The Taxation Laws (Amendment) Act, 1984--Explanatory notes on the provisions thereof (Part 1) - Income Tax - 394/1984

The Taxation Laws (Amendment) Act, 1984--Explanatory notes on the provisions thereof (Part 1) Circular No. 394 Dated 14/9/1984 Explanatory Notes Introduction 1. The Taxation Laws (Amendment) Bill, 1984, as passed by Parliament, received the assent of the President on 14th September, 1984 and has been enacted as the Taxation Laws (Amendment) Act, 1984 (67 of 1984). 2. Objects of the Act - The Taxation Laws (Amendment) Act, 1984 (herein-after referred to as "the Amending Act") has amended the provisions of the Income-tax Act, 1961, the Wealth-tax Act, 1957, the Gift-tax Act, 1958, the Companies (Profits) Surtax Act, 1964, the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 and the Interest-tax Act, 1974. These amendments are intended mainly to streamline procedures in the interest of better work management, avoid inconvenience to taxpayers, reduce litigation, remove certain anomalies in, and rationalise some of the provisions of, these enactments and counteract tax avoidance and tax evasion. 3. Commencement- Section 1(2) of the Amending Act provides that section 84 of that Act shall come into force on 1st October, 1984 and, save as otherwise provided, the remaining provisions of the said Act shall come into force on 1st April, 1985. This circular explains the provisions of the Amending act which come into force from 1st October, 1984 or which have been brought into force from an earlier date. AMENDMENTS TO INCOME-TAX ACT Exemption of foreign film producers from taxation of income attributable to shooting of cinematograph films in India 4.1 The Amending Act has inserted a new clause (a) in the Explanation to clause (i) of sub-section (1) of section 9 of the Income-tax Act relating to income deemed to accrue or arise in India. 4.2 Under section 9(1)(i) of the Income-tax Act, an income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India, or through the transfer of a capital asset situate in India, is deemed to accrue or arise in India. 4.3 The new clause (a) of the aforesaid Explanation provides that, in the case of a non-resident, no income shall be deemed to accrue or arise in India through or from operations which are confined to the shooting of any cinematograph film in India if such non-resident is- (a) an individual who is not a citizen of India; or (b) a firm which does not have any partner who is a citizen of India or who is resident in India; or (c) a company which does not have any shareholder who is citizen of India or who is resident in India. The aforesaid provision takes effect retrospectively from 1st April, 1982 and will,-accordingly, apply in relation to the assessment year 1982-83 and subsequent years. [Section 3 of the Amending Act] Exemption of remuneration received for rendering services in connection with shooting of cinematograph films by foreign film producers 5.1 The Amending Act has inserted a new clause (5A) in section 10 of the Income-tax Act relating to incomes not included in total income. 5.2 New clause (5A) provides that in the case of an individual who is not a citizen of India and is a non-resident, who comes to India solely in connection with the shooting of a cinematograph film in India by the individual, firm or company referred to in new clause (a) of the Explanation to section 9(1)(i) of the Income-tax Act, any remuneration received by him for rendering any service in connection with such shooting shall not be included in computing the total income of such individual. 5.3 The aforesaid provision takes effect from 1st April, 1982 and will, accordingly, apply in relation to the assessment year 1982-83 and subsequent years. [Section 4(a) of the Amending Act] Clarification regarding scope of exemption in respect of payments received for not availing of leave 6.1 Section 10(10AA) of the Income-tax Act provides exemption in respect of amounts received by a person on retirement from service by way of cash equivalent of unutilised earned leave. In the case of persons who are not employed by the Central Government or any State Government, the exemption under this provision is subject to an overall ceiling, which currently stands at Rs. 30,000. 6.2 It has come to notice that attempts have been made by taxpayers to claim exemption under the aforesaid provision in respect of payments received by them for not utilising leave even while in service. With a view to avoiding litigation on this point, the Amending Act has made two amendments to put the underlying intention beyond doubt. 6.3 Under one of the amendments, a new sub-clause (va) has been inserted in clause (1) of section 17 of the Income-tax Act to provide that any payment received by an employee in respect of any period of leave not availed of by him shall be regarded as "salary". The other amendment has been made in section 10(10AA) of the Act to clarify that the exemption under the aforesaid provision shall be allowed only where the payment is received by the employee on his retirement, whether on superannuation or otherwise. The combined effect of the two aforesaid amendments will be that payments received by an employee in respect of any period of leave not availed of by him will be exempt from income tax only in cases where such payments are received on retirement and subject to the fulfilment of the other conditions laid down in section 10(10AA) of the Income-tax Act. 6.4 Both these amendments have been made with retrospective effect from 1st April, 1978, that is, the date from which clause 10(10AA) was inserted in section 10 of the Income-tax Act by the Finance Act, 1982. The provisions of section 10(10AA) and section 17(1) as amended Will, therefore, apply in relation to the assessment year 1978-79 and subsequent years. [Section 4(b) and section 7(1) of the Amending Act] Clarification regarding scope of exemption in respect of house rent allowance 7.1 Section 10(13A) of the Income-tax Act exempts any special allowance, specifically granted to an assessee by his employer. 7.2 In the case of CIT V. Justice S.C Mittal [1980] 121 ITR 503, (PH) the Punjab and Haryana High Court has held that exemption under the aforesaid provision would be admissible where the assessee suffers monetary loss by way of expenditure or otherwise in respect of residential accommodation occupied by him. According to the High Court, an assessee, who occupied his own house, disentitled himself from the rent which he would have been entitled to if he had not occupied the same himself and, in that sense, he suffered expenditure in that regard. The -High Court, therefore, held that an assessee occupying his own house, if compensated by the employer by payment of house rent allowance, will be entitled to the benefit of exemption under section 10(13A) of the Income-tax Act. This decision has been followed by the Punjab and Haryana High Court in the case of CIT v. Justice M.S. Gujiral [1980] 125 ITR 655 (PH), where the assessee was residing in the house owned by the Hindu undivided family of which he was a member. 