989)

5. Subs. by Act 36 of 1989, sec. 28(c)(i) for “In a case referred to in sub-section (1), if the Assessing Officer” (w.r.e.f. 1-4-1989).

6. Subs. by Act 36 of 1989, sec. 28(c) (ii), for “he shall serve on the assessee” (w.r.e.f. 1-4-1989).

7. Subs. by Act 49 of 1991, sec. 74(a), for the proviso (w.e.f. 1-10-1991).

8. Subs. by Act 12 of 1990, sec. 54(b), for “before the end of the relevant assessment year” (w.e.f. 1-4-1990).

9. Ins. by Act 36 of 1989, sec. 28(d) (w.r.e.f. 1-4-1989).

10. Sub-section (7) omitted by Act 27 of 1999, sec. 92(d) (w.e.f. 1-6-1999). Earlier sub-section (7) was inserted by Act 36 of 1989, sec. 28(d) (w.r.e.f. 1-4-1989).

11. Explanation omitted by Act 27 of 1999, sec. 92(e) (w.e.f. 1-6-1999). Earlier Explanation was inserted by Act 49 of 1991, sec. 74(b) (w.e.f. 1-10-1991).

Section 16 A. Reference to Valuation Officer.

¹[16A. Reference to Valuation Officer. —(1) For the purpose of making an assessment (including an assessment in respect of any assessment year commencing before the date of coming into force of this section) under this Act, ² [where under the provisions of section 7 read with the rules made under this Act or, as the case may be, the rules made in Schedule III, the market value of any asset is to be taken into account in such assessment,] the ³[Assessing Officer] may refer the valuation of any asset to a Valuation Officer—

(a) in a case where the value of the asset as returned is in accordance with the estimate made by a registered valuer, if the ³[Assessing Officer] is of opinion that the value so returned is less than its fair market value;

(b) in any other case, if the ³[Assessing Officer] is of opinion—

(i) that the fair market value of the asset exceeds the value of the asset as returned by more than such percentage of the value of the asset as returned or by more than such amount as may be prescribed in this behalf; or

(ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do.

(2) For the purpose of estimating the value of any asset in pursuance of a reference under sub-section (1), the Valuation Officer may serve on the assessee a notice requiring him to produce or cause to be produced on a date specified in the notice such accounts, records or other documents as the Valuation Officer may require.

(3) Where the Valuation Officer is of opinion that the value of the asset has been correctly declared in the return made by the assessee under section 14 or section 15, he shall pass an order in writing to that effect and send a copy of his order to the ³[Assessing Officer] and to the assessee.

(4) Where the Valuation Officer is of opinion that the value of the asset is higher than the value declared in the return made by the assessee under section 14 or section 15, or where the asset is not disclosed or the value of the asset is not declared in such return or where no such return has been made, the Valuation Officer shall serve a notice on the assessee intimating the value which he proposes to estimate and giving the assessee an opportunity to state, on a date to be specified in the notice, his objections either in person or in writing before the Valuation Officer and to produce or cause to be produced on that date such evidence as the assessee may rely in support of his objections.

(5) On the date specified in the notice under sub-section (4), or as soon thereafter as may be, after hearing such evidence as the assessee may produce and after considering such evidence as the Valuation Officer may require on any specified points and after taking into account all relevant material which he has gathered, the Valuation Officer shall, by order in writing, estimate the value of the asset and send a copy of his order to the ³[Assessing Officer] and to the assessee.

(6) On receipt of the order under sub-section (3) or sub-section (5) from the Valuation Officer, the ³ [Assessing Officer] shall, so far as the valuation of the asset in question is concerned, proceed to complete the assessment in conformity with the estimate of the Valuation Officer.] ]

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1. Ins. by Act 45 of 1972, sec. 10 (w.e.f. 1-1-1973).

2. Ins. by Act 3 of 1989, sec. 65 (w.e.f. 1-4-1989).

3. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

Section 17. Wealth escaping assessment.

17. Wealth escaping assessment. —¹[(1) If the Assessing Officer ²[has reason to believe] that the net wealth chargeable to tax in respect of which any person is assessable under this Act has escaped assessment for any assessment year (whether by reason of under-assessment or assessment at too low a rate or otherwise], he may, subject to the other provisions of this section and section 17A, serve on such person a notice requiring him to furnish within such period, ³[***] as may be specified in the notice, a return in the prescribed form and verified in the prescribed manner setting forth the net wealth in respect of which such person is assessable as on the valuation date mentioned in the notice, along with such other particulars as may be required by the notice, and may proceed to assess or reassess such net wealth and also any other net wealth chargeable to tax in respect of which such person is assessable, which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section for the assessment year concerned (hereafter in this section referred to as the relevant assessment year), and the provisions of this Act shall, so far as may be, apply as if the return were a return required to be furnished under section 14:

Provided that where an assessment under sub-section (3) of section 16 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any net wealth chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 14 or section 15 or in response to a notice issued under sub-section (4) of section 16 or this section or to disclose fully and truly all material facts necessary for his assessment for that assessment year:

⁴[Provided further that the Assessing Officer shall, before issuing any notice under this sub-section, record his reasons for doing so:]

⁵[Provided also that the Assessing Officer may assess or reassess such net wealth, other than the net wealth which is the subject matter of any appeal, reference or revision, which is chargeable to tax and has escaped assessment.]

Explanation .—Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso.]

(1A) No notice under sub-section (1) shall be issued for the relevant assessment year,—

⁶[(a) if four years have elapsed from the end of the relevant assessment year unless the case falls under clause (b);

(b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the net wealth chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees ten lakh or more for that year.]

Explanation. —For the purposes of sub-section (1) and sub-section (1A), the following shall also be deemed to be cases where net wealth chargeable to tax has escaped assessment, namely:—

(a) where no return of net wealth has been furnished by the assessee although his net wealth or the net wealth of any other person in respect of which he is assessable under this Act on the valuation date exceeded the maximum amount which is not chargeable to wealth-tax;

(b) where a return of net wealth has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the net wealth or has claimed excessive exemption or deduction in the return.

(1B) (a) In a case where an assessment under sub-section (3) of section 16 or sub-section (1) of this section has been made for the relevant assessment year, no notice shall be issued under sub-section (1) ⁷[by an Assessing Officer, who is below the rank of ⁸[Assistant Commissioner or Deputy Commissioner], unless the ⁹ [Joint Commissioner] is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the issue of such notice]:

Provided that after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Chief Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice.

(b) In a case other than a case falling under clause (a), no notice shall be issued under sub-section (1) by an Assessing Officer, who is below the rank of ⁹[Joint Commissioner], after the expiry of four years from the end of the relevant assessment year, unless the ⁹[Joint Commissioner] is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice.]

¹⁰[ Explanation. —For the removal of doubts, it is hereby declared that the Joint Commissioner, the Commissioner or the Chief Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice, need not issue such notice himself.]

¹¹[(2) Nothing contained in this section limiting the time within which any proceeding for assessment or reassessment may be commenced, shall apply to an assessment or reassessment to be made on such person in consequence of or to give effect to any finding or direction contained in an order under section 23, 24, 25, 27 or 29 ¹²[or by a court in any proceedings under any other law]:

Provided that the provisions of this sub-section shall not apply in any case where any such assessment or reassessment relates to an assessment year in respect of which an assessment or reassessment could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any provision limiting the time within which any action for assessment of reassessment may be taken.]

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1. Subs. by Act 4 1988, sec. 139(a), for sub-section (1) (w.e.f. 1-4-1989). Earlier sub-section (1) was amended by Act 46 of 1964, sec. 17 (w.e.f. 1-4-1965).

2. Subs. by Act 3 of 1989, sec.66(a), for “for reasons to be recorded by him in writing, is of the opinion” (w.e.f. 1-4-1989).

3. The words “not being less than thirty days,” omitted by Act 32 of 2003, sec. 100 (w.r.e.f. 1-4-1989).

4. Ins. by Act 3 of 1989, sec. 66(b) (w.e.f. 1-4-1989).

5. Ins. by the Finance Act, 2008 , sec. 60(a) (w.r.e.f. 1-4-2008).

6. Subs. by Act 14 of 2001, sec. 96, for clauses (a) and (b) (w.e.f. 1-6-2001).

7. Subs. by Act 12 of 1990, sec. 55, for certain words (w.r.e.f. 1-4-1990).

8. Subs. by Act 21 of 1998, sec. 66, for “Deputy Commissioner” (w.e.f. 1-10-1998).

9. Subs. by Act 21 of 1998, sec. 66, for “Assistant Commissioner” (w.e.f. 1-10-1998).

10. Ins. by the Finance Act, 2008 , sec. 60(b) (w.r.e.f. 1-10-1998).

11. Ins. by Act 46 of 1964, sec. 17(b) (w.e.f. 1-4-1965).

12. Ins. by Act 4 of 1988, sec. 139(b) (w.e.f. 1-4-1989).

Section 17 A. Time-limit for completion of assessment and reassessment.

¹[17A. Time-limit for completion of assessment and reassessment. —

²[(1) No order of assessment shall be made under section 16 at any time after the expiry of two years from the end of the assessment year in which the net wealth was first assessable:

³[Provided that,—

(a) where the net wealth was first assessable in the assessment year commencing on the 1st day of April, 1987, or any earlier assessment year, such assessment may be made on or before the 31st day of March, 1991;

(b) where the net wealth was first assessable in the assessment year commencing on the 1st day of April, 1988, such assessment may be made on or before the 31st day of March, 1992.]

⁴[Provided further that in case the assessment year in which the net wealth was first assessable is the assessment year commencing on the 1st day of April, 2004 or any subsequent year, the provisions of this sub-section shall have effect as if for the words “two years”, the words “twenty-one months” had been substituted]

(2) No order of assessment or reassessment shall be made under section 17 after the expiry of 5[one year] from the end of the financial year in which the notice under sub-section (1) of that section was served:

⁶[Provided that where the notice under sub-section (1) of section 17 was served on or after the 1st day of April, 1999 but before the 1st day of April, 2000, such assessment or reassessment may be made at any time up to the 31st day of March, 2002:]

⁷[Provided further that where the notice under sub-section (1) of section 17 was served on or after the 1st day of April, 2005, the provisions of this sub-section shall have effect as if for the words “one year”, the words “nine months” had been substituted.]

⁸[***]]

(3) Notwithstanding anything contained in sub-sections (1) and (2), an order of fresh assessment in pursuance of an order passed on or after the 1st day of April, 1975, under section ⁹[23A], section 24 or section 25, setting aside or cancelling an assessment, may be made at any time before the expiry of ¹⁰[one year] from the end of the financial year in which the order under section ⁹[23A] or section 24 is received by the ¹¹[Chief Commissioner or

Commissioner] or, as the case may be, the order under section 25 is passed by the Commissioner:

¹²[Provided that where the order under section 23A or section 24 is received by the Chief Commissioner or Commissioner or, as the case may be, the order under section 25 is passed by the Commissioner, on or after the 1st day of April, 1999 but before the 1st day of April, 2000, such an order of fresh assessment may be made at any time up to the 31st day of March, 2002:]

¹³[Provided further that where the order under section 23A or section 24 is received by the Chief Commissioner or Commissioner or, as the case may be, the order under section 25 is passed by the Commissioner, on or after the 1st day of April, 2005, the provisions of this sub-section shall have effect as if for the words “one year”, the words “nine months” had been substituted.]

(4) The provisions of sub-sections (1) and (2) shall not apply to the assessment or reassessment made on the assessee or any other person in consequence of, or to give effect to, any finding or direction contained in an order under section 23, section 24, section 25, section 27 or section 29 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act, and such assessment or reassessment may, subject to the provisions of sub-section (3), be completed at any time.

Explanation 1.—In computing the period of limitation for the purposes of this section—

(i) the time taken in reopening the whole or any part of the proceeding or in giving an opportunity to the assessee to be reheard under the proviso to section 39, or

(ii) the period during which the assessment proceeding is stayed by an order or injunction of any court, or

¹⁴[(iia) the period (not exceeding sixty days) commencing from the date on which the ¹⁵[Assessing Officer] received the declaration under sub-section (1) of section 18C and ending with the date on which the order under sub-section (3) of that section is made by him, or]

(iii) in a case where an application made before the Wealth-tax Settlement Commissioner under section 22C is rejected by it or is not allowed to be proceeded with by it, the period commencing from the date on which such application is made and ending with the date on which the order under sub-section (1) of section 22D is received by the ¹⁶Chief Commissioner or Commissioner] under sub-section (2) of that section, shall be excluded:

¹⁷[Provided that where immediately after the exclusion of the aforesaid time or period, the period of limitation referred to in sub-sections (1), (2) and (3) available to the Assessing Officer, for making an order of assessment or reassessment, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly:

¹⁸[Provided further that where a proceeding before the Settlement Commission abates under section 22HA, the period of limitation referred to in this section available to the Assessing Officer for making an order of assessment or reassessment, as the case may be, shall, after the exclusion of the period under sub-section (4) of section 22HA, be not less than one year; and where such period of limitation is less than one year, it shall be deemed to be extended to one year.]

Explanation 2. —Where, by an order referred to in sub-section (4), any asset is exclued from the net wealth of one person and held to be the asset of another person, then, an assessment in respect of such asset on such other person shall, for the purposes of sub-section (2) of section 17 and this section, be deemed to be one made in consequence of, or to give effect to, any finding or direction contained in the said order, provided such other person was given an opportunity of being heard before the said order was passed.]

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1. Ins. by Act 41 of 1975, sec. 90 (w.e.f. 1-1-1976).

2. Subs. by Act 4 of 1988, sec. 140(a), for sub-sections (1) and (2) (w.e.f. 1-4-1989).

3. Subs. by Act 13 of 1989, sec. 28, for the proviso (w.e.f. 1-4-1989).

4. Ins. by Act 21 of 2006, sec. 57(a) (w.e.f. 1-6-2006).

5. Subs. by Act 14 of 2001, sec. 97(a)(i), for “two years” (w.e.f. 1-6-2001).

6. Subs. by Act 14 of 2001, sec. 97(a)(ii), for the proviso (w.e.f. 1-6-2001).

7. Ins. by Act 21 of 2006, sec. 57(b) (w.e.f. 1-6-2006).

8. Explanation omitted by Act 14 of 2001, sec. 97(a)(iii) (w.e.f. 1-6-2001).

9. Subs. by Act 14 of 2001, sec. 97(b)(ii), for “23” (w.e.f. 1-6-2001).

10. Subs. by Act 14 of 2001, sec. 97(b)(i), for “two years” (w.e.f. 1-6-2001). Earlier the words “two years” were substituted by Act 4 of 1988, sec. 140(b)(i), for the words “four years” (w.e.f. 1-4-1989).

11. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1989).

12. Subs. by Act 14 of 2001, sec. 97(b)(iii), for the proviso (w.e.f. 1-6-2001). Earlier the proviso was inserted by Act 4 of 1988, sec. 140(b)(ii) (w.e.f. 1-4-1989).

13. Ins. by Act 21 of 2006, sec. 57(c) (w.e.f. 1-6-2006). 14. Ins. by Act 67 of 1984, sec. 56 (w.e.f. 1-10-1984).

15. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

16. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

17. Ins. by Act 49 of 1991, sec. 75 (w.e.f. 27-9-1991). 18. Ins. by the Finance Act, 2008 , sec. 61 (w.r.e.f. 1-6-2007).

Section 17 B. Interest for defaults in furnishing return of net wealth.

¹[17B. Interest for defaults in furnishing return of net wealth. —(1) Where the return of net wealth for any assessment year under sub-section (1) of section 14 or section 15, or in response to a notice under clause (i) of sub-section (4) of section 16, is furnished after the due date, or is not furnished, the assessee shall be liable to pay simple interest at the rate of ²[ ³[one per cent.]] for every month or part of a month comprised in the period commencing on the date immediately following the due date, and,—

(a) where the return is furnished after the due date, ending on the date of furnishing of the return, or

(b) where no return has been furnished, ending on the date of completion of the assessment under sub-section (5) of section 16, on the amount of tax payable on the net wealth as determined ⁴[under sub- section (1) of section 16 or] on regular assessment.

Explanation 1.— In this section, “due date” means the date specified in sub-section (1) of section 14 as applicable in the case of the assessee.

⁵[ Explanation 2.— In this sub-section, “tax payable on the net wealth as determined under sub-section (1) of section 16” shall not include the additional wealth-tax, if any, payable under section 16.]

Explanation 3. —Where, in relation to an assessment year, an assessment is made for the first time under section 17, the assessment so made shall be regarded as a regular assessment for the purposes of this section.

⁶[ Explanation 4. —In this sub-section, “tax payable on the net wealth as determined under sub-section (1) of section 16 or on regular assessment” shall, for the purposes of computing the interest payable under section 15B, be deemed to be tax payable on the net wealth as declared in the return.]

(2) The interest payable under sub-section (1) shall be reduced by the interest, if any, paid under section 15B towards the interest chargeable under this section.

(3) Where the return of net wealth for any assessment year, required by a notice under sub-section (1) of section 17 issued ⁷[after the determination of net wealth under sub-section (1) of section 16 or] after the completion of an assessment under sub-section (3) or sub-section (5) of section 16 or section 17 is furnished after the expiry of the time allowed under such notice, or is not furnished, the assessee shall be liable to pay simple interest at the rate of ⁸[⁹[one per cent.]] for every month or part of a month comprised in the period commencing on the day immediately following the expiry of the time allowed as aforesaid, and,—

(a) where the return is furnished after the expiry of the time aforesaid, ending on the date of furnishing the return; or

(b) where no return has been furnished, ending on the date of completion of the reassessment under section 17, on the amount by which the tax on the net wealth determined on the basis of such reassessment exceeds the tax on the net wealth as determined ¹⁰ [under sub-section (1) of section 16 or] on the basis of the earlier assessment aforesaid.

¹¹[***]

(4) Where, as a result of an order under section 23 or section 24 or section 25 or section 27 or section 29 or section 35 or any order of the Wealth-tax Settlement Commissioner under sub-section (4) of section 22D, the amount of tax on which interest was payable under this section has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and,—

(i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 30 and the provisions of this Act shall apply accordingly, and

(ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded.

(5) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.]

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1. Ins. by Act 4 of 1988, sec. 141 (w.e.f. 1-4-1989).

2. Subs. by Act 14 of 2001, sec. 98, for “two per cent.” (w.e.f. 1-6-2001).

3. Subs. by Act 54 of 2003, sec. 19, for “one and one-fourth per cent.” (w.r.e.f. 8-9-2003).

4. Ins. by Act 3 of 1989, sec. 67(a)(i) (w.e.f. 1-4-1989).

5. Subs. by Act 3 of 1989, sec. 67(a)(ii), for Explanation 2 (w.e.f. 1-4-1989).

6. Ins. by Act 3 of 1989, sec. 67(a)(iii) (w.e.f. 1-4-1989).

7. Ins. by Act 3 of 1989, sec. 67(b)(i) (w.e.f. 1-4-1989).

8. Subs. by Act 14 of 2001, sec. 98, for “two per cent.” (w.e.f. 1-6-2001).

9. Subs. by Act 54 of 2003, sec. 19, for “one and one-fourth per cent.” (w.r.e.f. 8-9-2003).

10. Ins. by Act 3 of 1989, sec. 67(b)(ii) (w.e.f. 1-4-1989).

11. Explanation omitted by Act 3 of 1989, sec. 67(b)(iii) (w.e.f. 1-4-1989).

Section 18. Penalty for failure to furnish returns, to comply with notices and concealment of assets, etc.

¹[18. Penalty for failure to furnish returns, to comply with notices and concealment of assets, etc. —(1) If the ²[Assessing Officer], ³[Joint Commissioner (Appeals)],— ⁴[Commissioner (Appeals),] ⁵[Chief Commissioner or Commissioner] or Appellate Tribunal in the course of any proceedings under this Act is satisfied that any person—

⁶[***]

(b) has ⁷[***] failed to comply with a notice under sub-section (2) or sub-section (4) of section 16; or

(c) has concealed the particulars of any assets or furnished inaccurate particulars of any assets or debts; he or it may, by order in writing, direct that such person shall pay by way of penalty—

⁸[ ⁹[***]

¹⁰[(ii) in the cases referred to in clause (b), in addition to the amount of wealth-tax payable by him, a sum which shall not be less than one thousand rupees but which may extend to twenty-five thousand rupees for each such failure;]

(iii) in the cases referred to in clause (c), in addition to any wealth-tax payable by him, a sum which shall not be less than, but which shall not exceed five times, the amount of tax sought to be evaded by reason of the concealment of particulars of any assets or the furnishing of inaccurate particulars in respect of any assets or debts:

¹¹[Provided that in the cases referred to in clause (b), no penalty shall be imposable if the person proves that there was a reasonable cause for the failure referred to in that clause.]

Explanation 1. —For the purposes of clause (iii) of this sub-section, the expression “the amount of tax sought to be evaded”—

(a) in a case to which Explanation 3 applies, means the tax on the net wealth assessed;

(b) in any other case, means the difference between the tax on the net wealth assessed and the tax that would have been chargeable had the net wealth assessed been reduced by the amount which represents the value of any assets in respect of which particulars have been concealed or inaccuate particulars have been furnished and of any debts in respect of which inaccurate particulars have been furnished.

Explanation 2. —Where in respect of any facts material to the computation of the net wealth of any person under this Act,—

(A) such person fails to offer an explanation or offers an explanation which is found by the ¹²[Assessing Officer] or the ¹³[Deputy Commissioner (Appeals)] ¹⁴[or the Commissioner (Appeals)] ¹⁵[or the Commissioner] to be false, or

(B) such person offers an explanation which he is ¹⁶[not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his net wealth have been disclosed by him], then, the amount added or disallowed in computing the net wealth of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the value of the assets in respect of which particulars have been concealed.

¹⁷[***]

¹⁸[ Explanation 3. —Where any person ¹⁹[***] fails, without reasonable cause, to furnish within the period specified in sub-section (1) of section 17A, a return of his net wealth which he is required to furnish under section 14 in respect of any assessment year commencing on or after the 1st day of April, 1989, and until the expiry of the period aforesaid, no notice has been issued to him under clause (i) of sub-section (4) of section 16 or sub-section (1) of section 17 and the ssessing Officer or the Deputy Commissioner] (Appeals) or the Commissioner (Appeals) is satisfied that in respect of such assessment year such person has assessable net wealth, the such person shall, for the purposes of clause (c) of this sub-section, be deemed to have concealed the particulars of his assets or furnished inaccurate particulars of any assets or debts in respect of such assessment year, notwithstanding that such person furnishes a return of his net wealth at any time after the expiry of either of the periods aforesaid applicable to him in pursuance of a notice under section 17.]

Explanation 4.—Where the value of any asset returned by any person is less than seventy per cent. of the value of such asset as determined in an assessment under section 16 or section 17, such person shall be deemed to have furnished inaccurate particulars of such asset within the meaning of clause (c) of this sub-section, unless he proves that the value of the asset as returned by him is the correct value.]

²⁰[ Explanation 5.—Where in the course of a search under section 37A, the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets represent or form part of his net wealth,—

(a) on any valuation date falling before the date of the search, but the return in respect of the net wealth on such date has not been furnished before the date of the search or, where such return has been furnished before the said date, such assets have not been declared in such return; or

(b) on any valuation date falling on or after the date of the search, then, notwithstanding that such assets are declared by him in any return of net wealth furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of such assets or furnished inaccurate particulars of such assets, ²¹[unless—

(1) such assets are recorded,—

(i) in a case falling under clause (a), before the date of the search; and

(ii) in a case falling under clause (b), on or before such date, in the books of account, if any, maintained by him or such assets are otherwise disclosed to the ²²[Chief Commissioner or Commissioner] before the said date; or

²³[(1A) Where any amount is added or disallowed in computing the net wealth of an assessee in any order of assessment or reassessment and the said order contains a direction for initiation of penalty proceedings under clause (c) of sub-section (1), such an order of assessment or reassessment shall be deemed to constitute satisfaction of the Assessing Officer for initiation of the penalty proceedings under the said clause (c).]

(2) he, in the course of the search, makes a statement under sub-section (4) of section 37A that any money, bullion, jewellery or other valuable article or thing found in his possession or under his control, forms part of his net wealth which has not been disclosed so far in his return on net wealth to be furnished before the expiry of the time specified in sub-section (1) of section 14, and also specifies in the statement the manner in which such net wealth has been acquired and pays the tax, together with interest, if any, in respect of such net wealth.]

²⁴[ Explanation 6. —Where any adjustment is made in the wealth declared in the return under the proviso to clause (a) of sub-section (1) of section 16 and additional wealth-tax charged under that section, the provisions of this sub-section shall not apply in relation to the adjustments so made.]

²⁵ [***]

(2) No order shall be made under sub-section (1) unless the person concerned has been given a reasonable opportunity of being heard.

²⁶[***]

²⁷[(3) No order imposing a penalty under sub-section (1) shall be made,—

(i) by the Income-tax Officer, where the penalty exceeds ten thousand rupees;

(ii) by the ²⁸[Assistant Commissioner or Deputy Commissioner], where the penalty exceeds twenty thousand rupees. except with the prior approval of the ²⁹ [Joint Commissioner].]

³⁰[***]

(4) A ³¹[Deputy Commissioner (Appeals)], ³²[a Commissioner (Appeals),] a ³³[Chief Commissioner or Commissioner] or the Appellate Tribunal on making an order under this section imposing a penalty, shall forthwith send a copy of the same to the ³⁴[Assessing Officer].

³⁵[(5) No order imposing a penalty under this section shall be passed—

(i) in a case where the assessment to which the proceedings for imposition of penalty relate is the subject-matter of an appeal to the Joint Commissioner (Appeals) or the Commissioner (Appeals) under section 23 or an appeal to the Appellate Tribunal under sub-section (2) of section 24, 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 the order of the Joint Commissioner (Appeals) or the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Chief Commissioner or Commissioner, whichever is later;

(ii) in a case where the relevant assessment is the subject-matter of revision under sub-section (2) of section 25, after the expiry of six months from the end of the month in which such order or revision is passed;

(iii) in any other case, 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 onths 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 purpose of this section,—

(i) any period during which the immunity granted under section 22H remained in force;

(ii) the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 39; and

(iii) any period during which a proceeding under this section for the levy of penalty is stayed by an order or injunction of any court, shall be excluded.

(6) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1989, shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.]]

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1. Subs. by Act 46 of 1964, sec. 18, for section 18 (w.e.f. 1-4-1965).

2. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

3. Subs. by Act 21 of 1998, sec. 66, for “Deputy Commissioner” (w.e.f. 1-10-1998). Earlier the words “Deputy Commissioner” were substituted by Act 4 of 1988, sec. 127, for the words “Inspecting Commissioner or Inspecting Assistant Commissioner of Wealth-tax” (w.e.f. 1-4-1988).

4. Ins. by Act 29 of 1977, sec. 39 and Sch. V (w.e.f. 10-7-1978).

5. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

6. Clause (a) omitted by Act 3 of 1989, sec. 68(a)(i) (w.e.f. 1-4-1989).

7. The words “without reasonable cause” omitted by Act 46 of 1986, sec. 33(a) (w.e.f. 10-9-1986).

8. Clauses (i), (ii), (iii) and Explanations 1 to 4 subs. by Act 41 of 1975, sec. 91(i), for clauses (i), (ii), (iii) and Explanations 1 and 2 (w.e.f. 1-4-1976). Earlier clause (iii) and Explanation were amended by Act 19 of 1968, sec. 32(b) (w.r.e.f. 1-4-1968), clause (ii) was substituted by Act 14 of 1969, sec. 24(c) (w.r.e.f. 1-4-1969).

9. Clause (i) omitted by Act 3 of 1989, sec. 68(a)(ii) (w.e.f. 1-4-1989). Earlier clause (i) was substituted by Act 14 of 1968, sec. 24(c) (w.r.e.f. 1-4-1969), and was amended by Act 32 of 1971, sec. 33(a) (w.e.f. 1-4-1972).

10. Subs. by Act 3 of 1989, sec. 68(a)(iii), for clause (ii) (w.e.f. 1-4-1989).

11. Subs. by Act 3 of 1989, sec. 68(a)(iv), for the proviso (w.e.f. 1-4-1989). Earlier the proviso was inserted by Act 46 of 1986, sec. 33(b) (w.e.f. 10-9-1986).

12. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

13. Subs. by Act 4 of 1988, sec. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988).

14. Ins. by Act 29 of 1977, sec. 39, Sch. V (w.e.f. 10-7-1978). 15. Ins. by Act 20 of 2002, sec. 110(a) (w.e.f. 1-6-2002).

16. Subs. by Act 46 of 1986, sec. 33(b)(ii)(1), for “not able to substantiate” (w.e.f. 10-9-1986).

17. Proviso omitted by Act 46 of 1986, sec. 33(b)(ii)(2) (w.e.f. 10-9-1986).

18. Subs. by Act 3 of 1989, sec. 68(a)(v), for Explanation 3 (w.e.f. 1-4-1989).

19. The words “who has not previously been assessed under this Act,” omitted by Act 20 of 2002, sec. 110(b) (w.e.f. 1-4-2003).

20. Ins. by Act 67 of 1984, sec. 57 (w.e.f. 1-10-1984).

21. Subs. by Act 46 of 1986, sec. 33(b)(iii), for certain words (w.e.f. 10-9-1986).

22. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

23. Ins. by the Finance Act, 2008 , sec. 62 (w.r.e.f. 1-4-1989).

24. Ins. by Act 3 of 1989, sec. 68(a)(vi) (w.e.f. 1-4-1989).

25. Sub-sections (1A) omitted by Act 41 of 1975, sec. 91(ii). Earlier sub-section (1A) was inserted by Act 32 of 1971, sec. 33(b) (w.e.f. 1-4-1972).

26. Sub-sections (2A) and (2B) omitted by Act 41 of 1975, sec. 91(iii) (w.e.f. 1-4-1976). Earlier sub-sections (2A) and (2B) were inserted by Act 15 of 1965, sec. 20 (w.e.f. 1-4-1965) and sub-section (2A) was amended by Act 42 of 1970, sec. 61(a) (w.e.f. 1-4-1971).

27. Subs. by Act 3 of 1989, sec. 68(b), for sub-section (3) (w.e.f. 1-4-1989). Earlier sub-section (3) was amended by Act 42 of 1970, sec. 61(b) (w.e.f. 1-4-1971) and was substituted by Act 41 of 1975, sec. 91(iv) (w.e.f. 1-4-1976).

28. Subs. by Act 21 of 1998, sec. 66, for “Assistant Commissioner” (w.e.f. 1-10-1998).

29. Subs. by Act 21 of 1998, sec. 66, for “Deputy Commissioner” (w.e.f. 1-10-1998). Earlier the words “Deputy Commissioner” were substituted by Act 4 of 1988, sec. 127, for the words “Inspecting Commissioner or Inspecting Assistant Commissioner of Wealth-tax” (w.e.f. 1-4-1988).

30. Sub-section (3A) omitted by Act 3 of 1989, sec. 68(c) (w.e.f. 1-4-1989). Earlier sub-section (3A) was inserted by Act 41 of 1975, sec. 91(iv) (w.e.f. 1-4-1976).

31. Subs. by Act 4 of 1988, sec. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988).

32. Ins. by Act 29 of 1977, sec. 39 and Sch. V (w.e.f. 10-7-1978).

33. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

34. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

35. Subs. by Act 3 of 1989, sec. 68(d), for sub-section (5) (w.e.f. 1-4-1989). Earlier sub-section (5) was substituted by Act 42 of 1970, sec. 61(c) (w.e.f. 1-4-1971).

Section 18 A. Penalty for failure to answer questions, sign statements, furnish information, allow inspections, etc .

¹[18A. Penalty for failure to answer questions, sign statements, furnish information, allow inspections, etc . —(1) If any 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 wealth-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 wealth-tax authority may legally require him to sign; or

(c) to whom a summons is issued under sub-section (1) of section 37 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 38, 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 wealth-tax authority not lower in rank than a 2[Joint Director] or a 2[Joint Commissioner], by such wealth-tax authority;

(b) in any other case, by the Joint Director or the Joint Commissioner.

(4) No order under this section shall be passed by any wealth-tax authority referred to in sub-section (3) unless the person on whom the 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, “wealth-tax authority” includes a Director General, Director, ²[Joint Director], ³[Assistant Director or Deputy Director] and a 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 37.]

——————————————–

1. Sub. by Act 3 of 1989, sec. 69, for section 18A (w.e.f. 1-4-1989). Earlier section 18A was inserted by Act 41 of 1975, sec. 92 (w.e.f. 1-4-1976) and was amended by Act 46 of 1986, sec. 34 (w.e.f. 10-9-1986) and was substituted by Act 4 of 1988, sec. 142 (w.e.f. 1-4-1989).

1. Subs. by Act, 21 of 1998, sec. 66, for “Deputy Director” (w.e.f. 1-10-1998).

2. Subs. by Act, 21 of 1998 sec. 66, for “Assistant Director” (w.e.f. 1-10-1998).

Section 18 B. Power to reduce or waive penalty in certain cases.

¹[18B. Power to reduce or waive penalty in certain cases. —(1) Notwithstanding anything contained in this Act, the ²[ ³[***] Commissioner] may, in his discretion, whether on his own motion or otherwise,—

⁴[***]

(ii) reduce or waive the amount of penalty imposed or imposable on a person under clause (iii) of sub-section (1) of section 18, it he is satisfied that such person,—

⁵[***]

(b) in the case referred to in clause (ii), has, prior to the detection by the ⁶[Assessing Officer], of the concealment of particulars of assets or of the inaccuracy of particulars furnished in respect of any asset or debt in respect of which the penalty is imposable, voluntarily and in good faith made full and true disclosure of such particulars, and also has co-operated in any inquiry relating to the assessment of his net wealth and has either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year.

⁷[ Explanation 1 ].—For the purposes of this sub-section, a person shall be deemed to have made full and true disclosure of the particulars of his assets or debts in any case where the excess of net wealth assessed over the net wealth returned is of such a nature as not to attract the provisions of clause (c) of sub-section (1) of section 18.

⁸[***]

(2) Notwithstanding anything contained in sub-section (1), if in a case falling under clause (c) of sub-section (1) of section 18, the net wealth in respect of which the peanlty is imposed or imposable for the relevant assessment year, or, where such disclosure relates to more than one assessment year, the net wealth for any one of the relevant assessment years, exceeds five hundred thousand rupees, no order reducing or waiving the penalty under sub-section (1) shall be made by ⁹[the Commissioner except with the previous approval of the Chief Commissioner, or Director-General, as the case may be].

(3) Where an order has been made under sub-section (1) in favour of any person, whether such order relates to one or more assessment years, he shall not be entitled to any relief under this section in relation to any other assessment year at any time after the making of such order:

¹⁰[Provided that where an order has been made in favour of any person under sub-section (1) on or before the 24th day of July, 1991, such person shall be entitled to further relief only once in relation to other assessment year or years if he makes an application to the wealth-tax authority referred to in sub-section (4) at any time before the 1st day of April, 1992].

(4) Without prejudice to the powers conferred on him by any other provision of this Act, the ¹¹[ ¹² [***] Commissioner] may, on an application made in this behalf by an assessee, and after recording his reasons for so doing, reduce or waive the amount of any penalty payable by the assessee under this Act or stay or compound any proceeding for the recovery of any such amount, if he is satisfied that—

(i) to do otherwise would cause genuine hardship to the assessee, having regard to the circumstances of the case, and

(ii) the assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him.

(5) Every order made under this section shall be final and shall not be called into question by any court or any other authority.]

¹³[(6) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1989, shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.]

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1. Ins. by Act 41 of 1975, sec. 92 (w.e.f. 1-10-1975).

2. The words “Chief Commissioner or Commissioner” subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

3. The words “Chief Commissioner or“ omitted by Act 38 of 1993, sec. 40(a) (w.e.f. 1-6-1993).

4. Clause (i) omitted by Act 3 of 1989, sec. 70(a)(i) (w.e.f. 1-4-1989).

5 Clause (a) omitted by Act 3 of 1989, sec. 70(a) (ii) (w.e.f. 1-4-1989).

6. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

7. Explanation renumbered as Explanation 1 by Act 67 of 1984, sec. 58(a) (w.e.f. 1-10-1984).

8. Explanation 2 omitted by Act 32 of 1985, sec. 38 (w.e.f. 24-5-1985). Earlier Explanation 2 was inserted by Act 67 of 1984, sec. 58(b) (w.e.f. 1-10-1984).

9. Subs. by Act 38 of 1993, sec. 40(b), for “The Chief Commissioner or Commissioner, except with the previous approval of the Board” (w.e.f. 1-6-1993).

10. Ins. by Act 49 of 1991, sec. 76 (w.e.f. 27-9-1991).

11. The words “Chief Commissioner or Commissioner” subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

12. The words “Chief Commissioner or” omitted by Act 38 of 1993, sec. 40(c) (w.e.f. 1-6-1993).

13. Ins. by Act 3 of 1989, sec. 70(b) (w.e.f. 1-4-1989).

Chapter IV A – Special Provision for Avoiding repetitive appeals

Section 18 C. Procedure when assessee claims identical question of law is pending before Hight Court or Supreme Court.

¹[18C. Procedure when assessee claims identical question of law is pending before Hight Court or Supreme Court. —(1) Notwithstanding anything contained in this Act, where an assessee claims that any question of law arising in his case for an assessment year which is pending before the ²[ Assessing Officer] or any appellate authority (such case being hereafter in this section referred to as the relevant case) is identical with a question of law arising in his case for another assessment year which is pending before the Hight Court or the Supreme Court on a reference under section 27 ³[or in appeal under section 27A before the High Court] or in appeal before the Supreme Court under section 29 (such case being hereafter in this section referred to as the other case), he may furnish to the ³[Assessing Officer] or the appellate authority, as the case may be, a declaration in the prescribed form and verified in the prescribed manner, that if the ²[Assessing Officer] or the appellate authority, as the case may be, agrees to apply to the relevant case the final decision on the question of law in the other case, he shall not raise such question of law in the relevant case in appeal before any appellate authority or ⁴[in appeal before the High Court under section 27A or the Supreme Court under section 29].

(2) Where a declaration under sub-section (1) is furnished to any appellate authority, the appellate authority shall call for a report from the ²[Assessing Officer] on the correctness of the claim made by the assessee and, where the ²[Assessing Officer] makes a request to the appellate authority to give him an opportunity of being heard in the matter, the appellate authority shall allow him such opportunity.

(3) The ²[Assessing Officer] or the appellate authority, as the case may be, may, by order in writing,—

(i) admit the claim of the assessee if he or it is satisfied that the question of law arising in the relevant case is identical with the question of law in the other case; or

(ii) reject the claim if he or it is not so satisfied.

(4) Where a claim is admitted under sub-section (3)—

(a) the ²[Assessing Officer] or, as the case may be, the appellate authority may make an order disposing of the relevant case without awaiting the final decision on the question of law in the other case; and

(b) the assessee shall not be entitled to raise, in relation to the relevant case, such question of law in appeal before any appellate authority
or ⁵[in appeal before the High Court under section 27A or the Supreme Court under section 29].

(5) Where the decision on the question of law in the other case, becomes final, it shall be applied to the relevant case and the ²[Assessing Officer] or the appellate authority, as the case may be, shall, if necessary, amend the order referred to in clause (a) of sub-section (4) conformably to such decision.

(6) An order under sub-section (3) shall be final and shall not be called in question in any proceeding by way of appeal, reference or revision under this Act.

Explanation .—In this section,—(a) “appellate authority” means the ⁶[Deputy Commissioner (Appeals)], or the Commissioner (Appeals) or the Appellate Tribunal;

(b) “case”, in relation to an assessee, means any proceeding under this Act for the assessment of the net wealth of the assessee or for the imposition of any penalty on him.]

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1. Chapter IV (containing section 18C) ins. by Act 67 of 1984, sec. 59 (w.e.f. 1-10-1984).

2. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

3. Ins. by Act 20 of 2002, sec. 111(a)(i) (w.e.f 1-6-2002).

4. Subs. by Act 20 of 2002, sec. 111(a)(ii), for certain words (w.e.f. 1-6-2002).

5. Subs. by Act 20 of 2002, sec. 111(b), for certain words (w.e.f. 1-6-2002).

6. Subs. by Act 4 of 1988, sec. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988).

Chapter IV B – Charge or Additional Wealth-Tax in certain cases

Section 18 D. Additional wealth-tax.

¹[18D. Additional wealth-tax. —[ Rep. by the Direct Tax Laws (Amendment) Act, 1989 (3 of 1989), sec. 95(p) (w.r.e.f. 1-4-1988). ]

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1. Chapter IVB relating to “CHARGE OF ADDITIONAL WEALTH-TAX IN CERTAIN CASES” (containing section 18D) omitted by Act 3 of 1989, sec. 95(p) (w.e.f. 1-4-1989). Earlier Chapter IVB (containing section 18D) was inserted by Act 4 or 1988, sec. 143 (w.e.f. 1-4-1989).

Chapter V – Liability to Assessment in Special cases

Section 19. Tax of deceased person payable by legal representative.

(1) Where a person dies, his executor, administrator or other legal representative shall be liable to pay out of the estate of the deceased person, to the extent to which the estate is capable of meeting the charge, the wealth-tax assessed as payable by such person, or any sum, which would have been payable by him under this Act if he had not died.

(2) Where a person dies without having furnished a return under the provisions of section 14 or after having furnished a return which the ¹[Assessing Officer] has reason to believe to be incorrect or incomplete, the ¹[Assessing Officer] may make an assessment of the net wealth of such person and determine the wealth-tax payable by the person on the basis of such assessment, and for this purpose may, by the issue of the appropriate notice which would have had to be served upon the deceased person if he had survived, require from the executor, administrator or other legal representative of the deceased person any accounts, documents or other evidence which might under the provisions of section 16 have been required from the deceased person.

(3) The provisions of sections 14, 15 and 17 shall apply to an executor, administrator or other legal representative as they apply to any person referred to in those sections.

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1. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

Section 19 A. Assessment in the case of executors.

¹[19A. Assessment in the case of executors. —(1) Subject to as hereinafter provided, the net wealth of the estate of a deceased person shall be chargeable to tax in the hands of the executor or executors.

(2) The executor or executors shall for the purposes of this Act be treated as an individual.

(3) The status of the executor or executors shall for the purposes of this Act as regards residence and citizenship be the same as that of the deceased on the valuation date immediately preceding his death.

(4) The assessment of an executor under this section shall be made separately from any assessment that may be made on him in respect of his own net wealth or on the net wealth of the deceased under section 19.

(5) Separate assessments shall be made under this section in respect of the net wealth as on each valuation date as is included in the period from the date of the death of the deceased to the date of complete distribution to the beneficiaries of the estate according to their several interests.

(6) In computing the net wealth on any valuation date under this section, any assets of the estate distributed to, or applied to the benefit of, any specific legatee of the estate prior to that valuation date shall be excluded, but the assets so excluded shall, to the extent such assets are held by the legatee on any valuation date, be included in the net wealth of such specific legatee on the valuation date.

Explanation .—In this section, “executor” includes an administrator or other person administering the estate of a deceased person.]

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1. Ins. by Act 46 of 1964, sec. 19 (w.e.f. 1-4-1965).

Section 20. Assessment after partition of a Hindu Undivided Family.

20. Assessment after partition of a Hindu Undivided Family. —(1) Where at the time of making an assessment, it is brought to the notice of the ¹[Assessing Officer] that a partition has taken place among the members of a Hindu undivided family, and the ¹[Assessing Officer], after inquiry, is satisfied that the joint family property has been partitioned as a whole among the various members or group of members in definite portions, he shall record an order to that effect and shall make assessment on the net wealth of the undivided family as such for the assessment year or years, including the year relevant to the previous year in which the partition has taken place, if the partition has taken place on the last day of the previous year and each member or group of members shall be liable jointly and severally for the tax assessed on the net wealth of the joint family as such.

(2) Where the ¹[Assessing Officer] is not so satisfied, he may, by order, declare that such family shall be deemed for the purposes of this Act to continue to be a Hindu undivided family liable to be assessed as such.

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1. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

Section 20 A. Assessment after partial partition of a Hindu Undivided Family.

¹[20A. Assessment after partial partition of a Hindu Undivided Family. —Where a partial partition has taken place after the 31st day of December, 1978, among the members of a Hindu undivided family hitherto assessed as undivided,—

(a) such family shall continue to be liable to be assessed under this Act as if no such partial partition had taken place;

(b) each member or group of members of such family immediately before such partial partition and the family shall be jointly and severally liable for any tax, penalty, interest, fine or other sum payable under this Act by the family in respect of any period, whether before or after such partial partition,;

(c) the several liability of any member or group of members aforesaid shall be computed according to the portion of the joint family property allotted to him or it at such partial partition, and the provisions of this Act shall apply accordingly.

Explanation .—For the purposes of this section, “partial partition” shall have the meaning assigned to it in clause (b) of the Explanation to section 171 of the Income-tax Act.]

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1. Ins. by Act 44 of 1980, sec. 39 (w.e.f. 1-4-1980).

Section 21. Assessment when assets are held by courts of wards, administrators-general, etc .

(1) ¹[Subject to the provisions of sub-section (1A), in the case of assets chargeable to tax under this Act], which are held by a court of wards or an administrator-general or an official trustee or any receiver or manager or any other person, by whatever name called, appointed under any order of a court to manage property on behalf of another, or any trust appointed under a trust declared by a duly executed instrument in writing, whether testamentary or otherwise (including a trustee under a valid deed of wakf), the wealth-tax shall be levied upon and recoverable from the court of wards, administrator-general, official trustee, receiver, manager or trustee, as the case may be, in the like manner and to the same extent as it would be leviable upon and recoverable from the person ²[on whose behalf or for whose benefit] the assets are held, and the provisions of this Act shall apply accordingly.

³[ Explanation. —A trust which is not declared by a duly executed instrument in writing (including a valid deed of wakf) shall be deemed, for the purposes of this sub-section, to be a trust declared by a duly executed instrument in writing if a statement in writing, signed by the trustee or trustees, setting out the purpose or purposes of the trust, particulars as to the trustee or trustees, the beneficiary or beneficiaries and the trust property, is forwarded to the ⁴[Assessing Officer]—

(i) where the trust has been declared before the 1st day of June, 1981, within a period of three months from that day; and

(ii) in any other case, within three months from the date of declaration of the trust.]

⁵[(1A) Where the value or aggregate value of the interest or interests of the person or persons on whose behalf or for whose benefit such assets are held falls short of the value of any such assets, then, in addition to the wealth-tax leviable and recoverable under sub-section (1), the wealth-tax shall be levied upon and recovered from the court of wards, administrator-general, official trustee, receiver, manager or other person or trustee aforesaid in respect of the value of such assets, to the extent it exceeds the value or aggregate value of such interest value were the net wealth of an individual who is a citizen of India and resident in India for the purposes of this Act, and—

(i) at the rates specified in Part I of Schedule I; or

(ii) at the rate of three per cent., whichever course would be more beneficial to the revenue.]

(2) Nothing contained in sub-section (1) shall prevent either the direct assessment of the person ⁶[on whose behalf or for whose benefit] the assets above referred to are held, or the recovery from such person of the tax payable in respect of such assets.

(3) Where the guardian or trustee of any person being a minor, lunatic or idiot ⁷[***] holds any assets 8[on behalf or for the benefit of such beneficiary,] the tax under this Act shall be levied upon and recoverable from such guardian or trustee, as the case may be, in the like manner and to the same extent as it would be leviable upon and recoverable from any such beneficiary if of full age, of sound mind and in direct ownership of such assets.

⁹ [(4) ¹⁰[Notwithstanding anything contained in the foregoing provisions of this section], where the shares of the persons on whose behalf or for whose benefit any such assets are held are indeterminate or unknown, the wealth-tax shall be levied upon and recovered from the court of wards, administrator-general, official trustee, receiver, manager, or other person aforesaid ¹¹[, as the case may be, in the like manner and to the same extent as it would be leviable upon and recoverable from an individual who is a citizen of India and resident in India] for the purposes of this Act, and—

(a) at the rates specified in Part I of ¹² [Schedule I] ¹³[***] or

(b) at the rate of 14[three per cent.], whichever course would be more beneficial to the revenue:

Provided that in a case where—

(i) such assets are held ¹⁵ [under a trust declared by any person by will and such trust is the only trust so declared by him]; or

¹⁶[(ia) none of the beneficiaries has net wealth exceeding the amount not chargeable to wealth-tax in the case of an individual who is a citizen of India and resident in India for the purposes of this Act or is a beneficiary under any other trust; or]

(ii) such assets are held under a trust created before the 1st day of March, 1970, by a non-testamentary instrument and the ¹⁷[Assessing Officer] is satisfied, having regard to all the circumstances existing at the relevant time, that the trust was created bona fide exclusively for the benefit of the relatives of the settlor or where the settlor is a Hindu undivided family, exclusively for the benefit of the members of such family, in circumstances where such relatives or members were mainly dependent on the settlor for their support and maintenance; or

(iii) such assets are held by the trustees on behalf of a provident fund, superannuation fund, gratuity fund, pension fund or any other fund created bona fide by a person carrying on a business or profession exclusively for the benefit of persons employed in such business or profession,

wealth-tax shall be charged at the rates specified in Part I of ¹⁸[Schedule I ¹⁹[***]]

²⁰[ Explanation 1.—For the purposes of this sub-section, the shares of the persons on whose behalf or for whose benefit any such assets are held shall be deemed to be indeterminate or unknown unless the shares of the persons on whose behalf or for whose benefit such assets are held on the relevant valuation date are expressly stated in the order of the court or instrument of trust or deed of wakf, as the case may be, and are ascertainable as such on the date of such order, instrument or deed.]

²¹[ ²²[ Explanation 2 ]—Notwithstanding anything contained in section 5, in computing the net wealth ²³[for the purposes of this sub-section or sub-section (4A) in any case, not being a case referred to in the proviso to this sub-section], any assets referred to in clauses (xv), (xvi), (xxii), (xxiii), (xxiv), (xxv), (xxvi), (xxvii), (xxviii) and (xxix), of sub-section (1) of that section shall not be excluded.]

