jb nagar ca budget 2012

7/31/2019 JB Nagar CA Budget 2012

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1ANALYSIS OF THE UNION BUDGET 2012

TEAM J. B. NAGAR

OUR VISION

To Accelerate the Progressive Learning andNetworking

With Best Compliments From :

BOOK COMPILED BY

CA Haridas Bhat CA Mahavir Jain CA Jayesh ShahCA Manish Gadia CA Jinit Shah CA Akhil Kedia

CA Harsh Bajaj CA Ashwini Kabra Mr.Sumit Jhunjhunwala

Convenor

CA B. L. Maheshwari

Dy. Convenor

CA S. N. Kataruka

Past Conveners Other Core Members

2010 2011 CA Jayesh Shah CA Jinesh Shah

2009 2010 CA Rakesh Gupta CA Ajay Agarwal

2008 2009 CA Amar Bafna CA Satish Trivedi

2007 2008 CA N. M. Jain CA Ibrahim Kothari

2006 2007 CA Haridas Bhat CA Mandeep SinghTalwar

2005 2006 CA Mahavir Jain CA Pramod Agarwal

2004 2005 CA N. K. Jain CA Jatin Bansal

2003 2004 CA Mahesh Bhageria CA Shirish Pandit

2002 2003 CA Prabhat Maheshwari CA Kamlesh KothariCA Harsh Bajaj CA Naresh Khetan

CA Malvika Mitra

1999 2002 CA L. S. Lodha CA Sachin Sethi

1999 2002 CA Sanjeev Maheshwari CA Rakesh Agarwal

1999 2002 CA Manish Gadia CA Sanjay Bansal

J. B. NAGAR CPE STUDY CIRCLEOF WIRC OF THE INSTITUTE OF CHARTERED ACCOUNTANT OF INDIA

Winner of Best Study Circle Award for Ten years In Row


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2 J.B. NAGAR CPE STUDY CIRCLE OF WIRC

Hightlights of Activities 2011

Best Study Circle for Tenth Year in Succession

Investors Awareness programmes conducted for Public under theAegis of Ministry of Corporate Affairs, GOI & ICAI.

A well maintained Library cum Reading Room facility isPDLQWDLQHGLQRXUDUHDIRUWKHEHQHWRI&$VWXGHQWV

Formation of Study Group (i) Auditing, Accounting Standard (ii)Direct & Indirect Tax and (iii) Study Group All Aspects ofConstruction & INFRA Industry.

Special tie-up for website designing and hosting at Rs.1499/- formembers.

3000+ booklets on budget 2011 distributed free of cost duringpublic budget meeting attended by more than 450 persons forTenth year consecutively.

Adjudged by WIRC as Best Study Circle in 2011 for Ten yearsin Row.

Distributed approx 400 copies of different publication of WIRC.

65 events in a year on an average more than one event everyweek.

191 Absolute CPE Hours as against the requirement of 80 CPEhours by POU.

VDWLVHGSDLGPHPEHUV

1600 calendar of 2012 with various due dates published and

distributed.

10200+ persons attended the various events of study circle.

33712 CPE Hours generated as against 21200 mandatory CPEhours required.

150000+ SMS sent to the members.


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A budget is like a laundry list either way you loseyour shirt

- Fred Allen

The Union Budget 2012-13 has evoked mixed reactions from variousquarters. Our clients and society at large, look forward to CharteredAccountants to enable them to better understand the nuances andintricacies of the Budget proposals.

I am glad to note that J B Nagar CPE Study Circle is organizing itsWZHOIWKVXFFHVVLYH3XEOLFPHHWLQJIRUWKHEHQHWRIFRPPRQPDQ

We are what we repeatedly do. Excellence, then, isnot an act, but a habit.

- Aristotle

J B Nagar CPE Study Circle has over the last decade continuouslyexcelled in every sphere of activity undertaken by it. Being aFounder-Convenor of this Study Circle, I have witnessed theenthusiasm, team spirit and dedication of all the core groupPHPEHUV7KHFRQWLQXRXVLQQRYDWLRQLQLWVDFWLYLWLHVDSWO\UHHFWVWKHefforts of the Team J B Nagar.

Continue the excellent work!

With Best Wishes,

CA Sanjeev MaheshwariCentral Council Member of ICAI


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MAJOR AMENDMENTS PROPOSED INFINANCE BILL 2012

PROVISIONS RELATING TO INCOME TAX

Rates of Tax

The Rates of Tax proposed in Finance Bill 2012 are tabulated asunder:

Type of Assessee Income Slab Rate

Individual,HUF, AOP and BOI Upto Rs. 2,00,000 Nil

Rs.2,00,001 to 5,00,000 10%

Rs.5,00,001 to 10,00,000 20%

Above Rs.10,00,000 30%

Individuals above the age of Upto Rs. 2,50,000 Nil

60 Years Rs.2,50,001 to 5,00,000 10%

Rs.5,00,001 to 10,00,000 20%

Above Rs.10,00,000 30%

Individuals above the age of Upto Rs.5,00,000 Nil

80 years Rs.5,00,001 to 10,00,000 20%

Above Rs.10,00,000 30%

Income Tax on Short Term Capital gain U/s 111A and 115AD 15%

Firm & LLP 30%

Domestic Company 30%

plus surcharge of 5%on tax if the

Taxable Income Exceeds Rs.

1,00,00,000/-

Corporate Dividend Tax 15% plus 5% Surcharge, Cess

Minimum Alternative Tax 18.5% plus 5% Surcharge, Cess

on Domestic Companies

and LLPs

No change in case of Foreign Companies.

No change in case of Co-op Society and Local Authority

Additional Education Cess of 2% and Secondary and Higher

Education Cess of 1% will continue on Income Tax and Surcharge.


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6HFWLRQ'HQLWLRQV

1HZ([SODQDWLRQ,Q&ODXVHLWLVKHUHE\FODULHGWKDWSURSHUW\includes and shall be deemed to have always included any rights inor in relation to an Indian company, including rights of managementor control or any other rights whatsoever;

This amendment will take effect retrospectively from 1st April, 1962

&ODXVHWRLQFOXGHWKH'LUHFWRURI,QFRPHWD[LQWKHGHQLWLRQof the Commissioner.This amendment will take effect retrospectivelyfrom 1st April, 1988.

Section 2(19AA) (Iv) to exclude the requirement of issue of shares tothe shareholders of the demerged company where resulting companyitself in a scheme of demerger is a shareholder of the demerged

company.

New Explanation In Clause (47) the expression transfer includesand shall be deemed to have always included disposing of or partingwith an asset or any interest therein, or creating any interest in anyasset in any manner whatsoever, directly or indirectly, absolutely orconditionally, voluntarily or involuntarily, by way of an agreement(whether entered into in India or outside India) or otherwise,notwithstanding that such transfer of rights has been characterisedDVEHLQJHIIHFWHGRUGHSHQGHQWXSRQRURZLQJIURPWKHWUDQVIHURIa share or shares of a company registered or incorporated outsideIndia;


Section 9 - Income deemed to accrue or arise in India

Section 9(1)(i)

New Explanation 4 to clarify that the expression through shallmean and include and shall be deemed to have always meant andincluded by means of, in consequence of or by reason of.

New Explanation 5 to clarify that an asset or a capital asset being anyshare or interest in a company or entity registered or incorporatedoutside India shall be deemed to be and shall always be deemed tohave been situated in India, if the share or interest derives, directlyor indirectly, its value substantially from the assets located in India.

These amendments will take effect retrospectively from 1st April,1962


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Section 9(1)(iv)

New Explanation 4 the transfer of all or any rights in respect ofany right, property or information includes and has always includedtransfer of all or any right for use or right to use a computer software(including granting of a licence) irrespective of the medium throughwhich such right is transferred.

New Explanation 5 the royalty includes and has always includedconsideration in respect of any right, property or information, whetheror not

(a) the possession or control of such right, property orinformation is with the payer;

(b) such right, property or information is used directly by the

payer;

(c) the location of such right, property or information is inIndia.

A New Explanation 6 the expression process includes and shall bedeemed to have always included transmission by satellite (includingXSOLQNLQJDPSOLFDWLRQFRQYHUVLRQIRUGRZQOLQNLQJRIDQ\VLJQDOFDEOHRSWLFEUHRUE\DQ\RWKHUVLPLODUWHFKQRORJ\ZKHWKHURUQRWsuch process is secret.

These amendments will take effect retrospectively from 1st day ofJune, 1976

Section 10(10D) Insurance receipts

It is proposed to allow exemption of any sum received under aninsurance policy issued on or after 1st April, 2012 only if the premium

for the policy does not exceed ten per cent of the actual capital sumassured.

Section 10(23C) Income of Trusts etc.

New proviso to provide that the income of a trust or institutionreferred to in sub-clause (iv) or sub clause (v) shall be included in itsWRWDOLQFRPHRIWKHSUHYLRXV\HDULIWKHSURYLVLRQVRIWKHUVWSURYLVRto section 2(15) becomes applicable to such trust or institution in theVDLGSUHYLRXV\HDUZKHWKHURUQRWDQ\DSSURYDOJUDQWHGRUQRWLFDWLRQissued in respect of such trust or institution has been withdrawn orrescinded.


Section 10(23FB)(C). Income of Venture Capital

It is proposed to define the venture capital undertaking as the

venture capital undertaking referred to in the Securities and Exchange


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Board of India (Venture Capital Funds) Regulations, 1996 madeunder the Securities and Exchange Board of India Act, 1992.

Section 32 (1) (iia) Additional Depreciation

It is proposed to allow deduction of a further sum equal to twenty percent. of actual cost of any new machinery or plant (other than shipsand aircraft) acquired and installed after 31st day of March, 2012,as further depreciation to an assessee engaged in the business ofgeneration or generation and distribution of power.