7.3 As the decisions of the Punjab and Haryana High Court are not in conformity with the underlying intention, the Amending Act has inserted an Explanation to clause (13A) of section 10 of the Income-tax Act, The new Explanation declares, for the removal of doubts, that nothing contained in the aforesaid clause (13A) shall apply in a case where (a) the residential accommodation occupied by the assessee is owned by him; or (b) the assessee has not actually incurred expenditure on payment of rent (by whatever name called) in respect of the residential accommodation occupied by him. 7.4 The aforesaid amendment takes effect from 1st April, 1976. [Section 4(c) of the Amending Act] Clarificatory amendment regarding ceiling on standard deduction in the case of salaried taxpayers 8.1 Salaried taxpayers are entitled to a standard deduction under section 16(i) of the Income-tax Act at the rate of 25 per cent of the salary subject to a maximum of Rs. 6,000. In cases where a person is employed with more than one employer, it has been claimed that the monetary ceiling of Rs. 6,000 will apply separately in computing the taxable salary received by the person from each employer. Such an interpretation of the relevant provisions would not be in conformity with the underlying intention. With a view to avoiding litigation on this point, the Amending Act has inserted an Explanation to clause (i) of section 16 of the Income-tax Act. The new Explanation declares, for the removal of doubts, that where, in the case of an assessee, salary is due from, or paid or allowed by, more than one employer, the deduction under the aforesaid provision shall be computed with reference to the aggregate salary due, paid or allowed to the assessee and shall in no case exceed the amount specified under the said provision. Hence, any claim that the monetary ceiling laid down in section 16(i) of the Income-tax Act should be applied separately in the case of persons who are employed with more than one employer stands clearly debarred by virtue of the provision contained in the aforesaid Explanation. 8.2 The aforesaid amendment takes effect from 1st April, 1975, that is, the date from which a standard deduction under section 16(i) of the Income-tax Act was provided for by the Finance Act, 1974. The aforesaid amendment will, accordingly, apply in relation to the assessment year 1975-76 and subsequent years. [Section 6 of the Amending Act] Deduction in respect of newly constructed residential units let out on rent 9.1 The second proviso to section 23(1) of the Income-tax Act provides for a deduction in the computation of income from house property for a period of five successive years after the completion of new residential buildings let out on rent. In the case of residential units the erection of which is completed after 31 st March, 1982, deduction is allowed at the rate of Rs. 3,600 in respect of each such unit. However, where the annual value of the residential unit as determined under section 23(1) does not exceed Rs. 3,600 the deduction is limited to the amount of such annual value. The aforesaid second proviso ends with the following words: "so, however, that the income in respect of any residential unit referred to in clause (a) or clause (b) or clause (c) or clause (a) is in no case a loss." 9.2 Apprehensions had been expressed that the above quoted words may be construed to imply that no loss shall be allowed in respect of such new residential units even when the loss may arise as a result of other deductions claimed by the assessee, as for instance, interest paid on borrowed capital for purposes of constructing the residential building. With a view to removing any controversy or doubt in the matter, the above quoted words have been omitted from the aforesaid second proviso. This would secure that the deduction admissible to the assessee under the provisions of section 24 of the Income-tax Act in computing the income from house property shall not be limited to the annual letting value of the house property as arrived at after providing for the deduction under the said second proviso. 9.3 The aforesaid amendment takes effect from 1st April, 1984 and will, accordingly, apply in relation to the assessment year 1984-85 and subsequent years. [Section 8(b) of the Amending Act] Extension of time for reinvestment in cases where compensation for compulsory acquisition is delayed 10.1 Section 54E of the lncome-tax Act provide for exemption of capital gains in cases where the net consideration arising from the transfer of a long-term capital asset is reinvested within six months in specified financial assets, namely, the National Rural Development Bonds and special series of units of the Unit Trust of India notified by the Central Government in this behalf. The time of six months allowed for reinvestment may, however, not be adequate in some cases of compulsory acquisition where the whole or a part of the compensation is not immediately paid by the Government. 10.2 With a view to avoiding hardship in such cases, the Amending Act has inserted a second proviso to section 54E(1) of the Income-tax Act to provide that in a case where the full amount of compensation awarded for compulsory acquisition of an asset is not received by the assessee on the date of such acquisition, the period of six months referred to in the said provision shall, in relation to so much of such compensation as is not received on the date of the transfer, be reckoned from the date immediately following the date on which such compensation is received by the assessee. 10.3 The aforesaid amendment takes effect from 1st April, 1984 and will, accordingly, apply in relation to the assessment year 1984-85 and subsequent years. [Section 16 of the Amending Act] Clarificatory amendment of sections 80C, 80CC and 80L of the Income-tax Act 11.1 Section 80C(2)(g) of the Income-tax Act provides for deduction of savings made in specified forms by an association of persons or a body of individuals consisting only of husband and wife governed by the system of community of property in force in the Union territories of Dadra and Nagar Haveli and Goa, Daman and Diu. Section 80C(2)(h) similarly specifies another mode of savings by such associations or bodies, besides individuals and Hindu undivided families. Section 80CC of the Income-tax Act also provides for deduction in respect of investment in certain new shares by such associations and bodies, besides individuals and Hindu undivided families. Section 80L of the Income-tax Act also provides for deduction in respect of income from investment in specified financial assets to such associations and bodies, besides individuals and Hindu undivided families. 11.2 The aforesaid sections have been misconstrued in certain appellate orders to imply that the expression "consisting only of husband and wife governed by the system of community of property in force" in certain Union territories only qualifies the expression "body of individuals" and not the expression "association of persons". As such an interpretation of the relevant provisions is clearly not in conformity with the underlying intention, the aforesaid provisions have been amended retrospectively to clarify that the expression "consisting only of husband and wife governed by the system of community of property in force" in certain Union territories will qualify the expressions "association of persons" as well as "body of individuals". 11.3 The aforesaid amendment to clause (g) of section 80C(2) will take effect retrospectively from 1st April, 1971, that is, the date from which the said clause (g) was inserted in the said section. The amendment will, therefore, apply in relation to the assessment year 1971-72 and subsequent years. 11.4 The amendment to clause (h) of section 80C(2) takes effect from 1st April, 1983, that is, the date from which the said clause (h) was inserted in section 80C(2). The amendment, will, therefore, apply in relation to the assessment year 1983-84 and subsequent years. 11.5 The amendment to section 80CC takes effect from 1st April, 1978, that is, the date from which the said section was introduced in the Income-tax Act. The amendment will, accordingly, apply in relation to the assessment year 1978-79 and subsequent years. 