²⁴[(4A.) Notwithstanding anything contained in this section, where the assets chargeable to tax under this Act are held by a trustee under an oral trust, the wealth-tax shall be levied upon and recovered from such trustee in the like manner and to the same extent as it would be leviable upon and recoverable from an individual who is a citizen of India and resident in India for the purposes of this Act, and—

(a) at the rates specified in Part I of Schedule I; or

(b) at the rate of three per cent.,

whichever course would be more beneficial to the revenue.

Explanation. —For the purposes of this sub-section, “oral trust” means a trust which is not declared by a duly executed instrument in writing (including a valid deed of wakf) and which is not deemed under the Explanation to sub-section (1) to be a trust declared by a duly executed instrument in writing.]

²⁵[(5) Any person who pays any sum by virtue of the provisions of this section in respect of the net wealth of any beneficiary shall be entitled to recover the sum so paid from such beneficiary, and may retain out of any assets that he may hold on behalf or for the benefit of such beneficiary, an amount equal to the sum so paid.

Explanation. —In this section, the term “beneficiary” means any person including a minor, lunatic or idiot on whose behalf or for whose benefit assets are held by any other person.]

²⁶[(6) Nothing contained in this section shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1993, or any subsequent assessment year.]

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1. Subs. by Act 44 of 1980, sec. 40(a), for “In the case of assets chargeable to tax under this Act” (w.e.f. 1-4-1980).

2. Subs. by Act 46 of 1964, sec. 20(a), for “on whose behalf” (w.e.f. 1-4-1965).

3. Ins. by Act 16 of 1981, sec. 26(a) (w.r.e.f. 1-4-1981).

4. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

5. Ins. by Act 44 of 1980, sec. 40(b) (w.e.f. 1-4-1980).

6. Subs. by Act 46 of 1964, sec. 20(a), for “on whose behalf” (w.e.f. 1-4-1965).

7. The words ‘(all of which persons are hereinafter in this sub-section included in the term “beneficiary”)’ omitted by Act 46 of 1964, sec. 20(b)(i) (w.e.f. 1-4-1965).

8. Subs. by Act 46 of 1964, sec. 20(b)(ii), for “on behalf of such beneficiary” (w.e.f. 1-4-1965).

9. Subs. by Act 19 of 1970, sec. 26(e), for sub-section (4) (w.e.f. 1-4-1971). Earlier sub-section (4) was amended by Act 46 of 1964, sec. 20(c) (w.e.f. 1-4-1965) and was substituted by Act 19 of 1970, sec. 26(e) (w.e.f. 1-4-1971).

10. Subs. by Act 16 of 1981, sec. 26(b)(i), for “Notwithstanding anything contained in this section” (w.r.e.f. 1-4-1981).

11. Subs. by Act 44 of 1980, sec. 40(c)(i), for certain words (w.e.f. 1-4-1980).

12. Subs. by Act 66 of 1976, sec. 27(4), for “the Schedule” (w.e.f. 1-4-1977).

13. The words “in the case of an individual” omitted by Act 32 of 1971, sec. 34(a) (w.e.f. 1-4-1972).

14. Subs. by Act 44 of 1980, sec. 40(c)(iv), for “one and one-half per cent.” (w.e.f. 1-4-1980).

15. Subs. by Act 44 of 1980, sec. 40(c)(iii)(I), for “under a trust declared by will” (w.e.f. 1-4-1980).

16. Ins. by Act 44 of 1980, sec. 40(c)(ii)(2) (w.e.f. 1-4-1980).

17. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 18. Subs. by Act 66 of 1976, sec. 27(4), for “the Schedule” (w.e.f. 1-4-1977).

19. The words “in the case of an individual” omitted by Act 32 of 1971, sec. 34(a) (w.e.f. 1-4-1972).

20. Ins. by Act 44 of 1980, sec. 40(c)(iv) (w.e.f. 1-4-1980).

21. Ins. by Act 32 of 1971, sec. 34(b) (w.e.f. 1-4-1972).

22. Explanation renumbered as Explanation 2 by Act 44 of 1980, sec. 40(c)(iv) (w.e.f. 1-4-1980).

23. Subs. by Act 16 of 1981, sec. 26(b)(ii), for certain words (w.r.e.f. 1-4-1981).

24. Ins. by Act 16 of 1981, sec. 26(c)(w.r.e.f. 1-4-1981).

25. Ins. by Act 46 of 1964, sec. 20(d) (w.e.f. 1-4-1965).

26. Ins. by Act 18 of 1992, sec. 94 (w.e.f. 1-4-1993).

Chapter V A – Settlement of Cases

Section 21 A. Assessment in cases of diversion of property, or of income from property, held under trust for public charitable or religious purposes.

¹[21A. Assessment in cases of diversion of property, or of income from property, held under trust for public charitable or religious purposes. — ²[ ³[Notwithstanding anything contained in clause (1) of section 5, where any property is held] under trust for any public purpose of a charitable or religious nature in India, and

⁴[(i) any part of such property or any income of such trust [whether derived from such property or from voluntary contributions referred to in sub-clause (iia) of clause (24) of section 2 of the Income-tax Act], being a trust created on or after the 1st day of April, 1962 enures, directly or indirectly, for the benefit of ⁵[any interested person], or

(ii) any part of the income of the trust [whether derived from such property or from voluntary contributions referred to in sub-clause (iia) of clause (24) of section 2 of the Income-tax Act], being a trust created on or after the 1st day of April, 1962 enures, directly or indirectly, for the benefit of ⁶[any interested person], ⁷[***] wealth-tax shall be leviable upon, and recoverable from the trustee or manager (by whatever name called) in the like manner and to the same extent as if the property were held by an individual who is a citizen of India and resident in India for the purposes of this Act,⁸[***]]:

Provided that in the case of a trust created before the 1st day of April, 1962, the provisions of clause (i) shall not apply to any use or application, whether directly or indirectly, of any part of such property or any income of such trust for the benefit of 9[any interested person] if such use or application is by way of compliance with a mandatory term of the trust:

¹⁰[***]

¹¹ [ ¹²[Provided further that],—

¹³[(a) in the case of any trust or institution of national importance notified under clause (d) of sub-section (1) of section 80F of the Income-tax Act,—

(i) the provisions of clause (i) and clause (ii) shall not apply; and

(ii) the other provisions of this section shall apply with the modification that the words “at the maximum marginal rate”, the words and figures “at the rates specified in ¹⁴[sub-section (2) of section 3];

(b) in the case of any institution, fund or trust referred to in clause (22) or clause (22A) or clause (23B) or clause (23C) of section 10 of the Income-tax Act, the provisions of ¹⁵[clauses (i) to (ii)] shall not apply.]

Explanation.— For the purposes of this section,—

¹⁶[(a) the expression “interested person” shall have the meaning assigned to if in clause (a) of Explanation 1 below sub-section (4) of section 80F of the Income-tax Act;

(ab) any part of the property or income of a trust shall be deemed to have been used or applied for the benefit of any interested person in every case in which it can be so deemed to have been used or applied within the meaning of clause (c) of sub-section (3) of section 80F of the Income-tax Act at any time during the period of twelve months ending with the relevant valuation date;]]

¹⁷[***]

(b) “trust” includes any other legal obligation.]

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1. Ins. by Act 16 of 1972, sec. 46 (w.e.f. 1-4-1973).

2. Subs. by Act 18 of 1992, sec. 95, for “Notwithstanding anything contained in clause (i) of sub-section (1) of section 5, where any property is held” (w.e.f. 1-4-1993)

3. Subs. by Act 33 of 1996, sec. 58, for “Where any property is held” (w.e.f 1-4-1993).

4. Subs. by Act 21 of 1984, sec. 34(b)(1), for certain words (w.e.f. 1-4-1985).

5. Subs. by Act 4 of 1988, sec. 144(a), for “any person referred to in sub-section (3) of section 13 of the Income-tax Act” (w.e.f. 1-4-1989).

6. Subs. by Act 4 of 1988, sec. 144(b), for “any person referred to in sub-section (3) of section 13 of the Income Tax Act, or” (w.e.f. 1-4-1989).

7. Clause (iii) omitted by Act 4 of 1988, sec. 144(c) (w.e.f. 1-4-1989).

8. Certain words omitted by Act 18 of 1992, sec. 95(b) (w.e.f. 1-4-1993).

9. Subs. by Act 4 of 1988, sec. 144(d), for “any person referred to in sub-section (3) of section 13 of the Income-tax Act” (w.e.f. 1-4-1989).

10. Second Proviso omitted by Act 18 of 1992, sec. 95(c) (w.e.f. 1-4-1993). Earlier second proviso was amended by Act 4 of 1988, sec. 144(e) (w.e.f. 1-4-1989).

11. Ins. by Act 21 of 1984, sec. 34(b)(2) (w.e.f. 1-4-1985).

12. Subs. by Act 18 of 1992, sec. 95(d)(i), for “Provided also that” (w.e.f. 1-4-1993). Earlier this proviso was amended by Act 4 of 1988, sec. 144(f) (w.e.f. 1-4-1989).

13. Subs. by Act 4 of 1988, sec. 144(f)(i), for clause (a) (w.e.f. 1-4-1989).

14. Subs. by Act 18 of 1992, sec. 95(d)(ii), for “Part I of Schedule I in the case of an individual” (w.e.f. 1-4-1993).

15. Subs. by Act 4 of 1988, sec. 144(f)(ii), for “clauses (i) to (ii)” (w.e.f. 1-4-1989).

16. Subs. by Act 4 of 1988, sec. 144(g), for clauses (a) and (aa) (w.e.f. 1-4-1989).

17. Clause (aa) omitted by Act 18 of 1992, sec. 95(e) (w.e.f. 1-4-1993). Earlier clause (aa) was inserted by Act 21 of 1984, sec. 34(b)(3) (w.e.f. 1-4-1985).

Section 21 AA. Assessment when assets are held by certain associations of persons.

¹[21AA. Assessment when assets are held by certain associations of persons. —(1) Where assets chargeable to tax under this Act are held by an association of persons, other than a company or co-operative society ²[or society registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India], and the individual shares of the members of the said association in the income or assets or both of the said association on the date of its formation or at any time thereafter are indeterminate or unknown, the wealth-tax shall be levied upon and recovered from such association in the like manner and to the same extent as it would be leviable upon and recoverable from an individual who is a citizen of India and resident in India for the ³[purposes of this Act ⁴[***]].

(2) Where any business or profession carried on by an association of persons referred to in sub-section (1) has been discontinued or where such association of persons is dissolved, the ⁵[Assessing Officer] shall make an assessment of the net wealth of the association of persons as if no such discontinuance or dissolution had taken place and all the provisions of this Act, including the provisions relating to the levy of penalty or any other sum chargeable under any provision of this Act, so far as may be, shall apply to such assessment.

(3) Without prejudice to the generality of the provisions of sub-section (2), if the ⁵[Assessing Officer] or the ⁶[Deputy Commissioner (Appeals)] or the Commissioner (Appeals) in the course of any proceedings under this Act in respect of any such association of persons as is referred to in sub-section (1) is satisfied that the association of persons was guilty of any of the acts specified in section 18 or section 18A, he may impose or direct the imposition of a penalty in accordance with the provisions of the said sections.

(4) Every person who was at the time of such discontinuance or dissolution a member of the association of persons, and the legal representative of any such person who is deceased, shall be jointly and severally liable for the amount of tax, penalty or other sum payable, and all the provisions of this Act, so far as may be, shall apply to any such assessment or imposition of penalty or other sum.

(5) Where such discontinuance or dissolution takes place after any proceedings in respect of an assessment year have commenced, the proceedings may be continued against the persons referred to in sub-section (4) from the stage at which the proceedings stood at the time of such discontinuance or dissolution, and all the provisions of this Act shall, so far as may be, apply accordingly.

⁷ [***]]

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1. Ins. by Act 16 of 1981, sec. 27 (w.r.e.f. 1-4-1981).

2. Ins. by Act 13 of 1989, sec. 29 (w.r.e.f. 1-4-1989).

3. Subs. by Act 4 of 1988, sec. 145, for certain words (w.e.f. 1-4-1989).

4. The words “, and at the maximum marginal rate” omitted by Act 18 of 1992, sec. 96(a) (w.e.f. 1-4-1993).

5. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

6. Subs. by Act 4 of 1988, sec. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988).

7. Explanation omitted by Act 18 of 1992, sec. 96(6) (w.e.f. 1-4-1993). Earlier Explanation was inserted by Act 16 of 1981, sec. 28 (w.e.f. 1-4-1981).

Section 22. Assessment of persons residing outside India.

¹22. Assessment of persons residing outside India. —(1) Where the person liable to tax under this Act resides outside India, the tax may be levied upon and recovered from his agent, and the agent shall be deemed to be, for all the purposes of this Act, the assessee in respect of such tax.

(2) Any person employed by or on behalf of a person referred to in sub-section (1) or through whom such person is in the receipt of any income, profits or gains, or who is in possession or has custody of any asset of such person and upon whom the ¹[Assessing Officer] has caused a notice to be served of his intention of treating him as the agent of such person shall, for the pusposes of sub-section (1), be deemed to be the agent of such person.

²[***]

³[(3) No person shall be deemed to be the agent of any person residing outside India unless he has had an opportunity of being heard by the ¹[Assessing Officer] as to his being treated as such.

(4) Any agent, who, as such, pays any sum under this Act, shall be entitled to recover the sum so paid from the person on whose behalf it is paid or to retain out of any moneys that may be in his possession or may come to him in his capacity as such agent, an amount equal to the sum so paid.

(5) Any agent, or any person who apprehends that he may be assessed as an agent, may retain out of money payable by him to the person residing outside India on whose behalf he is liable to pay tax (hereinafter in this section referred to as the principal), a sum equal to his estimated liability under this section, and in the event of any disagreement between the principal and such agent or person, as to the amount to be so retained, such agent or person may secure from the 1[Assessing Officer] a certificate stating the amount to be so retained pending final settlement of the liability, and the certificate so obtained shall be his warrant for retaining that amount.

(6) The amount recoverable from such agent or person at the time of final settlement shall not exceed the amount specified in such certificate, except to the extent to which such agent or person may at such time have in his hands additional assets of the principal.

(7) Notwithstanding anything contained in this section, any arrears of tax due from a person residing outside India may be recovered also in accordance with the provisions of this Act from any assets of such person which are or may at any time come within India.]

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1. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

2. Proviso omitted by Act 46 of 1964, sec. 21(a) (w.e.f. 1-4-1965).

3. Ins. by Act 46 of 1964, sec. 21(b) (w.e.f. 1-4-1965).

Section 22 A Definitions.

¹[² [22A Definitions. —In this Chapter, unless the context otherwise requires,—

(a) “Bench” means a Bench of the Settlement Commission;

³[(b) “case” means any proceeding for assessment under this Act, of any person in respect of any assessment year or assessment years which may be pending before an Assessing Officer on the date on which an application under sub-section (1) of section 22C is made:

Provided that—

(i) a proceeding for assessment or reassessment under section 17;

(ii) a proceeding for making fresh assessment in pursuance of an order under section 23A or section 24 or section 25, setting aside or cancelling an assessment;

(iii) a proceeding for assessment or reassessment which may be initiated on the basis of a search under section 37A or requisition under section 37B, shall not be a proceeding for assessment for the purposes of this clause.

Explanation. —For the purposes of this clause—

(i) a proceeding for assessment or reassessment referred to in clause (i) of the proviso shall, in case where a notice under section 17 is issued but not on the basis of search under section 37A or requisition under section 37B, be deemed to have commenced from the date on which a notice under section 17 is issued;

(ii) a proceeding for making fresh assessment referred to in clause (ii) of the proviso shall be deemed to have commenced from the date on which the order under section 23A or section 24 or section 25, setting aside or cancelling an assessment was passed;

(iii) a proceeding for assessment or reassessment referred to in clause (iii) of the proviso shall be deemed to have commenced on the date of initiation of the search under section 37A or requisition under section 37B;

(iv) a proceeding for assessment for an assessment year, other than the proceeding of assessment or reassessment referred to in clause (i) or clause (ii) or clause (iii) of the proviso, shall be deemed to have commenced from the 1st day of the assessment year and concluded on the date on which the assessment is made;]

(c) “Chairman” means the Chairman of the Settlement Commission

(d) “Member” means a Member of the Settlement Commission, and includes the Chairman and a Vice-Chairman;

(e) “Settlement Commission” means the Income-tax Settlement Commission constituted under section 245B of the Income-tax Act;

(f) “Vice-Chairman” means a Vice-Chairman of the Settlement Commission ⁴[and includes a Member who is senior amongst the Members of the Bench];

(g) “Wealth-tax authority” means an income-tax authority specified in section 116 of the Income-tax Act who is treated as a Wealth-tax authority under section 8.] ]

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1. Chapter VA (Containing sections 22A to 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Subs. by Act 11 of 1987, sec. 77, for section 22A (w.e.f. 1-6-1987). Earlier section 22A was amended by Act 67 of 1984, sec. 60 (w.e.f. 1-10-1984).

3. Subs. by Finance Act, 2007, sec. 84(a), for clause (b) (w.e.f. 1-6-2007). Clause (b), before substitution, stood as under: ‘(b) “case” means any proceeding under this Act for the assessment or reassessment of any person in respect of any year or years, or by way of appeal or revision in connection with such assessment or reassessment, which may be pending before any wealth-tax authority on the date on which an application under sub-section (1) of section 22C is made: Provided that where any appeal or application for revision has been preferred after the expiry of the period specified for the filing of such appeal or application for revision under this Act and which has not been admitted, such appeal or revision shall not be deemed to be a proceeding pending within the meaning of this clause;’.

4. Ins. by Finance Act, 2007, sec. 84(b) (w.e.f. 1-6-2007).

Section 22 B. Wealth-tax Settlement Commission.

¹[22B. Wealth-tax Settlement Commission. —(1) The Central Government shall constitute a Commission to be called the Wealth-tax Settlement Commission ²[***] for the settlement of cases under this Chapter.

(2) The Settlement Commission shall consist of a Chairman ³[and as many Vice-Chairmen and other members as the Central Government thinks fit] and shall function within the Department of the Central Government dealing with direct taxes.

⁴[***]

(3) The Chairman ⁵ [, Vice-Chairmen] and other members of the Settlement Commission shall be appointed by the Central Government from amongst persons of integrity and outstanding ability, having special knowledge of, and experience in, problems relating to direct taxes and business accounts:

Provided that, where a member of the Board is appointed as the Chairman ⁶[, Vice-Chairman] or as a member of the Settlement Commission, he shall cease to be a member of the Board.

⁷[***]].

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1. Chapter VA (Containing sections 22A to 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. The words “(hereafter in this Chapter referred to as “the Settlement Commissioner”) omitted by Act 11 of 1987, sec. 78 (w.e.f. 1-6-1987).

3. Subs. by Act 46 of 1986, sec. 35(a), for “and two other members” (w.e.f. 10-9-1986).

4. Sub-section (2A) omitted by Act 46 of 1986, sec. 35(b) (w.e.f. 10-9-1986). Earlier sub-section (2A) was inserted by Act 14 of 1982, sec. 36 (w.r.e.f. 1-4-1982).

5. Ins. by Act 46 of 1986, sec. 35(c)(i) (w.e.f. 10-9-1986).

6. Ins. by Act 46 of 1986, sec. 35(c)(ii) (w.e.f. 10-9-1986).

7. Second proviso omitted by Act 46 of 1986, sec. 35(c)(iii) (w.e.f. l0-9-1986).

Section 22 BA. Jurisdiction and powers of Settlement Commission .

¹[²[22BA. Jurisdiction and powers of Settlement Commission .—(1) Subject to the other provisions of this Chapter, the jurisdiction, powers and authority of the Settlement Commission may be exercised by Benches thereof.

(2) Subject to the other provisions of this section, a Bench shall be presided over by the Chairman or a Vice-Chairman and shall consist of two other Members.

(3) The Bench for which the Chairman is the Presiding Officer shall be the principal Bench and the other Benches shall be known as additional Benches.

(4) Notwithstanding anything contained in sub-sections (1) and (2), the Chairman may authorise the Vice-Chairman or other Member appointed to one Bench to discharge also the functions of the Vice-Chairman or, as the case may be, other Member of another Bench.

(5) Notwithstanding anything contained in the foregoing provisions of this section, and subject to any rules that may be made in this behalf, when one of the persons constituting a Bench (whether such person be the Presiding Officer or other Member of the Bench) is unable to discharge his functions owing to absence, illness or any other cause or in the event of the occurrence of any vacancy either in the office of the Presiding Officer or in the office of one or the other Members of the Bench, the remaining two persons may function as the Bench and if the Presiding Officer of the Bench is not one of the remaining two.persons, the senior among the remaining persons shall act as the Presiding Officer of the Bench:

Provided that if at any stage of the hearing of any case or matter, it appears to the Presiding Officer that the case or matter is of such a nature that it ought to be heard by a Bench consisting of three Members, the case or matter may be referred by the Presiding Officer of such Bench to the Chairman for transfer to such Bench as the Chairman may deem fit.

³ [(5A) Notwithstanding anything contained in the foregoing provisions of this section the Chairman may, for the disposal of any particular case, constitute a Special Bench consisting of more than three Members.]

(6) Subject to the other provisions of this Chapter, the places at which the principal Bench and the additional Benches shall ordinarily sit, shall be such as the Central Government may, by notification in the Official Gazette, specify ⁴[and the Special Bench shall sit at a place to be fixed by the Chairman]].

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1. Chapter VA (Containing sections 22A to 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Ins. by Act 11 of 1987, sec. 79 (w.e.f 1-6-1987).

3. Ins. by Act 49 of 1991, sec. 77(a) (w.e.f. 1-10-1991).

4. Ins. by Act 49 of 1991, sec. 77(b) (w.e.f. 1-10-1991).

Section 22 BB. Vice-Chairman to act as Chairman or to discharge his functions in certain circumstances .

¹[²[22BB. Vice-Chairman to act as Chairman or to discharge his functions in certain circumstances .—(1) In the event of the occurrence of any vacancy in the office of the Chairman by reason of his death, resignation or otherwise, the Vice-Chairman or, as the case may be, such one of the Vice-Chairmen as the Central Government may, by notification in the Official Gazette, authorise in this behalf, shall act as the Chairman until the date on which a new Chairman, appointed in accordance with the provisions of this Chapter to fill such vacancy, enters upon his office.

(2) When the Chairman is unable to discharge his functions owing to absence, illness or any other cause, the Vice-Chairman or, as the case may be, such one of the Vice-Chairmen as the Central Government may, by notification in the Official Gazette, authorise in this behalf, shall discharge the functions of the Chairman until the date on which the Chairman resumes his duties.] ]

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1. Chapter VA (Containing sections 22A to 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Ins. by Act 11 of 1987, sec. 79 (w.e.f. 1-6-1987).

Section 22 BC. Power of Chairman to transfer cases from one Bench to another.

¹[²[22BC. Power of Chairman to transfer cases from one Bench to another.—On the application of the assessee or the ³[Chief Commissioner or Commissioner] and after notice to them, and after hearing such of them as may desire to be heard, or on his own motion without such notice, the Chairman may transfer any case pending before one Bench, for disposal, to another Bench.]]

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1. Chapter VA (Containing sections 22A to 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Ins. by Act 11 of 1987, sec. 79 (w.e.f. 1-6-1987). 3. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

Section 22 BD. Decision to be by majority.

¹[²[22BD. Decision to be by majority.—If the Members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the Members are equally divided, they shall state the point or points on which, they differ, and make a reference to the Chairman who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other Members of the Settlement Commission and such point or points shall be decided according to the opinion of the majority of the Members of the Settlement Commission who have heard the case, including those who first heard it.]]

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1. Chapter VA (Containing sections 22A to 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Ins. by Act 11 of 1987, sec. 79 (w.e.f. 1-6-1987).

Section 22 C. Application for settlement of cases .

¹[22C. Application for settlement of cases .— ²[(1) An assessee may, at any stage of a case relating to him, make an application in such form and in such manner as may be prescribed, and containing a full and true disclosure of his wealth which has not been disclosed before the ³[Assessing Officer], the manner in which such wealth has been derived, the additional amount of wealth-tax payable on such wealth and such other particulars as may be prescribed, to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinafter provided:

⁴[Provided that no such application shall be made unless such wealth-tax and the interest thereon, which would have been paid under the provisions of this Act had the wealth declared in the application been declared in the return of wealth before the Assessing Officer on the date of application, has been paid on or before the date of making the application and the proof of such payment is attached with the application.]

(1A) For the purposes of sub-section (1) of this section ⁵[***], the additional amount of wealth-tax payable in respect of the wealth disclosed in an application made under sub-section (1) of this section shall be the amount calculated in accordance with the provisions of sub-sections (1B) to (1D).

⁶[(1B) Where the wealth disclosed in the application relates to only one previous year,—

(i) if the applicant has not furnished a return in respect of the net wealth of that year, then, wealth-tax shall be calculated on the wealth disclosed in the application as if such wealth were the net wealth;

(ii) if the applicant has furnished a return in respect of the net wealth of that year, wealth-tax shall be calculated on the aggregate of the net wealth returned and the wealth disclosed in the application as if such aggregate were the net wealth.]

⁷[(1C) The additional amount of wealth-tax payable in respect of the wealth disclosed in the application relating to the previous year referred to in sub-section (IB) shall be;

(a) in a case referred to in clause (i) of that sub-section, the amount of wealth-tax calculated under that clause;

(b) in a case referred to in clause (ii) of that sub-section, the amount of wealth-tax calculated under that clause as reduced by the amount of wealth-tax calculated on the net wealth returned for that year;

⁸[***]]

(1D) Where the wealth disclosed in the application relates to more than one assessment year, the additional amount of wealth-tax payable in respect of the wealth disclosed for each of the years shall first be calculated in accordance with the provisions of sub-sections (1B) and (1C) and the aggregate of the amount so arrived at in respect of each of the years for which the application has been made under sub-section (1) shall be the additional amount of wealth-tax payable in respect of the wealth disclosed in the application.

(1E) Where any books of account or other documents belonging to an assessee are seized under section 37A, the assessee shall not be entitled to make an application under sub-section (e) before the expiry of one hundred and twenty days from the date of the seizure.]

(2) Every application made under sub-section (1) shall be accompanied by such fees as may be prescribed.

(3) An application made under sub-section (1) shall not be allowed to be withdrawn by the applicant.

⁹[(4) An assessee shall, on the date on which he makes an application under sub-section (1) to the Settlement Commission, also intimate the Assessing Officer in the prescribed manner of having made such application to the said Commission.] ]

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1. Chapter VA (Containing sections 22A to 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Subs. by Act 67 of 1984, sec. 61, for sub-section (1) (w.e.f. 1-10-1984).

3. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

4. Subs. by Finance Act, 2007, sec. 85(i), for the proviso (w.e.f. 1-6-2007). Earlier the proviso was inserted by Act 11 of 1987, sec. 80(i) (w.e.f. 1-6-1987). The proviso, before substitution by Finance Act, 2007, stood as under: “Provided that no such application shall be made unless the assessee has furnished the return of wealth which he is or was required to furnish under any of the provisions of this Act.”.

5. The words “and sub-sections (2A) to (2D) of section 22D” omitted by Act 22 of 2007, sec. 85(ii) (w.e.f. 1-6-2007).

6. Subs. by Act 22 of 2007, sec. 85(iii), for sub-section (1B) (w.e.f. 1-6-2007). Earlier sub-section (1B) was inserted by Act 67 of 1984, sec. 61 (w.e.f. 1-10-1984) and was substituted by Act 11 of 1987, section 80(ii) (w.e.f. 1-6-1987). Sub-section (1B), before substitution by Act 22 of 2007, stood as under: “(1B) Where the wealth disclosed in the application relates to only one previous year,— (i) if the applicant has not furnished a return in respect of the net wealth of that year (whether or not an assessment has been made in respect of the net wealth of that year), then, except in a case covered by clause (iii),wealth-tax shall be calculated on the wealth disclosed in the application as if such wealth were the net wealh; (ii) if the applicant has furnished a return in respect of the net wealth of that year (whether or not an assessment has been made in pursuance of such return), wealth tax shall be calculated on the aggregate of the net wealth returned and the wealth disclosed in the application as if such aggregate were the net wealth; (iii) if the proceeding pending before the wealth-tax authority is in the nature of a proceeding for reassessment of the applicant under section 17 or by way of appeal or revision in connection with such reassessment, and the applicant has not furnished a return in respect of the net wealth of that year in the course of such proceeding for reassessment, wealth-tax shall be calculated on the aggregate of the net wealth as assessed in the earlier proceeding for assessment under section 16 or section 17 and the wealth disclosed in the application as if such aggregate were the net wealth.”.

7. Subs. by Act 11 of 1987, sec. 8(ii) (w.e.f. 1-6-1987). Earlier sub-section (1C) was inserted by Act 67 of 1984, sec. 61 (w.e.f. 1-10-1984).

8. Clause (c) omitted by Act 22 of 2007, sec. 85(iv) (w.e.f. 1-6-2007). Clause (c), before omission, stood as under: “(c) in a case referred to in clause (iii) of that sub-section, the amount of wealth-tax calculated under that clause as reduced by the amount of wealth-tax calculated on the net wealth assessed in the earlier proceeding for assessment under section 16 or section 17.”.

9. Ins. by Act 22 of 2007, sec. 85(v) (w.e.f. 1-6-2007).

Section 22 D. Procedure on receipt of an application under section 22C .

¹[22D. Procedure on receipt of an application under section 22C .— ²[(1) On receipt of an application under section 22C, the Settlement Commission shall, within seven days from the date of receipt of the application, issue a notice to the applicant requiring him to explain as to why the application made by him be allowed to be proceeded with, and on hearing the applicant, the Settlement Commission shall, within a period of fourteen days from the date of the application, by an order in writing, reject the application or allow the application to be proceeded with:

Provided that where no order has been passed within the aforesaid period by the Settlement Commission, the application shall be deemed to have been allowed to be proceeded with.]

³[***]

(2) A copy of every order under sub-section (1) shall be sent to the applicant and to the Commissioner.

⁴[(2A) Where an application was made under section 22C before the 1st day of June, 2007 but an order under the provisions of sub-section (1) of this section, as they stood immediately before their amendment by the Finance Act, 2007, has not been made before the 1st day of June, 2007, such application shall be deemed to have been allowed to be proceeded with if the additional wealth-tax on the wealth disclosed in such application and the interest thereon is paid on or before the 31st day of July, 2007.

Explanation. —In respect of the application referred to in this sub-section, the 31st day of July, 2007 shall be deemed to be the date of the order of rejection or allowing the application to be proceeded with under sub-section (1).]

⁵[(2B) The Settlement Commission shall,—

(i) in respect of an application which is allowed to be proceeded with under sub-section (1), within thirty days from the date on which the application was made; or

(ii) in respect of an application referred to in sub-section (2A) which is deemed to have been allowed to be proceeded with under that sub-section, on or before the 7th day of August, 2007, call for a report from the Commissioner, and the Commissioner shall furnish the report within a period of thirty days of the receipt of communication from the Settlement Commission.]

⁶[(2C) Where a report of the Commissioner called for under sub-section (2B) has been furnished within the period specified therein, the Settlement Commission may, on the basis of the material contained in such report and within a period of fifteen days of the receipt of the report, by an order in writing, declare the application in question as invalid, and shall send the copy of such order to the applicant and the Commissioner:

Provided that an application shall not be declared invalid unless an opportunity has been given to the applicant of being heard:

Provided further that where the Commissioner has not furnished the report within the aforesaid period, the Settlement Commission shall proceed further in the matter without the report of the Commissioner.]

⁷[(2D) Where an application was made under sub-section (1) of section 22C before the 1st day of June, 2007 and an order under the provisions of sub-section (1) of this section, as they stood immediately before their amendment by the Finance Act, 2007, allowing the application to have been proceeded with, has been passed before the 1st day of June, 2007, but an order under the provisions of sub-section (4), as they stood immediately before their amendment by the Finance Act, 2007, was not passed before the 1st day of June, 2007, such application shall not be allowed to be further proceeded with unless the additional wealth-tax on the wealth disclosed in such application and the interest thereon, is, notwithstanding any extension of time already granted by the Settlement Commission, paid on or before the 31st day of July, 2007.]

⁸[(3) The Settlement Commission, in respect of —

(i) an application which has not been declared invalid under sub-section (2C); or

(ii) an application referred to in sub-section (2D) which has been allowed to be further proceeded with under that sub-section, may call for the records from the Commissioner and after examination of such records, if the Settlement Commission is of the opinion that any further enquiry or investigation in the matter is necessary, it may direct the Commissioner to make or cause to be made such further enquiry or investigation and furnish a report on the matters covered by the application and any other matter relating to the case, and the Commissioner shall furnish the report within a period of ninety days of the receipt of communication from the Settlement Commission:

Provided that where the Commissioner does not furnish his report within the aforesaid period, the Settlement Commission may proceed to pass an order under sub-section (4) without such report.

(4) After examination of the records and the report of the Commissioner, if any, received under—

(i) sub-section (2B) or sub-section (3), or

(ii) the provisions of sub-section (1), as they stood immediately before their amendment by the Finance Act, 2007, and after giving an opportunity to the applicant and to the Commissioner to be heard, either in person or through a representative duly authorised in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of this Act, pass such order, as it thinks fit, on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner.]

⁹[(4A) The Settlement Commission shall pass an order under sub- section (4),—

(i) in respect of an application referred to in sub-section (2A) or sub-section (2D), on or before the 31st day of March, 2008;

(ii) in respect of an application made on or after 1st day of June, 2007, within twelve months from the end of the month in which the application was made.]

¹⁰[(5) Subject to the provisions of section 22BA, the materials brought on record before the Settlement Commission shall be considered by the members of the concerned Bench before passing any order under sub-section (4) and, in relation to the passing of such order, the provisions of section 22BD shall apply.]

(6) Every order passed under sub-section (4) shall provide for the terms of settlement including any demand by way of ¹¹[tax, penalty or interest], the manner in which any sum due under the settlement shall be paid and all other matters to make the settlement effective and shall also provide that the settlement shall be void if it is subsequently found by the Settlement Commission that it has been obtained by fraud or misrepresentation of facts.

¹²[(6A) Where any tax payable in pursuance of an order under sub-section (4) is not paid by the assessee within thirty-five days of the receipt of a copy of the order by him, then, whether or not the Settlement Commission has extended the time for payment of such tax or has allowed payment thereof by instalments, the assessee shall be liable to pay simple interest at ¹³[one and one-fourth per cent. for every month or part of a month] on the amount remaining unpaid from the date or expiry of the period of thirty-five days aforesaid.]

(7) Where a settlement becomes void as provided in sub-section (6), the proceedings with respect to the matters covered by the settlement shall be deemed to have been revived from the stage at which the application was allowed to be proceeded with by the Settlement Commission and the Wealth-tax authority concerned may, notwithstanding anything contained in any other provision of this Act, complete such proceedings at any time before the expiry of two years from the end of the financial year in which the settlement became void.

¹⁴[(8), For the removal of doubts, it is hereby declared that nothing contained in section 17A shall apply to any order passed under sub-section (4) or to any order or assessment or reassessment required to be made by the ¹⁵[Assessing Officer] in pursuance of any directions contained in such order passed by the Settlement Commission.]

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1. Chapter VA (Containing sections 22A to 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Subs. by Act 22 of 2007, sec. 86(i), for sub-section (1) (w.e.f. 1-6-2007). Earlier sub-section (1) was amended by Act 21 of 1979, sec. 24(a) (w.e.f. 1-4-1980), by Act 49 of 1991, sec. 78(a) (w.e.f. 27-9-1991) and by Act 20 of 2002, sec. 112(a) (w.e.f. 1-6-2002). Sub-section (1), before substitution, by Act 22 of 2007, stood as under: “(1) On receipt of an application under section 22C, the Settlement Commission shall call for a report from the Commissioner and on the basis of the materials contained in such report and having regard to the nature and circumstances of the case or the complexity of the investigation involved therein, the Settlement Commission shall, where it is possible, by order, reject the application or allow the application to be proceeded with within a period of one year from the end of the month in which such application was made under section 22C: Provided that an application shall not be rejected under this sub-section unless an opportunity has been given to the applicant of being heard.” Provided further that the Commissioner shall furnish the report within a period of one hundred and twenty days of the receipt of communication from the Settlement Commission in case of all applications made under section 22C on or after the date on which the Finance (No.2) Act, 1991, receives the assent of the President and if the Commissioner fails to furnish the report within the said period, the Settlement Commission may make the order without such report.”.

3. Sub-section (1A) omitted by Act 49 of 1991, sec. 78(b) (w.e.f. 27-9-1991). Earlier sub-section (1A) was inserted by Act 21 of 1979, sec. 24(b) (w.r.e.f. 1-4-1979).

4. Subs. by Finance Act, 2007, sec. 86(ii), for sub-section (2A) (w.e.f. 1-6-2007). Earlier sub-section (2A) was amended by Act 32 of 1985, sec. 39 (w.r.e.f. 1-10-1984) and was inserted by Act 67 of 1984, sec. 62(a) (w.e.f. 1-10-1984). Sub-section (2A), before substitution by Finance Act, 2007, stood as under: “(2A) Subject to the provisions of sub-section (2B), the assessee shall, within thirtyfive days of the receipt of a copy of the order under sub-section (1) allowing the application to be proceeded with, pay the additional amount of wealth-tax payable on the wealth disclosed in the application and shall furnish proof of such payment to the Settlement Commission.”.

5. Subs. by Finance Act, 2007, sec. 86(ii), for sub-section (2B) (w.e.f. 1-6-2007). Earlier sub-section (2B) was inserted by Act 67 of 1984, sec. 62(a) (w.e.f. 1-10-1984). Sub-section (2B), before substitution by Finance Act, 2007, stood as under: “(2B) If the Settlement Commission is satisfied, on an application made in this behalf by the assessee, that he is unable for good and sufficient reasons to pay the additional amount of wealth-tax referred to in sub-section (2A) within the time specified in that sub-section, it may extend the time for payment of the amount which remains unpaid or allow payment thereof by instalments if the assessee furnishes adequate security for the payment thereof.”.

6. Subs. by Finance Act, 2007, sec. 86(ii), for sub-section (2C) (w.e.f. 1-6-2007). Earlier sub-section (2C) was inserted by Act 67 of 1984, sec. 62(a) (w.e.f. 1-10-1984). Sub-section (2C), before substitution by Finance Act, 2007, stood as under: “(2C) Where the additional amount of wealth-tax is not paid within the time specified under sub-section (2A), then whether or not the Settlement Commission has extended the time for payment of the amount which remains unpaid or has allowed payment thereof by instalments under sub-section (2B), the assessee shall be liable to pay simple interest at fifteen per cent per annum on the amount remaining unpaid from the date of expiry of the period of thirty-five days referred to in sub-section (2A).”.

7. Subs. by Finance Act, 2007, sec. 86(ii), for sub-section (2D) (w.e.f. 1-6-2007). Earlier sub-section (2D) was inserted by Act 67 of 1984, sec. 62(a) (w.e.f. 1-10-1984), and was amended by Act 4 of 1988, sec. 127 (w.e.f. 1-4-1988). Sub-section (2D), before substitution by Finance Act, 2007, stood as under: “(2D) Where the additional amount of wealth-tax referred to in sub-section (2A) is not paid by the assessee within the time specified under that sub-section or extended under sub-section (2B), as the case may be, the Settlement Commision may direct that the amount of wealth-tax remaining unpaid together with any interest payable thereon under sub-section (2C), be recovered and any penalty for default in making payment of such additional amount of wealth-tax may be imposed and recovered, in accordance with the provisions of Chapter VII, by the Assessing Officer having jurisdiction over the assessee.”.

8. Subs. by Finance Act, 2007, sec. 86(iii), for sub-section (3) and (4) (w.e.f. 1-6-2007). Sub-sections (3) and (4), before substitution by Finance Act, 2007, stood as under: “(3) Where an application is allowed to be proceeded with under sub-section (1), the Settlement Commission may call for the relevant records from the Commissioner and after examination of such records, if the Settlement Commission is of the opinion that any further enquiry or investigation in the matter is necessary, it may direct the Commissioner to make or cause to be made such further enquiry or investigation and furnish a report on the matters covered by the application and any other matter relating to the case. (4) After examination of the records and the report of the Commissioner received under sub-section (1) and the report, if any, of the Commissioner received under sub-section (3), and after giving an opportunity to the applicant and to the Commissioner to be heard, either in person or through a representative duly authorised in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of this Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application but referred to in the report of the Commissioner under subsection (1) or sub-section (3).”.

9. Subs. by Finance Act, 2007, sec. 86(iii), for sub-section (4A) (w.e.f. 1-6-2007). Earlier sub-section (4A) was inserted by Act 20 of 2002, sec. 112(b) (w.e.f. 1-6-2002). Sub-section (4A), before substitution by Finance Act, 2007, stood as under: “(4A) In every application, allowed to be proceeded with under sub-section (1), the Settlement Commission shall, where it is possible, pass an order under sub-section (4) within a period of four years from the end of the financial year in which such application was allowed to be proceeded with.”.

10. Ins. by Act 11 of 1987, sec. 81(a) (w.e.f. 1-6-1987). Earlier sub-section (5) was amended by Act 14 of 1982, sec. 37 (w.r.e.f. 1-4-1982) and was omitted by Act 46 of 1986, sec. 35 (w.e.f. 10-9-1986).

11. Subs. by Act 11 of 1987, sec. 81(b), for “tax or penalty” (w.e.f. 1-6-1987). Earlier the words “tax or penalty” were substituted by Act 67 of 1984, sec. 62(b), for the words “tax, penalty or interest” (w.e.f. 1-10-1984).

12. Ins. by Act 67 of 1984, sec. 62(c) (w.e.f. 1-10-1984).

13. Subs. by Finance Act, 2007, for “fifteen per cent. per annum” (w.e.f. 1-4-2008).

14. Ins. by Act 67 of 1984, sec. 62(d) (w.e.f. 1-10-1984).

15. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

Section 22 DD. Power of Settlement Commission to order provisional attachment to protect revenue .

¹[²[22DD. Power of Settlement Commission to order provisional attachment to protect revenue .—(1) Where, during the pendency of any proceeding before it, the Settlement Commission is of the opinion that for the purpose of protecting the interests of the revenue it is necessary so to do, it may, by order, attach provisionally any property belonging to the applicant in the manner provided in the Second Schedule to the Income-tax Act as made applicable to this Act by section 32:

Provided that where a provisional attachment made under section 34C is pending immediately before an application is made under section 22C, an order under this sub-section shall continue such provisional attachment upto the period upto which an order made under section 34C would have continued if such application had not been made:

Provided further that where the Settlement Commission passes an order under this sub-section after the expiry of the period referred to in the preceding proviso, the provisions of sub-section (2) shall apply to such order as if the said order had originally been passed by the Settlement Commission.

(2) Every provisional attachment made by the Settlement Commission under sub-section (1) shall cease to have effect after the expiry of a period of six months from the date of the order made under sub-section (1):

Provided that the Settlement Commission may, for reasons to be recorded in writing, extend the aforesaid period by such further period or periods as it thinks fit ³[***].]

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1. Chapter VA (Containing sections 22A to 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Ins. by Act 26 of 1988, sec. 56 (w.r.e.f. 1-4-1988).

3. The words “, so, however, that the total period of extension shall not in any case exceed two years” omitted by Finance Act, 2007, sec. 87 (w.e.f. 1-6-2007).

[Section 22 E. Power of Settlement Commission to re-open completed proceedings .

¹[22E. Power of Settlement Commission to re-open completed proceedings .—If the Settlement Commission is of the opinion (the reasons for such opinion to be recorded by it in writing) that, for the proper disposal of the case pending before it, it is necessary or expedient to re-open any proceeding connected with the case, but which has been completed under this Act by any Wealth-tax authority before the application under section 22C was made, it may, with the concurrence of the applicant, re-open such proceeding and pass such order thereon as it thinks fit as if the case in relation to which the application for settlement had been made by the applicant under that section covered such proceeding also:

²[Provided that no proceeding shall be reopened by the Settlement Commission under this section if the period between the end of the assessment year to which such a proceeding relates and the date of application for settlement under section 22C exceeds nine years:]

³[Provided further that no proceeding shall be reopened by the Settlement Commission under this section in a case where an application under section 22C is made on or after the 1st day of June, 2007.] ]

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1. Chapter VA (Containing sections 22A to 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Subs. by Act 11 of 1987, sec. 82 (w.e.f. 1-6-1987).

3. Ins. by Finance Act, 2007, sec. 88 (w.e.f. 1-6-2007).

Section 22 F. Powers and procedure of Settlement Commission .

¹[22F. Powers and procedure of Settlement Commission .—(1) In addition to the powers conferred on the Settlement Commission under this Chapter, it shall have all the powers which are vested in a Wealth-tax authority under this Act.

(2) Where an application made under section 22C has been allowed to be proceeded with under section 22D, the Settlement Commission shall, until an order is passed under sub-section (4) of section 22D, have, subject to the provisions of sub-section (3) of that section, exclusive jurisdiction to exercise the powers and perform the functions of a Wealth-tax authority under this Act in relation to the case:

²[Provided that where an application has been made under section 22C on or after the 1st day of June, 2007, the Settlement Commission shall have such exclusive jurisdiction from the date on which the application was made:

Provided further that where—

(i) an application made on or after the 1st day of June, 2007, is rejected under sub-section (1) of section 22D; or

(ii) an application is not allowed to be proceeded with under sub-section (2A) of section 22D, or, as the case may be, is declared invalid under sub-section (2C) of that section; or

(iii) an application is not allowed to be further proceeded with under sub-section (2D) of section 22D, the Settlement Commission, in respect of such application shall have such exclusive jurisdiction up to the date on which the application is rejected, or, not allowed to be proceeded with, or, declared invalid, or, not allowed to be further proceeded with, as the case may be.]

(3) Notwithstanding anything contained in sub-section (2) and in the absence of any express direction to the contrary by the Settlement Commission, nothing contained in this section shall affect the operation of any other provision of this Act requiring the applicant to pay tax on the basis of self assessment in relation to the matters before the Settlement Commission.

(4) For the removal of doubt, it is hereby declared that, in the absence of any express direction by the Settlement Commission to the contrary, nothing in this Chapter, shall affect the operation of the provisions of this Act insofar as they relate to any matters other than those before the Settlement Commission.

³[ ⁴[***]

(7) The Settlement Commission shall, subject to the provisions of this Chapter, have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of its exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings.] ]

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1. Chapter VA (Containing sections 22A to 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Ins. by Finance Act, 2007, sec. 89 (w.e.f. 1-6-2007).

3. Sub-sections (5) and (6) and (7) subs. by Act 46 of 1986, sec. 37, for sub-section (5) (w.e.f. 10-9-1986).

4. Sub-sections (5) and (6) omitted by Act 11 of 1987, sec. 83 (w.e.f 1-6-1987).

Section 22 G. Inspection, etc., of reports.

¹[22G. Inspection, etc., of reports.—No person shall be entitled to inspect, or obtain copies of, any reports made by any Wealth-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 the prescribed fee:

Provided that, for the purpose of enabling any person whose case is under consideration to rebut any evidence brought on the record against him in any such report, the Settlement Commission shall, on an application made in this behalf and on payment of the prescribed fee by such person, furnish him with a certified copy of any such report or part thereof relevant for the purpose.]

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1. Chapter VA (Containing sections 22A to 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

Section 22H. Powers of Settlement Commission to grant immunity from prosecution .

[22H. Powers of Settlement Commission to grant immunity from prosecution .—(1) The Settlement Commission may, if it is satisfied that any person who made the application for settlement under section 22C has co-operated with the Settlement Commission in the proceedings before it and has made a full and true disclosure of his net wealth and the manner in which such wealth has been acquired, grant to such person, subject to such conditions as it may think fit to impose, immunity from prosecution for any offence under this Act or under the Indian Penal Code (45 of 1860) or under any other Central Act for the time being in force ²[and also (either wholly or in part) from the imposition of any penalty] under this Act, with respect to the case covered by the settlement:

³[Provided that no such immunity shall be granted by the Settlement Commission in cases where the proceedings for the prosecution for any such offence have been instituted before the date of receipt of the application under section 22C.]

⁴[Provided further that the Settlement Commission shall not grant immunity from prosecution for any offence under the Indian Penal Code (45 of 1860) or under any Central Act other than this Act and the Income-tax Act, 1961 (43 of 1961) to a person who makes an application under section 22C on or after the 1st day of June, 2007.]

⁵[(1A) An immunity granted to a person under sub-section (1) shall stand withdrawn if such person fails to pay any sum specified in the order of settlement passed under sub-section (4) of section 22D within the time specified in such order or within such further time as may be allowed by the Settlement Commission, or fails to comply with any other condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted.]

(2) An immunity granted to a person under sub-section (1) may, at any time, be withdrawn by the Settlement Commission, if it is satisfied that such person ⁶[***] had, in the course of the settlement proceedings, concealed any particulars material to the settlement or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which he appears to have been guilty in connection with the settlement and shall also become liable to the imposition of any penalty under this Act to which such person would have been liable, had no such immunity been granted. ]

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1. Chapter VA (Containing sections 22A to 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Subs. by Act 67 of 1984, sec. 63, for “and also from the imposition of any penalty” (w.e.f. 1-10-1984).

3. Ins. by Act 11 of 1987, sec. 84(a) (w.e.f. 1-6-1987). 4. Ins. by Finance Act, 2007, sec. 90 (w.e.f. 1-6-2007).

5. Ins. by Act 11 of 1987, sec. 84(b) (w.e.f. 1-6-1987).

6. Certain words omitted by Act 11 of I987, sec. 84(c) (w.e.f. l-6-1987).

Section 22 HA. Abatement of the proceedings before Settlement Commission.

¹[²[22HA. Abatement of the proceedings before Settlement Commission. — (1) Where—

(i) an application made under section 22C on or after the 1st day of June, 2007 has been rejected under sub-section (1) of section 22D; or

(ii) an application made under section 22C has not been allowed to be proceeded with under sub-section (2A) or further proceeded with under sub-section (2D) of section 22D; or

(iii) an application made under section 22C has been declared as invalid under sub-section (2C) of section 22D; or

(iv) in respect of any other application made under section 22C, an order under sub-section (4) of section 22D has not been passed within the time or period specified under sub-section (4A) of section 22D, the proceedings before the Settlement Commission shall abate on the specified date.