6HFWLRQ$%([SHQGLWXUHRQ6FLHQWLF5HVHDUFK

It is proposed that a company engaged in the business of bio-technology or in any business of manufacture or production of any

article or thing, not being an article or thing specified in the listRI(OHYHQWK6FKHGXOHLQFXUVDQ\H[SHQGLWXUHRQVFLHQWLFUHVHDUFK(not being expenditure in the nature of cost of any land or building)on in-house research and development facility as approved by theprescribed authority, then, there shall be allowed a deduction of asum equal to two times of the expenditure so incurred. However,deduction is allowable under the said sub-section in respect of suchexpenditure incurred up to 31st March, 2017.

Section 35AD (1) Deduction in respect of expenditure onVSHFLHGEXVLQHVV

It is proposed that one hundred per cent. deduction in respect of anycapital expenditure incurred, other than expenditure incurred on theDFTXLVLWLRQRIDQ\ ODQGRUJRRGZLOORUQDQFLDOLQVWUXPHQWGXULQJWKH\HDUE\WKHVSHFLHGEXVLQHVV

,WLVSURSRVHGWRSURYLGHWKDWZKHUHWKHVSHFLHGEXVLQHVVLVRIWKHnature referred to in Section 35AD(8)(c) sub-clauses (i) or (ii) or(v) or (vii) or (viii) and has commenced its operations on or afterthe 1st day of April, 2012, the deduction under sub-section (1) shallbe allowed of an amount equal to one and one-half times of theexpenditure referred to therein.

It is further proposed to include three new categories of business asVSHFLHGEXVLQHVVQDPHO\

(i) setting up and operating an inland container depot or aFRQWDLQHUIUHLJKWVWDWLRQQRWLHGRUDSSURYHGXQGHUWKHCustoms Act, 1962;

(ii) bee-keeping and production of honey and beeswax;

(iii) setting up and operating a warehousing facility forstorage of sugar.

It is also proposed that the date of commencement of operations of


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WKHVHWKUHHVSHFLHGEXVLQHVVHVIRUWKHSXUSRVHVRIWKHDIRUHVDLGdeductions shall be on or after 1st April, 2012.

It is also proposed to provide that where the assessee builds a hotelRIWZRVWDURUDERYHFDWHJRU\DVFODVVLHGE\WKH&HQWUDO*RYHUQPHQWand subsequently, while continuing to own the hotel, transfers theoperation thereof to another person, the assessee shall be deemed toEHFDUU\LQJRQWKHVSHFLHGEXVLQHVVRIEXLOGLQJDQGRSHUDWLQJKRWHO


New Sections 35CCC Expenditure on agricultural extensionproject

the proposed new section 35CCC provides that where an assesseeLQFXUVDQ\H[SHQGLWXUHRQDJULFXOWXUDOH[WHQVLRQSURMHFWQRWLHGE\

the Board in this behalf in accordance with the guidelines as may beprescribed, then there shall be allowed a deduction of a sum equal toone and one-half times of such expenditure.

Sub-section (2) of the aforesaid section provides that wherea deduction under this section is claimed and allowed for anyassessment year in respect of any expenditure referred to in sub-section (1), deduction shall not be allowed in respect of suchexpenditure under any other provisions of the Income-tax Act for thesame or any other assessment year.

New Section 35CCD Expenditure on skill developmentproject

It is proposed that where a company incurs any expenditure (notbeing expenditure in the nature of cost of any land or building) onDQ\VNLOOGHYHORSPHQWSURMHFWQRWLHGE\WKH%RDUGLQWKLVEHKDOILQ

accordance with the guidelines as may be prescribed, then, thereshall be allowed a deduction of a sum equal to one and one-halftimes of such expenditure.

Sub-section (2) of the aforesaid section provides that wherea deduction under this section is claimed and allowed for anyassessment year in respect of any expenditure

referred to in sub-section (1), deduction shall not be allowed inrespect of such expenditure under any other provisions of theIncome-tax Act for the same or any other assessment year.

Section 40 Amounts not deductible

It is proposed that the new proviso to sub-clause (ia) to provide thatwhere an assessee fails to deduct the whole or any part of the tax inaccordance with the provisions of Chapter XVII-B on any such sumEXWLVQRWGHHPHGWREHDQDVVHVVHHLQGHIDXOWXQGHUWKHUVWSURYLVR

to section 201(1), then, for the purpose of this sub-clause, it shall


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This amendment will take effect retrospectively from 1stApril, 2011

Section 44AD (b)

It is proposed that total turnover or gross receipts in the previousyear should not exceed ` One Crore rupees for the purpose ofFRPSXWLQJSURWVDQGJDLQVRI EXVLQHVVRQSUHVXPSWLYHEDVLVIRUA.Y.2012-13.

Section 47 (vii) (a) Transactions not regarded astransfer

in case of a merger, any transfer of capital asset being shares, heldby a shareholder in the amalgamating company, shall not be regarded

DVWUDQVIHULI

(a) such transfer is made in consideration of the allotment to him ofany share or shares in the amalgamated company, and

(b) the amalgamated company except where the shareholderitself is the amalgamated company is an Indian Company.

Section 49(1)(iii)(e) Cost with reference to certain modes ofacquisition

It is proposed that to bring the transfers referred to in clause (xiii)and clause (xiv) of section 47 within the scope of section 49 whichdeals with cost with reference to certain modes of acquisition.


Section 50D Fair market value deemed to be full value

of consideration in certain casesIt is proposed to insert a new section 50D so as to provide thatwhere the consideration received or accruing as a result of thetransfer of a capital asset by an assessee, is not ascertainable orcannot be determined, then, for the purpose of computing income

chargeable to tax as capital gains, the fair market value of the saidasset on the date of transfer shall be deemed to be the full value ofthe consideration received or accruing as a result of such transfer.

Section 54B Capital gain on transfer of land used foragricultural purposes not to be charged in certaincases

It is proposed that if an assessee transfers land which, in the twoyears immediately preceding the date on which the transfer tookplace, was being used by the assessee or a parent or a Hinduundivided family of his for agricultural purposes, giving rise to capital


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gain and purchases any other land for being used for agriculturalpurposes, within two years after the date of such transfer, the capitalgain is exempt to the extent such gain has been utilised for theaforesaid purpose.

New Section 54GB Capital gain on transfer of residen-tial property not to be charged in certain cases

It is proposed that where the capital gain arises from the transfer ofa long-term capital asset, being a residential property (a house or aplot of land), owned by the eligible assessee (herein referred to asthe assessee) and such assessee before the due date of furnishingof return of income under sub-section (1) of section 139 utilises thenet consideration for subscription in the equity shares of an eligible

company (herein referred to as the company) and such company has,within one year from the date of subscription in equity shares by theassessee, utilised this amount for purchase of new asset then, if theamount of the net consideration is greater than the cost of the newasset, then, so much of the capital gain as it bears to the whole ofthe capital gain the same proportion as the cost of the new assetbears to the net consideration, shall not be charged under section45 as the income of the previous year or if the amount of the netconsideration is equal to or less than the cost of the new asset, thecapital gain shall not be charged under section 45 as the income ofthe previous year.

It is proposed that the amount of the net consideration, which hasbeen received by the company for issue of share to the assessee, tothe extent it is not utilised by the company for the purchase of thenew asset before the said due date of furnishing of the return ofincome by the assessee under section 139, shall be deposited bythe company, before the due date of furnishing, in an account in anyVXFKEDQNRULQVWLWXWLRQDVPD\EHVSHFLHGDQGVKDOOEHXWLOLVHGLQaccordance with any scheme which the Central Government may, byQRWLFDWLRQLQWKH2IFLDO*D]HWWHIUDPHLQWKLVEHKDOIDQGWKHUHWXUQfurnished by the assessee shall be accompanied by proof of suchdeposit having been made.

It is proposed that for the purposes of sub-section (1), the amount,if any, already utilised by the company for the purchase of the newasset together with the amount deposited under sub-section (2) shallbe deemed to be the cost of the new asset.

However, if the amount so deposited is not utilised, wholly or partly,IRUWKHSXUFKDVHRIWKHQHZDVVHWZLWKLQWKHSHULRGVSHFLHGLQVXEsection (1), then, the amount by which the amount of capital gainarising from the transfer of the residential property not chargedunder section 45 on the basis of the cost of the new asset, exceeds


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the amount that would not have been so charged had the amountactually utilised for the purchase of the new asset within the periodVSHFLHGLQVXEVHFWLRQEHHQWKHFRVWRIWKHQHZDVVHWVKDOOEHcharged under section 45 as income of the assessee of the previousyear in which the period of one year from the date of the subscriptionin equity shares by the assessee expires and the company shall beentitled to withdraw such amount in accordance with the scheme.

It is proposed that if the equity shares of the company or the newasset acquired by the company are sold or otherwise transferredZLWKLQDSHULRGRIYH\HDUVIURPWKHGDWHRIWKHLUDFTXLVLWLRQWKHamount of capital gain arising from the transfer of the residentialproperty not charged under section 45 as provided in sub-section(1) shall be deemed to be the income of the assessee chargeable

under the head capital gains of the previous year in which suchequity shares or such new asset are sold or otherwise transferred, inaddition to taxability of gains, arising on account of transfer of sharesor of the new asset, in the hands of the assessee or the company,as the case may be.

It is also proposed to provide that the provisions of this section shallnot apply to any transfer of residential property made after the 31stday of March, 2017.

for the purpose of this section.

a) eligible assessee means an individual or a Hindu undividedfamily;

EHOLJLEOHFRPSDQ\PHDQVD FRPSDQ\ZKLFKIXOOVWKHIROORZLQJFRQGLWLRQVQDPHO\

(i) it is a company incorporated in India during the period fromthe 1st day of April of the previous year relevant to theassessment year in which the capital gain arises to the duedate of furnishing of return of income under sub-section (1)of section 139 by the assessee;

(ii) it is engaged in the business of manufacture of an article ora thing;

LLL LWLVDFRPSDQ\LQZKLFKWKH DVVHVVHHKDVPRUHWKDQIW\SHUFHQWVKDUHFDSLWDORUPRUHWKDQIW\SHUFHQWYRWLQJrights after the subscription in shares by the assessee; and

LY LWLV DFRPSDQ\ZKLFKTXDOLHVWREHD VPDOORUPHGLXPenterprise under the Micro, Small and Medium EnterprisesAct, 2006;

(c) net consideration shall have the meaning assigned to it in theExplanation to section 54F;


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(d) new asset means new plant and machinery but does notLQFOXGH

(i) any machinery or plant which, before its installation by theassessee, was used either within or outside India by anyother person;

LL DQ\PDFKLQHU\RUSODQWLQVWDOOHGLQDQ\RIFHSUHPLVHVRUany residential accommodation, including accommodation inthe nature of a guest-house;

(iii) any office appliances including computers or computersoftware;

(iv) any vehicle; or

(v) any machinery or plant, the whole of the actual cost of whichis allowed as a deduction(whether by way of depreciation orotherwise) in computing the income chargeable under the head

Profits and gains of business or profession of any previousyear..

