THE WEALTH-TAX ACT, 1957 
(Modified as on 12th November 2018) 
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ARRANGEMENT OF SECTIONS 
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SECTIONS 

1. Short title, extent and commencement. 

2. Definitions. 

CHARGE OF WEALTH-TAX AND ASSETS SUBJECT TO SUCH CHARGE 

CHAPTER II 

3. Charge of wealth-tax . 

4. Net wealth to include certain assets. 

5. Exemptions in respect of certain assets. 

6. Exclusion of assets and debts outside India. 

7. Value of assets, how to be determined. 

CHAPTER III 

WEALTH-TAX AUTHORITIES 

8.  Wealth-tax authorities and their jurisdiction. 

8A. [Omitted.]. 

8AA. [Omitted.]. 

8B. [Omitted.]. 

9. Control of wealth-tax authorities. 

9A. [Omitted.]. 

10. Instructions to subordinate authorities. 

10A. [Omitted.]. 

11. Jurisdiction of Assessing Officers and power to transfer cases. 

11A. [Omitted.]. 

11AA. [Omitted.]. 

11B. [Omitted.]. 

12. [Omitted.]. 

12A. Appointment of Valuation Officers. 

13. [Omitted.]. 

13A. Powers  of Director-General  or  Director,  Chief  Commissioner  or  Commissioner  and Joint 

Commissioner to make enquiries. 

 Subject to verification and confirmation by the Department. 

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CHAPTER IV 

ASSESSMENT 

SECTIONS 

14. Return of wealth. 

14A.  Power of Board to dispense with furnishing documents, etc., with return of wealth. 

14B. Filing of return in electronic form. 

15.  Return after due date and amendment of return. 

15A. Return by whom to be signed. 

15B. Self-assessment. 

15C. [Omitted.]. 

16. Assessment. 

16A. Reference to Valuation Officer. 

17. Wealth escaping assessment. 

17A. Time limit for completion of assessment and reassessment. 

17B. Interest for defaults in furnishing return of net wealth. 

18. Penalty for failure to furnish returns, to comply with notices and concealment of assets, etc. 

18A. Penalty for failure to answer questions, sign statements, furnish information, allow inspection, 

etc. 

18B. Power to reduce or waive penalty in certain cases. 

18BA. Power of Commissioner to grant immunity from penalty. 

CHAPTER IVA 

SPECIAL PROVISION FOR AVOIDING REPETITIVE APPEALS 

18C. Procedure when assessee claims identical question of law is pending before High Court or 

Supreme Court. 

CHAPTER IVB 

CHARGE OF ADDITIONAL WEALTH-TAX IN CERTAIN CASES 

18D. [Omitted.]. 

CHAPTER V 

LIABILITY TO ASSESSMENT IN SPECIAL CASES 

19. Tax of deceased person payable by legal representative. 

19A. Assessment in the case of executors. 

20. Assessment after partition of a Hindu undivided family. 

20A. Assessment after partial partition of a Hindu undivided family. 

21. Assessment when assets are held by courts of wards, administrators-general, etc. 

21A. Assessment in cases of diversion of property, or of income from property, held under trust for 

public charitable or religious purposes. 

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SECTIONS 

21AA. Assessment when assets are held by certain associations of persons. 

22. Assessment of persons residing outside India. 

CHAPTER VA 

SETTLEMENT OF CASES 

22A. Definitions. 

22B. Wealth-tax Settlement Commission. 

22BA. Jurisdiction and powers of Settlement Commission. 

22BB. Vice-Chairman to act as Chairman or to discharge his functions in certain circumstances. 

22BC. Power of Chairman to transfer cases from one Bench to another. 

22BD. Decision to be by majority. 

22C. Application for settlement of cases. 

22D. Procedure on receipt of an application under section 22C. 

22DD. Power of Settlement Commission to order provisional attachment to protect   revenue. 

22E. Power of Settlement Commission to reopen completed proceedings. 

22F. Powers and procedure of Settlement Commission. 

22G. Inspection, etc., of reports. 

22H. Powers of Settlement Commission to grant immunity from prosecution. 

22HA. Abatement of proceedings before Settlement Commission. 

22HAA. Credit for tax paid in case of abatement of proceedings. 

22-I. Order of settlement to be conclusive. 

22J. Recovery of sums due under order of settlement. 

22K. Bar on subsequent application for settlement. 

22L. Proceedings before the Settlement Commission to be judicial proceedings. 

22M. [Omitted.]. 

CHAPTER VI 

APPEALS, REVISIONS AND REFERENCES 

23. Appeal to the Deputy Commissioner (Appeals) from orders of Assessing Officer. 

23A. Appealable orders before Commissioner (Appeals). 

24. Appeal to the Appellate Tribunal from orders of the Deputy Commissioner (Appeals). 

25. Powers of Commissioner to revise orders of subordinate authorities. 

26. Appeal to the Appellate Tribunal from orders of enhancement by Chief Commissioner or 

Commissioner. 

27A. Appeal to High Court. 

28. Hearing by High Court. 

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SECTIONS 

29. Appeal to Supreme Court. 

29A. Tax to be paid notwithstanding reference, etc. 

29B. Definition of High Court. 

CHAPTER VII 

PAYMENT AND RECOVERY OF WEALTH-TAX 

30. Notice of demand. 

31. When tax, etc., payable and when assessee deemed in default. 

32. Mode of recovery. 

33. Liability of transferees of properties in certain cases. 

34. [Omitted.]. 

34A. Refunds. 

CHAPTER VIIA 

REFUNDS 

CHAPTER VIIB 

REGISTERED VALUERS 

34AA. Appearance by registered valuers. 

34AB. Registration of valuers. 

34AC. Restrictions on practice as registered valuer. 

34ACC. Furnishing of particulars in certain cases. 

34AD. Removal from register of names of valuers and restoration. 

34AE. Existing registered valuers to apply afresh. 

CHAPTER VIII 

MISCELLANEOUS 

34B. Transfers to defraud revenue to be void. 

34C. Provisional attachment to protect revenue in certain cases. 

35. Rectification of mistakes. 

35A. Wilful attempt to evade tax, etc. 

35B. Failure to furnish returns of net wealth. 

35C. Failure to produce accounts, records, etc. 

35D. False statement in verification, etc., made under certain provisions of the Act. 

35E. False statement in verification mentioned in section 34AB. 

35EE. Failure to furnish particulars under section 34ACC. 

35EEE. Contravention of order made under second proviso to sub-section (1) or sub-section (3A) of 

section 37A. 

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SECTIONS 

35F. Abetment of false return, etc. 

35G. Punishment for second and subsequent offences. 

35GA. Power of Commissioner to grant immunity from prosecution. 

35H. Offences by Hindu undivided families. 

35HA. Offences by companies. 

35I. Prosecutions to be with the previous sanction of certain wealth-tax authorities and their power to 

compound offences. 

35J. Certain offences to be non-cognizable. 

35K. Bar on prosecution and on inadmissibility of evidence in certain circumstances. 

35L. Jurisdiction of courts. 

35M. Section 360 of the Code of Criminal Procedure, 1973, and the Probation of Offenders Act, 

1958, not to apply. 

35N. Presumption as to books of account, etc., in certain cases. 

35O. Presumption as to culpable mental state. 

36. Proof of entries in records or documents. 

36A. Power to tender immunity from prosecution. 

37. Power to take evidence on oath, etc. 

37A. Power of search and seizure. 

37B. Power to requisition books of account, etc. 

37C. Application of retained assets. 

38. Information, returns and statements. 

38A. Powers of Valuation Officer, etc. 

39. Effect of transfer of authorities on pending proceedings. 

40. Computation of periods of limitation. 

41. Service of notice. 

42. Notice deemed to be valid in certain circumstances. 

42A. Publication of information respecting assessees. 

42B. Disclosure of information respecting assessees. 

42C. Return of wealth, etc., not to be invalid on certain grounds. 

42D. Presumption as to assets, books of account, etc. 

43. Bar of jurisdiction. 

44. Appearance before wealth-tax authorities by authorised representatives. 

44A. Agreement for avoidance or relief of double taxation with respect to wealth-tax. 

44B. Countries with which no agreement exists. 

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SECTIONS 

44C. Rounding off of net wealth. 

44D. Rounding off of tax, etc. 

45. Act not to apply in certain cases. 

46. Power to make rules. 

46A. Power to make exemption, etc., in relation to certain Union territories. 

47. Power to remove difficulties. 

SCHEDULE I 

SCHEDULE II—[Omitted.]. 

SCHEDULE III 

6 

 
THE WEALTH-TAX ACT, 1957 
ACT NO. 27 OF 19571 

[12th September, 1957.] 

An Act to provide for the levy of wealth-tax. 

BE it enacted by Parliament in the Eighth Year of the Republic of India as follows:— 

CHAPTER I 

PRELIMINARY 

1. Short title, extent and commencement.—(1) This Act may be called the Wealth-tax Act, 1957. 

(2) It extends to the whole of India. 

(3) It shall be deemed to have come into force on the 1st day of April, 1957. 

2. Definitions.—In this Act, unless the context otherwise requires,— 

2* 

* 

* 

* 

* 

3[(b)  “Appellate  Tribunal”  means  the  Appellate  Tribunal  constituted  under  section  252  of  the 

Income-tax Act; 

(c) “assessee” means a person by whom wealth-tax or any other sum of money is payable under 

this Act, and includes— 

(i)  every  person  in  respect  of  whom  any  proceeding  under  this  Act  has  been  taken  for  the 
determination of wealth-tax payable by him or by any other person or the amount of refund due to 
him or such other person; 

(ii) every person who is deemed to be an assessee under this Act; 

(iii) every person who is deemed to be an assessee in default under this Act; 

4[(ca)  “Assessing  Officer”  means  the  Deputy  Commissioner  of  Income-tax  or  the  Assistant 
Commissioner  or  the  Income-tax  Officer  who  is  vested  with  the  relevant  jurisdiction  by  virtue  of 
directions  or  orders  issued  under  sub-section  (1)  or  sub-section  (2)  of  section  120  or  any  other 
provision of the Income-tax  Act which apply for the purposes of wealth-tax under section 8 of this 
Act and also the 5[Additional Commissioner or] 6[Additional Director or] Joint Commissioner who is 
directed under clause (b) of sub-section (4) of the said section 120 to exercise or perform all or any of 
the powers and functions conferred on or assigned to the Assessing Officer under that Act;] 

7[(cb)] “assessment” includes reassessment; 

(d)  “assessment  year”  means  a  period  of  twelve  months  commencing  on  the  1st  day  of  April, 

every year;] 

 Subject to verification and confirmation by the Department. 
1.  This  Act  has  been  extended  with  modifications  to  Dadra  and  Nagar  Haveli,  Goa,  Daman  and  Diu,  and  Pondicherry  by 

Regulation 3 of 1963, s. 3(1) and Schedule (w.e.f. 1-4-1963). 

2.  Clause  (a)  omitted  by  Act  4  of  1988,  s.  128  (w.e.f.  1-4-1988).  Earlier  clause  (a)  amended  by  Act  26  of  1988,  s.  88                    

(w.e.f. 1-4-1988) 

3. Subs. by Act 46 of 1964, s. 2, for clauses (b), (c) and (d) (w.e.f. 1-4-1965). 
4. Subs. by Act 21 of 1998, s. 67, for clause (ca) (w.e.f. 1-10-1998). Earlier clause (ca) was inserted by Act 4 of 1988, s. 128 

(w.e.f. 1-4-1988) and amended by Act 26 of 1988, s. 88 (w.e.f. 1-4-1988). 

5. Ins. by Act 22 of 2007, s. 83 (w.r.e.f. 1-6-1994). 
6. Ins. by s. 83, ibid. (w.r.e.f. 1-10-1996). 
7. Clause (ca) re-lettered as clause (cb) thereof by Act 4 of 1988, s. 128 (w.e.f. 1-4-1988). 

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1 [(e)  “assets”  includes  property  of  every  description,  movable  or  immovable,  but  does  not 

include,— 

(1) in  relation  to  the  assessment  year  commencing  on  the  1st  day  of  April,  1969,  or  any 

earlier assessment year— 

(i) agricultural land and growing crops, grass or standing trees on such land; 

(ii) any building owned or occupied by a cultivator of, or receiver of rent or revenue out 

of, agricultural land: 

Provided that the building is on or in the immediate vicinity of the land and is a building 
which the cultivator or the receiver of rent or revenue by reason of his connection with the 
land requires as a dwelling house or a store-house or an out-house; 

(iii) animals; 

(iv)  a  right  to  any  annuity  in  any  case  where  the  terms  and  conditions  relating  thereto 

preclude the commutation of any portion thereof into a lump sum grant; 

(v) any interest in property where the interest is available to an assessee for a period not 

exceeding six years from the date the interest vests in the assessee; 

(2)  in  relation  to  the  assessment  year  commencing  on  the  1st  day  of  April,  1970,  or  any 

subsequent assessment year 2[but before the 1st day of April, 1993]— 

(i)  animals; 

(ii)  a right to 3[any annuity  (not being an annuity purchased by the assessee or purchased 
by any other person in pursuance of a contract with the assessee)] in any case where the terms 
and conditions relating thereto preclude the commutation of any portion thereof into a lump 
sum grant; 

(iii) any interest in property where the interest is available to an assessee for a period not 

exceeding six years from the date the interest vests in the assessee:] 

4[Provided that  in  relation  to  the  assessment  year  commencing  on  the  1st  day  of  April, 
1981, 5[and the assessment year commencing on the 1st day of April,  1982], this sub-clause 
shall have effect subject to the modification that for item (i) thereof, the following item shall 
be substituted, namely:— 

“(i)  (a)  agricultural  land  other  than  land  comprised  in  any  tea,  coffee,  rubber  or 
cardamom plantation; 

(b) any building owned or occupied by a cultivator of, or receiver of rent or revenue 
out of, agricultural land other than land comprised in any tea, coffee, rubber or cardamom 
plantation: 

Provided that  the  building  is  on  or  in  the  immediate  vicinity  of  the  land  and  is  a 
building  which  the  cultivator  or  the  receiver  of  the  rent  or  revenue  by  reason  of  his 
connection with the land requires as a dwelling-house or a store-house or an out-house; 

(c) animals: 

1. Subs. by Act 14 of 1969, s. 24, for clause (e) (w.e.f. 1-4-1969). 
2. Ins. by Act 18 of 1992, s. 89 (w.e.f. 1-4-1993). 
3. Subs. by Act 20 of 1974, s. 14, for “any annuity” (w.e.f. 1-4-1975). 
4. Subs. by Act 44 of 1980, s. 36, for “Provided that” (w.e.f. 1-4-1981). 
5. Subs. by Act 14 of 1982, s. 33, for “or any subsequent assessment year” (w.e.f. 1-4-1983). 