Explanation. —For the purposes of this sub-section, “specified date” means—

(a) in respect of an application referred to in clause (i), the date on which the application was rejected;

(b) in respect of an application referred to in clause (ii), the 31st day of July, 2007;

(c) in respect of an application referred to in clause (iii), the last day of the month in which the application was declared invalid;

(d) in respect of an application referred to in clause (iv), on the date on which the time or period specified in sub-section (4A) of section 22D expires.

(2) Where a proceeding before the Settlement Commission abates, the Assessing Officer, or, as the case may be, any other wealth-tax authority before whom the proceeding at the time of making the application was pending, shall dispose of the case in accordance with the provisions of this Act as if no application under section 22C had been made.

(3) For the purposes of sub-section (2), the Assessing Officer, or, as the case may be, other wealth-tax authority, shall be entitled to use all the material and other information produced by the assessee before the Settlement Commission or the results of the inquiry held or evidence recorded by the Settlement Commission in the course of the proceedings before it, as if such material, information, inquiry and evidence had been produced before the Assessing Officer or other wealth-tax authority or held or recorded by him in the course of the proceedings before him.

(4) For the purposes of the time-limit under sections 17A, 32, and 35 and for the purposes of payment of interest under section 34A, in case referred to in sub-section (2), the period commencing on and from the date of a application to the Settlement Commission under section 22C and ending with “specified date” referred to in sub-section (1) shall be excluded.] ]

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1. Chapter VA (Containing sections 22A to 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Ins. by Finance Act, 2007, sec. 91 (w.e.f. 1-6-2007). Earlier section 22HA relating to “Power of Settlement Commission to send a case back to the Wealth-tax Officer if the assessee does not co-operate” was inserted by Act 11 of 1987, sec. 85 (w.e.f. 1-6-1987) and was amended by Act 4 of 1988, sec. 127 (w.e.f. 1-4-1988) and was omitted by Act 20 of 2002, sec. 113 (w.e.f. 1-6-2002).

Section 22 HAA. Credit for tax paid in case of abatement of proceedings.

¹[²[22HAA. Credit for tax paid in case of abatement of proceedings. —Where an application made under section 22C on or after the 1st day of June, 2007, is rejected under sub-section (1) of section 22D, or any other application made under section 22C is not allowed to be proceeded with under sub-section (2A) of section 22D or is declared invalid under sub-section (2C) of section 22D or has not been allowed to be further proceeded with under sub-section (2D) of section 22D or an order under sub-section (4) of section 22D has not been passed within the time or period specified under sub-section (4A) of section 22D, the Assessing Officer shall allow the credit for the tax and interest paid on or before the date of making the application or during the pendency of the case before the Settlement Commission.]]

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1. Chapter VA (Containing sections 22HAA) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Ins. by Finance Act, 2007, sec. 91 (w.e.f. 1-6-2007).

Section 22-I. Order of Settlement to be conclusive .

¹[22-I. Order of Settlement to be conclusive .—Every order of settlement passed under sub-section (4) of Section 22D shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in this Chapter, be re-opened in any proceeding under this Act or under any other law for the time being in force.]

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1. Chapter VA (Containing sections 22-I) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

Section 22 J. Recovery of sums due under order of settlement .

¹[22J. Recovery of sums due under order of settlement .—Any sum specified in an order of settlement passed under sub-section (4) of section 22D may, subject to such conditions, if any, as may be specified therein, be recovered, and any penalty for default in making payment of such sum may be imposed and recovered in accordance with the provisions of section 32 by the ²[Assessing Officer] having jurisdiction over the person who made the application for settlement under section 22C. ]

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1. Chapter VA (Containing sections 22J) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

Section 22 K. Bar on subsequent application for settlement.

¹[²[ 22K. Bar on subsequent application for settlement. —(1) Where,—

(i) an order of settlement passed under sub-section (4) of section 22D provides for the imposition of a penalty on the person who made the application under section 22C for settlement, on the ground of concealment of particulars of his net wealth; or

(ii) after the passing of an order of settlement under the said sub-section (4) in relation to a case, such person is convicted of any offence under Chapter VIII in relation to that case; or

(iii) the case of any such person was sent back to the Assessing Officer by the Settlement Commission on or before the 1st day of June, 2002, then, he shall not be entitled to apply for settlement under section 22C in relation to any other matter.

(2) Where a person has made an application under section 22C on or after the 1st June, 2007 and if such application has been allowed to be proceeded with under sub-section (1) of section 22D, such person shall not be subsequently entitled to make an application under section 22C.]]

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1. Chapter VA (Containing sections 22K) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Subs. by Finance Act, 2007, sec, 92, for section 22K (w.e.f. 1-6-2007). Earlier section 22K was inserted by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976) and was amended by Act 11 of 1987, sec. 86 (w.e.f. 1-6-1987) and by Act 4 of 1988 (w.e.f. 1-4-1988). Section 22K, before substitution, by Finance Act, 2007, stood as under:

“22K. Bar on subsequent application for settlement in certain cases .—

Where— (i) an order of settlement passed under sub-section (4) of section 22D provides for the imposition of a penalty on the person who made the application under section 22C for settlement, on the ground of concealment of particulars of his net wealth; or (ii) after the passing of an order of settlement under the said sub-section (4) in relation to a case, such person is convicted of any offence under Chapter VIII in relation to that case or; (iii) the case of any such person is sent back to the Assessing Officer by the Settlement Commission under section 22HA, then, he shall not be entitled to apply for settlement under section 22C in relation to any other matter.”.

Section 22 L. Proceedings before Settlement Commission to be judicial proceedings .

¹[22L. Proceedings before Settlement Commission to be judicial proceedings .—Any proceeding under this Chapter before the Settlement Commission shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196, of the Indian Penal Code (45 of 1860).]

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1. Chapter VA (Containing sections 22L) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

Section 22M. Certain persons who have filed appeals to the Appellate Tribunal entitle to make applications to the Settlement Commission.

¹[²[22M. Certain persons who have filed appeals to the Appellate Tribunal entitle to make applications to the Settlement Commission. —[ Rep. by Act 11 of 1987, sec. 87 (w.e.f. 1-6-1987). ]]]

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1. Chapter VA (Containing sections 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

2. Section 22M was earlier amended by Act 67 of 1984, sec. 64 (w.e.f. 1-10-1984).

Chapter VI – Appeals, Revisions and References

Section 23. Appeal to the [Deputy Commissioner (Appeals)] from orders of [Assessing Officer] .

¹23. Appeal to the ¹[Deputy Commissioner (Appeals)] from orders of ²[Assessing Officer] .—(1) ³[Subject to the provisions of sub-section (lA), any person]—

(a) objecting to the amount of⁴[net wealth] determined under this Act; or

(b) objecting to the amount of wealth-tax determined as payable by him under this Act; or

(c) denying his liability to be assessed under this Act; or

⁵[(d) objecting to any penalty imposed by the Assessing Offcer under section 18 ⁶[***];]

(e) objecting to any order of the ²[Assessing Officer] under sub-section (2) of section 20; or

(f) objecting to any penalty imposed by the ²[Assessing Officer] under the provisions of ⁷[section 221] of the Income-tax Act as applied under section 32 for the purposes of wealth-tax; ⁸[or]

⁹[(g) objecting to any order made by the ²[Assessing Officer] under section 22 treating him as the agent of a person residing outside India ; or

(h) objecting to any order of the ²[Assessing Officer] under section 35 having the effect of enhancing the assessment or reducing a refund or refusing to allow the claim made by the assessee under the said section; or]

¹⁰[(ha) objecting to any order of the Valuation Officer under section 35 having the effect of enhancing the valuation of any asset or refusing to allow the claim made by the assessee under the said section; or ¹¹[***]] may appeal to the ¹²[Deputy Commissioner (Appeals)] ¹³[before the 1st day of June, 2000,] against the assessment or order, as the case may be, in the prescribed form and verified in the prescribed manner.

¹⁴[(1A) Notwithstanding anything contained in sub-section (1), any person;

(a) objecting to the amount of net wealth determined under this Act or objecting to the amount of wealth-tax determined as payable by him under this Act or denying his liability to be assessed under this Act, where the net wealth determined on assessment made under section 16 exceeds fifteen lakh rupees; or

¹⁵[(b) objecting to any penalty imposed under sub-section (1) of section 18 with the previous approval of the ¹⁶[Joint Commissioner] as specified in sub-section (3) of that section]; or

¹⁷[(c) objecting to any assessment or order referred to in clauses (a) to (h) (both inclusive) of sub-section (1), where such assessment or order has been made by the ¹⁶[Joint Commissioner] in exercise of the powers or functions conferred on or assigned to him under section 8 or section ll; or

(d) objecting to any penalty imposed by the ¹⁸[Joint Director] or the ¹⁶[Joint Commissioner] under section 18A;] or

(e) objecting to an order made by ¹⁹[an Assessing Officer] in the case of such persons or classes of persons as the Board may, having regard to the nature of the cases, the complexities involved and other relevant considerations, direct, may appeal to the Commissioner (Appeals) ²⁰[before the 1st day of June, 2000] against the assessment or order, as the case may be, in the prescribed form and verified in the prescribed manner.

²¹[(1AA) Notwithstanding anything contained in sub-section (1), every appeal filed, on or after the 1st day of October, 1998, but before the 1st day of June, 2000, before the Deputy Commissioner (Appeals) and any matter arising out of or connected with such appeal and which is so pending shall stand transferred to the Commissioner (Appeals) and the Commissioner (Appeals) may proceed with such appeal or matter from the stage at which it was on that day.]

²²[(1B) Notwithstanding anything contained in sub-section (1), the Board or the Director General or Chief Commissioner or Commissioner if so authorised by the Board, may, by order in writing, transfer any appeal which is pending before a Deputy Commissioner (Appeals) and any matter arising out of or connected with such appeal and which is so pending, to the Commissioner (Appeals) if the Board or, as the case may be, the Director General, Chief Commissioner or Commissioner (at the request of the appellant or otherwise) is satisfied that it is necessary or expedient so to do having regard to the nature of the case, the complexities involved and other relevant considerations and the Commissioner (Appeals) may proceed with such appeal or matter from the stage at which it was before it was so transferred:

Provided that the appellant may demand that before proceeding further with the appeal or matter, the previous proceedings or any part thereof be re-opened or that he be reheard;]

(2) An appeal shall be presented within thirty days of the receipt of the notice of demand relating to the assessment or penalty objected to, or the date on which any order objected to, is communicated to him, but the ²³[Deputy Commissioner (Appeals)]²⁴[or, as the case may be, the Commissioner (Appeals)] may admit an appeal after the expiration of the period aforesaid if he is satisfied that the appellant had sufficient cause for not presenting the appeal within that period.

²⁵[(2A) Where a return has been filed by an assessee, no appeal under this section shall be admitted unless at the time of filing of the appeal he has paid the tax due on the net wealth returned by him.

²⁶[***]]

(3) The ²³[Deputy Commissioner (Appeals)] ²⁴[or, as the case may be, the Commissioner (Appeals)] shall fix a day and place for the hearing of the appeal and may, from time to time, adjourn the hearing.

²⁷[(3A) If the valuation of any asset is objected to in an appeal under clause (a) of sub-section (1)²⁴[or of sub-section (1A)], the ²³[Deputy Commissioner (Appeals)] ²⁴[or, as the case may be, the Commissioner (Appeals)] shall—

(a) in a case where such valuation has been made by a Valuation Officer under section 16A, give such Valuation Officer an opportunity of being heard;

(b) in any other case, on a request being made in this behalf by the ²⁶[Assessing Offcer] give an opportunity of being heard to any Valuation Officer nominated for the purpose by the ²⁸[Assessing Officer].]

(4) The ²⁹[Deputy Commissioner (Appeals)] ³⁰[or, as the case may be, the Commissioner (Appeals)) may

(a) at the hearing of an appeal, allow an appellant to go into any ground of appeal not specified in the grounds of appeal;

(b) before disposing of an appeal, make such further inquiry as he thinks fit or cause further inquiry to be made by the ³¹[ ³²[Assessing Officer] or, as the case may be, the Valuation Officer].

(5) In disposing of an appeal the, ²⁹ [Deputy Commissioner (Appeals)] ³⁰[or, as the case may be, the Commissioner (Appeals)] may pass such order as he thinks fit which may include an order enhancing the assessment or penalty:

Provided that no order enhancing the assessment or penalty shall be made unless the person affected thereby has been given a reasonable opportunity of showing cause against such enhancement.

³³[(5A) In disposing of an appeal, the ²⁹[Deputy Commissioner (Appeals)] ³⁰[or, as the case may be, the Commissioner (Appeals)] may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the ²⁹[Deputy Commissioner (Appeals)] 30[or, as the case may be, the Commissioner (Appeals)] by the appellant.]

³³[(5B) The order of the ²⁹[Deputy Commissioner (Appeals)] ³⁰[or, as the case may be, the Commissioner (Appeals)] disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for the decision.]

(6) A copy of every order passed by the ²⁹[Deputy Commissioner (Appeals)] ³⁰[or, as the case may be, the Commissioner (Appeals)] under this section shall be forwarded to the appellant and the ³²[Chief Commissioner or Commissioner].

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1. Subs. by Act 4 of 1988, sec. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988).

2. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax-Officer” (w.e.f. 1-4-1988).

3. Subs. by Act 29 of 1977, sec. 39 and Sch. V, for “Any person” (w.e.f. 10-7-1978).

4. Subs. by Act 46 of 1964, sec. 22(a)(i), for “his net wealth” (w.e.f. 1-4-1965).

5. Subs. by Act 4 of 1988, sec. 146(a)(i), for clause (d) (w.e.f. 1-4-1989). Earlier clause (d) was amended by Act 46 of 1964, sec. 20(a)(ii) (w.e.f. 1-4-1965).

6. Certain words omitted by Act 3 of 1989, sec. 71(i) (w.e.f. 1-4-1989).

7. Subs. by Act 46 of 1964, sec. 22(a)(iii) for “sub-section (1) of section 46” (w.e.f. 1-4-1965).

8. Ins. by Act 46 of 1964, sec. 22(a)(iii) (w.e.f. 1-4-1965).

9. Ins. by Act 46 of 1964, sec. 22(a)(iv) (w.e.f. 1-4-1965).

10. Ins. by Act 45 of 1972, sec. 11(a)(i) (w.e.f. 1-1-1973).

11. Clause (i) omitted by Act 4 of 1988, sec. 146(a)(ii) (w.e.f. 1-4-1989). Earlier clause (i) was inserted by Act 46 of 1964, sec. 22(a)(iv) (w.e.f. 1-4-1965) and was amended by Act 45 of 1972, sec. 11(a)(ii) (w.e.f. 1-1-1973).

12. Subs. by Act 4 of 1988, sec. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988).

13. Ins. by Act 10 of 2000, sec. 72(a) (w.e.f. 1-6-2000).

14. Ins. by Act 29 of 1977, sec. 39 and Sch. V (w.e.f. 10-7-1978).

15. Subs. by Act 3 of 1989, sec. 71(ii), for clause (b) (w.e.f. 1-4-1989). Earlier clause (b) was substituted by Act 4 of 1988, sec. 146(b) (w.e.f. 1-4-1988).

16. Subs. by Act, 21 of 1998, sec. 66, for “Deputy Commissioner” (w.e.f. 1-10-1998).

17. Subs. by Act 4 of 1988, sec. 146(b), for clauses (c) and (d) (w.e.f. 1-4-1988).

18. Subs. by Act 21 of 1998, sec. 66, for “Deputy Director” (w.e.f. 1-10-1998).

19. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

20. Ins. by Act 10 of 2000, sec. 72(b) (w.e.f. 1-6-2000).

21. Ins. by Act 10 of 2000, sec. 72(c) (w.e.f. 1-6-2000).

22. Subs. by Act 4 of 1988, sec. 146(c), for sub-sections (1B) and (1C) (w.e.f. 1-4-1989). Earlier sub-sections (1B) and (1C) were inserted by Act 29 of 1977, sec. 39 and Sch. V (w.e.f. 10-7-1978).

23. Subs. by Act 4 of 1988, sec. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988).

24. Ins. by Act 29 of 1977, sec. 39 and Sch. V (w.e.f. 10-7-1978).

25. Ins. by Act 41 of 1975, sec. 94 (w.e.f. 1-10-1975).

26. Proviso omitted by Act 4 of 1988, sec. 146(d) (w.e.f. 1-4-1989).

27. Ins. by Act 45 of 1972, sec. 11(b) (w.e.f. 1-1-1973).

28. Subs. by Act 45 of 1972, sec. 11(c), for “Wealth-tax Officer” (w.e.f. 10-7-1978).

29. Subs. by Act 4 of 1988, sec. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988).

30. Ins. by Act 29 of 1977, sec. 39 and Sch. V (w.e.f. 10-7-1978).

31. Subs. by Act 45 of 1972, sec. 11(c), for “Wealth-tax Officer” (w.e.f. 1-1-1973)

32. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 33. Ins. by Act 46 of 1964, sec. 22(b) (w.e.f. 1-4-1965).

Section 23 A. Appealable orders before Commissioner (Appeals).

¹[23A. Appealable orders before Commissioner (Appeals). —(1) Any person—

(a) objecting to the amount of net wealth determined under this Act, or

(b) objecting to the amount of wealth-tax determined as payable by him under this Act; or

(c) denying his liability to be assessed under this Act; or

(d) objecting to any penalty imposed by the Assessing Officer under section 18 or section 18A; or

(e) objecting to any order of the Assessing Officer under sub-section (2) of section 20; or (f) objecting to any penalty imposed by the Assessing Officer under the provisions of section 221 of the Income-tax Act as applied under section 32 for the purposes of wealth-tax; or

(g) objecting to any order made by the Assessing Officer under section 22 treating him as the agent of a person residing outside India ; or

(h) objecting to any order of the Assessing Officer under section 35 having the effect of enhancing the assessment or reducing a refund or refusing to allow the claim made by the assessee under the said section; or

(i) objecting to any order of the Valuation Officer under section 35 having the effect of enhancing the valuation of any asset or refusing to allow the claim made by the assessee under the said section; or

(j) objecting to any penalty imposed by the Deputy Director or Deputy Commissioner under section 18A.

may appeal to the Commissioner (Appeals) against the assessment or order, as the case may be, in the prescribed form and verified in the prescribed manner and on payment of a fee of two hundred and fifty rupees.

Explanation.— For the purposes of this sub-section, where on or before the 1st day of October, 1998, the post of Deputy Commissioner has been redesignated as Joint Commissioner and the post of Deputy Director has been redesignated as Joint Director, the references in this sub-section for “Deputy Commissioner” and “Deputy Director” shall be substituted by “Joint Commissioner” and “Joint Director” respectively.

(2) Notwithstanding anything contained in sub-section (1) of section 23, every appeal under this Act which is pending immediately before the appointed day, before the Deputy Commissioner (Appeals) and any matter arising out of or connected with such appeal and which is so pending shall stand transferred on that day to the Commissioner (Appeals) and the Commissioner (Appeals) may proceed with such appeals or matter from the stage on which it was on that day:

Provided that the appellant may demand that before proceeding further with the appeal or matter, the previous proceedings or any part thereof be re-opened or that he be re-heard.

Explanation.— For the purposes of this sub-section, “appointed day” means the day appointed under section 246A of the Income-tax Act.

(3) An appeal shall be presented within thirty days of the receipt of the notice of demand relating to the assessment or penalty objected to or the day on which any order objected to is communicated to him, but the Commissioner (Appeals) may admit an appeal after the expiration of the period aforesaid, if he is satisfied that the appeallant had sufficient cause for not presenting the appeal within that period.

(4) Where a return has been filed by an assessee no appeal under this section shall be admitted unless at the time of filing of the appeal, he has paid the tax due on the net wealth returned by him.

(5) The Commissioner (Appeals) shall fix a day and place for the hearing of the appeal and may, from time to time, adjourn the hearing.

(6) If the valuation of any asset is objected to in an appeal under clause (a) or clause (i) of sub-section (1), the Commissioner (Appeals) shall.—

(a) in case where such valuation has been made by a Valuation Officer under section 16A give such Valuation Officer an opportunity of being heard;

(b) in any other case on request being made in this behalf by the Assessing Officer, give an opportunity of being heard to any Valuation Officer nominated for the purpose by the Assessing Officer.

(7) The Commissioner (Appeals) may,—

(a) at the hearing of an appeal, allow an appellant to go into any ground of appeal not specified in the grounds of appeal;

(b) before disposing of any appeal, make such further enquiry as he thinks fit or cause further enquiry to be made by the Assessing Officer or, as the case may be, by the Valuation Officer.

(8) In disposing of an appeal, the Commissioner (Appeals) may pass such order as he thinks fit which may include an order enhancing the assessment or penalty:

Provided that no order enhancing the assessment or penalty shall be made unless the person affected thereby has been give a reasonable opportunity of showing cause against such enhancement.

²[(8A) In every appeal, the Commissioner (Appeals), where it is possible, may hear and decide such appeal within a period of one year from the end of the financial year in which such appeal is filed under sub-section (1).]

(9) In disposing of an appeal, the Commissioner (Appeals) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not placed before the Commissioner (Appeals) by the appellant.

³[(9A) In disposing of an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 22HA, he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceedings before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment.]

(10) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determining the decision thereon and reasons for the decision.

(11) A copy of every order passed by the Commissioner (Appeals) under this section shall be forwarded to the appellant and the Chief Commissioner or Commissioner.]

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1. Ins. by Act 21 of 1998, sec. 69 (w.e.f. 1-10-1998). Earlier section 23A was inserted by Act 4 of 1988, sec. 147 (w.e.f. 1-4-1989) and was omitted by Act 3 of 1989, sec. 95(p) (w.e.f. 1-4-1989).

2. Ins. by Act 27 of 1999, sec. 93 (w.e.f. 1-6-1999).

3. Ins. by the Finance Act, 2008, sec. 64 (w.r.e.f. 1-4-2008).

Section 24. Appeal to the Appellate Tribunal from orders of the [Deputy Commissioner (Appeals)].

24. Appeal to the Appellate Tribunal from orders of the ¹[Deputy Commissioner (Appeals)]. — ² [(1) An assessee objecting to an order passed by the ¹[Deputy Commissioner (Appeals)]³[or the Commissioner (Appeals)] under section 18 or section 18A or section 23, ⁴[section 23A] or sub-section (2) of section 37, ⁵[***]] may appeal to the Appellate Tribunal within sixty days of the date on which the order is communicated to him.]

(2) The Commissioner may, if he is not satisfied as to the correctness of any order passed by ⁶[a Commissioner (Appeals) under sub-section (10) of section 23A] direct the⁷[Assessing Officer] to appeal to the Appellate Tribunal against such order, and such appeal may be made at any time before the expiry of sixty days of the date on which the order is communicated to the Commissioner.

⁸[(2A) The ³[Assessing Officer] or the assessee, as the case may be, on receipt of notice that an appeal against the order of ⁹[***] the Commissioner (Appeals) has been preferred under sub-section (1) or sub-section (2) by the other party, may, notwithstanding that he may not have appealed against such order or any part thereof, within thirty days of the receipt of the notice, file a memorandum of cross objections, verified in the prescribed manner against any part of the order of ⁹[***] 6[the Commissioner (Appeals)] and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (1) or sub-section (2).]

¹⁰[(3) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum of cross objections after the expiry of the relevant period referred to in sub-section (1) or sub-section (2) or sub-section (2A), if it is satisfied that there was sufficient cause for not presenting it within that period.]

(4) An appeal to the Appellate Tribunal shall be in the prescribed form and shall be verified in the prescribed manner and shall, except in the case of an appeal referred to in sub-section (2), be accompanied by ¹¹[a fee of ¹²[one thousand rupees]]:

¹³[Provided that in the case of an appeal not relatable to net wealth as computed by the Assessing Officer, the appeal shall be accompanied by a fee of five hundred rupees.]

(5) The Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, and any such orders may include an order enhancing the assessment or penalty:

¹⁴[Provided that if the valuation of any asset is objected to, the Appellate Tribunal shall,—

(a) in a case where such valuation has been made by a Valuation Officer under section 16A, also give such Valuation Officer an opportunity of being heard;

(b) in any other case, on a request being made in this behalf by the ⁷[Assessing Officer], give an opportunity of being heard also to any Valuation Officer nominated for the purpose by the ⁷[Assessing Officer:

Provided further that] no order enhancing an assessment or penalty shall be made unless the person affected thereby has been given a reasonable opportunity of showing cause against such enhancement.

¹⁵ [(5A) In every appeal, the Appellate Tribunal where it is possible, may hear and decide such appeal within a period of four years from the end of the financial year in which such appeal is filed under sub-section (1) 16[or sub-section (2)];]

¹⁵[(5B) The cost of any appeal to the Appellate Tribunal shall be at the discretion of that Tribunal.”]

¹⁷[***]

(9) A copy of every order passed by the Appellate Tribunal under this section shall be forwarded to the assessee and the Commissioner.

(10) Save as provided in section 27, ¹⁸[or section 27A] any order passed by the Appellate Tribunal on appeal shall be final.

(11) The provisions of ¹⁹[sub-sections (1), (4) and (5) of section 255] of the Income-tax Act shall apply to the Appellate Tribunal in the discharge of its functions under this Act as they apply to it in the discharge of its functions under the Income-tax Act.

——————————————–

1. Subs. by Act 4 of 1988, sec. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988).

2. Subs. by Act 41 of 1975, sec. 95, for sub-section (1) (w.e.f. 10-7-1978). Earlier sub-section (1) was substituted by Act 46 of 1964, sec. 23(a) (w.e.f. 1-4-1965).

3. Ins. by Act 29 of 1977, sec. 39 and Sch. V (w.e.f. 10-7-1978).

4. Ins. by Act 21 of 1998, sec. 70(a) (w.e.f. 1-10-1998). Earlier the words “or section 23A” were inserted by Act 4 of 1988, sec. 160(2) (w.e.f. 1-4-1989) and said words were omitted by Act 3 of 1989, sec. 95(r) (w.e.f. 1-4-1989).

5. Certain words omitted by Act 29 of 1977, sec. 39 and Sch. V (w.e.f. 10-7-1978).

6. Subs. by Act 21 of 1998, sec. 70(b), for “a Deputy Commissioner (Appeals) or a Commissioner (Appeals) under section 23” (w.e.f. 1-10-1998).

7. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

8. Ins. by Act 46 of 1964, sec. 23(b) (w.e.f. 1-4-1965).

9. The words “the Deputy Commissioner (Appeals) or” omitted by Act 21 of 1998, sec. 70(c) (w.e.f. 1-10-1998).

10. Subs. by Act 46 of 1964, sec. 23(c), for sub-section (3) (w.e.f. 1-4-1971).

11. Subs. by Act 42 of 1970, sec. 62, for “a fee of one hundred rupees” (w.e.f. 1-4-1971).

12. Subs. by Act 21 of 1998, sec. 70(d), for “two hundred rupees” (w.e.f. 1-10-1998). Earlier the words “two hundred rupees” were substituted by Act 16 of 1981, sec. 28, for “One hundred and twenty five rupees” (w.e.f. 1-6-1981).

13. Ins. by Act 27 of 1999, sec. 94(a) (w.e.f. 1-6-1999).

14. Subs. by Act 45 of 1972, sec. 12(a), for “Provided that” (w.e.f. 1-1-1973).

15.Ins. by Act 27 of 1999, sec. 94(b) (w.e.f. 1-6-1999).

16. Ins. by Act 10 of 2000, sec. 73 (w.e.f. 1-6-2000).

17. Sub-sections (6), (7), (8A) and (8B) omitted by Act 45 of 1972, sec. 12(b) (w.e.f. 1-1-1973). Earlier sub-section (6) was amended by Act 58 of 1960, sec. 58 and Second Sch. (w.e.f. 26-12-1960) and sub-sections (6), (7), (8), (8A) and (8B) were substituted by Act 46 of 1964, sec. 23(d), for sub-sections (6), (7) and (8) (w.e.f. 1-4-1965).

18. Ins. by Act 27 of 1999, sec. 92(c) (w.e.f. 1-6-1999).

19. Subs. by Act 46 of 1964, sec. 23(e), for “sub-sections (5), (7) and (8) of section 5A” (w.e.f. 1-4-1965).

Section 25. Powers of Commissioner to revise orders of subordinate authorities.

(1) The Commissioner may, either of his own motion or on application made by an assessee in this behalf, call for the record of any proceeding under this Act in which an order has been passed by any authority subordinate to him, and may make such inquiry, or cause such inquiry to be made, and, subject to the provisions of this Act, pass such order thereon, not being an order prejudicial to the assessee, as the Commissioner thinks fit:

Provided that the Commissioner shall not revise any order under this sub-section in any case— (a) where an appeal against the order lies to the ¹[Deputy Commissioner (Appeals)] ²[or to the Commissioner (Appeals)] or to the Appellate Tribunal, the time within which such appeal can be made has not expired or in the case of an appeal 2[to the Commissioner (Appeals) or] to the Appellate Tribunal the assessee has not waived his right of appeal;

(b) where the order is the subject of an appeal before the ¹[Deputy Commissioner (Appeals)] ²[or the Commissioner (Appeals)] or the Appellate Tribunal;

(c) where the application is made by the assessee for such revision, unless—

(i) the application is accompanied by a fee of twenty-five rupees; and

(ii) the application is made within one year from the date of the order sought to be revised or within such further period as the Commissioner may think fit to allow on being satisfied that the assessee was prevented by sufficient cause from making the application within that period; and

(d) where the order is sought to be revised by the Commissioner of his own motion, if such order is made more than one year previously.

Explanation.—For the purpose of this sub-section,—

(a) the ¹[Deputy Commissioner (Appeals)] shall be deemed to be an authority subordinate to the Commissioner; and

(b) an order by the Commissioner declining to interfere shall be deemed not to be an order prejudicial to the assessee.

(2) Without prejudice to the provisions contained in sub-section (1), the Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by 3[an Assessing Officer] is erroneous insofar as it is prejudicial to the interests of revenue, he may, after giving the assessee an opportunity of being heard, and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment or cancelling it and directing a fresh assessment.

⁴[Explanation.—For the removal of doubts, it is hereby declared that, for the purposes of this sub-section;

(a) an order passed ⁵[on or before or after the 1st day of June, 1988,] by the Assessing Officer shall include an order made by the Deputy Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on or assigned to him under orders or directions issued by the Board or by the ChiefCommissioner or Director General or Commissioner authorised by the Board in this behalf under section 120 of the Income-tax Act read with section 8 of this Act;

(b) “record” ⁶[shall include and shall be deemed always to have included] all records relating to any proceeding under this Act available at the time of examination by the Commissioner;

(c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal ⁷[filed on or before or after the 1st day of June, 1988], the owers of the Commissioner under this sub-section shall extend ⁸[and shall be deemed always to have extended] to such matters as had not been considered and decided in such appeal.]

⁹[(3) No order shall be made under sub-section (2) after the expiry of two years ¹⁰[from the end of the financial year in which the order sought to be revised was passed].

¹¹[(3A) On every application made by an assessee for revision under sub-section (1), an order shall be passed by the Commissioner within one year from the end of financial year in which such application is made by the assessee for revision.

Explanation .—In computing the period of limitation for the purposes of this sub-section the time taken in giving an opportunity to the assessee to be re-heard under the proviso to section 39 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded.]

¹²[(4) Notwithstanding anything contained in sub-section (3) or sub-section (3A), an order in revision under sub-section (1) or sub-section (2) may be passed at any time in consequence of, or to give effect to, any finding or direction contained in an order of Appellate Tribunal, ¹³[National Tax Tribunal] the High Court or the Supreme Court.]

Explanation.— In computing the period of limitation for the purposes of sub-section (3) the time taken in giving an opportunity to the assessee to be re-heard under the proviso to section 39 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded.]

——————————————–

1. Subs. by Act 4 of 1988, sec. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988).

2. Ins. by Act 29 of 1977, sec. 39 and Sch. V (w.e.f. 10-7-1978).

3. Subs. by Act 4 of 1988, sec. 127, for “a Wealth-tax Officer” (w.e.f. 1-4-1986).

4. Subs. by Act 26 of 1988, sec. 57, for Explanation (w.e.f. 1-6-1988). Earlier Explanation was inserted by Act 67 of 1984, sec. 65(a) (w.e.f. 1-10-1984).

5. Ins. by Act 13 of 1989, sec. 30(i) (w.r.e.f. 1-6-1988).

6. Subs. by Act 13 of 1989, sec. 30(ii), for “includes” (w.r.e.f. 1-6-1988).

7. Ins. by Act 13 of 1989, sec. 30(iii)(a) (w.r.e.f. 1-6-1988).

8. Ins. by Act 13 of 1989, sec. 30(iii)(b) (w.r.e.f. 1-6-1988).

9. Ins. by Act 46 of 1964, sec. 24 (w.e.f. 1-4-1965).

10. Subs. by Act 67 of 1984, sec. 65(b), for “from the date of the order sought to be refused” (w.e.f. 1-10-1984).

11. Ins. by Act 21 of 1998, sec. 71(a) (w.e.f. 1-10-1998).

12. Subs. by Act 21 of 1998, sec. 71(b), for sub-section (4) (w.e.f. 1-10-1998). Earlier sub-section (4) was inserted by Act 46 of 1964, sec. 24 (w.e.f. 1-4-1965).

13. Ins. by Act 49 of 2005, sec. 30 and Schedule, Pt. II-2.

Section 26. Appeal to the Appellate Tribunal from orders of enhancement by ¹[Chief Commissioners or Commissioners].

26. Appeal to the Appellate Tribunal from orders of enhancement by ¹[Chief Commissioners or Commissioners]. —(1) Any assessee objecting to ²[an order passed by the ³[Chief Commissioner or Commissioner] under section 18 ⁴[or section 18A] or sub-section (2) of section 25], ⁵[or an order passed by the Director-General or Director under Section 18A] may appeal to the Appellate Tribunal within sixty days of the date on which the order is communicated to him.

(2) An appeal to the Appellate Tribunal under sub-section (1) shall be in the prescribed form and shall be verified in the prescribed manner and shall be accompanied by6[a fee of 7[two hundred rupees]].

(3) The provisions of 8[sub-section (3), (5), (9) and (10)] of section 24 shall apply in relation to any appeal under this section as they apply in relation to any appeal under that section.

——————————————–

1. Subs. by Act 4 of 1988, sec. 127, for “Commissioners” (w.e.f. 1-4-1988).

2. Subs. by Act 46 of 1964, sec. 25, for “an order of enhancement made by the Commissioner under section 25” (w.e.f. 1-4-1965).

3. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

4. Ins. by Act 41 of 1975, sec. 96 (w.e.f. 1-4-1976).

5. Ins. by Act 3 of 1989, sec. 72 (w.e.f. 1-4-1989).

6. Subs. by Act 42 of 1970, sec. 63, for “a fee of one hundred rupees” (w.e.f. 1-4-1971).

7. Subs. by Act 16 of 1981, sec. 29, for “One hundred and twenty-five rupees” (w.e.f. 1-6-1981).

8. Subs. by Act 45 of 1972, sec. 13, for “sub-sections (3) and (5) to (10) inclusive” (w.e.f. 1-1-1973).

Section 27. Reference of High Court.

27. Reference of High Court. — ¹[(1) The assessee or the ²[Chief Commissioner or Commissioner] may, within sixty days of the date upon which he is served with notice of an order ³[passed before the 1st day of June, 1999] under section 24 or section 26 ⁴[or clause (e) of sub-section (1) or section 35], by application in the prescribed form accompanied, where the application is made by the assessee, by ⁵[a fee of ⁶[two hundred rupees]] require the Appellate Tribunal to refer to the High Court any qestion of law arising out of such order and, subject to the other provisions contained in this section, the Appellate Tribunal shall, within one hundred and twenty days of the receipt of such application, draw up a statement of the case and refer it to the High Court.

(2) The Appellate Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the period specified in sub-section (1) allow it to be presented within a further period not exceeding thirty days.]

(3) If, on an application made under sub-section (1) the Appellate Tribunal.—

(a) refuses to state a case on the ground that no question of law arises; or

(b) rejects it on the ground that it is time barred; the applicant may, within ⁷[ninety days] from the date on which he is served with a notice of refusal or rejection, as the case may be, apply to the High Court, and the High Court may, if it is not satisfied with the correctness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state the case to the High Court, and on receipt of such requisition the Appellate Tribunal shall state the case:

Provided that, if in any case where the Appellate Tribunal has been required by an assessee to state a case the Appellate Tribunal refuses to do so on the ground that no question of law arises, the assessee may, within thirty days from the date on which he receives notice of refusal to state the case, withdraw his application, and if he does so, the fee paid by him under sub-section (1) shall be refunded to him.

⁸[(3A) If, on an application made under this section the Appellate Tribunal is of the opinion that, on account of a conflict in the decisions of the Hight Courts in respect of any particular question of law, it is expedient that a reference should be made direct to the Supreme Court, the Appellate Tribunal may draw up a statement of the case and refer it through its President direct to the Supreme Court.]

(4) The statement to the High Court ⁹[or the Supreme Court] shall set forth the facts, the determination of the Appellate Tribunal and the question of law which arises out of the case.

(5) If the High Court ⁹[or the Supreme Court] is not satisfied that the case as stated is sufficient to enable it to determine the question of law raised thereby, it may require the Appellate Tribunal to make much modifications therein as it may direct.

(6) The High Court 9[or the Supreme Court], upon hearing any such case, shall decide the question of law raised therein, and in doing so, may, if it thinks fit, alter the form of the question of law and shall deliver judgment thereon containing the ground on which such decision is founded and shall send a copy of the judgment under the seal of the court and the signature of the Registrar to the Appellate Tribunal and the Appellate Tribunal shall pass such orders as are necessary to dispose of the case conformably to such judgment.

¹⁰[(7) The cost of any reference to the High Court or the Supreme Court which shall not include the fee for making the reference, shall be in the discretion of the Court].

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1. Subs. by Act 46 of 1964, sec. 26(a), for sub-sections (1) and (2) (w.e.f. 1-4-1965).

2. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

3. Ins. by Act 27 of 1999, sec. 95 (w.e.f. 1-6-1999).

4. Ins. by Act 49 of 1991, sec. 79 (w.e.f. 27-9-1991).

5. Subs. by Act 42 of 1970, sec. 64, for “a fee of rupees one hundred” (w.e.f. 1-4-1971).

6. Subs. by Act 16 of 1981, sec. 30, for “one hundred and twenty-five rupees” (w.e.f. 1-6-1981).

7. Subs. by Act 46 of 1964, sec. 26(b), for “three months” (w.e.f. 1-4-1965).

8. Ins. by Act 46 of 1964, sec. 26(c) (w.e.f. 1-4-1965).

9. Ins. by Act 46 of 1964, sec. 26(d) (w.e.f. 1-4-1965).

10. Subs. by Act 46 of 1964, sec. 26(e), for sub-sections (7), (8) and (9) (w.e.f. 1-4-1965).

Section 27 A. Appeal to High Court.

¹[27A. Appeal to High Court.—(1) The assessee or the Chief Commissioner or Commissioner may within one hundred twenty days of the day upon which he is served with notice of an order under section 24 or section 26 or clause (e) of sub-section (1) of section 35, file on or after the 1st day of October, 1998 ²[but before the date of establishment of the National Tax Tribunal] appeal before the High Court.]

(2) An appeal shall lie to the High Court ³[before the date of establishment the National Tax Tribunal] from every order passed in appeal by the Appellate Tribunal, under sub-section (1) of section 24 only if the High Court is satisfied that the case involves a substantial question of law.

(3) In an appeal under this section, the Memorandum of Appeal shall precisely state the substantial question of law involved in the appeal ⁴[***].]

(4) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question.

(5) The appeal shall be heard only on the question so formulated and the respondent shall, at the time of hearing of the appeal, be allowed to argue that the case does not involve such question:

Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the Court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question.

(6) The High Court shall decide the question of law so formulated and deliver such judgment thereon containing the grounds on which such decision is founded and may award such cost as it deems fit.

(7) The Assessing Officer shall give effect to the order of the High Court on the basis of a certified copy of judgment delivered under sub-section (6).]

⁵[(8) The Provisions of the Code of Civil Procedure, 1908 (5 of 1908) relating to appeals to High Court shall, so far as may be, apply in the case of appeals under this section.]

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1. Ins. by Act 21 of 1998, sec. 72 (w.e.f. 1-10-1998).

2. Ins. by Act 49 of 2005, sec. 30 and Sch., Pt. II-3(i) (w.e.f. 28-12-2005).

3. Ins. by Act 49 of 2005, sec. 30 and Sch., Pt. II-3(ii) (w.e.f. 28-12-2005).

4. Certain words omitted by Act 27 of 1999, sec. 96(a) (w.e.f. 1-6-1999).

5. Ins. by Act 27 of 1999, sec. 96(b) (w.e.f. 1-6-1999).

Section 28. Hearing by High Court.

When a case has been stated to the High Court ¹[under section 27, or an appeal filed before the High Court under section 27A], it shall 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, if any:

Provided that where there is no such majority, the Judges shall state the point of law upon which they differ and the case shall then be heard upon that point only by one or more of the Judges of the High Court, and such point shall be decided according to the opinion of the majority of the Judges who have heard the case, including those who first heard it.

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1. Subs. by Act 21 of 1998, sec. 73, for “under section 27” (w.e.f. 1-10-1998).

Section 29. Appeal to Supreme Court.

(1) An appeal shall lie to the Supreme Court from any judgement of the High Court delivered ¹[before the date ofestablishment the National Tax Tribunal] on a case stated ²[under section 27 or an appeal filed under section 27A] in any case which the High Court certified as a fit case for appeal to the Supreme Court.

(2) Where the judgment of the High Court is varied or reversed on appeal under this section, effect shall be given to the order of the Supreme Court in the manner provided in sub-section (6) of section 27 ³[or in sub-section (7) of section 27A].

(3) The High Court may, on application made to it for the execution of any order of the Supreme Court in respect of any costs awarded by it, transmit the order for execution to any court subordinate to the High Court.

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1. Ins. by Act 49 of 2005, sec. 30 and Schedule, Pt. II-4 (w.e.f. 28-12-2005).

2. Subs. by Act 21 of 1998, sec. 74(a), for “under section 27” (w.e.f. 1-10-1998).

3. Ins. by Act 21 of 1998, sec. 74(b) (w.e.f. 1-10-1998).

Section 29 A. Tax to be paid notwithstanding reference, etc .

¹ [ 29A. Tax to be paid notwithstanding reference, etc . —Notwithstanding that a reference has been made to the High Court or the Supreme Court, or an appeal has been preferred to the Supreme Court, 2[under this Act before the commencement of the National Tax Tribunal, Act 2005 (49 of 2005)] wealth-tax shall be payable in accordance with the assessment made in the case.]

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1. Ins. by Act 46 of 1964, sec. 27 (w.e.f. 1-4-1965).

2. Ins. by Act 49 of 2005, sec. 30 and Schedule, Pt. II-5 (w.e.f. 28-12-2005).

Section 29 B. Definition of High Court:- In this Chapter, “High Court” means

¹[ 29B. Definition of High Court:- In this Chapter, “High Court” means–

(i) in relation to any State, the High Court of that State;

²[(ii) in relation to the Union territory of Delhi , the High Court of Delhi;

³[***]

⁴[(iii) in relation to the Union territories of Arunachal Pradesh and Mizoram, the Gauhati High Court (the High Court of Assam, Nagaland, Meghalaya, Manipur and Tripura);]

(iv) in relation to the Union territory of Andaman and Nicobar Islands, the High Court at Calcutta ;

(v) in relation to the Union territory of ⁵[ Lakshadweep ], the High Court of Kerala;

(vi) in relation to the Union territories of Dadra and Nagar Haveli and Goa, Daman and Diu, the High Court at Bombay ;

(vii) in relation to the Union territory of Pondicherry , the High Court at Madras ;

⁶[(viii) in relation to the Union territory of Chandigarh , the High Court of Punjab and Haryana.]]

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1. Ins. by Act 46 of 1964, sec. 27 (w.e.f. 1-4-1965).

2. Subs. by the Punjab Reorganisation of Delhi High Court (Adaptation of Laws on Union Subjects) Order, 1968, for clause (ii) (w.e.f. 1-11-1966).

3. Clause (iia) omitted by the State of Himachal Pradesh (Adaptation of Laws on Union Subjects) Order, 1973 (w.r.e.f. 25-1-1971).

4. Subs. by the North-Eastern Areas (Reorganisation) (Adaptation of Laws on Union Subjects) Order, 1974, for clause (iii) (w.r.e.f. 21-1-1972).

5. Subs. by the Laccadive, Minicoy, and Aminidivi lslands (Alteration of Name) Adaptation of Laws Order, l974, for “Laccadive, Minicoy and Aminidivi Islands ” (w.r.e.f 1-11-1973).

6. Ins. by the Punjab Reorganisation and Delhi High Court (Adaptation of Laws on Union Subjects) Order, 1968 (w.r.e.f. 1-11-1966).

Chapter VII – Payment and Recovery of Wealth-Tax

Section 30. Notice of demand.

¹[30. Notice of demand .—When any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under this Act, the ²[Assessing Officer] shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable.]

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1. Subs. by Act 46 of 1964, sec. 28, for section 30 (w.e.f. 1-4-1965).

2. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

Section 31. When tax, etc., payable and when assessee deemed in default

¹[31. When tax, etc., payable and when assessee deemed in default .—(1) Any amount specifed as payable in a notice of demand under section 30 shall be paid within ²[thirty days] of the service of the notice at the place and to the person mentioned in the notice:

Provided that, where the ³[Assessing Officer] has any reason to believe that it will be detrimental to revenue if the full period of ²[thirty days] aforesaid is allowed, he may, with the previous approval of the ⁴[Deputy Commissioner], direct that the sum specified in the notice of demand shall be paid within such period being a period less than the period of ²[thirty days] aforesaid, as may be specified by him in the notice of demand.

(2) If the amount specifed in any notice of demand under section 30 is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at ⁵[ ⁶[ ⁷[one per cent.]] for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid]:

Provided that, where as a result of an order under section 23 ⁸[or section 23A], or section 24, or section 25, or section 26, or section 27, or section 29, or section 35 ⁹[or any order of the Wealth-tax Settlement Commission under sub-section (4) of section 22D] the amount on which interest was payable under this section had been reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded:

¹⁰[Provided further that in respect of any period commencing on or before the 31st day of March, 1989, and ending after that date, such interest shall, in respect of so much of such period as falls after that date, be calculated at the rate of ¹¹[ ¹²[ ¹³[one per cent.]] for every month or part of a month.]

¹⁴[(2A) Notwithstanding anything contained in sub-section (2), ¹⁵[the [ ¹⁶ Chief Commissioner or Commissioner] may] reduce or waive the amount of ¹⁷[interest paid or payable by an assessee] under the said sub-section if ¹⁸[he is satisfied that]—

¹⁹[(i) payment of such amount has caused or would cause genuine hardship to the assessee;

(ii) default in the payment of the amount on which interest thas been paid or was payable under the said sub-section was due to circumstances beyond the control of the assessee; and]

(iii) the assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him.]

(3) Without prejudice to the provisions contained in sub-section (2), on an application made by the assessee before the expiry of the due date under sub-section (1), the²⁰[Assessing Officer] may extend the time for payment or allow payment by instalments, subject to such conditions as he may think fit to impose in the circumstances of the case.

(4) If the amount is not paid within the time limit under sub-section (1) or extended under sub-section (3), as the case may be, at the place and to the person mentioned in the said notice, the assessee shall be deemed to be in default.

(5) If in a case where payment by instalments is allowed under sub-section (3), the assessee commits default in paying any one of the instalments within the time fixed under that sub-section, that assessee shall be deemed to be in default as to the whole of the amount then outstanding, and the other instalment or instalments shall be deemed to have been due on the same date as the instalment actually in default.

(6) Where an assessee has presented an appeal under section 23 ²¹[or section 23A], the²⁰[Assessing Officer] may, in his discretion, and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired as long as such appeal remains undisposed of.

(7) Where an assessee has been assessed in respect of assets located in a country outside lndia, the laws of which prohibit or restrict the remittance of money to India, the ²⁰[Assessing Officer] shall not treat the assessee as in default in respect of that part of the tax which is attributable to those assets, and shall continue to treat the assessee as not in default in respect of that part of the tax until the prohibition or restriction of remittance is removed.]

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1. Subs. by Act 46 of 1964, sec. 28, for section 31 (w.e.f. 1-4-1965).

2. Subs. by Act 4 of 1988, sec. 148(a), for “thirty-five days” (w.e.f. 1-4-1989).

3. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

4. Subs. by Act 4 of 1988, sec. l27, for “Inspecting Assistant Commissioner” (w.e.f. l-4-1988).

5. Subs. by Act 4 of 1988, sec. 148(b)(i), for certain words (w.e.f. 1-4-1989).

6. Subs. by Act 4 of 2001, sec. 99, for “one and one-half per cent.” (w.e.f. 1-6-2001).

7. Subs. by Act 54 of 2003, sec. 20(a), for “one and one-fourth per cent.” (w.r.e.f. 8-9-2003).

8. Ins. by Act 10 of 2000, sec. 74(a) (w.e.f. 1-6-2000).

9. Ins. by Act 4 of 1988, sec. 148(b)(ii) (w.e.f. 1-4-1989).

10. lns. by Act 4 of 1988, sec. 148(b)(iii) (w.e.f. 1-4-1989).

11. Subs. by Act 14 of 2001, sec. 99(i), for “one and one-half per cent.” (w.e.f. 1-6-2001).

12. Subs. by Act 14 of 2001, sec. 99(ii), for “one and one-half per cent.” (w.e.f. 1-6-2001).

13. Subs. by Act 54 of 2003, sec. 20(b), for “one and one-fourth per cent.” (w.r.e.f. 8-9-2003).

14. Ins. by Act 67 of 1984, sec. 66(b) (w.e.f. 1-10-1984).

15. Subs. by Act 4 of 1988, sec. 88(a)(i), for “the Board may” (w.r.e.f. 1-4-1987).

16. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

17. Subs. by Act 11 of 1987, sec. 88(a)(ii), for “interest payable by an assessee” (w.r.e.f. 1-10-1984).

18. Subs. by Act 11 of 1987, sec. 88(a)(iii), for certain words (w.r.e.f. 1-4-1987).

19. Subs. by Act 11 of 1987, sec. 88(b), for clauses (i) and (ii) (w.r.e.f. 1-10-1984).

20. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

21. Ins. by Act 10 of 2000, sec. 74(b) (w.e.f. 1-6-2000).

Section 32. Mode of recovery :

¹[32. Mode of recovery :—The provisions contained in ²[sections 221 to 227, 228A], 229, 231 and 232 of the Income-tax Act and the Second and Third Schedules to that Act and any rules made thereunder shall, so far as may be, apply as if the said provisions were provisions of this Act and referred to wealth-tax and sums imposed by way of penalty, fine and interest under this Act instead of to income-tax and sums imposed by way of penalty, fine and interest under that Act ³[and to the corresponding wealth-tax authorities instead of to the income-tax authorities specified therein].

