Report No. 12
Chapter XXVI
Miscellaneous
Notes to clause 319
This is new. It seems desirable to make it clear that income once charged to tax should not again be charged to tax in the hands of the same person. This safeguard seems to be necessary, in view of the fact that an item of income may be chargeable either on the basis of its accrual or on the basis of its having arisen or on the basis of its actual receipt, within a particular period. In other words, the chargeable periods may vary according to the basis on which the tax is sought to be assessed.
Notes to clause 320
It has been made clear that even in the case of a local authority or company, service may be made on its principal officer. The definition of "principal officer" is applicable to local authorities and companies also.
Notes to clause 321
Sub-clause (1).- This is new. Since the family will not be in existence after partition, a provision for service of notices in respect of proceedings pertaining to the disrupted family appears to be necessary and has been incorporated in this sub-clause. The Supreme Court has held1 that in such cases the notice need not be given to all members. This view has been followed in the draft, treating, however, a notice under section 34 in a different manner2.
1. Laxmi Narain Bhadani v. C.I.T., (1951) 20 ITR 594 (SC).
2. Cf. ITIC Report, 1948, p. 155, paras 351 (352).
This draft sub-clause will apply only where an order recording a finding of total partition is passed. In cases of partial partition, the family continues in respect of undivided property; (if the partition is partial as regarding persons, the remaining members will continue joint); and notices can be served in the usual manner, and, no special provision is necessary to the effect that the notice in such cases must be served on all the members of the family. (In cases where some of the members went out of the family, the members so separated must of course be served. But this need not be provided for).
Sub-clause (2).-- This is new and is intended to provide for the service of notice in the case of a dissolved firm or association.
Notes to clause 322
This clause does not need any comments.
Notes to clause 323
This is new. It is desirable that documents placed on the file of an Income-tax authority should bear proper endorsement so that their tracing and identification may be facilitated whenever a reference to them becomes necessary. It is also desirable that where an Income-tax authority bases any order on any document, the document shall expressly be referred to in the order, so that there may be no difficulty in understanding the basis of the order. The draft clause is intended to achieve this object.
Notes to clause 324
Sub-clause (1).- Does not need any comments, except that existing section 61(1) and section 61(2) have, in the draft, been broken up so as to separate the details regarding various authorised representatives from the main provision authorising their appearance.
Sub-clause (2).- The various kinds of persons who can appear as authorised representatives have been listed in this sub-clause.
Items (i) and (ii).- Do not require any comments.
Item (iii).- relating to lawyers has been redrafted so as to simplify the language. This category has been restricted to legal practitioners who can appear in a civil court. (Persons already in practice will not, of course, be affected).
As to item (iv), see notes below, under "Explanation".
The right of persons entitled to appear under the existing Act will be preserved by item (v), even though the persons are not qualified under the new Act. But it has been made clear that this right is available only where such persons were actually in practice before the new Act came into force1.
1. The abolition of this category was recommended even by the Income-tax Investigation Commission vide its Report, 1948 p. 107, par., 240. The Taxation Enquiry Commission, however was not in favour of any change. See its Report, 1953-54, Vol. II, Ch XII, para 49-50.
Explanation.- The definition of "accountant" has been brought into line with the Chartered Accountants Act, 1949. Persons who are neither Chartered Accountants nor authorised to audit the accounts of companies under section 226(2) of the Companies Act, 1956, are proposed to be excluded from the definition. Existing section 61(2) item (iii) enables a member of an association of accountants recognised in this behalf by the Central Board of Revenue to appear as an authorised representative. It is proposed to restrict the right, however, to chartered accountants etc. (Persons already in practice at the time of the commencement of the new Act will not of course be affected).
Sub-clause (3).- Does not need any comments.
Sub-clause (4).- Under existing section 61(3) the power to take disciplinary action against persons "other than lawyers or accountants subject to their respective professional "bodies", is vested in the Commissioner. It is proposed to transfer these powers to an authority whose constitution would be laid down in the rules1. The present provision authorising appeals to the Central Board of Revenue will, of course, continue.
1. Cf. The Amendment Bill that was introduced in 1951 (which was allowed to lapse), printed in (1951) 28 ITR 466 (47).
Sub-clause (5)- is merely a transitional provision.
Notes to clause 325
No comments are needed.
Notes to clause 326
No comments are needed.
Notes to clause 327
No comments are needed.
Notes to clause 328
The word "year" has been replaced by words "assessment year" for precision. In addition to income-tax, super-tax has also been added for the sake of precision.
Notes to clause 329
Sub-clause (1).- It has been made clear that the rules will be published in the Official Gazette.
Sub-clause (2).- Paragraph (c) is new and is intended to empower the Central Board of Revenue to make rules (i) for the registration of Income-tax Practitioners who are not lawyers or accountants and (ii) for the constitution of an authority to take disciplinary action against theme1.
1. Vide notes to drat clause 324(4).
The changes made by the Finance Act, 1958, have been given effect to. Further, a provision for rules regarding income-tax verification certificates has been added, since it is felt that a statutory provision on the subject would be useful.
Sub-clause (3).- Does not need any comments.
Sub-clause (4).- Has been brought into line with recent legislative practice.
Existing section 60
Existing section 60(1) authorises the Central Government to make exemptions, reduction in rates or other modifications regarding income-tax in certain cases. SubÂsection (3) of that section, however, provides, that after the commencement of the Indian Income-tax (Amendment) Act, 1939, this power will not be exercisable except for the purpose of rescinding exemption, etc. already made. The result is, that no new exemption etc. can now be granted under section 60, sub-section (1). In view of this, this provision has been omitted in the draft.
So far as exemptions already granted are concerned, the question of their retention for assessments under the new Act will have to be considered by the Government, when the transitional provisions are drafted (Cf note regarding repeal etc. below).
So far as assessments for any period prior to the, commencement of the new Act are concerned, exemptions already granted under section 60(1) should, of course, continue to have effect, and the power to cancel them under section 60(3) should also continue (Cf. Note re: repeal etc. below).
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