6HFWLRQ$5HIHUHQFHWRYDOXDWLRQRIFHU

,WLVSURSRVHGWKDWWKH$VVHVVLQJ2IFHUZLWKDYLHZWRDVFHUWDLQthe fair market value of a capital asset may refer the valuation of aFDSLWDODVVHWWRD9DOXDWLRQ2IFHUZKHUHLQKLVRSLQLRQWKHYDOXHRIthe asset as claimed by the assessee is is at variance with its fairmarket value

This amendment will take effect from 1st July, 2012.

Section 56 Income from other sources

It is proposed to provide that the definition of relative shallalso include any sum or property received by a Hindu undividedfamily from its members apart from the persons referred to in theExplanation to clause (vi) of sub-section (2) of the said section.

This amendment will take effect retrospectively from 1st October,2009.

New Clause Section 56 (viib) Consideration onallotment of shares

where a company, not being a company in which the public aresubstantially interested, receives, in any previous year, from anyperson being a resident, any consideration for issue of shares thatexceeds the face value of such shares, the aggregate considerationreceived for such shares as exceeds the fair market value of theshares shall be chargeable to income-tax under the head Incomefrom other sources.


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However, the said new clause shall not apply where the considerationfor issue of shares is received by a venture capital undertaking froma venture capital company or a venture capital fund.

It is further proposed that the company receiving the considerationfor issue of shares shall be provided an opportunity to substantiateits claim regarding the fair market value of the shares.

Section 68 Cash credits

It is proposed to insert two new provisos

The first proviso seeks to provide that where the assessee is acompany, (not being a company in which the public are substantiallyinterested) and the sum so credited consists of share application

money, share capital, share premium or any such amount bywhatever name called, any explanation offered by such assesseeFRPSDQ\VKDOOEHGHHPHGWREHQRWVDWLVIDFWRU\XQOHVV

(a) the person, being a resident in whose name such creditis recorded in the books of such company also offers anexplanation about the nature and source of such sum socredited; and

E VXFKH[SODQDWLRQLQ WKHRSLQLRQRI$VVHVVLQJ2IFHUDIRUHVDLGKDVbeen found to be satisfactory.

The second proviso seeks to provide that nothing contained inWKHUVWSURYLVRVKDOODSSO\LIWKHSHUVRQLQZKRVHQDPHWKHVXPreferred to therein is recorded, is a venture capital fund or a venturecapital company as referred to in clause (23FB) of section 10.

Section 80A(6) Deduction to be made in computingtotal income

It is proposed to provide that market value in relation to any goodsor services sold, supplied or acquired, in case of a transaction beinga domestic transaction referred to in section 92BA shall be the armsOHQJWKSULFHDVGHQHGLQFODXVHLLRIVHFWLRQ)

Section 80C deduction in respect of life insurance premia, deferredannuity, contributions to provident fund, subscription to certain equityshares or debentures, etc.

It is proposed to restrict the deduction for insurance policies issuedon or after 1st April, 2012 to any premium or other payment madeon such insurance policy as is not in excess of ten per cent. of theactual capital sum assured.

Actual capital sum assured in relation to a life insurance policy shallmean the minimum amount assured under the policy on happening

of the insured event at any time during the term of the policy, not


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WDNLQJLQWRDFFRXQW

(i) the value of any premium agreed to be returned; or

LL DQ\EHQHWE\ZD\RIERQXVRURWKHUZLVHRYHUDQGDERYHthe sum actually assured, which is to be or may be receivedunder the policy by any person.

Section 80D(4) Deduction in respect of HealthInsurance Premia

It is proposed to add any payment made on account of preventivehealth check-up of the Assessee or his family or parent or parents ofWKHDVVHVVHHWREHTXDOLHGIRUGHGXFWLRQWRWKHH[WHQWLWGRHVQRWH[FHHGLQWKHDJJUHJDWHYHWKRXVDQGUXSHHV

,WLVSURSRVHGWRUHGXFHWKHDJHIRUGHQLQJDVHQLRUFLWL]HQIURPVL[W\YH\HDUVWRVL[W\\HDUVIRUWKHSXUSRVHVRIWKHVDLGGHGXFWLRQ

It is also proposed that for the purposes of the aforesaid deduction,SD\PHQWVKDOOEHPDGHE\LDQ\PRGHLQFOXGLQJFDVKLQUHVSHFWof any sum paid on account of preventive health check-up; (ii) anymode other than cash in all other cases.

Section 80DDB Deduction in respect of MedicalTreatment, etc

It is proposed to amend the aforesaid Explanation so as to reduceWKHDJHIURPVL[W\YH\HDUVWRVL[W\\HDUVIRUTXDOLI\LQJDVDVHQLRUcitizen.

Section 80G Deduction in respect of certain Donations

New Sub-Section 80G (5D) deduction in respect of donations tocertain funds, charitable institutions, etc

It is proposed to provide that no deduction shall be allowed underthis section in respect of donation of any sum exceeding ten thousandrupees unless such sum is paid by any mode other than cash.

Section 80GGA Deduction in respect of certain'RQDWLRQVIRUVFLHQWLFUHVHDUFKRUUXUDOGHYHORSPHQW

It is proposed to provide that no deduction shall be allowed underthis section in respect of any sum exceeding ten thousand rupeesunless such sum is paid by any mode other than cash.


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6HFWLRQ,$'HGXFWLRQVLQUHVSHFWRISURWVDQGgains from industrial undertakings or enterprisesengaged in infrastructure development, etc.

It is proposed that deduction shall be allowed to an undertakingwhich-

(a) is set up in any part of India for the generation or generationand distribution of power if it begins to generate power at anytime during the period beginning on 1st April, 1993 and endingon 31st March, 2013;

(b) starts transmission or distribution by laying a network of newtransmission or distribution lines at any time during the periodbeginning on 1st April, 1999 and ending on 31st March, 2013;

(c) undertakes substantial renovation and modernisation of theexisting network of transmission or distribution lines at any timeduring the period beginning on 1st April, 2004 and ending on31st March, 2013.

Explanation to Section 80-IA (8)

It is proposed that the definition of market value in relation toJRRGVRUVHUYLFHVLVWKHDUPVOHQJWKSULFHDVGHQHGLQFODXVHLLRIVHFWLRQ)ZKHUHWKHWUDQVIHURIVXFKJRRGVRUVHUYLFHVLVVSHFLHGGRPHVWLFWUDQVDFWLRQUHIHUUHGWRLQVHFWLRQ%$ZLWKLQWKHGHQLWLRQof market value in relation to any goods or services.

80IA(10)

It is proposed to provide that in case the arrangement mentioned inWKHVXEVHFWLRQLQYROYHVDVSHFLHGGRPHVWLFWUDQVDFWLRQUHIHUUHGWRLQVHFWLRQ%$DQGWKHDPRXQWRISURWVIURPVXFKWUDQVDFWLRQ

VKDOOEHGHWHUPLQHGKDYLQJUHJDUGWRDUPVOHQJWKSULFHDVGHQHGLQclause (ii) of section 92F.

A new Part CA Deductions in respect of other incomes ChapterVI-A inserted.

Section 80TTA Deduction in respect of Interest onDeposits in Savings account

It is proposed that a deduction up to an extent of ten thousandrupees in aggregate shall be allowed to an assessee, being anindividual or a Hindu undivided family, in respect of any income byway of interest on deposits (not being time deposits) in a savingsaccount with

(i) a banking company to which the Banking RegulationAct,1949, applies (including any bank or banking institutionreferred to in section 51 of that Act);


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(ii) a co-operative society engaged in carrying on the businessof banking (including a co-operative land mortgage bank ora co-operative land development bank); or

LLL DSRVWRIFHDVGHQHGLQFODXVHNRIVHFWLRQRIWKH,QGLDQ3RVW2IFH$FW

New Sub-Section Section 90 (2A) Applicability of DTAA.

It is proposed that the provisions of newly inserted Chapter X-A shallDSSO\HYHQLIVXFKSURYLVLRQVDUHQRWEHQHFLDOWRWKHDVVHVVHH

New Sub-Section 90(4) & 90A(4) Relief under DTAA

It is proposed that an assessee, not being a resident, to whoman agreement referred to in sub-section (1) applies, shall not beHQWLWOHGWRFODLPDQ\UHOLHIXQGHUVXFKDJUHHPHQWXQOHVVDFHUWLFDWHcontaining prescribed particulars, of his being a resident in anyFRXQWU\RXWVLGH,QGLDRUVSHFLHGWHUULWRU\RXWVLGH,QGLDDVWKHFDVHmay be, is obtained by him from the Government of that country orVSHFLHGWHUULWRU\

Section 90(3) Terms in DTAA

It is proposed to provide that where any term is used in anyagreement entered into under sub-section (1) and not defined inthe agreement or the Act, but is assigned a meaning to it in theQRWLFDWLRQLVVXHGXQGHUVXEVHFWLRQDQGVXFKQRWLFDWLRQLVVXHGthere under being in force, then, the meaning assigned to such termshall be deemed to have effect from the date on which the saidagreement came into force.

This amendment will take effect retrospectively from 1st October,

2009.

