Report No. 12

162. Other amendments.-

(1) Where in respect of any completed assessment of a partner in a firm it is found-

(a) on the assessment or reassessment of the firm, or

(b) on any reduction or enhancement made in the income of the firm under section 161(1), 259, 263, 269, 271 or 272, [section 31, section 33, section 33A, section 33B, section 66, section 66A or section 35(1)],

that the share of the partner in the income of the firm has not been included in the assessment of the partner or, if included, is not correct, the Income-tax Officer may amend the order of assessment of the partner with a view to the inclusion of the share in the assessment or the correction thereof, as the case may be; and the provisions of section 161 [35(1) to (4)] shall, mutatis-mutandis, apply thereto the period of four years specified in sub­section (7) of that section being reckoned from the date of the final order passed in the case of the firm.

[Section 35(5)]

(2) Where in respect of any completed assessment of a member of an association of persons it is found-

(a) on the assessment or re-assessment of the association, or

(b) on any reduction or enhancement made in the income of the association under sections 161(1), 259, 263, 269, 271 or 272, [section 31, section 33, section 33A, section 33B, section 66, section 66A or section 35(1)].

that the share of the member in the income of the association has not been included in the assessment of the member or, if included, is not correct, the Income-tax Officer may amend the order of assessment of the member with a view to the inclusion of the share in the assessment or the correction thereof, as the case may be; and the provisions of section 161 [35(1) to (4)] shall, mutatis-mutandis, apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from the date of the final order passed in the case of the association:

Provided that nothing in this sub-section shall affect the provisions of section 87, clause (v) [14(2)(b)].

(3) Where, as a result of proceedings initiated under clause (a) of section 152, [section corresponding to existing section 34(1) and (2)] a firm or an association of persons is assessed or reassessed and the Income-tax Officer concerned is of opinion that it is necessary to compute or recompute the total income of a partner in the firm or a member of the association of persons as the case may be, the Income-tax Officer may proceed to compute or recompute the total income and determine the sum payable on the basis of such computation or recomputation and make the necessary amendment; and the provisions of section 161 [35(1) to (4)] shall mutatis-mutandis apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from the date of the final order passed in the case of the firm or association as the case may be.

[Section 35(8)]

(4) Where the Income-tax Officer is satisfied that the income-tax payable by a company on its profits and gains out of which the company has declared a dividend, has not been paid within three years after the financial year in which the dividend was declared or within one year after the financial year in which the assessment of the company for the assessment year concerned was made, whichever is later, the amount of income-tax which a shareholder of the company is deemed himself to have paid in respect of such dividend under section 246 [49B], or the amount for which credit is due to him under section 246 [sub-section (5) of section 18] in respect of such dividend, shall be deemed to have been wrongly computed; and the Income-tax Officer may, notwithstanding anything contained in this Act, proceed to recompute such amount by reducing it in the same proportion as the amount of income-tax remaining unpaid by the company bears to the amount of income-tax payable by it on such profits and gains, and make the necessary amendment and the provisions of section 161 [35(1) to (4)] shall mutatis mutandis apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from the date on which the period of three years aforesaid has expired or the date on which the period of one year aforesaid has expired, whichever is later.

[Section 35(9)]

(5) Where an allowance by way of development rebate has been made wholly or partly to an assessee in respect of a ship, machinery or plant in any assessment year under section 33 [clause (vib) of sub-section (2) of section 10], and subsequently at any time before the expiry of ten years from the end of the previous year in which the ship was acquired or the machinery or plant was installed-

(i) the ship, machinery or plant is sold or otherwise transferred by the assessee to any person other than the Government: or

(ii) the assessee utilises the amount credited to the reserve account under the said section read with section 34 [section for conditions]-

(a) for distribution by way of dividends or profits; or

(b) for remittance outside India as profits or for the creation of any asset outside India; or

(c) for any other purpose which is not a purpose of the business of the undertaking, the development rebate originally allowed shall be deemed to have been wrongly allowed, and the Income-tax Officer may, notwithstanding anything contained in this Act, recompute the total income of the assessee for the relevant previous year and make the necessary amendment; and the provisions of section 161 [section 35(1) to (4)] shall, mutatis mutandis, apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from the end of the previous year in which the transfer takes place or the money is so utilised.

[Section 35(11)]

(6) Where any such debt or part of debt as is referred to in section 36(6)(i) [sub-clause (i) of clause (6) of section relating to deductions from business] is written off as irrecoverable in the accounts of the assessee for a previous year, and the Income-tax Officer is satisfied that such debt or part thereof became a bad debt in an earlier previous year, the Income-tax Officer may, notwithstanding anything contained in this Act, allow such debt or part of debt as a deduction for such earlier previous year, and recompute the total income of the assessee for such earlier previous year and make the necessary amendment; and the provisions of section 161 [35(1) to (4)] shall, mutatis mutandis, apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from the end of the previous year in which the debt is actually written off as irrecoverable.