11.6 The amendment to section 80L takes effect from 1st April, 1972, that is, the date from which the concession under the said section was extended to associations of persons or bodies of individuals of the nature referred to above. The amendment will, therefore, apply in relation to the assessment year 1972-73 and subsequent years. [Sections 19, 20 and 2 1 (a) of the Amending Act] Clarificatory amendment relating to exemption under section 80L in the case of partners of firms 12.1 It had come to notice that, in some cases, partners of firms had claimed exemption under section 80L in their own assessments in respect of income derived by the firm from investment in specified financial assets. Such claims for deduction are clearly not in conformity with the intention underlying the provisions of section 80L of the Act. 12.2 With a view to avoiding litigation on this point, the Amending Act has inserted a new sub-section (3) in section 80L of the Act. The new sub-section declares, for the removal of doubts, that where the income referred to in sub-section (1) of the said section is derived from any asset held by, or on behalf of, a firm or an association of persons or a body of individuals, no deduction shall be allowed under the said sub-section in respect of such income in computing the total income of any partner of the firm or any member of the association or body. 12.3 The aforesaid amendment takes effect retrospectively from 1st April, 1976. [Section 21(b) of the Amending Act] Extension of time for making summary assessments in cases of search and seizure 13.1 Section 132(5) of the Income-tax Act provides that where any money, bullion, jewellery or other valuable article or thing is seized in the course of search by the income-tax authorities under the said section, the Income-tax Officer shall within 90 days of the seizure, make an order (with the previous approval of the Inspecting Assistant Commissioner) estimating the undisclosed income in a summary manner to the best of his judgment on the basis of such materials as are available to him. The Income-tax Officer is also required to calculate the amount of tax on such estimated income, determine the amount of interest payable and the amount of penalty imposable in consequence of the order made by him; and specify the amount that will be required to satisfy any existing liability of the taxpayer under the direct taxes enactments. 13.2 The Amending Act has amended sub-section (5) of section 132 so as to extend the time for making, an order under the said sub-section from 90 days to 120 days of the seizure. A consequential amendment has also been made in Explanation 1 to section 132. 13.3 The aforesaid amendments take effect from 1st October, 1984. [Section 23(a) and (e) of the Amending Act] Application against an order under section 132(5) to lie to the Commissioner 14.1 Section 132(11) of the Income-tax Act provides that a taxpayer objecting for any reason to an order made by the Income-tax Officer under section 132(5) referred to in paragraph 13 above may make an application to the authority notified by the Central Government in this behalf for appropriate relief in the matter. The Amending Act has made an amendment to sub-section (11) of section 132 to provide that an application against an order under section 132(5) shall he to the Commissioner. A consequential amendment has been made to section 130(2) of the Income-tax Act to secure that, for the purposes of section 132, the Commissioner referred to therein shall, in relation to an assessee, be the Commissioner having for the time being jurisdiction over the assessee. 14.2 The Amending Act has also inserted a new sub-section (11A) in section 132 to provide that every application referred to in sub-section (11) which is pending immediately before 1st October, 1984 before an authority notified under that sub-section (as it stood immediately before 1st October, 1984) shall stand transferred on that date to the Commissioner, and the Commissioner may proceed with such application from the stage at which it was on that @ate. The applicant may, however, demand that before proceeding further with the application, he be reheard by the Commissioner. 14.3 The aforesaid amendments take effect from 1st October, 1984. [Section 22 and section 23(b), (c) and (d) of the Amending Act] Increase in the rate of interest chargeable from assessees, and also payable to assessees, by Government under the provisions of the Income-tax Act 15.1 Simple interest at 12 per cent per annum is chargeable from assessees under certain provisions of the Income-tax Act, e.g., for failure to pay the tax due within the time allowed under the notice of demand, short payment of advance tax, delay in furnishing return of income, etc. Likewise, assessees are entitled to receive simple interest from the Central Government at 12 per cent per annum on excess payment of advance tax, delay in issue of refund, etc. 15.2 The Amending Act has increased the rate of interest chargeable from, or payable to, assessees under the various provisions of the Income-tax Act from 12 per cent to 15 per cent per annum with effect from 1st October, 1984. These provisions are section 132B, section 139, section 201, sections 213 to 217, section 220, section 243, section 244 and section 269K and rule 60 of the Second Schedule. 15.3 Section 84 of the Amending Act specifically clarifies that the ncrease in the rate of interest will apply in respect of any period falling after 30th September, 1984, also in those cases where the interest became chargeable or payable from an earlier date. [Sections 24 and 84 of the Amending Act] Discontinuance of the procedure under section 144B of the Income-tax Act relating to reference to Inspecting Assistant Commissioners 16.1 Under section 144B of the Income-tax Act, the Income-tax Officer is required to send a draft of the assessment order to the assessee in cases where the aggregate amount of the variation to the returned income proposed by the Income-tax Officer exceeds a fixed amount, which is currently Rs. 1 lakh. If the assessee objects to the variation proposed by the Income-tax Officer, the objections are referred by the Income-tax Officer to the Inspecting Assistant Commissioner, who is authorised to give appropriate directions to the Income-tax Officer for the modification of the draft assessment order. 16.2 The Amending Act has made an amendment in sub-section (1) of section 144B to secure that the provisions of the said section shall apply only in those cases where the Income-tax Officer proposes to make, before 1st October, 1984, any variation to the returned income. In the result, the provisions of section 144B shall cease to apply in cases where any variation to the returned income is proposed to be made by the Income-tax Officer after 30th September, 1984. [Section 26 of the Amending Act] Withdrawal of the power of Income-tax Officer to cancel ex-parte assessment and make fresh assessment 17.1 Section 144 of the Income-tax Act empowers the Income-tax Officer to make an ex parte or best judgment assessment in cases where the assessee fails to furnish the return of income or to comply with the statutory notices issued by the Income-tax Officer in the course of assessment proceedings. The ex parte assessment can be cancelled by the Income-tax Officer under section 146 of the Income-tax Act if the assessee is able to show that he was prevented by sufficient cause from making the return or he did not receive the statutory notices or did not have reasonable opportunity to comply with, or was prevented by sufficient cause from complying with, such notices. 17.2 The Amending Act has made an amendment in sub-section (1) of section 146 of the Income-tax Act to secure that the provisions of the said section shall apply only in cases where an assessee has been assessed under section 144 before 1st October, 1984. [Section 27 of the Amending Act] Amendment of section 153 of the Income-tax Act relating to time limit for completion of assessments in certain cases 18.1 Under section 153(1) of the Income-tax Act, an order of assessment cannot, ordinarily, be made after the expiry of two years from the end of the assessment year in which the income was first assessable or the expiry of one year from the date of the filing of a return or a revised return, whichever is later. This provision has resulted in a practical difficulty in cases where an order of assessment is made by the Income-tax Officer under section 143(1) of the Act without requiring the presence of the assessee or the production by him of any evidence in support of the return filed by him. In such cases, the assessee is entitled under section 143(2)(a) of the Act to make an application within one month to the Income-tax Officer objecting to such assessment. On receipt of an application under this provision, the Income-tax Officer is required to make a fresh assessment after considering the objections raised by the assessee. 