New Sub-Section 90A (2A)

It is proposed that the provisions of newly inserted Chapter X-A shallDSSO\HYHQLIVXFKSURYLVLRQVDUHQRWEHQHFLDOWRWKHDVVHVVHH

Sub-Section 90A(3)

It is proposed that any term used in any agreement, where suchagreement is entered into under sub-section (1) and not definedunder the agreement or the Act, but is assigned a meaning to itLQWKHQRWLFDWLRQLVVXHGXQGHUVXEVHFWLRQDQGWKHQRWLFDWLRQissued there under being in force, then, the meaning assigned to suchterm shall be deemed to have effect from the date on which the saidagreement came into force.

This amendment will take effect retrospectively from 1st June, 2006.


20/77


New Sub-Section 92(2A) computation of income from transactionhaving regard to arms length price.

It is proposed that any allowance for an expenditure or interest orallocation of any cost or expense or any income in relation to theVSHFLHGGRPHVWLFWUDQVDFWLRQVKDOOEHFRPSXWHGKDYLQJUHJDUGWRthe arms length price.

Sub-Sections 92(2) and 92(3)

The expression international transaction or specified domestictransaction in place of international transaction so as to includeWKHUHLQWKHVSHFLHGGRPHVWLFWUDQVDFWLRQDQGDSSO\WKHSURYLVLRQVRIVXEVHFWLRQVDQGWRVSHFLHGGRPHVWLFWUDQVDFWLRQV

Section 92B Meaning of international transaction

7KHLQFOXVLYHGHQLWLRQRIWKH H[SUHVVLRQLQWHUQDWLRQDOWUDQVDFWLRQand intangible property is inserted.


1HZ6HFWLRQ%$0HDQLQJRIVSHFLHGGRPHVWLFtransaction

6SHFLHGGRPHVWLF WUDQVDFWLRQ LQFDVHRIDQDVVHVVHHPHDQVDQ\of the following transactions, not being an international transaction,QDPHO\

(i) any expenditure in respect of which payment has beenmade or is to be made to a person referred to in clause (b)of sub-section (2) of section 40A;

(ii) any transaction referred to in section 80A;(iii) any transfer of goods or services referred to in sub-section

(8) of section 80-IA;

(iv) any business transacted between the assessee and otherperson as referred to in sub-section (10) of section 80-IA;

(v) any transaction, referred to in any other section underChapter VI-A or section 10AA, to which provisions ofsub-section (8) or sub-section (10) of section 80-IA areapplicable; or

(vi) any other transaction as may be prescribed,

and where the aggregate of such transactions entered into by theDVVHVVHHLQWKHSUHYLRXV\HDUH[FHHGVDVXPRIYHFURUHUXSHHV


21/77


Section 92C Computation of arms length price

It is proposed that the Central Government to notify the limit ofpercentage as not exceeding three per cent. of the later in case ofthe variation between the arms length price so determined and priceat which the international transaction has actually been undertaken.

It is further proposed to clarify that the provisions of the secondproviso shall also be applicable to any assessment or reassessmentproceedings for computation of arms length price, if pending as onWKHVWGD\RI2FWREHUEHIRUHDQ$VVHVVLQJ2IFHU


Section 92C (2A)

,WLVDOVRSURSRVHGWRSURYLGHWKDWZKHUHWKHUVWSURYLVRWRVXEsection (2) as it stood before its amendment by the Finance (No.2) Act, 2009, is applicable in respect of an international transactionfor an assessment year and the variation between the arithmeticalmean referred to in said proviso and the price at which suchWUDQVDFWLRQKDVDFWXDOO\EHHQXQGHUWDNHQH[FHHGVYHSHUFHQWRIthe arithmetical mean, then, the assessee shall not be entitled toexercise the option as referred to in the said proviso.


New sub-Section Section 92C (2B)

It is proposed that nothing contained in sub-section (2A) shallHPSRZHUWKH$VVHVVLQJ2IFHUHLWKHUWRDVVHVVRUUHDVVHVVXQGHU

section 147 or pass an order enhancing the assessment or reducinga refund already made or otherwise increasing the liability of theassessee under section 154 for any assessment year the proceedingsof which have been completed before the 1st day of October, 2009.


Chapter X Special Provisions Relating to Avoidance ofTax

It is proposed to amend the sections 92C, 92D and 92E to substituteWKHZRUGVLQWHUQDWLRQDOWUDQVDFWLRQRUVSHFLHGGRPHVWLFWUDQVDFWLRQfor the words international transaction wherever they occur so asWRH[WHQGWKHSURYLVLRQVRIWKHDIRUHVDLGVHFWLRQVWRWKHVSHFLHGdomestic transaction.


22/77


6HFWLRQ&$5HIHUHQFHWR7UDQVIHU3ULFLQJ2IFHU

It is proposed to substitute the expression international transactionor specified domestic transaction in place of internationalWUDQVDFWLRQVRDVWRLQFOXGHWKHVSHFLHGGRPHVWLFWUDQVDFWLRQIRUthe purposes of computation of arms length price.

New sub-Section 92CA (2B)

It is proposed that where in respect of an international transaction,the assessee has not furnished the report under section 92E and suchWUDQVDFWLRQFRPHVWRWKHQRWLFHRI WKH7UDQVIHU3ULFLQJ2IFHULQ WKHcourse of proceeding before him, then he shall be empowered to takeinto account such transaction as if it is an international transactionreferred to him by the Assessing Officer and all the provisions of

Chapter X of the Income-tax Act shall apply accordingly.


New sub-Section 92CA (2C)

It is proposed that nothing contained in this sub-section shallHPSRZHUWKH$VVHVVLQJ2IFHUHLWKHUWRUHDVVHVVXQGHUVHFWLRQor pass an order enhancing the assessment or reducing a refundalready made or otherwise increasing the liability of the assesseeunder section 154, for any assessment year commencing on or before1st April, 2012.


New Section 92CC

It is proposed that the Board, with the approval of the Central

Government may enter into an advance pricing agreement with anyperson, determining the arms length price, specifying the mannerin which arms length price is to be determined, in relation to aninternational transaction to be entered into by that person.

It is proposed that the manner of determination of arms length pricereferred to in sub-section (1) may include the methods, as referredto in sub-section (1) of section 92C or any other method, with suchadjustments or variations, as may be necessary or expedient so todo.

It is proposed that the arms length price of any internationaltransaction, in respect of which the advance pricing agreement hasbeen entered into, notwithstanding anything contained in section 92Cor section 92CA, shall be determined in accordance with the advancepricing agreement so entered.

It is proposed that the agreement shall be valid for such periodas specified in the agreement which in no case shall exceed five


23/77


consecutive previous years.

It is proposed that the advance pricing agreement entered intoshall be binding on the person in whose case, and in respect of thetransaction in relation to which, the agreement has been entered intoand on the Commissioner, and the income-tax authorities subordinateto him, in respect of the said person and the said transaction.However, the agreement shall not be binding if there is a change inlaw or facts having bearing on the agreement so entered.

It is proposed that the Board may with the approval of the CentralGovernment, by an order, declare an agreement to be void ab initio,LILWQGVWKDWWKHDJUHHPHQWKDVEHHQREWDLQHGE\WKHSHUVRQE\fraud or misrepresentation of facts. upon declaring the agreementvoid ab initio all the provisions of the Act shall apply to the person asif such agreement had never been entered into and notwithstandinganything contained in the Act, for the purpose of computing anyperiod of limitation under this Act, the period beginning with the dateof such agreement and ending on the date of the order under sub-section (7) shall be excluded. However, where immediately after theexclusion of the aforesaid period, the period of limitation, referred toin any provision of this Act, is less than sixty days, such remainingperiod shall be extended to sixty days and the aforesaid period oflimitation shall be deemed to be extended accordingly.

It is proposed that the Board may, for the purposes of this section,prescribe a Scheme specifying therein the manner, form, procedureand any other matter generally in respect of the advance pricingagreement.

It is proposed that where an application is made by a person forentering into an agreement, proceedings shall be deemed to bepending in the case of the person for purposes of the Act.

It is proposed that notwithstanding anything to the contrary containedin section 139, where any person has entered into an agreementand prior to the date of entering into the agreement any returnof income has been furnished under the provisions of section 139for any assessment year relevant to a previous year to which suchagreement applies, such person shall furnish, within a period of threemonths from the end of the month in which the said agreement wasHQWHUHGLQWRDPRGLHGUHWXUQLQDFFRUGDQFHZLWKDQGOLPLWHGWRWKHagreement.

It is proposed that save as otherwise provided in this section, all theRWKHUSURYLVLRQVRIWKLV$FWVKDOODSSO\DFFRUGLQJO\DV LIWKHPRGLHGreturn is a return furnished under section 139.

It is proposed that if the assessment or reassessment proceedings

for an assessment year relevant to a previous year to which the


24/77


agreement applies have been completed before the expiry of periodDOORZHGIRUIXUQLVKLQJRIPRGLHGUHWXUQXQGHUVXEVHFWLRQDQGWKH$VVHVVLQJ2IFHUVKDOOLQDFDVHZKHUHPRGLHGUHWXUQLVOHGin accordance with the provisions of sub-section (1), proceed toassess or reassess or re-compute the total income of the relevantassessment year having regard to and in accordance with theagreement.

It is proposed that where the assessment or reassessmentproceedings for an assessment year relevant to the previous yearWRZKLFKWKHDJUHHPHQWDSSOLHVDUHSHQGLQJRQWKHGDWHRIOLQJRIPRGLHGUHWXUQLQDFFRUGDQFHZLWKWKHSURYLVLRQRIVXEVHFWLRQWKH$VVHVVLQJ2IFHUVKDOOSURFHHGWRFRPSOHWHWKHDVVHVVPHQWRUreassessment proceedings in accordance with the agreement taking

LQWRFRQVLGHUDWLRQWKHPRGLHGUHWXUQVRIXUQLVKHGIt is proposed that notwithstanding anything contained in section153 or section 153B or section 144C the order of assessment,reassessment or re-computation of total income under sub-section(2) shall be passed within a period of one year from the end of theQDQFLDO\HDULQZKLFKWKHPRGLHGUHWXUQXQGHUVXEVHFWLRQLVfurnished and the period of limitation as provided in section 153 orsection 153B or section 144C, for completion of pending assessmentor reassessment proceedings referred to in sub-section (3) shall beextended by a period of twelve months.