8 

                                                           
1[Provided further that in relation to the assessment year commencing on the 1st day 
of  April,  1983  or  any  subsequent  assessment  year,  this  sub-clause  shall  have  effect 
subject  to  the  modification  that  for  item  (i)  thereof,  the  following  item  shall  be 
substituted, namely:— 

(i)  (a)  agricultural  land  and  growing  crops  (including  fruits  on  trees),  grass  or 

standing trees on such land; 

(b) one building or one group of buildings owned or occupied by a cultivator of, 

or receiver of rent or revenue out of, agricultural land: 

Provided that  such  buildings  or  group  of  buildings  is  on  or  in  the  immediate 
vicinity of the land and is a building which the cultivator or the receiver of rent or 
revenue  by  reason  of  his  connection  with  the  land  requires  as  store-house  or  for 
keeping livestock; 

(c) animals:] 
2[3[Provided  also  that]]  in  relation  to  the  State  of  Jammu  and  Kashmir*,  this          

sub-clause  shall  have  effect  subject to  the  modification  that  for the  assets specified 
in 4[item (i)] of this sub-clause, the assets specified in 5[items (i) to (iii)] of sub-clause 
(1)  shall  be  substituted  and  the  other  provisions  of  this  Act  shall  be  construed 
accordingly;] 

6[(ea)  “assets”,  in  relation  to  the  assessment  year  commencing  on  the  1st  day  of  April,  1993,  or  any 

subsequent assessment year, means— 

7[(i)  any  building  or  land  appurtenant  thereto  (hereinafter  referred  to  as  “house”),  whether 
used for residential or commercial purposes or for the purpose of maintaining a guest house or 
otherwise including a farm house situated within twenty-five kilometres from local limits of any 
municipality (whether known as Municipality, Municipal Corporation or by any other name) or a 
Cantonment Board, but does not include— 

(1) a house meant exclusively for residential purposes and which is allotted by a company 
to an employee or an officer or a director who is in whole-time employment, having a gross 
annual salary of less than 8[ten lakh rupees]; 

(2) any house for residential or commercial purposes which forms part of stock-in-trade; 

(3)  any  house  which  the  assessee  may  occupy  for  the  purposes  of  any  business  or 

profession carried on by him; 

(4) any residential property that has been let-out for a minimum period of three hundred 

days in the previous year; 

(5) any property in the nature of commercial establishments or complexes;] 

(ii) motor cars (other than those used by the assessee in the business of running them on hire 

or as stock-in-trade); 

1. Ins. by Act 14 of 1982, s. 33 (w.e.f. 1-4-1983). 
2. Added by Act 19 of 1970, s. 26 (w.r.e.f. 1-4-1969) 
3. Subs. by Act 14 of 1982, s. 33, for “Provided further that” (w.e.f. 1-4-1983). 
4. Subs. by Act 20 of 1974, s. 14, for “items (i) to (iii)” (w.e.f. 1-4-1975). 
5. Subs. by s. 14, ibid., for “items (i) to (v)” (w.e.f. 1-4-1975). 
6. Ins. by Act 18 of 1992, s. 89 (w.e.f. 1-4-1993). 
7. Subs. by Act 21 of 1998, s. 67, for sub-clause (i) (w.e.f. 1-4-1999). Earlier sub-clause (i) was substituted by Act 33 of 1996, s. 

56 (w.e.f 1-4-1997). 

8. Subs. by Act 23 of 2012, s. 115, for “five lakh rupees” (w.e.f. 1-4-2013). 
*. Vide notification No. S.O. 3912(E), dated 30th October, 2019, this Act is made applicable to the Union territory of Jammu and 

Kashmir and the Union territory of Ladakh.  

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(iii) jewellery, bullion, furniture, utensils or any other article made wholly or partly of gold, 
silver, platinum or any other precious metal or any alloy containing one or more of such precious 
metals: 

Provided that where any of the said assets is used by the assessee as stock-in-trade, such asset 

shall be deemed as excluded from the assets specified in this sub-clause; 

(iv)  yachts,  boats  and  aircrafts  (other  than  those  used  by  the  assessee  for  commercial 

purposes); 

(v) urban land; 

(vi)  cash  in  hand,  in  excess  of  fifty  thousand  rupees,  of  individuals  and  Hindu  undivided 

families and in the case of other persons any amount not recorded in the books of account. 

Explanation 1[1].—For the purposes of this clause,— 

(a) “jewellery” includes— 

(i)  ornaments  made  of  gold,  silver,  platinum  or  any  other  precious  metal  or  any  alloy 
containing one or more of such precious metals, whether or not containing any precious or semi-
precious stones, and whether or not worked or sewn into any wearing apparel; 

(ii)  precious  or  semi-precious  stones,  whether  or  not  set  in  any  furniture,  utensils  or  other 

article or worked or sewn into any wearing apparel; 

2[(b) “urban land” means land situate— 

(i) in any area which is comprised within the jurisdiction of a  municipality (whether known 
as  a  municipality,  municipal  corporation,  notified  area  committee,  town  area  committee,  town 
committee, or by any other name) or a cantonment board and which has a population of not less 
than ten thousand; or 

(ii) in any area within the distance, measured aerially,— 

(I)  not  being  more  than  two  kilometres,  from  the  local  limits  of  any  municipality  or 
cantonment board referred to in sub-clause (i) and which has a population of more than ten 
thousand but not exceeding one lakh; or 

(II)  not  being  more  than  six  kilometres,  from  the  local  limits  of  any  municipality  or 
cantonment board referred to in sub-clause (i) and which has a population of more than one 
lakh but not exceeding ten lakh; or 

(III) not being  more  than eight  kilometres,  from  the local  limits  of  any  municipality  or 
cantonment board referred to in sub-clause (i) and which has a population of more than ten 
lakh, 

but does not include land classified as agricultural land in the records of the Government and used for 
agricultural purposes or land on which construction of a building is not permissible under any law for 
the time being in force in the area in which such land is situated or the land occupied by any building 
which has been constructed with the approval of the appropriate authority or any unused land held by 
the assessee for industrial purposes for a period of two years from the date of its acquisition by him or 
any  land  held  by  the  assessee  as  stock-in-trade  for  a  period  of  ten  years  from  the  date  of  its 
acquisition by him. 

1. Explanation renumbered as Explanation 1 thereof  by Act 27 of 1999, s. 91 (w.e.f. 1-4-2000). 
2. Subs. by Act 17 of 2013, s. 61, for clause (b) (w.e.f. 1-4-2014). 

10 

                                                           
Explanation.—For  the  purposes  of  clause  (b)  of Explanation  1, “population”  means  the  population 
according to the last preceding census of which the relevant figures have been published before the date 
of valuation.]] 

1[Explanation 2.—For the removal of doubts, it is hereby declared that “jewellery” does not include 
the  Gold  Deposit  Bonds  issued  under  the  Gold  Deposit  Scheme,  1999  notified  by  the  Central 
Government;] 

(f) “Board”  means  the 2[Central  Board  of  Direct Taxes  constituted  under  the  Central  Boards  of 

Revenue Act, 1963 (54 of 1963)]; 

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4 [(h)  “company”  shall  have  the  meaning  assigned  to  it  in  clause  (17)  of  section  2  of  the              

Income-tax Act;] 

5[(ha)  “co-operative  society”  means  a  co-operative  society  registered  under  the  Co-operative 
Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the 
registration of co-operative societies;] 

6* 

* 

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* 

(i) “executor” means an executor or administrator of the estate of a deceased person; 

7[(ia)  “High  Court”,  in  relation  to  the  Union  territories  of  Dadra  and  Nagar  Haveli  and  Goa, 

Daman and Diu, means the High Court at Bombay;] 

8[(j) “Income-tax Act” means the Income-tax Act, 1961 (43 of 1961);] 

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* 

10[(ka)  “India”  means  the  territory  of  India  as  referred  to  in  article  1  of  the  Constitution,  its 
territorial  waters,  seabed  and  subsoil  underlying  such  waters,  continental  shelf, exclusive  economic 
zone or any other maritime zone as referred to in the Territorial Waters, Continental Shelf, Exclusive 
Economic  Zone  and  other  Maritime  Zones  Act,  1976  (80  of  1976),  and  the  air  space  above  its 
territory and territorial waters;] 

11* 

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* 

* 

12[(lb) “legal representative” has the meaning assigned to it in clause (11) of section 2 of the Code 

of Civil Procedure, 1908 (5 of 1908);] 

1. Ins. by Act 27 of 1999, s. 91 (w.e.f. 1-4-2000). 
2.  Subs.  by  Act  54  of  1963,  s.  5,  for  “Central  Board  of  Revenue  constituted  under  the  Central  Board  of  Revenue                               

Act, 1924 (4 of 1924)” (w.e.f. 1-1-1964). 

3. Clauses (g) and (gg) omitted by Act 4 of 1988, s. 128 (w.e.f. 1-4-1988). 
4. Subs. by s. 128, ibid., for clause (h) (w.e.f. 1-4-1989) 
5. Ins. by Act 16 of 1972, s. 44 (w.r.e.f. 1-4-1957). 
6.  Clause  (hb)  omitted  by  Act  4  of  1988,  s.  128  (w.e.f.  1-4-1988).  Earlier  clause  (hb)  inserted  by  Act  46  of  1964,  s.  2                        

(w.e.f. 1-4-1965) and later amended by Act 16 of 1972, s. 44 (w.e.f. 1-4-1965). 

7. Ins. by the Taxation Laws (Extension to Union Territories) Regulation, 1963 (3 of 1963) (w.e.f. 1-4-1963). 
8. Subs. by Act 46 of 1964, s. 2, for clause (j) (w.e.f. 1-4-1965).  
9. Clause (k) omitted by Act 4 of 1988, s. 128 (w.e.f. 1-4-1988). 
10.  Subs.  by  Act  22  of  2007,  s.  83,  for  clause  (ka)  (w.r.e.f.  25-8-1976).  Earlier  clause  (ka)  inserted  by  the  Taxation  Laws 

(Extension to Union Territories) Regulation, 1963 (3 of 1963) (w.e.f. 1-4-1963). 

11. Clauses (l) and (la) omitted by Act 4 of 1988, s. 128 (w.e.f. 1-4-1988). Earlier clause (la) inserted by Act 46 of 1964, s. 2 

(w.e.f. 1-4-1965). 

12. Ins. by Act 46 of 1964, s. 2 (w.e.f. 1-4-1965). 

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1[(lc) “maximum marginal rate” means the rate of wealth-tax applicable in relation to the highest 

slab of wealth in the case of an individual as specified in Part I of Schedule I;] 

2[(ld) “National Tax Tribunal” means the National Tax Tribunal established under section 3 of the 

National Tax Tribunal Act, 2005 (49 of 2005);] 

(m) “net wealth” means the amount by which the aggregate value computed in accordance with 
the  provisions  of  this  Act  of  all  the  assets,  wherever  located,  belonging  to  the  assessee  on  the 
valuation  date, including  assets  required  to  be  included  in  his net  wealth as  on that  date  under this 
Act, is in excess of the aggregate value of all the debts owed by the assessee 3[on the valuation date 
which have been incurred in relation to the said assets;] 

(n) “prescribed” means prescribed by rules made under this Act; 

(o)  “principal  officer”,  used  with  reference  to  a  company,  means  the  secretary,  manager, 
managing  agent  or  managing  director  of  the  company,  and  includes any  person  connected  with the 
management of the affairs of the company upon whom the 4[Assessing Officer] has served a notice of 
his intention of treating him as the principal officer thereof; 

5[(oa)  “public  servant” has  the  same  meaning  as  in  section  21  of  the  Indian  Penal  Code  (45 of 

1860); 

6[(oaa) “registered valuer” means a person registered as a valuer under section 34AB;] 

(ob) “regular assessment” means the assessment made under 7[sub-section (3) or sub-section (5) 

of section 16];] 

(p) “Ruler” means a Ruler as defined in clause (22) of article 366 of the Constitution; 

(q) “valuation date”, in relation to any year for which an assessment is to be made under this Act, 
means  the  last  day  of  the  previous  year  as  defined  in 8[section  3]  of  the  Income-tax  Act,  if  an 
assessment were to be made under that Act for that year: 

9[Provided that— 

10*   

* 

* 

* 

* 

(ii) in the case of a person who is not an assessee within the meaning of the Income-tax Act, 
the  valuation  date  for  the  purposes  of  this  Act  shall  be  the  31st  day  of  March  immediately 
preceding the assessment year; 

(iii) where an assessment is made in pursuance of section 19A, the valuation date shall be the 
same valuation date as would have been adopted in respect of the net wealth of the deceased if he 
were alive;] 

1. Ins. by Act 4 of 1988, s. 128 (w.e.f. 1-4-1989). 
2. Shall stand inserted (date to be notified) by Act 49 of 2005, s. 30 and the Schedule. This amendment has been struck down by 

the Supreme Court’s Order dated 25th September, 2014 in the Madras Bar Association Vs. Union of India. 

3. Subs. by Act 18 of 1992, s. 89, for certain words (w.e.f. 1-4-1993). 
4. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
5. Ins. by Act 46 of 1964, s. 2 (w.e.f. 1-4-1965). 
6. Ins. by Act 45 of 1972, s. 7 (w.e.f. 15-11-1972). 
7. Subs. by Act 12 of 1990, s. 51, for “section 16” (w.r.e.f. 1-4-1989).  
8. Subs. by Act 46 of 1964, s. 2, for “clause (11) of section 2” (w.e.f. 1-4-1965).  
9. Subs. by s. 2, ibid., for the proviso (w.e.f. 1-4-1965). 
10. Clause (i) omitted by Act 4 of 1988, s. 128 (w.e.f. 1-4-1989). 

12 

 
 
 
 
 
 
                                                           
1[(r) “Valuation Officer” means a person appointed as a Valuation Officer under section 12A, and 
includes  a  Regional  Valuation  Officer,  a  District  Valuation  Officer  and  an  Assistant  Valuation 
Officer;] 

2 [(s)  the  expressions  “Chief  Commissioner,  Director-General,  Commissioner,  Commissioner 
(Appeals),  Director,  Additional  Director  of  Income-tax,  Additional  Commissioner  of  Income-tax, 
Joint Director, Joint Commissioner of Income-tax, Deputy Director, Deputy Commissioner, Assistant 
Commissioner,  Assistant  Director,  Income-tax  Officer,  Inspector  of  Income-tax  and  Tax  Recovery 
Officer”  shall  have  the  meanings  respectively  assigned  to  them  under  section  2  of  the  Income-tax 
Act.] 

CHAPTER II 

CHARGE OF WEALTH-TAX AND ASSETS SUBJECT TO SUCH CHARGE 

3. Charge of wealth-tax .—3[(1)] 4[Subject to the other provisions contained in this Act], there shall 
be charged for every 5[assessment year] commencing on and from the first day of April, 1957 6[but before 
the first day of April, 1993], a tax (hereinafter referred to as wealth-tax) in respect of the net wealth on the 
corresponding  valuation date  of  every  individual,  Hindu  undivided  family  and  company 7[at the rate  or 
rates specified in Schedule I]. 

