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FINANCE ACT 2008

[10th May, 2008.]

% Short title and commencement. !

1. Short title and commencement. - (1) This Act may be called the Finance Act, 2008.

(2) Save as otherwise provided in this Act, sections 2 to 67 shall be deemed to have come into force on the 1st day of April, 2008. @ CHAPTER II % RATES OF INCOME-TAX ! CHAPTER II RATES OF INCOME-TAX @

% Income-tax. !

2. Income-tax. - (1) Subject to the provisions of sub-sections (2) and (3), for the assessment year commencing on the 1st day of April, 2008, income-tax shall be charged at the rates specified in Part I of the First Schedule and such tax as reduced by the rebate of income-tax calculated under Chapter VIII-A of the Income-tax Act, 1961 (hereinafter referred to as the Income-tax Act) shall be increased by a surcharge, for purposes of the Union, calculated in each case in the manner provided therein.

(2) In the cases to which Paragraph A of Part I of the First Schedule applies, where the assessee has, in the previous year, any net agricultural income exceeding five thousand rupees, in addition to total income, and the total income exceeds one lakh ten thousand rupees, then,- (a) the net agricultural income shall be taken into account, in the manner provided in clause (b) [that is to say, as if the net agricultural income were comprised in the total income after the first one lakh ten thousand rupees of the total income but without being liable to tax], only for the purpose of charging income-tax in respect of the total income; and (b) the income-tax chargeable shall be calculated as follows:- (i) the total income and the net agricultural income shall be aggregated and the amount of income-tax shall be determined in respect of the aggregate income at the rates specified in the said Paragraph A, as if such aggregate income were the total income; (ii) the net agricultural income shall be increased by a sum of one lakh ten thousand rupees, and the amount of income-tax shall be determined in respect of the net agricultural income as so increased at the rates specified in the said Paragraph A, as if the net agricultural income as so increased were the total income; (iii) the amount of income-tax determined in accordance with sub-clause (i) shall be reduced by the amount of income-tax determined in accordance with sub-clause (ii) and the sum so arrived at shall be the income-tax in respect of the total income: Provided that in the case of every woman, resident in India and below the age of sixty-five years at any time during the previous year, referred to in item (II) of Paragraph A of Part I of the First Schedule, the provisions of this sub-section shall have effect as if for the words "one lakh ten thousand rupees", the words "one lakh forty-five thousand rupees" had been substituted: Provided further that in the case of every individual, being a resident in India, who is of the age of sixty-five years or more at any time during the previous year, referred to in item (III) of Paragraph A of Part I of the First Schedule, the provisions of this sub-section shall have effect as if for the words "one lakh ten thousand rupees", the words "one lakh ninety-five thousand rupees" had been substituted: Provided also that the amount of income-tax so arrived at, as reduced by the amount of rebate of income-tax calculated under Chapter VIII-A of the Income-tax Act, shall be increased by a surcharge, for purposes of the Union, calculated in each case in the manner provided in that Paragraph and the sum so arrived at shall be the income-tax in respect of the total income.

(3) In cases to which the provisions of Chapter XII or Chapter XII-A or Chapter XII-H or section 115JB or sub-section (1A) of section 161 or section 164 or section 164A or section 167B of the Income- tax Act apply, the tax chargeable shall be determined as provided in that Chapter or that section, and with reference to the rates imposed by sub-section (1) or the rates as specified in that Chapter or section, as the case may be: Provided that the amount of income-tax computed in accordance with the provisions of section 111A or section 112 shall be increased by a surcharge, for purposes of the Union, as provided in Paragraph A, B, C, D or E, as the case may be, of Part I of the First Schedule: Provided further that in respect of any income chargeable to tax under sections 115A, 115AB, 115AC, 115ACA, 115AD, 115B, 115BB, 115BBA, 115BBC, 115E and 115JB or fringe benefits chargeable to tax under section 115WA of the Income-tax Act, the amount of income-tax computed under this sub-section shall be increased by a surcharge, for purposes of the Union, calculated,- (a) in the case of every individual, Hindu undivided family, association of persons and body of individuals, whether incorporated or not, at the rate of ten per cent. of such income-tax where the total income exceeds ten lakh rupees;

(b) in the case of every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, at the rate of ten per cent. of such income-tax; (c) in the case of every firm and domestic company, at the rate of ten per cent. of such income-tax where the total income exceeds one crore rupees; (d) in the case of every company, other than a domestic company, at the rate of two and one-half per cent. of such income-tax where the total income exceeds one crore rupees: Provided also that in the case of every company having total income chargeable to tax under section 115JB of the Income-tax Act, and such income exceeds one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees: Provided also that in respect of any fringe benefits chargeable to tax under section 115WA of the Income-tax Act, income-tax computed under this sub-section shall be increased by a surcharge, for purposes of the Union, calculated,- (a) in the case of every association of persons and body of individuals, whether incorporated or not, at the rate of ten per cent. of income-tax where the fringe benefits exceed ten lakh rupees; (b) in the case of every firm, artificial juridical person referred to in sub-clause (v) of clause (a) of section 115W of the Income-tax Act, and domestic company, at the rate of ten per cent. of such income-tax; (c) in the case of every company, other than a domestic company, at the rate of two and one-half per cent. of such income-tax.

(4) In cases in which tax has to be charged and paid under section 115-O or sub-section (2) of section 115R of the Income-tax Act, the tax shall be charged and paid at the rates as specified in those sections and shall be increased by a surcharge, for purposes of the Union, calculated at the rate of ten per cent. of such tax.

(5) In cases in which tax has to be deducted under sections 193, 194, 194A, 194B, 194BB, 194D and 195 of the Income-tax Act, at the rates in force, the deductions shall be made at the rates specified in Part II of the First Schedule and shall be increased by a surcharge, for purposes of the Union, calculated in each case, in the manner provided therein.

(6) In cases in which tax has to be deducted under sections 194C, 194E, 194EE, 194F, 194G, 194H, 194-I, 194J, 194LA, 196B, 196C and 196D of the Income-tax Act, the deductions shall be made at the rates specified in those sections and shall be increased by a surcharge, for purposes of the Union, calculated,- (a) in the case of every individual, Hindu undivided family, association of persons and body of individuals, whether incorporated or not, at the rate of ten per cent. of such tax where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds ten lakh rupees;

(b) in the case of every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, at the rate of ten per cent. of such tax; (c) in the case of every firm and domestic company, at the rate of ten per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees; (d) in the case of every company, other than a domestic company, at the rate of two and one-half per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees.

(7) In cases in which tax has to be collected under the proviso to section 194B of the Income-tax Act, the collection shall be made at the rates specified in Part II of the First Schedule, and shall be increased by a surcharge, for purposes of the Union, calculated in the manner provided therein.

(8) In cases in which tax has to be collected under section 206C of the Income-tax Act, the collection shall be made at the rates specified in that section and shall be increased by a surcharge, for purposes of the Union, calculated,- (a) in the case of every individual, Hindu undivided family, association of persons and body of individuals, whether incorporated or not, at the rate of ten per cent. of such tax, where the amount or the aggregate of such amounts collected and subject to the collection exceeds ten lakh rupees;

(b) in the case of every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, at the rate of ten per cent. of such tax; (c) in the case of every firm and domestic company at the rate of ten per cent. of such tax, where the amount or the aggregate of such amounts collected and subject to the collection exceeds one crore rupees; (d) in the case of every company, other than a domestic company, at the rate of two and one-half per cent. of such tax, where the amount or the aggregate of such amounts collected and subject to the collection exceeds one crore rupees.

(9) Subject to the provisions of sub-section (10), in cases in which income-tax has to be charged under sub-section (4) of section 172 or sub-section (2) of section 174 or section 174A or section 175 or sub-section (2) of section 176 of the Income-tax Act or deducted from, or paid on, income chargeable under the head "Salaries" under section 192 of the said Act or in which the "advance tax" payable under Chapter XVII-C of the said Act has to be computed at the rate or rates in force, such income-tax or, as the case may be, "advance tax" shall be so charged, deducted or computed at the rate or rates specified in Part III of the First Schedule and such tax shall be increased by a surcharge, for purposes of the Union, calculated in each case in the manner provided therein: Provided that in cases to which the provisions of Chapter XII or Chapter XII-A or Chapter XII-H or section 115JB or sub-section (1A) of section 161 or section 164 or section 164A or section 167B of the Income-tax Act apply, "advance tax" shall be computed with reference to the rates imposed by this sub-section or the rates as specified in that Chapter or section, as the case may be: Provided further that the amount of "advance tax" computed in accordance with the provisions of section 111A or section 112 of the Income-tax Act shall be increased by a surcharge, for purposes of the Union, as provided in Paragraph A, B, C, D or E, as the case may be, of Part III of the First Schedule: Provided also that in respect of any income chargeable to tax under sections 115A, 115AB, 115AC, 115ACA, 115AD, 115B, 115BB, 115BBA, 115BBC, 115E and 115JB of the Income-tax Act, "advance tax" computed under the first proviso shall be increased by a surcharge, for purposes of the Union, calculated,- (a) in the case of every individual, Hindu undivided family, association of persons and body of individuals, whether incorporated or not, at the rate of ten per cent. of "advance tax", where the total income exceeds ten lakh rupees;

(b) in the case of every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, at the rate of ten per cent. of such "advance tax"; (c) in the case of every firm and domestic company, at the rate of ten per cent. of such "advance tax", where the total income exceeds one crore rupees; (d) in the case of every company, other than a domestic company, at the rate of two and one-half per cent. of such "advance tax", where the total income exceeds one crore rupees: Provided also that in the case of every company having total income chargeable to tax under section 115JB of the Income-tax Act, and such income exceeds one crore rupees, the total amount payable as "advance tax" and surcharge on such income shall not exceed the total amount payable as "advance tax" on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees: Provided also that in respect of any fringe benefits chargeable to tax under section 115WA of the Income-tax Act, "advance tax" computed under the first proviso shall be increased by a surcharge, for purposes of the Union, calculated,- (a) in the case of every association of persons and body of individuals, whether incorporated or not, at the rate of ten per cent. of "advance tax", where the fringe benefits exceed ten lakh rupees; (b) in the case of every firm, artificial juridical person referred to in sub-clause (v) of clause (a) of section 115W of the Income-tax Act, and domestic company, at the rate of ten per cent. of such "advance tax"; (c) in the case of every company, other than a domestic company, at the rate of two and one-half per cent. of such "advance-tax".

(10) In cases to which Paragraph A of Part III of the First Schedule applies, where the assessee has, in the previous year or, if by virtue of any provision of the Income-tax Act, income-tax is to be charged in respect of the income of a period other than the previous year, in such other period, any net agricultural income exceeding five thousand rupees, in addition to total income and the total income exceeds one lakh fifty thousand rupees, then, in charging income-tax under sub-section (2) of section 174 or section 174A or section 175 or sub-section (2) of section 176 of the said Act or in computing the "advance tax" payable under Chapter XVII-C of the said Act, at the rate or rates in force,- (a) the net agricultural income shall be taken into account, in the manner provided in clause (b) [that is to say, as if the net agricultural income were comprised in the total income after the first one lakh fifty thousand rupees of the total income but without being liable to tax], only for the purpose of charging or computing such income-tax or, as the case may be, "advance tax" in respect of the total income; and (b) such income-tax or, as the case may be, "advance tax" shall be so charged or computed as follows:- (i) the total income and the net agricultural income shall be aggregated and the amount of income-tax or "advance tax" shall be determined in respect of the aggregate income at the rates specified in the said Paragraph A, as if such aggregate income were the total income; (ii) the net agricultural income shall be increased by a sum of one lakh fifty thousand rupees, and the amount of income-tax or "advance tax" shall be determined in respect of the net agricultural income as so increased at the rates specified in the said Paragraph A, as if the net agricultural income were the total income; (iii) the amount of income-tax or "advance tax" determined in accordance with sub-clause (i) shall be reduced by the amount of income-tax or, as the case may be, "advance tax" determined in accordance with sub-clause (ii) and the sum so arrived at shall be the income-tax or, as the case may be, "advance tax" in respect of the total income: Provided that in the case of every woman, resident in India and below the age of sixty-five years at any time during the previous year, referred to in item (II) of Paragraph A of Part III of the First Schedule, the provisions of this sub-section shall have effect as if for the words "one lakh fifty thousand rupees", the words "one lakh eighty thousand rupees" had been substituted: Provided further that in the case of every individual, being a resident in India, who is of the age of sixty-five years or more at any time during the previous year, referred to in item (III) of Paragraph A of Part III of the First Schedule, the provisions of this sub-section shall have effect as if for the words "one lakh fifty thousand rupees", the words "two lakh twenty-five thousand rupees" had been substituted: Provided also that the amount of income-tax or "advance tax" so arrived at shall be increased by a surcharge, for purposes of the Union, calculated, in each case, in the manner provided therein.