It is also proposed to define the expressions agreement andthe deemed provision relating to completion of assessment orreassessment proceedings for an assessment year.

These amendments will take effect from 1st July, 2012.

New Chapter X-A General Anti-Avoidance RuleConsisting of New Sections 95, 96, 97, 98, 99, 100, 101 and 102

The provisions of the proposed new section 95 provide that anarrangement entered into by an assessee may be declared to be animpermissible avoidance arrangement and consequences in relation totax of such a declaration can be determined.

The proposed section 96 provides the definition and conditionsunder which an arrangement can be declared to be an impermissibleavoidance arrangement. The section also provides for circumstancesunder which an arrangement shall be presumed to be entered into orFDUULHGRXWIRUPDLQSXUSRVHRIREWDLQLQJWD[EHQHW

The proposed section 97 provides for circumstances under which anarrangement shall be deemed to lack commercial substance.

The proposed section 98 provides for method of determination of

consequences in relation to tax of an arrangement after it is declared


25/77


to be an impermissible avoidance arrangement. It provides for certainillustrative but not exhaustive methods for determination of taxconsequences.

7KHSURSRVHGVHFWLRQSURYLGHVWKDWIRUGHWHUPLQLQJWD[EHQHWVfor the purposes of the newly inserted Chapter X-A parties who areconnected may be treated as one and same person, accommodatingparty may be disregarded; any accommodating or other party to anarrangement may be treated as one and the same person; and anarrangement may be looked through.

The proposed section 100 provides that provisions of newly insertedChapter X-A can be applied in alternative to or in addition to anyother basis of determination of tax liability.

The proposed section 101 provides for power to prescribe guidelinesfor application of provisions of newly inserted Chapter X-A.

7KHSURSRVHGVHFWLRQSURYLGHVGHQLWLRQRIFHUWDLQWHUPVUHOHYDQWfor newly inserted Chapter X-A.

Section 111A Tax on short-term capital gains in certaincases

It is proposed that in the case of an individual or a Hindu undividedfamily, being a resident, where the total income as reduced by suchshort-term capital gains is below the maximum amount which is notchargeable to income-tax, then, such short-term capital gains shall bereduced by the amount by which the total income as so reduced fallsshort of the maximum amount which is not chargeable to income-taxand the tax on the balance of such short-term capital gains shall beFRPSXWHGDWWKHUDWHRIIWHHQSHUFHQWLQVWHDGRI WHQSHUFHQW

This amendment will take effect retrospectively from 1st April, 2009.

Section 115A (iiaa) Tax on dividends, royalty andtechnical service fees in the case of foreign companies

It is proposed that the rates at which income-tax shall be payable,where the total income of a non-resident (not being a company) ora foreign company includes income received from the interest of thenature and extent referred to in section 194LC. Such income fromLQWHUHVWVKDOOEHWD[DEOHDWWKHUDWHRIYHSHUFHQW


Section 115BBA (1)(c) Tax on non-resident sportsmenor sports associations

It is proposed that any income received or receivable by anentertainer, who is not a citizen of India and is a non-resident, from


26/77


his performance in India and also to increase the tax on incomereferred to in this section from ten per cent to twenty per cent.

Section 115BBD Tax on certain dividends received fromforeign companies

It is proposed that where the total income of an assessee, being anIndian company, includes any income by way of dividends declared,distributed or paid by a subsidiary foreign company, the income-tax payable shall be the aggregate of the amount of income-taxcalculated on the income by way of such dividends at the rate offifteen per cent. and the amount of income-tax with which theassessee would have been chargeable had its total income beenreduced by the amount of aforesaid income by way of dividends. It

is further provided that no deductions in respect of any expenditureor allowance shall be allowed for computing its income by way ofdividend, in respect of foreign dividends to the income by way ofGLYLGHQGVUHFHLYHGGXULQJWKHQDQFLDO\HDUDOVR

New Section 115BBE Tax on income referred to insection 68 or section 69 or section 69A or section 69Bor section 69C or section 69D

It is proposed that where the total income of an assessee includesany income referred to in section 68, section 69, section 69A, section69B, section 69C or section 69D, the income-tax payable shall be theaggregate of-

(a) The amount of income-tax calculated on income referred to insection 68, section 69, section 69A, section 69B, section 69C orsection 69D, at the rate of thirty per cent.;

and

(b) The amount of income-tax with which the assessee would havebeen chargeable had his total income being reduced by theamount of income referred to in clause (a) of the said sub-section.

Notwithstanding anything contained in the Act, no deduction inrespect of any expenditure or allowance shall be allowed to theassessee under any provision of this Act in computing his incomereferred to in clause (a) of sub-section (1).

Section 115JB Special provision for payment of tax bycertain companies

Every assessee,

(a) Being a company, other than a company to which the proviso

to sub-section (2) of section 211 of the Companies Act, 1956


27/77


is applicable, shall, for the purposes of the aforesaid section,SUHSDUHLWVSURWVDQGORVVDFFRXQWIRUWKHUHOHYDQWSUHYLRXVyear in accordance with the provisions of Part II of Schedule VIto the Companies Act, 1956; or

(c) Being a company, to which the proviso to sub-section (2) ofsection 211 of the Companies Act, 1956 is applicable, shall, forWKHSXUSRVHVRIWKLVVHFWLRQSUHSDUHLWVSURWDQGORVVDFFRXQWfor the relevant previous year in accordance with the provisionsof the Act governing such company.

It is proposed to amend the Explanation to insert a new clause afterFODXVHLVRDVWRSURYLGHWKDWWKHERRNSURWVKDOOEHLQFUHDVHGE\the amount standing in revaluation reserve relating to revalued asseton the retirement or disposal of such asset, if not credited to theSURWDQGORVVDFFRXQW

Chapter XII-BA Special provisions relating Personsother than a company

It is proposed to make the special provisions under the said Chapterrelating to certain persons other than a company.

Section 115JC Special provisions for payment of tax by

certain Persons other than company

It is proposed to provide that where the regular income-tax payablefor a previous year by any person, other than a company, is lessthan the alternate minimum tax payable for such previous year, theadjusted total income shall be deemed to be the total income of suchperson and he shall be liable to pay income-tax on such total incomeat the rate of eighteen and one-half per cent.

For the purpose of the aforesaid provision, the adjusted total incomeshall be the total income before giving effect to the Chapter XII-BA asincreased by deductions claimed under any section (other than section80P) included in Chapter VI-A under the heading

C.Deductions in respect of certain incomes and deduction claimedunder section 10AA.

Section 115JD Tax credit for alternate minimum tax

It is proposed to provide that the credit for tax paid by a personunder section 115JC shall be allowed to him in accordance with theprovision of said section.


28/77


Section 115JE Application of other provisions of thisAct

It is proposed to provide that save as provided in Chapter XII-BA,all other provisions of the Income-tax Act shall apply to a personreferred to in the said Chapter.

New Section 115JEE application of Chapter XII-BA to certain persons.

The provisions of Chapter XII-BA shall apply to a person who hasclaimed any deduction under any section (other than section 80P)included in Chapter VI-A under the heading C. Deductions inrespect of certain incomes; or section 10AA.

The provisions of Chapter XII-BA shall not apply to an individualor a Hindu undivided family or an association of persons or a bodyRILQGLYLGXDOVZKHWKHULQFRUSRUDWHGRUQRWRUDQDUWLFLDOMXULGLFDOperson referred to in sub-clause (vii) of clause (31) of section 2, ifthe adjusted total income of such person does not exceed twentylakh rupees.

Section 115JF Interpretation in Chapter XII-BA

,WLVSURSRVHGWRRPLWFODXVHFUHODWLQJWRWKHGHQLWLRQRIOLPLWHGliability partnership.

It is further proposed to substitute a person on his total income

6HFWLRQ27D[RQGLVWULEXWHGSURWVRIGRPHVWLFcompanies

It is proposed to provide that in case domestic company receivesduring the year any dividend from any of its subsidiary and the

subsidiary has paid dividend distribution tax, which is payable, onsuch dividend, then the said amount, if it is distributed as dividend bythe domestic company being the holding company in the same year,shall not be subject to dividend distribution tax under the aforesaidsection.

It is also proposed to remove the condition that such domesticcompany is not a

subsidiary of any other company.

This amendment will Take with effect from 1st July, 2012.

Section 115U To tax on income in certain cases-Venture capital

The following changes are proposed in the section

Substitute the words income received with the words

income accruing or arising to or received


29/77


The person responsible for crediting or making payment of theincome shall furnish a statement in the prescribed form

The income paid or credited by the venture capital companyand the venture capital fund shall be deemed to be of thesame nature and in the same proportion in the hands of theperson

The income accruing or arising to or received shall bedeemed to have been credited to the account of the said personon the last day of the previous year

New Explanation to clarify that any income which hasbeen included in total income of the person on accountof it having accrued or arisen in the said previous year,

shall not be included in the total income of such personin the previous year in which such income is actually paid to him


Section 115VG Computation Of Tonnage Income

It is proposed to substitute the aforesaid Table so as to increase theamount of daily tonnage income of a qualifying ship.

Section 139 Return Of Income

It is proposed to provide that a person, being a resident, who is notrequired to furnish a return under this sub-section and who duringWKHSUHYLRXV\HDUKDVDQ\DVVHWLQFOXGLQJDQ\QDQFLDOLQWHUHVWLQany entity) located outside India or signing authority in any accountlocated outside India, shall furnish, on or before the due date, areturn in respect of his income or loss for the previous year in

VXFKIRUPDQGYHULHGLQVXFKPDQQHUDQGVHWWLQJIRUWKVXFKRWKHUparticulars as may be prescribed.

It is proposed to amend the aforesaid clauses (a) and (aa) so asWRH[WHQGWKHGXHGDWHIRUOLQJUHWXUQRILQFRPHLQFDVHRIDOOWKHpersons who are required to furnish a report referred to section 92E.