6[(2) Subject to the other provisions contained in this Act, there shall be charged for every assessment 
year commencing on and from the 1st day of April, 1993, 8[but before the 1st day of April, 2016], wealth-
tax in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided 
family and company, at the rate of one per cent. of the amount by which the net wealth exceeds fifteen 
lakh rupees:] 

9[Provided that in the case of every assessment year commencing on and from the 1st day of April, 
2010, the provisions of this section shall have effect as if for the words  “fifteen lakh rupees”, the words 
“thirty lakh rupees” had been substituted.] 

4. Net wealth to include certain assets.—(1) 10[In computing the net wealth— 

(a) of an individual, there shall be included, as belonging to that individual, the value of assets 

which on the valuation date are held—] 

11[(i)  by  the  spouse  of  such  individual  to  whom  such  assets  have  been  transferred  by  the 
individual, directly or indirectly, otherwise than for adequate consideration or in connection with 
an agreement to live apart, or 

1. Subs. by Act 45 of 1972, s. 7, for clause (r) (w.e.f. 15-11-1972).  
2. Subs. by Act 21 of 1998, s. 67, for clause (s) (w.e.f. 1-10-1998).  
3. Section 3 renumbered as sub-section (1) thereof by Act 18 of 1992, s. 90 (w.e.f. 1-4-1993). 
4. Amendment introduced by the Direct Tax Laws (Amendment) Act, 1987 (w.e.f. 1-4-1989), has become redundant in view of 

omission of provision relating to additional wealth-tax. 

5. Subs. by Act 46 of 1964, s. 3, for “financial year” (w.e.f. 1-4-1965). 
6. Ins. by Act 18 of 1992, s. 90 (w.e.f. 1-4-1993). 
7. Subs. by Act 66 of 1976, s. 27, for “at the rate or rates specified in the Schedule” (w.e.f. 1-4-1977). 
8. Ins. by Act 20 of 2015, s. 81 (w.e.f. 1-4-2016). 
9. Ins. by Act 33 of 2009, s. 83 (w.e.f. 1-4-2010). 
10.  Subs.  by  Act  3  of  1989,  s.  59,  for  certain  words  (w.e.f.  1-4-1989).  Earlier  it  was  amended  by  Act  46  of  1964,  s.  4                       

(w.e.f. 1-4-1965). 

11. Subs. by Act 46 of 1964, s. 4, for sub-clauses (i), (ii) and (iii) (w.e.f. 1-4-1965). 

13 

                                                           
(ii)  by  a  minor  child,  not  being 1[a  minor  child  suffering  from  any  disability  of  the  nature 
specified in section 80U of the Income-tax Act or] a married daughter, of such individual, 2*** or 

(iii) by a person or association of persons to whom such assets have been transferred by the 
individual 3[, directly or indirectly] otherwise than for adequate consideration for the immediate 
or deferred benefit of the individual, his or her spouse 4***, or] 

(iv) by a person or association of persons to whom such assets have been transferred by the 

individual otherwise than under an irrevocable transfer, 3[or] 

3[(v) by the son’s wife, 5*** of such individual, to whom such assets have been transferred by 
the  individual,  directly  or  indirectly,  on  or  after  the  1st  day  of  June,  1973,  otherwise  than  for 
adequate consideration,] 6[or] 

6[(vi) by a person or association of persons to whom such assets have been transferred by the 
individual,  directly  or  indirectly,  on  or  after  the  1st  day  of  June,  1973,  otherwise  than  for 
adequate  consideration  for  the  immediate  or  deferred  benefit  of  the  son’s  wife, 5***  of  such 
individual or both,] 

whether the assets referred to in any of the sub-clauses aforesaid are held in the form in which they were 
transferred or otherwise: 

7[Provided that  where  the  transfer  of  such  assets  or  any  part  thereof  is  either  chargeable  to  gift-tax 
under  the  Gift-tax  Act,  1958  (18  of  1958),  or  is  not  chargeable  under  section  5  of  that  Act,  for  any 
assessment year commencing 8[after the 31st day of March, 1964,  but before the 1st day of April, 1972,] 
the value of such assets or part thereof, as the case may be, shall not be included in computing the net 
wealth of the individual:] 

9[Provided  further that  nothing  contained  in  sub-clause  (ii)  shall  apply  in  respect  of  such  assets  as 
have been acquired by the minor child out of his income referred to in the proviso to sub-section (1A) of 
section 64 of the Income-tax Act and which are held by him on the valuation date : 

Provided  also that  where  the  assets  held  by  a  minor  child  are  to  be  included  in  computing  the  net 

wealth of an individual, such assets shall be included,— 

(a) where the marriage of his parents subsists, in the net wealth of that parent whose net wealth 

(excluding the assets of the minor child so includible under this sub-section) is greater; or 

(b)  where  the  marriage  of  his  parents  does  not  subsist,  in  the  net  wealth  of  that  parent  who 

maintains the minor child in the previous year as defined in section 3 of the Income-tax Act, 

and where any such assets are once included in the net wealth of either parent, any such assets shall not be 
included  in  the  net  wealth  of  the  other  parent  in  any  succeeding  year  unless  the  Assessing  Officer  is 
satisfied, after giving that parent an opportunity of being heard, that it is necessary so to do;] 

1. Ins. by Act 32 of 1994, s. 51 (w.e.f. 1-4-1995). 
2. The words “to whom such assets have been transferred by the individual, directly or indirectly, otherwise than for adequate 

consideration,” omitted by Act 18 of 1992, s. 91 (w.e.f. 1-4-1993). 

3. Ins. by Act 41 of 1975, s. 82 (w.e.f. 1-4-1976). 
4. The words “or minor child (not being a married daughter) or both” omitted by Act 18 of 1992, s. 91 (w.e.f. 1-4-1993). 
5. The words “or the son’s minor child,” omitted by s. 91, ibid. (w.e.f. 1-4-1993). 
6. Ins. by Act 67 of 1984, s. 54 (w.e.f. 1-4-1985). 
7. Ins. by Act 46 of 1964, s. 4 (w.e.f. 1-4-1965). 
8. Subs. by Act 32 of 1971, s. 31, for “after the 31st day of March, 1964” (w.e.f. 1-4-1972).  
9. Ins. by Act 18 of 1992, s. 91 (w.e.f. 1-4-1993). 

14 

                                                           
1[(b) of an assessee who is a partner in a firm or a member of an association of persons (not being 
a  co-operative  housing  society),  there  shall  be included,  as  belonging  to  that  assessee,  the  value  of 
his  2 [interest  in  the  assets  of  the  firm]  or  association  determined  in  the  manner  laid  down  in                 
Schedule III: 

3[Provided that where a minor is admitted to the benefits of partnership in a firm, the value of the 
interest of such minor in the firm, determined in the manner specified above, shall be included in the 
net wealth of the parent of the minor, so far as may be, in accordance with the provisions of the third 
proviso to clause (a).]] 

4[(1A) Where, in the case of an individual being a member of a Hindu undivided family, any property 
having been the separate property of the individual has, at any time after the 31st day of December, 1969, 
been converted by the individual into property belonging to the family through the act of impressing such 
separate property with the character of property belonging to the family or throwing it 5[into the common 
stock  of  the  family  or  been  transferred  by  the  individual,  directly  or  indirectly,  to the family  otherwise 
than for adequate consideration (the property so converted or transferred being hereinafter referred to as 
the converted property)], then, notwithstanding anything contained in any other provision of this Act or in 
any other law for the time being in force, for the purpose of computing the net wealth of the individual 
under this Act for any assessment year commencing on or after the 1st day of April, 1972,— 

(a) the individual shall be deemed to have transferred the converted property, through the family, 

to the members of the family for being held by them jointly ; 

(b) the converted property or any part thereof 6*** shall be deemed to be assets belonging to the 

individual and not to the family ; 

7[(c) where the converted property has been the subject-matter of a partition (whether partial or 
total)  amongst  the  members  of  the  family,  the  converted  property  or  any  part  thereof  which  is 
received  by  the  spouse  8 ***  of  the  individual  on  such  partition  shall  be  deemed  to  be  assets 
transferred indirectly by the individual to the spouse 8*** and the provisions of sub-section (1) shall, 
so far as may be, apply accordingly:] 

Provided that the property referred to in clause (b) or clause (c) shall, on being included in the net 
wealth of the individual, be excluded from the net wealth of the family or, as the case may be, the 
spouse 8*** of the individual.] 

9* 

10*   

* 

* 

* 

* 

* 

* 

* 

* 

(4) Nothing contained in clause (a) of sub-section (1) shall apply to any such transfer as is referred to 
therein made by an individual before the 1st day of April, 1956, and the value of any assets so transferred 
shall not be included in the computation of his net wealth. 

1.  Subs.  by  Act  3  of  1989,  s.  59,  for  clause  (b)  (w.e.f.  1-4-1989).  Earlier  it  was  amended  by  Act  32  of  1971,  s.  31                           

(w.e.f. 1-4-1972). 

2. Subs. by Act 18 of 1992, s. 91, for “interest in the firm” (w.e.f. 1-4-1993). 
3. Subs. by s. 91, ibid., for the proviso (w.e.f. 1-4-1993). 
4. Ins. by Act 32 of 1971, s. 31 (w.e.f. 1-4-1972). 
5. Subs. by Act 21 of 1979, s. 23, for “into the common stock of the family (such property being hereinafter referred to as the 

converted property)” (w.e.f. 1-4-1980). 

6.  The  words  “,  in  so  far  as  it  is  attributable  to  the  interest  of  the  individual  in  the  property  of  the  family,”  omitted  by                          

Act 41 of 1975, s. 82 (w.e.f. 1-4-1976). 

7. Subs. by s. 82, ibid., for clause (c) (w.e.f. 1-4-1976). 
8. The words “or minor child” omitted by Act 18 of 1992, s. 91 (w.e.f. 1-4-1993). 
9. Sub-section (2) omitted by Act 3 of 1989, s. 59 (w.e.f. 1-4-1989). 
10.  Sub-section  (3)  omitted  by  Act  18  of  1992,  s.  91  (w.e.f.  1-4-1993).  Earlier  it  was  amended  by  Act  21  of  1979,  s.  23                    

(w.e.f. 1-4-1980) and Act 25 of 1975, s. 26 (w.e.f. 1-4-1975),  

15 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
1[(4A) Notwithstanding anything in sub-section (4), nothing contained in clause (a) of sub-section (1) 
shall  apply  to any  such transfer  as  is  referred  to  therein  made  before  the  1st  day  of  April,  1963,  by  an 
individual who but for the extension of this Act to the Union territories of Dadra and Nagar Haveli, Goa, 
Daman  and  Diu,  and  Pondicherry,  would  not  have  been  an  assessee,  and  the  value  of  any  assets  so 
transferred shall not be included in the computation of his net wealth.] 

(5) The value of any assets transferred under an irrevocable transfer shall be liable to be included in 

computing the net wealth of the transferor as and when the power to revoke arises to him. 

2[(5A) Where a gift of money from one person to another is made by means of entries in the books of 
account maintained by the person making the gift or by an individual or a Hindu undivided family or a 
firm  or  an  association  of persons  or  body  of  individuals  with  whom  or  which he  has  business  or  other 
relationship, the value of such gift shall be liable to be included in computing the net wealth of the person 
making the gift unless he proves to the satisfaction of the 3[Assessing Officer] that the money has actually 
been delivered to the other person at the time the entries were made.] 

4[(6)  For  the  purposes  of  this  Act,  the  holder  of  an  impartible  estate  shall  be  deemed  to  be  the 

individual owner of all the properties comprised in the estate. 

5[(7)  Where  the  assessee  is  a  member  of  a  co-operative  society,  company  or  other  association  of 
persons and a building or part thereof is allotted or leased to him under a house building scheme of the 
society,  company  or  association,  as  the  case  may  be,  the  assessee  shall,  notwithstanding  anything 
contained  in this  Act  or  any  other  law for the time  being  in  force,  be  deemed  to  be  the owner  of  such 
building or part and the value of such building or part, shall be included in computing the net wealth of 
the  assessee;  and,  in  determining  the  value  of  such  building  or  part,  the  value  of  any  outstanding 
instalments  of  the  amount  payable  under  such  scheme  by  the  assessee  to  the  society,  company  or 
association towards the cost of such building or part and the land appurtenant thereto shall, whether the 
amount  so  payable is  described  as  such  or  in any  other  manner  in  such scheme,  be  deducted  as a  debt 
owed by him in relation to such building or part. 

(8) A person— 

(a) who is allowed to take or retain possession of any building or part thereof in part performance 
of  a  contract  of  the  nature  referred  to  in  section  53A of  the  Transfer  of  Property  Act,  1882  (4  of 
1882); 

(b) who acquires any rights (excluding any rights by way of a lease from month to month or for a 
period not exceeding one year) in or with respect to any building or part thereof by virtue of any such 
transaction as is referred to in clause (f) of section 269UA of the Income-tax Act, 1961 (43 of 1961), 

shall be deemed to be the owner of that building or part thereof and the value of such building or part 
shall be included in computing the net wealth of such person.] 

Explanation.—For the purposes of this section,— 

(a)  the  expression  “transfer”  includes  any  disposition,  settlement,  trust,  covenant,  agreement  or 

arrangement; 6*** 

2[(aa) the expression “child” includes a step-child and an adopted child;] 

1.  Ins.  by  The  Taxation  Laws  (Extension  to  Union  Territories)  Regulation,  1963  (3  of  1963),  s.  3  and  the  Schedule                             

(w.e.f. 1-4-1963). 

2. Ins. by Act 41 of 1975, s. 82 (w.e.f. 1-4-1976). 
3. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
4. Subs. by Act 46 of 1964, s. 4, for the Explanation (w.e.f. 1-4-1965). 
5. Subs. by Act 33 of 1996, s. 57, for sub-section (7) (w.e.f. 1-4-1997). Earlier sub-section (7) was inserted by Act 32 of 1971,            

s. 31 (w.e.f. 1-4-1972). 

6. The word “and” omitted by Act 32 of 1971, s. 31 (w.e.f. 1-4-1972). 

16 

                                                           
(b) the expression “irrevocable transfer” includes a transfer of assets which, by the terms of the 
instrument effecting it, is not revocable for a period exceeding six years or during the lifetime of the 
transferee, and under which the transferor derives no direct or indirect benefit, but does not include a 
transfer of assets if such instrument— 

(i) contains any provision for the retransfer, directly or indirectly, of the whole or any part of 

the assets or income therefrom to the transferor, or 

(ii) in any way gives the transferor a right to reassume power, directly or indirectly, over the 

whole or any part of the assets or income therefrom;] 1[and] 

2[(c) the expression “property” includes any interest in any property, movable or immovable, the 
proceeds of sale thereof and any money or investment for the time being representing the proceeds of 
sale thereof and where the property is converted into any other property by any method, such other 
property 3***. 