(11) The amount of income-tax as specified in sub-sections (1) to (10) and as increased by a surcharge, for purposes of the Union, calculated in the manner provided therein, shall be further increased by an additional surcharge, for purposes of the Union, to be called the "Education Cess on income-tax", calculated at the rate of two per cent. of such income-tax and surcharge so as to fulfil the commitment of the Government to provide and finance universalised quality basic education.

(12) The amount of income-tax as specified in sub-sections (1) to (10) and as increased by a surcharge, for purposes of the Union, calculated in the manner provided therein, shall also be increased by an additional surcharge, for purposes of the Union, to be called the "Secondary and Higher Education Cess on income-tax", calculated at the rate of one per cent. of such income-tax and surcharge so as to fulfil the commitment of the Government to provide and finance secondary and higher education.

(13) For the purposes of this section and the First Schedule,- (a) "domestic company" means an Indian company or any other company which, in respect of its income liable to income-tax under the Income-tax Act, for the assessment year commencing on the 1st day of April, 2008, has made the prescribed arrangements for the declaration and payment within India of the dividends, including dividends on preference shares, payable out of such income; (b) "insurance commission" means any remuneration or reward, whether by way of commission or otherwise, for soliciting or procuring insurance business, including business relating to the continuance, renewal or revival of policies of insurance; (c) "net agricultural income", in relation to a person, means the total amount of agricultural income, from whatever source derived, of that person computed in accordance with the rules contained in Part IV of the First Schedule; (d) all other words and expressions used in this section and the First Schedule but not defined in this sub-section and defined in the Income-tax Act shall have the meanings respectively assigned to them in that Act. @ CHAPTER III % DIRECT TAXES ! CHAPTER III DIRECT TAXES @

% Amendment of section 10. ! 3. Amendment of section 10. - Amendment of section 2. - In section 2 of the Income-tax Act,- (a) in clause (1A), after Explanation 2, the following Explanation shall be inserted with effect from the 1st day of April, 2009, namely:- ''Explanation 3.-For the purposes of this clause, any income derived from saplings or seedlings grown in a nursery shall be deemed to be agricultural income;'';

(b) for clause (15), the following clause shall be substituted with effect from the 1st day of April, 2009, namely:-

'(15) "charitable purpose" includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity;'. @

% Amendment of section 10. ! 4. Amendment of section 10.- In section 10 of the Income-tax Act,- (a) after clause (26AA) as omitted by the Finance Act, 1997, the following clause shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 1990, namely:- '(26AAA) in case of an individual, being a Sikkimese, any income which accrues or arises to him- (a) from any source in the State of Sikkim; or (b) by way of dividend or interest on securities: Provided that nothing contained in this clause shall apply to a Sikkimese woman who, on or after the 1st day of April, 2008, marries an individual who is not a Sikkimese. Explanation.-For the purposes of this clause, "Sikkimese" shall mean- (i) an individual, whose name is recorded in the register maintained under the Sikkim Subjects Regulation, 1961 read with the Sikkim Subject Rules, 1961 (hereinafter referred to as the "Register of Sikkim Subjects"), immediately before the 26th day of April, 1975; or (ii) an individual, whose name is included in the Register of Sikkim Subjects by virtue of the Government of India Order No. 26030/36/ 90-I.C.I., dated the 7th August, 1990 and Order of even number dated the 8th April, 1991; or (iii) any other individual, whose name does not appear in the Register of Sikkim Subjects, but it is established beyond doubt that the name of such individual's father or husband or paternal grandfather or brother from the same father has been recorded in that register;'; (b) after clause (26AAA) as so inserted, the following clause shall be inserted with effect from the 1st day of April, 2009, namely:- "(26AAB) any income of an agricultural produce market committee or board constituted under any law for the time being in force for the purpose of regulating the marketing of agricultural produce;"; (c) in clause (29A), after sub-clause (g), the following sub-clause shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2002, namely:- ''(h) the Coir Board established under section 4 of the Coir Industry Act, 1953;";

(d) after clause (42), the following clause shall be inserted, namely:-

''(43) any amount received by an individual as a loan, either in lump sum or in instalment, in a transaction of reverse mortgage referred to in clause (xvi) of section 47.". @

% Amendment of section 10A. !

5. Amendment of section 10A. - In section 10A of the Income-tax Act, in sub-section (1), in the fourth proviso, for the figures "2010", the figures "2011" shall be substituted. @

% Amendment of section 10B. !

6. Amendment of section 10B. - . In section 10B of the Income-tax Act, in sub-section (1), in the third proviso, for the figures "2010", the figures "2011" shall be substituted. @

% Amendment of section 35. ! 7. Amendment of section 35. - In section 35 of the Income-tax Act, with effect from the 1st day of April, 2009,-

(a) in sub-section (1), after clause (ii), the following clause shall be inserted, namely:- ''(iia) an amount equal to one and one-fourth times of any sum paid to a company to be used by it for scientific research: Provided that such company- (A) is registered in India, (B) has as its main object the scientific research and development, (C) is, for the purposes of this clause, for the time being approved by the prescribed authority in the prescribed manner, and (D) fulfils such other conditions as may be prescribed;";

(b) in sub-section (2AB), after clause (5), the following clause shall be inserted, namely:-

''(6) No deduction shall be allowed to a company approved under sub-clause (C) of clause (iia) of sub-section (1) in respect of the expenditure referred to in clause (1) which is incurred after the 31st day of March, 2008.". @

% In section 35D of the Income-tax Act, with effect from the 1st day of April, 2009, ! 8. In section 35D of the Income-tax Act, with effect from the 1st day of April, 2009,- (a) for the words "industrial undertaking", wherever they occur, the word "undertaking" shall be substituted; (b) for the words "industrial unit", wherever they occur, the word "unit" shall be substituted. @

% Amendment of section 36. !

9. Amendment of section 36. - In section 36 of the Income-tax Act, in sub-section (1), after clause (xiv), the following clauses shall be inserted with effect from the 1st day of April, 2009, namely:- '(xv) an amount equal to the securities transaction tax paid by the assessee in respect of the taxable securities transactions entered into in the course of his business during the previous year, if the income arising from such taxable securities transactions is included in the income computed under the head "Profits and gains of business or profession''. Explanation.-For the purposes of this clause, the expressions "securities transaction tax" and "taxable securities transaction" shall have the meanings respectively assigned to them under Chapter VII of the Finance (No. 2) Act, 2004; (xvi) an amount equal to the commodities transaction tax paid by the assessee in respect of the taxable commodities transactions entered into in the course of his business during the previous year, if the income arising from such taxable commodities transactions is included in the income computed under the head "Profits and gains of business or profession''. Explanation.-For the purposes of this clause, the expressions "commodities transaction tax" and "taxable commodities transaction" shall have the meanings respectively assigned to them under Chapter VII of the Finance Act, 2008.'. @

% Amendment of section 40. ! 10. In section 40 of the Income-tax Act, in clause (a),- (a) in sub-clause (ia), with effect from the 1st day of April, 2005,-

(i) for the words, brackets and figures "has not been paid during the previous year, or in the subsequent year before the expiry of the time prescribed under sub-section (1) of section 200", the following words, brackets, letters and figures shall be substituted and shall be deemed to have been substituted, namely:- "has not been paid,-

(A) in a case where the tax was deductible and was so deducted during the last month of the previous year, on or before the due date specified in sub-section (1) of section 139; or (B) in any other case, on or before the last day of the previous year."; (ii) for the proviso, the following proviso shall be substituted and shall be deemed to have been substituted, namely:- "Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted- (A) during the last month of the previous year but paid after the said due date; or (B) during any other month of the previous year but paid after the end of the said previous year, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid."; (b) sub-clause (ib) shall be omitted with effect from the 1st day of April, 2009. @

% Amendment of section 40A. !

11. Amendment of section 40A. - In section 40A of the Income-tax Act, for sub-section (3), the following sub-sections shall be substituted with effect from the 1st day of April, 2009, namely:-

''(3) Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure. (3A) Where an allowance has been made in the assessment for any year in respect of any liability incurred by the assessee for any expenditure and subsequently during any previous year (hereinafter referred to as subsequent year) the assessee makes payment in respect thereof, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, the payment so made shall be deemed to be the profits and gains of business or profession and accordingly chargeable to income-tax as income of the subsequent year if the payment or aggregate of payments made to a person in a day, exceeds twenty thousand rupees:

Provided that no disallowance shall be made and no payment shall be deemed to be the profits and gains of business or profession under sub-section (3) and this sub-section where a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, in such cases and under such circumstances as may be prescribed, having regard to the nature and extent of banking facilities available, considerations of business expediency and other relevant factors.''. @

% Amendment of section 43. !

12. Amendment of section 43. - In section 43 of the Income-tax Act, in clause (6), after Explanation 5, the following Explanation shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2003, namely:- ''Explanation 6.-Where an assessee was not required to compute his total income for the purposes of this Act for any previous year or years preceding the previous year relevant to the assessment year under consideration,- (a) the actual cost of an asset shall be adjusted by the amount attributable to the revaluation of such asset, if any, in the books of account; (b) the total amount of depreciation on such asset, provided in the books of account of the assessee in respect of such previous year or years preceding the previous year relevant to the assessment year under consideration shall be deemed to be the depreciation actually allowed under this Act for the purposes of this clause; and (c) the depreciation actually allowed under clause (b) shall be adjusted by the amount of depreciation attributable to such revaluation of the asset.". @

% Amendment of section 44AB. ! 13. Amendment of section 44AB. - In section 44AB of the Income-tax Act, in the Explanation, in clause (ii), for the figures, letters and words "31st day of October", the figures, letters and words "30th day of September" shall be substituted. @

% Amendment of section 47. ! 14. Amendment of section 47. - In section 47 of the Income-tax Act,- (a) after clause (x), the following clause shall be inserted, namely:-

''(xa) any transfer by way of conversion of bonds referred to in clause (a) of sub-section (1) of section 115AC into shares or debentures of any company;"; (b) after clause (xv), the following clause shall be inserted, namely:- ''(xvi) any transfer of a capital asset in a transaction of reverse mortgage under a scheme made and notified by the Central Government.". @

% Amendment of section 49. ! 15. Amendment of section 49. - In section 49 of the Income-tax Act, for sub-section (2A), the following sub-section shall be substituted, namely:- ''(2A) Where the capital asset, being a share or debenture of a company, became the property of the assessee in consideration of a transfer referred to in clause (x) or clause (xa) of section 47, the cost of acquisition of the asset to the assessee shall be deemed to be that part of the cost of debenture, debenture-stock, bond or deposit certificate in relation to which such asset is acquired by the assessee.". 16. In section 80C of the Income-tax Act,-

(a) in sub-section (2), after clause (xxii), the following clauses shall be inserted, namely:- "(xxiii) in an account under the Senior Citizens Savings Scheme Rules, 2004; (xxiv) as five year time deposit in an account under the Post Office Time Deposit Rules, 1981.";

(b) after sub-section (6), the following sub-section shall be inserted, namely:-

"(6A) If any amount, including interest accrued thereon, is withdrawn by the assessee from his account referred to in clause (xxiii) or clause (xxiv) of sub-section (2), before the expiry of the period of five years from the date of its deposit, the amount so withdrawn shall be deemed to be the income of the assessee of the previous year in which the amount is withdrawn and shall be liable to tax in the assessment year relevant to such previous year: Provided that the amount liable to tax shall not include the following amounts, namely:-

(i) any amount of interest, relating to deposits referred to in clause (xxiii) or clause (xxiv) of sub-section (2), which has been included in the total income of the assessee of the previous year or years preceding such previous year; and (ii) any amount received by the nominee or legal heir of the assessee, on the death of such assessee, other than interest, if any, accrued thereon, which was not included in the total income of the assessee for the previous year or years preceding such previous year.". 17. Substitution of new section for section 80D. - For section 80D of the Income-tax Act, the following section shall be substituted with effect from the 1st day of April, 2009,-

'80D. Deduction in respect of health insurance premia. - (1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted such sum, as specified in sub-section (2) or sub-section (3), payment of which is made by any mode, other than cash, in the previous year out of his income chargeable to tax.