⁴[Explanation I. —Any reference to section 173 and sub-section (2) or sub-section (6) or sub-section (7) of section 220 of the Income-tax Act in the said provisions of that Act or the rules made thereunder shall be construed as references to sub-section (7) of section 22 and sub-section (2) or sub-section (6) or sub-section (7) of section 31 of this Act respectively. ]]

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1. Subs. by Act 46 of 1964, sec. 28, for section 32 (w.e.f. 1-4-1965).

2. Subs. by Act 16 of 1972, sec. 48, for “sections 221 to 227” (w.e.f. 1-4-1972).

3. Subs. by Act 4 of 1988, sec. 149(a), for certain words (w.e.f. 1-4-1988).

4. Subs. by Act 4 of 1988, sec. 149(b), for Explanation II (w.e.f. 1-4-1988). Earlier Explanation II was amended by Act 32 of 1971, sec. 35 (w.e.f. 1-1-1972).

Section 33. Liability of transferees of properties in certain cases .

33. Liability of transferees of properties in certain cases .—(1) Where by reason of the provisions contained in section 4, the value of any assets transferred to any of the persons mentioned in that section have to be included in the net wealth of an individual, the person in whose name such assets stand shall, notwithstanding anything contained in any law to the contrary, be liable, on the service of a notice of demand by the ¹[Assessing Officer] in this behalf, to pay that portion of the tax assessed on the assessee as is attributable to the value of the asset standing in his name as aforesaid:

Provided that where any such asset is held jointly by more than one person, they shall be jointly and severally liable to pay the tax as is attributable to the value of the asset so jointly held.

(2) Where any such person as is referred to in sub-section (I) defaults in making payment of any tax demanded from him, he shall be deemed to be an assessee in default in respect of such sum, and all the provisions of this Act relating to recovery shall apply accordingly.

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1. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

Section 34. Restrictions on registration of transfers of immovable property in certain cases:

34. Restrictions on registration of transfers of immovable property in certain cases:—[ Rep. by the Wealth-tax Act, 1964 (46 of 1964), sec. 29 (w.e.f. 1-4-1965). ]

Chapter VII A – Refunds

Section 34 A. Refunds

¹[34A. Refunds .—(1) Where, as a result of any order passed in appeal or other proceeding including a rectification proceeding under this Act, refund of any amount becomes due to the assessee, the ²[Assessing Officer] shall, except as otherwise provided in this Act, refund the amount to the assessee without his having to make any claim in that behalf:

³[Provided that where, by the order aforesaid;

(a) an assessment is set aside or cancelled and an order of fresh assessment is directed to be made, the refund, if any, shall become due only on the making of such fresh assessment;

(b) the assessment is annulled, the refund shall become due only of the amount, if any, of the tax paid in excess of the tax chargeable on the ⁴[net wealth] returned by the assessee.]

⁵[(2) Where refund of any amount becomes due to the assessee as a result of an order under this Act or under the provisions of sub-section (1) of section 16 after a return has been” made under section 14 or section 15 or in response to a notice under clause (i) of sub-section (4) of section 16 and the Assessing Officer is of the opinion, having regard to the fact that,

(i) a notice has been issued, or is likely to be issued, under sub-section (2) of section 16 in respect of the said return; or

(ii) the order is the subject-matter of an appeal or further proceeding; or

(iii) any other proceeding under this Act is pending;

that the grant of the refund is likely to adversely affect the revenue, the Assessing Officer may, with the previous approval of the Chief Commissioner or Commissioner, withhold the refund till such time as the Chief Commissioner or Commissioner may determine.]

(3) Where a refund is due to the assessee in pursuance of an order referred to in sub-section (1) and the ²[Assessing Officer] does not grant the refund within a period of six months from the date of such order, the Central Government shall pay to the assessee simple interest at ⁶[ ⁷[ ⁸[ ⁹[six per cent.]]]] per annum on the amount of refund due from the date immediately following the expiry of the period of six months aforesaid to the date on which the refund is granted.

¹⁰[(3A) Where the whole or any part of the refund referred to in sub-section (3) is due to the assessee as a result of any amount having been paid by him after the 31st day of March, 1975 in pursuance of any order of assessment or penalty and such amount or any part thereof having been found in appeal or other proceeding under this Act to be in excess of the amount which such assessee is liable to pay as tax or penalty, as the case may be, under this Act, the Central Government shall pay to such assessee simple interest at the rate specified in sub-section (3) on the amount so found to be in excess from the date on which such amount was paid to the date on which the refund is granted:

Provided that, where the amount so found to be in excess was paid in instalments, such interest shall be payable on the amount of each such instalment or any part of such instalment, which was in excess, from the date on which such instalment was paid to the date on which the refund is granted:

Provided further that no interest under this sub-section shall be payable for a period of one month from the date of the passing of the order in appeal or other proceeding:

Provided also that where any interest is payable to an assessee under this sub-section, no interest under sub-section (3) shall be payable to him in respect of the amount so found to be in excess.]

(4) Where a refund is withheld under the provisions of sub-section (2), the Central Government shall pay interest at the aforesaid rate on the amount of refund ultimately determined to be due as a result of the appeal or further proceeding for the period commencing after the expiry of six months from the date of the order referred to in that sub-section to the date the refund is granted.

¹¹[(4A) The provisions of sub-sections (3), (3A) and (4) shall not apply in respect of any assessment for the assessment year commencing on the lst day of April, 1989, or any subsequent assessment year.

(4B) (a) ¹²[Where refund of any amount becomes due to the assessee under this Act,] he shall, subject to the provisions of sub-section, be entitled to receive, in addition to the said amount, simple interest thereon calculated at the rate of ¹³[¹⁴[ ¹⁵[one-half per cent.]]] for every month or part of a month comprised in the period or periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted.

Explanation .—For the purposes of this clause, “date of payment of the tax or penalty” means the date on and from which the amount of tax or penalty specified in the notice of demand issued under section 30 is paid in excess of such demand.

(b) If the proceedings resulting in the refund are delayed for reasons attributable to the assessee, whether wholly or in part, period of the delay so attributable to him shall be excluded from the period for which interest is payable and where any question arises as to the period to be excluded, it shall be decided by the Chief Commissioner or Commissioner whose decision thereon shall be final.

(c) Where as a result of an order under ¹⁶[sub-section (3) or sub-section (5) of section 16 or] section 17 or section 23 ¹⁷[or section 23A] or section 24 or section 25 or section 27 or section 29 or section 35 or any order of the Wealth-tax Settlement Commission under sub-section (4) of section 22D, the amount on which interest was payable under clause (a) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and in a case where the interest is reduced, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the amount of the excess interest paid and requiring him to pay such amount; and such notice of demand shall) be deemed to be a notice under section 30 and the provisions of this Act shall apply accordingly.

(d) The provisions of this sub-section shall apply in respect of assessments for the assessment year commencing on the lst day of April, 1989, and subsequent assessment years.]

(5) Where under any of the provisions of this Act, a refund is found to be due to any person, the ¹⁸[Assessing Officer] or ¹⁹[Deputy Commissioner (Appeals)] or ²⁰[Commissioner (Appeals)] or ²¹ [Chief Commissioner or Commissioner] as the case may be may in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against the sum, if any, remaining payable under this Act by the person to whom the refund is due, after giving an intimation in writing to such person of the action proposed to be taken under this section.] ]

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1. Chapter VIIA (containing section 34A) ins. by Act 46 of 1964, sec. 30 (w.e.f. 1-4-1965).

2. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

3. Ins. by Act 4 of 1988, sec. 150(i) (w.e.f. 1-4-1989).

4. Subs. by Act 3 of 1989, sec. 73(a), for “total income” (w.e.f. 1-4-1989).

5. Subs. by Act 36 of 1989, sec. 29, for sub-section (2) (w.r.e.f. 1-4-1989).

6. Subs. by Act 67 of 1984, sec. 67, for “twelve-per cent.” (w.e.f. 1-10-1984).

7. Subs. by Act 14 of 2001, sec. 100(a), for “fifteen per cent.” (w.e.f. 1-6-2001).

8. Subs. by Act 20 of 2002, sec. 114(a), for “nine per cent.” (w.e.f. 1-6-2002).

9. Subs. by Act 54 of 2003, sec. 21(a), for “eight per cent.” (w.r.e.f. 8-9-2003).

10. Ins. by Act 41 of 1975, sec. 97 (w.e.f. 1-10-1975).

11. Ins. by Act 4 of 1988, sec. 150(ii) (w.e.f. 1-4-1989).

12. Subs. by Act 3 of 1989, sec. 73(b)(i), for certain words (w.e.f. 1-4-1989).

13. Subs. by Act 14 of 2001, sec. 100(b), for “one per cent.” (w.e.f. 1-6-2001).

14. Subs. by Act 20 of 2002, sec. 114(b), for “three-fourth per cent.” (w.e.f. 1-6-2002).

15. Subs. by Act 54 of 2003, sec. 21(b), for “two-third per cent.” (w.r.e.f. 8-9-2003).

16. Ins. by Act 3 of 1989, sec. 73(b)(ii) (w.e.f. 1-4-1989).

17. Ins. by Act 10 of 2000, sec. 75 (w.e.f. 1-6-2000).

18. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

19. Subs. by Act 4 of 1988, sec. 127, for “Appellate Assistant Commissioner” (w.e.f. l-4-1988).

20. Ins. by Act 29 of 1977, sec. 39 and Sch. V (w.e.f. 10-7-1978).

21. Subs. by Act 4 of 1988, sec. 127, for “Commissioner’ (w.e.f. 1-4-1988).

Chapter VII B – Registered Valuers

Section 34 AA. Appearance by registered valuers .

¹[34AA. Appearance by registered valuers .—Notwithstanding anything contained in this Act, any assessee who is entitled to or required to attend before any wealth-tax authority or the Appellate Tribunal in connection with any matter relating to the valuation of any asset, except where he is required under this Act to attend in person, may attend by a registered valuer.]

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1. Chapter VIIB (containing sections 34AA) ins. by Act 45 of 1972, sec. 14 (w.e.f. 15-11-1972).

Section 34 AB. Registration of valuers .

¹[34AB. Registration of valuers .—(1) The 6 [Chief Commissioner or Director-General] shall maintain a register to be called the Register of Valuers in which shall be entered the names and addresses of persons registered under sub-section (2) as valuers.

(2) Any person who possesses the qualifications prescribed in this behalf may apply to the ²[Chief Commissioner or Director-General] in the prescribed form for being registered as a valuer under this section:

Provided that different qualifications may be prescribed for valuers of different classes of assets.

(3) Every application under sub-section (2) shall be verified in the prescribed manner, shall be accompanied by such fees as may be prescribed and shall contain a declartion to the effect that the applicant will (i) make an impartial and true valuation of any asset which he may be required to value;

(ii) furnish a report of such valuation in the prescribed form;

(iii) charge fees at a rate not exceeding the rate or rates prescribed in this behalf;

(iv) not undertake valuation of any asset in which he has a direct or indirect interest.

(4) The report of valuation of any asset by a registered valuer shall be in the prescribed form and be verified in the prescribed manner. ]

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1. Chapter VIIB (containing sections 34AB) ins. by Act 45 of 1972, sec. 14 (w.e.f. 15-11-1972).

2. Subs. by Act 26 of 1988, sec. 58, for “Board” (w.e.f. 1-6-1988).

Section 34 AC. Restrictions on practice as registered valuer.

34AC. Restrictions on practice as registered valuer.—(1) No person, either alone or in partnership with any other person, shall practise, describe himself or hold himself out as a registered valuer for the purposes of this Act or permit himself to be so described or held out, unless he is registered as a valuer or, as the case may be, unless he and all his partners are so registered under this Chapter.

(2) No company or other body corporate shall practise, describe itself or hold itself out as registered valuers for the purposes of this Act or permit itself to be so described or held out.

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1. Chapter VIIB (containing sections 34AC) ins. by Act 45 of 1972, sec. 14 (w.e.f. 15-11-1972).

Section 34 ACC. Furnishing of particulars in certain case

¹[²[34ACC. Furnishing of particulars in certain case .—Where any person who is registered as a valuer under section 34AB or who has made an application for registration as a valuer under that section is, at any time thereafter;

(a) convicted of any offence and sentenced to a term of imprisonment; or

(b) in a case where he is a member of any association or institution established in India having as its object the control, supervision, regulation or encouragement of the profession of architecture, accountancy, or company secretaries of such other profession as the Board may specify in this behalf by notification in the Official Gazette, found guilty of misconduct in his professional capacity, by such association or institution, he shall immediately after such conviction or, as the case may be, finding, intimate the particulars thereof 3[to the Chief Commissioner or Director-General.] ]

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1. Chapter VIIB (containing sections 34ACC) ins. by Act 45 of 1972, sec. 14 (w.e.f. 15-11-1972).

2. Ins. by Act 67 of 1984, sec. 68 (w.e.f. 1-10-1984).

3. Subs. by Act 26 of 1988, sec. 59, for “to the Board” (w.e.f. 1-6-1988).

Section 34 AD. Removal from register of names of valuers and restoration .

¹[34AD. Removal from register of names of valuers and restoration .—(1) The²[Chief Commissioner or Director-General] may remove the name of any person from the register of valuers where ³[he is satisfied] after giving that person a reasonable opportunity of being heard and after such further inquiry, if any, as ⁴[he thinks fit] to make;

(i) that his name has been entered in the register by error or on account of misrepresentation or suppression of a material fact;

(ii) that he has been convicted of any offence and sentenced to a term of imprisonment or has been guilty of misconduct in his professional capacity which, in the opinion of the ⁵[Chief Commissioner or Director-General], renders him unfit to be kept in the register.

(2) The ⁶[Chief Commissioner or Director-General] may, on application and on sufficient cause being shown, restore to the register the name of any person removed therefrom.]

⁷[(3) Without prejudice to the provisions of sub-sections (1) and (2), the Chief Commissioner or Director-General shall, once in three years, review the performance of all the registered valuers and may remove the name of any person from the register of valuers where he is satisfied, after giving that person a reasonable opportunity of being heard and after such further inquiry, if any, as he thinks fit to make, that his performance is such that his name should not remain on the register of valuers.]

⁷[(4) The Chief Commissioner or Director-General may himself conduct the inquiry referred to in sub-section (1) or sub-section (3) or appoint an Inquiry Officer not below the rank of a Commissioner to conduct such inquiry, and for the purposes of such inquiry, the Chief Commissioner or Director-General and the Inquiry Officer so appointed shall have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908) when trying a suit in respect of the following matters, namely:—

(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;

(d) issuing commission.]

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1. Chapter VIIB (containing sections 34AD) ins. by Act 45 of 1972, sec. 14 (w.e.f. 15-11-1972).

2. Subs. by Act 26 of 1988, sec. 60(a)(i), for “Board” (w.e.f. 1-6-1988).

3. Subs. by Act 26 of 1988, sec. 60(a)(ii), for “it is satisfied” (w.e.f. 1-6-1988).

4. Subs. by Act 26 of 1988, sec. 60(a)(iii), for “it thinks fit” (w.e.f. 1-6-1988).

5. Subs. by Act 26 of 1988, sec. 60(a)(i), for “Board” (w.e.f. 1-6-1988).

6. Subs. by Act 26 of 1988, sec. 60(b), for “Board” (w.e.f. 1-6-1988).

7. Ins. by Act 26 of 1988, sec. 60(c) (w.e.f. 1-6-1988).

Section 34 AE. Existing registered valuers to apply afresh :

¹[34AE. Existing registered valuers to apply afresh :- (1) Notwithstanding anything contained in this Chapter, every person whose name is included in the register of valuers immediately before the 1st day of June, (1988), shall, if he intends to continue to be registered under this Act, make an application under sub-section (2) of section 34AB within a period of three months from that date, for being registered aftesh as a valuer under this Chapter and the provisions of sub-section (3) of that section and the rules made thereunder shall be applicable in respect of the verification of the application; the fees that shall accompany such application and the declaration to be made by the applicant.

(2) The provisions of this Chapter regarding the registration of a person as a valuer and other matters shall, so far as may be, apply to every application made under sub-section (1).

(3) Every application pending before the Board immediately before the 1st day of June, 1988, shall be deemed to be an application received by the Chief Commissioner or Director General under sub-section (1).]

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1. Ins. by Act 26 of 1988, sec. 61 (w.e.f. 1-6-1988).

Chapter VII C – Miscellaneous

Section 34 B. Transfers to defraud revenue to be void .

¹[34B. Transfers to defraud revenue to be void .-—(1) Where, during the pendency of any proceeding under this Act or after the completion thereof, but before the service of notice under rule 2 of the Second Schedule to the Income-tax Act as made applicable to this Act by section 32, any assessee creates a charge on, or parts with (by way of sale, mortgage gift, exchange or any other mode of transfer whatsoever) the possession of any of his assets in favour of any other person, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the assessee as a result of the completion of the proceeding or otherwise:

Provided that such charge or transfer shall not be void, if it is made

(i) for adequate consideration and without notice of the pendency of such proceeding or, as the case may be, without notice of such tax or other sum payable by the assessee; or

(ii) with the previous permission of the 2[Assessing Officer].

(2) This section applies to cases where the amount of tax or other sum payable or likely to be payable exceeds] five thousand rupees and the assets charged or transferred exceed ten thousand rupees in value.

Explanation .—In this section, “assets” means land, building, machinery, plant, shares, securities and fixed deposits in banks to the extent to which any of the assets aforesaid does not form part of the stock in trade of the business of the assessee. ]

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1. Sections 34B and 34C subs. by Act 41 of 1975, sec. 98, for section 34B (w.e.f. 1-10-1975). Earlier section 34B was inserted by Act 46 of 1964, sec. 31 (w.e.f. 1-4-1965).

2. Subs. by Act 4 of 1988, sec. l27, for “Wealth-tax Officer” (w.e.f. l-4-1988).

Section 34 C. Provisional attachment to protect revenue in certain cases .

¹[34C. Provisional attachment to protect revenue in certain cases .—(1) Where, during the pendency of any proceeding for the assessment of net wealth or for the assessment or re-assessment of net wealth which has escaped assessment, the ²[Assessing Officer] is of the opinion that for the purpose of protecting the interests of the revenue it is necessary to do, he may, with the previous approval of the ³[Chief Commissioner or Commissioner], by order in writing, attach provisionally any property belonging to the assessee in the manner provided in the Second Schedule to the Income-tax Act as made applicable to this Act by section 32.]

⁴[ Explanation .—For the purposes of this sub-section, the proceedings under sub-section (5) of section 37A shall be deemed to be proceedings for the assessment of any net wealth or for the assessment or reassessment of any net wealth which has escaped assessment.]

(2) Every such provisional attachment shall cease to have effect after the expiry of a period of six months from the date of the order made under sub-section (1):

Provided that the ³[Chief Commissioner or Commissioner] may, for reasons to be recorded in writing, extend the aforesaid period by such further period or periods as he thinks fit, so however, that the total period of extension shall not in any case exceed two years:]

⁵[Provided further that where an application for settlement under section 22C is made the period commencing from the date on which such application is made and ending with the date on which an order under sub-section (1) of section 22D is made shall be excluded from the period specified in the preceding proviso.]

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1. Sections 34B and 34C subs. by Act 41 of 1975, sec. 98, for section 34B (w.e.f. 1-10-1975). Earlier section 34B was inserted by Act 46 of 1964, sec. 31 (w.e.f. 1-4-1965).

2. Subs. by Act 4 of 1988, sec. l27, for “Wealth-tax Officer” (w.e.f. l-4-1988).

3. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

4. Ins. by Act 26 of 1988, sec. 62(a) (w.r.e.f. 1-4-1988). 5. Ins. by Act 26 of l988, sec. 62(b) (w.r.e.f. 1-4-1988).

[Section 35. Rectification of mistakes

¹[35. Rectification of mistakes .—(1) With a view to rectifying any mistake apparent from the record

(a) the ²[Assessing Officer] may amend any order of assessment or of refund or any other order passed by him;

³[(aa) a wealth-tax authority may amend any intimation or deemed intimation under sub-section (1) of section 16.]

⁴[ ⁵[(aaa)] the Valuation Officer may amend any order passed by him under
section 16A;]

⁶[(b) the ⁷[Joint Director] or 8[Joint Commissioner] or Director or Commissioner or Deputy Commissioner (Appeals) or Commissioner (Appeals) may amend any order passed by him under section 18A;]

⁹[***]

¹⁰[(c) the Deputy Commissioner (Appeals) or Commissioner (Appeals) may amend any order passed by him under section 23 ¹¹[or section 23A];

(d) the Commissioner may amend any order passed by him under section 25;

(e) the Appellate Tribunal may amend any order passed by it under section 24.]

(2) Where the amount of tax, penalty or interest determined as a result of the first appeal or revision against the order referred to in sub-clause (iii) of clause (m) of section 2, ¹²[as it existed immediately before its amendment by the Finance Act, 1992,] is paid within six months of the date of the order passed in such appeal or revision, the ²[Assessing Officer] may, notwithstanding anything to the contrary in this Act, rectify the assessment by allowing a deduction to the extent the tax, penalty or interest so paid stood disallowed therein as if such rectification were a rectification of a mistake apparent from the record.

(3) Subject to the other provisions of this section, the authority concerned—

(a) may make an amendment under sub-section (1) or sub-section (2) of its own motion; and

(b) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee, and where the authority concerned is the ¹³[Valuation Officer or the ¹⁴[Deputy Commissioner (Appeals)]] ¹⁵[or the Commissioner (Appeals)] or the Appellate Tribunal, by the ²[Assessing Officer] also.

(4) An amendment, which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this section unless the authority concerned has given notice to the assessee of its intention so to do and has allowed the assessee a reasonable opportunity of being heard.

(5) Where an amendment is made under this section, an order shall be passed in writing by the Wealth-tax authority concerned or the Tribunal, as the case may be.

(6) Where any such amendment has the effect of enhancing the assessment or reducing a refund already made, the ²[Assessing Officer] shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be issued under section 30 and the provisions of this Act shall apply accordingly.

16[(6A) Where any amendment made by the Valuation Officer under clause (aa) of sub-section (1) has the effect of enhancing the valuation of any asset, he shall send a copy of his order to the ²[Assessing Officer] who shall thereafter proceed to amend the order of assessment in conformity with the order of the Valuation Officer and the provisions of subsection (6) shall apply accordingly.]

(7) No amendment under this section shall be made after the expiry of four years—

(a) in the case of an amendment under sub-section (2) ¹⁷[from the end of the financial year in which the order was passed in the first appeal or revision] referred to in that sub-section; and

(b) in any other case ¹⁸[from the end of the financial year in which the order sought to be amended was passed]

¹⁹[(7A) Notwithstanding anything contained in sub-section (7), where the valuation of any asset has been enhanced by the Valuation Officer under this section the consequential amendment to the order of assessment may be made by the 2[Assessing Officer] at any time before the expiry of one year from the date of the order of the Valuation Officer under this section.]

(8) Where any matter has been considered and decided in a proceeding by way of an appeal or revision relating to an order referred to in sub-section (1), the authoriry passing such order may, notwithstanding anything contained in any other law for the time being in force, amend the order under this section in relation to any matter other than the matter which has been so considered and decided.]

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1. Subs. by Act 46 of 1964, sec. 32, for section 35 (w.e.f. 1-4-1965).

2. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

3. Subs. by Act 27 of 1999, sec. 97, for clause (aa) (w.e.f. 1-6-1999). Earlier clasue (aa) was inserted by Act 4 of 1988, sec. 151 (w.e.f. 1-4-1989).

4. Ins. by Act 45 of 1972, sec. 15(a) (w.e.f. 1-1-1973).

5. Clause (aa) re-lettered as clause (aaa) by Act 4 of 1988, sec. 151 (w.e.f. 1-4-1989).

6. Subs. by Act 4 of 1988, sec. 160(3)(a), for clause (b) (w.e.f. 1-4-1989).

7. Subs. by Act 21 of 1998, sec. 66, for “Deputy Director” (w.e.f. 1-10-1998).

8. Subs. by Act 21 of 1998, sec. 66, for “Deputy Commissioner” (w.e.f. 1-10-1968).

9. Clause (c) omitted by Act 41 of 1975, sec. 99 (w.e.f. 1-4-1976).

10. Subs. by Act 4 of 1988, sec. 160(3)(b), for clauses (d) and (e) (w.e.f. 1-4-1988).

11. Ins. by Act 10 of 2000, sec. 76 (w.e.f. 1-6-2000). Earlier the words “or section 23A” were omitted by Act 3 of 1989, sec. 74 (w.e.f. 1-4-1989). 12. Ins. by Act 18 of 1992, sec. 97 (w.e.f. 1-4-1993).

13. Subs. by Act 45 of 1972, sec. 15(b), for “Appellate Assistant Commissioner” (w.e.f 1-1-1973).

14. Subs. by Act 4 of 1988, sec. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988).

15. Ins. by Act 29 of 1977, sec. 39 and Sch. V (w.e.f. 10-7-1978).

16. Ins. by Act 45 of 1972, sec. 15(c) (w.e.f. 1-1-1973).

17. Subs. by Act 67 of 1984, sec. 69(i), for “from the date of the order passed in the first appeal or revision” (w.e.f. 1-10-1984).

18. Subs. by Act 67 of 1984, sec. 69(ii), for “from the date of the order sought to be amended” (w.e.f. 1-10-1984).

19. Ins. by Act 45 of 1972, sec. 15(d) (w.e.f. 1-1-1973).

Section 35 A. Wilful attempt to evade tax, etc

¹[35A. Wilful attempt to evade tax, etc . —(1) If a person wilfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable;

(i) in a case where the amount sought to be evaded exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine;

(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine.

(2) If a person wilfully attempts in any manner whatsoever to evade the payment of any tax, penalty or interest under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provisions of this Act, be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and shall, in the discretion of the court, also be liable to fine.

Explanation .—For the purposes of this section, a wilful attempt to evade any tax, penalty or interest chargeable or imposable under this Act of the payment thereof shall include a case where any person

(a) has in his possession or control any books of account or other documents (being books of account or other documents relevant to any proceeding under this Act) containing a false entry or statement, or

(b) makes, or causes to be made, any false entry or statement in such books of account or other documents, or

(c) wilfully omits, or causes to be omitted, any relevant entry or statement in such books of account or other documents, or

(d) causes any other circumstances to exist which will have the effect of enabling such person to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof.]

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1. Ins. by Act 41 of 1975, sec. 100 (w.e.f. 1-10-1975).

Section 35 B. Failure to furnish returns of net wealth .

¹[35B. Failure to furnish returns of net wealth .—If a person wilfully fails to furnish in due time the return of his net wealth which he is required to furnish under sub-section (1) of section 14 or by notice given under sub-section (2) of section 14 or under sub-section (1) of section 17, he shall be punishable;

(i) in a case where the amount of tax, which would have been evaded if the failure had not been discovered, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine;

(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine:

Provided that a person shall not be proceeded against under this section for failure to furnish in due time the return of net wealth under sub-section (1) of section 14—

(i) for any assessment year commencing prior to the 1st day of April, 1975; or

(ii) for any assessment year commencing on or after the 1st day of April,
1975, if—

(a) the return is furnished by him before the expiry of the assessment year; or

(b) the tax payable by him on his net wealth determined on regular assessment does not exceed three thousand rupees.]

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1. Ins. by Act 41 of 1975, sec. 100 (w.e.f. 1-10-1975).

Section 35 C. Failure to produce accounts, records, etc.

¹[35C. Failure to produce accounts, records, etc.—If a person wilfully fails to produce, or cause to be produced, on or before the date specified in any notice under sub-section (4) of section 16, such accounts, records and documents as are referred to in the notice, he shall be punishable with rigorous imprisonment for a term which may extend to one year or with fine equal to a sum calculated at a rate which shall not be less than four rupees or more than ten rupees for every day during which the default continues, or with both.]

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1. Ins. by Act 41 of 1975, sec. 100 (w.e.f. 1-10-1975).

Section 35 D. False statement in verification, etc., made under certain provisions of the Act .

¹[35D. False statement in verification, etc., made under certain provisions of the Act .—If a person makes a statement in any verification under this Act (other than under section 34AB) 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,—

(i) in a case where the amount of tax which would have been evaded if the statement of account had been accepted as true, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine;

(ii) in any other case, with rigorous imprisonment for a term which shall
not be less than three months but which may extend to three years and with fine.]

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1. Ins. by Act 41 of 1975, sec. 100 (w.e.f. 1-10-1975).

[Section 35 E. False statement in verification mentioned in section 34AB

¹[35E. False statement in verification mentioned in section 34AB.—If a person makes a statement in a verification mentioned in section 34AB 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 imprisonment for a term which may extend to six months or with fine or with both.]

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1. Ins. by Act 67 of 1984, sec. 70 (w.e.f. 1-10-1984).

Section 35 EE. Failure to furnish particulars under section 34ACC.

¹[35EE. Failure to furnish particulars under section 34ACC.—If a person referred to in section 34ACC fails ²[***] to intimate to the Board the particulars of conviction of finding referred to in the said section, he shall be punishable with rigorous imprisonment for a term which may extend to two years and shall also be liable to fine:]

³[Provided that no person shall be punishable under this section if he proves that there was reasonable cause or excuse for the said failure.]

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1. Ins. by Act 67 of 1984, sec. 70 (w.e.f. 1-10-1984). 2. The words “without reasonable cause or excuse” omitted by Act 46 of 1986, sec. 38(i) (w.e.f. 10-9-1986). 3. Ins. by Act 46 of 1986, sec. 38(ii) (w.e.f. 10-9-1986).

[Section 35 EEE. Contravention of order made under second proviso to sub- section (1) or sub-section (3A) of section 37A .

¹[35EEE. Contravention of order made under second proviso to sub- section (1) or sub-section (3A) of section 37A .—If a person contravenes any order referred to in the second proviso to sub-section (1) or sub-section (3A) of section 37A, he shall be punishable with rigorous imprisonment for a term which may extend to two years and with fine.]

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1. Ins. by Act 12 of 1990, sec. 56 (w.r.e.f. 1-4-1990).

Section 35 F. Abetment of false return, etc .

¹[35F. Abetment of false return, etc .—If a person abets or induces in any manner another person to make and deliver an account, statement or declaration relating to any net wealth 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-section (1) of section 35A, he shall be punishable,—

(i) in a case where the amount of tax, penalty or interest, which would have been evaded, if the declaration, account or statement had been accepted as true, or which is wilfully attempted to be evaded, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine;

(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine.]

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1. Ins. by Act 41 of 1975, sec. 100 (w.e.f. 1-10-1975).

Section 35 G. Punishment for second and subsequent offences .

¹[35G. Punishment for second and subsequent offences .—If any person convicted of an offence under sub-section (1) of section 35A or section 35B or section 35D or section 35F is again convicted of an offence under any of the aforesaid provisions, he shall be punishable for the second and for every subsequent offence with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine.]

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1. Ins. by Act 41 of 1975, sec. 100 (w.e.f. 1-10-1975).

Section 35 GA. Power of Commissioner to grant immunity from prosecution.

¹[35GA. Power of Commissioner to grant immunity from prosecution. —(1) A person may make an application to the Commissioner for granting immunity from prosecution, if he has made an application for settlement under section 22C and the proceedings for settlement have abated under section 22HA.

(2) The application to the Commissioner under sub-section (1) shall not be made after institution of the prosecution proceedings after abatement.

(3) The Commissioner may, subject to such conditions as he may think fit to impose, grant to the person immunity from prosecution for any offence under this Act, if he is satisfied that the person has, after the abatement, co-operated with the wealth-tax authority in the proceedings before him and has made a full and true disclosure of his net wealth and the manner in which such net wealth has been derived:

Provided that where the application for settlement under section 22C had been made before the 1st day of June, 2007, the Commissioner may grant immunity from prosecution for any offence under this Act or under the Indian Penal Code (45 of 1860) or under any other Central Act for the time being in force.

(4) The immunity granted to a person under sub-section (3) shall stand withdrawn, if such person fails to comply with any condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted.

(5) The immunity granted to a person under sub-section (3) may, at any time, be withdrawn by the Commissioner, if he is satisfied that such person had, in the course of any proceedings, after abatement, concealed any particulars, material to the assessment, from the wealth-tax authority or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which he appears to have been guilty in connection with the proceedings.]

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1. Ins. by the Finance Act, 2008, sec. 65 (w.r.e.f. 1-4-2008).

Section 35 H. Offences by Hindu undivided families .

¹[35H. Offences by Hindu undivided families .—(1) Where an offence under this Act has been committed by a Hindu undivided family, the Karta thereof shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render the Karta liable to any punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a Hindu undivided family 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 member thereof, such member shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.]

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1. Subs. by Act 46 of 1964, sec. 28, for section 32 (w.e.f. 1-4-1965).

Section 35 HA. Offences by companies .

¹[35HA. Offences by companies .—(1) Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act 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 director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

²[(3) Where an offence under this Act has been committed by a person, being a company and such offence is punishable with imprisonment and fine, then, without prejudice to the provisions contained in sub-section (1) or sub-section (2), such company shall be punished with fine and every person, referred to in sub-section (1) or the director, manager, secretary or other officer of the company referred to in sub-section (2), shall be liable to be proceeded against and punished in accordance with the provisions of this Act.]

Explanation .—For the purposes of this section,—

(a) “company” means a body corporate, and includes

(i) a firm; and

(ii) an association of persons or a body of individuals whether incorporated or not; and

(b) “director”, in relation to,—

(i) a firm, means a partner in a firm;

(ii) any association of persons or a body of individuals, means any member controlling the affairs thereof.]

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1. Ins. by Act 18 of 1992, sec. 98 (w.e.f. 1-4-1993).

2. Ins. by Act 23 of 2004, sec. 65 (w.e.f. 1-10-2004).

[Section 35-I. Prosecutions to be with the previous sanction of certain wealth-tax authorities and their power to compound offences.

¹[35-I. Prosecutions to be with the previous sanction of certain wealth-tax authorities and their power to compound offences. — ²[(1) A person shall not be proceeded against for an offence under this Act except with the previous sanction of the Commissioner or Commissioner (Appeals):

Provided that the Chief Commissioner or, as the case may be, Director-General may issue such instructions or directions to the aforesaid wealth-tax authorities as he may deem fit for institution of proceedings under this sub-section.

(2) Any such offence may, either before or after the institution of proceedings, be compounded by the Chief Commissioner or Director-General.]]

³[ Explanation .—For the removal of doubts, it is hereby declared that the power of the Board to issue orders, instructions or directions under this Act shall include and shall be deemed always to have included the power to issue instructions or directions (including instructions or directions to obtain the previous approval of the Board) to other wealth-tax authorities for the proper composition of offences under this section.]

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1. Subs. by Act 26 of 1988, sec. 63, for section 35-I (w.e.f. 1-4-1989). Earlier section 35-I was inserted by Act 41 of 1975, sec. 100 (w.e.f. 1-10-1975).

2. Subs. by Act 49 of 1991, sec. 81(a), for sub-sections (1) and (2) (w.e.f. 1-10-1991).

3. Ins. by Act 49 of 1991, sec. 81(b) (w.r.e.f. 1-4-1989).

[Section 35J. Certain offences to be non-cognizable :

¹[35J. Certain offences to be non-cognizable.—Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), an offence punishable under section 35A or section 35B or section 35D or section 35F shall be deemed to be non-cognizable within the meaning of that Code.]

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1. Ins. by Act 41 of 1975, sec. 100 (w.e.f. 1-10-1975).

[Section 35 K. Bar on prosecutions and on inadmissibility of evidence in certain circumstances.

¹[35K. Bar on prosecutions and on inadmissibility of evidence in certain circumstances.— (1) A person shall not be proceeded against for an offence under section 35A or section 35D in relation to the assessment for ²[an assessment year] in respect of which the penalty imposed or imposable on him under clause (iii) of sub-section (1) of section 18 has been reduced or waived by an order under section 18B.

(2) Where any proceeding for prosecution has been taken against any person under this Act, any statement made on account or other document produced by such person before ³[any Wealth-tax authority (not being an Inspector of Income-tax)] shall not be inadmissible as evidence for the purpose of such proceedings merely on the ground that such statement was made or such account or other document was produced in the belief that the penalty imposable would be reduced or waived under section 18B or that the offence in respect of which such proceeding was taken would be compounded.].

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1. Ins. by Act 41 of 1975, sec. 100 (w.e.f. 1-10-1975).

2. Subs. by Act 12 of 1990, sec. 57, for “the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year” (w.r.e.f. 1-4-1989). Earlier these words were substituted by Act 4 of 1988, sec. 152(a), for “an assessment year” (w.e.f. 1-4-1989).

3. Subs. by Act 4 of 1988, sec. 152(b), for “any of the Wealth-tax authorities specified in sections 8, 9, 9A, 10, 10A and 11” (w.e.f. 1-4-1989). Earlier the words “in sections 8, 9, 9A” were substituted by Act 29 of 1977, sec. 39 and Sch. V, Pt. V, for “in sections 8, 9” (w.e.f. 10-7-1978)

[Section 35 L. Jurisdiction of courts. :

¹[35L. Jurisdiction of courts.—No court inferior to that of a Metropolitan Magistrate or a Magistrate of the first class shall try any offence under this Act.

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1. Ins. by Act 41 of 1975, sec. 100 (w.e.f. 1-10-1975).

Section 35 M. Section 360 of the Code of Criminal Procedure, 1973 and the Probation of Offenders Act, 1958, not to apply.

¹[35M. Section 360 of the Code of Criminal Procedure, 1973 and the Probation of Offenders Act, 1958, not to apply.—Nothing contained in section 360 of the Code of Criminal Procedure, 1973 (2 of 1974), or in the Probation of Offenders Act, 1958 (20 of 1958), shall apply to a person convicted of an offence under this Act unless that person is under eighteen years of age.]

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1. Ins. by Act 41 of 1975, sec. 100 (w.e.f. 1-10-1975).

Section 35 N. Presumption as to books of account, etc., in certain cases .

¹[35N. Presumption as to books of account, etc., in certain cases .—(1) Where during the course of any search made under section 37A, any books of account or other documents, articles or things including money have been found in the possession or control of any person and such books of account or other documents are tendered, or such articles or things including money are relied upon, by the prosecution in evidence against such person or against such person and the person referred to in section 35F for an offence under this Act, the provisions of sub-section (5) of section 37A shall, so far as may be, apply in relation to such books of account or other documents, articles or things including money.

(2) Where

(i) any books of account or other documents taken into custody, from the possession or control of any person by any officer or authority under clause (a) or clause (b) of sub-section (1) of section 37B, are delivered to the requisitioning officer under sub-section (2) of that section; or

(ii) any note or inventory of any articles or things including money taken into custody, from the possession of any person, by any officer or authority under clause (c) of sub-section (1) of section 37B, is furnished to the requisitioning officer under sub-section (2) of that section,

and such books of account or other documents are tendered, or such note or inventory is relied upon, by the prosecution in evidence against such person or against such person and the person referred to in section 35F for an offence under this Act, the provisions of sub-section (5) of section 37A shall, so far as may be, apply in relation to such books of account or other documents or, as the case may be, the articles or things including money, covered by such note or inventory.]

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1. Ins. by Act 41 of 1975, sec. 100 (w.e.f. 1-10-1975).

Section 35-O. Presumption as to culpable mental state .

¹[35-O. Presumption as to culpable mental state .—(1) In any prosecution for any offence under this Act which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state but 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.

Explanation .—In this sub-section, “culpable mental state” includes intention, motive or knowledge of a fact, or belief in, or reason to believe, a fact.

(2) For the purposes of this section, 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.]

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1. Ins. by Act 46 of 1986, sec. 39 (w.e.f. 10-9-1986).

Section 36. Proof of entries in records or documents .

¹[36. Proof of entries in records or documents .—Entries in the records or other documents in the custody of a wealth-tax authority shall be admitted in evidence in any proceedings for the prosecution of any person for an offence under this Act, and all such entries may be proved either by the production of the records or other documents in the custody of the Wealth-tax authority containing such entries or by the production of a copy of the entries certified by the Wealth-tax authority having custody of the records or other documents under its signature and stating that it is a true copy of the original entries and that such original entries are contained in the records or other documents in its custody.]

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1. Ins. by Act 3 of 1989, sec. 75 (w.e.f. 1-4-1989). Earlier section 36 was amended by Act 46 of 1964, sec. 33 (w.e.f. 1-4-1965), by Act 15 of 1965, sec. 20(iv) (w.e.f. 11-9-1965), by Act 45 of 1972, sec. 16 (w.e.f. 15-11-1972) and was omitted by Act 41 of 1975, sec. 101 (w.e.f. 1-10-1975).

Section 36 A. Power to tender immunity from prosecution

¹[36A. Power to tender immunity from prosecution .—(1) The Central Government may, if it is of opinion (the reasons for such opinion being recorded in writing) that with a view to obtaining the evidence of any person appearing to have been directly or indirectly concerned in or privy to the concealment of particulars of net wealth or to the evasion of payment of tax on net wealth, it is necessary or expedient so to do, tender to such person immunity from prosecution for any offence under this Act or under the Indian Penal Code (45 of 1860) or under any other Central Act for the time being in force and also from the imposition of any penalty under this Act on condition of his making a full and true disclosure of the whole circumstances relating to the concealment of particulars of net wealth or evasion of payment of tax on net wealth.

(2) A tender of immunity made to, and accepted by, the person concerned shall, to the extent to which the immunity extends, render him immune from prosecution for any offence in respect of which the tender was made or from the imposition of any penalty under this Act.

(3) If it appears to the Central Government that any person to whom immunity has been tendered under this section has not complied with the condition on which the tender was made or is wilfully concealing anything or is giving false evidence, the Central Government may record a finding to that effect, and thereupon the immunity shall be deemed to have been withdrawn, and any such person may be tried for the offence in respect of which the tender of immunity was made or for any other offence of which he appears to have been guilty in connection with the same matter and shall also become liable to the imposition of any penalty under this Act to which he would otherwise have been liable.

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1.Ins. by Act 46 of 1964, sec. 34 (w.e.f. 1-4-1965).

Section 37. Power to take evidence on oath, etc :

¹[37. Power to take evidence on oath, etc :- (1) ²[The ³[Assessing Officer], Valuation Officer,] ⁴[Deputy Commissioner (Appeals)], ⁵‘ [Commissioner (Appeals),] ⁶[Chief Commissioner or Commissioner] and the Appellate Tribunal shall, for the purposes of this Act, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the following matters, namely:—

(a) discovery and inspection;

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

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

(d) issuing commissions.

⁷[(1A) If the Director-General or Director or 8[Joint Director] or ⁸[Assistant Director] or Deputy Director], or the authorised officer referred to in sub-section (1) of section 37A before he takes action under clauses (i) to (vi) of that sub- section, has reason to suspect that any net wealth has been concealed, or is likely to be concealed, by any person or class of persons within his jurisdiction, then, for the purposes of making any inquiry or investigation relating thereto, it shall be competent for him to exercise the powers conferred under sub-section (1) on the wealth-tax authorities referred to in that sub-section, notwithstanding that no proceedings with respect to such person or class of persons are pending before him or any other wealth-tax authority.]

⁹[***]

(3) Subject to any rules made in this behalf, any authority referred to in sub-section (1) 10[or sub-section (lA) ] may impound and retain in its custody for such period as it thinks fit any books of account or other documents produced before it in any proceeding under this Act:

Provided that ¹¹[ ¹²[an Assessing Officer] or a Valuation Officer] ¹³[or an ¹⁴[Assistant Director or Deputy Director]] shall not—

(a) impound any books of account or other documents without recording his reasons for so doing, or

(b) retain in his custody any such books or documents for a period exceeding fifteen days (exclusive of holidays) without obtaining the approval of ¹⁵[the Chief Commissioner or Director-General or Commissioner or Director therefor, as the case may be].

(4) Any proceeding under this Act before a Wealth-tax authority or the Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196, of the Indian Penal Code (45 of 1860).]

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1. Subs. by Act 46 of 1964, sec. 35, for section 37 (w.e.f. 1-4-1965).

2. Subs. by Act 45 of 1972, sec. 17(a), for “The Wealth-tax Officer” (w.e.f. 1-1-1973).

3. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

4. Subs. by Act 4 of 1988, sec. l27, for “Appellate Assistant Commissioner” (w.e.f. l-4-1988).

5. Ins. by Act 29 of 1977, sec. 39 and Sch. V (w.e.f. 10-7-1978).

6. Subs. by Act 40 of 1988, sec. l27, for “Commissioner” (w.e.f. l-4-1988).

7. Subs. by Act 26 of 1988, sec. 64, for sub-section (1A) (w.e.f. 1-6-1988). Earlier sub-section (1A) was inserted by Act 4 of 1988, sec. 153(a) (w.e.f. 1-4-1989).

8. Subs. by Act 21 of 1998, sec. 66, for “Deputy Director” (w.e.f. 1-10-1998).

9. Sub-section (2) omitted by Act 4 of 1988, sec. 153(b) (w.e.f. 1-4-1989).

10. Ins. by Act 4 of 1988, sec. 153(c)(i) (w.e.f. 1-4-1989).

11. Subs. by Act 45 of 1972, sec. 17(b), for “a Wealth-tax Officer” (w.e.f. 1-1-1973).

12. Subs. by Act 4 of 1988, sec. 127, for “a Wealth-tax Officer” (w.e.f. 1-4-1988).

13. Ins. by Act 4 of 1988, sec. 153(c)(ii) (w.e.f. 1-4-1989).

14. Subs. by Act 21 of 1998, sec. 60, for “Assistant Director” (w.e.f. 1-10-1998).

15. Subs. by Act 26 of 1988, sec. 64(b), for “the Chief Commissioner or Commissioner therefor” (w.e.f. 1-6-1988). Earlier the words “Chief Commissioner or Commissioner” were substituted by Act 4 of 1988, sec. 127, for the word “Commissioner” (w.e.f. 1-4-988).

Section 37 A. Power of search and seizure :

¹[37A. Power of search and seizure :- (1) Where the ²[Director-General or Director] or the ³[Chief Commissioner or Commissioner] or any such ⁴[Joint Director] or ⁵[Joint Commissioner] as may be empowered in this behalf by the Board, in consequence of information in his possession, has reason to believe that—

(a) any person to whom a notice under sub-section (4) of section 16 or a summons under section 37 was issued to produce, or cause to be produced, any books of account or other documents, has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such notice or summons, or

(b) any person to whom a notice or summons as aforesaid has been or might be issued will not, or would not, produce, or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under this Act, or

(c) any person is in possession of⁶[any money, bullion, jewellery or other valuable article or thing] disproportionate to his known assets, particulars of which will be useful for, or relevant to, any proceeding under this Act, then,—

(A) the ⁷[Director-General or Director] or the ⁸[Chief Commissioner or Commissioner], as the case may be, may authorise any ⁹ [Joint Director], ¹⁰[Joint Commissioner], ¹¹[Assistant Director or Deputy Director], ¹²[Assistant Commissioner or Income-tax Officer], or

(B) such ⁹[Joint Director] or ¹⁰[Joint Commissioner] may authorise any ¹¹[Assistant Director or Deputy Director], ¹²[Assistant Commissioner or Income-tax Officer],

(the officer so authorised in all cases being hereafter in this section referred to as the authorised officer) to—

(i) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of account or other documents ¹³[money, bullion, jewellery or other valuable article or thing] are kept;

(ii) search any person who has got out of, or is about to get into, or is in, the building, place, vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such person has secreted about his person any such books of account or other documents, ¹³[money, bullion, jewellery or other valuable article or thing];

(iii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) where the keys thereof are not available;

¹⁴[(iv) seize any such books of account, other documents money, bullion, jewellery or other valuable article or thing found as a result of such search;]

(v) place, marks of identification on any such books of account or other documents or make, or cause to be made, extracts or copies therefrom;

(vi) make a note or an inventory of ¹⁵[any money, bullion, jewellery or other valuable article or thing] found which, in his opinion, will be useful for, or relevant to, any proceeding under this Act:

Provided that where any building, place, vessel, vehicle or aircraft referred to in clause (i) is within the area of jurisdiction of any ¹⁶[Chief Commissioner or Commissioner] but such 3 ¹⁶[Chief Commissioner or Commissioner] has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c) of this sub-section, then, notwithstanding anything contained in ¹⁷[section 8], it shall be competent for him to exercise the powers under this sub-section in all cases where he has reason to believe that any delay in getting the authorisation from the ¹⁶[Chief Commissioner or Commissioner] having jurisdiction over such person may be prejudicial to the interests of the revenue:

¹⁸[Provided further that where it is not possible or practicable to take physical possession of any valuable article or thing and remove it to a safe place due to its volume, weight or other physical characteristics or due to its being of a dangerous nature, the authorised officer may serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such authorised officer and such action of the authorised officer shall be deemed to be seizure of such valuable article or thing under clause (iv) of this sub-section.]

(2) Where any ¹⁶[Chief Commissioner or Commissioner], in consequence of information in his possession, has reason to suspect that any books of account or other documents, ¹⁹[money, bullion, jewellery or other valuable article or thing] in respect of which an officer has been authorised by the ²⁰[Director-General or Director] or any other ¹⁶[Chief Commissioner or Commissioner] or any such ²¹[Joint Director] or ²²[Joint Commissioner] as may be empowered in this behalf by the Board to take action under clauses (i) to (iv) of subsection (1) are kept in any building, place, vessel, vehicle or aircraft not mentioned in the authorisation under sub-section (1) such ²³ [Chief Commissioner or Commissioner] may, notwithstanding anything contained in ²⁴[section 8], authorise the said officer to take action under any of the clauses aforesaid in respect of such building, place, vessel, vehicle or aircraft.