4* 

* 

* 

* 

*] 

5. Exemptions in respect of certain assets.—5[6*** Wealth-tax shall not be payable by an assessee 
in  respect  of  the  following  assets],  and  such  assets  shall  not  be  included  in  the  net  wealth  of  the 
assessee— 

(i)  any  property  held  by  him  under  trust  or  other  legal  obligation  for  any  public  purpose  of  a 

charitable or religious nature in India : 

7[Provided that nothing contained in this clause shall apply to any property forming part of any 
business, not being a business referred to in clause (a) or clause (b) of sub-section (4A) of section 11 
of  the  Income-tax  Act  in  respect  of  which  separate  books  of  account  are  maintained  or  a  business 
carried on by an institution, fund or trust referred to in 8*** clause (23B) or clause (23C) of section 10 
of that Act;] 

(ii)  the  interest  of  the  assessee  in  the  coparcenary  property  of  any  Hindu  undivided  family  of 

which he is a member; 

(iii) 9[any one building in the occupation of a Ruler, being a building which immediately before 
the  commencement  of  the  Constitution  (Twenty-sixth  Amendment)  Act,  1971,  was  his  official 
residence by virtue of a declaration by the Central Government] under paragraph 13 of the Merged 
States  (Taxation  Concessions)  Order,  1949,  or  paragraph  15  of  the  Part  B  States  (Taxation 
Concessions) Order, 1950; 

10* 

* 

* 

* 

* 

1. Ins. by Act 41 of 1975, s. 82 (w.e.f. 1-4-1976). 
2. Ins. by Act 32 of 1971, s. 31 (w.e.f. 1-4-1972). 
3. The word “and” omitted by Act 41 of 1975, s. 82 (w.e.f. 1-4-1976). 
4. Clause (d) omitted by s. 82, ibid., (w.e.f. 1-4-1976). Earlier clause (d) inserted by Act 32 of 1971, s. 31 (w.e.f. 1-4-1972). 
5. The brackets, figures, words and letters, “(1) Subject to the provisions of sub-section (1A),” omitted by Act 18 of 1992, s. 92 

(w.e.f. 1-4-1993). 

6.  Subs.  by  Act  19  of  1970,  s.  26,  for  “Wealth-tax  shall  not  be  payable  by  an  assessee  in  respect  of  the  following  assets”                 

(w.e.f. 1-4-1971). 

7. Restored by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989). Earlier the proviso was added by Act 32 of 1985, s. 37 (w.e.f. 1-4-1986) 

which was later substituted by Act 4 of 1988, s. 60 (w.e.f. 1-4-1988). 

8. The words brackets, figures and letters “clause (22) or clause (22A) or” omitted by Act 21 of 1998, s. 68 (w.e.f. 1-4-1999). 
9. Subs. by Act 54 of 1972, s. 5, for “any one building in the occupation of a Ruler declared by the Central Government as his 

official residence” (w.e.f. 28-12-1971).  

10. Clauses (iv) to (viii) omitted by Act 18 of 1992, s. 92 (w.e.f. 1-4-1993). 

17 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
1[(iv)] jewellery in the possession of any Ruler, not being his personal property, which has been 
recognised  before  the  commencement  of  this  Act,  by  the  Central  Government  as  his  heirloom  or, 
where no such recognition exists, which the Board may, subject to any rules that may be made by the 
Central  Government  in  this  behalf,  recognise  as  his  heirloom  at  the  time  of  his  first  assessment  to 
wealth-tax under this Act: 

2[Provided that in the case of jewellery recognised by the Central Government as aforesaid, such 

recognition shall be subject to the following conditions, namely:— 

(i)  that  the  jewellery  shall  be  permanently  kept  in  India  and  shall  not  be  removed  outside 

India except for a purpose and period approved by the Board; 

(ii) that reasonable steps shall be taken for keeping the jewellery substantially in its original 

shape; 

(iii) that reasonable facilities shall be allowed to any officer of Government authorised by the 

Board in this behalf to examine the jewellery as and when necessary; and 

(iv) that if any of the conditions hereinbefore specified is not being duly fulfilled, the Board 
may, for reasons to be recorded in writing, withdraw the recognition retrospectively with effect 
from  the  date  of  commencement  of  clause  (b)  of  section  5  of  the  Rulers  of  Indian  States 
(Abolition  of  Privileges)  Act,  1972  (54  of  1972),  and  in  such  a  case,  wealth-tax  shall  become 
payable  by  the  Ruler  for  all  the  assessment  years  after  such  commencement  for  which  the 
jewellery was exempted on account of the recognition. 

Explanation.—For the purposes of clause (iv) of the foregoing proviso, the fair market value of any 
jewellery on the date of the withdrawal of the recognition in respect thereof shall be deemed to be the fair 
market  value  of  such  jewellery  on  each  successive  valuation  date  relevant  for  the  assessment  years 
referred to in the said proviso: 

Provided further that the aggregate  amount  of  wealth-tax  payable  in respect  of any  jewellery  under 
clause (iv) of the foregoing proviso for all the assessment years referred to therein shall not in any case 
exceed  fifty  per  cent.  of  its  fair  market  value  on  the  valuation  date  relevant  for  the  assessment  year  in 
which recognition was withdrawn;] 

3* 

* 

* 

* 

* 

4[5[(v)] in the case of an assessee, being a person of Indian origin 6[or a citizen of India (hereafter 
in this clause referred to as such person)] who was ordinarily residing in a foreign country and who, 
on  leaving  such  country,  has  returned  to  India  with  the  intention  of  permanently  residing  therein, 
moneys and the value of assets brought by him into India and the value of the assets acquired by him 
out of such moneys 7[within one year immediately preceding the date of his return and at any time 
thereafter]: 

Provided that  this  exemption  shall  apply  only  for  a  period  of  seven  successive  assessment  years 

commencing with the assessment year next following the date on which such person returned to India. 

1. Clause (xiv) renumbered as clause (iv) thereof by Act 18 of 1992, s. 92 (w.e.f. 1-4-1993). 
2. Added by Act 54 of 1972, s. 5 (w.e.f. 9-9-1972). 
3. Clauses (xv) to (xxxii) omitted by Act 18 of 1992, s. 92 (w.e.f. 1-4-1993). 
4. Clause (xxxiii) renumbered as clause (v) thereof by s. 92, ibid. (w.e.f. 1-4-1993). 
5. Ins. by Act 66 of 1976, s. 27 (w.e.f. 1-4-1977). 
6. Ins. by Act 67 of 1984, s. 54 (w.r.e.f. 1-4-1977). 
7. Ins. by Act 23 of 1986, s. 40 (w.e.f. 1-4-1987). 

18 

 
 
 
 
 
 
 
                                                           
Explanation 1[1].—A person shall be deemed to be of Indian origin if he, or either of his parents or 

any of his grand-parents, was born in undivided India.] 

2[Explanation 2.—For the removal of doubts, it is hereby declared that moneys standing to the credit 
of such person in a Non-resident (External) Account in any bank in India in accordance with the Foreign 
Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder, on the date of his return to 
India, shall be deemed to be moneys brought by him into India on that date;] 

3[(vi)  one  house  or  part  of  a  house  or  a  plot  of  land  belonging  to  an  individual  or  a  Hindu 

undivided family: 

Provided that wealth-tax shall not be payable by an assessee in respect of an asset being a plot of 

land comprising an area of five hundred square metres or less.] 

4* 

5* 

* 

* 

* 

* 

* 

* 

* 

* 

6. Exclusion of assets and debts outside India.—6[In computing the net wealth of an individual who 
is not a citizen of India or of an individual] or a Hindu undivided family not resident in India or resident 
but not ordinarily resident in India, or of a company not resident in India during the year ending on the 
valuation date— 

(i) the value of the assets and debts located outside India; and 

(ii) the value of the assets in India represented by any loans or debts owing to the assessee in any 
case where the interest, if any, payable on such loans or debts is not to be included in the total income 
of the assessee under 7[section 10] of the Income-tax Act; 

shall not be taken into account. 

Explanation  1.—An  individual  or  a  Hindu  undivided  family  shall  be  deemed  to  be  not  resident  in 
India  or  resident  but  not  ordinarily  resident  in  India  during  the  year  ending  on  the  valuation  date  if  in 
respect of that year the individual or the Hindu undivided family, as the case may be, is not resident in 
India or resident but not ordinarily resident in India within the meaning of the Income-tax Act. 

8[Explanation 1A.—Where in the case of an individual the value of an asset in India is represented by 
any debt owing to him, being any moneys to his credit in a Non-resident (External) Account, the interest 
payable on which is not to be included in his total income under 9[sub-clause (ii) of clause (4)] of section 
10 of the Income-tax Act, the provisions of this section shall, in relation to such asset, apply subject to the 
modification that the reference in this section to an individual not resident in India shall be construed as a 
reference to a person resident outside India as defined in clause (q) of section 2 of the Foreign Exchange 
Regulation Act, 1973 (46 of 1973).] 

1. The Explanation renumbered as Explanation 1 thereof by Act 23 of 1986, s. 40 (w.r.e.f. 1-4-1977). 
2. Ins. by s. 40, ibid. (w.r.e.f. 1-4-1977). 
3. Subs. by Act 21 of 1998, s. 68, for clause (vi) (w.e.f.. 1-4-1998). 
4.  Clauses  (xxxiv)  omitted  by  Act  18  of  1992,  s.  92  (w.e.f.  1-4-1993).  Earlier  it  was  inserted  by  Act  66  of  1976,  s.  27                       

(w.e.f. 1-4-1976). 

5. Sub-sections (1A) to (4) omitted by s. 92, ibid. (w.e.f. 1-4-1993). 
6. Subs. by Act 11 of 1958, s. 14, for “In computing the net wealth of an individual” (w.r.e.f. 1-4-1957).  
7. Subs. by Act 46 of 1964, s. 6, for “sub-section (3) of section 4” (w.e.f.1-4-1965). 
8. The Explanation inserted by Act 14 of 1982, s. 35 (w.e.f. 1-4-1982). 
9. Subs. by Act 3 of 1989, s. 61, for “clause (4A)” (w.e.f. 1-4-1989). 

19 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Explanation  2.—A  company  shall  be deemed  to  be resident  in  India  during  the  year  ending  on the 

valuation date, if— 

(a) it is a company formed and registered under the Companies Act, 1956 (1 of 1956), or is an 

existing company within the meaning of that Act; or 

(b) during that year the control and management of its affairs is situated wholly in India. 

1[7.  Value  of  assets,  how  to  be  determined.—(1) Subject to the provisions of sub-section (2), the 
value of any asset, other than cash, for the purposes of this Act shall be its value as on the valuation date 
determined in the manner laid down in Schedule III. 

(2)  The  value  of  a  house  belonging  to  the  assessee  and  exclusively  used  by  him  for  residential 
purposes throughout the period of twelve months immediately preceding the  valuation date, may, at the 
option of the assessee, be taken to be the value determined in the manner laid down in Schedule III as on 
the valuation date next following the date on which he became the owner of the house or the valuation 
date relevant to the assessment year commencing on the 1st day of April, 1971, whichever valuation date 
is later. 

2* 

* 

* 

* 

* 

Explanation.—For the purposes of this sub-section,— 

(i) where the house has been constructed by the assessee, he shall be deemed to have become the 

owner thereof on the date on which the construction of such house was completed; 

(ii) “house” includes a part of a house being an independent residential unit.] 

CHAPTER III 

WEALTH-TAX AUTHORITIES 

3 [8.   Wealth-tax  authorities  and  their  jurisdiction.—The  income-tax  authorities  specified  in 
section  116  of  the  Income-tax  Act  shall  be  the  wealth-tax  authorities  for  the  purposes  of  this  Act  and 
every such authority shall exercise the powers and perform the functions of a wealth-tax authority under 
this  Act  in  respect  of  any  individual,  Hindu  undivided  family  or  company,  and  for  this  purpose  his 
jurisdiction under this Act shall be the same as he has under the Income-tax Act by virtue of orders or 
directions  issued  under  section  120  of  that  Act  (including  orders  or  directions  assigning  concurrent 
jurisdiction) or under any other provision of that Act. 

Explanation.—For the purposes of this section, the wealth-tax authority having jurisdiction in relation 
to  a  person  who  is  not  an  assessee  within  the  meaning  of  the  Income-tax  Act  shall  be  the  wealth-tax 
authority having jurisdiction in respect of the area in which that person resides. 

8A. [Power of Commissioner respecting specified areas, cases, persons, etc.]—Omitted by the Direct 
Tax Laws (Amendment) Act, 1987 (4 of 1988), s. 132 (w.e.f. 1-4-1988). Earlier it was inserted by Act 46 
of 1964, s. 9 (w.e.f. 1-4-1965). 

1.  Subs.  by  Act  3  of  1989,  s.  62,  for  section  7  (w.e.f.  1-4-1989).  Earlier  section  7  was  amended  by  Act  46  of  1964,  s.  6                   

(w.e.f. 1-4-1965), Act 45 of 1972, s. 8 (w.e.f. 1-4-1973), Act 66 of 1976, s. 27 (w.e.f. 1-4-1976) and Act 44 of 1980, s. 38 
(w.e.f. 1-4-1980). 

2. The proviso omitted by Act 18 of 1992, s. 93 (w.e.f. 1-4-1993). 

3. Subs. by Act 4 of 1988, s. 131, for sections 8, 9, 10 and 11 (w.e.f. 1-4-1988). Earlier these sections was amended by Act 46 of 

1964, s. 8 and 10 (w.e.f. 1-4-1965), Act 20 of 1967, s. 34 (w.e.f. 1-4-1967) and Act 41 of 1975, s. 84 (w.e.f. 1-10-1975). 

20 

 
 
 
 
 
 
 
 
                                                           
8AA. [Concurrent 

jurisdiction  of 

Inspecting  Assistant  Commissioner  and  Wealth-tax                  

Officer.]—Omitted by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), s. 132 (w.e.f. 1-4-1988). 
Earlier it was inserted by Act 41 of 1975, s. 85 (w.e.f. 1-10-1975). 

8B. [Power to transfer cases.]—Omitted by s. 132, ibid. (w.e.f. 1-4-1988). 

9. Control  of  wealth-tax  authorities.—Section  118  of  the  Income-tax  Act  and  any  notification 
issued thereunder shall apply in relation to the control of wealth-tax authorities as they apply in relation to 
the control of the corresponding income-tax authorities, except to the extent to which the Board may, by 
notification in the Official Gazette, otherwise direct in respect of any wealth-tax authority. 