(2) Where the assessee is an individual, the sum referred to in sub-section (1) shall be the aggregate of the following, namely:- (a) the whole of the amount paid to effect or to keep in force an insurance on the health of the assessee or his family as does not exceed in the aggregate fifteen thousand rupees; and (b) the whole of the amount paid to effect or to keep in force an insurance on the health of the parent or parents of the assessee as does not exceed in the aggregate fifteen thousand rupees. Explanation.-For the purposes of clause (a), "family" means the spouse and dependant children of the assessee.

(3) Where the assessee is a Hindu undivided family, the sum referred to in sub-section (1) shall be the whole of the amount paid to effect or to keep in force an insurance on the health of any member of that Hindu undivided family as does not exceed in the aggregate fifteen thousand rupees.

(4) Where the sum specified in clause (a) or clause (b) of sub-section (2) or in sub-section (3) is paid to effect or keep in force an insurance on the health of any person specified therein, and who is a senior citizen, the provisions of this section shall have effect as if for the words "fifteen thousand rupees", the words "twenty thousand rupees" had been substituted. Explanation.- For the purposes of this sub-section, "senior citizen" means an individual resident in India who is of the age of sixty-five years or more at any time during the relevant previous year.

(5) The insurance referred to in this section shall be in accordance with a scheme made in this behalf by- (a) the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 and approved by the Central Government in this behalf; or

(b) any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999.'. 18. In section 80-IB of the Income-tax Act,-

(a) in sub-section (9), after the second proviso, the following proviso shall be inserted, namely: "Provided also that where such undertaking begins refining of mineral oil on or after the 1st day of April, 2009, no deduction under this section shall be allowed in respect of such undertaking unless such undertaking fulfils all the following conditions, namely:- (i) it is wholly owned by a public sector company or any other company in which a public sector company or companies hold at least forty-nine per cent. of the voting rights; (ii) it is notified by the Central Government in this behalf on or before the 31st day of May, 2008; and (iii) it begins refining not later than the 31st day of March, 2012."; (b) after sub-section (11B), the following sub-section shall be inserted with effect from the 1st day of April, 2009, namely:- '(11C) The amount of deduction in the case of an undertaking deriving profits from the business of operating and maintaining a hospital located anywhere in India, other than the excluded area, shall be hundred per cent. of the profits and gains derived from such business for a period of five consecutive assessment years, beginning with the initial assessment year, if- (i) the hospital is constructed and has started or starts functioning at any time during the period beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2013; (ii) the hospital has at least one hundred beds for patients; (iii) the construction of the hospital is in accordance with the regulations or bye-laws of the local authority; and

(iv) the assessee furnishes along with the return of income, a report of audit in such form and containing such particulars, as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation to sub-section (2) of section 288, certifying that the deduction has been correctly claimed. Explanation.- For the purposes of this sub-section- (a) a hospital shall be deemed to have been constructed on the date on which a completion certificate in respect of such construction is issued by the local authority concerned; (b) "initial assessment year" means the assessment year relevant to the previous year in which the business of the hospital starts functioning; (c) "excluded area" shall mean an area comprising- (i) Greater Mumbai urban agglomeration; (ii) Delhi urban agglomeration; (iii) Kolkata urban agglomeration; (iv) Chennai urban agglomeration; (v) Hyderabad urban agglomeration; (vi) Bangalore urban agglomeration; (vii) Ahmedabad urban agglomeration; (viii) District of Faridabad; (ix) District of Gurgaon; (x) District of Gautam Budh Nagar; (xi) District of Ghaziabad; (xii) District of Gandhinagar; and (xiii) City of Secunderabad; (d) the area comprising an urban agglomeration shall be the area included in such urban agglomeration on the basis of the 2001 census.'. @

% Amendment of section 80-ID. ! 19. Amendment of section 80-ID. - In section 80-ID of the Income-tax Act, with effect from the 1st day of April, 2009,-

(a) in sub-section (2), after clause (ii), the following clause shall be inserted, namely:- ''(iii) engaged in the business of hotel located in the specified district having a World Heritage Site, if such hotel is constructed and has started or starts functioning at any time during the period beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2013.";

(b) in sub-section (6), after clause (d), the following shall be inserted, namely:-

'(e) "specified district having a World Heritage Site" means districts, specified in column (2) of the Table below, of the States, specified in the corresponding entry in column (3) of the said Table: Table S.No. Name of district Name of State

(1) (2) (3) 1. Agra Uttar Pradesh 2. Jalgaon Maharashtra 3. Aurangabad Maharashtra 4. Kancheepuram Tamil Nadu 5. Puri Orissa 6. Bharatpur Rajasthan 7. Chhatarpur Madhya Pradesh 8. Thanjavur Tamil Nadu 9. Bellary Karnataka 10. South 24 Parganas West Bengal (excluding areas falling within the Kolkata urban agglomeration on the basis of the 2001 census) 11. Chamoli Uttarakhand 12. Raisen Madhya Pradesh 13. Gaya Bihar 14. Bhopal Madhya Pradesh 15 Panchmahal Gujarat 16. Kamrup Assam 17. Goalpara Assam 18. Nagaon Assam 19. North Goa Goa 20. South Goa Goa 21. Darjeeling West Bengal 22. Nilgiri Tamil Nadu.''. @

% Amendment of section 88E. !

20. Amendment of section 88E. - In section 88E of the Income-tax Act, after sub-section (2), the following sub-section shall be inserted, namely:-

''(3) No deduction under this section shall be allowed in, or after, the assessment year beginning on the 1st day of April, 2009.". @

% Amendment of section 111A. !

21. Amendment of section 111A. - In section 111A of the Income-tax Act, in sub-section (1), in clause (i), for the words ''ten per cent.'', the words ''fifteen per cent.'' shall be substituted with effect from the 1st day of April, 2009. @

% Amendment of section 115AD. !

22. Amendment of section 115AD. - In section 115AD of the Income-tax Act, in sub-section (1), in the proviso, for the words ''ten per cent.'', the words ''fifteen per cent.'' shall be substituted with effect from the 1st day of April, 2009. @

% Amendment of section 115JB. !

23. Amendment of section 115JB. - In section 115JB of the Income-tax Act, after sub-section (2),- (a) the Explanation shall be numbered as Explanation 1 and in Explanation 1 as so numbered, after clause (g), for the portion beginning with the words ''if any amount referred '' and ending with the words "as reduced by-", the following shall be substituted and shall be deemed to have been substituted with effect from the 1st day of April, 2001, namely:- ''(h) the amount of deferred tax and the provision therefor, if any amount referred to in clauses (a) to (h) is debited to the profit and loss account, and as reduced by-''; (b) in Explanation 1 as so numbered, after clause (vii), the following clause shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2001, namely:- "(viii) the amount of deferred tax, if any such amount is credited to the profit and loss account."; (c) after Explanation 1 as so numbered, the following shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2001, namely:- ''Explanation 2.- For the purposes of clause (a) of Explanation 1, the amount of income-tax shall include- (i) any tax on distributed profits under section 115-O or on distributed income under section 115R; (ii) any interest charged under this Act; (iii) surcharge, if any, as levied by the Central Acts from time to time; (iv) Education Cess on income-tax, if any, as levied by the Central Acts from time to time; and (v) Secondary and Higher Education Cess on income-tax, if any, as levied by the Central Acts from time to time.". @

% Amendment of section 115-O. !

24. Amendment of section 115-O. - In section 115-O of the Income-tax Act, after sub-section (1), the following sub-section shall be inserted, namely:-

''(1A) The amount referred to in sub-section (1) shall be reduced by the amount of dividend, if any, received by the domestic company during the financial year, if- (a) such dividend is received from its subsidiary; (b) the subsidiary has paid tax under this section on such dividend; and (c) the domestic company is not a subsidiary of any other company: Provided that the same amount of dividend shall not be taken into account for reduction more than once. Explanation.-For the purposes of this sub-section, a company shall be a subsidiary of another company, if such other company holds more than half in nominal value of the equity share capital of the company.". @

% Amendment of section 115WB. ! 25. Amendment of section 115WB. - In section 115WB of the Income-tax Act,-

(a) in sub-section (1), in the Explanation to clause (d), in clause (i), for the words "and includes employees' stock option", the words "and, where employees' stock option has been granted under any plan or scheme therefor, includes the securities offered under such plan or scheme" shall be substituted;

(b) in sub-section (2), with effect from the 1st day of April, 2009,- (I) in clause (B), after sub-clause (ii), the following sub-clause shall be inserted, namely:- ''(iii) any expenditure on or payment through non-transferable pre-paid electronic meal card usable only at eating joints or outlets and which fulfils such other conditions as may be prescribed;"; (II) in clause (E), for the Explanation, the following Explanation shall be substituted, namely:- ''Explanation.-For the purposes of this clause, any expenditure incurred or payment made to- (i) fulfil any statutory obligation; or (ii) mitigate occupational hazards; or (iii) provide first aid facilities in the hospital or dispensary run by the employer; or (iv) provide crŠche facility for the children of the employee; or (v) sponsor a sportsman, being an employee; or (vi) organise sports events for employees, shall not be considered as expenditure for employees' welfare;"; (III) clause (K) shall be omitted. @

% Amendment of section 115WC. !

26. Amendment of section 115WC. - In section 115WC of the Income-tax Act, in sub-section (1), with effect from the 1st day of April, 2009,- (i) in clause (c), for the words, brackets and letters "clauses (A) to (K)", the words, brackets and letters "clauses (A) to (L)" shall be substituted; (ii) in clause (d), for the words, brackets and letters "clauses (L) to (P)", the words, brackets and letters "clauses (M) to (P)" shall be substituted. @

% Amendment of section 115WD. !

27. Amendment of section 115WD. - In section 115WD of the Income-tax Act, in sub-section (1), in the Explanation, in clause (a), for the figures, letters and words "31st day of October", the figures, letters and words "30th day of September" shall be substituted. @

% Amendment of section 115WE. ! 28. Amendment of section 115WE. - In section 115WE of the Income-tax Act,-

(A) for sub-section (1), the following sub-sections shall be substituted, namely:-

'(1) Where a return has been made under section 115WD, such return shall be processed in the following manner, namely:- (a) the value of fringe benefits shall be computed after making the following adjustments, namely:- (i) any arithmetical error in the return; or (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; (b) the tax and interest, if any, shall be computed on the basis of the value of fringe benefits computed under clause (a); (c) the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax and interest, if any, computed under clause (b) by any advance tax paid, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest; (d) an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to, the assessee under clause (c); and (e) the amount of refund due to the assessee in pursuance of the determination under clause (c) shall be granted to the assessee: Provided that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the return is made. Explanation.-For the purposes of this sub-section,- (a) "an incorrect claim apparent from any information in the return" shall mean a claim, on the basis of an entry, in the return,- (i) of an item, which is inconsistent with another entry of the same or some other item in such return; (ii) in respect of which the information required to be furnished to substantiate such entry has not been so furnished under this Act; or (iii) in respect of a deduction or value of fringe benefits, where such deduction or value exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction; (b) the acknowledgment of the return shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the assessee under clause (c), and where no adjustment has been made under clause (a).