(3) The authorised officer may requisition the services of any police officer or of any officer of the Central Government, or of both, to assist him for all or any of the purposes specified in sub-section (1) or sub-section (2) and it shall be the duty of every such officer to comply with such requisition.

²⁵[(3A) The authorised officer may, where it is not practicable to seize any books of account, other documents, money, bullion, jewellery or other valuable article or thing, for reasons other than those mentioned in the second proviso to sub-section (1), serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub-section.

Explanation .—For the removal of doubts, it is hereby declared that serving of an order as aforesaid under this sub-section shall not be deemed to be seizure of such books of account, other documents, money, bullion, jewellery or other valuable article or thing under clause (iv) of sub-section (1).]

(4) 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 books of account or other documents, articles or things including money and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under this Act.

²⁶[ Explanation .—For the removal of doubts, it is hereby declared that the examination of any person under this sub-section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of matters relevant for the purposes of any investigation connected with any proceedings under this Act.]

(5) Where any books of account or other documents, articles or things including money are found in the possession or control of any person in the course of a search, it may be presumed that—

(i) such books of account or other documents, articles or things including money belong to such person;

(ii) the contents of such books of account or other documents are true; and

(iii) the signature and every other part of such books of account or other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person’s handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.

²⁷[(5A) Where any money, bullion, jewellery or other valuable article or thing (hereafter in this section and in sections 37B and 37C referred to as the assets) is seized under sub-section (1) or sub-section (2), the Assessing Officer, after affording a reasonable opportunity to the person concerned of being heard and making such inquiry as may be prescribed, shall, within one hundred and twenty days of the seizure, make an order, with the previous approval of the Joint Commissioner,—

(i) estimating the undisclosed net wealth in a summary manner to the best of his judgment on the basis of such materials as are available with him;

(ii) calculating the amount of tax on the net wealth so estimated in accordance with the provisions of this Act;

(iii) determining the amount of interest payable and the amount of any penalty imposable in accordance with the provisions of this Act, as if the order had been the order of regular assessment;

(iv) specifying the amount that will be required to satisfy any existing liability under this Act in respect of which such person is in default or is deemed to be in default,

and retain in his custody such assets or part thereof as are in his opinion sufficient to satisfy the aggregate of the amounts referred to in clauses (ii), (iii) and (iv) and forthwith release the remaining portion, if any, of the assets to the person from whose custody they were seized:

Provided that where a person has paid or made satisfactory arrangements for payment of all the amounts referred to in clauses (ii) (iii) and (iv) or any part thereof, the Assessing Officer, may with the previous approval of the Chief, Commissioner or Commissioner release the assets or such part thereof as he may deem fit in the circumstances of the case.]

²⁷[(5B) The assets retained under sub-section (5A) may be dealt with in accordance with the provision of section 37C.

²⁷[(5C) If the Assessing Officer is satisfied that the seized assets or any part thereof were held by such person for or on behalf of any other person, the Assessing Officer may proceed under sub-section (5A) against such other person and all the provisions of this section shall apply accordingly.]

(6) The books of account or other documents seized under sub-section (1) or sub-section (2) shall not be retained by the authorised officer for a period exceeding one hundred and eighty days from the date of the seizure unless the reasons for retaining the same are recorded by him in writing and the approval of the ²⁸[Chief Commissioner or Commissioner] for such retention in obtained:

Provided that the ²⁸[Chief Commissioner or Commissioner] shall not authorise the retention of the books of account or other documents for a period exceeding thirty days after all the proceedings under this Act in respect of the years for which the books of account or other documents are relevant are completed.

²⁹[(6A) An order under sub-section (3A) shall not be in force for a period exceeding sixty days from the date of the order, except where the authorised officer, for reasons to be recorded in writing by him, extends the period of operation of the order beyond sixty days, after obtaining the approval of the 2 [Director or, as the case may be, Commissioner] for such extension:

Provided that the ³⁰[Director or, as the case may be, Commissioner] shall not approve the extension of the period for any period beyond the expiry of thirty days after the completion of the proceedings under this Act in respect of the years for which the books of account, other documents, money, bullion, jewellery or other valuable articles or things are relevant.]

(7) The person from whose custody any books of account or other documents are seized under sub-section (1) or sub-section (2) may make copies thereof, or take extracts therefrom, in the presence of the authorised officer or any other person empowered by him in this behalf at such place and time as the authorised officer may appoint in this behalf.

(8) Where the authorised officer has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c) of sub-section (1), the books of account or other documents seized under that sub-section shall be handed over by the authorised officer to the ³¹[Assessing Officer] having jurisdiction over such person within a period of fifteen days of such seizure and thereupon the powers exercisable by the authorised officer under sub-section (6) or sub-section (7) shall be exercisable by such ³¹[Assessing Officer].

(9) If a person legally entitled to the books of account or other documents seized under sub-section (1) or sub-section (2) objects for any reason to the approval given by the ³²[Chief Commissioner or Commissioner] under sub-section (6), he may make an application to the Board stating therein the reasons for such objection and requesting for the return of the book of account or other document.

³³[(9A) If any person objects for any reason to an order made under sub-section (SA), he may, within thirty days from the date of such order, make an application to the Chief Commissioner or Commissioner stating therein the reasons for such objection and requesting for appropriate relief in the matter.]

³⁴[(10) On receipt of the application under sub-section (9), the Board, or on receipt of the application under sub-section (9A), the Chief Commissioner or Commissioner, may, after giving the applicant an opportunity of being heard, pass such orders as it or he thinks fit.]

(11) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches shall apply, so far as may be, to searches under this section.

(12) The Board may make rules in relation to searches or seizure under this section; and in particular and without prejudice to the generality of the foregoing power, such rules may 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;

(ii) for ensuring the safe custody of any books of account or other documents seized.]

³⁵[ Explanation 1. —In computing the period referred to in sub-section (5A) for the purposes of that sub-section, any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded.

Explanation 2. —In this section, the word “proceeding” means any proceeding in respect of any year under this Act which may be pending on the date on which a search is authorised under this section or which may have been completed on or before such date and includes also proceedings under this Act which may be commenced after such date in respect of any year.]

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1. Sections 37A and 37B subs. by Act 41 of 1975, sec. 102, for section 37A (w.e.f. 1-10-1975). Earlier section 37A was inserted by Act 46 of 1964, sec. 36 (w.e.f. 1-4-1965).

2. Subs. by Act 4 of 1988, sec. 127, for “Director of Inspection” (w.e.f. 1-4-1988).

3. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

4. Subs. by 21 of 1988, sec. 66, for “Deputy Director” (w.e.f. 1-10-1998). Earlier the words “Deputy Director” were substituted by Act 4 of 1988, sec. 127, for the words “Deputy Director of Inspection” (w.e.f. 1-4-1988).

5. Subs. by 21 of 1988, sec. 66, for “Deputy Commissioner” (w.e.f. 1-10-1998). Earlier the words “Deputy Commissioner” were substituted by Act 4 of 1988, for words “Inspecting Assistant Commissioner or Inspecting Assistant Commissioner of Wealth-tax” (w.e.f. 1-4-1988).

6. Subs. by Act 4 of 1988, sec. 154(1)(a), for “any articles or things including money” (w.e.f. 1-4-1989).

7. Subs. by Act 4 of 1988, sec. 127, for “Director of Inspection” (w.e.f. 1-4-1988).

8. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

9. Subs. by 21 of 1988, sec. 66, for “Deputy Director” (w.e.f. 1-10-1998). Earlier the words “Deputy Director” were substituted by Act 4 of 1988, sec. 127, for words “Deputy Director of Inspection” (w.e.f. 1-4-1988).

10. Subs. by 21 of 1988, sec. 66, for “Deputy Commissioner” (w.e.f. 1-10-1998). Earlier the words “Deputy Commissioner” were substituted by Act 4 of 1988, sec. 127, for words “Inspecting Assistant Commissioner or Inspecting Assistant Commissioner of Wealth-tax” (w.e.f. 1-4-1988).

11. Subs. by 21 of 1988, sec. 66, for “Assistant Director” (w.e.f. 1-10-1998). Earlier the words “Assistant Director” were substituted by Act 4 of 1988, sec. 127, for words “Assistant Director of Inspection” (w.e.f. 1-4-1988).

12. Subs. by Act 4 of 1988, sec. 154(1)(b), for “or Wealth-tax Officer” (w.e.f. 1-4-1989).

13. Subs. by Act 4 of 1988, sec. 154(1)(c), for “articles or things including money” (w.e.f. 1-4-1989).

14. Subs. by Act 4 of 1988, sec. 154(1)(d), for clause (iv) (w.e.f. 1-4-1989).

15. Subs. by Act 4 of 1988, sec. 154(1)(e), for “any article or things including money” (w.e.f. 1-4-1989).

16. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f 1-4-1988).

17. Subs. by Act 4 of 1988, sec. 154(1)(f), for “section 10” (w.e.f. 1-4-1989)

18. Ins. by Act 4 of 1988, sec. 154(1)(g) (w.e.f. 1-4-1989).

19. Subs. by Act 4 of 1988, sec. 154(2)(a), for “articles or things including money” (w.e.f. 1-4-1989).

20. Subs. by Act 4 of 1988, sec. 127, for “Director of Inspection” (w.e.f. 1-4-1988).

21. Subs. by Act 21 of 1998, sec. 60, for “Deputy Director” (w.e.f. 1-10-1998). Earlier the words “Deputy Director” were substituted by Act 4 of 1988 Sec. 127, for “Deputy Director of Inspection” (w.e.f. 1-4-1988).

22. Subs. by Act 21 of 1998, sec. 60, for “Deputy Commissioner” (w.e.f. 1-10-1998). Earlier the words “Deputy Commissioner” were substituted by Act 4 of 1988, sec. 127, for “Inspecting Assistant Commissioner” (w.e.f. 1-4-1988).

23. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f 1-4-1988).

24. Subs. by Act 4 of 1988, sec. 154(2)(b), for “section 10” (w.e.f. 1-4-1989).

25. Ins. by Act 4 of 1988, sec. 154(3) (w.e.f. 1-4-1989).

26. Ins. by Act 4 of 1988, sec. 154(4) (w.e.f. 1-4-1989).

27. Ins. by Act 4 of 1988, sec. 154(5) (w.e.f. 1-4-1989).

28. Subs. by Act 4 of 1988, sec. 27, for “Commissioner” (w.e.f. 1-4-1988).

29. Ins. by Act 4 of 1988, sec. 154(6) (w.e.f. 1-4-1989).

30. Subs. by Act 49 of 1991, sec. 82, for “Chief Commissioners or Commissioner” (w.e.f. 1-10-1991).

31. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).

32. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

33. Ins. by Act 4 of 1988, sec. 154(7) (w.e.f. 1-4-1989)

34. Subs. by Act 4 of 1988, sec. 154(8), for sub-section (10) (w.e.f. 1-4-1989).

35. Ins. by Act 4 of 1988, sec. 154(9) (w.e.f. 1-4-1989).

Section 37 B. Power to requisition books of account etc :

¹[37B. Power to requisition books of account etc :- (1) Where the ²[Director-General or Director] or the ³[Chief Commissioner or Commissioner], in consequence of information in his possession, has reason to believe that—

(a) any person to whom a notice under sub-section (4) of section 16 or a summons under section 37 was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such notice or summons and the said books of account or other documents have been taken into custody by any officer or authority under any other law for the time being in force, or

(b) any books of account or other documents will be useful for, or relevant to, any proceeding under this Act and any person to whom a notice or summons as aforesaid has been or might be issued will not, or would not, produce or cause to be produced such books of account or other documents on the return of such books of account or other documents by any officer or authority by whom or which such books of account or other documents have been taken into custody under any other law for the time being in force, or

(c) ⁴[any assets] disproportionate to the known assets of any person, particulars of which will be useful for, or relevant to, any proceeding under this Act, have been taken into custody by any officer or authority, under any other law for the time being in force, from the possession of such person,

then, the ⁵[Director-General or Director] or the ⁶[Chief Commissioner or Commissioner] may authorise any ⁷[Joint Director], ⁸[Joint Commissioner],⁹[Assistant Director or Deputy Director] ¹⁰[, Assistant Commissioner or Income-tax Officer] (hereafter in this section referred to as the requisitioning officer) to require such officer or authority ¹¹ [to deliver such books of account other documents, or assets to the requisitioning officer].

(2) On a requisition being made under sub-section (1) ¹²[the officer or authority referred to in clause (a) or clause (b) or clause (c) as the case may be, of that sub-section shall deliver the books of account, other documents, or assets 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].

¹³[(3) Where any books of account, other documents or assets have been delivered to the requisitioning officer, the provisions of sub-sections (5) to (12) (both inclusive) of section 37A and section 37C shall so far as may be, apply as if such books of account, other documents, or assets had been seized under sub-section (1) of section 37A by the requistioning officer from the custody of the person referred to in clause (a) clause (b) or clause (c) of sub-section (1) of this section and as if for the words “the authorised officer” occurring in sub-sections (5) to (12) aforesaid, the words “the requisitioning officer” were substituted.]]

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1. Sections 37A and 37B subs. by Act 41 of 1975, sec. 102, for section 37A (w.e.f. 1-10-1975).

2. Subs. by Act 4 of 1988, sec. 127, for “Director of Inspection” (w.e.f. 1-4-1988).

3. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

4. Subs. by Act 4 of 1988, sec. 155(a)(i), for “any articles or things including money” (w.e.f. 1-4-1989).

5. Subs. by Act 4 of 1988, sec. 127, for “Director of Inspection” (w.e.f. 1-4-1988).

6. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

7. Subs. by Act 21 of 1998, sec. 60, for “Deputy Director” (w.e.f. 1-10-1998). Earlier the words “Deputy Director” were substituted by Act 4 of 1988, sec. 127, for the words “Deputy Director of Inspection” (w.e.f. 1-4-1988).

8. Subs. by Act 21 of 1998, sec. 60, for “Deputy Commissioner” (w.e.f. 1-10-1998). Earlier the words “Deputy Commissioner” were substituted by Act 4 of 1988, sec. 127, for the words “Inspecting Assistant Commissioner” (w.e.f. 1-4-1988).

9. Subs. by 21 of 1998, sec. 66, for “Deputy Director” (w.e.f. 1-10-1998). Earlier the words “Deputy Director” were substituted by Act 4 of 1988, sec. 127, for the words “Deputy Director of Inspection” (w.e.f. 1-4-1988).

10. Subs. by Act 4 of 1988, sec. 155(a)(ii), for “or Wealth-tax Officer” (w.e.f. 1-4-1989).

11. Subs. by Act 4 of 1988, sec. 155(a)(iii), for clauses (i) and (ii) (w.e.f. 1-4-1989).

12. Subs. by Act 4 of 1988, sec. 155(b), for clauses (i) and (ii) (w.e.f. 1-4-1989).

13. Subs. by Act 4 of 1988, sec. 155(c), for sub-section (3) (w.e.f. 1-4-1989).

[37C. Application of retained assets :

¹[37C. Application of retained assets :- (1) The assets retained under sub-section (5A) of section 37A may be dealt with in the following manner, namely:

(i) the amount of the existing liability referred to in clause (iv) of the said sub-section and the amount of the liability determined on completion of the regular assessment or re-assessment for all the assessment years for which the net wealth referred to in clause (i) of that sub-section is assessable to tax (including any penalty levied or interest payable, in connection with such assessment or re-assessment) and in respect of which the assessee is in default or is deemed to be in default may be recovered out of such assets;

(ii) if the assets consist solely of money, or partly of money and partly of other assets, the Assessing Officer may apply such money in the discharge of the liabilities referred to in clause (i) and the assessee shall be discharged of such liabilities to the extent of the money so applied;

(iii) the assets other than money may also be applied for the discharge of any such liability referred to in clause (i) as remains undischarged and for this purpose such assets shall be deemed to be under distraint as if such distraint was effected by the Assessing Officer under authorisation from the Chief Commissioner or Commissioner under sub-section (5) of section 226 of the Income-tax Act as made applicable to this Act by section 32, and the Assessing Officer may recover the amount of such liabilities by the sale of such assets and such sale shall be effected in the manner laid down in the Third Schedule to the Income-tax Act as made applicable to this Act by section 32.

(2) Nothing contained in sub-section (1) shall preclude the recovery of the amount of liabilities aforesaid by any other mode laid down in this Act.

(3) Any assets or proceeds thereof which remain after the liabilities referred to in clause (i) of sub-section (1) are discharged shall be forthwith made over or paid to the persons from whose custody the assets were seized.

(4) (a) The Central Government shall pay simple interest at the rate of fifteen per cent. per annum on the amount by which the aggregate of the money retained under section 37A and of the proceeds, if any, of the assets sold towards the discharge of the existing liability referred to in clause (iv) of sub-section (5A) of that section exceeds the aggregate of the amounts required to meet the liabilities referred to in clause (i) of sub-section (I) of this section.

(b) Such interest shall run from the date immediately following the expiry of the period of six months from the date of the order under sub-section (5A) of section 37A to the date of the regular assessment or re-assessment referred to in clause (i) of sub-section (1) or, as the case may be, to the date of the last of such assessments or re-assessments.]

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1. Ins. by Act 4 of 1988, sec. 156 (w.e.f. 1-4-1989).

38. Information, returns and statements :-

¹[Where, for the purposes of this Act], it appears necessary for ²[any wealth-tax authority] to obtain any statement or information from any individual, company ³[(including a banking company)], firm, Hindu undivided family or other person, ²[such wealth-tax authority] may serve a notice requiring such individual, company, firm, Hindu undivided family or other person, on or before a date to be therein specified, to furnish such statement or information on the points specified in the notice, and the individual or the principal officer concerned or the manager of the Hindu undivided family, as the case may be, shall, notwithstanding anything in any law to the contrary, be bound to furnish such statement or information to 2[such wealth-tax authority]:

Provided that no legal practitioner shall be bound to furnish any statement or information under this section based on any professional

communications made to him otherwise than as permitted by section 126 of the Indian Evidence Act, 1872 (1 of 1872).

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1. Subs. by Act 4 of 1988, sec. 157(a), for “Where for the purposes of determining the wealth-tax payable by any person” (w.e.f. 1-4-1989).

2. Subs. by Act 4 of 1988, sec. 157(b), for “Wealth-tax Officer” (w.e.f. 1-4-1989).

3. Ins. by Act 4 of 1988, sec. 157(c) (w.e.f. 1-4-1989).

38A. Powers of Valuation Officer, etc :-

¹[38A. Powers of Valuation Officer, etc :- (1) For the purposes of this Act, a Valuation Officer or any overseer, surveyor or assessor authorised by him in this behalf may, subject to any rules made in this behalf and at such reasonable times as may be prescribed;

(a) enter any land within the limits of the area assigned to the Valuation Officer, or

(b) enter any land, building or other place belonging to or occupied by any person in connection with whose assessment a reference has been made under section 16A to the Valuation Officer, or

(c) inspect any asset in respect of which a reference under section 16A has been made to the Valuation Officer,

and require any person in charge of, or in occupation or possession of, such land, building or other place or asset to afford him the necessary facility to survey or inspect such land, building or other place or asset or estimate its value or inspect any books of account, document or record which may be relevent for the valuation of such land, building or other place or asset and gather other particulars relating to such land, building or other place or asset:

Provided that no Valuation Officer, overseer, surveyor or assessor shall enter any buliding or place referred to in clause (b) or inspect any asset referred to in clause (c) (unless with the consent of the person in charge of, or in occupation or possession of, such building, place or asset) without previously giving to such person at least two days’ notice in writing of his intention to do so.

(2) If a person who, under sub-section (1), is required to afford any facility to the Valuation Officer or the overseer, surveyor or assessor, either refuses or evades to afford such facility, the Valuation Officer shall have all the powers under sub-sections (1) and (2) of section 37 for enforcing compliance of the requirements made.]

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1. Ins. by Act 45 of 1972, sec. 18 (w.e.f. 15-11-1972).

39. Effect of transfer of authorities on pending proceedings :

-Whenever in respect of any proceeding under this Act any Wealth-tax authority ceases to exercise jurisdiction and is succeeded by another who has and exercises such jurisdiction, the authority so succeeding may continue the proceeding from the stage at which the proceeding was left by his predecessor:

¹[Provided that the assessee concerned may demand that before the proceeding is so continued the previous proceeding or any part thereof be reopened or that before any order of assessment is passed against him, he be reheard.]

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1. Ins. by Act 46 of 1964, sec. 37 (w.e.f. 1-4-1965).

40. Computation of periods of limitation :—

In computing the period of limitation prescribed for an appeal under this Act or for an application under section 27; the day on which the order complained of was made and the time requisite for obtaining a copy of such order shall be excluded.

41. Service of notice :-

(1) A notice or a requisition under this Act may be served on the person therein named either by post or as if it were a summons issued by a court under the Code of Civil Procedure, 1908 (5 of 1908).

(2) Any such notice or requisition may, in the case of a firm or a Hindu undivided family, be addressed to any member of the firm or to the manager or any adult male member of the family, ¹[and in the case of a company or any other association of persons] be addressed to the principal officer thereof.

²[(3) After a finding of total partition has been recorded by the³[Assessing Officer] under section 20 in respect of any Hindu family, notices under this Act in respect of the net wealth of the Hindu family shall be served on the person who was the last manager of the Hindu family, or, if such person is dead, then on all surviving adults who were members of the Hindu family immediately before the partition.]

⁴[(4) Where an association of persons referred to in section 21AA is dissolved, notices under this Act in respect of any matter relating to the association may be served on any person who was a member of the association immediately before its dissolution.]

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1. Subs. by Act 3 of 1989, sec. 76, for “and in the case of any other associations of persons” (w.e.f. 1-4-1989).

2. Ins. by Act 46 of 1964, sec. 38 (w.e.f. 1-4-1965).

3. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 4. Ins. by Act 16 of 1981, sec. 31 (w.r.e.f. 1-4-1981).

[42. Notice deemed to be valid in certain circumstances :—

¹[42. Notice deemed to be valid in certain circumstances :- Where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was—

(a) not served upon him; or

(b) not served upon him in time; or

(c) served upon him in an improper manner:

Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.]

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1. Ins. by Finance Act, 2008, sec. 66 (w.r.e.f. 1-4-2008). Earlier section 42 relating to ‘Prohibition of disclosure of information’ was repealed by the Finance Act, 1964 (5 of 1964), sec. 50(b) (w.r.e.f. 1-4-1964).

42A. Publication of information respecting assessees :-

¹[42A. Publication of information respecting assessees :- (1) lf the Central Government is of opinion that it is necessary or expedient in the public interest to publish the name of any assessees and any other particulars relating to any proceedings ²[or prosecutions] under this Act in respect of such assessees, it may cause to be published such names and particulars in such manner as it thinks fit.

³[(2) No publication under this section shall be made in relation to any penalty imposed under this Act until the time for presenting an appeal to the ⁴[Deputy Commissioner (Appeals)] ⁵[or, as the case may be, the Commissioner (Appeals)] has expired without an appeal having been presented or the appeal, if presented has been disposed of.]]

⁶[ Explanation.— In the case of a company, the names of the directors, secretaries and treasurers, or managers, of the company may also be published if in the opinion of the Central Goverrment, circumstances of the case justify it.]

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1. Subs. by Act 5 of 1964, sec. 50(c), for section 42A (w.e.f. 1-4-1964). Earlier section 42A was inserted by Act 28 of 1960, sec. 11 (w.e.f. 1-4-1960).

2. Ins. by Act 41 of 1975, sec. 103(i) (w.e.f. 1-10-1975).

3. Subs. by Act 41 of 1975, sec. 103(ii), for sub-section (2) (w.e.f. 1-10-1975).

4. Subs. by Act 4 of 1988, sec. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988).

5. Ins. by Act 29 of 1977, sec. 39 and Sch. V (w.e.f. 10-7-1978).

6. Ins. by Act 3 of 1989, sec. 77 (w.e.f. 1-4-1989).

42B. Disclosure of information respecting assessees

¹[42B. Disclosure of information respecting assessees :- Where a person makes an application to the ²[Chief Commissioner or Commissioner] in the prescribed form for any information relating to any assessee in respect of any assessment made under this Act, the 3 [Chief Commissioner or Commissioner] may, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished the information asked for in respect of that assessment only and his decision in this behalf shall be final and shall not be called in question in any court of law.]

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1. Subs. by Act 5 of 1964, sec. 50(c), for section 42B (w.e.f. 1-4-1964). Earlier section 42B was inserted by Act 28 of 1960, sec. 11 (w.r.e.f. 1-4-1960).

2. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).

42C. Return of wealth, etc. not to be invalid on certain grounds

¹[42C. Return of wealth, etc. not to be invalid on certain grounds :- No return of wealth, assessment, notice, summons or other proceeding furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of wealth, assessment, notice, summons or other proceeding if such return of wealth, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.]

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1. Ins. by Act 41 of 1975, sec. 104 (w.e.f. 1-10-1975).

42D. Presumption as to assets, books of account, etc :-

¹[42D. Presumption as to assets, books of account, etc :-² [(1)] Where any books of account or other documents, articles or things including money are found in the possession or control of any person in the course of a search under section 37A, it may, in any proceeding under this Act, be presumed that—

(i) such books of account or other documents, articles or things including money belong to such person;

(ii) the contents of such books of account or other documents are true; and

(iii) the signature and every other part of such books of account or other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person’s handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.]

³[(2) Where any books of account, other documents or assets have been delivered to the requisitioning officer in accordance with the provisions of section 37B, then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of section 37B, had been found in the possession or control of that person in the course of a search under section 37A.]

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1. Ins. by Finance Act, 2007, sec. 93 (w.r.e.f. 1-10-1975).

2. Section 42D re-numbered as sub-section (1) thereof by the Finance Act, 2008, sec. 67 (w.r.e.f. 1-4-2008).

3. Ins. by the Finance Act, 2008, sec. 67 (w.r.e.f. 1-10-1975).

43. Bar of jurisdiction :—

43. Bar of jurisdiction :- No suit shall lie in any civil court to set aside or modify ¹[any proceeding taken or order made] under this Act, and no prosecution, suit or other legal proceeding shall lie against ²[the Government or] any officer of the Government for anything in good faith done or intended to be done under this Act.

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1. Subs. by Act 26 of 1988, sec. 65, for “any order made” (w.r.e.f. 1-3-1988). Earlier the words ”any order made” were substituted by Act 11 of 1987, sec. 89, for the words “any assessment made” (w.r.e.f. 1-3-1987).

2. Ins. by Act 5 of 1964, sec. 50(d) (w.r.e.f. 1-4-1964).

44. Appearance before wealth-tax authorities by authorised representatives :-

¹[44. Appearance before wealth-tax authorities by authorised representatives :- (1) Any assessee who is entitled to or required to attend before any Wealth-tax authority or the Appellate Tribunal in connection with any proceeding under this Act, except where he is required under this Act to attend in person, may attend by a person who would be entitled to represent him before any income-tax authority or the Appellate Tribunal under section 288 of the Income-tax Act.

(2) Notwithstanding anything in sub-section (1)—

(i) no person who has been convicted of an offence connected with any wealth-tax proceeding or on whom a penalty has been imposed under this Act other than a penalty imposed on him under clause (i) or clause (ii) of sub-section (1) of section 18 shall be qualified to represent an assessee under sub-section (1) for such time as the ²[Chief Commissioner or Commissioner] may by order determine;

(ii) if any person who is not a legal practitioner or a chartered accountant, is found guilty of misconduct in connection with any wealth-tax proceeding by the prescribed authority, the prescribed authority may direct that he shall henceforth be disqualified to represent an assessee under sub-section (1);

(iii) no person not qualified to represent an assessee under the Indian Income-tax Act, 1922 (11 of 1922), the Estate Duty Act, 1953 (34 of 1953), the Expenditure-tax Act, 1957 (29 of 1957), or the Gift-tax Act, 1958 (18 of 1958), shall be entitled to appear on behalf of any assessee under this Act:

Provided that any order or direction under clause (i) or clause (ii) shall be subject to the following conditions, namely:—

(a) no such order or direction shall be made in respect of any
person unless he has been given a reasonable opportunity of being heard;

(b) any person against whom any such order or direction is made may, within one month of the making of the order or direction, appeal to the Board to have the order or direction cancelled; and

(c) no such order or direction shall take effect until the expiration of one month from the making thereof, or, where an appeal has been preferred, until the disposal of the appeal.]

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1. Subs. by Act 46 of 1964, sec. 39, for section 44 (w.e.f. 1-4-1965).

2. Subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988)

44A. Agreement for avoidance or relief of double taxation with respect to wealth-tax.

¹[44A. Agreement for avoidance or relief of double taxation with respect to wealth-tax. — ²[The Central Government may enter into an agreement with the Government of any reciprocating country—

(a) for the avoidance or relief of double taxation with respect to wealth-tax payable under this Act and under the corresponding law in force in the reciprocating country, or

(b) for exchange of information for the prevention of evasion or avoidance of wealth-tax chargeable under this Act, or under the corresponding law in force in that country or investigation of cases of such evasion or avoidance, or

(c) for recovery of tax under this Act and under the corresponding law in force in that country,

and may, by notification in the Official Gazette, make such provision as may be necessary for implementing the agreement.]

Explanation .—The expression “reciprocating country” for the purposes of this Act means any country which the Central Government may, by notification in the Official Gazette, declare to be a reciprocating country.]

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1. Ins. by Act 46 of 1964, sec. 39 (w.e.f. 1-4-1965 ).

2. Subs. by Act 16 of 1972, sec. 49, for certain words (w.e.f. 1-4-1972).

[44B. Countries with which no agreement exists :—

¹[44B. Countries with which no agreement exists :- Where the net wealth of any assessee includes any foreign wealth and he proves that, in respect of such foreign wealth, he has paid in any country, with which there is no reciprocal arrangement under section 44A for the relief or avoidance of double taxation, a tax in respect of wealth, under the law in force in that country, he shall be entitled to the deduction from the Indian wealth-tax payable by him of a sum calculated on such doubly taxed foreign wealth at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal.

Explanation :- In this section—

(1) the expression “Indian wealth-tax” means wealth-tax charged in accordance with the provisions of this Act;

(2) the expression “Indian rate of tax” means the rate determined by dividing the amount of Indian wealth-tax after deduction of any relief due under the provisions of this Act but before the deduction of any relief due under this section by the net wealth;

(3) the expression “rate of tax of the said country” means any tax in respect of wealth, actually paid in the said country, in accordance with the corresponding laws in force in the said country after deduction of all relief due, but before deduction of any relief due in the said country in respect of double taxation, divided by the whole amount of the wealth assessed in the said country;

(4) the expression “foreign wealth” in relation to any assessee means the value of all his assets located in any country outside India as reduced by the value of his debts in that country.

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1. Ins. by Act 46 of 1964, sec. 39 (w.e.f. 1-4-1965 ).

[44C. Rounding off of net wealth :—

¹[44C. Rounding off of net wealth :- The amount of net wealth computed in accordance with the foregoing provisions of this Act shall be rounded off to the nearest multiple of one hundred rupees and, for this purpose, any part of a rupee consisting of paise shall be ignored and thereafter, if such amount contains a part of one hundred rupees, then, if such part is fifty rupees or more, the amount shall be increased to the next higher amount which is a multiple of one hundred and, if such part is less than fifty rupees, the amount shall be reduced to the next lower amount which is a multiple of one hundred; and the amount so rounded off shall be deemed to be the net wealth of the assessee for the purposes of this Act.]

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1. Ins. by Act 42 of 1970, sec. 65 (w.e.f. 1-4-1971).

[44D. Rounding off of tax, etc:—

¹[44D. Rounding off of tax, etc :- The amount of wealth-tax, interest, penalty, fine or any other sum payable, and the amount of refund due, under the provisions of this Act, shall be rounded off to the nearest rupee and, for this purpose, where such amount contains a part of a rupee consisting of paise, then, if such part is fifty paise or more, it shall be increased to one rupee, and if such part is less than fifty paise, it shall be ignored.]

——————————————–

1. Ins. by Act 42 of 1970, sec. 65 (w.e.f. 1-4-1971).

45. Act not to apply in certain cases :—

Act not to apply in certain cases :- ¹[No tax shall be levied under this Act in respect of the net wealth of—]

²[***]

(f) any company registered under section 25 of the Companies Act 1956
(1 of 1956);

³[(g) any co-operative society;]

⁴[(h) any social club;]

⁵[(i) any political party.

Explanation :- For the purposes of clause (i), “political party” shall have the meaning assigned to it in the Explanation to section 13A of the Income-tax Act;]

⁶[(j) Mutual Fund specified under clause (23D) of section 10 of the Income-tax Act.]

——————————————–

1. Subs. by Act 16 of 1972, sec. 50(a), for “The provisions of this Act shall not apply to—” (w.e.f. 1-4-1972).

2. Clauses (a) to (e) omitted by Act 18 of 1992, sec. 99(a) (w.e.f. 1-4-1993).

3. Ins. by Act 16 of 1972, sec. 50(b) (w.r.e.f. 1-4-1957).

4. Subs. by Act 18 of 1992, sec. 99(b), for clause (h) (w.e.f. 1-4-1993). Earlier clause (h) was inserted by Act 25 of 1975, sec. 28 (w.r.e.f. 1-4-1957).

5. Ins. by Act 29 of 1978, sec. 3 (w.e.f. 1-4-1979). 6. Ins. by Act 4 of 1988, sec. 158 (w.e.f. 1-4-1989).

46. Power to make rules :-

(1) The Board may, by notification in the Official Gazette, make rules for carrying out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, rules made under this section may provide for—

(a) the manner in which the market value of any asset may be determined;

(b) the form in which returns under this Act shall be made and the manner in which they shall be verified;

(c) the form in which appeals and applications under this Act may be made, and the manner in which they shall be verified;

¹[(cc) the circumstances in which, the conditions subject to which and the manner in which, the ²[Deputy Commissioner (Appeals)]³[or 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 ⁴[Assessing Officer];]

(d) the form of any notice of demand under this Act;

⁵[(dd) the procedure to be followed in calculating interest payable by assessees or interest payable by the Government to assessees under any provision of this Act, 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;]

⁶[(e) the areas within which Valuation Officers may exercise jurisdiction;

(ee) the manner in which and the conditions subject to which Valuation Officers overseers, surveyors and assessors may exercise their powers under sub-section (1) of section 38A;]

(f) any other matter which has to be, or may be, prescribed for the purposes of this Act.

⁷[(3) The power to make rules conferred by this section shall include the power to give retrospective effect, from a date not earlier than the date of commencement of this Act, to the rules or any of them and, unless the contrary is permitted (whether expressly or by necessary implication), no retrospective effect shall be given to any rule so as to prejudicially affect the interests of assessees.]

⁸[(4) The Central Government shall cause every rule made under this Act ⁹[and the rules of procedure framed by the Settlement Commission under sub-section (7) of section 22F] to be laid as soon as may be after it is made before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session ¹⁰[or in two or more successive sessions], and if before the expiry of the session ¹¹[immediately following the session or the successive sessions aforesaid] both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be, so however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.]

——————————————–

1. Ins. by Act 16 of 1972, sec. 51 (w.e.f. 1-4-1972).

2. Subs. by Act 4 of 1988, sec. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988).

3. Ins. by Act 29 of 1977, sec. 39 and Sch. V (w.e.f. 10-7-1978).

4. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer’ (w.e.f. 1-4-1988).

5. Ins. by Act 42 of 1970, sec. 66 (w.e.f. 1-4-1971).

6. Subs. by Act 45 of 1972, sec. 19, for clause (e) (w.e.f. 15-11-1972).

7. Subs. by Act 26 of 1974, sec. 17, for sub-section (3) (w.e.f. 18-8-1974).

8. Subs. by Act 46 of 1964, sec. 40, for sub-section (4) (w.e.f. 1-4-1965).

9. Ins. by Act 32 of 1994, sec. 53 (w.e.f. 1-6-1994).

10. Subs. by Act 41 of 1975, sec. 105(i) for “or in two successive sessions” (w.e.f. 1-4-1976).

11. Subs. by Act 41 of 1975, sec. 105(ii), for “in which it is so laid or the session immediately following” (w.e.f. 1-4-1976).

[46A. Power to make exemption, etc . , in relation to certain Union Territories :—

¹[46A. Power to make exemption, etc . , in relation to certain Union Territories :- If the Central Government considers it necessary or expedient so to do for avoiding any hardship or anomaly or removing any difiiculty that may arise as a result of the application of this Act to the Union territories of Dadra and Nager Haveli, Goa, Daman and Diu, and Pondicherry, or in the case of the Union territory of Pondicherry, for implementing any provision of the Treaty of Cession concluded between France and India on the 28th day of May, 1956, that Government may, by general or special order, make an exemption, reduction in rate or other modification in respect of wealth-tax in favour of any class of assets or in regard to the whole or any part of the net wealth of any assessee or class of assessees:

Provided that the power conferred by this section shall not be exercisable after the 31st day of March, 1967 except for the purpose of rescinding an exemption, reduction or modification already made.]

——————————————–

1. Ins. by Act 3 of 1963, sec. 3 (w.e.f. 1-4-1963).

47. Power to remove difficulties :—

¹[47. Power to remove difficulties :- (1) If any difficulty arises in giving effect to the provisions of this Act as amended by the Direct Tax Laws (Amendment) Act, 1987, the Central Government may by order, do anything not inconsistent with such provisions for the purpose of removing the difficulty:

Provided that no such order shall be made after the expiration of three years from the 1st day of April, 1988.

(2) Every order made under sub-section (1) shall be laid before each House of Parliament.]

——————————————–

1. Ins. by Act 4 of 1988, sec. 159 (w.e.f. 1-4-1988).

47. Power to remove difficulties :—

¹[47. Power to remove difficulties :- (1) If any difficulty arises in giving effect to the provisions of this Act as amended by the Direct Tax Laws (Amendment) Act, 1987, the Central Government may by order, do anything not inconsistent with such provisions for the purpose of removing the difficulty:

Provided that no such order shall be made after the expiration of three years from the 1st day of April, 1988.

(2) Every order made under sub-section (1) shall be laid before each House of Parliament.]

——————————————–

1. 1.      Ins. by Act 4 of 1988, sec. 159 (w.e.f. 1-4-1988).

SCHEDULE I :— RATES OF WEALTH TAX

³ [PART I
(1) In the case of every individual or Hindu undivided family, not being a Hindu undivided family to which item (2) of this Part applies,—

Read Full Schedule 1

SCHEDULE II :—

¹[* * *]

—————-

1. 1.      Schedule II omitted by Act 18 of 1992, sec. 101 (w.e.f. 1-4-1993). Earlier Schedule II was inserted by Act 66 of 1976, sec. 27(6)(b) (w.e.f. 1-4-1977).

Schedule III :— RULES FOR DETERMINING THE VALUE OF ASSETS

PART A

General

l. Value of assets how to be determined.—The value of any asset, other than cash, for the purposes of this Act, shall be determined in the manner laid down in these rules.

2. Definitions.—In this Schedule, unless the context otherwise requires;—

(1) “accounting year” in relation to a company means a period in respect of which any profit and loss account of the company laid before it in the annual general meeting is made up;

(2) “debenture” includes debenture stock, bonds and any other securites of a company, whether constituting a charge on the assets of the company or not;

(3) “equity share” means any share in the share capital of a company other than a preference share;

(4) “gold” means gold, including its alloy, whether virgin, melted, remelted, wrought or unwrought, in any shape or form of a purity of not less than nine carats and includes any gold coin (whether legal tender or not), any gold ornament and other article of gold;

(5) “gold ornament” means any article in a finished form, meant for personal adornment or for the adornment of any idol, deity or any other object of religious worship, made of, or manufactured from gold, whether or not set with stones or gems, real or artificial, or with pearls, real, cultured or imitation, or with all or any of them and includes parts, pendants or broken pieces of gold ornaments;

(6) “investment company” means a company whose gross total income consists mainly of income which is chargeable to income-tax under the heads “Income from house property”, “Capital gains” and “Income from other sources”.

Read Full Schedule 3

Appendix

Table of 1/P+d – 1

Factories Act

November 30, 2014

Section 1. SHORT TITLE, EXTENT AND COMMENCEMENT. 

(1) This Act may be called the Factories Act, 1948.

¹[(2) It extends to the whole of India ²[***].]

(3) It shall come into force on the 1st day of April 1949.

—————————-

1. Subs. by the A.O. 1950, for sub-section (2).

2. The words “except the State of Jammu and Kashmir” omitted by Act 51 of 1970, sec. 2 and Sch. (w.e.f. 1-9-1971).

Section 2. INTERPRETATION. 

In this Act, unless there is anything repugnant in the subject or context,—

(a) “adult” means a person who has completed his eighteenth year of age;

(b) “adolescent” means a person who has completed his fifteenth year of age but has not completed his eighteenth year;

¹[(bb) “calendar year” means the period of twelve months beginning with the first day of January in any year;]

(c) “child” means a person who has not completed his fifteenth year of age;

²[(ca) “competent person”, in relation to any provision of this Act, means a person or an institution recognised as such by the Chief Inspector for the purposes of carrying out tests, examinations and inspections required to be done in a factory under the provisions of this Act having regard to

(i) the qualifications and experience of the person and facilities available at his disposal; or

(ii) the qualifications and experience of the persons employed in such institution and facilities available therein, with regard to the conduct of such tests, examinations and inspections, and more than one person or institution can be recognised as a competent person in relation to a factory;

(cb) “hazardous process” means any process or activity in relation to an industry specified in the First Schedule where, unless special care is taken, raw materials used therein or the intermediate or finished products, bye-products, wastes or effluents thereof would—

(i) cause material impairment to the health of the persons engaged in or connected therewith, or

(ii) result in the pollution of the general environment:

Provided that the State Government may, by notification in the Official Gazette, amend the First Schedule by way of addition, omission or variation of any industry specified in the said Schedule;]

(d) “young person” means a person who is either a child or an adolescent;

(e) “day” means a period of twenty-four hours beginning at midnight;

(f) “week” means a period of seven days beginning at midnight on Saturday night or such other night as may be approved in writing for a particular area by the Chief Inspector of Factories;

(g) “power” means electrical energy or any other form of energy which is mechanically transmitted and is not generated by human or animal agency;

(h) “prime mover” means any engine, motor or other appliance which generates or otherwise provides power;

(i) “transmission machinery” means any shaft, wheel, drum, pulley, system of pulleys, coupling, clutch, driving belt or other appliance or device by which the motion of a prime mover is transmitted to or received by any machinery or appliance;

(j) “machinery” includes prime movers, transmission machinery and all other appliances whereby power is generated, transformed, transmitted or applied;

(k) “manufacturing process” means any process for—

(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal,

³[(ii) pumping oil, water, sewage or any other substance; or]

(iii) generating, transforming or transmitting power; or

⁴[(iv) composing types for printing, printing by letter press, lithography,
photogravure or other similar process or book binding;]⁵[or]

(v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels; ⁵[or] ⁵[(vi) preserving or storing any article in cold storage;]

l) “worker” means a person ⁶[employed, directly or by or through any agency (including a contractor) with or without the knowledge of the principal employer, whether for remuneration or not], in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process ⁵[but does not include any member of the armed forces of the Union];

(m) “factory” means any premises including the precincts thereof—

(i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or

(ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on,—

but does not include a mine subject to the operation of ⁷[the Mines Act, 1952 (35 of 1952)], or ⁸[a mobile unit belonging to the armed forces of the Union, railway running shed or a hotel, restaurant or eating place].

⁵[Explanation ⁹[I].—For computing the number of workers for the purposes of this clause all the workers in ¹⁰[different groups and relays] in a day shall be taken into account;]

¹¹[Explanation II.—For the purposes of this clause, the mere fact that an Electronic Data Processing Unit or a Computer Unit is installed in any premises or part thereof, shall not be construed to make it a factory if no manufacturing process is being carried on in such premises or part thereof;]

(n) “occupier” of a factory means the person who has ultimate control over the affairs of the factory¹²[***].

¹³[Provided that—

(i) in the case of a firm or other association of individuals, any one of the individual partners or members thereof shall be deemed to be the occupier;

(ii) in the case of a company, any one of the directors shall be deemed to be the occupier

(iii) in the case of a factory owned or controlled by the Central Government or any State Government, or any local authority, the person or persons appointed to manage the affairs of the factory by the Central Government, the State Government or the local authority, as the case may be, shall be deemed to be the occupier:]

¹³[¹⁴[Provided further that] in the case of a ship which is being repaired, or on which maintenance work is being carried out, in a dry dock which is available for hire,—

(1) the owner of the dock shall be deemed to be the occupier for the purposes of any matter provided for by or under:

(a) section 6, section 7, ¹³[section 7A, section 7B,] section 11 or section 12;

(b) section 17, in so far as it relates to the providing and maintenance of sufficient and suitable lighting in or around the dock;

(c) section 18, section 19, section 42, section 46, section 47 or section 49, in relation to the workers employed on such repair or maintenance;

(2) the owner of the ship or his agent or master or other officer-in-charge of the ship or any person who contracts with such owner, agent or master or other officer-in-charge to carry out the repair or maintenance work shall be deemed to be the occupier for the purposes of any matter provided for by or under section 13, section 14, section 16 or section 17 (save as otherwise provided in this proviso) or Chapter IV (except section 27) or section 43, section 44 or section 45, Chapter VI, Chapter VII, Chapter VIII or Chapter IX or section 108, section 109 or section 110, in relation to—

(a) the workers employed directly by him, or by or through any agency; and

(b) the machinery, plant or premises in use for the purpose of carrying out such repair or maintenance work by such owner, agent, master or other officer-in-charge or person;]

¹⁵[***]

(o) “prescribed” means prescribed by rules made by the State Government under this Act;

¹⁶[***]

(r) where work of the same kind is carried out by two or more sets of workers working during different periods of the day, each of such sets is called a ¹⁷[“group” or “relay”] and each of such periods is called a “shift”.

Comments

(i) The establishment of hotel would not fall for classification as a factory under section 2(m) of the Act; Lal Bovta Hotel Aur Bakery Mazdoor Union v. Ritz Private Ltd., 2007 (113) FLR 568.

(ii) The definition of “manufacturing process” does not depend upon and is not co-related with any end product being manufactured out of a manufacturing process. It includes even repair, finishing, oiling or cleaning process with view to its use, sale, transport, delivery or disposal. It cannot be restricted to an activity which may result into manufacturing something or production of a commercially different article. The “manufacturing process” cannot be interpreted in a narrow sense in respect of an act which is meant for the purpose connected with social welfare; M/s Qazi Noorul Hasan Hamid Hussain Petrol Pump v. Deputy Director, Employee’s State Insurance Corporation, 2003 LLR 476.

(iii) In the case of a company, which owns a factory, it is only one of the directors of the company who can be notified as the occupier of the factory for the purposes of the Act and the company cannot nominate any other employee to be the occupier of the factory under section 2(n); Container Corporation of India Ltd. v. Lt. Governor Delhi, 2002 LLR 1068 : 2003 (98) FLR 653.

(iv) Under section 2(m) “Factory” means any premises including the precincts thereof in which a manufacturing process is being carried on

Explanation II of section 2(m) sets out that the mere fact that an electronic data processing unit or a computer unit is installed in any premises or part thereof would not render a unit into a factory if no manufacturing process is carried on in such premises or part thereof. Seelan Raj v. Presiding officer 1st Additional Labour Court, Chennai, 2001 LLR 418

(v) It has to be kept in view that the definition of “manufacturing process” in section 2(k) of Act the has nothing to do with manufacturing of goods which may attract excise duty under the Central Excises and Salt Act, 1944; Lal Mohammad v. Indian Railway Construction Co. Ltd., AIR 1999 SC 355.

(vi) All the workers employed by the construction company would squarely attract the definition of the term ‘workman’ as found in section 2(l) of the Act as they are working for remuneration in a manufacturing process carried out by the project; Lal Mohammad v. Indian Railway Construction Co. Ltd., AIR 1999 SC 355.

(vii) For the purpose of section 2(n) what is to be seen is who has the ‘ultimate’ control over the affairs of the factory. Relevant provisions regarding establishment of the Indian Oil Corporation Ltd., and its working, leave no doubt that the ultimate control over all the affairs of the Corporation, including opening and running of factories, is with the Central Government. Acting through the corporation is only a method employed by the Central Government for running its petroleum industry. In the context of section 2(n) it will have to be held that all the activities of the Corporation are really carried on by the Central Government with a corporate mask; Indian Oil Corporation v. Labour Commissioner, AIR 1998 SC 2456.

(viii) Commercial establishment receiving the products in bulk and after unpacking such bulk products pack them according to the customers’ requirements and despatch such products to customers. Such an act is manufacturing process within the meaning of section 2(k); Parry & Co. Ltd. v. Presiding Officer, II Additional Labour Court, Madras, (1998) I LLJ 406.

————

1 Ins. by Act 25 of 1954, sec. 2 (w.e.f. 7-5-1954)

2. Ins. by Act 20 of 1987, sec. 2 (w.e.f. 1-12-1987).

3. Subs. by Act 94 of 1976, sec. 2, for sub-clause (ii) (w.e.f. 26-10-1976).

4. Subs. by Act 25 of 1954, sec. 2, for sub-clause (iv) (w.e.f. 7-5-1954).

5. Ins. by Act 94 of 1976, sec. 2, (w.e.f. 26-10-1976).

6. Subs. by Act 94 of 1976, sec. 2, for certain words (w.e.f. 26-10-1976).

7. Subs. by Act 25 of 1954, sec. 2, for “the Indian Mines Act, 1923 (4 of 1923)”.

8. Subs. by Act 94 of 1976, sec. 2, for “a railway running shed” (w.e.f. 26-10-1976).

9. Explanation numbered as Explanation I by Act 20 of 1987, sec. 2 (w.e.f. 1-12-1987).

10. Subs. by Act 20 of 1987, sec. 2 for “different relays” (w.e.f. 1-12-1987).

11. Ins. by Act 20 of 1987, sec. 2 (w.e.f. 1-12-1987).

12. Certain words omitted by Act 20 of 1987, sec. 2, (w.e.f. 1-12-1987).

13. Ins. by Act 20 of 1987, sec. 2 (w.e.f. 1-12-1987).

14. Subs. by Act 20 of 1987, sec. 2, for “Provided that” (w.e.f. 1-12-1987).

15. Clause (o) omitted by Act 20 of 1987, sec. 2 (w.e.f. 1-12-1987).

16. Clause (q) omitted by the A. O. 1950.

17 Subs. by Act 20 of 1987, sec. 2, for “relay” (w.e.f. 1-12-1987).

Section 3. REFERENCES TO TIME OF DAY. 