18.2 It bad come to notice that, in certain cases, where the order of assessment under section 143(1) of the Act was made towards the expiry of the period of limitation laid down in section 153(1), the Income-tax Officer was not in a position to make a fresh assessment because the period of limitation had expired by the time the application filed by the assessee under section 143(2)(a) raising objections against the said assessment order was taken up for consideration by the Income-tax Officer. 18.3 With a view to removing this difficulty, the Amending Act has inserted a new clause (c) in sub-section (1) of section 153 of the Act to secure that, in such cases, the fresh assessment may be made by the Income-tax Officer within the period of limitation laid down under the existing provisions of section 153(1) or before the expiry of six months from the end of the month in which an application under clause (a) of sub-section (2) of section 143 of the Act is made by the assessee, whichever is later. The aforesaid amendment takes effect from 1st October, 1984. [Section 28(a) of the Amending Act] Amendment of section 153 of the Income-tax Act in consequence of insertion of section 158A 19.1 The Amending Act has inserted a new section 158A in the lncome-tax Act relating to procedure when assessee claims that identical question of law is pending before the High Court or Supreme Court. In consequence of the insertion of this section, the Amending Act has inserted a new clause (iva) in Explanation 1 below sub-section (3) of section 153 of the Income-tax Act. The new clause seeks to secure that in computing the period of limitation for the purposes of section 153, the period (not exceeding sixty days) commencing from the date on which the Income-tax Officer received the declaration under sub-section (1) of new section 158A and ending with the date on which the order under sub-section (3) of that section is made by him, shall be excluded 19.2 The aforesaid amendment takes effect from 1st October, 1984, that is, the date from which new section 158A has been inserted in the Income-tax Act. [Section 28(b) of the Amending Act] Amendment of section 154 relating to rectification of mistakes 20.1 Section 154 of the Income-tax Act empowers the Income-tax Officer, the Appellate Assistant Commissioner, the Commissioner(Appeals) and the Commissioner of Income-tax to rectify mistakes apparent from the record in the orders passed by them. All order of rectification can be made within a period of four years from the date of the passing of the order sought to be rectified. 20.2 The Amending Act has substituted sub-section (1) of section 154 by a new sub-section. The new sub-section (1) provides that with a view to rectifying any mistake apparent from the record, an income-tax authority referred to in section 116 may amend any order passed by it under the provisions of the Act. The effect of the substituted sub-section, therefore, will be that all income-tax authorities referred to in section 116 will be empowered to rectify any mistake apparent from the record in any order passed by them under the provisions of the Income-tax Act. 20.3 The Amending Act has also amended sub-section (7) of section 154 with a view to securing that the period of four years specified in that sub-section for rectification of mistakes shall be reckoned from the end of the financial year in which the order sought to be amended was passed by the concerned income-tax authority, and not from the date of such order as at present. This modification would facilitate the income-tax authorities in keeping track of the period of limitation. 20.4 The aforesaid amendments take effect from 1st October, 1984. [Section 29 of the Amending Act] Amendment of section 155 of the Income-tax Act 21.1 The Amending Act has made certain modifications in the provisions of section 155 of the Income-tax Act. 21.2 Under one of the amendments, a new clause (c) has been inserted in sub-section (1) of section 155. The new clause (c) seeks to secure that, wherein respect of any completed assessment of a partner in a firm, it is found on any order passed under sub-section (4) of section 245D by the Settlement Commission on the application made by the firm that the share of the partner in the income of the firm has not been included in the assessment of the partner or, if included, is not correct, the Income-tax Officer may amend the order of assessment of the partner, with a view to the inclusion of the share in the assessment or the correction thereof, as the case may be. 21.3 Under another amendment a new clause (c) has been inserted in sub-section (2) of section 155. The new clause seeks to secure that where in respect of any completed assessment of a member of an association of persons or body of individuals, it is found on any order passed under sub-section (4) of section 245D by the Settlement Commission on the application made by the association or body that the share of the member in the income of the association or body, as the case may be, has not been included in the assessment of the member, or if included, is not correct, the Income-tax Officer may amend the order of assessment of the member with a view to the inclusion of the share in the assessment or the correction thereof, as the case may be. 21.4 Sub-sections (1), (2), (4), (7), (8), (9), (10), (10A) and (10C) of section 155 have also been amended to secure that the period of rectification laid down in the respective sub-sections shall be reckoned from the end of the financial year in which the relevant order was passed, and not from the date of the relevant order as at present. This modification would facilitate in keeping track of the period of limitation laid down for passing an order under section 155 of the Act. 21.5 The aforesaid amendments take effect from 1st October, 1984. [Section 30, excluding clause (e), of the Amending Act] Special provision for avoiding repetitive appeals 22.1 When there is a difference between the Income-tax Officer and a taxpayer on any question of law arising in the case of the taxpayer for several years, the taxpayer has to contest the question of law for each of these years. This leads to unnecessary proliferation of appeals before the appellate authorities and reference applications before the High Courts on identical questions of law in the case of the same taxpayer. 22.2 With a view to avoiding such repetitive appeals and reference applications, the Amending Act has inserted a new Chapter XIVA in the Income-tax Act entitled "SPECIAL PROVISION FOR AVOIDING REPETITIVE APPEALS". The aforesaid Chapter contains a new section 158A which provides for a special procedure in cases where an assessee claims that any question of law arising in his case for an assessment year which is pending before the Income-tax Officer or any appellate authority (such case being hereafter referred to as "the relevant case") is identical with the question of law arising in his case for another assessment year which is pending before the High Court on a reference under section 256 or before the Supreme Court on a reference under section 257 or in appeal under section 261 (such case being hereafter referred to as "the other case"). In such cases, the assessee may furnish to the Income-tax Officer or the appellate authority, as the case may be, a declaration in the prescribed form and verified in the prescribed manner, that if the Income-tax Officer or, as the case may be, the appellate authority agrees to apply to the relevant case the final decision on the question of law in the other case, he shall not raise such question of law in the relevant case in appeal before any appellate authority or for a reference before the High Court or the Supreme Court or in appeal before the Supreme Court under the aforesaid sections of the Income-tax Act. 22.3 Where a declaration as aforesaid is furnished to any appellate authority, the appellate authority will have to call for a report from the Income-tax Officer on the correctness of the claim made by the assessee. Where the Income-tax Officer makes a request to the appellate authority to give him an opportunity of being heard in the matter, the appellate authority will have to allow such opportunity to the Income-tax Officer. 