(1A) For the purposes of processing of returns under sub-section (1), the Board may make a scheme for centralised processing of returns with a view to expeditiously determining the tax payable by, or the refund due to, the assessee as required under that sub-section. (1B) Save as otherwise expressly provided, for the purpose of giving effect to the scheme made under sub-section (1A), the Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in that notification; so, however, that no direction shall be issued after the 31st day of March, 2009. (1C) Every notification issued under sub-section (1B), alongwith the scheme made under sub-section (1A), shall, as soon as may be after the notification is issued, be laid before each House of Parliament.';

(B) in sub-section (2), in the proviso, for the words "twelve months from the end of the month", the words "six months from the end of the financial year" shall be substituted. @

% Insertion of new section 115WKB. ! 29. Insertion of new section 115WKB. - After section 115WKA of the Income-tax Act, the following section shall be inserted, namely:-

Deemed payment of tax by employee. - "115WKB. (1) Where an employer has paid any fringe benefit tax with respect to allotment or transfer of specified security or sweat equity shares, referred to in clause (d) of sub-section (1) of section 115WB, and has recovered such tax subsequently from an employee, it shall be deemed that the fringe benefit tax so recovered is the tax paid by such employee in relation to the value of the fringe benefit provided to him only to the extent to which the amount thereof relates to the value of the fringe benefit provided to such employee, as determined under clause (ba) of sub-section (1) of section 115WC.

(2) Notwithstanding anything contained in any other provisions of this Act, where the fringe benefit tax recovered from the employee is deemed to be the tax paid by such employee under sub-section (1), such employee shall, under this Act, not be entitled to claim - (i) any refund out of such payment of tax; or (ii) any credit of such payment of tax against tax liability on other income or against any other tax liability.". @

% Amendment of section 139. ! 30. Amendment of section 139. - In section 139 of the Income-tax Act,-

(a) in sub-section (1), in Explanation 2, in clause (a), for the figures, letters and words "31st day of October", the figures, letters and words "30th day of September" shall be substituted;

(b) in sub-section (9), in the Explanation, in clause (c), in sub-clause (i), the words, figures and letters "before the 1st day of April, 2008" shall be omitted. @

% Amendment of section 142. ! 31. Amendment of section 142. - In section 142 of the Income-tax Act, in sub-section (2C), in the proviso, for the words "on an application", the words "suo motu, or on an application" shall be substituted. @

% Amendment of section 143. ! 32. Amendment of section 143. - In section 143 of the Income-tax Act,-

(a) for sub-section (1), the following sub-sections shall be substituted, namely:-

'(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:- (a) the total income or loss shall be computed after making the following adjustments, namely:- (i) any arithmetical error in the return; or (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; (b) the tax and interest, if any, shall be computed on the basis of the total income computed under clause (a); (c) the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax and interest, if any, computed under clause (b) by any tax deducted at source, any tax collected at source, any advance tax paid, any relief allowable under an agreement under section 90 or section 90A, or any relief allowable under section 91, any rebate allowable under Part A of Chapter VIII, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest; (d) an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to, the assessee under clause (c); and (e) the amount of refund due to the assessee in pursuance of the determination under clause (c) shall be granted to the assessee: Provided that an intimation shall also be sent to the assessee in a case where the loss declared in the return by the assessee is adjusted but no tax or interest is payable by, or no refund is due to, him: Provided further that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the return is made. Explanation.-For the purposes of this sub-section,- (a) "an incorrect claim apparent from any information in the return" shall mean a claim, on the basis of an entry, in the return,- (i) of an item, which is inconsistent with another entry of the same or some other item in such return; (ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction; (b) the acknowledgment of the return shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the assessee under clause (c), and where no adjustment has been made under clause (a).

(1A) For the purposes of processing of returns under sub-section (1), the Board may make a scheme for centralised processing of returns with a view to expeditiously determining the tax payable by, or the refund due to, the assessee as required under the said sub-section. (1B) Save as otherwise expressly provided, for the purpose of giving effect to the scheme made under sub-section (1A), the Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in that notification; so, however, that no direction shall be issued after the 31st day of March, 2009. (1C) Every notification issued under sub-section (1B), along with the scheme made under sub-section (1A), shall, as soon as may be after the notification is issued, be laid before each House of Parliament.';

(b) in sub-section (2), in clause (ii), for the proviso, the following proviso shall be substituted, namely:- ''Provided that no notice under clause (ii) shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished.". @

% Amendment of section 147. ! 33. Amendment of section 147. - In section 147 of the Income-tax Act, after the proviso, the following proviso shall be inserted, namely:- ''Provided further that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment.". @

% Amendment of section 151. !

34. Amendment of section 151. - In section 151 of the Income-tax Act, after sub-section (2), the following Explanation shall be inserted and shall be deemed to have been inserted with effect from the 1st day of October, 1998, namely:- ''Explanation.-For the removal of doubts, it is hereby declared that the Joint Commissioner, the Commissioner or the Chief Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself.". @

% Amendment of section 153. !

35. Amendment of section 153. - In section 153 of the Income-tax Act, after sub-section (3),- (a) the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of June, 2003, namely:-

''(4) Notwithstanding anything contained in the foregoing provisions of this section, sub-section (2) of section 153A and sub-section (1) of section 153B, the order of assessment or reassessment, relating to any assessment year, which stands revived under sub-section (2) of section 153A, shall be made within one year from the end of the month of such revival or within the period specified in this section or sub-section (1) of section 153B, whichever is later."; (b) in Explanation 1,-

(i) in the proviso, for the brackets, figures, word and letter "(2) and (2A)", the brackets, figures, letter and word "(2), (2A) and (4)" shall be substituted and shall be deemed to have been substituted with effect from the 1st day of June, 2003; (ii) after the proviso, the following proviso shall be inserted and shall be deemed to have been inserted with effect from the 1st day of June, 2007, namely:-

''Provided further that where a proceeding before the Settlement Commission abates under section 245HA, the period of limitation available under this section to the Assessing Officer for making an order of assessment, reassessment or re-computation, as the case may be, shall, after the exclusion of the period under sub-section (4) of section 245HA, be not less than one year; and where such period of limitation is less than one year, it shall be deemed to have been extended to one year; and for the purposes of determining the period of limitation under sections 149, 153B, 154, 155, 158BE and 231 and for the purposes of payment of interest under section 243 or section 244 or, as the case may be, section 244A, this proviso shall also apply accordingly.''. @

% Amendment of section 153A. !

36. Amendment of section 153A. - Section 153A of the Income-tax Act shall be renumbered as sub-section (1) thereof and,-

(a) in sub-section (1) as so renumbered, in the second proviso, for the words "referred to in this section", the words "referred to in this sub-section" shall be substituted and shall be deemed to have been substituted with effect from the 1st day of June, 2003;

(b) after sub-section (1) as so renumbered and before the Explanation, the following shall be inserted and shall be deemed to have been inserted with effect from the 1st day of June, 2003, namely:-

''(2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside.". @

% Amendment of section 153B. !

37. Amendment of section 153B. - In section 153B of the Income-tax Act, in sub-section (1), with effect from the 1st day of June, 2003,-

(i) in clause (a), for the word, figures and letter "section 153A", the words, brackets, figures and letter "sub-section (1) of section 153A" shall be substituted and shall be deemed to have been substituted; (ii) in the Explanation,- (A) after clause (vi) and before the words "shall be excluded", the following clause shall be inserted and shall be deemed to have been inserted, namely:-

''(vii) the period commencing from the date of annulment of a proceeding or order of assessment or reassessment referred to in sub-section (2) of section 153A till the date of the receipt of the order setting aside the order of such annulment, by the Commissioner,"; (B) in the proviso, for the words, brackets and letters "clause (a) or clause (b) of this section", the words, brackets and letters "clause (a) or clause (b) of this sub-section" shall be substituted and shall be deemed to have been substituted. @

% Amendment of section 153C. !

38. Amendment of section 153C. - In section 153C of the Income-tax Act, in sub-section (1), in the proviso, for the word, figures and letter "section 153A", the words, brackets, figures and letter "sub-section (1) of section 153A" shall be substituted and shall be deemed to have been substituted with effect from the 1st day of June, 2003. @

% Amendment of section 153D. !

39. Amendment of section 153D. - In section 153D of the Income-tax Act, for the word, figures and letter "section 153A", the words, brackets, figures and letter "sub-section (1) of section 153A" shall be substituted and shall be deemed to have been substituted with effect from the 1st day of June, 2007. @

% Amendment of section 156. ! 40. Amendment of section 156. - In section 156 of the Income-tax Act, the following proviso shall be inserted, namely:-

''Provided that where any sum is determined to be payable by the assessee under sub-section (1) of section 143, the intimation under that sub-section shall be deemed to be a notice of demand for the purposes of this section.". @

% Amendment of section 191. ! 41. Amendment of section 191. - In section 191 of the Income-tax Act, for the Explanation, the following Explanation shall be substituted and shall be deemed to have been substituted with effect from the 1st day of June, 2003, namely:- ''Explanation.-For the removal of doubts, it is hereby declared that if any person, including the principal officer of a company,- (a) who is required to deduct any sum in accordance with the provisions of this Act; or (b) referred to in sub-section (1A) of section 192, being an employer,

does not deduct, or after so deducting fails to pay, or does not pay, the whole or any part of the tax, as required by or under this Act, and where the assessee has also failed to pay such tax directly, then, such person shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default within the meaning of sub-section (1) of section 201, in respect of such tax.". @

% Amendment of section 193. ! 42. Amendment of section 193. - In section 193 of the Income-tax Act, in the proviso, after clause (viii) and before the Explanation, the following clause shall be inserted with effect from the 1st day of June, 2008, namely:- ''(ix) any interest payable on any security issued by a company, where such security is in dematerialised form and is listed on a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 and the rules made thereunder.". @

% Amendment of section 194C. !

43. Amendment of section 194C. - In section 194C of the Income-tax Act, in sub-section (1), in clause (k), after the words ''Hindu undivided family", the words "or an association of persons or a body of individuals, whether incorporated or not, other than those falling under any of the preceding clauses" shall be inserted with effect from the 1st day of June, 2008. @

% Amendment of section 195. !

44. Amendment of section 195. - In section 195 of the Income-tax Act, after sub-section (5), the following sub-section shall be inserted, namely:-

''(6) The person referred to in sub-section (1) shall furnish the information relating to payment of any sum in such form and manner as may be prescribed by the Board.". @

% Substitution of new section for section 199. ! 45. Substitution of new section for section 199. - For section 199 of the Income-tax Act, the following section shall be substituted, namely:-

Credit for tax deducted. "199. (1) Any deduction made in accordance with the foregoing provisions of this Chapter and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made, or of the owner of the security, or of the depositor or of the owner of property or of the unit-holder, or of the shareholder, as the case may be.

(2) Any sum referred to in sub-section (1A) of section 192 and paid to the Central Government shall be treated as the tax paid on behalf of the person in respect of whose income such payment of tax has been made.

(3) The Board may, for the purposes of giving credit in respect of tax deducted or tax paid in terms of the provisions of this Chapter, make such rules as may be necessary, including the rules for the purposes of giving credit to a person other than those referred to in sub-section (1) and sub-section (2) and also the assessment year for which such credit may be given.". @

% Amendment of section 201. !

46. Amendment of section 201. - In section 201 of the Income-tax Act, for sub-section (1), the following sub-section shall be substituted and shall be deemed to have been substituted with effect from the 1st day of June, 2002, namely:-

''(1) Where any person, including the principal officer of a company,- (a) who is required to deduct any sum in accordance with the provisions of this Act; or (b) referred to in sub-section (1A) of section 192, being an employer, does not deduct, or does not pay, or after so deducting fails to pay, the whole or any part of the tax, as required by or under this Act, then, such person, shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of such tax: Provided that no penalty shall be charged under section 221 from such person, unless the Assessing Officer is satisfied that such person, without good and sufficient reasons, has failed to deduct and pay such tax.". @

% Amendment of section 203. !