In this Act references to time of day are references to Indian Standard Time, being five and a half hours ahead of Greenwich Mean Time :

Provided that for any area in which Indian Standard Time is not ordinarily observed the State Government may make rules -

(a) specifying the area,

(b) defining the local mean time ordinarily observed therein, and

(c) permitting such time to be observed in all or any of the factories situated in the area.

 Section 4. POWER TO DECLARE DIFFERENT DEPARTMENTS TO BE SEPARATE FACTORIES OR TWO OR MORE FACTORIES TO BE A SINGLE FACTORY.

¹[Power to declare different departments to be separate factories or two or more factories to be a single factory.—The State Government may, ²[on its own or] on an application made in this behalf by an occupier, direct, by an order in writing ²[and subject to such conditions as it may deem fit], that for all or any of the purposes of this Act different departments or branches of a factory of the occupier specified in the application shall be treated as separate factories or that two or more factories of the occupier specified in the application shall be treated as a single factory:]

³[Provided that no order under this section shall be made by the State Government on its own motion unless an opportunity of being heard is given to the occupier.]

——————————-

1. Subs. by Act 25 of 1954, sec. 3, for section 4 (w.e.f.7-5-1954).

2. Ins. by Act 20 of 1987, sec. 3 (w.e.f. 1-12-1987).

3. Added by Act 20 of 1987, sec. 3 (w.e.f. 1-12-1987).

Section 5. POWER TO EXEMPT DURING PUBLIC EMERGENCY. 

In any case of public emergency the State Government may, by notification in the Official Gazette, exempt any factory or class or description of factories from all or any of the provisions of this Act ¹except section 67 for such period and subject to such conditions as it may think fit : Provided that no such notification shall be made for a period exceeding three months at a time.

²Explanation : For the purposes of this section “public emergency” means a grave emergency whereby the security of India or of any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance.

——————————

1. Ins. by the A.O. 1950.

2.Ins. by Act 94 of 1976, sec. 3 (w.e.f. 26-10-1976).

Section 6. APPROVAL, LICENSING AND REGISTRATION OF FACTORIES. 

(1) The State Government may make rules -

¹(a) requiring, for the purposes of this Act, the submission of plans of any class or description of factories to the Chief Inspector or the State Government;

²(aa) requiring, the previous permission in writing of the State Government or the Chief Inspector to be obtained for the site on which the factory is to be situated and for the construction or extension of any factory or class or description of factories;

(b) requiring for the purpose of considering applications for such permission the submission of plans and specifications;

(c) prescribing the nature of such plans and specifications and by whom they shall be certified;

(d) requiring the registration and licensing of factories or any class or description of factories, and prescribing the fees payable for such registration and licensing and for the renewal of licences;

(e) requiring that no licence shall be granted or renewed unless the notice specified in section 7 has been given.

(2) If on an application for permission referred to in ³clause (aa) of sub-section (1) accompanied by the plans and specifications required by the rules made under clause (b) of that sub-section, sent to the State Government or Chief inspector by registered post, no order is communicated to the applicant within three months from the date on which it is so sent, the permission applied for in the said application shall be deemed to have been granted.

(3) Where a State Government or a Chief Inspector refuses to grant permission to the site, construction or extension of a factory or to the registration and licensing of a factory, the applicant may within thirty days of the date of such refusal appeal to the Central Government if the decision appealed from was of the State Government and to the State Government in any other case.

Explanation : A factory shall not be deemed to be extended within the meaning of this section by reason only of the replacement of any plant or machinery, or within such limits as may be prescribed, of the addition of any plant or machinery ⁴if such replacement or addition does not reduce the minimum clear space required for safe working around the plant or machinery or adversely affect the environmental conditions from the evolution or emission of steam, heat or dust or fumes injurious to health.

——————————

1. Ins. by Act 94 of 1976, sec. 4 (w.e.f. 26-10-1976).

2. Clause (a) re-lettered as clause (aa) by Act 94 of 1976, sec. 4 (w.e.f. 26-10-1976).

3. Subs. by Act 94 of 1976, sec. 4 “for clause (a)” (w.e.f. 26-10-1976).

4. Ins. by Act 94 of 1976, sec. 4 (w.e.f. 26-10-1976).

Section 7. NOTICE BY OCCUPIER. 

(1) The occupier shall, at least fifteen days before he begins to occupy or use any premises as a factory, send to the Chief Inspector a written notice containing -

(a) the name and situation of the factory;

(b) the name and address of the occupier;

¹(bb) the name and address of the owner of the premises or building (including the precincts thereof) referred to in section 93;

(c) the address to which communication relating to the factory may be sent;

(d) the nature of the manufacturing process -

(i) carried on in the factory during the last twelve months in the case of factories in existence on the date of the commencement of this Act, and

(ii) to be carried on in the factory during the next twelve months in the case of all factories;

²(e) the total rated horse power installed or to be installed in the factory, which shall not include the rated horse power of any separate stand-by plant;

(f) the name of the manager of the factory for the purposes of this Act;

(g) the number of workers likely to be employed in the factory;

(h) the average number of workers per day employed during the last

twelve months in the case of a factory in existence on the date of the commencement of this Act; (i) such other particulars as may be prescribed.

(2) In respect of all establishments which come within the scope of the Act for the first time, the occupier shall send a written notice to the Chief Inspector containing the particulars specified in sub-section (1) within thirty days, from the date of the commencement of this Act.

(3) Before a factory engaged in a manufacturing process which is ordinarily carried on for less than one hundred and eighty working days in the year resumes working, the occupier shall send a written notice to the Chief Inspector containing the particulars specified in sub-section (1)³ at least thirty days before the date of the commencement of work.

(4) Whenever a new manager is appointed, the occupier shall send to the ⁴Inspector a written notice and to the Chief Inspector a copy thereof within seven days from the date on which such person takes over charge.

(5) During any period for which no person has been designated as manager of a factory or during which the person designated does not manage the factory, any person found acting as manager, or if no such person is found, the occupier himself, shall be deemed to be the manager of the factory for the purposes of this Act.

——————————–

1. Ins. by Act 25 of 1954, sec. 4 (w.e.f. 7-5-1954).

2. Subs. by Act 94 of 1976, sec. 5, for clause (e) (w.e.f. 26-10-1976).

3. Subs. by Act 40 of 1949, sec. 3 and Sch. II, for “within thirty days”.

4. Subs. by Act 25 of 1954, sec. 4, for “Chief Inspector a written notice”.

Section 7 A. GENERAL DUTIES OF THE OCCUPIER. 

(1) Every occupier shall ensure, so far as is reasonably practicable, the health, safety and welfare of all workers while they are at work in the factory.

(2) Without prejudice to the generality of the provisions of sub-section (1), the matters to which such duty extends, shall include – (a) the provision and maintenance of plant and systems of work in the factory that are safe and without risks to health;

(b) the arrangements in the factory for ensuring safety and absence of risks to health in connection with the use, handling, storage and transport of articles and substances;

(c) the provision of such information, instruction, training and supervision as are necessary to ensure the health and safety, of all workers at work;

(d) the maintenance of all places of work in the factory in a condition that is safe and without risks to health and the provision and maintenance of such means of access to, and egress from, such places as are safe and without such risks;

(e) the provision, maintenance or monitoring of such working environment in the factory for the workers that is safe, without risks to health and adequate as regards facilities and arrangements for their welfare at work.

(3) Except in such cases as may be prescribed, every occupier shall prepare, and, as often as may be appropriate, revise, a written statement of his general policy with respect to the health and safety of the workers at work and the organisation and arrangements for the time being in force for carrying out that policy, and to bring the statement and any revision thereof to the notice of all the workers in such manner as may be prescribed.

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1.   Ins. by Act 20 of 1987, sec. 4 (w.e.f. 1-12-1987).

Section 7 B. GENERAL DUTIES OF MANUFACTURERS, ETC., AS REGARDS ARTICLES AND SUBSTANCES FOR USE IN FACTORIES. 

¹(1) Every person who designs, manufactures, imports or supplies any article for use in any factory shall -

(a) ensure, so far as is reasonably practicable, that the article is so designed and constructed as to be safe and without risks to the health of the workers when properly used;

(b) carry out or arrange for the carrying out of such tests and examination as may be considered necessary for the effective implementation of the provisions of clause (a);

(c) take such steps as may be necessary to ensure that adequate information will be available -

(i) in connection with the use of the article in any factory;

(ii) about the use for which it is designed and tested; and

(iii) about any conditions necessary to ensure that the article, when put to such use, will be safe, and without risks to the health of the workers :

Provided that where an article is designed or manufactured outside India, it shall be obligatory on the part of the importer to see -

(a) that the article conforms to the same standards if such article is manufactured in India, or

(b) if the standards adopted in the country outside for the manufacture of such article is above the standards adopted in India, that the article conforms to such standards.

(2) Every person, who undertakes to design or manufacture any article for use in any factory, may carry out or arrange for the carrying out of necessary research with a view to the discovery and, so far as is reasonably practicable, the elimination or minimization of any risks to the health or safety of the workers to which the design or article may give rise.

(3) Nothing contained in sub-sections (1) and (2) shall be construed to require a person to repeat the testing, examination or research which has been carried out otherwise than by him or at his instance in so far as it is reasonable for him to rely on the results thereof for the purposes of the said sub-sections.

(4) Any duty imposed on any person by sub-sections (1) and (2) shall extend only to things done in the course of business carried on by him and to matters within his control.

(5) Where a person designs, manufactures, imports or supplies an article on the basis of a written undertaking by the user of such article to take the steps specified in such undertaking to ensure, so far as is reasonably practicable, that the article will be safe and without risks to the health of the workers when properly used, the undertaking shall have the effect of relieving the person designing, manufacturing, importing or supplying the article from the duty imposed by clause (a) of sub-section (1) to such extent as is reasonable having regard to the terms of the undertaking.

(6) For the purposes of this section, an article is not to be regarded as properly used if it is used without regard to any information or advice relating to its use which has been made available by the person who has designed, manufactured, imported or supplied the article.

Explanation : For the purposes of this section, “article” shall include plant and machinery

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1. Ins. by Act 20 of 1987, sec. 4 (w.e.f. 1-6-1988).

Section 8. INSPECTORS. 

(1) The State Government may, by notification in the Official Gazette, appoint such persons as possess the prescribed qualification to be Inspectors for the purposes of this Act and may assign to them such local limits as it may think fit.

(2) The State Government may, by notification in the Official Gazette, appoint any person to be a Chief Inspector who shall, in addition to the powers conferred on a Chief Inspector under this Act, exercise the powers of an Inspector throughout the State.

¹(2A) The State Government may, by notification in the Official Gazette, appoint as many Additional Chief Inspectors, Joint Chief Inspectors and Deputy Chief Inspectors and as many other officers as it thinks fit to assist the Chief Inspector and to exercise such of the powers of the Chief Inspector as may be specified in such notification.

(2B) Every Additional Chief Inspector, Joint Chief Inspector, Deputy Chief Inspector and every other officer appointed under sub-section (2A) shall, in addition to the powers of a Chief Inspector specified in the notification by which he is appointed, exercise the powers of an Inspector throughout the State.

(3) No person shall be appointed under sub-section (1), sub-section (2)¹sub-section (2A) lra-38 ] or sub-section (5), or having been so appointed, shall continue to hold office, who is or becomes directly or indirectly interested in a factory or in any process or business carried on therein or in any patent or machinery connected therewith.

(4) Every District Magistrate shall be an Inspector for his district.

(5) The State Government may also, by notification as aforesaid, appoint such public officers as it thinks fit to be additional Inspectors for all or any of the purposes of this Act, within such local limits as it may assign to them respectively.

(6) In any area where there are more Inspectors than one the State Government may, by notification as aforesaid, declare the powers, which such Inspectors shall respectively exercise and the Inspector to whom the prescribed notices are to be sent.

(7)² Every Chief Inspector, Additional Chief Inspector, Joint Chief Inspector, Deputy Chief Inspector, Inspector and every other officer appointed under this section shall be deemed to be a public servant within the meaning of the Indian Penal Code (45 of 1860), and shall be officially subordinate to such authority as the State Government may specify in this behalf.

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1.   Ins. by Act 94 of 1976, sec. 6 (w.e.f. 26-10-1976).

2.   Subs. by Act 94 of 1976, sec. 6, for “Every Chief Inspector or Inspector” (w.e.f. 26-10-1976).

Section 9. POWERS OF INSPECTORS. 

Subject to any rules made in this behalf, an Inspector may, within the local limits for which he is appointed, -

(a) enter, with such assistants, being persons in the service of the Government, or any local or other public authority, ¹[or with an expert] as he thinks fit, any place which is used, or which he has reason to believe is used, as a factory;

²[(b) make examination of the premises, plant, machinery, article or substance;

(c) inquire into any accident or dangerous occurrence, whether resulting in bodily injury, disability or not, and take on the spot or otherwise statements of any person which he may consider necessary for such inquiry;

(d) require the production of any prescribed register or any other document relating to the factory;

(e) seize, or take copies of, any register, record or other document or any portion thereof, as he may consider necessary in respect of any offence under this Act, which he has reason to believe, has been committed;

(f) direct the occupier that any premises or any part thereof, or anything lying therein, shall be left undisturbed (whether generally or in particular respects) for so long as is necessary for the purpose of any examination under clause (b);

(g) take measurements and photographs and make such recordings as he considers necessary for the purpose of any examination under clause (b), taking with him any necessary instrument or equipment;

(h) in case of any article or substance found in any premises, being an article or substance which appears to him as having caused or is likely to cause danger to the health or safety of the workers, direct it to be dismantled or subject it to any process or test (but not so as to damage or destroy it unless the same is, in the circumstances necessary, for carrying out the purposes of this Act), and take possession of any such article of substance or a part thereof, and detain it for so long as is necessary for such examination; (i) exercise such other powers as may be prescribed :

Provided that no person shall be compelled under this section to answer any question or give any evidence tending to incriminate himself.

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1.   Ins. by Act 20 of 1987, sec. 5 (w.e.f. 1-12-1987).

2.   Subs. by Act 20 of 1987, sec. 5, for clauses (b) and (c) (w.e.f. 1-12-1987).

Section 10 CERTIFYING SURGEONS. 

(1) The State Government may appoint qualified medical practitioners to be certifying surgeons for the purposes of this Act within such local limits or for such factory or class or description of factories as it may assign to them respectively.

(2) A certifying surgeon may, with the approval of the State Government, authorize any qualified medical practitioner to exercise any of his powers under this Act for such period as the certifying surgeon may specify and subject to such conditions as the State Government may think fit to impose, and references in this Act to a certifying surgeon shall be deemed to include references to any qualified medical practitioner when so authorized.

(3) No person shall be appointed to be, or authorized to exercise the powers of, a certifying surgeon, or having been so appointed or authorized, continue to exercise such powers, who is, or becomes the occupier of a factory or is or becomes directly or indirectly interested therein or in any process or business carried on therein or in any patent or machinery connected therewith or is otherwise in the employ of the factory :

¹Provided that the State Government may, by order in writing and subject to such conditions as may be specified in the order, exempt any person or class of persons from the provisions of this sub-section in respect of any factory or class or description of factories.

(4) The certifying surgeon shall carry out such duties as may be prescribed in connection with -

(a) the examination and certification of young persons under this Act;

(b) the examination of persons engaged in factories in such dangerous occupations or processes as may be prescribed;

(c) the exercising of such medical supervision as may be prescribed for any factory or class or description of factories where -

(i) cases of illness have occurred which it is reasonable to believe are due to the nature of the manufacturing process carried on, or other conditions of work prevailing, therein;

(ii) by reason of any change in the manufacturing process carried on or in the substances used therein or by reason of the adoption of any new manufacturing process or of any new substance for use in a manufacturing process, there is a likelihood of injury to the health of workers employed in that manufacturing process;

(iii) young persons are, or are about to be, employed in any work which is likely to cause injury to their health. Explanation : In this section “qualified medical practitioner” means a person holding a qualification granted by an authority specified in the Schedule to the Indian Medical Degrees Act, 1916 (7 of 1916) or in the Schedules to the Indian Medical Council Act, 1933 (27 of 1933). ²

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1.   Ins. by Act 94 of 1976, sec. 7 (w.e.f. 26-10-1976).

2.   Now see the Indian Medical Council Act, 1956 (102 of 1956).

Section 11. CLEANLINESS. 

(1) Every factory shall be kept clean and free from effluvia arising from any drain, privy or other, nuisance, and in particular -

(a) accumulations of dirt and refuse shall be removed daily by sweeping or by any other effective method from the floors and benches of workrooms and from staircases and passages, and disposed of in a suitable manner;

(b) the floor of every workroom shall be cleaned at least once in every week by washing, using disinfectant, where necessary, or by some other effective method;

(c) where a floor is liable to become wet in the course of any manufacturing process to such extent as is capable of being drained, effective means of drainage shall be provided and maintained;

(d) all inside walls and partitions, all ceilings or tops of rooms and all walls, sides and tops of passages and staircases shall—

(i) where they are 1[painted otherwise than with washable water-paint] or varnished, be re-painted or re-varnished at least once in every period of five years;

²[(ia) where they are painted with washable water-paint, be re-painted with at least one coat of such paint at least once in every period of three years and washed at least once in every period of six months;]

(ii) where they are painted or varnished or where they have smooth impervious surfaces be cleaned at least once in every period of fourteen months by such method as may be prescribed;

(iii) in any other case, be kept white washed or colourwashed, and the white-washing or colourwashing shall be carried out at least once in every period of fourteen months;

²[(dd) all doors and window frames and other wooden or metallic framework and shutters shall be kept painted or varnished and the painting or varnishing shall be carried out at least once in every period of five years;]

(e) the dates on which the processes required by clause (d) are carried out shall be entered in the prescribed register.

(2) If, in view of the nature of the operations carried on ³[in a factory or class or description of factories or any part of a factory or class or description of factories], it is not possible for the occupier to comply with all or any of the provisions of sub-section (1), the State Government may by order exempt such factory or class or description of factories ²[or part] from any of the provisions of that sub-section and specify alternative methods for keeping the factory in a clean state.

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1. Subs. by Act 94 of 1976, sec. 8, for “painted” (w.e.f. 26-10-1976).

2. Ins. by Act 94 of 1976, sec. 8 (w.e.f. 26-10-1976).

3. Subs. by Act 94 of 1976, sec. 8, for “in a factory” (w.e.f. 26-10-1976).

Section 12. DISPOSAL OF WASTES AND EFFLUENTS. 

(1) Effective arrangements shall be made in every factory for the treatment of wastes and effluents due to the manufacturing process carried on therein, so as to render them innocuous, and for their disposal.

(2) The State Government may make rules prescribing the arrangements to be made under sub-section (1) or requiring that the arrangements made in accordance with sub-section (1) shall be approved by such authority as may be prescribed.

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1.   Subs. by Act 94 of 1976, sec. 9, for sub-section (1) (w.e.f. 26-10-1976).

Section 13. VENTILATION AND TEMPERATURE. 

(1) Effective and suitable provision shall be made in every factory for securing and maintaining in every workroom -

(a) adequate ventilation by the circulation of fresh air, and

(b) such a temperature as will secure to workers therein reasonable conditions of comfort and prevent injury to health; and in particular, – (i) walls and roofs shall be of such material and so designed that such temperature shall not be exceeded but kept as low as practicable;

(ii) where the nature of the work carried on in the factory involves, or is likely to involve, the production of excessively high temperatures such adequate measures as are practicable shall be taken to protect the workers therefrom, by separating the process which produces such temperatures from the workroom, by insulating the hot parts or by other effective means.

(2) The State Government may prescribe a standard of adequate ventilation and reasonable temperature for any factory or class or description of factories or parts thereof and direct that ¹[proper measuring instruments, at such places and in such position as may be specified, shall be provided and such records, as may be prescribed, shall be maintained].

²[(3) If it appears to the Chief Inspector that excessively high temperatures in any factory can be reduced by the adoption of suitable measures, he may, without prejudice to the rules made under sub-section (2), serve on the occupier, an order in writing specifying the measures which, in his opinion, should be adopted, and requiring them to be carried out before a specified date.]

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1. Subs. by Act 20 of 1987, sec. 6, for certain words (w.e.f. 1-12-1987).

2. Subs. by Act 20 of 1987, sec. 6, for sub-section (3) (w.e.f. 1-12-1987).

Section 14. DUST AND FUME. 

(1) In every factory in which, by reason of the manufacturing process carried on, there is given off any dust or fume or other impurity of such a nature and to such an extent as is likely to be injurious or offensive to the workers employed therein, or any dust in substantial quantities, effective measures shall be taken to prevent its inhalation and accumulation in any workroom, and if any exhaust appliance is necessary for this purpose, it shall be applied as near as possible to the point of origin of the dust, fume or other impurity, and such point shall be enclosed so far as possible.

(2) In any factory no stationary internal combustion engine shall be operated unless the exhaust is conducted into the open air, and no other internal combustion engine shall be operated in any room unless effective measures have been taken to prevent such accumulation of fumes therefrom as are likely to be injurious to workers employed in the room.

Section 15. ARTIFICIAL HUMIDIFICATION. 

(1) In respect of all factories in which the humidity of the air is artificially increased, the State Government may make rules, -

(a) prescribing standards of humidification;

(b) regulating the methods used for artificially increasing the humidity of the air,

(c) directing prescribed tests for determining the humidity of the air to be correctly carried out and recorded;

(d) prescribing methods to be adopted for securing adequate ventilation and cooling of the air in the workrooms.

(2) In any factory in which the humidity of the air is artificially increased, the water used for the purpose shall be taken from a public supply, or other source of drinking water, or shall be effectively purified before it is so used.

(3) If it appears to an Inspector that the water used in a factory for increasing humidity which is required to be effectively purified under sub-section (2) is not effectively purified he may serve on the manager of the factory an order in writing, specifying the measures which in his opinion should be adopted, and requiring them to be carried out before specified date.

Section 16. OVERCROWDING. 

(1) No room in any factory shall be overcrowded to an extent injurious to the health of the workers employed therein.

(2) Without prejudice to the generality of sub-section (1) there shall be in every workroom of a factory in existence on the date of the commencement of this Act at least ¹[9.9 cubic metres] and of a factory built after the commencement of this Act at least ²[14.2 cubic metres] of space for every worker employed therein, and for the purposes of this sub-section no account shall be taken of any space which is more than ³[4.2 metres] above the level of the floor of the room.

(3) If the Chief Inspector by order in writing so requires, there shall be posted in each workroom of a factory a notice specifying the maximum number of workers who may, in compliance with the provisions of this section, be employed in the room.

(4) The Chief Inspector may by order in writing exempt, subject to such conditions, if any, as he may think fit to impose, any workroom from the provisions of this section, if he is satisfied that compliance therewith in respect of the room is unnecessary in the interest of the health of the workers employed therein.

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1.   Subs. by Act 20 of 1987, sec. 7, for “three hundred and fifty cubic feet” (w.e.f. 1-12-1987).

2.   Subs. by Act 20 of 1987, sec. 7, for “five hundred cubic feet” (w.e.f. 1-12-1987).

3.   Subs. by Act 20 of 1987, sec. 7, for “fourteen feet” (w.e.f. 1-12-1987).

Section 17. LIGHTING

(1) In every part of a factory where workers are working or passing there shall be provided and maintained sufficient and suitable lighting, natural or artificial, or both.

(2) In every factory all glazed windows and skylights used for the lighting of the workroom shall be kept clean on both the inner and outer surfaces and, so far as compliance with the provisions of any rules made, under sub-section (3) of section 13 will allow, free from obstruction.

(3) In every factory effective provision shall, so far as is practicable, be made for the prevention of -

(a) glare, either directly from a source of light or by reflection from a smooth or polished surface;

(b) the formation of shadows to such an extent as to cause eye-strain or the risk of accident to any worker.

(4) The State Government may prescribe standards of sufficient and suitable lighting for factories or for any class or description of factories or for any manufacturing process.

Section 18. DRINKING WATER. 

(1) In every factory effective arrangements shall be made to provide and maintain at suitable points conveniently situated for all workers employed therein a sufficient supply of wholesome drinking water.

(2) All such points shall be legibly marked “drinking water” in a language understood by a majority of the workers employed in the factory, and no such point shall be situated within ¹six metres of any washing place, urinal, latrine, spittoon, open drain carrying sullage or effluent or any other source of contamination unless a shorter distance is approved in writing by the Chief Inspector.

(3) In every factory wherein more than two hundred and fifty workers are ordinarily employed, provisions shall be made for cooling drinking water during hot weather by effective means and for distribution thereof.

(4) In respect of all factories or any class or description of factories the State Government may make rules for securing compliance with the provisions of sub-sections (1), (2) and (3) and for the examination by prescribed authorities of the supply and distribution of drinking water in factories.

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1.   Subs. by Act 20 of 1987, sec. 8, for certain words (w.e.f. 1-12-1987).

Section 19. LATRINES AND URINALS. 

(1) In every factory -

(a) sufficient latrine and urinal accommodation of prescribed types shall be provided conveniently situated and accessible to workers at all times while they are at the factory;

(b) separate enclosed accommodation shall be provided for male and female workers;

(c) such accommodation shall be adequately lighted and ventilated, and no latrine or urinal shall, unless specially exempted in writing by the Chief Inspector, communicate with any workroom except through an intervening open space or ventilated passage;

(d) all such accommodation shall be maintained in a clean and sanitary condition at all times;

(e) sweepers shall be employed whose primary duty it would be to keep clean latrines, urinals and washing places.

(2) In every factory wherein more than two hundred and fifty workers are ordinarily employed -

(a) all latrine and urinal accommodation shall be of prescribed sanitary types;

(b) the floors and internal walls, up to a height of ¹ninety centimeters, of the latrines and urinals and the sanitary blocks shall be laid in glazed titles or otherwise finished to provide a smooth polished impervious surface;

(c) without prejudice to the provisions of clauses (d) and (e) of sub-section (1), the floors, portions of the walls and blocks so laid or finished and the sanitary pans of latrines and urinals shall be thoroughly washed and cleaned at least once in every seven days with suitable detergents or disinfectants or with both.

(3) The State Government may prescribe the number of latrines and urinals to be provided in any factory in proportion to the numbers of male and female workers ordinarily employed therein, and provide for such further matters in respect of sanitation in factories, including the obligation of workers in this regard, as it considers necessary in the interest of the health of the workers employed therein.

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1.   Subs. by Act 20 of 1987, sec. 9, for “three feet” (w.e.f. 1-12-1987).

Section 20. SPITTOONS. 

(1) In every factory there shall be provided a sufficient number of spittoons in convenient places and they shall be maintained in a clean and hygienic condition.

(2) The State Government may make rules prescribing the type and the number of spittoons to be provided and their location in any factory and provide for such further matters relating to their maintenance in a clean and hygienic condition.

(3) No person shall spit within the premises of a factory except in the spittoons provided for the purpose and a notice containing this provision and the penalty for its violation shall be prominently displayed at suitable places in the premises.

(4) Whoever spits in contravention of sub-section (3) shall be punishable with fine not exceeding five rupees.

Section 21. FENCING OF MACHINERY. 

(1) In every factory the following, namely, -

(i) every moving part of a prime mover and every flywheel connected to a prime mover, whether the prime mover or flywheel is in the engine house or not;

(ii) the headrace and tailrace of every water-wheel and water turbine;

(iii) any part of a stock-bar which projects beyond the head stock of a lathe; and

(iv) unless they are in such position or of such construction as to be safe to every person employed in the factory as they would be if they were securely fenced, the following, namely -

(a) every part of an electric generator, a motor or rotary converter;

(b) every part of transmission machinery; and

(c) every dangerous part of any other machinery, shall be securely fenced by safeguards of substantial construction which ¹shall be constantly maintained and kept in position while the parts of machinery they are fencing are in motion or in use :

²Provided that for the purpose of determining whether any part of machinery is in such position or is of such construction as to be safe as

aforesaid, account shall not be taken of any occasion when – (i) it is necessary to make an examination of any part of the machinery aforesaid while it is in motion or, as a result of such examination, to carry out lubrication or other adjusting operation while the machinery is in motion, being an examination or operation which it is necessary to be carried out while that part of the machinery is in motion, or

(ii) in the case of any part of a transmission machinery used in such process as may be prescribed (being a process of a continuous nature the carrying on of which shall be, or is likely to be, substantially interfered with by the stoppage of that part of the machinery), it is necessary to make an examination of such part of the machinery while it is in motion or, as a result of such examination, to carry out any mounting or shipping of belts or lubrication or other adjusting operation while the machinery is in motion, and such examination or operation is made or carried out in accordance with the provisions of sub-section (1) of section 22.

(2) The State Government may by rules prescribe such further precautions as it may consider necessary in respect of any particular machinery or part thereof, or exempt, subject to such condition as may be prescribed, for securing the safety of the workers, any particular machinery or part thereof from the provisions of this section.

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1. Subs. by Act 94 of 1976, sec. 10, for “shall be kept in position” (w.e.f. 26-10-1976).

2. Subs. by Act 94 of 1976 sec. 10, for the proviso (w.e.f. 26-10-1976).

Section 22. WORK ON OR NEAR MACHINERY IN MOTION. 

¹(1) Where in any factory it becomes necessary to examine any part of machinery referred to in section 21, while the machinery is in motion, or, as a result of such examination, to carry out -

(a) in a case referred to in clause (i) of the proviso to sub-section (1) of section 21, lubrication or other adjusting operation; or

(b) in a case referred to in clause (ii) of the proviso aforesaid, any mounting or shipping of belts or lubrication or other adjusting operation, while the machinery is in motion such examination or operation shall be made or carried out only by a specially trained adult male worker wearing tight fitting clothing (which shall be supplied by the occupier) whose name has been recorded in the register prescribed in this behalf and who has been furnished with a certificate of his appointment, and while he is so engaged, – (a) such worker shall not handle a belt at a moving pulley unless -

(i) the belt is not more than fifteen centimeters in width;

(ii) the pulley is normally for the purpose of drive and not merely a fly-wheel or balance wheel (in which case a belt is not permissible);

(iii) the belt joint is either laced or flush with the belt;

(iv) the belt, including the joint and the pulley rim, are in good repair;

(v) there is reasonable clearance between the pulley and any fixed plant or structure;

(vi) secure foothold and, where necessary, secure handhold, are provided for the operator; and

(vii) any ladder in use for carrying out any examination or operation aforesaid is securely fixed or lashed or is firmly held by a second person.

(b) without prejudice to any other provision of this Act relating to the fencing of machinery, every set screw, bolt and key on any revolving shaft, spindle, wheel or pinion, and all spur, worm and other toothed or friction gearing in motion with which such worker would otherwise be liable to come into contact, shall be securely fenced to prevent such contact.

²(2) No woman or young person shall be allowed to clean, lubricate or adjust any part of a prime mover or of any transmission machinery while the prime mover or transmission machinery is in motion, or to clean, lubricate or adjust any part of any machine if the cleaning, lubrication or adjustment thereof would expose the woman or young person to risk of injury from any moving part either of that machine or of any adjacent machinery.

(3) The State Government may, by notification in the official. Gazette, prohibit, in any specified factory or class or description of factories, the cleaning, lubricating or adjusting by any person of specified parts of machinery when those parts are in motion.

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1.   Subs. by Act 94 of 1976, sec. 11, for the opening paragraph and clause (a) (w.e.f. 26-10-1976).

2.   Subs. by Act 25 of 1954, sec. 6, for sub-section (2) (w.e.f. 7-5-1954).

Section 23. EMPLOYMENT OF YOUNG PERSONS ON DANGEROUS MACHINES. 

(1) No young person ¹shall be required or allowed to work at any machine to which this section applies, unless he has been fully instructed as to the dangers arising in connection with the machine and the precautions to be observed and -

(a) has received sufficient training in work at the machine, or

(b) is under adequate supervision by a person who has a thorough knowledge and experience of the machine. (2) Sub-section (1) shall apply to such machines as may be prescribed by the State Government, being machines which in its opinion are of such a dangerous character that young persons ought not to work at them unless the foregoing requirements are complied with.

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1.   Subs. by Act 20 of 1987, 10, for “shall work” (w.e.f. 1-12-1987).

Section 24. STRIKING GEAR AND DEVICES FOR CUTTING OFF POWER. 

(1) In every factory -

(a) suitable striking gear or other efficient mechanical appliance shall be provided and maintained and used to move driving belts to and from fast and loose pulleys which form part of the transmission machinery, such gear or appliances shall be so constructed, placed and maintained as to prevent the belt from creeping back on to the fast pulley;

(b) driving belts when not in use shall not be allowed to rest or ride upon shafting in motion.

(2) In every factory suitable devices for cutting off power in emergencies from running machinery shall be provided and maintained in every work-room:

Provided that in respect of factories in operation before the commencement of this Act, the provisions of this sub-section shall apply only to work-rooms in which electricity is used as power.

¹[(3) When a device, which can inadvertently shift from “off” to “on” position, is provided in a factory to cut off power, arrangements shall be provided for locking the device in safe position to prevent accidental starting of the transmission machinery or other machines to which the device is fitted].

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1. Ins. by Act 94 of 1976, sec. 12 (w.e.f. 26-10-1976).

Section 25. SELF-ACTING MACHINES. 

No traversing part of a self-acting machine in any factory and no material carried thereon shall, if the space over which it runs is a space over which any person is liable to pass, whether in the course of his employment or otherwise, be allowed to run on its outward or inward traverse within a distance of ¹forty-five centimeters from any fixed structure which is not part of the machine :

Provided that the Chief Inspector may permit the continued use of a machine installed before the commencement of this Act which does not comply with the requirements of this section on such conditions for ensuring safety as he may think fit to impose.

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  1.   Subs. by Act 20 of 1987, sec. 11, for “eighteen inches” (w.e.f. 1-12-1987).

Section 26. CASING OF NEW MACHINERY. 

(1) In all machinery driven by power and installed in any factory after the commencement of this Act, -

(a) every set screw, bolt or key on any revolving shaft, spindle, wheel pinion shall be so sunk, encased or otherwise effectively guarded as to prevent danger;

(b) all spur, worm and other toothed or friction gearing which does not require frequent adjustment while in motion shall be completely encased, unless it is so situated as to be as safe as it would be if it were completely encased.

(2) Whoever sells or lets on hire or, as agent of a seller or hirer, causes or procures to be sold on let or hire, for use in a factory any machinery driven by power which does not comply with the provisions of ¹Sub-section (1) or any rules made under sub-section (3), shall be punishable with imprisonment for a term which may extend to three months or with fine which may extend to five hundred rupees or with both.

²[(3) The State Government may make rules specifying further safeguards to be provided in respect of any other dangerous part of any particular machine or class or description of machines.]

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1. Subs. by Act 25 of 1954, sec. 7, for “sub-section (1)”.

2. Subs. by Act 25 of 1954, sec. 7, for sub section (3).

Section 27. PROHIBITION OF EMPLOYMENT OF WOMEN AND CHILDREN NEAR COTTON-OPENERS. 

No woman or child shall be employed in any part of a factory for pressing cotton in which a cotton-opener is at work :

Provided that if the feed-end of a cotton-opener is in a room separated from the delivery end by a partition extending to the roof or to such height as the Inspector may in any particular case specify in writing, women and children may be employed on the side of the partition where the feed-end is situated.

Section 28. HOISTS AND LIFTS. 

(1) In every factory -

(a) every hoist and lift shall be -

(i) of good mechanical construction, sound material and adequate strength;

(ii) properly maintained, and shall be thoroughly examined by a competent person at least once in every period of six months, and a register shall be kept containing the prescribed particulars of every such examination;

(b) every hoistway and liftway shall be sufficiently protected by an enclosure fitted with gates, and the hoist or lift and every such enclosure shall be so constructed as to prevent any person or thing from being trapped between any part of the hoist or lift and any fixed structure or moving part;

(c) the maximum safe working load shall be plainly marked on every hoist or lift, and no load greater than such load shall be carried thereon;

(d) the cage of every hoist or lift used for carrying persons shall be fitted with a gate on each side from which access is afforded to a landing;

(e) every gate referred to in clause (b) or clause (a) shall be fitted with interlocking or other efficient device to secure that the gate cannot be opened except when the cage is at the landing and that the cage cannot be moved unless the gate is closed.

(2) The following additional requirements shall apply to hoists and lifts used for carrying persons and installed or reconstructed in a factory after the commencement of this Act, namely : (a) where the cage is supported by rope or chain, there shall be at least two ropes or chains separately connected with the cage and balance weight, and each rope or chain with its attachments shall be capable of carrying the whole weight of the cage together with its maximum load;

(b) efficient devices shall be provided and maintained capable of supporting the cage together with its maximum load in the event of breakage of the ropes, chains or attachments;

(c) an efficient automatic device shall be provided and maintained to prevent the cage from over-running.

(3) The Chief Inspector may permit the continued use of a hoist or lift installed in a factory before the commencement of this Act which does not fully comply with the provisions of sub-section (1) upon such conditions for ensuring safety as he may think fit to impose.

(4) The State Government may, if in respect of any class or description of hoist or lift, it is of opinion that it would be unreasonable to enforce any requirement of sub-sections. (1) and (2), by order direct that such requirement shall not apply to such class or description of hoist or lift.

¹[Explanation.—For the purposes of this section, no lifting machine or appliance shall be deemed to be a hoist or lift unless it has a platform or cage, the direction or movement of which is restricted by a guide or guides.]

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1. Ins. by Act 20 of 1987, sec. 12 (w.e.f. 1-12-1987).

Section 29. LIFTING MACHINES, CHAINS, ROPES AND LIFTING TACKLES. 

¹(1) In any factory the following provisions shall be complied with in respect of every lifting machine (other than a hoist and lift) and every chain, rope and lifting tackle for the purpose of raising or lowering persons, goods or materials :- (a) all parts, including the working gear, whether fixed or movable, of every lifting machine and every chain, rope or lifting tackle shall be -

(i) of good construction, sound material and adequate strength and free from defects;

(ii) properly maintained; and

(iii) thoroughly examined by a competent person at least once in every period of twelve months, or at such intervals as the Chief Inspector may specify in writing, and a register shall be kept containing the prescribed particulars of every such examination;

(b) no lifting machine and no chain, rope or lifting tackle shall, except for the purpose of test, be loaded beyond the safe working load which shall be plainly marked thereon together with an identification mark and duly entered in the prescribed register, and where this is not practicable, a table showing the safe working loads of every kind and size of lifting machine or, chain, rope or lifting tackle in use shall be displayed in prominent positions on the premises;

(c) while any person is employed or working on or near the wheel track of a travelling crane in any place where he would be liable to be struck by the crane, effective measures shall be taken to ensure that the crane does not approach within ²[six metres] of that place.

(2) The State Government may make rules in respect of any lifting machine or any chain, rope or lifting tackle used in factories – (a) prescribing further requirements to be complied with in addition to those set out in this section;

(b) providing for exemption from compliance with all or any of the requirements of this section, where in its opinion, such compliance is unnecessary or impracticable.

(3) For the purposes of this section a lifting machine or a chain, rope or lifting tackle shall be deemed to have been thoroughly examined if a visual examination supplemented, if necessary, by other means and by the dismantling of parts of the gear, has been carried out as carefully as the conditions permit in order to arrive at a reliable conclusion as to the safety of the parts examined. Explanation : In this section, -

(a) “lifting machine” means a crane, crab, winch, teagle, pulley block, gin wheel, transporter or runway;

³(b) “lifting tackle” means any chain, sling, rope sling, hook, shackle, swivel, coupling, socket, clamp, tray or similar appliance, whether fixed or movable, used in connection with the raising or lowering of persons, or loads by use of lifting machines.

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1. Subs. by Act 25 of 1954, sec. 8, for section 29 (w.e.f. 7-5-1954).

2. Subs. by Act 20 of 1987, sec. 13, for “twenty feet” (w.e.f. 1-12-1987).

3. Subs. by Act 20 of 1987, sec. 13, for clause (b) (w.e.f. 1-12-1987)

Section 30. REVOLVING MACHINERY. 

¹(1) In every factory in which the process of grinding is carried on there shall be permanently affixed to or placed near each machine in use a notice indicating the maximum safe working peripheral speed of every grindstone or abrasive wheel, the speed of the shaft or spindle upon which the wheel is mounted, and the diameter of the pulley upon such shaft or spindle necessary to secure such safe working peripheral speed.

(2) The speeds indicated in notices under sub-section (1) shall not be exceeded.

(3) Effective measures shall be taken in every factory to ensure that the safe working peripheral speed of every revolving vessel, cage, basket, flywheel, pulley, disc or similar appliance driven by power is not exceeded.

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1. Subs. by Act 20 of 1987 sec. 14, for “In every room in a factory” (w.e.f. 1-12-1987).

Section 31. PRESSURE PLANT. 

¹(1) If in any factory, any plant or machinery or any part thereof is operated at a pressure above atmospheric pressure, effective measures shall be taken to ensure that the safe working pressure of such plant or machinery or part is not exceeded.

(2) The State Government may make rules providing for the examination and testing of any plant or machinery such as is referred to in sub-section (1) and prescribing such other safety measures in relation thereto as may in its opinion be necessary in any factory or class or description of factories.

²(3) The State Government may, by rules, exempt, subject to such conditions as may be specified therein, any part of any plant or machinery referred to in sub-section (1) from the provisions of this section.

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1. Subs. by Act 20 of 1987 sec. 15, for sub-section (1) (w.e.f. 1-12-1987).

2. Ins. by Act 94 of 1976, sec. 13 (w.e.f. 26-10-1976).

Section 32. FLOORS, STAIRS AND MEANS OF ACCESS.

In every factory – (a) all floors, steps, stairs, passages and gangways shall be of sound construction and properly maintained ¹and shall be kept free from obstructions and substances likely to cause persons to slip, and where it is necessary to ensure safety, steps, stairs, passages and gangways shall be provided with substantial handrails;

(b) there shall, so far as is reasonably practicable, be provided and maintained safe means of access to every place at which any person is at any time required to work.

²(c) when any person has to work at a height from where he is likely to fall, provision shall be made, so far as is reasonably practicable, by fencing or otherwise, to ensure the safety of the person so working.

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1. Ins. by Act 94 of 1976, sec. 14, (w.e.f. 26-10-1976).

2. Subs. by Act 20 of 1987, sec. 16, for clause (c) (w.e.f. 1-12-1987).

Section 33. PITS, SUMPS, OPENINGS IN FLOORS, ETC. 

(1) In every factory fixed vessel, sump, tank, pit or opening in the ground or in a floor which, by reasons of its depth, situation, construction or contents, is or may be a source of danger, shall be either securely covered or securely fenced.

(2) The State Government may, by order in writing, exempt, subject to such conditions as may be prescribed, any factory or class or description of factories in respect of any vessel, sump, tank, pit or opening from compliance with the provisions of this section.

Section 34. EXCESSIVE WEIGHTS. 

(1) No person shall be employed in any factory to lift, carry or move any load so heavy as to be likely to cause him injury.

(2) The State Government may make rules prescribing the maximum weights which may be lifted, carried or moved by adult men, adult women, adolescents and children employed in factories or in any class or description of factories or in carrying on any specified process

Section 35. PROTECTION OF EYES. 

In respect of any such manufacturing process carried on in any factory as may be prescribed, being a process which involves -

(a) risk of injury to the eyes from particles or fragments thrown off in the course of the process, or

(b) risk to the eyes by reason of exposure to excessive light, the State Government may by rules require that effective screens or suitable goggles shall be provided for the protection of persons employed on, or in the immediate vicinity of, the process.

Section 36. PRECAUTIONS AGAINST DANGEROUS FUMES, GASES, ETC. 

¹ (1) No person shall be required or allowed to enter any chamber, tank, vat, pit, pipe, flue or other confined space in any factory in which any gas, fume, vapour or dust is likely to be present to such an extent as to involve risk to persons being overcome thereby, unless it is provided with a manhole of adequate size or other effective means of egress.

(2) No person shall be required or allowed to enter any confined space as is referred to in sub-section (1), until all practicable measures have been taken to remove any gas, fume, vapour or dust, which may be present so as to bring its level within the permissible limits and to prevent any ingress of such gas, fume, vapour or dust and unless -

(a) a certificate in writing has been given by a competent person, based on a test carried out by himself that the space is reasonably free from dangerous gas, fume, vapour or dust; or

(b) such person is wearing suitable breathing apparatus and a belt securely attached to a rope the free end of which is held by a person outside the confined space.

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1. Subs. by Act 20 of 1987, sec. 17, for section 36 (w.e.f. 1-12-1987).

Section 36 A. PRECAUTIONS REGARDING THE USE OF PORTABLE ELECTRIC LIGHT. 

¹[36A. Precautions regarding the use of portable electric light.—In any factory—

(a) no portable electric light or any other electric appliance of voltage exceeding twenty-four volts shall be permitted for use inside any chamber, tank, vat, pit, pipe, flue or other confined space ²[unless adequate safety devices are provided]; and

(b) if any inflammable gas, fume or dust is likely to be present in such chamber, tank, vat, pit, pipe, flue or other confined space, no lamp or light other than that of flame-proof construction shall be permitted to be used therein.]

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1. Ins. by Act 94 of 1976, sec. 16 (w.e.f. 26-10-1976).

2. Ins. by Act 20 of 1987, sec. 18 (w.e.f. 1-12-1987).

Section 37. EXPLOSIVE OR INFLAMMABLE DUST, GAS, ETC. 

(1) Where in any factory any manufacturing process produces dust, gas, fume or vapour of such character and to such extent as to be likely to explode to ignition, all practicable measures shall be taken to prevent any such explosion by -

(a) effective enclosure of the plant or machinery used in the process;

(b) removal or prevention of the accumulation of such dust, gas, fume or vapour;

(c) exclusion or effective enclosure of all possible sources of ignition.

(2) Where in any factory the plant or machinery used in a process such as is referred to in sub-section (1) is not so constructed as to withstand the probable pressure which such an explosion as aforesaid would produce, all practicable measures shall be taken to restrict the spread and effects of the explosion by the provisions in the plant or machinery of chokes, baffles, vents or other effective appliances.

(3) Where any part of the plant or machinery in a factory contains any explosive or inflammable gas or vapour under pressure greater than atmospheric pressure, that part shall not be opened except in accordance with the following provisions, namely :-

(a) before the fastening of any joint of any pipe connected with the part of the fastening of the cover of any opening into the part is loosened, any flow of the gas or vapour into the part of any such pipe shall be effectively stopped by a stop valve or other means;

(b) before any such fastening as aforesaid is removed, all practicable measures shall be taken to reduce the pressure of the gas or vapour in the part or pipe to atmospheric pressure;

(c) where any such fastening as aforesaid has been loosened or removed

effective measures shall be taken to prevent any explosive or inflammable gas or vapour from entering the part of pipe until the fastening has been secured, or, as the case may be, securely replaced : Provided that the provisions of this sub-section shall not apply in the case of plant or machinery installed in the open air.

(4) No plant, tank or vessel which contains or has contained any explosive or inflammable substance shall be subjected in any factory to any welding, brazing, soldering or cutting operation which involves the application of heat unless adequate measures have first been taken to remove such substance and any fumes arising therefrom or to render such substance and fumes non-explosive or non-inflammable, and no such substance shall be allowed to enter such plant, tank or vessel after any such operation until the metal has cooled sufficiently to prevent any risk of igniting the substance.

(5) The State Government may by rules exempt, subject to such conditions as may be prescribed, any factory or class or description of factories from compliance with all or any of the provisions of this section.

Section 38. PRECAUTIONS IN CASE OF FIRE. 

¹38. PRECAUTIONS IN CASE OF FIRE. (1) In every factory, all practicable measures shall be taken to prevent outbreak of fire and its spread, both internally and externally, and to provide and maintain – (a) safe means of escape for all persons in the event of a fire, and (b) the necessary equipment and facilities for extinguishing fire.

(2) Effective measures shall be taken to ensure that in every factory all the workers are familiar with the means of escape in case of fire and have been adequately trained in the routine to be followed in such cases.

(3) The State Government may make rules, in respect of any factory or class or description of factories, requiring the measures to be adopted to give effect to the provisions of sub-sections (1) and (2).

(4) Notwithstanding anything contained in clause (a) of sub-section (1) or sub-section (2), if the Chief Inspector, having regard to the nature of the work carried on in any factory, the construction of such factory, special risk to life or safety, or any other circumstances, is of the opinion that the measures provided in the factory, whether as prescribed or not, for the purposes of clause (a) of sub-section (1) or sub-section (2), are inadequate, he may, by, order in writing, require that such additional measures as he may consider reasonable and necessary, be provided in the factory before such date as is specified in the order

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1.   Subs. by Act 20 of 1987, sec. 19, for section 38 (w.e.f. 1-12-1987).

Section 39. POWER TO REQUIRE SPECIFICATIONS OF DEFECTIVE PARTS OR TESTS OF STABILITY. 

If it appears to the Inspector that any building or part of a building or any part of the ways, machinery or plant in a factory is in such a condition that it may be dangerous to human life or safety, he may serve on ¹the occupier or manager or both of the factory an order in writing requiring him before a specified date -

(a) to furnish such drawings, specifications and other particulars as may be necessary to determine whether such building, ways, machinery or plant can be used with safety, or

(b) to carry out such test in such manner as may be specified in the order, and to inform the Inspector of the results thereof.

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1.   Subs. by Act 94 of 1976, sec. 18, for “the manager” (w.e.f. 26-10-1976).

Section 40. SAFETY OF BUILDINGS AND MACHINERY. 

(1) If it appears to the Inspector that any building or part of a building or any part of the ways, machinery or plant in a factory is in such a condition that it is dangerous to human life or safety, he may serve on the occupier or manager or both of the factory an order in writing specifying the measures which in his opinion should be adopted, and requiring them to be carried out before a specified date.

(2) If it appears to the Inspector that the use of any building or part of a building or any part of the ways, machinery or plant in a factory involves imminent danger to human life or safety, he may serve on ¹[the occupier or manager or both] of the factory an order in writing prohibiting its use until it has been properly repaired or altered.