Section 140A Self-Assessment

It is proposed to provide that credit available to be set off inaccordance with the provisions of section 115JD will also be takeninto account under section 140A for the purposes of computing taxpayable, and interest chargeable under sections 234A and 234B,before furnishing the return of income.


30/77


Section 143(1D) Assessment

It is proposed to provide that), processing of a return U/s143(1) shallnot be necessary, where a notice has been issued to the assesseeunder section 143(2).


New proviso to sub-Section 143(3)

It is proposed to provide that notwithstanding anything containedLQWKHUVWDQGWKHVHFRQGSURYLVRQRHIIHFWVKDOOEHJLYHQE\WKH$VVHVVLQJ2IFHUWRWKHSURYLVLRQVRIVHFWLRQ&LQ FDVHRIDWUXVWRULQVWLWXWLRQIRUDSUHYLRXV\HDULI WKHSURYLVLRQVRIUVWSURYLVRto section 2 (15) become applicable in the case of such person in

such previous year whether or not the approval granted to suchWUXVWRULQVWLWXWLRQRUQRWLFDWLRQLVVXHGLQUHVSHFWRIVXFKWUXVWRUinstitution has been withdrawn or rescinded.


New Section 144BA Reference to Commissioner incertain cases

It is proposed that the Assessing Officer, if at any stage ofassessment or reassessment proceedings considers it necessary toinvoke provisions of the newly inserted Chapter X-A, shall refer thematter to the Commissioner.

2QUHFHLSWRIUHIHUHQFHIURP$VVHVVLQJ2IFHULI&RPPLVVLRQHULVRIthe opinion that the provisions of newly inserted Chapter X-A arerequired to be invoked, he shall issue notice to the assessee seekingREMHFWLRQVZLWKLQWKHWLPHVSHFLHGLQQRWLFH

The time given in notice shall not exceed sixty days and notice shalldisclose reasons and basis of proposed action.

If the assessee does not object or respond to the notice the&RPPLVVLRQHUPD\LVVXHVXFKGLUHFWLRQVDVKHGHHPVWUHJDUGLQJdeclaration of an arrangement as an impermissible avoidancearrangement.

If the assessee object to invocation of provisions of Chapter X-A and&RPPLVVLRQHULVQRWVDWLVHGZLWKUHSO\RIDVVHVVHHDQGKDYLQJKHDUGthe assessee, refer the matter to an Approving Panel.

,IDIWHUKHDULQJWKHDVVHVVHHWKH&RPPLVVLRQHULVVDWLVHGWKDWLWLVQRWDWFDVHIRULQYRNLQJSURYLVLRQVRI&KDSWHU;$KHPD\SDVVDQRUGHULQZULWLQJZLWKFRS\WRWKH$VVHVVLQJ2IFHUDQGWKHDVVHVVHH

Approving Panel on receipt of reference from Commissioner shall

LVVXHVXFKGLUHFWLRQVDVLWGHHPVWLQUHVSHFWRIGHFODUDWLRQRIDQ


31/77


arrangement as an impermissible avoidance arrangement. It may alsoprovide in direction the previous year or years to which such directionshall apply.

A direction prejudicial either to assessee or revenue shall not beissued unless opportunity of being heard has been granted toDVVHVVHHRUWKH$VVHVVLQJ2IFHUDVWKHFDVHPD\EH

Approving Panel may before issuing directions can call for records orevidences and direct Commissioner to carry out further inquiry andsubmit report.

In case of difference in opinion on an issue the direction shall beissued according to majority opinion.

Every direction issued by Approving Panel or Commissioner shall beELQGLQJRQ$VVHVVLQJ2IFHUDQG$VVHVVLQJ2IFHUVKDOOFRPSOHWHWKHproceeding in accordance with such directions and provisions of newlyinserted Chapter X-A.

If direction is applicable to any other previous year other thanin respect of which reference was made, then, while completingassessment or reassessment proceedings for such other previous\HDUV$VVHVVLQJ2IFHUVKDOOEHERXQGE\GLUHFWLRQVDQGSURYLVLRQVRIChapter X-A and fresh reference on the issue would not be required.

Assessment or reassessment order where provisions of Chapter X-ADUHLQYRNHGVKDOOEHSDVVHGE\WKH$VVHVVLQJ2IFHURQO\ZLWKSULRUapproval of the Commissioner.

The limitation of six months from end of month of receipt ofreference, by approving panel for issue of directions.

Constitution of Approving Panel by the Board consisting of income-taxauthorities of rank of Commissioner or above and consisting of notless than three members.

7KHSRZHUWR%RDUGWRIUDPHUXOHVIRUSXUSRVHRIHIFLHQWIXQFWLRQLQJof the Approving Panel.

Section 144C Reference to Dispute Resolution Panel

It is proposed to give the reference of section 153B also in the saidsub-section.


144C (8) Power of Dispute Resolution Panel

It is proposed to clarify that the power of the Dispute Resolution


32/77


Panel to enhance the variation shall include and shall be deemedalways to have included the power to consider any matter arisingout of the assessment proceedings relating to the draft order,notwithstanding that such matter was raised or not by the eligibleassessee.


144C (13) Assessement on the order of DisputeResolution Panel

It is proposed to amend the aforesaid sub-section so as to give thereference of section 153B also in the said sub-section.

This amendment will take effect retrospectively from 1st October,

2009.

New sub-Section 144C (14A)

The provisions of section144C shall not apply to an assessment orUHDVVHVVPHQWRUGHUSDVVHGE\WKH$VVHVVLQJ2IFHUZLWKWKHDSSURYDOof the Commissioner in accordance with sub-section (12) of newlyinserted section 144BA.

Section 147 Income Escaping Assessment

,WLVSURSRVHGWRSURYLGHWKDWQRWKLQJFRQWDLQHGLQWKHUVWSURYLVRshall apply in a case where any income in relation to any asset(including financial interest in any entity) located outside India,chargeable to tax, has escaped assessment for any assessment year.the case where the assessee has failed to furnish a report in respectof any international transaction which he was required under section

92E for the purposes of deemed cases where income chargeable totax has escaped assessment under the aforesaid section.

It is also proposed to provide that income shall be deemed to haveescaped assessment where a person is found to have any assetLQFOXGLQJQDQFLDOLQWHUHVWLQDQ\HQWLW\ORFDWHGRXWVLGH,QGLD

The provisions of section 147 are procedural in nature. However, it isFODULHGE\LQVHUWLQJDQHZ([SODQDWLRQWRWKHDIRUHVDLGVHFWLRQWKDWthe above amendments shall also be applicable to the proceedingsinitiated under this section for any assessment year beginning on orbefore 1st April, 2012.


Section 149 Time-Limit For Notice

It is proposed to provide that if four years, but not more than sixteen

years, have elapsed from the end of the relevant assessment year


33/77


XQOHVVWKHLQFRPHLQUHODWLRQWRDQ\DVVHWLQFOXGLQJQDQFLDOLQWHUHVWin any entity) located outside India, chargeable to tax, has escapedassessment.

Sub-Section 149 (3) Notice to Agent of Non Resident

It is proposed to substitute the words two years with the wordssix years so as to provide that the notice shall not be issued afterthe expiry of a period of six years from the end of the relevantassessment year.

The provisions of section 149 are procedural in nature. However, it isFODULHGE\LQVHUWLQJDQHZ([SODQDWLRQWR WKHDIRUHVDLGVHFWLRQWKDWthe provisions of sub-sections (1) and (3) of this section as amendedby the Finance Act 2012, shall also be applicable to the proceedingsinitiated under this section for any assessment year beginning on orbefore 1st April, 2012.

These amendments will take effect from 1st day of July, 2012.

Section 153 Time limit for Completion of Assessmentsand Reassessments. and

Section 153B Time limit for Completion of Assessmentunder section 153A

It is proposed to revise the time limits wherever specified forcompletion of assessments and reassessments. The revised timeOLPLWVVKDOOEHWKHWLPHOLPLWVVSHFLHGXQGHUWKHDIRUHVDLGVHFWLRQas respectively increased by three months.

,WLVSURSRVHGWR H[WHQGWKHSHULRGRIH[WHQWLRQVVSHFLHGWKHUHLQ

from six months to one year.These amendments will take effect from 1st July, 2012.

New clause (ix) In Explanation 1 of the Section 153

It is proposed to provide for exclusion of time period starting fromreceipt of reference by the Commissioner under sub-section (1)of newly inserted section 144BA and ending on date on which adirection under sub-section (3) or sub-section (6) or an order undersub-section (5) of newly inserted section144BA is received by the$VVHVVLQJ2IFHU

This amendment will take effect from 1st April, 2013

Section 153A Assessment in case of Search orRequisition

It is proposed to provide that the Central Government may by


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rules made by it and published in the Official Gazette, (except incases where any assessment or reassessment has abated under thesecond proviso), specify the class or classes of cases in which the$VVHVVLQJ2IFHUVKDOOQRWEHUHTXLUHGWRLVVXHQRWLFHIRUDVVHVVLQJor reassessing the total income for six assessment years immediatelypreceding the assessment year relevant to the previous year in whichsearch is conducted or requisition is made.


Section 153C Assessment of income of any otherperson

It is proposed to provide that the Central Government may by rulesPDGHE\LWDQGSXEOLVKHGLQWKH2IFLDO*D]HWWHVSHFLI\WKHFODVVor classes of cases in respect of such other person, in which the$VVHVVLQJ2IFHUVKDOOQRWEHUHTXLUHGWRLVVXHQRWLFHIRUDVVHVVLQJor reassessing the total income for six assessment years immediatelypreceding the assessment year relevant to the previous year in whichsearch is conducted or requisition is made except in cases where anyassessment or reassessment has abated.


6HFWLRQ5HFWLFDWLRQRI0LVWDNH

It is proposed to provide that an income-tax authority may amendany intimation issued under sub-section (1) of section 200A.

It is also proposed to substitute the words the assessee, whereverthey occur, with the words the assessee or the deductor.

It is proposed to provide that where any such amendment has theeffect of reducing the assessment or otherwise reducing the liabilityRIWKHDVVHVVHHRUWKHGHGXFWRUWKH$VVHVVLQJ2IFHUVKDOOPDNHDQ\refund which may be due to such assessee or the deductor.