47. Amendment of section 203. - In section 203 of the Income-tax Act, in sub-section (3), for the figures, letters and words "1st day of April, 2008", the figures, letters and words "1st day of April, 2010" shall be substituted. @

% Amendment of section 206C. ! 48. Amendment of section 206C. - In section 206C of the Income-tax Act,-

(a) for sub-section (4), the following sub-section shall be substituted, namely:-

''(4) Any amount collected in accordance with the provisions of this section and paid to the credit of the Central Government shall be deemed to be a payment of tax on behalf of the person from whom the amount has been collected and credit shall be given to such person for the amount so collected in a particular assessment year in accordance with the rules as may be prescribed by the Board from time to time.";

(b) in sub-section (5), in the first proviso, for the figures, letters and words "1st day of April, 2008", the figures, letters and words "1st day of April, 2010" shall be substituted. @

% Amendment of section 251. !

49. Amendment of section 251. - In section 251 of the Income-tax Act, in sub-section (1), after clause (a), the following clause shall be inserted, namely:- "(aa) in an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 245HA, he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment;". @

% Amendment of section 254. ! 50. Amendment of section 254. - In section 254 of the Income-tax Act, in sub-section (2A), for the third proviso, the following proviso shall be substituted with effect from the 1st day of October, 2008, namely:- ''Provided also that if such appeal is not so disposed of within the period allowed under the first proviso or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty-five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee.". @

% Insertion of new section 268A. ! 51. Insertion of new section 268A. - After section 268 of the Income-tax Act, the following section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 1999, namely:-

Filing of appeal or application for reference by income-tax authority. - "268A. (1) The Board may, from time to time, issue orders, instructions or directions to other income-tax authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for reference by any income-tax authority under the provisions of this Chapter.

(2) Where, in pursuance of the orders, instructions or directions issued under sub-section (1), an income-tax authority has not filed any appeal or application for reference on any issue in the case of an assessee for any assessment year, it shall not preclude such authority from filing an appeal or application for reference on the same issue in the case of- (a) the same assessee for any other assessment year; or (b) any other assessee for the same or any other assessment year.

(3) Notwithstanding that no appeal or application for reference has been filed by an income-tax authority pursuant to the orders or instructions or directions issued under sub-section (1), it shall not be lawful for an assessee, being a party in any appeal or reference, to contend that the income-tax authority has acquiesced in the decision on the disputed issue by not filing an appeal or application for reference in any case.

(4) The Appellate Tribunal or Court, hearing such appeal or reference, shall have regard to the orders, instructions or directions issued under sub-section (1) and the circumstances under which such appeal or application for reference was filed or not filed in respect of any case.

(5) Every order, instruction or direction which has been issued by the Board fixing monetary limits for filing an appeal or application for reference shall be deemed to have been issued under sub-section (1) and the provisions of sub-sections (2), (3) and (4) shall apply accordingly.". @

% Amendment of section 271. ! 52. Amendment of section 271.- Filing of appeal or application for reference by income-tax authority. - In section 271 of the Income-tax Act, after sub-section (1A), the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 1989, namely:-

''(1B) Where any amount is added or disallowed in computing the total income or loss of an assessee in any order of assessment or reassessment and the said order contains a direction for initiation of penalty proceedings under clause (c) of sub-section (1), such an order of assessment or reassessment shall be deemed to constitute satisfaction of the Assessing Officer for initiation of the penalty proceedings under the said clause (c).". @

% Insertion of new section 273AA. ! 53. Insertion of new section 273AA. - After section 273A of the Income-tax Act, the following section shall be inserted, namely:-

Power of Commissioner to grant immunity from penalty. - "273AA. (1) A person may make an application to the Commissioner for granting immunity from penalty, if- (a) he has made an application for settlement under section 245C and the proceedings for settlement have abated under section 245HA; and (b) the penalty proceedings have been initiated under this Act.

(2) The application to the Commissioner under sub-section (1) shall not be made after the imposition of penalty after abatement.

(3) The Commissioner may, subject to such conditions as he may think fit to impose, grant to the person immunity from the imposition of any penalty under this Act, if he is satisfied that the person has, after the abatement, co-operated with the income-tax authority in the proceedings before him and has made a full and true disclosure of his income and the manner in which such income has been derived.

(4) The immunity granted to a person under sub-section (3) shall stand withdrawn, if such person fails to comply with any condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted.

(5) The immunity granted to a person under sub-section (3) may, at any time, be withdrawn by the Commissioner, if he is satisfied that such person had, in the course of any proceedings, after abatement, concealed any particulars material to the assessment from the income-tax authority or had given false evidence, and thereupon such person shall become liable to the imposition of any penalty under this Act to which such person would have been liable, had not such immunity been granted.". @

% Insertion of new section 278AB. ! 54. Insertion of new section 278AB. - After section 278AA of the Income-tax Act, the following section shall be inserted, namely:-

Power of Commissioner to grant immunity from prosecution. - "278AB. (1) A person may make an application to the Commissioner for granting immunity from prosecution, if he has made an application for settlement under section 245C and the proceedings for settlement have abated under section 245HA.

(2) The application to the Commissioner under sub-section (1) shall not be made after institution of the prosecution proceedings after abatement.

(3) The Commissioner may, subject to such conditions as he may think fit to impose, grant to the person immunity from prosecution for any offence under this Act, if he is satisfied that the person has, after the abatement, co-operated with the income-tax authority in the proceedings before him and has made a full and true disclosure of his income and the manner in which such income has been derived: Provided that where the application for settlement under section 245C had been made before the 1st day of June, 2007, the Commissioner may grant immunity from prosecution for any offence under this Act or under the Indian Penal Code or under any other Central Act for the time being in force.

(4) The immunity granted to a person under sub-section (3) shall stand withdrawn, if such person fails to comply with any condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted.

(5) The immunity granted to a person under sub-section (3) may, at any time, be withdrawn by the Commissioner, if he is satisfied that such person had, in the course of any proceedings, after abatement, concealed any particulars material to the assessment from the income-tax authority or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which he appears to have been guilty in connection with the proceedings.". @

% Insertion of new section 282A. ! 55. Insertion of new section 282A. - After section 282 of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 2008, namely:-

Authentication of notices and other documents. - "282A. (1) Where this Act requires a notice or other document to be issued by any income-tax authority, such notice or other document shall be signed in manuscript by that authority.

(2) Every notice or other document to be issued, served or given for the purposes of this Act by any income-tax authority, shall be deemed to be authenticated if the name and office of a designated income-tax authority is printed, stamped or otherwise written thereon.

(3) For the purposes of this section, a designated income-tax authority shall mean any income-tax authority authorised by the Board to issue, serve or give such notice or other document after authentication in the manner as provided in sub-section (2).". @

% Insertion of new section 292BB. ! 56. Insertion of new section 292BB. - After section 292B of the Income-tax Act, the following section shall be inserted, namely:- "292BB. Where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was- (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.". @

% Amendment of section 292C. !

57. Amendment of section 292C. - Section 292C of the Income-tax Act shall be renumbered as sub-section (1) thereof and-

(a) in sub-section (1) as so renumbered, after the words and figures "search under section 132", the words, figures and letter "or survey under section 133A" shall be inserted and shall be deemed to have been inserted with effect from the 1st day of June, 2002;

(b) after sub-section (1) as so renumbered, the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of October, 1975, namely:-

''(2) Where any books of account, other documents or assets have been delivered to the requisitioning officer in accordance with the provisions of section 132A, then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of section 132A, had been found in the possession or control of that person in the course of a search under section 132.". @

% Amendment of section 295. !

58. Amendment of section 295. - In section 295 of the Income-tax Act, in sub-section (2), after clause (f), the following clause shall be inserted, namely:-

''(fa) the form and manner in which the information relating to payment of any sum may be furnished under sub-section (6) of section 195;". @

% Amendment of Fourth Schedule. !

59. Amendment of Fourth Schedule. - In the Fourth Schedule to the Income-tax Act, in Part A, in rule 3, in sub-rule (1), in the first proviso, for the figures, letters and words "31st day of March, 2008", the figures, letters and words "31st day of March, 2009" shall be substituted. Wealth-tax @

% Amendment of section 17. ! 60. Amendment of section 17. - In section 17 of the Wealth-tax Act,-

(a) in sub-section (1), after the second proviso, the following proviso shall be inserted, namely:- ''Provided also that the Assessing Officer may assess or reassess such net wealth, other than the net wealth which is the subject matter of any appeal, reference or revision, which is chargeable to tax and has escaped assessment."; (b) in sub-section (1B), after clause (b), the following Explanation shall be inserted and shall be deemed to have been inserted with effect from the 1st day of October, 1998, namely:- ''Explanation.-For the removal of doubts, it is hereby declared that the Joint Commissioner, the Commissioner or the Chief Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice, need not issue such notice himself.". @

% Amendment of section 17A. !

61. Amendment of section 17A - of the Wealth-tax Act, after sub-section (4), in Explanation 1, after the proviso, the following proviso shall be inserted and shall be deemed to have been inserted with effect from the 1st day of June, 2007, namely:-

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

% Amendment of section 18. !

62. Amendment of section 18. - In section 18 of the Wealth-tax Act, after sub-section (1), the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 1989, namely:-

''(1A) Where any amount is added or disallowed in computing the net wealth of an assessee in any order of assessment or reassessment and the said order contains a direction for initiation of penalty proceedings under clause (c) of sub-section (1), such an order of assessment or reassessment shall be deemed to constitute satisfaction of the Assessing Officer for initiation of the penalty proceedings under the said clause (c).". @

% Insertion of new section 18BA. ! 63. Insertion of new section 18BA. - After section 18B of the Wealth-tax Act, the following section shall be inserted, namely:-

Power of Commissioner to grant immunity from penalty. - "18BA. (1) A person may make an application to the Commissioner for granting immunity from penalty, if- (a) he has made an application for settlement under section 22C and the proceedings for settlement have abated under section 22HA; and (b) the penalty proceedings have been initiated under this Act.

(2) The application to the Commissioner under sub-section (1) shall not be made after the imposition of penalty after abatement.

(3) The Commissioner may, subject to such conditions as he may think fit to impose, grant to the person immunity from the imposition of any penalty under this Act, if he is satisfied that the person has, after the abatement, co-operated with the wealth-tax authority in the proceedings before him and has made a full and true disclosure of his net wealth and the manner in which such net wealth has been derived.

(4) The immunity granted to a person under sub-section (3) shall stand withdrawn, if such person fails to comply with any condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted.

(5) The immunity granted to a person under sub-section (3) may, at any time, be withdrawn by the Commissioner, if he is satisfied that such person had, in the course of any proceedings, after abatement, concealed any particulars, material to the assessment, from the wealth-tax authority or had given false evidence, and thereupon such person shall become liable to the imposition of any penalty under this Act to which such person would have been liable, had not such immunity been granted.". @

% Amendment of section 23A. !

64. Amendment of section 23A. - In section 23A of the Wealth-tax Act, after sub-section (9), the following sub-section shall be inserted, namely:- "(9A) In disposing of an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 22HA, he may, after taking into consideration all the material and other information produced "(9A) In disposing of an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 22HA, he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceedings before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment.". @

% Insertion of new section 35GA. ! 65. Insertion of new section 35GA. - After section 35G of the Wealth-tax Act, the following section shall be inserted, namely:-

Power of Commissioner to grant immunity from prosecution. - "35GA. (1) A person may make an application to the Commissioner for granting immunity from prosecution, if he has made an application for settlement under section 22C and the proceedings for settlement have abated under section 22HA.

(2) The application to the Commissioner under sub-section (1) shall not be made after institution of the prosecution proceedings after abatement.

(3) The Commissioner may, subject to such conditions as he may think fit to impose, grant to the person immunity from prosecution for any offence under this Act, if he is satisfied that the person has, after the abatement, co-operated with the wealth-tax authority in the proceedings before him and has made a full and true disclosure of his net wealth and the manner in which such net wealth has been derived: Provided that where the application for settlement under section 22C had been made before the 1st day of June, 2007, the Commissioner may grant immunity from prosecution for any offence under this Act or under the Indian Penal Code or under any other Central Act for the time being in force.

(4) The immunity granted to a person under sub-section (3) shall stand withdrawn, if such person fails to comply with any condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted.