9A. [Commissioners of Wealth-tax (Appeals).]—Omitted by the Direct Tax Laws  (Amendment) Act, 

1987 (4 of 1988), s. 132 (w.e.f. 1-4-1988). 

10. Instructions  to  subordinate  authorities.—(1)  The  Board  may,  from  time  to  time,  issue  such 
orders,  instructions  and  directions  to  other  wealth-tax  authorities  as  it  may  deem  fit  for  the  proper 
administration of this Act, and such authorities and all other persons employed  in the execution of this 
Act shall observe and follow such orders, instructions and directions of the Board: 

Provided that no such orders, instructions or directions shall be issued— 

(a) so as to require any wealth-tax authority to make a particular assessment or to dispose of a 

particular case in a particular manner ; or 

(b) so as to interfere with the discretion of the Deputy Commissioner (Appeals) or Commissioner 

(Appeals) in the exercise of his appellate functions. 

(2) Without prejudice to the generality of the foregoing power,— 

(a) the Board may, if it considers it necessary or expedient so to do, for the purpose of proper and 
efficient management of the work of assessment and collection of revenue, issue, from time to time, 
(whether by way of relaxation of any of the provisions of sections 1[14, 15, 16, 17, 17B,] 18 and 35 or 
otherwise),  general  or  special  orders  in  respect  of  any  class  of  cases,  setting  forth  directions  or 
instructions  (not  being  prejudicial  to  assessees)  as  to  the  guidelines,  principles  or  procedures  to  be 
followed by other wealth-tax authorities in the work relating to assessment or collection of revenue or 
the initiation of proceedings for the imposition of penalties and any such order may, if the Board is of 
opinion  that  it  is  necessary  in  the  public  interest  so  to  do,  be  published  and  circulated  in  the 
prescribed manner for general information ; 

(b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship 
in any case or class of cases, by general or special order, authorise any wealth-tax authority, not being 
a Deputy Commissioner (Appeals) or Commissioner (Appeals), to admit an application or claim for 
any  exemption,  deduction,  refund  or  any  other  relief  under  this  Act  after  the  expiry  of  the  period 
specified by or under this Act for making such application or claim and deal with the same on merits 
in accordance with law.] 

10A. [Directors  of  Inspection.]—Omitted  by  the  Direct  Tax  Laws  (Amendment)  Act,  1987  (4  of 

1988), (w.e.f. 1-4-1988). Earlier section 10A was inserted by Act 46 of 1964, s. 10 (w.e.f. 1-4-1965). 

1. Subs. by Act 12 of 1990, s. 53, for “16, 17” (w.e.f. 1-4-1990). 

21 

                                                           
11. Jurisdiction of Assessing Officers and power to transfer cases.—(1) The provisions of sections 
124  and  127  of  the  Income-tax  Act  shall,  so  far  as  may  be,  apply  for  the  purposes  of  this  Act  as  they 
apply for the purposes of the Income-tax Act, subject to the modifications specified in sub-section (2). 

(2) The modifications referred to in sub-section (1) shall be the following, namely:— 

(a) in section 124 of the Income-tax Act,— 

(i) in sub-section (3), references to the provisions of the Income-tax Act shall be construed as 

references to the corresponding provisions of the Wealth-tax Act; 

(ii) sub-section (5) shall be omitted; 

(b) in section 127 of the Income-tax Act, in the Explanation below sub-section 1[(4)], references 
to  proceedings  under  the  Income-tax  Act  shall  be  construed  as  including  references  to  proceedings 
under the Wealth-tax Act.] 

11A. [Inspector  of  Wealth-tax.]—Omitted  by  the  Direct  Tax  Laws  (Amendment)  Act,  1987  (4  of 
1988),  s.  132    (w.e.f.  1-4-1988).  Earlier  inserted  by  Act  46  of  1964,  s.  11  (w.e.f.  1-4-1965)  and  later 
substituted by Act 20 of 1967, s. 34 (w.e.f. 1-4-1967). 

11AA. [Commissioner  competent  to  perform  any  function  or  functions.]—Omitted  by  s.  132,  ibid. 

w.e.f. 1-4-1988. Earlier section 11AA was inserted by Act 19 of 1970, s. 26 (w.e.f. 1-4-1970). 

11B. [Wealth-tax Officer competent to perform any function or functions.]—Omitted by s. 132, ibid. 
(w.e.f. 1-4-1988). Earlier section  11B was inserted by Act 20 of 1967, s. 34 (w.e.f. 1-4-1967)  and later 
amended by Act 41 of 1975, s. 87 (w.e.f. 1-10-1975). 

12.  [Control  of  wealth-tax  authorities.]—Omitted  by  s.  132,  ibid.  (w.e.f.  1-4-1988).  Earlier 

substituted by Act 46 of 1964, s. 11 (w.e.f. 1-4-1965). 

2[12A.  Appointment  of  Valuation  Officers.—(1)  The  Central  Government  may  appoint  as  many 

Valuation Officers as it thinks fit. 

(2) Subject to the rules and orders of the Central Government regulating the conditions of service of 
persons in public services and posts, a wealth-tax authority may appoint as many overseers, surveyors and 
assessors as may be necessary to assist the Valuation Officers in the performance of their functions.] 

13. [Wealth-tax  authorities  to  follow  orders,  etc.,  of  the  Board.]—Omitted  by  the  Direct  Tax  Laws 

(Amendment) Act, 1987 (4 of 1988), s. 132 (w.e.f. 1-4-1988). 

3 [13A. Powers  of  4 [Director-General  or  Director],  5 [Chief  Commissioner  or  Commissioner] 
and  6 [Joint  Commissioner]  to  make  enquiries.—The 4[Director-General  or  Director],  the 5[Chief 
Commissioner or Commissioner] and the 6[Joint Commissioner] shall be competent to make any enquiry 
under this Act, and for this purpose shall have all the powers that an 7[Assessing Officer] has under this 
Act in relation to the making of enquiries.] 

1. Subs. by Act 3 of 1989, s. 63, for “(5)” (w.r.e.f. 1-4-1988).  
2. Ins. by Act 45 of 1972, s. 9 (w.e.f. 15-11-1972). 
3. Ins. by Act 46 of 1964, s. 13 (w.e.f. 1-4-1965). 
4. Subs. by Act 4 of 1988, s. 127, for “Director of Inspection” (w.e.f. 1-4-1988). 
5. Subs. by s. 127, ibid., for “Commissioner” (w.e.f. 1-4-1988). 
6. Subs. by Act 21 of 1998, s. 3, for “Deputy Commissioner” (w.e.f. 1-4-1988). Earlier the quoted words were substituted by Act 

4 of 1988, s. 127, for “Inspecting Assistant Commissioner” (w.e.f. 1-4-1988). 

7. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 

22 

                                                           
CHAPTER IV 

ASSESSMENT 

14. Return of wealth.—1[(1) Every person, if his net wealth or the net wealth of any other person in 
respect  of  which  he  is  assessable  under  this  Act  on  the  valuation  date  exceeded  the  maximum  amount 
which is not chargeable to wealth-tax, shall, on or before the due date, furnish a return of his net wealth or 
the net wealth of such other person as on that valuation date in the prescribed form and verified in the 
prescribed  manner  setting  forth  particulars  of  such  net  wealth  and  such  other  particulars  as  may  be 
prescribed. 

Explanation.—In  this  sub-section,  “due  date”  in  relation  to  an  assessee  under  this  Act  shall  be  the 
same date as that applicable to an assessee under the Income-tax Act under the Explanation to sub-section 
(1) of section 139 of the Income-tax Act. 

(2)  Notwithstanding  anything  contained  in  any  other  provision  of  this  Act,  a  return  of  net  wealth 
which shows the net wealth below the maximum amount which is not chargeable to tax shall be deemed 
never to have been furnished: 

Provided that  this  sub-section  shall  not  apply  to  a  return  furnished  in  response  to  a  notice  under 

section 17.] 

2* 

* 

* 

* 

* 

3[14A.  Power of Board to dispense with furnishing documents, etc., with return of wealth.—The 
Board  may  make  rules  providing  for  a  class  or  classes  of  persons  who  may  not  be  required  to  furnish 
documents,  statements,  receipts,  certificates,  audit  reports,  reports  of  registered  valuer  or  any  other 
documents, which are otherwise under any other provisions of this Act, except section 14B, required to be 
furnished, along with the return but on demand to be produced before the Assessing Officer. 

14B. Filing of return in electronic form.—The Board may make rules providing for— 

(a) the class or classes of persons who shall be required to furnish the return in electronic form; 

(b) the form and the manner in which the return in electronic form may be furnished; 

(c) the documents, statements, receipts, certificates, audit reports, reports  of registered valuer or 
any other documents which may not be furnished along with the return in electronic form but shall be 
produced before the Assessing Officer on demand; 

(d) the computer resource or the electronic record to which the return in electronic form may be 

transmitted.] 

4[15.  Return after due date and amendment of return.—If any person has not furnished a return 
within the time allowed under sub- section (1) of section 14 or under a notice issued under clause (i) of 
sub-section  (4)  of  section  16,  or  having  furnished  a  return  discovers  any  omission  or  wrong  statement 
therein, he may furnish a return or a revised return, as the case may be, at any time before the expiry of 
one  year  from  the  end  of  the  relevant  assessment  year  or  before  the  completion  of  the  assessment, 
whichever is earlier: 

1.  Subs.  by  Act  4  of  1988,  s.  133,  for  sub-sections  (1)  and  (2)  (w.e.f.  1-4-1989).  Earlier  these  sub-sections  amended  by                       
Act 58 of 1960, s. 3 and the Second Schedule (w.e.f. 26-12-1960), Act 46 of 1964, s. 14 (w.e.f. 1-4-1964), Act 19 of 1970,                
s. 26 (w.e.f. 1-4-1970). 

2. Sub-section (3) omitted by s. 133, ibid. (w.e.f. 1-4-1989). 
3. Ins. by Act 17 of 2013, s. 62 (w.e.f. 1-6-2013). 
4. Subs. by Act 4 of 1988, s. 134, for section 15 (w.e.f. 1-4-1989). 

23 

 
 
 
 
 
 
 
 
                                                           
Provided that— 

(a) where such return or revised return relates to the assessment year commencing on the 1st day 
of April, 1987, or any earlier assessment year, it may be furnished at any time up to and inclusive of 
the 31st day of March, 1990 or before the completion of the assessment, whichever is earlier; 

(b) where such return or revised return relates to the assessment year commencing on the 1st day 
of April, 1988, it may be furnished at any time up to and inclusive of the 31st day of March, 1991 or 
before the completion of the assessment, whichever is earlier.] 

1[15A.  Return  by  whom  to  be  signed.—The  return  made  under  section  14  or  section  15  shall  be 

signed and verified— 

2[(a) in the case of an individual,— 

(i) by the individual himself; 

(ii)  where  he  is  absent  from  India,  by  the  individual  himself  or  by  some  person  duly 

authorised by him in this behalf; 

(iii) where he is mentally incapacitated from attending to his affairs, by his guardian or any 

other person competent to act on his behalf; and 

(iv) where, for any other reason, it is not possible for the individual to sign the return, by any 

person duly authorised by him in this behalf: 

Provided that in a case referred to in sub-clause (ii) or sub-clause (iv), the person signing the 
return holds a valid power of attorney from the individual to do so, which shall be attached to the 
return;] 

(b)  in  the  case  of  a  Hindu  undivided  family,  by  the  karta,  and,  where  the  karta  is  absent  from 
India  or  is  mentally  incapacitated  from  attending  to  his  affairs,  by  any  other  adult  member  of such 
family; and 

3[(c) in the case of a company, by the managing director thereof, or where for any unavoidable 
reason such managing director is not able to sign and verify the return or where there is no managing 
director, by any director thereof:] 

4[Provided that where the company is not resident in India, the return may be signed and verified 
by a person who holds a valid power of attorney from such company to do so, which shall be attached 
to the return: 

Provided further that,— 

(a)  where  the  company  is  being  wound  up,  whether  under  the  orders  of  the  court  or 
otherwise, or where any person has been appointed as the receiver of any assets of the company, 
the return shall be signed and verified by the liquidator referred to in sub-section (1) of section 
178 of the Income-tax Act; 

(b) where the management of the company has been taken over by the Central Government or 
any State Government under any law, the return of the company shall be signed and verified by 
the principal officer thereof.] 

1. Ins. by Act 46 of 1964, s. 15 (w.e.f. 1-4-1965). 
2. Subs. by Act 4 of 1988, s. 135, for clause (a) (w.e.f. 1-4-1989). 
3. Subs. by Act 41 of 1975, s. 88, for clause (c) (w.e.f. 1-4-1976).  
4. Added by Act 4 of 1988, s. 135 (w.e.f. 1-4-1989). 

24 

                                                           
1[15B.   Self-assessment.—(1)  Where  any  tax is  payable  on  the  basis  of any  return  furnished  under 
section  14  or  section  15  or  in  response  to  a  notice  under  clause  (i)  of  sub-section  (4)  of  section  16  or 
under section 17, after taking into account the amount of tax, if any, already paid under any provision of 
this Act, the assessee shall be liable to pay such tax, together with interest payable under any provision of 
this  Act,  for  any  delay  in  furnishing  the  return,  before  furnishing  the  return  and  the  return  shall  be 
accompanied by proof of payment of such tax and interest. 

Explanation.—Where  the  amount  paid  by  the  assessee  under  this  sub-section  falls  short  of  the 
aggregate  of  the  tax  and  interest  as  aforesaid,  the  amount  so  paid  shall  first  be  adjusted  towards  the 
interest payable as aforesaid and the balance, if any, shall be adjusted towards the tax payable. 

(2) After the regular assessment under section 16 has been made, any amount paid under sub-section 

(1) shall be deemed to have been paid towards such regular assessment. 

(3) If any assessee fails to pay the whole or any part of such tax or interest or both in accordance with 
the  provisions  of  sub-section  (1),  he  shall,  without  prejudice  to  any  other  consequences  which  he  may 
incur, be deemed to be an assessee in default in respect of the tax or interest or both remaining unpaid and 
all the provisions of this Act shall apply accordingly.] 

2[(4) The provisions of this section as they stood immediately before their amendment by the Direct 
Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the 
assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references 
in this section to the other provisions of this Act shall be construed as references to those provisions as for 
the time being in force and applicable to the relevant assessment year.] 

15C. [Provisional  assessment.]—Omitted  by  the  Direct  Tax  Laws  (Amendment)  Act,  1987,  s.  137 

(w.e.f.  1-4-1989).  Earlier  it  was  inserted  by  the  Wealth-tax  (Amendment)  Act,  1964,  s.  15                          
(w.e.f. 1-4-1965). 