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1. Subs. by Act 94 of 1976, sec. 18, for “the manager” (w.e.f. 26-10-1976).

Section 40 A. MAINTENANCE OF BUILDINGS. 

¹[40A. Maintenance of buildings.—If it appears to the Inspector that any building or part of a building in a factory is in such a state of disrepair as is likely to lead to conditions detrimental to the health and welfare of the workers, he may serve on the occupier or manager or both of the factory an order in writing specifying the measures which in his opinion should be taken and requiring the same to be carried out before such date as is specified in the order.

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1.   Ins. by Act 94 of 1976, sec. 19 (w.e.f. 26-10-1976).

Section 40 B. SAFETY OFFICERS. 

¹[40B. Safety Officers.—(1) In every factory, -

(i) wherein one thousand or more workers are ordinarily employed, or

(ii) wherein, in the opinion of the State Government, any manufacturing process or operation is carried on, which process or operation involves any risk of bodily injury, poisoning or disease, or any other hazard to health, to the persons employed in the factory, the occupier shall, if so required by the State Government by notification in the Official Gazette, employ such number of Safety Officers as may be specified in that notification.

(2) The duties, qualifications and conditions of service of Safety Officers shall be such as may be prescribed by the State Government.

———-

1. Ins. by Act 94 of 1976, sec. 19 (w.e.f. 26-10-1976).

Section 41 POWER TO MAKE RULE TO SUPPLEMENT THIS CHAPTER. 

The State Government may make rules requiring the provision in any factory or in any class or description of factories of such further 1[devices and measures] for securing the safety of persons employed therein as it may deem necessary.

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1. Subs. by Act 94 of 1976, sec. 20, for “devices” (w.e.f. 26-10-1976).

Section 41 A. CONSTITUTION OF SITE APPRAISAL COMMITTEES. 

*41A. Constitution of Site Appraisal Committees.—(1) The State Government may, for purposes of advising it to consider applications for grant of permission for the initial location of a factory involving a hazardous process or for the expansion of any such factory, appoint a Site Appraisal Committee consisting of -

(a) the Chief Inspector of the State who shall be its Chairman;

(b) a representative of the Central Board for the Prevention and Control of Water Pollution appointed by the Central Government under section 3 of the Water (Prevention and Control of Pollution) Act, 1974 (6 of 1974);

(c) a representative of the Central Board for the Prevention and Control of Air Pollution referred to in section 3 of the Air (Prevention and Control of Pollution) Act, 1981 (14 of 1981);

(d) a representative of the State Board appointed under section 4 of the Water (Prevention and Control of Pollution) Act, 1974 (6 of 1974);

(e) a representative of the State Board for the Prevention and Control of Air Pollution referred to in section 5 of the Air (Prevention and Control of Pollution) Act, 1981 (14 of 1981);

(f) a representative of the Department of Environment in the State;

(g) a representative of the Meteorological Department of the Government of India;

(h) an expert in the field of occupational health; and

(i) a representative of the Town Planning Department of the State Government, and not more than five other members who may be co-opted by the State Government who shall be – (i) a scientist having specialised knowledge of the hazardous process which will be involved in the factory,

(ii) a representative of the local authority within whose jurisdiction the factory is to be established, and (iii) not more than three other persons as deemed fit by the State Government.

(2) The Site Appraisal Committee shall examine an application for the establishment of a factory involving hazardous process and make its recommendation to the State Government within a period of ninety days of the receipt of such applications in the prescribed form.

(3) Where any process relates to a factory owned or controlled by the Central Government or to a corporation or a company owned or controlled by the Central Government, the State Government shall co-opt in the Site Appraisal Committee a representative nominated by the Central Government as a member of that Committee.

(4) The Site Appraisal Committee shall have power to call for any information from the person making an application for the establishment or expansion of a factory involving a hazardous process.

(5) Where the State Government has granted approval to an application for the establishment or expansion of a factory involving hazardous process, it shall not be necessary for an applicant to obtain a further approval from the Central Board or the State Board established under the Water (Prevention and Control of Pollution) Act 1974 (6 of 1974) and the Air (Prevention and Control of Pollution) Act, 1981 (14 of 1981).

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*Sections 41A ins. by Act 20 of 1987, sec. 20 (w.e.f. 1-12-1987).

Section 41 B. COMPULSORY DISCLOSURE OF INFORMATION BY THE OCCUPIER. 

*41B. Compulsory disclosure of information by the occupier. (1) The occupier of every factory involving a hazardous process shall disclose in the manner prescribed all information regarding dangers, including health hazards and the measures to overcome such hazards arising from the exposure to or handling of the materials or substances in the manufacture, transportation, storage and other processes, to the workers employed in the factory, the Chief Inspector, the local authority within whose jurisdiction the factory is situate and the general public in the vicinity.

(2) The occupier shall, at the time of registering the factory involving a hazardous process, lay down a detailed policy with respect to the health and safety of the workers employed therein and intimate such policy to the Chief Inspector and the local authority and, thereafter, at such intervals as may be prescribed, inform the Chief Inspector and the local authority of any change made in the said policy

(3) The information furnished under sub-section (1) shall include accurate information as to the quantity, specifications and other characteristics of wastes and the manner of their disposal.

(4) Every occupier shall, with the approval of the Chief Inspector, draw up an on-site emergency plan and detailed disaster control measures for his factory and make known to the workers employed therein and to the general public living in the vicinity of the factory the safety measures required to be taken in the event of an accident taking place.

(5) Every occupier of a factory shall, – (a) if such factory engaged in a hazardous process on the commencement of the Factories (Amendment) Act, 1987 (2 of 1987), within a period of thirty days of such commencement; and (b) if such factory proposes to engage in a hazardous process at any time after such commencement, within a period of thirty days before the commencement of such process, inform the Chief Inspector of the nature and details of the process in such form and in such manner as may be prescribed.

(6) Where any occupier of a factory contravenes the provisions of sub-section (5), the licence issued under section 6 to such factory shall, notwithstanding any penalty to which the occupier of factory shall be subjected to under the provisions of this Act, be liable for cancellation.

(7) The occupier of a factory involving a hazardous process shall, with the previous approval of the Chief Inspector, lay down measures for the handling, usage, transportation and storage of hazardous substances inside the factory premises and the disposal of such substances outside the factory premises and publicise them in the manner prescribed among the workers and the general public living in the vicinity.

—————-

*Sections 41B ins. by Act 20 of 1987, sec. 20 (w.e.f. 1-12-1987).

Section 41 C. SPECIFIC RESPONSIBILITY OF THE OCCUPIER IN RELATION TO HAZARDOUS PROCESSES. 

*41C. Specific responsibility of the occupier in relation to hazardous processes. Every occupier of a factory involving any hazardous process shall -

(a) maintain accurate and up-to-date health records or, as the case may be, medical records, of the workers in the factory who are exposed to any chemical, toxic or any other harmful substances which are manufactured, stored, handled or transported and such records shall be accessible to the workers subject to such conditions as may be prescribed;

(b) appoint persons who possess qualifications and experience in handling hazardous substances and are competent to supervise such handling within the factory and to provide at the working place all the necessary facilities for protecting the workers in the manner prescribed :

Provided that where any question arises as to the qualifications and experience of a person so appointed, the decision of the Chief Inspector shall be final;

(c) provide for medical examination of every worker -

(i) before such worker is assigned to a job involving the handling of, or working with, a hazardous substance, and

(ii) while continuing in such job, and after he has ceased to work in such job, at intervals not exceeding twelve months, in such manner as may be prescribed.

————–

* Sections 41C ins. by Act 20 of 1987, sec. 20 (w.e.f. 1-12-1987).

Section 41 D. POWER OF CENTRAL GOVERNMENT TO APPOINT INQUIRY COMMITTEE. 

*41D. Power of Central Government to appoint Inquiry Committee. (1) The Central Government may, in the event of the occurrence of an extraordinary situation involving a factory engaged in a hazardous process, appoint an Inquiry Committee to inquire into the standards of health and safety observed in the factory with a view to finding out the causes of any failure or neglect in the adoption of any measures or standards prescribed for the health and safety of the workers employed in the factory or the general public affected, or likely to be affected, due to such failure or neglect and for the prevention and recurrence of such extraordinary situations in future in such factory or elsewhere.

(2) The Committee appointed under sub-section (1) shall consist of a chairman and two other members and the terms of reference of the Committee and the tenure of office of its members shall be such as may be determined by the Central Government according to the requirements of the situation.

(3) The recommendations of the Committee shall be advisory in nature.

—————

* Sections 41D ins. by Act 20 of 1987, sec. 20 (w.e.f. 1-12-1987).

Section 41 E. EMERGENCY STANDARDS. 

*41E. Emergency standards. (1) Where the Central Government is satisfied that no standards of safety have been prescribed in respect of a hazardous process or class of hazardous processes, or where the standards so prescribed are inadequate, it may direct the Director-General of Factory Advice Service and Labour Institutes or any institution specialised in matters relating to standards of safety in hazardous processes, to lay down emergency standards for enforcement of suitable standards in respect of such hazardous processes.

(2) The emergency standards laid down under sub-section (1) shall, until they are incorporated in the rules made under this Act, be enforceable and have the same effect as if they had been incorporated in the rules made under this Act.

—————-

*  Sections 41E ins. by Act 20 of 1987, sec. 20 (w.e.f. 1-12-1987).

Section 41 F. PERMISSIBLE LIMITS OF EXPOSURE OF CHEMICAL AND TOXIC SUBSTANCES. 

*41F. Permissible limits of exposure of chemical and toxic substances.—(1) The maximum permissible threshold limits of exposure of chemical and toxic substances in manufacturing processes (whether hazardous or otherwise) in any factory shall be of the value indicated in the Second Schedule.

(2) The Central Government may, at any time, for the purpose of giving effect to any scientific proof obtained from specialised institutions or experts in the field,, by notification in the Official Gazette, make suitable changes in the said Schedule.

————-

* Sections 41F ins. by Act 20 of 1987, sec. 20 (w.e.f. 1-6-1988).

Section 41 G. WORKERS’ PARTICIPATION IN SAFETY MANAGEMENT.

*41G. Workers’ participation in safety management.—(1) The occupier shall, in every factory where a hazardous process takes place, or where hazardous substances are used or handled, set up a Safety Committee consisting of equal number of representatives of workers and management to promote cooperation between the workers and the management in maintaining proper safety and health at work and to review periodically the measures taken in that behalf :

Provided that the State Government may, by order in writing and for reasons to be recorded, exempt the occupier of any factory or class of factories from setting up such committee.

(2) The composition of the Safety Committee, the tenure of office of its members and their rights and duties shall be such as may be prescribed.

——————-

* Sections 41G ins. by Act 20 of 1987, sec. 20 (w.e.f. 1-12-1987).

Section 41 H. RIGHT OF WORKERS TO WARN ABOUT IMMINENT DANGER. 

*41H. Right of workers to warn about imminent danger. (1) Where the workers employed in any factory engaged in a hazardous process have reasonable apprehension that there is a likelihood of imminent danger to their lives or health due to any accident, they may bring the same to the notice of the occupier, agent, manager or any other person who is incharge of the factory or the process concerned directly or through their representatives in the Safety Committee and simultaneously bring the same to the notice of the Inspector.

(2) It shall be the duty of such occupier, agent, manager or the person incharge of the factory or process to take immediate remedial action if he is satisfied about the existence of such imminent danger and send a report forthwith of the action taken to the nearest Inspector.

(3) If the occupier, agent, manager or the person incharge referred to in sub-section (2) is not satisfied about the existence of any imminent danger as apprehended by the workers, he shall, nevertheless, refer the matter forthwith to the nearest Inspector whose decision on the question of the existence of such imminent danger shall be final.

——————

* Sections 41E ins. by Act 20 of 1987, sec. 20 (w.e.f. 1-12-1987).

Section 42. WASHING FACILITIES. 

(1) In every factory -

(a) adequate and suitable facilities for washing shall be provided and maintained for the use of the workers therein;

(b) separate and adequately screened facilities shall be provided for the use of male and female workers;

(c) such facilities shall be conveniently accessible and shall be kept clean.

(2) The State Government may, in respect of any factory or class or description of factories or of any manufacturing process, prescribe standards of adequate and suitable facilities for washing.

Section 43. FACILITIES FOR STORING AND DRYING CLOTHING. 

The State Government may, in respect of any factory or class or description of factories, make rules requiring the provision therein of suitable places for keeping clothing not worn during working hours and for the drying of wet clothing.

Section 44. FACILITIES FOR SITTING. 

(1) In every factory suitable arrangements for sitting shall be provided and maintained for all workers obliged to work in a standing position, in order that they may take advantage of any opportunities for rest which may occur in the course of their work.

(2) If, in the opinion of the Chief Inspector, the workers in any factory engaged in a particular manufacturing process or working in a particular room are able to do their work efficiently in a sitting position, he may, by order in writing, require the occupier of the factory to provide before a specified date such seating arrangements as may be practicable for all workers so engaged or working.

(3) The State Government may, by notification in the Official Gazette, declare that the provisions of sub-section (1) shall not apply to any specified factory or class or description of factories or to any specified manufacturing process.

Section 45. FIRST AID APPLIANCES. 

(1) There shall in every factory be provided and maintained so as to be readily accessible during all working hours first-aid boxes or cupboards equipped with the prescribed contents, and the number of such boxes or cupboards to be provided and maintained shall not be less than one for every one hundred and fifty workers ordinarily employed ¹[at any one time] in the factory.

²[(2) Nothing except the prescribed contents shall be kept in a first-aid box or cupboard.

(3) Each first-aid box or cupboard shall be kept in the charge of a separate responsible person ³[who holds a certificate in first-aid treatment recognised by the State Government] and who shall always be readily available during the working hours of the factory.]

⁴[(4)] In every factory wherein more than five hundred workers are 5[ordinarily employed] there shall be provided and maintained an ambulance room of the prescribed size, containing the prescribed equipment and in the charge of such medical and nursing staff as may be prescribed 6[and those facilities shall always be made readily available during the working hours of the factory.

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1. Ins. by Act 25 of 1954, sec. 9 (w.e.f. 7-5-1954).

2. Subs. by Act 25 of 1954 sec. 9, for sub-section (2) (w.e.f. 7-5-1954).

3. Subs. by Act 94 of 1976, sec. 21, for “who is trained in first-aid treatment” (w.e.f. 26-10-1976).

4. Sub-section (3) re-numbered as sub-section (4) by Act 25 of 1954, sec. 9 (w.e.f. 7-5-1954).

5. Subs. by Act 94 of 1976, sec. 21, for “employed” (w.e.f. 26-10-1976).

6. Ins. by Act 94 of 1976, sec. 21 (w.e.f. 26-10-1976).

Section 46. CANTEENS. 

(1) The State Government may make rules requiring that in any specified factory wherein more than two hundred and, fifty workers are ordinarily employed, a canteen or canteens shall be provided and maintained by the occupier for the use of the workers.

(2) Without prejudice to the generality of the foregoing power, such rules may provide for -

(a) the date by which such canteen shall be provided;

(b) the standards in respect of construction, accommodation, furniture and other equipment of the canteen;

(c) the foodstuffs to be served therein and the charges which may be made therefor;

(d) the constitution of a managing committee for the canteen and representation of the workers in the management of the canteen;

¹(dd) the items of expenditure in the running of the canteen which are not to be taken into account in fixing the cost of foodstuffs and which shall be

borne by the employer;

(e) the delegation to the Chief Inspector, subject to such conditions as may be prescribed, of the power to make rules under clause (c).

———————————

1. Ins. by Act 94 of 1976, sec. 22 (w.e.f. 26-10-1976).

Section 47. SHELTERS, REST ROOMS AND LUNCH ROOMS. 

(1) In every factory wherein more than one hundred and fifty workers are ordinarily employed, adequate and suitable shelters or rest rooms and a suitable lunch room, with provision for drinking water, where workers can eat meals brought by them, shall be provided and maintained for the use of the workers : Provided that any canteen maintained in accordance with the provisions of section 46 shall be regarded as part of the requirements of this sub-section : Provided further that where a lunch room exists no workers shall eat any food in the work room.

(2) The shelters or rest rooms or lunch rooms to be provided under sub-section (1) shall be sufficiently lighted and ventilated and shall be maintained in a cool and clean condition.

(3) The State Government may – (a) prescribe the standards in respect of construction, accommodation, furniture and other equipment of shelters, rest rooms and lunch rooms to be provided under this section;

(b) by notification in the Official Gazette, exempt any factory or class or description of factories from the requirements of this section.

Section 48. CRECHES. 

(1) In every factory wherein more than ¹thirty women workers are ordinarily employed there shall be provided and maintained a suitable room or rooms for the use of children under the age of six years of such women.

(2) Such rooms shall provide adequate accommodation, shall be adequately lighted and ventilated, shall be maintained in a clean and sanitary condition and shall be under the charge of women trained in the care of children and infants.

(3) The State Government may make rules – (a) prescribing the location and the standards in respect of construction, accommodation, furniture and other equipment of rooms to be provided, under this section;

(b) requiring the provision in factories to which this section applies of additional facilities for the care of children belonging to women workers, including suitable provision of facilities for washing and changing their clothing;

(c) requiring the provision in any factory of free milk or refreshment or both for such children;

(d) requiring that facilities shall be given in any factory for the mothers of such children to feed them at the necessary intervals.

——————————

1.   Subs. by Act  94 of 1976, sec. 23, for “fifty women workers” (w.e.f. 26-10-1976).

Section 49. WELFARE OFFICERS. 

(1) In every factory wherein five hundred or more workers are ordinarily employed the occupier shall employ in the factory such number of Welfare officers as may be prescribed.

(2) The State Government may prescribe the duties, qualifications and Conditions of service of officers employed under sub-section (1).

Section 50. POWER TO MAKE RULES TO SUPPLEMENT THIS CHAPTER. 

The State Government may make rules -

(a) exempting, subject to compliance with such alternative arrangements for the welfare of workers as may be prescribed, any factory or class or description of factories from compliance with any of the provisions of this Chapter;

(b) requiring in any factory or class or description of factories that representatives of the workers employed in the factory shall be associated with the management of the welfare arrangements of the workers.

 Section 51. WEEKLY HOURS. 

No adult workers shall be required or allowed to work in a factory for more than forty-eight hours in any week.

Section 52. WEEKLY HOLIDAYS.

(1) No adult worker shall be required or allowed to work in a factory on the first day of the week (hereinafter referred to as the said day), unless -

(a) he has or will have a holiday for a whole day on one of the three days immediately before or after the said day, and

(b) the manager of the factory has, before the said day or the substituted day under clause (a), whichever is earlier, -

(i) delivered a notice at the office of the Inspector of his intention to require the worker to work on the said day and of the day which is to be substituted, and

(ii) displayed a notice to that effect in the factory : Provided that no substitution shall be made which will result in any worker working for more than ten days consecutively without a holiday for a whole day.

(2) Notices given under sub-section (1) may be cancelled by a notice delivered at the office of the Inspector and a notice displayed in the factory not later than the day before the said day or the holiday to be cancelled, whichever is earlier.

(3) Where, in accordance with the provisions of sub-section (1), any worker works on the said day and has had a holiday on one of the three days immediately before it, that said day shall, for the purpose of calculating his weekly hours of work, be included in the preceding week.

Section 53. COMPENSATORY HOLIDAYS. 

(1) Where, as a result of the passing of an order or the making of a rule under the provisions of this Act exempting a factory or the workers therein from the provisions of section 52, a worker is deprived of any of the weekly holidays for which provision is made in sub-section (1) of that section, he shall be allowed, within the month in which the holidays were due to him or within the two months immediately following that month, compensatory holidays of equal number to the holidays so lost.

(2) The State Government may prescribe the manner in which the holidays for which provision is made in sub-section (1) shall be allowed.

Section 54. DAILY HOURS. 

Subject to the provisions of section 51, not adult worker shall be required or allowed to work in a factory for more than nine hours in any day:

¹[Provided that, subject to the previous approval of the Chief Inspector, the daily maximum specified in this section may be exceeded in order to facilitate the change of shifts.]

—————————–

1. Added by Act 25 of 1954, sec. 10 (w.e.f. 7-5-1954).

Section 55. INTERVALS FOR REST. 

¹ (1)² The periods of work of adult workers in a factory each day shall be so fixed that no period shall exceed five hours and that no worker shall work for more than five hours before he has had an interval for rest of at least half an hour.

³ (2) The State Government or, subject to the control of the State Government, the Chief Inspector, may, by written order and for the reasons specified therein, exempt any factory from the provisions of sub-section (1) so however that the total number of hours worked by a worker without an interval does not exceed six.

——————————-

1. Section 55 re-numbered as sub-section (1) of that section by Act 25 of 1954, sec. 11 (w.e.f. 7-5-1954).

2. Subs. by Act 40 of 1949, sec. 3 and Sch. II, for “The period” (w.e.f. 1-5-1949).

3. Added by Act 25 of 1954, sec. 11 (w.e.f. 7-5-1954).

Section 56. SPREADOVER. 

The periods of work of an adult worker in a factory shall be so arranged that inclusive of his intervals for rest under section 55, they shall not spreadover more than ten and a half hours in any day : Provided that the Chief Inspector may, for reasons to be specified in in writing, increase the spreadover up to twelve hours.

—————————-

1. Subs. by Act 94 of 1976, sec. 24, for “spread over to twelve hours” (w.e.f. 26-10-1976).

Section 57. NIGHT SHIFTS. 

Where a worker in a factory works on a shift which extends beyond midnight, -

(a) for the purposes of sections 52 and 53, a holiday for a whole day shall mean in his case a period of twenty-four consecutive hours beginning when his shift ends;

(b) the following day for him shall be deemed to be the period of twenty-four hours beginning when such shift ends, and the hours he has worked after midnight shall be counted in the previous day.

Section 58. PROHIBITION OF OVERLAPPING SHIFTS. 

(1) Work shall not be carried on in any factory by means of a system of shifts so arranged that more than one relay of workers is engaged, in work of the same kind at the same time.

¹(2) The State Government or subject to the control of the State Government, the Chief Inspector, may, by written order and for the reasons specified therein, exempt on such conditions as may be deemed expedient, any factory or class or description of factories or any department or section of a factory or any category or description of workers therein from the provisions of sub-section (1).

——————————

1.   Subs. by Act 25 of 1954, sec. 12, for sub-section (2) (w.e.f. 7-5-1954).

Section 59. EXTRA WAGES FOR OVERTIME. 

(1) Where a worker works in a factory for more than nine hours in any day or for more than forty-eight hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.

¹(2) For the purposes of sub-section (1), “ordinary rate of wages” means the basic wages plus such allowances, including the cash equivalent of the advantage accruing through the concessional sale to workers of foodgrains and other articles, as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work.

(3) Where any workers in a factory are paid on a piece-rate basis, the time rate shall be deemed to be equivalent to the daily average of their full-time earnings for the days on which they actually worked on the same or identical job during the month immediately preceding the calendar month during which the overtime work was done, and such time rates shall be deemed to be the ordinary rates of wages of those workers :

Provided that in the case of a worker who has not worked in the immediately preceding calendar month on the same or identical job, the time rate shall be deemed to be equivalent to the daily average of the earnings of the worker for the days on which he actually worked in the week in which the overtime work was done.

Explanation : For the purposes of this sub-section, in computing the earnings for the days on which the worker actually worked such allowances, including the cash equivalent of the advantage accruing through the concessional sale to workers of foodgrains and other articles, as the worker is for the time being entitled to, shall be included but any bonus or wages for overtime work payable in relation to the period with reference to which the earnings are being computed shall be excluded.

²(4) The cash equivalent of the advantage accruing through the concessional sale to a worker of foodgrains and other articles shall be computed as often as may be prescribed on the basis of the maximum quantity of foodgrains and other articles admissible to a standard family.

Explanation 1 : Standard family means a family consisting of the worker, his or her spouse and two children below the age of fourteen years requiring in all three adult consumption units.

Explanation 2 : Adult consumption unit means the consumption unit of a male above the age of fourteen years; and the consumption unit of a female above the age of fourteen years and that of a child below the age of fourteen years shall be calculated at the rates of 0.8 and 0.6 respectively of one adult consumption unit.

(5) The State Government may make rules prescribing -

(a) the manner in which the cash equivalent of the advantage accruing through the concessional sale to a worker of foodgrains and other articles shall be computed; and

(b) the registers that shall be maintained in a factory for the purpose of securing compliance with the provisions of this section.

——————————-

1. Subs. by Act 94 of 1976, sec. 25, for sub-sections (2) and (3) (w.e.f. 26-10-1976).

2. Subs. by Act 25 of 1954, sec. 13, for sub-section (4) (w.e.f. 7-5-1954).

Section 60. RESTRICTION ON DOUBLE EMPLOYMENT. 

No adult worker shall be required or allowed to work in any factory on any day on which he has already been working in any other factory, save in such circumstances as may be prescribed.

Section 61. NOTICE OF PERIODS OF WORK FOR ADULTS. 

(1) There shall be displayed and correctly maintained in every factory in accordance with the provisions of sub-section (2) of section 108, a notice of periods of work for adults, showing clearly for every day the periods during which adult workers may be required to work.

(2) The periods shown in the notice required by sub-section (1) shall be fixed beforehand in accordance with the following provisions of this section, and shall be such that workers working for those periods would not be working in contravention of any of the provisions of sections 51, 52, 53, 54, ¹55, 56 and 58.

(3) Where all the adult workers in a factory are required to work during the same periods, the manager of the factory shall fix those periods for such workers generally.

(4) Where all the adult workers in a factory are not required to work during the same periods, the manager of the factory shall classify them into groups according to the nature of their work indicating the number of workers in each group.

(5) For each group which is not required to work on a system of shifts, the manager of the factory shall fix the periods during which the group may be required to work.

(6) Where any group is required to work on a system of shifts and the relays are not to be subject to predetermined periodical changes of shifts, the manager of the factory shall fix the periods during which each relay of the group may be required to work.

(7) Where any group is to work on a system of shifts and the relays are to be subject to predetermined periodical changes of shifts, the manager of the factory shall draw up a scheme of shifts whereunder the periods during which any relay of the group may be required to work and the relay which will be working at any time of the day shall be known for any day.

(8) The State Government may prescribe forms of the notice required by sub-section (1) and the manner in which it shall be maintained.

(9) In the case of a factory beginning work after the commencement of this Act, a copy of the notice referred to in sub-section (1) shall be sent in duplicate to the Inspector before the day on which work is begun in the factory.

(10) Any proposed change in the system of work in any factory which will necessitate a change in the notice referred to in sub-section (1) shall be notified to the Inspector in duplicate before the change is made, and except with the previous sanction of the Inspector, no such change shall be made until one week has elapsed since the last change.

———————————

1.   Subs. by Act 25 of 1954, sec. 14, for “55 and 56”.

Section 62. REGISTER OF ADULT WORKERS. 

(1) The manager of every factory shall maintain a register of adult workers, to be available to the Inspector at all times during working hours, or when any work is being carried on in the factory, showing – (a) the name of each adult worker in the factory;

(b) the nature of his work;

(c) the group, if any, in which he is included;

(d) where his group works on shifts, the relay to which he is allotted; and

(e) such other particulars as may be prescribed :

Provided that if the Inspector is of opinion that any muster roll or register maintained as a part of the routine of a factory gives in respect of any or all the workers in the factory the particulars required under this section, he may, by order in writing, direct that such muster roll or register shall to the corresponding extent be maintained in place of, and be treated as, the register of adult workers in that factory.

¹[(1A) No adult worker shall be required or allowed to work in any factory unless his name and other particulars have been entered in the register of adult workers.]

(2) The State Government may prescribe the form of the register of adult workers, the manner in which it shall be maintained and the period for which it shall be preserved.

————————————-

1. Ins. by Act 94 of 1976, sec. 26 (w.e.f. 26-10-1976).

Section 63. HOURS OF WORK TO CORRESPOND WITH NOTICE UNDER SECTION 61 AND REGISTER UNDERSECTION 62. 

No adult worker shall be required or allowed to work in any factory otherwise than in accordance with the notice of periods of work for adults displayed in the factory and the entries made beforehand against his name in the register of adult workers of the factory.

Section 64. POWER TO MAKE EXEMPTING RULES. 

(1) The State Government may make rules defining the persons who hold positions of supervisions or management or are employed in a confidential position in a factory ¹or empowering the Chief inspector to declare any person, other than a person defined by such rules, as a person holding position of supervision or management or employed in a confidential position in a factory if, in the opinion of the Chief Inspector, such person holds such position or is so employed and the provisions of this chapter, other than the provisions of clause (b) of sub-section (1) of section 66 and of the proviso to that sub-section, shall not apply to any person so defined or declared :

¹Provided that any person so defined or declared shall, where the ordinary rate of wages of such person ²does not exceed the wage limit specified in sub-section (6) of section 1 of the Payment of Wages Act, 1936 (4 of 1936), as amended from time to time, be entitled to extra wages in respect of over time work under section 59.

(2) The State Government may make rules in respect of adult workers in factories providing for the exemption, to such extent and subject to such conditions as may be prescribed. -

(a) of workers engaged on urgent repairs, from the provisions of sections 51, 52, 54, 55 and 56;

(b) of workers engaged in work in the nature of preparatory or complementary work which must necessarily be carried on outside the limits laid down for the general working of the factory, from the provisions of sections 51, 54, 55 and 56;

(c) of workers engaged in work which is necessarily so intermittent that the intervals during which they do not work while on duty ordinarily amount to more than the intervals for rest required by or under section 55, from the provisions of sections 51, 54, 55 and 56;

(d) of workers engaged in any work which for technical reasons must be carried on continuously ³[***] from the provisions of sections 51, 52, 54, 55 and 56;

(e) of workers engaged in making or supplying articles of prime necessity which must be made or supplied every day, from the provisions of ⁴[section 51 and section 52];

(f) of workers engaged in a manufacturing process which cannot be carried on except during fixed seasons, from the provisions of ²[section 51, section 52 and section 54];

(g) of workers engaged in a manufacturing process which cannot be carried on except at times dependent on the irregular action of natural forces, from the provisions of sections 52 and 55;

(h) of workers engaged in engine-rooms or boiler-houses or in attending to power-plant or transmission machinery, from the provisions of ⁴[section 51 and section 52];

⁵[(i) of workers engaged in the printing of newspapers, who are held up on account of the breakdown of machinery, from the provisions of sections 51, 54 and 56.

Explanation.—In this clause the expression “newspapers” has the meaning assigned to it in the Press and Registration of Books Act, 1867 (25 of 1867);

(j) of workers engaged in the loading or unloading of railway wagons, 6[or lorries or trucks] from the provisions of sections 51, 52, 54, 55 and 56];

⁶[(k) of workers engaged in any work, which is notified by the State Government in the Official Gazette as a work of national importance, from the provisions of section 51, section 52, section 54, section 55 and section 56.]

(3) Rules made under sub-section (2) providing for any exemption may also provide for any consequential exemption from the provisions of section 61 which the State Government may deem to be expedient, subject to such conditions as it may prescribe.

⁷[(4) In making rules under this section, the State Government shall not exceed, except in respect of exemption under clause (a) of sub-section (2) the following limits of work inclusive of overtime:—

(i) the total number of hours of work in any day shall not exceed ten;

(ii) the spreadover, inclusive of intervals for rest, shall not exceed twelve hours in any one day :

Provided that the State Government may, in respect of any or all of the categories of workers referred to in clause (d) of sub-section (2), make rules prescribing the circumstances in which, and the conditions subject to which, the restrictions imposed by clause (i) and clause (ii) shall not apply in order to enable a shift worker to work the whole or part of a subsequent shift in the absence of a worker who has failed to report for duty;

⁸[(iii) the total number of hours of work in a week, including overtime, shall not exceed sixty;]

⁹[(iv)] the total number of hours of overtime shall not exceed fifty for any one quarter.

Explanation.—“Quarter” means a period of three consecutive months beginning on the 1st of January, the 1st of April, the 1st of July or the 1st of October.]

(5) Rules made under this section shall remain in force for not more than ¹⁰[five years].

————————————-

1. Ins. by Act 94 of 1976, sec. 27 (w.e.f. 26-10-1976).

2. Subs. by Act 20 of 1987, 21, for “does not exceed rupees seven hundred and fifty per month” (w.e.f. 1-12-1987).

3. Omitted by Act 25 of 1954, sec. 15 for the words “throughout the day”.

4. Subs. by Act 94 of 1976, sec. 27 for “section 52” (w.e.f. 26-10-1976).

5. Added by Act 25 of 1954, sec. 15 (w.e.f. 7-5-1954).

6. Ins. by Act 94 of 1976, sec. 27 (w.e.f. 26-10-1976).

7. Subs. by Act 25 of 1954, sec. 15, for sub-section (4) (w.e.f. 7-5-1954).

8. Ins. by Act 94 of 1976, sec. 27 (w.e.f. 26-10-1976).

9. Clause (iii) re-numbered as clause (iv) by Act 94 of 1976, sec. 27 (w.e.f. 26-10-1976).

10. Subs. by Act 94 of 1976, sec. 27, for “three years” (w.e.f. 26-10-1976).

Section 65. POWER TO MAKE EXEMPTING ORDERS. 

(1) Where the State Government is satisfied that, owing to the nature of the work carried on or to other circumstances, it is unreasonable to require that the periods of work of any adult workers in any factory or class or description of factories should be fixed beforehand, it may, by written order, relax or modify the provisions of section 61 in respect of such workers therein, to such extent and in such manner as it may think fit, and subject to such conditions as it may deem expedient to ensure control over periods of work.

(2) The State Government or, subject to the control of the State Government, the Chief Inspector, may by written order exempt, on such conditions as it or he may deem expedient, any or all of the adult workers in any factory or group or class or description of factories from any or all of the provisions of sections, 51, 52, 54 and 56 on the ground that the exemption is required to enable the factory or factories to deal with an exceptional press of work.

¹(3) Any exemption granted under sub-section (2) shall be subject to the following conditions, namely :- (i) the total number of hours of work in any day shall not exceed twelve;

(ii) the spread over, inclusive of intervals for rest, shall not exceed thirteen hours in any one day;

(iii) the total number of hours of work in any week, including overtime, shall not exceed sixty;

(iv) no worker shall be allowed to work overtime, for more than seven days at a stretch and the total number of hours of overtime work in any quarter shall not exceed seventy-five. Explanation : In this sub-section “quarter” has the same meaning as in sub-section (4) of section 64.

²[***]

————————————-

1. Subs. by Act 94 of 1976, sec. 28, for sub-section (3) (w.e.f. 26-10-1976).

2. Sub-section (4) omitted by Act 94 of 1976, sec. 28 (w.e.f. 26-10-1976).

Section 66. FURTHER RESTRICTIONS ON EMPLOYMENT OF WOMEN. 

(1) The provisions of this Chapter shall, in their application to women in factories, be supplemented by the following further restrictions, namely :-

(a) no exemption from the provisions of section 54 may be granted in respect of any women;

(b) no woman shall be ¹[required or allowed to work in any factory] except between the hours of 6 A.M. and 7 P.M. :

Provided that the State Government may, by notification in the Official Gazette, in respect of ²[any factory or group or class or description of factories,] vary the limits laid down in clause (b), but so that no such variation shall authorize the employment of any woman between the hours of 10 P.M. and 5 A.M.;

³[(c) there shall be no change of shifts except after a weekly holiday or any other holiday.]

(2) The State Government may make rules providing for the exemption from the restrictions set out in sub-section (1), to such extent and subject to such conditions as it may prescribe, of women working in fish curing or fish-canning factories, where the employment of women beyond the hours specified in the said restrictions is necessary to prevent damage to or deterioration in, any raw material.

(3) The rules made under sub-section (2) shall remain in force for not more than three years at a time.

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1. Subs. by Act 94 of 1976, sec. 29, for “employed in any factory” (w.e.f. 26-10-1976).

2. Subs. by Act 94 of 1976, sec. 29, for “any class or deseription of factories”(w.e.f. 26-10-1976).

3. Ins. by Act 25 of 1954, sec. 17 (w.e.f. 7-5-1954).

Section 67. PROHIBITION OF EMPLOYMENT OF YOUNG CHILDREN. 

No child who has not completed his fourteenth year shall be required or allowed to work in any factory.

Section 68. NON-ADULT WORKERS TO CARRY TOKENS. 

A child who has completed his fourteenth year or an adolescent shall not be required or allowed to work in any factory unless -

(a) a certificate of fitness granted with reference to him under section 69 is in the custody of the manager of the factory; and

(b) such child or adolescent carries while he is at work a token giving a reference to such certificate.

Section 69. CERTIFICATES OF FITNESS. 

(1) A certifying surgeon shall, on the application of any young person or his parent or guardian accompanied by a document signed by the manager of a factory that such person will be employed therein if certified to be fit for work in a factory, or on the application of the manager of the factory in which any young person wishes to work, examine such person and ascertain his fitness for work in a factory.

(2) The certifying surgeon, after examination, may grant to such young person, in the prescribed form, or may renew – (a) a certificate of fitness to work in a factory as a child, if he is satisfied that the young person has completed his fourteenth year, that he has attained the prescribed physical standards and that he is fit for such work;

(b) a certificate of fitness to work in a factory as an adult, if he is satisfied that the young person has completed his fifteenth year, and is fit for a full day’s work in a factory :

Provided that unless the certifying surgeon has personal knowledge of the place where the young person proposes to work and of the manufacturing process in which he will be employed, he shall not grant or renew a certificate under this sub-section until he has examined such place.

(3) A certificate of fitness granted or renewed under sub-section (2) – (a) shall be valid only for a period of twelve months from the date thereof;

(b) may be made subject to conditions in regard to the nature of the work in which the young person may be employed, or requiring re-examination of the young person before the expiry of the period of twelve months.

(4) A certifying surgeon shall revoke any certificate granted or renewed under sub-section (2) if in his opinion the holder of it is no longer fit to work in the capacity stated therein in a factory.

(5) Where a certifying surgeon refuses to grant or renew a certificate or a certificate of the kind requested or revokes a certificate, he shall, if so requested by any person who could have applied for the certificate or the renewal thereof, state his reasons in writing for so doing.

(6) Where a certificate under this section with reference to any young person is granted or renewed subject to such conditions as are referred to in clause (b) of sub-section (3), the young person shall not be required or allowed to work in any factory except in accordance with those conditions.

(7) Any fee payable for a certificate under this section shall be paid by the occupier and shall not be recoverable from the young person, his parents or guardian.

Section 70. EFFECT OF CERTIFICATE OF FITNESS GRANTED TO ADOLESCENT. 

(1) An adolescent who has been granted a certificate of fitness to work in a factory as an adult under clause (b) of sub-section (2) of section 69, and who while at work in a factory carries a token giving reference to the certificate, shall be deemed to be an adult for all the purposes of Chapters VI and III.

¹[***]

²[(1A)

No female adolescent or a male adolescent who has not attained the age of seventeen years but who has been granted a certificate of fitness to work in a factory as an adult, shall be required or allowed to work in any factory except between 6 A.M. and 7 P.M. :

Provided that the State Government may, by notification in the Official Gazette, in respect of any factory or group or class or description of factories -

(i) vary the limits laid down in this sub-section so, however, that no such section shall authorise the employment of any female adolescent between 10 P.M. and 5 A.M.;

(ii) grant exemption from the provisions of this sub-section in case of serious emergency where national interest is involved.

(2) An adolescent who has not been granted a certificate of fitness to work in a factory as an adult under the aforesaid clause (b) shall, notwithstanding his age, be deemed to be a child for all the purposes of

this Act.

——————————

1. The proviso and the Explanation omitted by Act 20 of 1987, sec. 22 (w.e.f. 1-12-1987).

2. Ins. by Act 20 of 1987, sec. 22 (w.e.f. 1-12-1987).

Section 71. WORKING HOURS FOR CHILDREN. 

(1) No child shall be employed or permitted to work, in any factory -

(a) for more than four and a half hours in any day;

¹[(b) during the night.

Explanation.—For the purpose of this sub-section “night” shall mean a period of at least twelve consecutive hours which shall include the interval between 10 P.M. and 6 A.M.]

(2) The period of work of all children employed in a factory shall be limited to two shifts which shall not overlap or spread over more than five hours each; and each child shall be employed in only one of the relays which shall not, except with the previous permission in writing of the Chief Inspector, be changed more frequently than once in a period of thirty days.

(3) The provisions of section 52 shall apply also to child workers and no exemption from the provisions of that section may be granted in respect of any child.

(4) No child shall be required or allowed to work in any factory on any day on which he has already been working in another factory.

²[(5) No female child shall be required or allowed to work in any factory except between 8 A.M. and 7 P.M.]

——————————-

1. Subs. by Act 25 of 1954, sec 19, for clause (b) (w.e.f. 7-5-1954).

2. Ins. by Act 20 of 1987, sec. 23 (w.e.f. 1-12-1987).

Section 72. NOTICE OF PERIODS OF WORK FOR CHILDREN. 

(1) There shall be displayed and correctly maintained in every factory in which children are employed, in accordance with the provisions of sub-section (2) of section 108 a notice of period of work for children, showing clearly for every day the periods during which children may be required or allowed to work.

(2) The periods shown in the notice required by sub-section (1) shall be fixed beforehand in accordance with the method laid down for adult workers in section 61, and shall be such that children working for those periods would not be working in contravention of any of the provisions of section 71.

(3) The provisions of sub-sections (8), (9) and (10) of section 61 shall apply also to the notice required by sub-section (1) of this section.

Section 73. REGISTER OF CHILD WORKERS. 

(1) The manager of every factory in which children are employed shall maintain a register of child workers, to be available to the Inspector at all times during working hours or when any work is being carried on in a factory, showing -

(a) the name of each child worker in the factory,

(b) the nature of his work,

(c) the group, if any, in which he is included,

(d) where his group works in shifts, the relay to which he is allotted, and

(e) the number of his certificate of fitness granted under section 69.

¹[(1A) No child worker shall be required or allowed to work in any factory unless his name and other particulars have been entered in the register of child workers.]

(2) The State Government may prescribe the form of the register of child workers, the manner in which it shall be maintained and the period for which it shall be preserved.

——————————–

1. Ins. by Act 94 of 1976, sec. 30 (w.e.f. 26-10-1976).

Section 74. HOURS OF WORK TO CORRESPOND WITH NOTICE UNDER SECTION 72 AND REGISTER UNDER SECTION 73. 

No child shall be employed in any factory otherwise than in accordance with the notice of periods of work for children displayed in the factory and the entries made beforehand against his name in the register of child workers of the factory.

Section 75. POWER TO REQUIRE MEDICAL EXAMINATION. 

Where an Inspector is of opinion -

(a) that any person working in a factory without a certificate of fitness is a young person, or

(b) that a young person working in a factory with a certificate of fitness is no longer fit to work in the capacity stated therein, – he may serve on the manager of the factory a notice requiring that such person or young person, as the case may be, shall be examined by a certifying surgeon, and such person or young person shall not, if the Inspector so directs, be employed, or permitted to work, in any factory until he has been so examined and has been granted a certificate of fitness or a fresh certificate of fitness, as the case may be, under section 69, or has been certified by the certifying surgeon examining him not to be a young person.

Section 76. POWER TO MAKE RULES. 

The State Government may make rules -

(a) prescribing the forms of certificates of fitness to be granted under section 69, providing for the grant of duplicates in the event of loss of the original certificates, and fixing the fees which may be charged for such certificates and renewals thereof and such duplicates;

(b) prescribing the physical standards to be attained by children and adolescents working in factories;

(c) regulating the procedure of certifying surgeons under this Chapter;

(d) specifying other duties which certifying surgeons may be required to perform in connection with the employment of young persons in factories, and fixing the fees which may be charged for such duties and the persons by whom they shall be payable.

 Section 77. CERTAIN OTHER PROVISIONS OF LAW NOT BARRED. 

The provisions of this Chapter shall be in addition to, and not in derogation of, the provisions of the Employment of Children Act, 1938 (26 of 1938).

Section 78. APPLICATION OF CHAPTER. 

(1) The provisions of this Chapter shall not operate to the prejudice of any right to which a worker may be entitled under any other law or under the terms of any award, ¹[agreement (including settlement)] or contract of service:

²[Provided that if such award, agreement (including settlement) or contract of service provides for a longer annual leave with wages than provided in this Chapter, the quantum of leave, which the worker shall be entitled to, shall be in accordance with such award, agreement or contract of service, but in relation to matters not provided for in such award, agreement or contract of service or matters which are provided for less favourably therein, the provisions of sections 79 to 82, so far as may be, shall apply.]

(2) The provisions of this Chapter shall not apply to workers ³[in any factory] of any railway administered by the Government, who are governed by leave rules approved by the Central Government.

———————————–

1. Subs. by Act 94 of 1976, sec. 31, for “agreement” (w.e.f. 26-10-1976).

2. Subs. by Act 94 of 1976, sec. 31, for the proviso (w.e.f. 26-10-1976).

3. Subs. by Act 94 of 1976, sec. 31, for “in any workshop” (w.e.f. 26-10-1976).

Section 79. ANNUAL LEAVE WITH WAGES. 

(1) Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of -

(i) if an adult, one day for every twenty days of work performed by him during the previous calendar year;

(ii) if a child, one day for every fifteen days of work formed by him during the previous calendar year.

Explanation 1 : For the purpose of this sub-section – (a) any days of lay off, by agreement or contract or as permissible under the standing orders;

(b) in the case of a female worker, maternity leave for any number of days not exceeding twelve weeks; and

(c) the leave earned in the year prior to that in which the leave is enjoyed; shall be deemed to be days on which the worker has worked in a factory for the purpose of computation of the period of 240 days or more, but he shall not earn leave for these days.

Explanation 2 : The leave admissible under this sub-section shall be exclusive of all holidays whether occurring during or at either end of the period of leave.

(2) A worker whose service commences otherwise than on the first day of January shall be entitled to leave with wages at the rate laid down in clause (i) or, as the case may be, clause (ii) of sub-section (1) if he has worked for two-thirds of the total number of days in the remainder of the calender year.

¹(3) If a worker is discharged or dismissed from service or quits his employment or is superannuated or dies while in service, during the course of the calendar year, he or his heir or nominee, as the case may be, shall be entitled to wages in lieu of the quantum of leave to which he was entitled immediately before his discharge, dismissal, quitting of employment, superannuation or death calculated at the rates specified in sub-section (1), even if he had not worked for the entire period specified in sub-section (1) or sub-section (2) making him eligible to avail of such leave, and such payment shall be made -

(i) where the worker is discharged or dismissed or quits employment, before the expiry of the second working day from the date of such discharge, dismissal or quitting, and

(ii) where the worker is superannuated or dies while in service, before the expiry of two months from the date of such superannuation or death.

(4) In calculating leave under this section, fraction of leave of half a day or more shall be treated as one full day’s leave, and fraction of less than half a day shall be omitted.

(5) If a worker does not in any one calendar year take the whole of the leave allowed to him under sub-section (1) or sub-section (2), as the case may be, any leave not taken by him shall be added to the leave to be allowed to him in the succeeding calendar year :

Provided that the total number of days of leave that may be carried forward to a succeeding year shall not exceed thirty in the case of an adult or forty in the case of a child :

Provided further that a worker, who has applied for leave with wages but has not been given such leave in accordance with any scheme laid down in sub-sections (8) and (9) ²[or in contravention of sub-section (10)] shall be entitled to carry forward the ³[leave refused] without any limit.

(6) A worker may at any time apply in writing to the manager of a factory not less than fifteen days before the date on which he wishes his leave to begin, to take all the leave or any portion thereof allowable to him during the calendar year :

Provided that the application shall be made not less than thirty days before the date on which the worker wishes his leave to begin, if he is employed in a public utility service as defined in clause (n) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947) :

Provided further that the number of times in which leave may be taken during any year shall not exceed three.

(7) If a worker wants to avail himself of the leave with wages due to him to cover a period of illness, he shall be granted such leave even if the application for leave is not made within the time specified in sub-section

(6); and in such a case wages as admissible under section 81 shall be paid not later than fifteen days, or in the case of a public utility service not later than thirty days from the date of the application for leave.

(8) For the purpose of ensuring the continuity of work, the occupier or manager of the factory, in agreement with the Works Committee of the factory constituted under section 3 of the Industrial Disputes Act, 1947 (14 of 1947), or a similar Committee constituted under any other Act or if there is no such Works Committee or a similar Committee in the factory, in agreement with the representatives of the workers therein chosen in the prescribed manner, may lodge with the Chief Inspector a scheme in writing whereby the grant of leave allowable under this section may be regulated.

(9) A scheme lodged under sub-section (8) shall be displayed at some conspicuous and convenient places in the factory and shall be in force for a period of twelve months from the date on which it comes into force, and may thereafter be renewed with or without modification for a further period of twelve months at a time, by the manager in agreement with the Works Committee or a similar Committee, or as the case may be, in agreement with the representatives of the workers as specified in sub-section (8), and a notice of renewal shall be sent to the Chief Inspector before it is renewed.

(10) An application for leave which does not contravene the provisions of sub-section (6) shall not be refused, unless refusal is in accordance with the scheme for the time being in operation under sub-sections (8) and (9).

(11) If the employment of a worker who is entitled to leave under sub-section (1) or sub-section (2), as the case may be, is terminated by the occupier before he has taken the entire leave to which he is entitled, or if having applied for and having not been granted such leave, the worker quits his employment before he has taken the leave, the occupier of the factory shall pay him the amount payable under section 80 in respect of the leave not taken, and such payment shall be made, where the employment of the worker is terminated by the occupier, before the expiry of the second working day after such termination, and where a worker who quits his employment, on or before the next pay day.

(12) The unavailed leave of a worker shall not be taken into consideration in computing the period of any notice required to be given before discharge or dismissal.

——————————

1. Subs. by Act 94 of 1976, sec. 32, for sub-section (3) (w.e.f. 26-10-1976).

2. Ins. by Act 94 of 1976, sec. 32 (w.e.f. 26-10-1976).

3. Subs. by Act 94 of 1976, sec. 32, for “unavailed leave” (w.e.f. 26-10-1976).

Section 80. WAGES DURING LEAVE PERIOD. 