(5) The immunity granted to a person under sub-section (3) may, at any time, be withdrawn by the Commissioner, if he is satisfied that such person had, in the course of any proceedings, after abatement, concealed any particulars, material to the assessment, from the wealth-tax authority or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which he appears to have been guilty in connection with the proceedings.". @

% Insertion of new section 42. ! 66. Insertion of new section 42. - After section 41 of the Wealth-tax Act, the following section shall be inserted, namely:- Notice deemed to be valid in certain circumstances. - "42. Where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was- (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.''. @

% Amendment of section 42D. !

67. Amendment of section 42D. - Section 42D of the Wealth-tax Act shall be renumbered as sub-section (1) thereof and after sub-section (1) as so renumbered, the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1st day October, 1975, namely:-

''(2) Where any books of account, other documents or assets have been delivered to the requisitioning officer in accordance with the provisions of section 37B, then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of section 37B, had been found in the possession or control of that person in the course of a search under section 37A.". @ CHAPTER IV % INDIRECT TAXES ! CHAPTER IV INDIRECT TAXES @

% Amendment of section 28B. ! 68. Amendment of section 28B. - In section 28B of the Customs Act, 1962 (hereinafter referred to as the Customs Act),-

(i) after sub-section (1), the following sub-section shall be inserted, namely:- ''(1A) Every person who has collected any amount in excess of the duty assessed or determined or paid on any goods or has collected any amount as representing duty of customs on any goods which are wholly exempt or are chargeable to nil rate of duty from any person in any manner, shall forthwith pay the amount so collected to the credit of the Central Government.";

(ii) in sub-section (2), for the word, brackets and figure "sub-section (1)", the words, brackets, figures and letter "sub-section (1) or sub-section (1A), as the case may be," shall be substituted;

(iii) in sub-section (4),-

(a) for the words, brackets and figures "sub-section (1) or sub-section (3)", the words, brackets, figures and letter "sub-section (1) or sub-section (1A) or sub-section (3), as the case may be," shall be substituted;

(b) for the word, brackets and figure "sub-section (1)", the words, brackets, figures and letter "sub-section (1) and sub-section (1A)" shall be substituted. @

% Amendment of section 108. !

69. Amendment of section 108. - In section 108 of the Customs Act, in sub-section (1), the words "duly empowered by the Central Government in this behalf," shall be omitted and shall be deemed to have been omitted with effect from the 13th day of July, 2006. @

% Amendment of section 117. ! 70. Amendment of section 117. - In section 117 of the Customs Act, for the words "ten thousand rupees", the words "one lakh rupees" shall be substituted. @

% Amendment of section 129A. !

71. Amendment of section 129A. - In section 129A of the Customs Act, in sub-section (2), the following proviso and Explanation shall be inserted at the end, namely:- 'Provided that where the Committee of Commissioners of Customs differs in its opinion regarding the appeal against the order of the Commissioner (Appeals), it shall state the point or points on which it differs and make a reference to the jurisdictional Chief Commissioner of Customs who shall, after considering the facts of the order, if is of the opinion that the order passed by the Commissioner (Appeals) is not legal or proper, direct the proper officer to appeal to the Appellate Tribunal against such order. Explanation.-For the purposes of this sub-section, "jurisdictional Chief Commissioner" means the Chief Commissioner of Customs having jurisdiction over the adjudicating authority in the matter.'. @

% Amendment of section 129D. ! 72. Amendment of section 129D. In section 129D of the Customs Act,-

(i) in sub-section (1), the following proviso shall be inserted at the end, namely:- ''Provided that where the Committee of Chief Commissioners of Customs differs in its opinion as to the legality or propriety of the decision or order of the Commissioner of Customs, it shall state the point or points on which it differs and make a reference to the Board which, after considering the facts of the decision or order passed by the Commissioner of Customs, if is of the opinion that the decision or order passed by the Commissioner of Customs is not legal or proper, may, by order, direct such Commissioner or any other Commissioner to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order, as may be specified in its order.";

(ii) for sub-section (3), the following sub-section shall be substituted, namely:-

''(3) Every order under sub-section (1) or sub-section (2), as the case may be, shall be made within a period of three months from the date of communication of the decision or order of the adjudicating authority.". @

% Insertion of new section 129EE. ! 73. Insertion of new section 129EE. - After section 129E of the Customs Act, the following section shall be inserted, namely:- Interest on delayed refund of amount deposited under the proviso to section 129E. - "129EE. Where an amount deposited by the appellant in pursuance of an order passed by the Commissioner (Appeals) or the Appellate Tribunal (hereinafter referred to as the appellate authority), under the first proviso to section 129E, is required to be refunded consequent upon the order of the appellate authority and such amount is not refunded within three months from the date of communication of such order to the adjudicating authority, unless the operation of the order of the appellate authority is stayed by a superior court or tribunal, there shall be paid to the appellant interest at the rate specified in section 27A after the expiry of three months from the date of communication of the order of the appellate authority, till the date of refund of such amount.". @

% Amendment of section 141. !

74. Amendment of section 141. - Section 141 of the Customs Act shall be numbered as sub-section (1) thereof and, after sub-section (1) as so numbered, the following sub-section shall be inserted, namely:-

''(2) The imported or export goods may be received, stored, delivered, despatched or otherwise handled in a customs area in such manner as may be prescribed and the responsibilities of persons engaged in the aforesaid activities shall be such as may be prescribed.". @

% Amendment of section 158. !

75. Amendment of section 158. - In section 158 of the Customs Act, in sub-section (2), for clause (ii), the following clause shall be substituted, namely:- "(ii) that any person who contravenes any provision of a rule or regulation or abets such contravention or who fails to comply with any provision of a rule or regulation with which it was his duty to comply, shall be liable to a penalty which may extend to fifty thousand rupees.". @

%

Amendment of notification issued under sub-section (1) of section 25 of the Customs Act, 1962. !

76. Amendment of notification issued under sub-section (1) of section 25 of the Customs Act, 1962. - In the notification of the Government of India in the Ministry of Finance (Department of Revenue) number G.S.R. 277(E), dated the 1st April, 2003 which was issued in exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962, the condition No. 7, as inserted vide notification of the Government of India in the Ministry of Finance (Department of Revenue) number G.S.R. 673(E), dated the 17th November, 2005 which provides "that the importer shall be entitled to avail of the drawback or CENVAT credit of additional duty leviable under section 3 of the said Customs Tariff Act against the amount debited in the said certificate", shall be deemed to have, and always to have for all purposes validly, come into force on and from the 4th day of June, 2005 at all material times. Explanation.- For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if this section had not come into force. Customs tariff @

% Amendment of Act 51 of 1975. ! 77. Amendment of Act 51 of 1975. - In the Customs Tariff Act, 1975 (hereinafter referred to as the Customs Tariff Act),- (i) in section 9A, for sub-section (2A), the following sub-section shall be substituted, namely:-

'(2A) Notwithstanding anything contained in sub-section (1) and sub-section (2), a notification issued under sub-section (1) or any anti-dumping duty imposed under sub-section (2), shall not apply to articles imported by a hundred per cent. export-oriented undertaking unless,- (i) specifically made applicable in such notifications or such impositions, as the case may be; or (ii) the article imported is either cleared as such into the domestic tariff area or used in the manufacture of any goods that are cleared into the domestic tariff area, and in such cases anti-dumping duty shall be levied on that portion of the article so cleared or so used as was leviable when it was imported into India.

Explanation.-For the purposes of this sub-section, the expression "hundred per cent. export-oriented undertaking" shall have the meaning assigned to it in Explanation 2 to sub-section (1) of section 3 of the Central Excise Act, 1944.'; (ii) the First Schedule shall be amended in the manner specified in the Second Schedule; (iii) the Second Schedule shall be amended in the manner specified in the Third Schedule. Excise @

% Amendment of section 2. ! 78. Amendment of section 2. - In section 2 of the Central Excise Act, 1944 (hereinafter referred to as the Central Excise Act), after clause (d), the following Explanation shall be inserted, namely:- 'Explanation.- For the purposes of this clause, "goods" includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable.'. @

% Insertion of new section 3A. ! 79. Insertion of new section 3A. - After section 3 of the Central Excise Act, the following section shall be inserted, namely:-

Power of Central Government to charge excise duty on the basis of capacity of production in respect of notified goods. - '3A. (1) Notwithstanding anything contained in section 3, where the Central Government, having regard to the nature of the process of manufacture or production of excisable goods of any specified description, the extent of evasion of duty in regard to such goods or such other factors as may be relevant, is of the opinion that it is necessary to safeguard the interest of revenue, specify, by notification in the Official Gazette, such goods as notified goods and there shall be levied and collected duty of excise on such goods in accordance with the provisions of this section.

(2) Where a notification is issued under sub-section (1), the Central Government may, by rules,- (a) provide the manner for determination of the annual capacity of production of the factory, in which such goods are produced, by an officer not below the rank of Assistant Commissioner of Central Excise and such annual capacity shall be deemed to be the annual production of such goods by such factory; or (b) (i) specify the factor relevant to the production of such goods and the quantity that is deemed to be produced by use of a unit of such factor; and (ii) provide for the determination of the annual capacity of production of the factory in which such goods are produced on the basis of such factor by an officer not below the rank of Assistant Commissioner of Central Excise and such annual capacity of production shall be deemed to be the annual production of such goods by such factory: Provided that where a factory producing notified goods is in operation during a part of the year only, the annual production thereof shall be calculated on proportionate basis of the annual capacity of production: Provided further that in a case where the factor relevant to the production is altered or modified at any time during the year, the annual production shall be re-determined on a proportionate basis having regard to such alteration or modification.

(3) The duty of excise on notified goods shall be levied, at such rate, on the unit of production or, as the case may be, on such factor relevant to the production, as the Central Government may, by notification in the Official Gazette, specify, and collected in such manner as may be prescribed: Provided that where a factory producing notified goods did not produce the notified goods during any continuous period of fifteen days or more, the duty calculated on a proportionate basis shall be abated in respect of such period if the manufacturer of such goods fulfils such conditions as may be prescribed.

(4) The provisions of this section shall not apply to goods produced or manufactured, by a hundred per cent. export-oriented undertaking and brought to any other place in India. Explanation 1.-For the removal of doubts, it is hereby clarified that for the purposes of section 3 of the Customs Tariff Act, 1975, the duty of excise leviable on the notified goods shall be deemed to be the duty of excise leviable on such goods under the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985, read with any notification for the time being in force. Explanation 2.-For the purposes of this section, the expression "hundred per cent. export-oriented undertaking" shall have the meaning assigned to it in section 3.'. @

% Amendment of section 11B. ! 80. Amendment of section 11B. - In section 11B of the Central Excise Act,-

(i) in sub-section (1),- (a) for the words "duty of excise", wherever they occur, the words "duty of excise and interest, if any, paid on such duty" shall be substituted; (b) for the word "duty", wherever it occurs, the words "duty and interest, if any, paid on such duty" shall be substituted;

(ii) in sub-section (2), except in clauses (a) and (c) of the first proviso,- (a) for the words "duty of excise", wherever they occur, the words "duty of excise and interest, if any, paid on such duty" shall be substituted; (b) for the word "duty", wherever it occurs, the words "duty and interest, if any, paid on such duty" shall be substituted. @

% Amendment of section 11D. ! 81. Amendment of section 11D. - In section 11D of the Central Excise Act,-

(i) after sub-section (1), the following sub-section shall be inserted, namely:- ''(1A) Every person, who has collected any amount in excess of the duty assessed or determined and paid on any excisable goods or has collected any amount as representing duty of excise on any excisable goods which are wholly exempt or are chargeable to nil rate of duty from any person in any manner, shall forthwith pay the amount so collected to the credit of the Central Government.";

(ii) in sub-section (2), for the word, brackets and figure "sub-section (1)", the words, brackets, figures and letter "sub-section (1) or sub-section (1A), as the case may be," shall be substituted;

(iii) in sub-section (4),-

(a) for the words, brackets and figures "sub-section (1) or sub-section (3)", the words, brackets, figures and letter "sub-section (1) or sub-section (1A) or sub-section (3), as the case may be," shall be substituted;

(b) for the word, brackets and figure "sub-section (1)", the words, brackets, figures and letter "sub-section (1) and sub-section (1A)" shall be substituted. @

% Amendment of section 11DD. !