3[16. Assessment.—4[(1) Where a return has been made under section 14 or section 15 or in response 

to a notice under clause (i) of sub-section (4),— 

(i)  if any tax or interest is found due on the basis of such return, after adjustment of any amount 
paid  by  way  of  tax  or  interest,  then,  without  prejudice  to  the  provisions  of  sub-section  (2),  an 
intimation shall be sent to the assessee specifying the sum so payable, and such intimation shall be 
deemed to be a notice of demand issued under section 30 and all the provisions of this Act shall apply 
accordingly; and 

(ii)  if  any  refund  is  due  on  the  basis  of  such  return,  it  shall  be  granted  to  the  assessee  and  an 

intimation to this effect shall be sent to the assessee: 

Provided that except as otherwise provided in this sub-section, the acknowledgement of the return 
shall  be  deemed  to  be  an  intimation  under  this  sub-section  where  either  no  sum  is  payable  by  the 
assessee or no refund is due to him: 

Provided  further that  no  intimation  under  this  sub-section  shall  be  sent  after  the  expiry  of  two 

years from the end of the assessment year in which the net wealth was first assessable.] 

1.  Subs.  by  Act  4  of  1988,  s.  136,  for  section  15B  (w.e.f.  1-4-1989).  Earlier  it  was  inserted  by  Act  46  of  1964,  s.  15                         

(w.e.f.  1-4-1965)  which  was  later  amended  by  Act  42  of  1970,  s.  60  (w.e.f.  1-4-1971)  and  Act  41  of  1975,  s.  89                            
(w.e.f. 1-4-1976). 

2. Ins. by Act 36 of 1989, s. 27 (w.r.e.f. 1-4-1989). 
3.  Subs.  by  Act  4  of  1988,  s. 138,  for  section  16  (w.e.f.  1-4-1989).  Earlier  section 16  was  amended  by  Act  46  of  1964,  s. 16 

(w.e.f. 1-4-1965). 

4.  Subs.  by  Act  27  of  1999,  s.  92,  for  sub-section  (1)  (w.e.f.  1-6-1999).  Earlier  it  was  amended  by  Act  3  of  1989,  s.  64                      

(w.e.f. 1-4-1989) and Act 36 of 1989, s. 28 (w.r.e.f. 1-4-1989). 

25 

                                                           
1* 

* 

* 

* 

* 

(2) 2[Where a return has been made under section 14 or section 15, or in response to a notice under 
clause (i) of sub-section (4) of this section, the Assessing Officer shall, if he] considers it necessary or 
expedient to ensure that the assessee has not understated the net wealth or has not underpaid the tax in any 
manner, 3[serve on the assessee] a notice requiring him, on a date to be specified therein, either to attend 
at the office of the Assessing Officer or to produce, or cause to be produced there, any evidence on which 
the assessee may rely in support of the return: 

4[Provided that  no  notice  under  this  sub-section  shall  be  served  on  the  assessee  after  the  expiry  of 

twelve months from the end of the month in which the return is furnished.] 

(3) On the day specified in the notice issued under sub-section (2) or as soon afterwards as may be, 
after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer 
may require on specified points, and after taking into account all relevant material which he has gathered, 
the Assessing Officer shall, by order in writing, assess the net wealth of the assessee and determine the 
sum payable by him on the basis of such assessment. 

(4) For the purposes of making an assessment under this Act, the Assessing Officer may serve, on any 
person who has made a return under section 14 or section 15 or in whose case the time allowed under 
sub-section (1) of section 14 for furnishing the return has expired, a notice requiring him, on a date to be 
specified therein,— 

(i)  where such person has not made a return 5[within the time allowed under sub-section (1) of 
section 14] to furnish a return of his net wealth or the net wealth of any other person in respect of 
which he is assessable under this Act on the valuation date, in the prescribed form and verified in the 
prescribed manner, setting forth the particulars of such net wealth and such other particulars as may 
be prescribed, or 

(ii)  to  produce  or  cause  to  be  produced  such  accounts,  records  or  other  documents  as  the 

Assessing Officer may require. 

(5) If any person,— 

(a) fails to make the return required under sub-section (1) of section 14 and has not made a return 

or a revised return under section 15, or 

(b) fails to comply with all the terms of a notice issued under sub-section (2) or sub-section (4), 

the Assessing Officer, after taking into account, all relevant material which he has gathered, shall, after 
giving such person an opportunity of being heard, estimate the net wealth to the best of his judgment and 
determine the sum payable by the person on the basis of such assessment: 

Provided that  such  opportunity  shall  be  given  by  the  Assessing  Officer  by  serving  a  notice  calling 
upon  the  person  to  show  cause,  on  a  date  and  time  to  be  specified  in  the  notice,  why  the  assessment 
should not be completed to the best of his judgment: 

Provided further that it shall not be necessary to give such opportunity in a case where a notice under 

sub-section (4) has been issued prior to the making of the assessment under this sub-section.] 

1. Sub-section (1A) and (1B) omitted by Act 27 of 1999, s. 92 (w.e.f. 1-6-1999). Earlier sub-section (1A) inserted by  Act 3 of 
1989, s. 64 (w.e.f. 1-4-1989) and later amended by Act 36 of 1989, s. 28 (w.r.e.f. 1-4-1989). Sub-section (1B) inserted by Act 
12 of 1990, s. 54 (w.r.e.f. 1-4-1989). 

2. Subs. by Act 36 of 1989, s. 28, for “In a case referred to in sub-section (1), if the Assessing Officer” (w.r.e.f. 1-4-1989).  
3. Subs. by s. 28, ibid., for “he shall server or the Assessee” (w.r.e.f. 1-4-1989). 
4. Subs. by Act 49 of 1991, s. 74, for the proviso (w.e.f. 1-10-1991).  
5. Subs. by Act 12 of 1990, s. 54, for “before the end of the relevant assessment year” (w.e.f. 1-4-1990). 

26 

 
 
 
 
 
 
 
 
                                                           
1[(6) Where a regular assessment under sub-section (3) or sub-section (5) is made,— 

(a) any tax or interest paid by the assessee under sub-section (1) shall be deemed to have been 

paid towards such regular assessment ; 

(b)  if  no  refund  is  due  on  regular  assessment  or  the  amount  refunded  under  sub-section  (1) 
exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded 
shall  be  deemed  to  be  tax  payable  by  the  assessee  and  the  provisions  of  this  Act  shall  apply 
accordingly. 

2* 

3* 

* 

* 

* 

* 

* 

* 

*] 

* 

4[16A. Reference to Valuation Officer.—(1) For the purpose of making an assessment (including an 
assessment  in  respect of any  assessment  year  commencing  before the  date  of coming  into  force  of  this 
section) under this Act, 5[where under the provisions of section 7 read with the rules made under this Act, 
or, as the case may be, the rules in Schedule III, the market value of any asset is to be taken into account 
in  such  assessment,]  the   6 [Assessing  Officer]  may  refer  the  valuation  of  any  asset  to  a  Valuation 
Officer— 

(a) in a case where the value of the asset as returned is in accordance with the estimate made by a 
registered valuer, if the 6[Assessing Officer] is of opinion that the value so returned is less than its fair 
market value ; 

(b) in any other case, if the 6[Assessing Officer] is of opinion— 

(i) that the fair market value of the asset exceeds the value of the asset as returned by more 
than such percentage of the value of the asset as returned or by more than such amount as may be 
prescribed in this behalf; or 

(ii) that  having  regard  to  the  nature  of  the  asset  and  other  relevant  circumstances,  it  is 

necessary so to do. 

(2) For the purpose of estimating the value of any asset in pursuance of a reference under sub-section 
(1),  the  Valuation  Officer  may  serve  on  the  assessee  a  notice  requiring  him  to  produce  or  cause  to  be 
produced  on  a  date  specified  in  the  notice  such  accounts,  records  or  other  documents  as  the  Valuation 
Officer may require. 

(3) Where the Valuation Officer is of opinion that the value of the asset has been correctly declared in 
the return made by the assessee under section 14 or section 15, he shall pass an order in writing to that 
effect and send a copy of his order to the 6[Assessing Officer] and to the assessee. 

(4)  Where  the  Valuation  Officer  is  of  opinion  that  the  value  of  the  asset  is  higher  than  the  value 
declared  in  the  return  made  by  the  assessee  under  section  14  or,  section  15,  or  where  the  asset  is  not 
disclosed or the value of the asset is not declared in such return or where no such return has been made, 
the  Valuation  Officer  shall  serve  a  notice  on  the  assessee  intimating  the  value  which  he  proposes  to 
estimate  and  giving  the  assessee  an  opportunity  to  state,  on  a  date  to  be  specified  in  the  notice,  his 
objections  either  in  person  or  in  writing  before  the  Valuation  Officer  and  to  produce  or  cause  to  be 
produced on that date such evidence as the assessee may rely in support of his objections. 

1. Ins. by Act 36 of 1989, s. 28 (w.r.e.f. 1-4-1989). 
2.  Sub-section  (7)  omitted  by  Act  27  of  1999,  s.  92  (w.e.f.  1-6-1999).  Earlier  it  was  inserted  by  Act  36  of  1989,  s.  28                  

(w.r.e.f. 1-4-1989). 

3. The Explanation omitted by s. 92, ibid. (w.e.f. 1-6-1999). Earlier it was inserted by Act 49 of 1991, s. 74 (w.e.f. 1-10-1991). 
4. Ins. by Act 45 of 1972, s. 10 (w.e.f. 1-1-1973). 
5. Ins. by Act 3 of 1989, s. 65 (w.e.f. 1-4-1989). 
6. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 

27 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
(5) On the  date specified in the notice under sub-section (4), or as soon thereafter as may be, after 
hearing such evidence as the assessee may produce and after considering such evidence as the Valuation 
Officer may require on any specified points and after taking into account all relevant material which he 
has gathered, the Valuation Officer shall, by order in writing, estimate the value of the asset and send a 
copy of his order to the 1[Assessing Officer] and to the assessee. 

(6)  On  receipt  of  the  order  under  sub-section  (3)  or  sub-section  (5)  from  the  Valuation  Officer, 
the 1[Assessing  Officer]  shall,  so  far  as  the  valuation  of  the  asset  in  question  is  concerned,  proceed  to 
complete the assessment in conformity with the estimate of the Valuation Officer.] 

17. Wealth escaping assessment.—2[(1) If the Assessing Officer 3[has reason to believe] that the net 
wealth  chargeable  to  tax  in  respect  of  which  any  person  is  assessable  under  this  Act  has  escaped 
assessment for any assessment year (whether by reason of under- assessment or assessment at too low a 
rate or otherwise), he may, subject to the other provisions of this section and section 17A, serve on such 
person  a  notice  requiring  him  to  furnish  within  such  period, 4***  as  may  be  specified  in  the  notice,  a 
return in the prescribed form and verified in the prescribed manner setting forth the net wealth in respect 
of which such person is assessable as on the valuation date mentioned in the notice, along with such other 
particulars as may be required by the notice, and may proceed to assess or reassess such net wealth and 
also  any  other  net  wealth  chargeable  to  tax  in  respect  of  which  such  person  is  assessable,  which  has 
escaped assessment and which comes to his notice subsequently in the course of the proceedings under 
this  section  for  the  assessment  year  concerned  (hereafter  in  this  section  referred  to  as  the  relevant 
assessment year), and the provisions of this Act shall, so far as may be, apply as if the return were a return 
required to be furnished under section 14: 

Provided that where an assessment under sub-section (3) of section 16 or this section has been made 
for the relevant assessment year, no action shall be taken under this section after the expiry of four years 
from  the  end  of  the  relevant  assessment  year,  unless  any  net  wealth  chargeable  to  tax  has  escaped 
assessment for such assessment year by reason of the failure on the part of the assessee to make a return 
under section 14 or section 15 or in response to a notice issued under sub-section (4) of section 16 or this 
section  or to disclose fully  and truly  all  material  facts  necessary  for  his  assessment  for that  assessment 
year: 

5[Provided further that the Assessing Officer shall, before issuing any notice under this sub-section, 

record his reasons for doing so:] 

6[Provided also that nothing contained in the first proviso shall apply in a case where any net wealth 
in relation to any asset (including financial interest in any entity) located outside India chargeable to tax, 
has escaped assessment for any assessment year:] 

7[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.] 

Explanation.—Production  before  the  Assessing  Officer  of  account  books  or  other  evidence  from 
which material evidence could with due diligence have been discovered by the Assessing Officer will not 
necessarily amount to disclosure within the meaning of the foregoing proviso. 

1. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
2. Subs. by s. 139, ibid., for sub-section (1) (w.e.f. 1-4-1989). Earlier it was amended by Act 46 of 1964, s. 17 (w.e.f. 1-4-1965). 
3. Subs. by Act 3 of 1989, s. 66, for “, for reasons to be recorded by him in writing, is of the opinion” (w.e.f. 1-4-1989). 
4. The words “not being less than thirty days,” omitted by Act 32 of 2003, s. 100 (w.r.e.f. 1-4-1989). 
5. Ins. by Act 3 of 1989, s. 66 (w.e.f. 1-4-1989). 
6. Ins. by Act 23 of 2012, s. 116 (w.r.e.f. 1-7-2012). 
7. Ins. by Act 18 of 2008, s. 60 (w.e.f. 1-4-2008). 

28 

                                                           
(1A) No notice under sub-section (1) shall be issued for the relevant assessment year,— 

1[(a) if four years have elapsed from the end of the relevant assessment year, unless the case falls 

under clause (b) 2[or clause (c)]; 

(b)  if  four  years,  but  not  more  than  six  years,  have  elapsed  from  the  end  of  the  relevant 
assessment year unless the net wealth chargeable to tax which has escaped assessment amounts to or 
is likely to amount to rupees ten lakhs or more for that year;] 

2[(c)  if  four  years,  but  not  more  than  sixteen  years,  have  elapsed  from  the  end  of  the  relevant 
assessment  year  unless  the  net  wealth  in  relation  to  any  asset  (including  financial  interest  in  any 
entity) located outside India, chargeable to tax, has escaped assessment for any assessment year.] 

3[Explanation 1].—For the purposes of sub-section (1) and sub-section (1A), the following shall also 

be deemed to be cases where net wealth chargeable to tax has escaped assessment, namely:— 

(a) where no return of net wealth has been furnished by the assessee although his net wealth or 
the net wealth of any other person in respect of which he is assessable under this Act on the valuation 
date exceeded the maximum amount which is not chargeable to wealth-tax; 

(b) where a return of net wealth has been furnished by the assessee but no assessment has been 
made and it is noticed by the Assessing Officer that the assessee has understated the net wealth or has 
claimed excessive exemption or deduction in the return; 

2[(c) where a person is found to have any asset (including financial interest in any entity) located 

outside India.] 

2[Explanation 2.—For the removal of doubts, it is hereby clarified that the provisions of this section, 
as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or 
before the 1st day of April, 2012 (23 of 2012).] 