It is further proposed to provide that where any amendment hasthe effect of enhancing the assessment or reducing a refund alreadymade or otherwise increasing the liability of the assessee or theGHGXFWRUWKH$VVHVVLQJ2IFHUVKDOOVHUYHRQWKHDVVHVVHHRUWKHdeductor, as the case may be, a notice of demand in the prescribedform specifying the sum payable, and such notice of demand shall bedeemed to be issued under section 156 and the provisions of this Actshall apply accordingly.


Section 156 Notice Of Demand

It is proposed to provide that where any sum is determined to be

payable by the assessee or by the deductor under section 143(1)


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New Section 195(7)

Notwithstanding anything contained in sub-section (1) and sub-sectionWKH%RDUGPD\E\QRWLFDWLRQLQWKH2IFLDO*D]HWWHVSHFLI\Dclass of persons or cases, where the person responsible for paying toa non-resident, not being a company, or to a foreign company, anysum, whether or not chargeable under the provisions of this Act, shallPDNHDQDSSOLFDWLRQWRWKH$VVHVVLQJ2IFHUWRGHWHUPLQHE\JHQHUDOor special order, the appropriate proportion of sum chargeable, andupon such determination, tax shall be deducted under sub-section (1)on that proportion of the sum which is so chargeable.


Section 197A No Deduction to be made in certain cases

No deduction of tax shall be made under section 193 or section 194or section 194A or section 194EE or section 194K in the case of anindividual resident in India, who is of the age of sixty years or moreat any time during the previous year, if such individual furnishes tothe person responsible for paying any income of the nature referredto in the aforesaid sections, a declaration in writing in duplicate in theSUHVFULEHGIRUPDQGYHULHGLQWKHSUHVFULEHGPDQQHUWRWKHHIIHFWthat the tax on his estimated total income of the previous year inwhich such income is to be included in computing his total incomewill be nil.


Section 201 Consequences of failure to Deduct or Pay

New proviso in section 201(1)

,WLVSURSRVHGWKDWDQ\SHUVRQLQFOXGLQJWKHSULQFLSDORIFHURIDcompany, who fails to deduct the whole or any part of the tax inaccordance with the provisions of this Chapter on the sum paid toa resident or on the sum credited to the account of a resident shallnot be deemed to be an assessee in default in respect of such tax ifsuch resident :

(i) has furnished his return of income under section 139;

(ii) has taken into account such sum for computing income insuch return of income; and has paid the tax due on theincome declared by him in such return of income, andthe person furnishes a certificate to this effect from anaccountant in such form as may be prescribed.

New proviso to sub-section (1A)

,WLVSURSRVHGWKDWLQFDVHDQ\SHUVRQLQFOXGLQJWKHSULQFLSDORIFHU


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of a company fails to deduct the whole or any part of the tax inaccordance with the provisions of this Chapter on the sum paid to aresident or on the sum credited to the account of a resident but isQRWGHHPHGWREHDQDVVHVVHHLQ GHIDXOWXQGHUWKHUVWSURYLVRRIsub-section (1), the interest under clause (i) shall be payable fromthe date on which such tax was deductible to the date of furnishingof return of income by such resident.


It is proposed that no order shall be made under sub-section (1)of the said section deeming a person to be an assessee in defaultfor failure to deduct the whole or any part of the tax from a personresident in India, at any time after the expiry of two years from theHQGRIWKHQDQFLDO\HDULQDFDVHLQZKLFKWKHVWDWHPHQWUHIHUUHGWRLQVHFWLRQKDVEHHQOHGDQGLQDQ\RWKHUFDVH6L[\HDUVIURPWKHHQGRIWKHQDQFLDO\HDULQZKLFKSD\PHQWLVPDGHRUFUHGLWLVgiven.


Explanation after sub-section (4) of the aforesaid section so as toGHQHWKHH[SUHVVLRQDFFRXQWDQW


Section 204 Meaning of Person responsible forpaying

It is proposed to provide that in the case of credit, or as the casemay be, payment of any sum chargeable under the provisions ofthis Act made by or on behalf of the Central Government or the*RYHUQPHQWRID6WDWHWKHGUDZLQJDQGGLVEXUVLQJRIFHURUDQ\other person, by whatever name called, responsible for crediting, oras the case may be, paying such sum shall be the person responsibleIRUSD\LQJZLWKLQWKHPHDQLQJRIGHQLWLRQXQGHUWKLVVHFWLRQ


6HFWLRQ&3URWVDQGJDLQVIURPWKHEXVLQHVVRItrading in alcoholic liquor, forest produce, scrap, etc.

New serial number (vii) It is proposed to insert business relating tominerals, being coal or lignite or iron ore in the Table in said sub-section to provide for collection of tax at source at the rate of one percent. in case of minerals, being coal or lignite or iron ore.

New sub-section (1D) to provide that every person, being a seller,who receives any amount in cash as consideration for sale ofbullion or jewellery, shall, at the time of receipt of such amount in

cash, collect from the buyer, a sum equal to one per cent. of sale


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during the previous year.


Section 209 Computation of Advance Tax

It is proposed to insert a proviso to provide that for computingliability for advance tax, income-tax calculated under clause (a)or clause (b) or clause (c) shall not, in each case, be reduced bythe aforesaid amount of income-tax which would be deductible orFROOHFWLEOHDWVRXUFHGXULQJWKHVDLGQDQFLDO\HDUXQGHUDQ\SURYLVLRQof this Act from any income, if the person responsible for deductingtax has paid or credited such income without deduction of tax or ithas been received or debited by person responsible for collecting taxwithout collection of such tax.


Section 234A interest for defaults in furnishing return of income andsection 234B interest for defaults in payment of advance tax Andsection 234C interest for deferment of advance tax

It is proposed to insert or section 115JD, after section115JAA inclause (vi) of sub-section (1) of the aforesaid section so as to providefor reduction of tax credit allowed to be set off under section 115JDfrom the tax on total income.

New Explanation to Section 234D Interest on excess refund

It is proposed to insert a new Explanation so as to clarify that theprovisions of this section shall also apply to an assessment yearcommencing before the 1st day of June, 2003 if the proceedings inrespect of such assessment year is completed after the said date.


A New sub-heading G.Levy of fee in certain cases

New Section 234E Fee for defaults in furnishingStatements

It is proposed to insert a new section 243E so as to provide that:

1. Without prejudice to the provisions of the Act, where a personfails to deliver or cause to be delivered a statement withinthe time prescribed in section 200(3) or the proviso to section206C(3), he shall be liable to pay, by way of fee, a sum of twohundred rupees for every day during which the failure continues.

2. The amount of fee referred to in sub-section (1) shall not exceedthe amount of tax deductible or collectible, as the case may be.


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Section 246A(1) (bb)

It is proposed that any assessee aggrieved by an order ofassessment under sub-section (3) of section 92CD(3) may appealto the Commissioner (Appeals). The proposed amendment is ofconsequential nature.

It is proposed to provide that an appeal against the order of penaltypassed under section 271AAB shall also lie before the Commissioner(Appeals).


Section 253 Appeals to the Appellate Tribunal

It is proposed to provide that any assessee aggrieved by an orderSDVVHGE\DQ$VVHVVLQJ2IFHUXQGHUVHFWLRQ$RUVHFWLRQ&in pursuance of the directions of the Dispute Resolution Panel or anorder passed under section 154 in respect of such order may alsoappeal to the Appellate Tribunal.


It is further proposed to provide that an order of assessment orreassessment passed with approval of the Commissioner undersub-section (12) of newly inserted section 144BA or an order undersection 154 or section 155 passed in respect of such an order againstwhich appeal lies before the Appellate Tribunal.

It is also proposed to provide that the Commissioner may, if heobjects to any direction issued by the Dispute Resolution Panel underVXEVHFWLRQRIVHFWLRQ&LQUHVSHFWRIDQ\REMHFWLRQOHGRQor after the 1st day of July, 2012, by the assessee under sub-sectionRIVHFWLRQ&LQSXUVXDQFHRIZKLFKWKH$VVHVVLQJ2IFHUKDVpassed an order completing the assessment or reassessment, directWKH$VVHVVLQJ2IFHUWRDSSHDOWRWKH$SSHOODWH7ULEXQDODJDLQVWWKHorder.

It is also proposed to provide that every appeal under sub-section$VKDOOEHOHGZLWKLQVL[W\GD\VRIWKHGDWHRQZKLFKWKHRUGHUVRXJKWWREHDSSHDOHGDJDLQVWLVSDVVHGE\WKH$VVHVVLQJ2IFHULQpursuance of the directions of the Dispute Resolution Panel under sub-section (5) of section 144C.

,WLVDOVRSURSRVHGWRSURYLGHWKDWDQDSSHDOFDQDOVREHOHGE\WKH$VVHVVLQJ2IFHUDJDLQVWWKHRUGHUSDVVHGE\KLPLQSXUVXDQFHRIWKH

directions of the Dispute Resolution Panel.


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Section 254 Orders of Appellate Tribunal

It is proposed to amend section 254(2A) so as to insert thereina reference of section 253(2A). The proposed amendment isconsequential in nature in view of the amendment to section 253.


Section 271 Failure to furnish return, comply with

notice, concealment of income, etc.

,WLVSURSRVHGWRLQFOXGHWKHUHLQWKHUHIHUHQFHRIDVSHFLHGGRPHVWLFtransaction for the purposes of said Explanation.

Section 271AA Penalty for failure to keep and maintain

information and document, etc., in respect of certaintransactions

It is proposed to substitute the aforesaid section so as to providethe levy of penalty under the said section also in case where suchperson fails to report such transaction which he is required to do so;or maintains or furnishes an incorrect information or document.