82. Amendment of section 11DD. - In section 11DD of the Central Excise Act, in sub-section (1), for the words "buyer of such goods, the person", the words "buyer of such goods or from any person or where a person has collected any amount as representing duty of excise on any excisable goods which are wholly exempt or are chargeable to nil rate of duty, the person" shall be substituted. @

% Amendment of section 35B. !

83. Amendment of section 35B. - In section 35B of the Central Excise Act, in sub-section (2), the following proviso and Explanation shall be inserted at the end, namely:- 'Provided that where the Committee of Commissioners of Central Excise differs in its opinion regarding the appeal against the order of the Commissioner (Appeals), it shall state the point or points on which it differs and make a reference to the jurisdictional Chief Commissioner of Central Excise who shall, after considering the facts of the order, if is of the opinion that the order passed by the Commissioner (Appeals) is not legal or proper, direct any Central Excise Officer to appeal to the Appellate Tribunal against such order. Explanation.-For the purposes of this sub-section, "jurisdictional Chief Commissioner" means the Chief Commissioner of Central Excise having jurisdiction over the adjudicating authority in the matter.'. @

% Amendment of section 35E. ! 84. Amendment of section 35E. - In section 35E of the Central Excise Act,-

(i) in sub-section (1), the following proviso shall be inserted at the end, namely:- ''Provided that where the Committee of Chief Commissioners of Central Excise differs in its opinion as to the legality or propriety of the decision or order of the Commissioner of Central Excise, it shall state the point or points on which it differs and make a reference to the Board which, after considering the facts of the decision or order, if is of the opinion that the decision or order passed by the Commissioner of Central Excise is not legal or proper, may, by order, direct such Commissioner or any other Commissioner to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order, as may be specified in its order.";

(ii) for sub-section (3), the following sub-section shall be substituted, namely:-

''(3) Every order under sub-section (1) or sub-section (2), as the case may be, shall be made within a period of three months from the date of communication of the decision or order of the adjudicating authority.". @

% Insertion of new section 35FF. ! 85. Insertion of new section 35FF. - After section 35F of the Central Excise Act, the following section shall be inserted, namely:- Interest on delayed refund of amount deposited under the proviso to section 35F. - ''35FF. Where an amount deposited by the appellant in pursuance of an order passed by the Commissioner (Appeals) or the Appellate Tribunal (hereinafter referred to as the appellate authority), under the first proviso to section 35F, is required to be refunded consequent upon the order of the appellate authority and such amount is not refunded within three months from the date of communication of such order to the adjudicating authority, unless the operation of the order of the appellate authority is stayed by a superior court or tribunal, there shall be paid to the appellant interest at the rate specified in section 11BB after the expiry of three months from the date of communication of the order of the appellate authority, till the date of refund of such amount.". @

% Amendment of Central Excise Rules, 1944. !

86. Amendment of Central Excise Rules, 1944. - (1) In the Central Excise Rules, 1944, made by the Central Government in exercise of the powers conferred by section 37 of the Central Excise Act, rule 12, as substituted by rule 2 of the Central Excise (Eleventh Amendment) Rules, 1994 published in the Official Gazette vide notification of the Government of India in the Ministry of Finance (Department of Revenue), number G.S.R. 699(E), dated the 22nd September, 1994 shall stand amended and shall be deemed to have been amended retrospectively in the manner as specified in column (2) of the Fourth Schedule on and from the corresponding date specified in column (3) of that Schedule against the rule specified in column (1) of that Schedule.

(2) Notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority, any action taken or anything done or purported to have been taken or done, at any time during the period commencing on and from the 8th day of July, 1999 and ending with the 30th day of June, 2001 under the rule as amended by sub-section (1), shall be deemed to be and always to have been, for all the purposes, as validly and effectively taken or done as if the amendment made by sub-section (1) had been in force at all material times.

(3) Notwithstanding the supersession of the Central Excise Rules, 1944 referred to in sub-section (1), for the purposes of that sub-section, the Central Government shall have and shall be deemed to have the power to make rules with retrospective effect as if the Central Government had the power to make rules under section 37 of the Central Excise Act, retrospectively, at all material times. Explanation.- For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence, which would not have been so punishable if this section had not come into force. @

% Amendment of Central Excise (No. 2) Rules, 2001. !

87. Amendment of Central Excise (No. 2) Rules, 2001. - (1) In the Central Excise (No. 2) Rules, 2001, made by the Central Government in exercise of the powers conferred by section 37 of the Central Excise Act, rule 18 thereof as published in the Official Gazette vide notification of the Government of India in the Ministry of Finance (Department of Revenue), number G.S.R. 444(E), dated the 21st June, 2001 shall stand amended and shall be deemed to have been amended retrospectively in the manner as specified in column (2) of the Fifth Schedule on and from the corresponding date specified in column (3) of that Schedule against the rule specified in column (1) of that Schedule.

(2) Notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority, any action taken or anything done or purported to have been taken or done, at any time during the period commencing on and from the 1st day of July, 2001 and ending with the 28th day of February, 2002 under the rule as amended by sub-section (1), shall be deemed to be and always to have been, for all the purposes, as validly and effectively taken or done as if the amendment made by sub-section (1) had been in force at all material times.

(3) Notwithstanding the supersession of the Central Excise (No. 2) Rules, 2001 referred to in sub-section (1), for the purposes of that sub-section, the Central Government shall have and shall be deemed to have the power to make rules with retrospective effect as if the Central Government had the power to make rules under section 37 of the Central Excise Act, retrospectively, at all material times. Explanation.-For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence, which would not have been so punishable if this section had not come into force. @

% Amendment of Central Excise Rules, 2002 !

88. Amendment of Central Excise Rules, 2002. - (1) In the Central Excise Rules, 2002, made by the Central Government in exercise of the powers conferred by section 37 of the Central Excise Act, rule 18 thereof as published in the Official Gazette vide notification of the Government of India in the Ministry of Finance (Department of Revenue), number G.S.R. 143(E), dated the 1st March, 2002 shall stand amended and shall be deemed to have been amended retrospectively in the manner as specified in column (2) of the Sixth Schedule on and from the corresponding date specified in column (3) of that Schedule against the rule specified in column (1) of that Schedule.

(2) Notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority, any action taken or anything done or purported to have been taken or done, at any time during the period commencing on and from the 1st day of March, 2002 and ending with the 7th day of December, 2006 under the rule as amended by sub-section (1), shall be deemed to be and always to have been, for all the purposes, as validly and effectively taken or done as if the amendment made by sub-section (1) had been in force at all material times.

(3) For the purposes of sub-section (1), the Central Government shall have and shall be deemed to have the power to make rules with retrospective effect as if the Central Government had the power to make rules under section 37 of the Central Excise Act, retrospectively, at all material times. Explanation.-For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence, which would not have been so punishable if this section had not come into force. Excise tariff @

% Amendment of Act 5 of 1986. ! 89. Amendment of Act 5 of 1986. - The First Schedule to the Central Excise Tariff Act, 1985 (hereinafter referred to as the Central Excise Tariff Act) shall be amended in the manner specified in the Seventh Schedule. @ CHAPTER V % SERVICE TAX ! CHAPTER V SERVICE TAX @

% Amendment of Act 32 of 1994. ! 90. Amendment of Act 32 of 1994. - In the Finance Act, 1994,- (A) in section 65, with effect from such date as the Central Government may, by notification in the Official Gazette, appoint,-

(1) after clause (7a), the following clause shall be inserted, namely:- '(7b) "associated enterprise" has the meaning assigned to it in section 92A of the Income-tax Act, 1961;';

(2) in clause (12),- (a) in sub-clause (a), for item (iv), the following item shall be substituted, namely:- ''(iv) securities and foreign exchange (forex) broking, and purchase or sale of foreign currency, including money changing;"; (b) for sub-clause (b), the following sub-clause shall be substituted, namely:- ''(b) foreign exchange broking and purchase or sale of foreign currency, including money changing provided by a foreign exchange broker or an authorised dealer in foreign exchange or an authorised money changer, other than those covered under sub-clause (a);"; (c) after sub-clause (b) as so amended, the following Explanation shall be inserted at the end, namely:- 'Explanation.- For the purposes of this clause, it is hereby declared that "purchase or sale of foreign currency, including money changing" includes purchase or sale of foreign currency, whether or not the consideration for such purchase or sale, as the case may be, is specified separately;';

(3) in clause (19),- (a) in sub-clause (ii), the following Explanation shall be inserted at the end, namely:- 'Explanation.- For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, "service in relation to promotion or marketing of service provided by the client" includes any service provided in relation to promotion or marketing of games of chance, organised, conducted or promoted by the client, in whatever form or by whatever name called, whether or not conducted online, including lottery, lotto, bingo;'; (b) the words "any information technology service and" shall be omitted; (c) in the Explanation, clause (b) shall be omitted;

(4) for clause (23), the following clause shall be substituted, namely:-

'(23) "cargo handling service" means loading, unloading, packing or unpacking of cargo and includes,- (a) cargo handling services provided for freight in special containers or for non-containerised freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport, and cargo handling service incidental to freight; and (b) service of packing together with transportation of cargo or goods, with or without one or more of other services like loading, unloading, unpacking, but does not include, handling of export cargo or passenger baggage or mere transportation of goods;';

(5) in clause (31), for the words "to a client", the words "to any person" shall be substituted;

(6) after clause (53), the following clause shall be inserted, namely:- '(53a) "information technology software" means any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form, and capable of being manipulated or providing interactivity to a user, by means of a computer or an automatic data processing machine or any other device or equipment;';

(7) for clause (57a), the following clause shall be substituted, namely:- '(57a) "internet telecommunication service" includes,- (i) internet backbone services, including carrier services of internet traffic by one Internet Service Provider to another Internet Service Provider, (ii) internet access services, including provision of a direct connection to the internet and space for the customer's web page, (iii) provision of telecommunication services, including fax, telephony, audio conferencing and video conferencing, over the internet;';

(8) in clause (64), for the Explanation, the following Explanation shall be substituted, namely:- 'Explanation.- For the removal of doubts, it is hereby declared that for the purposes of this clause,- (a) "goods" includes computer software; (b) "properties" includes information technology software;';

(9) in clause (68), for the words "to a client", the words "to any other person" shall be substituted;

(10) in clause (75), for the words "to a customer", the words "to any person" shall be substituted;

(11) after clause (86c), the following clause shall be inserted, namely:- '(86d) "processing and clearinghouse" means any person including the clearing corporation authorised or assigned by a recognised stock exchange, recognised association or a registered association to perform the duties and functions of a clearinghouse in relation to,- (i) the periodical settlement of contracts for, or relating to, the sale or purchase of securities, goods or forward contracts and differences thereunder; (ii) the delivery of, and payment for, securities, goods or forward contracts; (iii) any other matter incidental to, or connected with, securities, goods and forward contracts;';

(12) in clause (90a), the Explanation occurring at the end shall be numbered as Explanation 1 thereof, and after the Explanation 1 as so numbered, the following Explanation shall be inserted, namely:- 'Explanation 2.- For the removal of doubts, it is hereby declared that for the purposes of this clause "renting of immovable property" includes allowing or permitting the use of space in an immovable property, irrespective of the transfer of possession or control of the said immovable property;';

(13) in clause (92), for the words "to a client", the words "to any person" shall be substituted;