(1B)  (a)  In  a  case  where  an  assessment  under  sub-section  (3)  of  section  16  or  sub-section  (1)                      

of  this  section  has  been  made  for  the  relevant  assessment  year,  no  notice  shall  be  issued  under             
sub-section (1) 4[by an Assessing Officer, who is below the rank of 5[Assistant Commissioner or Deputy 
Commissioner], unless the 6[Joint Commissioner] is satisfied, on the reasons recorded by such Assessing 
Officer, that it is a fit case for the issue of such notice]: 

Provided that,  after  the  expiry  of  four  years  from  the  end  of  the  relevant  assessment  year,  no  such 
notice  shall  be  issued  unless  the  Chief  Commissioner  or  Commissioner  is  satisfied,  on  the  reasons 
recorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice. 

(b) In a case other than a case falling under clause (a), no notice shall be issued under sub-section (1) 
by an Assessing Officer, who is below the rank of 6[Joint Commissioner], after the expiry of four years 
from the end of the relevant assessment year, unless the 6[Joint Commissioner] is satisfied, on the reasons 
recorded by such Assessing Officer, that it is a fit case for the issue of such notice.] 

7[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.] 

1. Subs. by Act 14 of 2001, s. 96, for clauses (a) and (b) (w.e.f. 1-6-2001). 
2. Ins. by Act 23 of 2012, s. 116 (w.e.f. 1-7-2012). 
3. The Explanation renumbered as Explanation 1 thereof by s. 116, ibid. (w.e.f. 1-7-2012). 
4.  Subs.  by  Act  12  of  1990,  s.  55,  for  “except  by  an  Assessing  Officer  of  the  rank  of  Assistant  Commissioner  or  Deputy 

Commissioner” (w.e.f. 1-4-1990).  

5. Subs. by Act 21 of 1998, s. 66, for “Assistant Commissioner” (w.e.f. 1-10-1998). 
6. Subs. by s. 66, ibid., for “Deputy Commissioner” (w.e.f. 1-10-1998). 
7. Ins. by Act 18 of 2008, s. 60 (w.r.e.f. 1-10-1998). 

29 

                                                           
1[(2) Nothing contained in this section limiting the time within which any proceeding for assessment 
or reassessment  may  be  commenced,  shall apply  to an  assessment  or  reassessment to  be  made  on  such 
person  in  consequence  of  or  to  give  effect  to  any  finding  or  direction  contained  in  an  order  under            
section 23, 24, 25, 27 or 29 2[or by a Court in any proceedings under any other law]: 

Provided that the provisions of this sub-section shall not apply in any case where any such assessment 
or reassessment relates to an assessment year in respect of which an assessment or reassessment could not 
have been made at the time the order which was the subject-matter of the appeal, reference or revision, as 
the  case  may  be,  was  made  by  reason  of  any  provision  limiting  the  time  within  which  any  action  for 
assessment or reassessment may be taken.] 

3[17A. Time limit for completion of assessment and reassessment.—4[(1) No order of assessment 
shall be made under section 16 at any time after the expiry of two years from the  end of the assessment 
year in which the net wealth was first assessable: 

5[Provided that,— 

(a) where the net wealth was first assessable in the assessment year commencing on the 1st day of 
April, 1987, or any earlier assessment year, such assessment may be made on or before the 31st day 
of March, 1991; 

(b) where the net wealth was first assessable in the assessment year commencing on the 1st day of 

April, 1988, such assessment may be made on or before the 31st day of March, 1992:] 

6[Provided further that in case the assessment year in which the net wealth was first assessable is 
the  assessment  year 7[commencing  on  or  after  the  1st  day  of  April,  2004  but  before  the  1st  day  of 
April, 2010], the provisions of this sub-section shall have effect as if for the words “two years”, the 
words “twenty-one months” had been substituted.] 

(2) No order of assessment or reassessment shall be made under section 17 after the expiry of 8[one 
year]  from  the  end  of  the  financial  year  in  which  the  notice  under  sub-section  (1)  of  that  section  was 
served]: 

9[Provided that where the notice under sub-section (1) of section 17 was served on or after the 1st day 
of April, 1999 but before the 1st day of April, 2000, such assessment or reassessment may be made at any 
time up to the 31st day of March, 2002:] 

6[Provided further that where the notice under sub-section (1) of section 17 was served on or 10[after 
the 1st day of April, 2005 but before the 1st day of April, 2011], the provisions of this sub-section shall 
have effect as if for the words "one year", the words "nine months" had been substituted.] 

11*   

* 

* 

* 

*] 

1. Ins. by Act 46 of 1964, s. 17 (w.e.f. 1-4-1965). 
2. Added by Act 4 of 1988, s. 139 (w.e.f. 1-4-1989). 
3. Ins. by Act 41 of 1975, s. 90 (w.e.f. 1-4-1976). 
4. Subs. by Act 4 of 1988, s. 140, for sub-sections (1) and (2) (w.e.f. 1-4-1989).  
5. Subs. by Act 13 of 1989, s. 28, for the proviso (w.e.f. 1-4-1989). 
6. Ins. by Act 21 of 2006, s. 57 (w.e.f. 1-6-2006). 
7. Subs. by Act 23 of 2012, s. 117, for “commencing on the 1st day of April, 2004 or any subsequent year” (w.e.f. 1-7-2012) 
8. Subs. by Act 14 of 2001, s. 97, for “two years” (w.e.f. 1-6-2001). 
9. Subs. by s. 97, ibid., for the proviso (w.e.f. 1-6-2001). 
10. Subs. by Act 23 of 2012, s. 117, for “after the 1st day of April, 2005” (w.e.f. 1-7-2012). 
11. The Explanation omitted by Act 14 of 2001, s. 97 (w.e.f. 1-6-2001). 

30 

 
 
 
 
 
 
 
                                                           
(3) Notwithstanding anything contained in sub-sections (1) and (2), an order of fresh assessment in 
pursuance of an order passed on or after the 1st day of April, 1975,  under section 1[23A], section 24 or 
section 25, setting aside or cancelling an assessment, may be made at any time before the expiry of 2[one 
year] from the end of the financial year in which the order under section 1[23A] or section 24 is received 
by  the 3[Chief  Commissioner  or  Commissioner]  or,  as  the  case  may  be,  the  order  under  section  25  is 
passed by the Commissioner: 

4 [Provided that  where  the  order  under  section  23A  or  section  24  is  received  by  the  Chief 
Commissioner  or  Commissioner  or,  as  the  case  may  be,  the  order  under  section  25  is  passed  by  the 
Commissioner, on or after the 1st day of April, 1999 but before the 1st day of April, 2000, such an order 
of fresh assessment may be made at any time up to the 31st day of March, 2002:] 

5[Provided  further that  where  the  order  under  section  23A  or  section  24  is  received  by  the  Chief 
Commissioner  or  Commissioner  or,  as  the  case  may  be,  the  order  under  section  25  is  passed  by  the 
Commissioner,  on  or  6[after  the  1st  day  of  April,  2005 but  before  the  1st  day  of  April,  2011],  the 
provisions of this sub-section shall have effect as if for the words "one year", the words "nine months" 
had been substituted.] 

(4) The provisions of sub-sections (1) and (2) shall not apply to the assessment or reassessment made 
on  the  assessee  or  any  other  person  in  consequence  of,  or  to  give  effect  to,  any  finding  or  direction 
contained in an order under section 23, section 24, section 25, section 27 or section 29 or in an order of 
any  court  in  a  proceeding  otherwise  than  by  way  of  appeal  or  reference  under  this  Act,  and  such 
assessment or reassessment may, subject to the provisions of sub-section (3), be completed at any time. 

Explanation 1.—In computing the period of limitation for the purposes of this section— 

(i) the time taken in reopening the whole or any part of the proceeding or in giving an opportunity 

to the assessee to be reheard under the proviso to section 39, or 

(ii) the period during which the assessment proceeding is stayed by an order or injunction of any 

court, or 

7[(iia) the period (not exceeding sixty days) commencing from the date on which the 8[Assessing 
Officer]  received  the  declaration  under  sub-section  (1)  of  section  18C  and  ending  with  the  date  on 
which the order under sub-section (3) of that section is made by him, or] 

(iii)  in  a  case  where  an  application  made  before  the  Wealth-tax  Settlement  Commission  under 
section 22C is rejected by it or is not allowed to be proceeded with by it, the period commencing from 
the  date  on  which  such  application  is  made  and  ending  with  the  date  on  which  the  order  under          
sub-section (1) of section 22D is received by the Commissioner under sub-section (2) of that section, 

shall be excluded: 

9[Provided that where immediately after the exclusion of the aforesaid time or period, the period of 
limitation  referred  to  in  sub-sections  (1),  (2)  and  (3)  available  to  the  Assessing  Officer  for  making  an 
order of assessment or reassessment, as the case may be, is less than sixty days, such remaining period 
shall  be  extended  to  sixty  days  and  the  aforesaid  period  of  limitation  shall  be  deemed  to  be  extended 
accordingly:] 

1. Subs. by Act 14 of 2001, s. 97, for “23” (w.e.f. 1-6-2001). 
2. Subs. by s. 97, ibid., for “two years” (w.e.f. 1-6-2001). Earlier the quoted words were substituted by Act 4 of 1988, s. 140, for 

“four years” (w.e.f. 1-4-1989). 

3. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f 1-4-1988). 
4. Subs. by Act 14 of 2001, s. 97, for the proviso (w.e.f. 1-6-2001). Earlier the proviso was inserted by Act 4 of 1988, s. 140 

(w.e.f. 1-4-1989). 

5. Ins. by Act 21 of 2006, s. 57 (w.e.f. 1-6-2006). 
6. Subs. by Act 23 of 2012, s. 117, for “after the 1st day of April, 2005” (w.e.f. 1-7-2012). 
7. Ins. by Act 67 of 1984, s. 56 (w.e.f. 1-10-1984). 
8. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
9. Ins. by Act 49 of 1991, s. 75 (w.e.f. 27-9-1991). 

31 

                                                           
1 [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.] 

Explanation 2.—Where, by an order referred to in sub-section (4), any asset is excluded from the net 
wealth of one person and held to be the asset of another person, then, an assessment in respect of such 
asset  on  such  other  person  shall,  for  the  purposes  of  sub-section  (2)  of  section  17  and  this  section,  be 
deemed to be one made in consequence of, or to give effect to, any finding or direction contained in the 
said order, provided such other person was given an opportunity of being heard before the said order was 
passed.] 

2[17B.   Interest  for  defaults  in  furnishing  return  of  net  wealth.—(1)  Where  the  return  of  net 
wealth  for  any  assessment  year  under  sub-section  (1)  of  section  14  or  section  15,  or  in  response  to  a 
notice under clause (i) of sub-section (4) of section 16, is furnished after the due date, or is not furnished, 
the assessee shall be liable to pay simple interest at the rate of 3[one per cent.] for every month or part of a 
month comprised in the period commencing on the date immediately following the due date, and,— 

(a) where the return is furnished after the due date, ending on the date of furnishing of the return, 

or 

(b) where no return has been furnished, ending on the date of completion of the assessment under 

sub-section (5) of section 16, 

on the amount of tax payable on the net wealth as determined 4[under sub-section (1) of section 16 or] on 
regular assessment. 

Explanation 1.—In this section, “due date” means the date specified in sub-section (1) of section 14 

as applicable in the case of the assessee. 

5[Explanation 2.—In this sub-section, “tax payable on the net wealth as determined under sub-section 

(1) of section 16” shall not include the additional wealth-tax, if any, payable under section 16.] 

Explanation  3.—Where, in  relation to  an  assessment  year,  an  assessment  is  made  for  the  first time 
under section 17, the assessment so made shall be regarded as a regular assessment for the purposes of 
this section. 

4[Explanation 4.—In this sub-section, “tax payable on the net wealth as determined under sub-section 
(1) of section 16 or on regular assessment” shall, for the purposes of computing the interest payable under 
section 15B, be deemed to be tax payable on the net wealth as declared in the return.] 

(2)  The  interest  payable  under  sub-section  (1)  shall  be  reduced  by  the  interest,  if  any,  paid  under 

section 15B towards the interest chargeable under this section. 

1. Ins. by Act 18 of 2008, s. 61 (w.r.e.f. 1-6-2007). 

2. Ins. by Act 4 of 1988, s. 141 (w.e.f. 1-4-1989). 

3. Subs. by Act 54 of 2003, s. 19, for “one and one-fourth per cent.” (w.e.f. 8-9-2003). Earlier the quoted words were substituted 

by Act 14 of 2001, s. 98, for “two per cent.” (w.e.f. 1-6-2001). 

4. Ins. by Act 3 of 1989, s. 67 (w.e.f. 1-4-1989). 

5. Subs. by s. 67, ibid., for the Explanation (w.e.f. 1-4-1989). 

32 

                                                           
(3) Where the return of net wealth for any assessment year, required by a notice under sub-section (1) 
of section 17, issued 1[after the determination of net wealth under sub-section (1) of section 16 or] after 
the completion of an assessment under sub-section (3) or sub-section (5) of section 16 or section 17, is 
furnished after the expiry of the time allowed under such notice, or is not furnished, the assessee shall be 
liable to pay simple interest at the rate of 2[one per cent.] for every month or part of a month comprised in 
the  period  commencing  on  the  day  immediately  following  the  expiry  of  the  time  allowed  as  aforesaid, 
and,— 

(a)  where  the  return  is  furnished  after  the  expiry  of  the  time  aforesaid,  ending  on  the  date  of 

furnishing the return; or 

(b)  where  no  return  has  been  furnished,  ending  on  the  date  of  completion  of  the  reassessment 

under section 17, 

on the amount by which the tax on the net wealth determined on the basis of such reassessment exceeds 
the tax on the net wealth as determined 1[under sub-section (1) of section 16 or] on the basis of the earlier 
assessment aforesaid. 

3* 

* 

* 

* 

* 

(4)  Where,  as  a  result  of  an  order  under  section  23  or  section  24  or  section  25  or  section  27  or          

section 29 or section 35 or any order of the Wealth-tax Settlement Commission under sub-section (4) of 
section  22D,  the  amount  of tax  on  which  interest  was  payable under this section  has  been  increased  or 
reduced, as the case may be, the interest shall be increased or reduced accordingly, and,— 

(i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee a 
notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall 
be deemed to be a notice under section 30 and the provisions of this Act shall apply accordingly, and 

(ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded. 

(5)  The  provisions  of  this  section  shall  apply  in  respect  of  assessments,  for  the  assessment  year 

commencing on the 1st day of April, 1989 and subsequent assessment years.] 