22.4 If the Income-tax Officer or, as the case may be, the appellate authority is satisfied that the question of law arising in the relevant case is identical with the question of law in the other case, the Income-tax Officer or, as the case may be, the appellate authority, may admit the claim of the assessee. Where the Income-tax Officer or the appellate authority is not so satisfied, the claim of the assessee shall be rejected. The order admitting or rejecting the claim will have to be made in writing. The order of the Income-tax Officer or the appellate authority admitting or rejecting the claim shall be final and shall not be called in question in any proceeding by way of appeal, reference or revision under the Income-tax Act. 22.5 The fact that the claim made by the assessee is admitted will not, however, preclude the Income.-tax Officer or, as the case may be, the appellate authority from making an order disposing of the relevant case without awaiting the final decision on the question of law in the other case. However, when the decision on the question of law in the other case becomes final, it shall be applied to the relevant case and the Income-tax Officer or, as the case may be, the appellate authority, shall, if necessary, amend the order earlier passed by the Income-tax Officer or the appellate authority conformably to the final decision on the question of law in the other case. 22.6 When a claim made by the assessee is admitted, the assessee shall not be entitled to raise, in relation to the relevant case, the question of law in appeal before any appellate authority, or for a reference before the High Court or the Supreme Court or in appeal before the Supreme Court under the aforesaid sections of the Income-tax Act. 22.7 For purposes of new section 158A, the expression "appellate authority"means the Appellate Assistant Commissioner, the Commissioner (Appeals) or the Appellate Tribunal. The expression "case", in relation to an assessee, has been defined to mean any proceeding under the Income-tax Act for the assessment of the total income of the assessee or for the imposition of any penalty on him. 22.8 The aforesaid provisions take effect from 1st October 1984. [Section 31 of the Amending Act] Amendment of section 186 relating to cancellation of registration 23.1 Sub-section (3) of section 186 provides that where the registration of a firm is cancelled for any assessment year, the Income-tax Officer shall amend the assessments of the firm and its partners for that assessment year on the footing that the firm is an unregistered firm. Sub-section (4) of section 186 provides that the provisions of section 154 shall, so far as may be, apply to the amendments of the assessments of the firm and its partners under the aforesaid sub-section (3) and the period of four years specified in section 154(7) shall, for this purpose, be reckoned from the date of the order cancelling the registration. The Amending Act has made an amendment in section 186 to secure that the aforesaid period of four years shall be reckoned from the end of the financial year in which the order cancelling the registration was passed, and not from the date of such order as at present. 23.2 The aforesaid amendment takes effect from 1st October, 1984. [Section 32 of the Amending Act] Amendment of section 187 relating to change in the constitution of a firm 24.1 Section 187 of the Income-tax Act provides that where at the time of making an assessment it is found that a change has occurred in the constitution of a firm, the assessment shall be made on the firm as constituted at the time of making the assessment. Section 187(2) of the Act clarifies that if one or more of the partners cease to be partners or one or more new partners are admitted in such circumstances that one or more of the persons who were partners of the firm before the change continue as partner or partners after the change or where all the partners continue with a change in their respective shares or in the shares of some of them, such cases would be regarded as cases of change in the constitution of the firm. 24.2 The question whether the provisions of section 187(2) of the Act would also apply in cases where a firm stands dissolved by operation of law or by virtue of an agreement among the partners, has given rise to considerable litigation and conflict of judicial decisions. With a view to ending uncertainty and litigation on this issue, the Amending Act has inserted a proviso to sub-section (2) of section 187 to provide that nothing contained in clause (a) of the said sub-section shall apply to a case where the firm is dissolved on the death of any of its partners. The effect of this amendment will be that where a firm is dissolved on the death of any of its partners, it shall not be regarded as a case of change in the constitution of the firm under the special provisions contained in section 187(2)(a) of the Income-tax Act. 24.3 The aforesaid amendment takes effect from 1st April, 1975 and will, accordingly, apply in relation to the assessment year 1975-76 and subsequent years. [Section 33 of the Amending Act] New provision for reduction or waiver of interest chargeable for default in payment of tax, etc. 25.1 Section 220(2) of the Income-tax Act provides that if the amount specified in any notice of demand under section 156 is not paid within the period limited under sub-section (1) of section 220, the assessee shall be liable to pay simple interest at the specified rate from the day commencing after the end of the period mentioned in sub-section (1) of section 220. 25.2 The Amending Act has inserted a new sub-section (2A) empowering the Board to reduce or waive the amount of interest payable by an assessee under sub-section (2) of section 220. The Board will exercise this power only on the recommendation made by the Commissioner in this behalf. An order reducing or waiving the interest will be passed by the Board only if it is satisfied that (a) the payment of such interest would cause genuine hardship to the assessee; (b) the default in the payment of the amount on which interest was payable was due to circumstances beyond the control of the assessee; and (c) the assessee has cooperated in any enquiry relating to the assessment or any proceeding for the recovery of any amount due from him. 25.3 The aforesaid provision takes effect from 1st October, 1984. [Section 37 of the Amending Act] Extension of the period of limitation for commencing recovery proceedings 26.1 Section 231 of the Income-tax Act provides that no action for recovery can be commenced after the expiration of one year from the end of the financial year in which the demand was raised. The Amending Act has made an amendment in section 231 with a view to extending the period of limitation for commencement of recovery proceedings, from one year to three years, from the end of the financial year in which the demand was made, or in the case of a person who is deemed to be an assessee in default under any provision of the Act, from one year to three years after the expiration of the last day of the financial year in which the assessee is deemed to be in default. 26.2 The aforesaid amendment takes effect from 1st October, 1984. [Section 38 of the Amending Act] Amendment of section 245A 27.1 The Amending Act has substituted the definition of the term "case" for the purposes of Chapter-XIXA relating to settlement of cases by a new definition. Under this new definition, the term "case" would mean any proceeding under the Income-tax Act, 1961 (and not under the Indian Income-tax Act, 1922) for the assessment or reassessment of any person in respect of any year or years, or by way of appeal or revision in connection with such assessment or reassessment, which may be pending before an income-tax authority on the date on which an application under sub-section (1) of section 245C is made by the assessee. 