(1) For the leave allowed to him under ¹[section 78 or section 79, as the case may be,] a worker ²[shall be entitled to wages] at a rate equal to the daily average of his total full time earnings for the days on which ³[he actually worked] during the month immediately preceding his leave, exclusive of any overtime and bonus but inclusive of dearness allowance and the cash equivalent of the advantage accruing through the concessional sale to the worker of foodgrains and other articles:

⁴[Provided that in the case of a worker who has not worked on any day during the calendar month immediately preceding his leave, he shall be paid at a rate equal to the daily average of his total full time earnings for the days on which he actually worked during the last calendar month preceding his leave, in which he actually worked, exclusive of any overtime and bonus but inclusive of dearness allowance and the cash equivalent of the advantage accruing through the concessional sale to the workers of foodgrains and other articles.]

(2) The cash equivalent of the advantage accruing through the concessional sale to the worker of foodgrains and other articles shall be computed as often as may be prescribed, on the basis of the maximum quantity of foodgrains and other articles admissible to a standard family.

Explanation 1 : “Standard family” means a family consisting of a worker, his or her spouse and two children below the age of fourteen years requiring in all three adult consumption units.

Explanation 2 : Adult consumption unit means the consumption unit of a male above the age of fourteen years; and the consumption unit of a female above the age of fourteen years and that of a child below the age of fourteen years shall be calculated at the rates of 0.8 and 0.6 respectively of one adult consumption unit.

(3) The State Government may make rules prescribing -

(a) the manner in which the cash equivalent of the advantage accruing through the concessional sale to a worker of foodgrains and other articles shall be computed; and

(b) the registers that shall be maintained in a factory for the purpose of securing compliance with the provisions of this section.

———————————

1.Subs. by Act 94 of 1976, sec. 33, for “section 79” (w.e.f. 26-10-1976).

2.Subs. by Act 20 of 1987, sec. 24, for “shall be paid” (w.e.f. 1-12-1987).

3.Subs. by Act 94 of 1976, sec. 33, for “he worked” (w.e.f. 26-10-1976).

4.Ins. by Act 20 of 1987, sec. 24 (w.e.f. 1-12-1987).

Section 81. PAYMENT IN ADVANCE IN CERTAIN CASES. 

A worker who has been allowed leave for not less than four days, in the case of an adult, and five days, in the case of a child, shall, before his leave begins, be paid the wages due for the period of the leave allowed.

Section 82. MODE OF RECOVERY OF UNPAID WAGES. 

Any sum required to be paid by an employer, under this chapter but not paid by him shall be recoverable as delayed wages under the provisions of the Payment of Wages Act, 1936 (4 of 1936).

Section 83. POWER TO MAKE RULES. 

The State Government may make rules directing managers of factories to keep registers containing such particulars as may be prescribed and requiring the registers to be made available for examination by Inspectors..

Section 84. POWERS TO EXEMPT FACTORIES. 

Where the State Government is satisfied that the leave rules applicable to workers in a factory provide benefits which in its opinion are not less favourable than those for which this Chapter makes provision it may, by written order, exempt the factory from all or any of the provisions of this Chapter subject to such conditions as may be specified in the order.

Explanation : For the purposes of this section, in deciding whether the benefits which are provided for by any leave rules are less favourable than those for which this Chapter makes provision, or not, the totality of the benefits shall be taken into account.

¹[Explanation.—For the purposes of this section, in deciding whether the benefits which are provided for by any leave rules are less favourable than those for which this Chapter makes provision, or not, the totality of the benefits shall be taken into account.]

———————————

1. Ins. by Act 94 of 1976, sec. 34 (w.e.f. 26-10-1976).

Section 85. POWER TO APPLY THE ACT TO CERTAIN PREMISES. 

(1) The State Government may, by notification in the Official Gazette, declare that all or any of the provisions of this Act shall apply to any place wherein a manufacturing process is carried on with or without the aid of power or is so ordinarily carried on, notwithstanding that -

(i) the number of persons employed therein is less than ten, if working with the aid of power and less than twenty if working without the aid of power, or

(ii) the persons working therein are not employed by the owner thereof but are working with the permission of, or under agreement with, such owner :

Provided that the manufacturing process is not being carried on by the owner only with the aid of his family.

(2) After a place is so declared, it shall be deemed to be a factory for the purposes of this Act, and the owner shall be deemed to be the occupier, and any person working therein, a worker.

Explanation : For the purposes of this section, owner shall include a lessee or mortgagee with possession of the premises.

Section 86. POWER TO EXEMPT PUBLIC INSTITUTIONS. 

The State Government may exempt, subject to such conditions as it may consider necessary, any workshop or workplace where a manufacturing process is carried on and which is attached to a public institution, maintained for the purposes of education, ¹training, research or reformation, from all or any of the provisions of this Act :

Provided that no exemption shall be granted from the provisions relating to hours of work and holidays, unless the persons having the control of the institution submit, for the approval of the State Government, a scheme for the regulation of the hours of employment, intervals for meals, and holidays of the persons employed in or attending the institution or who are inmates of the institution, and the State Government is satisfied that the provisions of the scheme are not less favourable than the corresponding provisions of this Act.

—————————–

1.   Subs. by Act 94 of 1976, sec. 35, for “training” (w.e.f. 26-10-1976).

Section 87. DANGEROUS OPERATIONS. 

Where the State Government is of opinion that any 1[manufacturing process or operation] carried on in a factory exposes any persons employed in it to a serious risk of bodily injury, poisoning or disease, it may make rules applicable to any factory or class or description of factories in which the 1[manufacturing process or operation] is carried on—

(a) specifying the 1[manufacturing process or operation] and declaring it to be dangerous;

(b) prohibiting or restricting the employment of women, adolescents or children in the ¹[manufacturing process or operation];

(c) providing for the periodical medical examination of persons employed, or seeking to be employed, in the ¹[manufacturing process or operation], and prohibiting the employment or persons not certified as fit for such employment ²[and requiring the payment by the occupier of the factory of fees for such medical examination];

(d) providing for the protection of all persons employed in the 1[manufacturing process or operation] or in the vicinity of the places where it is carried on;

(e) prohibiting, restricting or controlling the use of any specified materials or processes in connection with the ¹[manufacturing process or operation];

²[(f) requiring the provision of additional welfare amenities and sanitary facilities and the supply of protective equipment and clothing, and laying down the standards thereof, having regard to the dangerous nature of the manufacturing process or operation.

³[***]

——————————-

1. Subs. by Act 94 of 1976, sec. 36, for “operation” (w.e.f. 26-10-1976).

2. Ins. by Act 94 of 1976, sec. 36 (w.e.f. 26-10-1976).

3. Clause (g) omitted by Act of 20 of 1987, sec. 25 (w.e.f. 1-12-1987).

Section 87 A. POWER TO PROHIBIT EMPLOYMENT ON ACCOUNT OF SERIOUS HAZARD. 

¹[87A. Power to prohibit employment on account of serious hazard.—(1) Where it appears to the Inspector that conditions in a factory or part thereof are such that they may cause serious hazard by way of injury or death to the persons employed therein or to the general public in the vicinity, he may, by order in writing to the occupier of the factory, state the particulars in respect of which he considers the factory or part thereof to be the cause of such serious hazard and prohibit such occupier from employing any person in the factory or any part thereof other than the minimum number of persons necessary to attend to the minimum tasks till the hazard is removed.

(2) Any order issued by the Inspector under sub-section (1) shall have effect for a period of three days until extended by the Chief Inspector by a subsequent order.

(3) Any person aggrieved by an order of the Inspector under sub-section (1), and the Chief Inspector under sub-section (2), shall have the right to appeal to the High Court.

(4) Any person whose employment has been affected by an order issued under sub-section (1), shall be entitled to wages and other benefits and it shall be the duty of the occupier to provide alternative employment to him wherever possible and in the manner prescribed.

(5) The provisions of sub-section (4) shall be without prejudice to the rights of the parties under the Industrial Disputes Act, 1947 (14 of 1947).

—————————-

1. Ins. by Act 20 of 1987, sec. 26 (w.e.f. 1-12-1987).

Section 88. NOTICE OF CERTAIN ACCIDENTS. 

¹(1) Where in any factory an accident occurs which causes death, or which causes any bodily injury by reason of which the person injured is prevented from working for a period of forty-eight hours or more immediately following the accident, or which is of such nature as may be prescribed in this behalf, the manager of the factory shall send notice thereof to such authorities, and in such form and within such time, as may be prescribed.

²(2) Where a notice given under sub-section (1) relates to an accident causing death, the authority to whom the notice is sent shall make an inquiry into the occurrence within one month of the receipt of the notice or, if such authority is not the Inspector, cause the Inspector to make an inquiry within the said period.

(3) The State Government may make rules for regulating the procedure at inquiries under this section.

————————-

1. Section 88 re-numbered as sub-section (1) thereof by Act 94 of 1976, sec. 37 (w.e.f. 26-10-1976).

2. Ins. by Act 94 of 1976, sec. 37 (w.e.f. 26-10-1976)

Section 88 A. NOTICE OF CERTAIN DANGEROUS OCCURRENCES. 

¹[88A. Notice of certain dangerous occurrences.—Where in a factory any dangerous occurrence of such nature as may be prescribed, occurs, whether causing any bodily injury or disability or not, the manager of the factosry shall send notice thereof to such authorities, and in such form and within such time, as may be prescribed.

———

1.   Ins. by Act 94 of 1976, sec. 38 (w.e.f. 26-10-1976).

Section 89. NOTICE OF CERTAIN DISEASES. 

(1) Where any worker in a factory contracts any disease specified in¹ the Third Schedule, the manager of the factory shall send notice thereof to such authorities, and in such form and within such time as may be prescribed.

(2) If any medical practitioner attends on a person who is or has been employed in a factory, and who is, or is believed by the medical practitioner to be, suffering from any disease, specified in the Third Schedule the medical practitioner shall without delay send a report in writing to the office of the Chief Inspector stating -

(a) the name and full postal address of the patient,

(b) the disease from which he believes the patient to be suffering, and

(c) the name and address of the factory in which the patient is, or was last, employed.

(3) Where the report under sub-section (2) is confirmed to the satisfaction

of the Chief Inspector, by the certificate of a certifying surgeon or otherwise, that the person is suffering from a disease specified in the Third Schedule, he shall pay to the medical practitioner such fee as may be prescribed, and the fee so paid shall be recoverable as an arrear of land revenue from the occupier of the factory in which the person contracted the disease.

(4) If any medical practitioner fails to comply with the provisions of sub-section (2), he shall be punishable with fine which may extend to ²one thousand rupees.

³(5) The Central Government may, by notification in the Official Gazette,

add to or alter the Third Schedule and any such addition or alteration shall have effect as if it had been made by this Act.

—————————

1. Subs. by Act 20 of 1987, sec. 27, for “the Schedule” (w.e.f. 1-12-1987).

2. Subs. by Act 20 of 1987, sec. 27, for “fifty rupees” (w.e.f. 1-12-1987).

3. Added by Act 20 of 1987, sec. 27 (w.e.f. 1-12-1987).

Section 90. POWER TO DIRECT ENQUIRY INTO CASES OF ACCIDENT OR DISEASE. 

(1) The State Government may, if it considers it expedient so to do, appoint a competent person to inquire into the causes of any accident occurring in a factory or into any case where a disease specified in ¹the Third Schedule has been, or is suspected to have been, contracted in a factory, and may also appoint one or more persons possessing legal or special knowledge to act as assessors in such inquiry.

(2) The person appointed to hold an inquiry under this section shall have all the powers of a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), for the purposes of enforcing the attendance of witnesses and compelling the production of documents and material objects, and may also, so far as may be necessary for the purposes of the inquiry, exercise any of the powers of an Inspector under this Act; and every person required by the person making the inquiry to furnish any information shall be deemed to be legally bound so to do within the meaning of section 176 of the Indian Penal Code, 1860 (45 of 1860).

(3) The person holding an inquiry under this section shall make a report to the State Government stating the causes of the accident, or as the case may be, disease, and any attendant circumstances, and adding any observations which he or any of the assessors may think fit to make.

(4) The State Government may, if it thinks fit, cause to be published any report made under this section or any extracts therefrom.

(5) The State Government may make rules for regulating the procedure as Inquiries under this section.

————————

1.   Subs. by Act 20 of 1987, sec. 28, for “the Schedule” (w.e.f. 1-12-1987).

Section 91. POWER TO TAKE SAMPLES. 

(1) An Inspector may at any time during the normal working hours of a factory, after informing the occupier or manager of the factory or other person for the time being purporting to be in charge of the factory, take in the manner hereinafter provided a sufficient sample of any substance used or intended to be used in the factory, such use being -

(a) in the belief of the Inspector in contravention of any of the provisions of this Act or the rules made thereunder, or

(b) in the opinion of the Inspector likely to cause bodily injury to, or injury to the health of, workers in the factory.

(2) Where the Inspector takes a sample under sub-section (1), he shall, in the presence of the person informed under that sub-section unless such person wilfully absents himself, divide the sample into three portions and effectively seal and suitably mark them, and shall permit such person to add his own seal and mark thereto.

(3) The person informed as aforesaid shall, if the Inspector so requires, provide the appliances for dividing, sealing and marking the sample taken under this section.

(4) The Inspector shall -

(a) forthwith give one portion of the sample to the person informed under sub-section (1);

(b) forthwith send the second portion to a Government Analyst for analysis and report thereon;

(c) retain the third portion for production to the Court before which proceedings, if any, are instituted in respect of the substance.

(5) Any document purporting to be a report under the hand of any Government Analyst upon any substance submitted to him for analysis and report under this section, may be used as evidence in any proceedings instituted in respect of the substance.

Section 91 A. SAFETY AND OCCUPATIONAL HEALTH SURVEYS. 

¹[91A. Safety and occupational health surveys.—(1) The Chief Inspector, or the Director General of Factory Advice Service and Labour Institutes, or the Director General of Health Services, to the Government of India, or such other officer as may be authorised in this behalf by the State Government or the Chief Inspector or the Director General of Factory Advice Service and Labour Institutes or the Director General of Health Services may, at any time during the normal working hours of a factory, or at any other time as is found by him to be necessary, after giving notice in writing to the occupier or manager of the factory or any other person who for the time being purports to be in charge of the factory, undertake safety and occupational health surveys and such occupier or manager or other person shall afford all facilities for such survey, including facilities for the examination and testing of plant and machinery and collection of samples and other data relevant to the survey.

(2) For the purpose of facilitating surveys under sub-section (1) every worker shall, if so required by the person conducting the survey, present himself to undergo such medical examination as may be considered necessary by such person and furnish all information in his possession and relevant to the survey.

(3) Any time spent by a worker for undergoing medical examination or furnishing information under sub-section (2) shall, for the purpose of calculating wages and extra wages for overtime work, be deemed to be time during which such worker worked in the factory.

Explanation : For the purposes of this section, the report, if any, submitted to the State Government by the person conducting the survey under sub-section (1) shall be deemed to be a report submitted by an Inspector under this Act.

²[Explanation.—For the purposes of this section, the report, if any, submitted to the State Government by the person conducting the survey under sub-section (1) shall be deemed to be a report submitted by an Inspector under this Act.]

————————————

1. Ins. by Act 94 of 1976, sec. 39 (w.e.f. 26-10-1976).

2. Ins. by Act 20 of 1987, sec. 29 (w.e.f. 1-12-1987).

Section 92. GENERAL PENALTY FOR OFFENCES. 

Save as is otherwise expressly provided in this Act and subject to the provisions of section 93, if in, or in respect of, any factory there is any contravention of any of the provisions of this Act or of any rules made thereunder or of any order in writing given thereunder, the occupier and manager of the factory shall each be guilty of an offence and punishable with imprisonment for a term which may extend to

¹[two years] or with fine which may extend to ²[one lakh rupees] or with both, and if the contravention is continued after conviction, with a further fine which may extend to ³[one thousand rupees] for each day on which the contravention is so continued:

⁴[Provided that where contravention of any of the provisions of Chapter IV or any rule made thereunder or under section 87 has resulted in an accident causing death or serious bodily injury, the fine shall not be less than ⁵[twenty-five thousand rupees] in the case of an accident causing death, and ⁶[five thousand rupees] in the case of an accident causing serious bodily injury.

Explanation : In this section and in section 94 “serious bodily injury” means an injury which involves, or in all probability will involve, the permanent loss of the use of, or permanent injury to, any limb or the permanent loss of, or injury to, sight or hearing, or the fracture of any bone, but shall not include, the fracture of bone or joint (not being fracture of more than one bone or joint) of any phalanges of the hand or foot.

————————————-

1. Subs. by Act 20 of 1987, sec. 30, for “three months” (w.e.f. 1-12-1998).

2. Subs. by Act 20 of 1987, sec. 30, for “two thousand rupees” (w.e.f. 1-12-1987).

3. Subs. by Act 20 of 1987, sec. 30, for “seventy-five rupees” (w.e.f. 1-12-1987).

4. Ins. by Act 94 of 1976, sec. 40 (w.e.f. 26-10-1976).

5. Subs. by Act 20 of 1987, sec. 30, for “one thousand rupees” (w.e.f. 1-12-1987).

6. Subs. by Act 20 of 1987, sec. 30, for “five hundred rupees” (w.e.f. 1-12-1987).

Section 93. LIABILITY OF OWNER OF PREMISES IN CERTAIN CIRCUMSTANCES. 

¹[93. Liability of owner of premises in certain circumstances.—(1) Where in any premises separate buildings are leased to different occupiers for use as separate factories, the owner of the premises shall be responsible for the provision and maintenance of common facilities and services, such as approach roads, drainage, water supply, lighting and sanitation.

(2) The Chief Inspector shall have, subject to the control of the State Government, power to issue orders to the owner of the premises in respect of the carrying out of the provisions of sub-section (1).

(3) Where in any premises, independent or self-contained, floors or flats are leased to different occupiers for use as separate factories, the owner of the premises shall be liable as if he were the occupier or manager of a factory, for any contravention of the provisions of this Act in respect of -

(i) latrines, urinals and washing facilities in so far as the maintenance of the common supply of water for these purposes is concerned;

(ii) fencing of machinery and plant belonging to the owner and not specifically entrusted to the custody or use of an occupier;

(iii) safe means of access to the floors or flats and maintenance and cleanliness of staircases and common passages;

(iv) precautions in case of fire;

(v) maintenance of hoists and lifts; and

(vi) maintenance of any other common facilities provided in the premises.

(4) The Chief Inspector shall have, subject to the control of the State Government, power to issue orders to the owner of the premises in respect of the carrying out the provisions of sub-section (3).

(5) The provisions of sub-section (3) relating to the liability of the owner shall apply where in any premises independent rooms with common latrines, urinals and washing facilities are leased to different occupiers for use as separate factories :

Provided that the owner shall be responsible also for complying with the requirements relating to the provisions and maintenance of latrines, urinals and washing facilities.

(6) The Chief Inspector shall have, subject to the control of the State Government, the power to issue orders to the owner of the premises referred to in sub-section (5) in respect of the carrying out of the provisions of section 46 or section 48.

(7) Where in any premises portions of a room or a shed are leased to different occupiers for use as separate factories, the owner of the premises shall be liable for any contravention of the provisions of – (i) Chapter III, except sections 14 and 15;

(ii) Chapter IV, except sections 22, 23, 27, 34, 35 and 36 :

Provided that in respect of the provisions of sections 21, 24 and 32 the owners liability shall be only in so far as such provisions relate to things under his control : Provided further that the occupier shall be responsible for complying with the provisions of Chapter IV in respect of plant and machinery belonging to or supplied by him;

(iii) section 42.

(8) The Chief Inspector shall have, subject to the control of the State Government, power to issue orders to the owner of the premises in respect of the carrying out of the provisions of sub-section (7).

(9) In respect of sub-sections (5) and (7), while computing for the purposes of any of the provisions of this Act the total number of workers employed, the whole of the premises shall be deemed to be a single factory.

———————————–

1.   Subs. by Act 25 of 1954, sec. 21, for section 93 (w.e.f. 7-5-1954).

Section 94. ENHANCED PENALTY AFTER PREVIOUS CONVICTION. 

¹[(1)] If any person who has been convicted of any offence punishable under section 92 is again guilty of an offence involving a contravention of the same provision, he shall be punishable on a subsequent conviction with imprisonment for a term which may extend to ²[three years] or with fine ³[which shall not be less than ⁴[ten thousand rupees] but which may extend to ⁵[two lakh rupees]] or with both:

⁶[Provided that the court may, for any adequate and special reasons to be mentioned in the judgment, impose a fine of less than ⁴[ten thousand rupees]:

Provided further that where contravention of any of the provisions of Chapter IV or any rule made thereunder or under section 87 has resulted in an accident causing death or serious bodily in jury, the fine shall not be less than ⁷[thirty-five thousand rupees] in the case of an accident causing death and ⁵[ten thousand rupees] in the case of an accident causing serious bodily injury.]

⁹[(2) For the purposes of sub-section (1) no cognizance shall be taken of any conviction made more than two years before the commission of the offence for which the person is subsequently being convicted.]

———————————

1. Section 94 re-numbered as sub-section (1) thereof by Act 94 of 1976, sec. 41 (w.e.f.26-10-1976).

2. Subs. by Act 20 of 1987, sec. 31, for “six months” (w.e.f. 1-12-1987).

3. Subs. by Act 94 of 1976, sec. 41, for “which may extend to one thousand rupees”(w.e.f. 26-10-1976).

4. Subs. by Act 20 of 1987, sec. 31, for “ two hundred rupees” (w.e.f. 1-12-1987).

5. Subs. by Act 20 of 1987, sec. 31, for “five thousand rupees” (w.e.f. 1-12-1987).

6. Subs. by Act 94 of 1976, sec. 41, for the proviso (w.e.f. 26-10-1976).

7. Subs. by Act 20 of 1987 sec. 31, for “two thousand rupees” (w.e.f. 1-12-1987).

8. Subs. by Act 20 of 1987, sec. 31, for “one thousand rupees” (w.e.f. 1-12-1987).

9. Ins. by Act 94 of 1976, sec. 41 (w.e.f. 26-10-1976).

Section 95. PENALTY FOR OBSTRUCTING INSPECTOR. 

Whoever wilfully obstructs an Inspector in the exercise of any power conferred on him by or under this Act, or fails to produce on demand by an Inspector any registers or other documents in his custody kept in pursuance of this Act or of any rules made thereunder, or conceals or prevents any worker in a factory from appearing before, or being examined by, an Inspector, shall be punishable with imprisonment for a term which may extend to ¹[six months] or with fine which may extend to ²[ten thousand rupees] or with both.

——————————-

1. Subs. by Act 20 of 1987, sec. 32, for “three months” (w.e.f. 1-12-1987).

2. Subs. by Act 20 of 1987, sec. 32, for “five hundred rupees” (w.e.f. 1-12-1987).

Section 96. PENALTY FOR WRONGFULLY DISCLOSING RESULTS OF ANALYSIS UNDER SECTION 91. 

Whoever, except in so far as it may be necessary for the purposes of a prosecution for any offence punishable under this Act, publishes or discloses to any person the results of an analysis made under section 91, shall be punishable with imprisonment for a term which may extend to ¹[six months] or with fine which may extend to ²[ten thousand rupees] or with both.

——————————-

1. Subs. by Act 20 of 1987, sec. 33, for “three months” (w.e.f. 1-12-1987).

2. Subs. by Act 20 of 1987, sec. 33, for “five hundred rupees” (w.e.f. 1-12-1987).

Section 96 A. PENALTY FOR CONTRAVENTION OF THE PROVISIONS OF SECTIONS 41B, 41C AND 41H. 

¹(1) Whoever fails to comply with or contravenes any of the provisions of section 41B, 41C or 41H or the rules made thereunder, shall, in respect of such failure or contravention, be punishable with imprisonment for a term which may extend to seven years and with fine which may extend to two lakh rupees, and in case the failure or contravention continues, with additional fine which may extend to five thousand rupees for every day during which such failure or contravention continues after the conviction for the first such failure or contravention.

(2) If the failure or contravention referred to in sub-section (1) continues beyond a period of one year after the date of conviction, the offender shall be punishable with imprisonment for a term which may extend to ten years.

—————————-

1.   Ins. by Act 20 of 1987, sec. 34 (w.e..f. 1-12-1987).

Section 97. OFFENCES BY WORKERS. 

(1) Subject to the provisions of section 111, if any worker employed in a factory contravenes any provision of this Act or any rules or orders made thereunder, imposing any duty or liability on workers, he shall be punishable with fine which may extend to ¹five hundred rupees.

(2) Where a worker is convicted of an offence punishable under sub-section (1), the occupier or manager of the factory shall not be deemed to be guilty of an offence in respect of that contravention, unless it is proved that he failed to take all reasonable measures for its prevention.

——————————-

1.   Subs. by Act 20 of 1987, sec 35, for “twenty rupees” (w.e.f. 1-12-1987).

Section 98. PENALTY FOR USING FALSE CERTIFICATE OF FITNESS. 

Whoever knowingly uses or attempts to use, as a certificate of fitness granted to himself under section 70, a certificate granted to another person under that section, or who, having procured such a certificate, knowingly allows it to be used, or an attempt to use to be made, by another person, shall be punishable with imprisonment for a term which may extend to ¹[two months] or with fine which may extend to ²[one thousand rupees] or with both.

——————————-

1. Subs. by Act 20 of 1987, sec. 36, for “one month” (w.e.f. 1-12-1987).

2. Subs. by Act 20 of 1987 sec. 36, for “fifty rupees” (w.e.f. 1-12-1987).

Section 99. PENALTY FOR PERMITTING DOUBLE EMPLOYMENT OF CHILD. 

If a child works in a factory on any day on which he has already been working in another factory, the parent or guardian of the child or the person having custody of or control over him or obtaining any direct benefit from his wages, shall be punishable with fine which may extend to ¹one thousand rupees unless it appears to the Court that the child so worked without the consent or connivance of such parent, guardian or person.

—————————

1.   Subs. by Act 20 of 1987 sec. 37, for “fifty rupees” (w.e.f. 1-12-1987).

Section 100. DETENTION OF OCCUPIER IN CERTAIN CASES.

[Rep. by the Factories (Amendment) Act, 1987 (20 of 1987). Sec. 38 (w.e.f. 1-12-1987)].

Section 101. EXEMPTION OF OCCUPIER OR MANAGER FROM LIABILITY IN CERTAIN CASES. 

Where the occupier or manager of a factory is charged with an offence punishable under this Act, he shall be entitled, upon complaint duly made by him and on giving to the prosecutor not less than three clear days notice in writing of his intention so to do, to have any other person whom he charges as the actual offender brought before the Court at the time appointed for hearing the charge; and if, after the commission of the offence has been proved, the occupier or manager of the factory, as the case may be, proves to the satisfaction of the court -

(a) that he has used due diligence to enforce the execution of this Act, and

(b) that the said other person committed the offence in question without his knowledge, consent or connivance, – that other person shall be convicted of the offence and shall be liable to the like punishment as if he were the occupier or manager of the factory, and the occupier or manager, as the case may be, shall be discharged from any liability under this Act in respect of such offence : Provided that in seeking to prove as aforesaid, the occupier or manager of the factory, as the case may be, may be examined on oath, and his evidence and that of any witness whom he calls in his support shall be subject to cross-examination on behalf of the person he charges as the actual offender and by the prosecutor : Provided further that, if the person charged as the actual offender by the occupier or manager cannot be brought before the Court at the time appointed for hearing the charge, the Court shall adjourn the hearing from time to time for a period not exceeding three months and if by the end of the said period the person charged as the actual offender cannot still be brought before the Court, the Court shall proceed to hear the charge against the occupier or manager and shall, if the offence be proved, convict the occupier or manager.

Section 102. POWER OF COURT TO MAKE ORDERS. 

(1) Where the occupier or manager of a factory is convicted of an offence punishable under this Act the Court may, in addition to awarding any punishment, by order in writing require him, within a period specified in the order (which the Court may, if it thinks fit and on application in such behalf, from time to time extend) to take such measures as may be so specified for remedying the matters in respect of which the offence was committed.

(2) Where an order is made under sub-section (1), the occupier or manager of the factory, as the case may be, shall not be liable under this Act in respect of the continuation of the offence during the period or extended period, if any, allowed by the Court, but if, on the expiry of such period or extended period, as the case may be, the order of the Court has not been fully complied with, the occupier or manager, as the case may be, shall be deemed to have committed a further offence, and may be sentenced therefor by the Court to undergo imprisonment for a term which may extend to six months or to pay a fine which may extend to one hundred rupees for every day after such expiry on which the order has not been complied with, or both to undergo such imprisonment and to pay such fine, as aforesaid.

Section 103. PRESUMPTION AS TO EMPLOYMENT. 

If a person is found in a factory at any time, except during intervals for meals or rest, when work is going on or the machinery is in motion, he shall until the contrary is proved, be deemed for the purposes of this Act and the rules made thereunder to have been at that time employed in the factory.

Section 104. ONUS AS TO AGE. 

(1) When any act or omission would, if a person were under a certain age, be an offence punishable under this Act, and such person is in the opinion of the Court prima facie under such age, the burden shall be on the accused to prove that such person is not under such age.

(2) A declaration in writing by a certifying surgeon relating to a worker that he has personally examined him and believes him to be under the age stated in such declaration shall, for the purposes of this Act and the rules made thereunder, be admissible as evidence of the age of that worker.

Section 104 A. ONUS OF PROVING LIMITS OF WHAT IS PRACTICABLE, ETC.

¹[104A. Onus of proving limits of what is practicable, etc.-In any proceeding for an offence for the contravention of any provision of this Act or rules made thereunder consisting of a failure to comply with a duty or requirement to do something, it shall be for the person who is alleged to have failed to comply with such duty or requirement, to prove that it was not reasonably practicable, or, as the case may be, all practicable measures were taken to satisfy the duty or requirement.

———————————

1.   Ins. by Act 20 of 1987, sec. 39 (w.e.f. 1-12-1987).

Section 105. COGNIZANCE OF OFFENCES.

(1) No Court shall take cognizance of any offence under this Act except on complaint by, or with the previous sanction in writing of, an Inspector.

(2) No Court below that of a Presidency Magistrate or of a Magistrate of the first class shall try any offence punishable under this Act.

comments

Since the written complaint was filed by an Inspector of the Factory himself, therefore no previous sanction at all was required to be taken; K.C. Majumdar v. State of Bihar, 2003 (98) FLR 116

state amendment

Himachal Pradesh.—In Section 105, in sub-section (2), omit the words “of a Presidency Magistrate or”.

[Vide Himachal Pradesh A.L.O. 1948 (w.e.f. 25-12-1948)].

Section 106. LIMITATION OF PROSECUTIONS. 

No Court shall take cognizance of any offence punishable under this Act unless complaint thereof is made within three months of the date on which the alleged commission of the offence came to the knowledge of an Inspector :

Provided that where the offence consists of disobeying a written order made by an Inspector, complaint thereof may be made within six months of the date on which the offence is alleged to have been committed.

¹Explanation : For the purposes of this section,

(a) in the case of a continuing offence, the period of limitation shall be computed with reference to every point of time during which the offence continues;

(b) where for the performance of any act time is granted or extended on an application made by the occupier or manager of a factory, the period of limitation shall be computed from the date on which the time so granted or extended expired.

STATE AMENDMENT

Uttar Pradesh.—After section 106, insert the following section.—

“106A. Compounding in offences.—The Inspector may, subject to any general or special order of the State Government in this behalf, compound any offences punishable under this Act with fine only, and committed for the first time, either before or after the institution of the prosecution, on realisation of such amount of composition fee as he thinks fit not exceeding the maximum amount of fine fixed for the offence; and where the offence is so compounded,—

(i) before the institution of the prosecution, the offender shall not be liable to prosecution, for such offence and shall, if in custody, be set at liberty;

(ii) after the institution of the prosecution the composition shall amount to acquittal of the offender.”

[Vide Uttar Pradesh Act, 35 of 1979, sec. 4 (w.e.f. 21-12-1979)].

————————————

1. Ins. by Act 94 of 1976, sec. 43 (w.e.f. 26-10-1976).

Section 106 A. JURISDICTION OF A COURT FOR ENTERTAINING PROCEEDINGS, ETC., FOR OFFENCE. 

¹[106A. Jurisdiction of a court for entertaining proceedings, etc., for offence.—For the purposes of conferring jurisdiction on any court in relation to an offence under this Act or the rules made thereunder in connection with the operation of any plant, the place where the plant is for the time being situate shall be deemed to be the place where such offence has been committed.]

————————————

1.Ins. by Act 20 of 1987, sec. 40 (w.e.f. 1-12-1987).

Section 107. APPEALS. 

(1) The manager of a factory on whom an order in writing by an Inspector has been served under the provisions of this Act or the occupier of the factory may, within thirty days of the service of the order, appeal against it to the prescribed authority, and such authority may, subject to rules made in this behalf by the State Government, confirm, modify or reverse the order.

(2) Subject to rules made in this behalf by the State Government (which may prescribe classes of appeals which shall not be heard with the aid of assessors), the appellate authority may, or if so required in the petition of appeal shall, hear the appeal with the aid of assessors, one of whom shall be appointed by the appellate authority and the other by such body representing the industry concerned as may be prescribed :

Provided that if no assessor is appointed by such body before the time fixed for hearing the appeal, or if the assessor so appointed fails to attend the hearing at such time, the appellate authority may, unless satisfied that the failure to attend is due to sufficient cause, proceed to hear the appeal without the aid of such assessor or, if it thinks fit, without the aid of any assessor.

(3) Subject to such rules as the State Government may make in this behalf and subject to such conditions as to partial compliance or the adoption of temporary measures as the appellate authority may in any case think fit to impose, the appellate authority may, if it thinks fit, suspend the order appealed against pending the decision of the appeal.

Section 108. DISPLAY OF NOTICES. 

(1) In addition to the notices required to be displayed in any factory by or under this Act, there shall be displayed in every factory a notice containing such abstracts of this Act and of the rules made thereunder as may be prescribed and also the name and address of the Inspector and the certifying surgeon.

(2) All notices required by or under this Act to be displayed in a factory shall be in English and in a language understood by the majority of the workers in the factory, and shall be displayed at some conspicuous and convenient place at or near the main entrance to the factory, and shall be maintained in a clean and legible condition.

(3) The Chief Inspector may, by order in writing served on the manager of any factory, require that there shall be displayed in the factory any other notice or poster relating to the health, safety or welfare of the workers in the factory.

 Section 109. SERVICE OF NOTICE.

The State Government may make rules prescribing the manner of the service of orders under this Act on owners, occupiers or managers of factories.

Section 110. RETURNS. 

The State Government may make rules requiring owners, occupiers or managers of factories to submit such returns, occasional or periodical, as may in its opinion be required for the purposes of this Act.

Section 111. OBLIGATIONS OF WORKERS. 

(1) No worker in a factory -

(a) shall wilfully interfere with or misuse any appliance, convenience or other thing provided in a factory for the purposes of securing the health, safety or welfare of the workers therein;

(b) shall wilfully and without reasonable cause do anything likely to endanger himself or others; and

(c) shall wilfully neglect to make use of any appliance or other thing provided in the factory for the purposes of securing the health or safety of the workers therein.

(2) If any worker employed in a factory contravenes any of the provisions of this section or of any rule or order made thereunder, he shall be punishable with imprisonment for a term which may extend to three months, or with fine which may extend to one hundred rupees, or with both.

Section 111 A. RIGHT OF WORKERS, ETC. 

¹[111A. Right of workers, etc.

Every worker shall have the right to -

(i) obtain from the occupier, information relating to workers’ health and safety at work;

(ii) get trained within the factory wherever possible, or, to get himself sponsored by the occupier for getting trained at a training centre or institute, duly approved by the Chief Inspector, where training is imparted for workers’ health and safety at work;

(iii) represent to the Inspector directly or through his representative in the matter of inadequate provision for protection of his health or safety in the factory.

————————–

1.   Ins. by Act 20 of 1987, sec. 41 (w.e.f. 1-12-1987).

Section 112. GENERAL POWER TO MAKE RULES. 

The State Government may make rules providing for any matter which, under any of the provisions of this Act, is to be or may be prescribed or which may be considered expedient in order to give effect to the purposes of this Act.

Section 113. POWERS OF CENTRE TO GIVE DIRECTIONS.

The Central Government may give directions to a State Government as to the carrying into execution of the provisions of this Act.

 Section 114. NO CHARGE FOR FACILITIES AND CONVENIENCES. 

Subject to the provisions of section 46 no fee or charge shall be realised from any worker in respect of any arrangements or facilities to be provided, or any equipments or appliances to be supplied by the occupier under the provisions of this Act.

Section 115. PUBLICATION OF RULES. 

¹[(1)] All rules made under this Act shall be published in the Official Gazette, and shall be subject to the condition of previous publication; and the date to be specified under clause (3) of section 23 of the General Clauses Act, 1897 (10 of 1897), shall be not less than ²[forty-five days] from the date on which the draft of the proposed rules was published.

³[(2) Every rule made by the State Government under this Act shall be laid, as soon as may be after it is made, before the State Legislature.]

———————

1. Section 115 re-numbered as sub-section (1) thereof by Act 20 of 1987 sec. 42 (w.e.f. 1-12-1987).

2. Subs. by Act 20 of 1987, sec. 42, for “three months” (w.e.f. 1-12-1987).

3. Ins. by Act 20 of 1987, sec. 42 (w.e.f. 1-12-1987).

Section 116. APPLICATION OF ACT TO GOVERNMENT FACTORIES. 

Unless otherwise provided this Act shall apply to factories belonging to the Central or any State Government.

Section 117. PROTECTION TO PERSONS ACTING UNDER THIS ACT. 

No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done under this Act.

Section 118. RESTRICTION ON DISCLOSURE OF INFORMATION. 

(1) No Inspector shall, while in service or after leaving the service, disclose otherwise than in connection with the execution, or for the purposes, of this Act any information relating to any manufacturing or commercial business or any working process which may come to his knowledge in the course of his official duties.

(2) Nothing in sub-section (1) shall apply to any disclosure of information made with the previous consent in writing of the owner of such business or process of for the purposes of any legal proceeding (including arbitration) pursuant to this Act or of any criminal proceeding which may be taken, whether pursuant to this Act or otherwise, or for the purpose of any report of such proceedings as aforesaid.

(3) If any Inspector contravenes the provisions of sub-section (1) he shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.

Section 118A. RESTRICTION ON DISCLOSURE OF INFORMATION. 

¹[118A. Restriction on disclosure of information.—(1) Every Inspector shall treat as confidential the source of any complaint brought to his notice on the breach of any provision of this Act.

(2) No inspector shall, while making an inspection under this Act, disclose to the occupier, manager or his representative that the inspection is made in pursuance of the receipt of a complaint : Provided that nothing in this sub-section shall apply to any case in which the person who has made the complaint has consented to disclose his name.

—————————-

1. Ins. by Act 20 of 1987, sec. 43 (w.e.f. 1-12-1987).

Section 119. ACT TO HAVE EFFECT NOTWITHSTANDING ANYTHING CONTAINED IN ACT 37 OF 1970. 

¹[119. Act to have effect notwithstanding anything contained in Act 37 of 1970. The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in the Contract Labour (Regulation and Abolition) Act, 1970 ²[or any other law for the time being in force].]

——————————-

1. Ins. by Act 94 of 1976, sec. 44 (w.e.f. 26-10-1976). Earlier section 119 was repealed by Act 35 of 1950, sec. 2 and Sch. 1.

2. Ins. by Act 20 of 1987, sec. 44 (w.e.f. 1-12-1987)

Section 120. REPEAL AND SAVINGS. 

The enactments set out in the Table appended to this section are hereby repealed : Provided that anything done under the said enactments which could have been done under this Act if it had then been in force shall be deemed to have been done under this Act.

STATE AMENDMENT

Himachal Pradesh :

For section 120, substitute the following section, namely:—

“120. Any law in force in Himachal Pradesh relating to Factories other than this Act is hereby repealed:
Provided that anything done under any such law which could have been done under this Act if it had then been in force shall be deemed to have been done under this Act.”

[Vide Himachal Pradesh, A.L.O. 1948 (w.e.f. 25-12-1948)].

Table.—Enactments repealed.— [Rep. by the Repealing and Amending Act, 1950 (35 of 1950), Sec. 2 and Sch. I.]

Schedule I

LIST OF INDUSTRIES INVOLVING HAZARDOUS PROCESSES.

¹THE FIRST SCHEDULE

[See section 2(cb)]

1. Ferrous metallurgical Industries

– Integrated Iron and Steel

– Ferro-alloys

–Special Steels

2. Non-ferrous metallurgical Industries

- Primary Metallurgical Industries, namely, zinc, lead, copper manganese and aluminium

3. Foundries (ferrous and non-ferrous)

- Castings and forgings including cleaning or smoothing/roughening by sand and shot blasting.

4. Coal (including coke) industries. – Coal, Lignite, Coke, etc.

- Fuel Gases (including Coal gas, Producer gas, Water gas)

5. Power Generating Industries

6. Pulp and paper (including paper products) industries

7. Fertiliser Industries

- Nitrogenous

- Phosphatic

- Mixed

8. Cement Industries

- Portland Cement (including slag cement, puzzolona cement and their products)

9. Petroleum Industries

- Oil Refining

- Lubricating Oils and Greases

10. Petro-chemical Industries

11. Drugs and Pharmaceutical Industries

- Narcotics, Drugs and Pharmaceuticals

12. Fermentation Industries (Distilleries and Breweries)

13. Rubber (Synthetic) Industries

14. Paints and Pigment Industries

15. Leather Tanning Industries

16. Electro-plating Industries

17. Chemical Industries

– Coke Oven by-products and Coaltar Distillation Products

– Industrial Gases (nitrogen, oxygen, acetylene, argon, carbon-dioxide, hydrogen, sulphur-dioxide, nitrous oxide, halogenated hydro-carbon, ozone etc.)

– Industrial Carbon

- Alkalies and Acids

- Chromates and dichromates

- Leads and its compounds

- Electrochemicals (metallic sodium, potassium and magnesium, chlorates, perchlorates and peroxides)

- Electrothermal produces (artificial abrasive, calcium carbide)

- Nitrogenous compounds (cyanides, cyanamides and other nitrogenous compounds)

– Phosphorous and its compounds

- Halogens and Halogenated compounds (Chlorine, Fluorine, Bromine and Iodine)

– Explosives (including industrial explosives and detonators and fuses)

18. Insecticides, Fungicides, herbicides and other Pesticides Industries

19. Synthetic Resin and Plastics

20. Man-made Fibre (Cellulosic and non-cellulosic) Industry

21. Manufacture and repair of electrical accumulators

22. Glass and Ceramics

23. Grinding or glazing of metals

24. Manufacture, handling and processing of asbestos and its products

25. Extraction of oils and fats from vegetable and animal sources

26. Manufacture, handling and use of benzene and substances containing benzene

27. Manufacturing processes and operations involving carbon disulphide

28. Dyes and Dyestuff including their intermediates

29. Highly flammable liquids and gases.

————————–

1.   Ins. by Act 20 of 1987, sec. 45 (w.e.f. 1-12-1987).

Schedule. II

¹Schedule. II

[See section 41F]

PERMISSIBLE LEVELS OF CERTAIN CHEMICAL SUBSTANCES IN WORK ENVIRONMENT

1. Subs. by S.O. 170 (E), dated 2nd March, 1989.
2. Subs. by S.O. 342 (E), dated 19th April, 2001 (w.e.f. 19-4-2001).
* Lint-free dust as measured by the vertical clutricator cotton-dust sampler.

Schedule III

LIST OF NOTIFIABLE DISEASES

³Schedule III

[See sections 89 and 90]

1. Lead poisoning, including poisoning by any preparation or compound of lead or their sequelae.

2. Lead tetra-ethyl poisoning

3. Phosphorus poisoning or its sequelae.

4. Mercury poisoning or its sequelae.

5. Manganese poisoning or its sequelae.

6. Arsenic poisoning or its sequelae.

7. Poisoning by nitrous fumes.

8. Carbon disulphide poisoning.

9. Benzene poisoning, including poisoning by any of its homologues, their nitro or amido derivatives or its sequelae.

10. Chrome ulceration or its sequelae.

11. Anthrax.

12. Silicosis.

13. Poisoning by halogens or halogen derivatives of the hydrocarbons of the aliphatic series.

14. Pathological manifestations due to

(a) radium or other radio-active substances.

(b) X-rays.

15. Primary epitheliomatous cancer of skin.

16. Toxic anaemia.

17. Toxic jaundice due to poisonous substances.

²18. Oil acne or dermatitis due to mineral oils and compounds containing mineral oil base.

19. Byssionosis.

20. Asbestosis.

21. Occupational or contract dermatitis caused by direct contract with chemicals and paints. These are of two types, that is primary irritants and allergic sensitizers.

22. Noise induced hearing loss (exposure to high noise levels).

³23. Beriyllium poisoning.

⁴24. Carbon monoxide

25. Coal miners’ pnoumoconiosis.

26. Phosgene poisoning.

27. Occupational cancer.

28. Isocyanates poisoning.

29. Toxic nephirits.

—————

1.   The existing Schedule re-numbered as the Third  Schedule (w.e.f. 26-10-1976) by Act 20 of 1987, sec. 46 (w.e.f. 1-12-1987).

2.   Ins. by Act 94 of 1976, sec. 45 (w.e.f. 26-10-76).

3.   Ins. by Act 20 of 1987, sec. 46 (w.e.f. 1-12-1987).

4.   Subs. by S.O. 343 (E), dated 19th April, 2001 (w.e.f. 19-4-2001).

General Clauses Act

November 30, 2014

Section 1. Short title. 

(1) This Act may be called the General Clauses Act, 1897;

¹[***]

²[***]

———-

1. The word “and” rep. by Act 10 of 1914, sec. 3 and Sch. II.

2. Sub-section (2) rep. by Act 1 of 1914, sec. 3 and Sch. II.

Section 2. Repeal.

(Repealed by the Repealing and Amending Act, 1903 (1 of 1903), Sec. 4 and Schedule III)

Section 3. Definitions.

¹ Definitions.-

1. Subs. by the A.O. 1950, for section 3.

In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context,-

1. “Abet”, with its grammatical variations and cognate expressions, shall have the same meaning as in the Indian Penal Code (45 of 1860).

2. “Act”, used with reference to an offence or a civil wrong, shall include a series of acts, and words which refer to acts done extend also to illegal omissions,

3. “affidavit” shall include affirmation and declaration in the case of persons by law allowed to affirm or declare instead of swearing,

4. “barrister” shall mean a barrister of England or Ireland, or a member of the Faculty of Advocates in Scotland,

5. “British India” shall mean, as respects the period before the commencement of Part III of Government of India Act, 193, all territories and places within His Majesty’s dominions which were for the time being governed by His Majesty through the Governor General of India or through any Governor or Officer subordinate to the Governor General of India, and as respects any period after that date and before the date of establishment of the Dominion of India means all territories for the time being except that a reference to British India in an Indian law passed or made before the commencement of Part III of the Government of India Act, 1935, shall not include a reference to Bearer.

6. “British possession” shall mean any part of Her Majesty’s dominions exclusive of the United Kingdom , and where parts of those dominions are under both a Central and a Local Legislature, all parts under the Central Legislature shall, for the purposes of this definition, be deemed to be one British possession.

7. “Central Act” shall means an Act of Parliament, and shall include- An Act of the Dominion Legislature or of the Indian Legislature passed before the commencement of the Constitution,

and Act made before such commencement by the Governor General in Council or the Governor General, acting in a legislature capacity.

¹[(8) “Central Government” shall,—

(a) in relation to anything done before the commencement of the Constitution, mean the Governor General or the Governor General in Council, as the case may be; and shall include,—

(i) in relation to functions entrusted under sub-section (1) of section 124 of the Government of India Act, 1935, to the Government of a Province, the Provincial Government acting within the scope of the authority given to it under that subsection; and

(ii) in relation to the administration of a Chief Commissioner’s Province, the Chief Commissioner acting within the scope of the authority given to him under sub-section (3) of section 94 of the said Act; and

(b) in relation to anything done or to be done after the commencement of the Constitution, mean the President; and shall include,—

(i) in relation to functions entrusted under clause (1) of article 258 of the Constitution, to the Government of a State, the State Government acting within the scope of the authority given to

________________

* 26th January, 1950.

1. Subs. by Adaptation of Laws (Amendent) Order, 1950

____________

it under that clause; ¹[***]

(ii) in relation to the administration of a Part C State ²[before the commencement of the Constitution (Seventh Amendment) Act, 1956†], the Chief Commissioner or the Lieutenant- Governor or the Government of a neighbouring State or other authority acting within the scope of the authority given to him or it under article 239 or article 243 of the Constitution, as the case may be;] ²[and]

³[(iii) in relation to the administration of a Union territory, the administrator thereof acting within the scope of the authority given to him under article 239 of the Constitution;]

9. “Chapter” shall mean a chapter of the Act or Regulation in which the word occurs,

10. “Chief Controlling Revenue Authority” or “Chief Revenue Authority” shall mean—

(a) in a State where there is a Board of Revenue, that Board;

(b) in a State where there is a Revenue Commissioner, that Commissioner;

(c) in Punjab, the Financial Commissioner; and

(d) elsewhere, such authority as, in relation to matters enumerated in List I in the Seventh Schedule to the Constitution, the Central Government, and in relation to other matters, the State Government, may by notification in the Official Gazette, appoint;

11. “Collector” shall mean, in a Presidency-town, the Collector of Calcutta, Madras or Bombay, as the case may be, and elsewhere the chief officer-incharge of the revenue administration of a district.

12. “Colony”-

(a) in any Central Act passed after the commencement of Part III of the Government of India Act, 1935*, shall mean any part of His Majesty’s dominions exclusive of the British Islands, the Dominions of India and Pakistan (and before the establishment of those Dominions††, British India), any Dominions as defined in the Statute of Westminster, 1931, any Province or State forming part of any of the said Dominions, and British Burma; and

(b) in any Central Act passed before the commencement of Part III of the said Act, mean any part of His Majesty’s dominions exclusive of the British Islands and of British India, and in either case where parts of those dominions are under both a Central and

1. The word “and” omitted by the Adaptation of Laws (No. 1) Order, 1956.
2. Ins. by the Adaptation of Laws (No. 1) Order, 1956.

† 1st January, 1956

3. Ins. by the Adaptation of Laws (No. 1) Order, 1956.

* 1st April, 1937.

†† 15th August, 1947.