(14) in clause (105),- (a) in sub-clauses (e), (h), (j), (k), (p), (q), (r), (s), (t), (u), (v), (w), (x), (y), (z), (za), (zc), (zi), (zj), (zu), (zzt) and (zzw), for the words "to a client", occurring at the beginning, the words "to any person" shall be substituted; (b) in sub-clauses (f), (l), (zb), (zh), (zm), (zo), (zq), (zt), (zz), (zzd), (zzg), (zzp), (zzv) and (zzx), for the words "to a customer", occurring at the beginning, the words "to any person" shall be substituted; (c) for sub-clause (g), the following sub-clause shall be substituted, namely:- "(g) to any person, by a consulting engineer in relation to advice, consultancy or technical assistance in any manner in one or more disciplines of engineering including the discipline of computer hardware engineering. Explanation.- For the purposes of this sub-clause, it is hereby declared that services provided by a consulting engineer in relation to advice, consultancy or technical assistance in the disciplines of both computer hardware engineering and computer software engineering shall also be classifiable under this sub-clause;"; (d) in sub-clause (m), for the words "a client" and "the client", wherever they occur, the words "any person" and "such person" shall respectively be substituted; (e) for sub-clause (zzk), the following sub-clause shall be substituted, namely:- "(zzk) to any person, by a foreign exchange broker, including an authorised dealer in foreign exchange or an authorised money changer, other than a banking company or a financial institution including a non-banking financial company or any other body corporate or commercial concern referred to in sub-clause (zm);"; (f) in sub-clause (zzzu), for the words "internet telephony", the words "internet telecommunication service" shall be substituted; (g) after sub-clause (zzzzd), the following sub-clauses shall be inserted, namely:- "(zzzze) to any person, by any other person in relation to information technology software for use in the course, or furtherance, of business or commerce, including,- (i) development of information technology software, (ii) study, analysis, design and programming of information technology software, (iii) adaptation, upgradation, enhancement, implementation and other similar services related to information technology software, (iv) providing advice, consultancy and assistance on matters related to information technology software, including conducting feasibility studies on implementation of a system, specifications for a database design, guidance and assistance during the start-up phase of a new system, specifications to secure a database, advice on proprietary information technology software, (v) acquiring the right to use information technology software for commercial exploitation including right to reproduce, distribute and sell information technology software and right to use software components for the creation of and inclusion in other information technology software products, (vi) acquiring the right to use information technology software supplied electronically; (zzzzf) to a policy holder, by an insurer carrying on life insurance business, in relation to management of investment, under unit linked insurance business, commonly known as Unit Linked Insurance Plan (ULIP) scheme. Explanation.- For the purposes of this sub-clause,- (i) management of segregated fund of unit linked insurance business by the insurer shall be deemed to be the service provided by the insurer to the policy holder in relation to management of investment under unit linked insurance business; (ii) the gross amount charged by the insurer from the policy holder for the said services provided or to be provided shall be equivalent to the difference between,- (a) premium paid by the policy holder for the Unit Linked Insurance Plan policy; and (b) the sum of premium paid for or attributable to risk cover, whether for life, health or other specified purposes, and the amount segregated for actual investment. Illustration Total premium paid for the Unit Linked Insurance Plan policy = Rs.100 Risk premium = Rs. 10 Amount actually invested = Rs. 85 Gross amount charged for the service provided = Rs. 5 [100-(10+85)]; (iii) in addition to the amount referred to in clause (ii), the gross amount charged shall include any amount charged subsequently, whether or not periodically, by the insurer from the policy holder in relation to management of investment under unit linked insurance business; (zzzzg) to any person, by a recognised stock exchange in relation to assisting, regulating or controlling the business of buying, selling or dealing in securities and includes services provided in relation to trading, processing, clearing and settlement of transactions in securities; (zzzzh) to any person, by a recognised association or a registered association in relation to assisting, regulating or controlling the business of the sale or purchase of any goods or forward contracts and includes services provided in relation to trading, processing, clearing and settlement of transactions in goods or forward contracts; (zzzzi) to any person, by a processing and clearinghouse in relation to processing, clearing and settlement of transactions in securities, goods or forward contracts including any other matter incidental to, or connected with, such securities, goods and forward contracts; (zzzzj) to any person, by any other person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right of possession and effective control of such machinery, equipment and appliances;";

(15) in clause (106), after the words ''goods or material or'', the words "information technology software or" shall be inserted;

(16) in clause (108), for the words ''process or material'', at both the places where they occur, the words ''process or material or information technology software'' shall be substituted;

(17) in clause (109a), in sub-clause (c), for the words "internet telephony", the words "internet telecommunication service" shall be substituted;

(18) for clause (115), the following clause shall be substituted, namely:-

'(115) "tour operator" means any person engaged in the business of planning, scheduling, organising or arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours in a tourist vehicle or a contract carriage by whatever name called, covered by 72. If any person, liable to pay service tax,- (a) fails to furnish the return under section 70; (b) having made a return, fails to assess the tax in accordance with the provisions of this Chapter or rules made thereunder, the Central Excise Officer, may require the person to produce such accounts, documents or other evidence as he may deem necessary and after taking into account all the relevant material which is available or which he has gathered, shall by an order in writing, after giving the person an opportunity of being heard, make the assessment of the value of taxable service to the best of his judgment and determine the sum payable by the assessee or refundable to the assessee on the basis of such assessment.'; (E) for section 77, the following section shall be substituted, namely:-

"77. (1) Any person,- (a) who is liable to pay service tax, or required to take registration, fails to take registration in accordance with the provisions of section 69 or rules made under this Chapter shall be liable to pay a penalty which may extend to five thousand rupees or two hundred rupees for every day during which such failure continues, whichever is higher, starting with the first day after the due date, till the date of actual compliance; (b) who fails to keep, maintain or retain books of account and other documents as required in accordance with the provisions of this Chapter or the rules made thereunder, shall be liable to a penalty which may extend to five thousand rupees; (c) who fails to- (i) furnish information called by an officer in accordance with the provisions of this Chapter or rules made thereunder; or (ii) produce documents called for by a Central Excise Officer in accordance with the provisions of this Chapter or rules made thereunder; or (iii) appear before the Central Excise Officer, when issued with a summon for appearance to give evidence or to produce a document in an inquiry, shall be liable to a penalty which may extend to five thousand rupees or two hundred rupees for every day during which such failure continues, whichever is higher, starting with the first day after the due date, till the date of actual compliance; (d) who is required to pay tax electronically, through internet banking, fails to pay the tax electronically, shall be liable to a penalty which may extend to five thousand rupees; (e) who issues invoice in accordance with the provisions of the Act or rules made thereunder, with incorrect or incomplete details or fails to account for an invoice in his books of account, shall be liable to a penalty which may extend to five thousand rupees.

(2) Any person, who contravenes any of the provisions of this Chapter or any rules made thereunder for which no penalty is separately provided in this Chapter, shall be liable to a penalty which may extend to five thousand rupees."; value of the land accordingly.

(3) The competent authority shall, before assessing and determining the market- value of the land being acquired under this Act,- (a) ascertain the intended land use category of such land; and (b) take into account the value of the land of the intended category in the adjoining areas or vicinity, for the purpose of determination of the market-value of the land being acquired.

(4) In determining the market-value of the building and other immovable property or assets attached to the land or building which are to be acquired, the competent authority may use the services of a competent engineer or any other specialist in the relevant field, as may be considered necessary by the competent authority.

(5) The competent authority may, for the purpose of determining the value of trees and plants, use the services of experienced persons in the field of agriculture, forestry, horticulture, sericulture, or any other field, as may be considered necessary by him.

(6) For the purpose of assessing the value of the standing crops damaged during the process of land acquisition proceedings, the competent authority may utilise the services of experienced persons in the field of agriculture as he considers necessary. 20H. Deposit and payment of amount.

(1) Deposit and payment of amount. - The amount determined under section 20F shall be deposited by the Central Government, in such manner as may be prescribed by that Government, with the competent authority before taking possession of the land.

(2) As soon as may be after the amount has been deposited under sub-section (1), the competent authority shall on behalf of the Central Government pay the amount to the person or persons entitled thereto.

(3) Where several persons claim to be interested in the amount deposited under sub-section (1), the competent authority shall determine the persons who in its opinion are entitled to receive the amount payable to each of them.

(4) If any dispute arises as to the apportionment of the amount or any part thereof or to any person to whom the same or any part thereof is payable, the competent authority shall refer the dispute to the decision of the principal civil court of original jurisdiction within the limits of whose jurisdiction the land is situated.

(5) Where the amount determined under section 20F by the arbitrator is in excess of the amount determined by the competent authority, the arbitrator may award interest at nine per cent. per annum on such excess amount from the date of taking possession under section 20-I till the date of actual deposit thereof.

(6) Where the amount determined by the arbitrator is in excess of the amount determined by the competent authority, the excess amount together with interest, if any, awarded under sub-section (5) shall be deposited by the Central Government, in such manner as may be prescribed by that Government, with the competent authority and the provisions of sub-sections (2) to (4) shall apply to such deposit. Power to take possession.

20-I. Power to take possession. (1) Where any land has vested in the Central Government under sub-section (2) of section 20E, and the amount determined by the competent authority under section 20F with respect to such land has been deposited under sub-section (1) of section 20H with the competent authority by the Central Government, the competent authority may, by notice in writing, direct the owner as well as any other person who may be in possession of such land to surrender or deliver possession thereof to the competent authority or any person duly authorised by it in this behalf within a period of sixty days of the service of the notice.

(2) If any person refuses or fails to comply with any direction made under sub-section (1), the competent authority shall apply- (a) in case of any land situated in any area falling within the metropolitan area, to the Commissioner of Police; (b) in case of any land situated in any area other than the area referred to in clause (a), to the Collector of a district, and such Commissioner or Collector, as the case may be, shall enforce the surrender of the land, to the competent authority or to the person duly authorised by it. Right to enter into land where land has vested in Central Government. 20J. Right to enter into land where land has vested in Central Government. Where the land has vested in the Central Government under section 20E, it shall be lawful for any person authorised by the Central Government in this behalf, to enter and do other act necessary upon the land for carrying out the building, maintenance, management or operation of the special railway project or part thereof or any other work connected therewith. Competent authority to have certain powers of civil court. 20K. Competent authority to have certain powers of civil court. - 5 of 1908.The competent authority shall have, for the purposes of this Act, all the powers of a civil court while trying a suit under the Code of Civil Procedure, 1908 in respect of the following matters, namely:- (a) summoning and enforcing the attendance of any person and examining him on oath; (b) requiring the discovery and production of any document; (c) reception of evidence on affidavits; (d) requisitioning any public record from any court or office; (e) issuing commission for examination of witnesses. Utilisation of land for the purpose it is acquired. 20L

Utilisation of land for the purpose it is acquired.. (1) The land acquired under this Act shall not be transferred to any other purpose except for a public purpose, and after obtaining the prior approval of the Central Government.

(2) When any land or part thereof, acquired under this Act remains unutilised for a period of five years from the date of taking over the possession, the same shall return to the Central Government by reversion. Sharing with landowners the difference in price of a land when transferred for a higher considera-tion. 20M. Sharing with landowners the difference in price of a land when transferred for a higher considera-tion. - Whenever any land acquired under this Act is transferred to any person for a consideration, eighty per cent. of the difference in the acquisition cost and the consideration received, which in no case shall be less than the acquisition cost, shall be shared amongst the persons from whom the lands were acquired or their heirs, in proportion to the value at which the lands were acquired, and for the purpose, a separate fund may be maintained which shall be administered by the competent authority in such manner as may be prescribed by the Central Government. 20N. Nothing in the Land Acquisition Act, 1894 shall apply to an acquisition under this Act. Application of the National Rehabilitation and Resettlement Policy, 2007 to persons affected due to land acquisition. 20-O. Application of the National Rehabilitation and Resettlement Policy, 2007 to persons affected due to land acquisition. The provisions of the National Rehabilitation and Resettlement Policy, 2007 for project affected families, notified by the Government of India in the Ministry of Rural Development vide number F.26011/4/2007-LRD, dated the 31st October, 2007, shall apply in respect of acquisition of land by the Central Government under this Act. Power to make rules in respect of matters in this Chapter. 20P. Power to make rules in respect of matters in this Chapter.

(1) The Central Government may, by notification, make rules to carry out the purposes of this Chapter.

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

(a) the manner of appointment of arbitrator under sub-section (6) of section 20F;

(b) the manner in which the amount shall be deposited with the competent authority under sub-sections (1) and (6) of section 20H; (c) the manner of maintenance and administration of separate fund for the purposes of section 20M.'. Repeal Repeal and savings. The Railways (Amendment) Ordinance, 2008 is hereby repealed.

(2) Repeal and savings. Notwithstanding such repeal, anything done or any action taken under the principal Act, as amended by the said Ordinance, shall be deemed to have been done or taken under the corresponding provisions of the principal Act, as amended by this Act. K. D. SINGH, Secy. to the Govt. of India. {}