27.2 The amended definition takes effect from 1st October, 1984. [Section 39 of the Amending Act] Amendment of section 245C 28.1 The Amending Act has substituted sub-section (1) of section 245C of the Income-tax Act relating to application for settlement of cases by new sub-sections (1) to (1E). 28.2 New sub-section (1) provides that an assessee may, at any stage of a case relating to him, make an application in such form and in such manner as may be prescribed, and containing a full and true disclosure of his income which has not been disclosed before the Income-tax Officer, the manner in which such income has been derived, the additional amount of income-tax payable on such income and such other particulars as may be prescribed, to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner provided in the provisions of Chapter XIXA of the Act. 28.3 The proviso to sub-section (1) lays down that no such application shall be made unless the additional amount of income-tax payable on the income disclosed in the application exceeds Rs. 50, 000. 28.4 The portions italicised above indicate the salient features of the difference between the earlier sub-section (1) and the new sub-section (1) of section 245C. It will be observed that under the new provision, the application to the Settlement Commission will have to contain: (a) a full and true disclosure of the applicant's income which has not been disclosed before the Income-tax Officer; (b) the manner in which such income has been derived; and (c) the additional amount of income-tax payable on such income. Besides, the new sub-section, for the first time, precludes persons from making an application to the Settlement Commission unless the additional amount of income-tax payable on the income disclosed in the application exceeds Rs. 50,000. 28.5 New sub-section (1A) provides that the additional amount of income-tax payable in respect of the income disclosed in the application under sub-section (1) shall be calculated in accordance with the provisions of sub-sections (1B) to (1D). 28.6 New sub-section (1B) provides that where the income disclosed in the application relates to only, one previous year, the additional income-tax will be determined in the following manner: (i) if the applicant has not furnished a return in respect of the total income of that year and no assessment has been made in respect of the total income of that year, tax shall be calculated on the income disclosed in the application as if such income were the total income; (ii) if the applicant has furnished a return in respect of the total income of that year and no assessment has been made in pursuance of such return, tax shall be calculated on the aggregate of the total income returned and the income disclosed in the application as if such aggregate were the total income; (iii) if an assessment in respect of the total income of that year has been made, tax shall be calculated on the aggregate of the total income as assessed and the income disclosed in the application as if such aggregate were the total income. 28.7 New sub-section (1C) provides that the tax as calculated under sub-section (1B) shall be reduced as indicated below: (a) in a case referred to in (i) of the preceding paragraph, by the sum, if any, deducted at source under Chapter XVIIB or paid in advance under Chapter XVIIC of the Income-tax Act; (b) in a case referred to in (ii) of the preceding paragraph, by the aggregate of the sums referred to in (a) above and the tax, if any, paid by the applicant under section 140A of the Income-tax Act; and (c) in a case referred to in (iii) of the preceding paragraph, by the aggregate of the sums and tax referred to in (b) above as increased by the tax, if any, paid in pursuance of the assessment made in respect of the total income of that year. The resultant amount so arrived at shall be the additional amount of income-tax payable in respect of the income disclosed in the application relating to that year. 28.8 New sub-section (1D) provides that where the income disclosed in the application relates to more than one previous year, the additional amount of income-tax payable in respect of the income disclosed for each of the years shall first be calculated in accordance with the provisions of sub-sections (1B) and (1C) and the aggregate of the amount so arrived at in respect of each of the years for which the application has been made shall be the additional amount of income-tax payable in respect of the income disclosed in the application. 28.9 New sub-section (1E) provides that where any books of account, other documents, money, bullion, jewellery or other valuable article or thing belonging to an assessee are seized under section 132 of the Income-tax Act, the assessee shall not be entitled to make an application under sub-section (1) of section 245C before the expiry of 120 days from the date of the seizure. 28.10 The aforesaid provisions take effect from 1st October, 1984. [Section 40 of the Amending Act] Amendment of section 245D relating to procedure on receipt of application under section 245C 29.1 The Amending Act has made a number of modifications in section 245D of the Income-tax Act 29.2 Under the first amendment, the reference in sub-section (1A) to the Indian Income-tax Act, 1922 has been omitted. This omission is consequential to the amendment of the definition of the term "case", contained in section 245A which excludes proceedings under the Indian Income-tax Act, 1922 from the purview of settlement of cases by the Settlement Commission. 29.3 The Amending Act has inserted new sub-sections (2A) to (2D) in section 245D. 29.4 Sub-section (2A) provides that the assessee shall, within thirty-five days of the receipt of a copy of the order of the Settlement Commission under sub-section (1), pay the additional amount of income-tax payable on the income disclosed in the application and shall furnish proof such payment to the Settlement Commission. As a case effectively falls under the jurisdiction of the Settlement Commission only after an application is allowed to be proceeded with by it, the aforesaid requirement of payment of additional tax will also apply only in those cases where the Settlement Commission has made an order under section 245D(1) showing the application to be proceeded with, and not in cases where the application is rejected. 29.5 Sub-section (2B) provides that if the Settlement Commission is satisfied on an application made in this behalf by the assessee, that he is unable for good and sufficient reasons to pay the additional amount of income-tax within the time specified in sub-section (2A), it may extend the time for payment of the amount which remains unpaid or allow payment thereof by instalments. Such an order under sub-section (2B) win be made by the Settlement Commission only if the assessee furnishes adequate security for the payment of the aforesaid amount. 29.6 New sub-section (2C) provides that where the additional amount of income-tax is not paid within the time specified under sub-section (2A), the assessee shall be liable to pay simple interest at 15 per cent per annum on the amount remaining unpaid from the date of expiry of the period of thirty-five days referred to in the said sub-section. Interest under this provision will have to be paid by the assessee irrespective of whether or not the Settlement Commission has extended the time for payment of the amount or has allowed payment thereof by instalments. 