Report No. 29
9. The Gift-Tax Act, 1958 (18 of 1958)
Section 16.-Gift escaping assessment:
(1) If the Gift-tax officer-
(a) has reason to believe that by reason of omission or failure on the part of an assessee to make a return under section 13 for any assessment year or to disclose fully and truly all material facts necessary for his assessment for that year, any taxable gift has escaped assessment for that year, whether by reason of under-assessment or assessment at too low a rate or otherwise; or
(b) has, in consequence of any information in his possession, reason to believe, notwithstanding that there has been no such omission or failure as is referred to in clause (a), that any taxable gift has escaped assessment for any year whether by reason of under assessment or assessment at too low a rate or otherwise;
he may, in cases falling under clause (a) at any time within eight years and in cases falling under clause (b) at any time within four years of the end of that assessment year, serve on the assessee a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 13, and may proceed to assess or reassess any taxable gift which has escaped assessment, and the provisions of this Act shall, so far as may be, apply as if the notice had issued under that sub-section.
(2) Nothing containing in this section limiting the time within which any proceedings for assessment or re-assessment may be commenced shall apply to an assessment or re-assessment to be made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 22, section 23, section 24, section 26 or section 28.
Section 17.-Penalty for default and Concealment.
(1) If the Gift-tax Officer, Appellate Assistant Commissioner, Commissioner or Appellate Tribunal, in the course of any proceedings under this Act, is satisfied that any person-
(a) has without reasonable cause failed to furnish the return which he is required to furnish under sub-section (1) or sub-section (2) of section 13, or section 16 or has without reasonable cause failed to furnish it within the time allowed and in the manner required; or
(b) has without reasonable cause failed to comply with a notice under sub-section (2) or sub-section (4) of section 15; or
(c) has concealed the particulars of any gift or deliberately furnished inaccurate particulars thereof, he or it may, by order in writing, direct that such person shall pay by way of penalty
(i) in the case referred to in clause (a), in addition to the amount of gift-tax payable by him, a sum not exceeding one and a half times the amount of such tax, and
(ii) in the case referred to in clause (b) or clause (c), in addition to the amount of gift-tax payable by him, a sum not exceeding one and a half times the amount of the tax, if any, which would have been avoided if the return made by such person under section 13, section 14, or section 16, as the case may be, had been accepted as correct.
(2) No order shall be made under sub-section (1) unless the person concerned has been given a reasonable opportunity of being heard.
(3) No prosecution for an offence under this Act shall be instituted in respect of the same facts in relation to which a penalty has been imposed under this section.
(4) The Gift-tax Officer shall not impose any penalty under this section without the previous approval of the Inspecting Assistant Commissioner of Gift-tax.
(1) If any person fails without reasonable cause
(a) to furnish in due time any return of gifts under this Act;
(b) to produce, or cause to be produced, on or before the date mentioned in any notice under sub-section (2) or sub-section (4) of section 15, such accounts, records and documents as are referred to in the notice;
(c) to furnish within the time specified any statement or information which such person is bound to furnish to the Gift-tax Officer under section 37,
he shall, on conviction before a Magistrate, be punishable with fine which may extend to rupees ten for every day during which the default continues.
(2) If a person makes a statement in a verification in any return of gifts furnished under this Act or in a verification mentioned in sections 22, 23 or 25 which is false, and which he either knows or believes to be false, or does not believe to be true, he shall on conviction before a Magistrate, be punishable with simple imprisonment which may extend to one year, or with fine which may extend to rupees one thousand or with both.
(3) A person shall not be proceeded against for an offence under this section except at the instance of the Commissioner.
Explanation.-For the purposes of this section "Magistrate" means a Presidency Magistrate; a Magistrate of the first class or a Magistrate of the second class specially empowered by the Central Government to try offences under this Act.