Section 271AA Penalty for failure to keep and maintaininformation and document in respect of international

transaction

It is proposed to amend the aforesaid section so as to includeWKHUHLQWKHUHIHUHQFHRIVSHFLHGGRPHVWLFWUDQVDFWLRQWRSURYLGHthat in the cases where information and document in respect ofspecified domestic transaction has not been maintained, or suchVSHFLHGGRPHVWLFWUDQVDFWLRQKDVQRWEHHQUHSRUWHGRUWKHDVVHVVHHmaintains or furnishes incorrect information or documents, a penaltyRIWZRSHUFHQWRIWKHYDOXHRIWKH VSHFLHGGRPHVWLFWUDQVDFWLRQshall be levied.

Section 271AAA Penalty where search has beeninitiated

It is proposed to provide that the provisions of the said section shallbe applicable in respect of cases where a search has been initiatedunder section 132 on or after the 1st day of June, 2007 but before1st day of July, 2012.



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New Section 271AAB Penalty where search has beeninitiated

It is proposed to provide that in a case where search has beeninitiated under section 132 on or after the 1st day of July, 2012,the assessee shall pay by way of penalty, in addition to tax, if any,payable by him, a sum computed at the rate of ten percent of theXQGLVFORVHGLQFRPHRI WKHVSHFLHGSUHYLRXV\HDULI VXFKDVVHVVHH(i) in the course of the search, in a statement under sub-sectionRIVHFWLRQDGPLWVWKHXQGLVFORVHGLQFRPHDQGVSHFLHVWKHmanner in which such income has been derived; (ii) substantiates themanner in which the undisclosed income was derived; and (iii) on orEHIRUHWKHVSHFLHGGDWH$SD\VWKHWD[WRJHWKHUZLWKLQWHUHVWif any, in respect of the undisclosed income; and (B) furnishes the

return of income for the specified previous year declaring suchundisclosed income therein.

It is further proposed to provide that the assessee shall pay byway of penalty, in addition to tax, if any payable by him, a sumcomputed at the rate of twenty percent of the undisclosed incomeRIWKHVSHFLHGSUHYLRXV\HDULIVXFKDVVHVVHHLLQWKHFRXUVHof the search, in a statement under sub-section (4) of section 132,GRHVQRWDGPLWWKHXQGLVFORVHGLQFRPHLLRQRUEHIRUHWKHVSHFLHGdate,:(A) declares such income in the return of income furnishedIRUWKHVSHFLHGSUHYLRXV\HDUDQG%SD\VWKHWD[WRJHWKHUZLWKinterest, if any, in respect of the undisclosed income.

It is also proposed to provide that the assessee shall pay by way ofpenalty, in addition to tax, if any payable by him, a sum which shallnot be less than thirty percent but which shall not exceed ninetySHUFHQWRIWKHXQGLVFORVHGLQFRPHRIWKHVSHFLHGSUHYLRXV\HDULILW

is not covered by clauses (a) and (b).It is also proposed to provide that no penalty under the provisionsof clause (c) of sub-section (1) of section 271 shall be imposed uponthe assessee in respect of the undisclosed income referred to in sub-section (1).

It is also proposed to provide that the provisions of section 274 andsection 275 shall, as far as may be, apply in relation to the penaltyleviable under the proposed new section.

,WLVDOVRSURSRVHGWRGHQHWKHH[SUHVVLRQVXQGLVFORVHGLQFRPHVSHFLHGSUHYLRXV\HDUDQGVSHFLHGGDWHIRU WKHSXUSRVHVRIWKHsaid section.



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Section 271G Penalty for failure to furnish informationor document under section 92D

,WLVSURSRVHGWRLQFOXGHWKHUHLQWKHUHIHUHQFHRIVSHFLHGGRPHVWLFtransaction so as to provide in the cases where the assessee failsto furnish any document or information as required by section 92D,a penalty of two percent of the value of the specified domestictransaction shall be levied in such cases.

New Section 271H Penalty for failure to furnishstatements

It is proposed to provide that without prejudice to the provisions ofthe Act, a person shall be liable to pay penalty if he fails to deliveror cause to be delivered a statement within the time prescribed insection 200(3) or the proviso to section 206C(3) or furnishes incorrectinformation in the statement which is required to be delivered orcause to be delivered under section 200(3) or the proviso to section206C(3)

It is further proposed to provide that the penalty referred to in sub-section (1) shall be a sum which shall not be less than ten thousandrupees but which may extend to one lakh rupees.

It is also proposed to provide that notwithstanding anything containedin the foregoing provisions of this section, no penalty shall be leviedfor the failure referred to in clause (a) of sub-section (1), if theperson proves that after paying tax deducted or collected along withthe fee and interest, if any, to the credit of the Central Government,he had delivered or cause to be delivered the statement referred toin section 200(3) or the proviso to section 206C(3) before the expiryof one year from the time prescribed for delivering or causing to be

delivered such statement.

It is also proposed to provide that the provisions of this section shallapply to a statement referred to in section 200(3) or the proviso tosection 206C(3) which is to be delivered or caused to be delivered fortax deducted at source or tax collected at source, as the case maybe, on or after the 1st day of July, 2012.


Section 272A Penalty for failure to answer questions,sign statements, furnish information, return orstatement, allow inspections, etc

It is proposed to insert a new proviso to sub-section (2) of theaforesaid sub-section so as to provide that no penalty shall be leviedunder this section for the failure referred to in clause (k) if such

failure relates to a statement referred to in section 200(3) or the


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UXSHHVWR WZHQW\YHKXQGUHGWKRXVDQGUXSHHVDQGWR UHGXFHWKHmaximum imprisonment from three years to two years.


New Sections 280A, 280B, 280C and Section 280D Special Courts,offences Triable by Special Court, trial of offences as summonscase and application of the Code of Criminal Procedure, 1973 toproceedings before Special Court.

The proposed new section 280A provides that the CentralGovernment, in consultation with the Chief Justice of the HighCourt, may, for trial of offences punishable under Chapter-XXII, byQRWLFDWLRQGHVLJQDWHRQHRUPRUHFRXUWVRI0DJLVWUDWHVRIWKHUVWclass as Special Court for such area or areas or for such cases or

FODVVRUJURXSRIFDVHVDVPD\EHVSHFLHGLQWKHQRWLFDWLRQ

It further explains that High Court means the High Court of the6WDWHLQZKLFKD0DJLVWUDWHRIUVWFODVVGHVLJQDWHGDV6SHFLDO&RXUWwas functioning immediately before such designation.

It also provides that while trying an offence under the Income-taxAct, a Special Court shall also try an offence, other than an offencereferred to in sub-section (1), with which the accused may, underthe Code of Criminal Procedure, 1973, be charged at the same trial.

The proposed new section 280B provides that notwithstandinganything contained in the Code of Criminal Procedure, 1973, (a) theoffences punishable under Chapter-XXII shall be triable only by theSpecial Court if so designated for the area or areas or for cases orclass or group of cases, as the case may be, in which the offence hasbeen committed. However, a court competent to try offences undersection 292, (i) which has been designated as a Special Court underthis section, shall continue to try the offences before it or offencesarising under this Act after such designation; (ii) which has not beendesignated as a Special Court may continue to try such offencepending before it till its disposal; or (b) a Special Court may, upona complaint made by an authority authorised in this behalf under theIncome-tax Act take cognizance of the offence for which the accusedis committed for trial. The proposed new section 280C provides thatnotwithstanding anything contained in the Code of Criminal Procedure,1973, the Special Court, shall try, an offence under Chapter-XXIISXQLVKDEOHZLWKLPSULVRQPHQWQRWH[FHHGLQJWZR\HDUVRUZLWKQHor with both, as a summons case, and the provisions of the Codeof Criminal Procedure, 1973 as applicable in the case of trial ofsummons case, shall apply accordingly.

The proposed new section 280D provides that the provisions of theCode of Criminal Procedure, 1973 (including the provisions as to bails

or bonds), shall apply to the proceedings before a Special Court and


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the person conducting the prosecution before the Special Court, shallbe deemed to be a Public Prosecutor.

,WIXUWKHUSURYLGHVWKDWD SHUVRQVKDOOQRWEHTXDOLHGWREHDSSRLQWHGas a Public Prosecutor or a Special Public Prosecutor unless hehas been in practice as an advocate for not less than seven yearsrequiring special knowledge of law.

It also provides that every person appointed as a Public Prosecutor ora Special Public Prosecutor shall be deemed to be a Public Prosecutorwithin the meaning of clause (u) of section 2 of the Code of CriminalProcedure, 1973 and the provisions of that Code shall have effectaccordingly.


New Section 292CC Authorisation and assessment in

case of search or requisition

It is proposed to insert aforesaid new section 292CC so as to providethat notwithstanding anything contained in this Act, it shall not benecessary to issue an authorisation under section 132 or make arequisition under section 132A separately in the name of each person.

It is further proposed that where an authorisation under section 132has been issued or requisition under section 132A has been madementioning therein the name of more than one person, the mentionof such names of more than one person on such authorisation orrequisition shall not be deemed to construe that it was issued in thename of an association of persons or body of individuals consistingof such persons.

It is also proposed to provide that notwithstanding that anauthorisation under section 132 has been issued or requisition undersection 132A has been made mentioning therein the name of morethan one person, the assessment or reassessment shall be madeseparately in the name of each of the persons mentioned in suchauthorisation or requisition.


6HFWLRQ5XOHVDQGFHUWDLQQRWLFDWLRQVWREH

placed before Parliament

It is proposed to provide that the rules made by the CentralGovernment under the third proviso to sub-section (1) of section153A or under the second proviso to sub-section (1) of section 153Care laid before Parliament.



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WEALTH-TAX

6HFWLRQ'HQLWLRQV

It is proposed to raise the gross annual salary limit in the case wherea house is allotted for residential purposes by a company of employeeRUDQRIFHURUGLUHFWRUZKRLVLQWKHZKROHWLPHHPSOR\PHQWIURPYHODNKUXSHHVWRWHQODNKUXSHHV

Section 17 Wealth escaping assessment

,WLVSURSRVHGWRSURYLGHWKDWQRWKLQJFRQWDLQHGLQWKHUVWSURYLVRshall apply in a case where any net wealth in relation to any asset(including financial interest in any entity) located outside Indiachargeable to tax, has escaped assessment for any assessment year.

These amendments will take effect from 1

jb nagar ca budget 2012

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