29.7 New sub-section (2D) provides that where the additional amount of income-tax is not paid by the assessee within the time specified under sub-section (2A) or within the extended time allowed by the Settlement Commission, the Settlement Commission may direct that the amount remaining unpaid, together with any interest payable thereon under sub- section (2C), shall be recovered and any penalty for default in making payment of such additional amount may be imposed and recovered by the Income-tax Officer having jurisdiction over the assessee in accordance with the provisions of Chapter XVII of the Income-tax Act. 29.8 Sub-section (6) of section 245D, inter alia, provides that every order passed under sub-section (4) shall provide for the terms of settlement including any demand by way of tax, penalty or interest. The Amending Act has amended the aforesaid sub-section with a view to deleting the reference to "interest" under the aforesaid provision. The aforesaid amendment is consequential to the insertion of new sub- section (2C) which provides for payment of interest on the additional amount of income-tax and new sub-section (6A) which also provides for payment of interest on the tax payable by an assessee in pursuance of an order made by the Settlement Commission under sub-section (4) of section 245D. However, as the existing provisions of sub-section (6) empower the Settlement Commission to specify the terms of settlement, including any demand by way of tax, penalty or interest, the omission of the word "interest" by the Amending Act will not preclude Settlement Commission from setting out the terms relating to payment of interest in its order under section 245D(4) to the extent that such terms do not contravene the provisions of new sub-sections (2C) and (6A). 29.9 The Amending Act includes a new sub-section (6A) in section 245D. The new sub-section provides that where any tax payable in pursuance of an order under sub-section (4) is not paid by the assessee within thirty-five days of the receipt of a copy of the order by him, the assessee shall be liable to pay simple interest at 15 per cent per annum on the amount remaining unpaid from the date of expiry of the aforesaid period of thirty-five days. Interest will have to be paid by the assessee irrespective of whether or not the Settlement Commission has extended the time for payment of such tax or has allowed payment thereof by instalments. 29.10 The Amending Act has also inserted a new sub-section (8) in section 245D. The new sub-section declares, for the removal of doubts, that nothing contained in section 153 of the Income-tax Act relating to the time limit for completion of assessments and reassessments shall apply to any order passed under sub-section (4) of section 245D or to any order of assessment, reassessment or recomputation required to be made by the Income-tax Officer in pursuance of any directions contained in such order passed by the Settlement Commission. 29.11 The aforesaid amendments take effect from 1st October, 1984. [Section 41 of the Amending Act] Amendment of section 245E 30.1 The Amending Act has made an amendment in section 245E relating to power of Settlement Commission to reopen completed proceedings. Under the amendment, the reference to proceedings completed under the Indian Income-tax Act, 1922, has been omitted from the section. This amendment has been made with a view to removing all scope for doubt or controversy regarding the power of Settlement Commission to reopen completed proceedings. As clearly laid down iii the proviso to section 245E, no proceeding can be reopened by the Settlement Commission after the expiration of the period of eight years from the end of the assessment year to which such proceeding relates. 30.2 The aforesaid amendment takes effect from 1st October, 1984. [Section 42 of the Amending Act] Amendment of section 245H 31.1 The Amending Act has made an amendment in section 245H relating to power of Settlement Commission to grant immunity from prosecution and penalty. The amendment empowers the Settlement Commission to provide even partial immunity from the imposition of any penalty under the Income-tax Act. 31.2 The amendment takes effect from 1st October, 1984. [Section 43 of the Amending Act] Amendment of section 245M 32. The Amending Act has made an amendment in section 245M which enables persons who have filed appeals to the Tribunal to make applications to the Settlement Commission after withdrawing the appeal pending before the Appellate Tribunal. The effect of the amendment will be that the provisions of section 245M will apply only in cases where the appeal is withdrawn by the assessee before 1st October, 1984. In other words, an assessee who has filed an appeal to the Tribunal for an assessment year which is pending before it, shall not be entitled to make an application to the Settlement Commission by withdrawing such appeal unless such appeal has been withdrawn before 1st October, 1984. [Section 44 of the Amending Act] Amendment of section 246 relating to appealable orders 33.1 The Amending Act has made two amendments in section 246 of the Income-tax Act. 33.2 Under the first amendment, a new clause (a) has been inserted in section 246(2) of the Act to provide that an appeal to the Commissioner (Appeals) shall he in cases where an order of assessment is made after 30th September, 1984 on the basis of directions issued by the inspecting Assistant Commissioner under section 144A of the Income-tax Act. 33.3 The other amendment seeks to insert a new clause (ff) in section 246(2). The new clause provides that an appeal shall lie to the Commissioner (Appeals) against an order made by the Inspecting Assistant Commissioner under section 154 of the Income-tax Act. 33.4 These amendments take effect from 1st October, 1984. [Section 45, of the Amending Act] Amendment of section 253 relating to appeals to the Appellate Tribunal 34.1 The Amending Act has omitted clause (b) of sub-section (1) of section 253 which provides that an appeal shall lie to the Appellate Tribunal against an order passed by an Inspecting Assistant Commissioner under section 154 of the Income-tax Act. This amendment is consequential to the insertion of new clause (ff) in section 246(2) of the Income-tax Act which provides that an appeal against an order made by the Inspecting Assistant Commissioner under section 154 shall lie to the Commissioner (Appeals). 34.2 The aforesaid amendment takes effect from 1st October, 1984. [Section 46 of the Amending Act] Amendment of section 263 of the Income-tax Act relating to revision of orders prejudicial to revenue 35.1 The Amending Act has modified the provisions of section 263 of the Income-tax Act in certain respects. 35.2 Under one of the amendments, a new Explanation has been inserted at the end of sub-section (1) of section 263. The new Explanation declares, for the removal of doubts, that for the purposes of the said sub-section, an order passed by the Income-tax Officer shall include an order of assessment made on the basis of directions issued by the Inspecting Assistant Commissioner under section 144A or section 144B of the Income-tax Act. The new Explanation also provides that an order made by the Inspecting Assistant Commissioner in exercise of the powers or in performance of the functions of an Income-tax Officer conferred on, or assigned to, him under section 125(1)(a) or section 125A(1) of the Income-tax Act, shall also be regarded as an order passed by the Income-tax Officer. The new Explanation seeks to clarify the aforesaid position with a view to removing further controversy and litigation on these points. 35.3 Under another amendment, sub-section (2) of section 263 has been substituted by a new sub-section. The effect of the new sub-section will be that it will be permissible for the Commissioner to revise under section 263 even an order of reassessment made under section 147 of the Income-tax Act. This has been secured by omitting from the new sub-section the reference to the prohibition against revision of such orders contained in sub-section (2) of section 263 as it stood prior to its amendment by the Amending Act. 35.4 The new sub-section also seeks to secure that no order under section 263 shall be made by the Commissioner after the expiry of two years from the end of the financial year in which the order sought to be revised was passed, as against two years from the date of such order as at present. 35.5 The aforesaid amendments take effect from 1st October, 1984. [Section 47 of the Amending Act] Amendment of section 271 relating to penalty for certain defaults 36.1 The Amending Act has inserted a new Explanation 5 to sub-section (1) of section 271 of the Income-tax Act. 36.2 The new Explanation contains a special provision applicable to cases where in the course of a search under section 132 of the Income-tax Act, the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing. The new Explanation provides that if in such cases, the assessee claims that the assets referred to above have been acquired by him by utilising (whether wholly or in part) his income for any previous year which has ended before the date of the search, but the return of income for such year has not been furnished before the said date, or where such return has been furnished before the said date, such income has not been declared in the return, the assessee shall, for the purposes of imposition of penalty under section 271(1)(c) of the Income-tax Act, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income unless such income is, or the transactions resulting in such income are, recorded before the date of the search in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the Commissioner before the date of the search. Where the assessee claims Chat the aforesaid assets have been acquired by him by utilising (whether wholly or in part) his income for any previous year which is to end on or after the date of the search, he shall for the purposes of section 271(1)(c) of the Act be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income, unless such income is or the transactions resulting in such income are, recorded on or before such date in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the Commissioner before the said date. 36.3 The fact that the income referred to above is declared by the assessee in any return of income furnished by him on or after the date of tile search will not provide immunity to the assessee from imposition of penalty under section 271(1)(c) of the Act unless the conditions mentioned in the preceding paragraph are fulfilled. 36.4 The aforesaid amendments take effect from 1st October, 1984. [Section 48 of the Amending Act] Amendment of section 273A of the Income-tax Act 37.1 The Amending Act seeks to make certain modifications in section 273A of the Income-tax Act relating to power of Commissioner to reduce or waive penalty, etc. 37.2 Under one of the amendments, a new Explanation 2 has been inserted in section 273A(1). The new Explanation provides that where any books of account, other documents, money, bullion, jewellery or other valuable article or thing belonging to a person are seized under section 132 of the Income-tax Act and, within 15 days of such seizure, the person makes a full and true disclosure of his income to the Commissioner, such person shall for the purposes of clause (b) of sub-section (1) of section 273A, be deemed to have made, prior to the detection by the Income-tax Officer of the concealment of particulars of income or of the inaccuracy of the particulars furnished in respect of such income, voluntarily and in good faith, a disclosure of such particulars. 37.3 Another provision has amended sub-section (2) of section 273A. The effect of this amendment will be that the Commissioner will be required to take the prior approval of the Board for making an order for the reduction or waiver of penalty in the cases referred to in clause (a) of sub-section (2) only where the amount or, as the case may be, the aggregate amount of the penalty imposed or imposable exceeds Rs. 1 lakh, as against the existing limit of Rs. 50,000 only. 37.4 Another amendment seeks to insert a proviso to sub-section (4) of section 273A. The new proviso lays down that where the amount of any penalty payable under the Income-tax Act, or where the application under sub-section (4) relates to more than one penalty, the aggregate amount of such penalties exceeds Rs. 1 lakh, no order reducing or waiving such amount or compounding any proceeding for its recovery under sub-section (4) shall be made by the Commissioner except with the previous approval of the Board. 37.5 The aforesaid amendments take effect from 1st October, 1984. [Section 50 of the Amending Act] Amendment of section 279 of the Income-tax Act relating to prosecution for offences 38.1 The Amending Act has amended sub-section (1) of section 279 of the Income-tax Act. This amendment seeks to secure that a person shall not be proceeded against for an offence under section 276DD relating to failure to comply with the provisions of section 269SS except at the instance of the Commissioner. 38.2 The aforesaid amendment takes effect from 1st April, 1984, i.e., the date from which sections 269SS and 276DD were inserted in the Income-tax Act by the Finance Act, 1984. [Section 51 of the Amending Act] Amendment of section 288 of the Income-tax Act relating to appearance by authorised representative 39.1 Section 288(3) of the Income-tax Act provides that if a person formerly employed as an income-tax authority (not below the rank of an income-tax Officer) has retired or resigned from such employment after having served for not less than three years from the date of his first employment as such, he shall not be entitled to represent any assessee for a period of two years from the date of his retirement or resignation. 39.2 The Amending Act has omitted the aforesaid sub-section (3) of section 288. Although the aforesaid sub-section (3) has been omitted, officers belonging to the Indian Revenue Service (Income-tax Wing) who have retired from Government service shall continue to be governed by the provision of the Central Civil Services (Pension Rules) which regulates the setting up of practice by such officers after retirement. 39.3 The aforesaid amendment takes effect from 1st October, 1984. [Section 52 of the Amending Act] AMENDMENTS TO WEALTH-TAX ACT Amendment of section 5 of the Wealth-tax Act 40.1 Section 5(1)(xxxiii) of the Wealth-tax Act provides for exemption from wealth-tax of the moneys and the value of assets brought into India by persons of Indian origin who are ordinarily residing in foreign countries in cases where such persons return to India with the intention of permanently residing therein. The value of assets acquired by them out of the moneys brought into India also qualifies for exemption under this provision. The exemption is available for seven assessment years commencing with the assessment year next following the date on which such person returns to India. 40.2 The Amending Act has amended the aforesaid provision with a view to extending the exemption under the said provision to Indian citizens as well. 40.3 The aforesaid amendment takes effect from 1st April, 1977, i.e., the date from which the aforesaid provision was introduced in the Wealth-tax Act by the Finance Act, 1976. The amended provision will, therefore, apply in relation to the assessment year 1977-78 and subsequent years. [Section 54(a)(ii) of the Amending Act] Substitution of section 8A by new section 41.1 Section 8A of the Wealth-tax Act provides that the Commissioner may, by general or special order in writing, direct that such of the functions assigned to the Wealth-tax Officer by or under the Wealth-tax Act as are specified in any such order may, in respect of any specified area or specified cases or classes of cases or specified persons or classes of persons, be performed by an Inspector of Wealth-tax or any member of the ministerial staff appointed to work under the Commissioner or any other wealth-tax authority subordinate to him, and specified in such order. 41.2 The Amending Act substitutes section 8A of the Wealth-tax Act with a view to enabling the Commissioner to also make a general or special order in writing directing that the powers conferred on the Wealth-tax Officer by or under the Wealth-tax Act shall, in respect of any specified cases or class of cases or of any specified person or class of persons, be exercised by the Inspecting Assistant Commissioner. The substituted section also provides that where such order is made by the Commissioner, references in the Wealth-tax Act or in any rule made thereunder to the Wealth-tax Officer shall be deemed to be references to the Inspecting Assistant Commissioner and any provision of that Act requiring approval or sanction of the Inspecting Assistant Commissioner shall not apply.