4 [18.  Penalty  for  failure  to  furnish  returns,  to  comply  with  notices  and  concealment  of                  

assets,  etc.—(1)  If  the 5  [Assessing  Officer],  6 [Deputy  Commissioner  (Appeals)],  7 [Commissioner 
(Appeals),]  8 [Chief  Commissioner  or  Commissioner]  or  Appellate  Tribunal  in  the  course  of  any 
proceedings under this Act is satisfied that any person— 

9* 

* 

* 

* 

* 

(b)  has  10 ***  failed  to  comply  with  a  notice  under  sub-section  (2)  or  sub-section  (4)  of                

section 16; or 

1. Ins. by Act 3 of 1989, s. 67 (w.e.f. 1-4-1989). 
2. Subs. by Act 54 of 2003, s. 19, for “one and one-fourth per cent.” (w.e.f. 8-9-2003). Earlier the quoted words were substituted 

by Act 14 of 2001, s. 98, for “two per cent.” (w.e.f. 1-6-2001). 
3. The Explanation omitted by Act 3 of 1989, s. 67 (w.e.f. 1-4-1989). 
4. Restored by s. 95, ibid. (w.e.f. 1-4-1989). Earlier subs. by Act 4 of 1988, s. 142 (w.e.f. 1-4-1989) and also substituted by Act 

46 of 1964, s. 18 (w.e.f. -1-4-1965). 

5. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
6. Subs. by s. 127, ibid., for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 
7. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 
8. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988). 
9.  Clause  (a)  omitted  by  Act  3  of  1989,  s.  68  (w.e.f.  1-4-1989).  Earlier  it  was  amended  by  Act  46  of  1986,  s.  33                                

(w.e.f. 10-9-1986). 

10. The words “without reasonable cause” omitted by Act 46 of 1986, s. 33 (w.e.f. 10-9-1986). 

33 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
(c) has concealed the particulars of any assets or furnished inaccurate particulars of any assets or 

debts, 

he or it may, by order in writing, direct that such person shall pay by way of penalty— 

1* 

* 

* 

* 

* 

2[(ii) in the cases referred to in clause (b), in addition to the amount of wealth-tax payable by him, a 
sum  which  shall  not  be  less  than  one  thousand  rupees  but  which  may  extend  to  twenty-five  thousand 
rupees for each such failure;] 

3[(iii) in the cases referred to in clause (c), in addition to any wealth-tax payable by him, a sum which 
shall not be less than, but which shall not exceed five times, the amount of tax sought to be evaded by 
reason of the concealment of particulars of any assets or the furnishing of inaccurate particulars in respect 
of any assets or debts: 

4[Provided that  in  the  cases  referred  to  in  clause  (b),  no  penalty  shall  be  imposable  if  the  person 

proves that there was a reasonable cause for the failure referred to in that clause.] 

Explanation 1.—For the purposes of clause (iii) of this sub-section, the expression “the amount of tax 

sought to be evaded”— 

(a) in a case to which Explanation 3 applies, means the tax on the net wealth assessed ; 

(b) in any other case, means the difference between the tax on the net wealth assessed and the tax 
that  would  have  been  chargeable  had  the  net  wealth  assessed  been  reduced  by  the  amount  which 
represents the value of any assets in respect of which particulars have been concealed or inaccurate 
particulars have been furnished and of any debts in respect of which inaccurate particulars have been 
furnished. 

Explanation 2.—Where in respect of any facts material to the computation of the net wealth of any 

person under this Act,— 

(A) such  person  fails  to  offer  an  explanation  or  offers  an  explanation  which  is  found  by 
the  5 [Assessing  Officer]  or  the  6 [Deputy  Commissioner  (Appeals)]   7 [or  the  Commissioner 
(Appeals)] 8[or the Commissioner] to be false, or 

(B) such person offers an explanation which he is 9[not able to substantiate and fails to prove that 
such  explanation  is bona  fide and  that  all  the  facts  relating  to  the  same  and  material  to  the 
computation of his net wealth have been disclosed by him,] 

then, the amount added or disallowed in computing the net wealth of such person as a result thereof shall, 
for the purposes of clause (c) of this sub-section, be deemed to represent the value of the assets in respect 
of which particulars have been concealed. 

1.  Clause  (i)  omitted  by  Act  3  of  1989,  s.  68  (w.e.f.  1-4-1989).  Earlier  it  was  substituted  by  Act  41  of  1975,  s.  91                             

(w.e.f. 1-4-1976). 

2. Subs. by s. 68, ibid., for clause (ii) (w.e.f. 1-4-1989). Earlier it was substituted by Act 41 of 1975, s. 91 (w.e.f. 1-4-1976). 
3. Subs. by Act 41 of 1975, s. 91, for clause (iii) and the Explanations (w.e.f. 1-4-1975). Earlier clause (iii) and the Explanations 

were substituted by Act 19 of 1968, s. 32 (w.e.f. 1-4-1968).  

4.  Subs.  by  Act  3  of  1989,  s.  68,  for  the  proviso  (w.e.f.  1-4-1989).  Earlier  it  was  inserted  by  Act  46  of  1986,  s.  33                            

(w.e.f. 10-9-1986). 

5. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
6. Subs. by s. 127, ibid., for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 
7. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 
8. Ins. by Act 20 of 2002, s. 110 (w.e.f. 1-6-2002).  
9. Subs. by Act 46 of 1986, s. 33, for “not able to substantiate” (w.e.f. 10-9-1986). 

34 

 
 
 
 
 
 
 
 
                                                           
1* 

* 

* 

* 

* 

2[Explanation 3.—Where any person 3*** fails, without reasonable cause, to furnish within the period 
specified in sub-section (1) of section 17A, a return of his net wealth which he is required to furnish under 
section 14 in respect of any assessment year commencing on or after the 1st day of April, 1989, and until 
the expiry of the period aforesaid, no notice has been issued to him under clause (i) of sub-section (4) of 
section  16  or  sub-section  (1)  of  section  17  and  the  Assessing  Officer  or  the  Deputy  Commissioner 
(Appeals) or the Commissioner (Appeals) is satisfied that in respect of such assessment year such person 
has assessable net wealth, then, such person shall, for the purposes of clause (c) of this sub-section, be 
deemed to have concealed the particulars of his assets or furnished inaccurate particulars of any assets or 
debts in respect of such assessment year, notwithstanding that such person furnishes a return of his net 
wealth at any time after the expiry of either of the periods aforesaid applicable to him in pursuance of a 
notice under section 17.] 

Explanation 4.—Where the value of any asset returned by any person is less than seventy per cent. of 
the value of such asset as determined in an assessment under section 16 or section 17, such person shall 
be deemed to have furnished inaccurate particulars of such asset within the meaning of clause (c) of this 
sub-section, unless he proves that the value of the asset as returned by him is the correct value.] 

4[Explanation 5.—Where in the course of a search under section 37A, the assessee is found to be the 
in 
owner  of  any  money,  bullion, 
this Explanation referred to as assets) and the assessee claims that such assets represent or form part of 
his net wealth,— 

jewellery  or  other  valuable  article  or 

thing  (hereafter 

(a) on any valuation date falling before the date of the search, but the return in respect of the net 
wealth on such date has not been furnished before the date of the search or, where such return has 
been furnished before the said date, such assets have not been declared in such return; or 

(b) on any valuation date falling on or after the date of the search, 

then, notwithstanding that such assets are declared by him in any return of net wealth furnished on or after 
the  date  of  the  search,  he  shall,  for  the  purposes  of  imposition  of  a  penalty  under  clause  (c)  of                         
sub-section  (1) of this section, be  deemed  to  have  concealed  the  particulars of such  assets  or  furnished 
inaccurate particulars of such assets, 5[unless— 

(1) such assets are recorded,— 

(i) in a case falling under clause (a), before the date of the search; and 

(ii) in a case falling under clause (b), on or before such date, 

in the books of account, if any, maintained by him or such assets are otherwise disclosed to the 6[Chief 
Commissioner or Commissioner] before the said date; or 

(2)   he, in the course of the search, makes a statement under sub-section (4) of section 37A that any 
money, bullion, jewellery or other valuable article or thing found in his possession or under his control, 
forms part of his net wealth which has not been disclosed so far in his return of net wealth to be furnished 
before the expiry of the time specified in sub-section (1) of section 14, and also specifies in the statement 
the manner in which such net wealth has been acquired and pays the tax, together with interest, if any, in 
respect of such net wealth].] 

1. The proviso omitted by Act 46 of 1986, s. 33 (w.e.f. 10-9-1986). 
2. Subs. by Act 3 of 1989, s. 68, for Explanation 3 (w.e.f. 1-4-1989).  
3. The words “who has not previously been assessed under this Act” omitted by Act 20 of 2002, s. 110 (w.e.f. 1-4-2003). 
4. Ins. by Act 67 of 1984, s. 57 (w.e.f. 1-10-1984). 
5. Subs. by Act 46 of 1986, s. 33, for certain words (w.e.f. 10-9-1986). 
6. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988). 

35 

 
 
 
 
 
 
 
 
                                                           
1[Explanation  6.—Where  any  adjustment  is  made  in  the  wealth  declared  in  the  return  under  the 
proviso to clause (a) of sub-section (1) of section 16 and additional wealth-tax charged under that section, 
the provisions of this sub-section shall not apply in relation to the adjustments so made.] 

2[(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).] 

(2)  No  order  shall  be  made  under  sub-section  (1)  unless  the  person  concerned  has  been  given  a 

reasonable opportunity of being heard. 

3* 

* 

* 

* 

* 

4[(3) No order imposing a penalty under sub-section (1) shall be made,— 

(i) by the Income-tax Officer, where the penalty exceeds ten thousand rupees; 

(ii)  by  the  5 [Assistant  Commissioner or  Deputy  Commissioner],  where  the  penalty  exceeds 

twenty thousand rupees, 

except with the prior approval of the 6[Joint Commissioner].] 

7* 

* 

* 

* 

* 

(4) A 8[Deputy Commissioner (Appeals)], 9[a Commissioner (Appeals),] a 10[Chief Commissioner or 
Commissioner] or the Appellate Tribunal on making an order under this section imposing a penalty, shall 
forthwith send a copy of the same to the 11[Assessing Officer.] 

12[(5) No order imposing a penalty under this section shall be passed— 

(i) in a case where the assessment to which the proceedings for imposition of penalty relate is the 
subject-matter of an appeal to the Deputy Commissioner (Appeals) or the Commissioner (Appeals) 
under section 23 or an appeal to the Appellate Tribunal under sub-section (2) of section 24, after the 
expiry of the financial year in which the proceedings, in the course of which action for the imposition 
of penalty has been initiated, are completed, or six months from the end of the month in which the 
order of the Deputy Commissioner (Appeals) or the Commissioner (Appeals) or, as the case may be, 
the Appellate Tribunal is received by the Chief Commissioner or Commissioner, whichever is later ; 

(ii) in a case where the relevant assessment is the subject-matter of revision under sub-section (2) 
of  section  25,  after  the  expiry  of  six  months  from  the  end  of  the  month  in  which  such  order  of 
revision is passed; 

1. Ins. by Act 3 of 1989, s. 68 (w.e.f. 1-4-1989). 
2. Ins. by Act 18 of 2008, s. 62 (w.r.e.f. 1-4-1989). Earlier sub-section (1) was inserted by Act 32 of 1971, s. 33 (w.e.f. 1-4-1972) 

which was later omitted by Act 41 of 1975, s. 91 (w.e.f. 1-4-1976). 

3.  Sub-sections  (2A)  and  (2B)  omitted  by  Act  41  of  1975,  s.  91 (w.e.f.  1-4-1976).  Earlier  these  sub-sections  were  inserted  by                 

Act 15 of 1965, s. 20 (w.e.f. 11-9-1965). 

4. Subs. by Act 3 of 1989, s. 68, for sub-section (3) (w.e.f. 1-4-1989). 
5. Subs. by Act 21 of 1998, s. 66, for “Assistant Commissioner” (w.e.f. 1-10-1998). 
6. Subs. by s. 66, ibid. for “Deputy Commissioner” (w.e.f. 1-10-1998). 
7. Sub-section (3A) omitted by Act 3 of 1989, s. 68 (w.e.f. 1-4-989). 
8. Subs. by Act 4 of 1988, s. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 
9. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 
10. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988). 
11. Subs. by s. 127, ibid., for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
12. Subs. by Act 3 of 1989, s. 68, for sub-section (5) (w.e.f. 1-4-1989). 

36 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
(iii) in any other case, after the expiry of the financial year in which the proceedings, in the course 
of which action for the imposition of penalty has been initiated, are completed, or six months from 
the end of the month in which action for imposition of penalty is initiated, whichever period expires 
later. 

Explanation.—In computing the period of limitation for the purposes of this section,— 

(i) any period during which the immunity granted under section 22H remained in force; 

(ii)  the  time  taken  in  giving  an  opportunity  to  the  assessee  to  be  reheard  under  the  proviso  to 

section 39; and 

(iii) any period during which a proceeding under this section for the levy of penalty is stayed by 

an order or injunction of any court, 

shall be excluded. 

(6) The  provisions of  this  section as  they  stood immediately  before  their  amendment  by  the  Direct 
Tax Laws (Amendment) Act, 1989 (3 of 1989) shall apply to and in relation to any assessment for the 
assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references 
in this section to the other provisions of this Act shall be construed as references to those provisions as for 
the time being in force and applicable to the relevant assessment year.] 

1[18A. Penalty  for  failure  to  answer  questions,  sign  statements,  furnish  information,  allow 

inspection, etc.—(1) If any person,— 

(a)  being  legally  bound  to  state  the  truth  of  any  matter  touching  the  subject  of  his  assessment, 
refuses  to  answer  any  question  put  to  him  by  a  wealth-tax  authority  in  the  exercise  of  his  powers 
under this Act; or 

(b) refuses to sign any statement made by him  in the course of any proceedings under this Act, 

which a wealth-tax authority may legally require him to sign; or 

(c)  to  whom  a  summons  is  issued  under  sub-section  (1)  of  section  37  either  to  attend  to  give 
evidence or produce books of account or other documents at a certain place and time, omits to attend 
or produce the books of account or documents at the place and time, 

he shall pay, by way of penalty, a sum which shall not be less than five hundred rupees but which may 
extend to ten thousand rupees for each such default or failure: 

Provided that  no  penalty  shall  be  imposable  under  clause  (c)  if  the  person  proves  that  there  was 

reasonable cause for the said failure. 

(2) If a person fails to furnish in due time any statement or information which such person is bound to 
furnish to the Assessing Officer under section 38, he shall pay, by way of penalty, a sum which shall not 
be less than one hundred rupees but which may extend to two hundred rupees for every day during which 
the failure continues: 

Provided that no penalty shall be imposable under this sub-section if the person proves that there was 

reasonable cause for the said failure. 

1.  Restored  by  Act  3  of  1989,  s.  95  (w.e.f.  1-4-1989). Substituted  by  Act  3  of  1989,  s.  69,  for  section 18A  (w.e.f.  1-4-1989). 
Earlier section 18A was amended by 46 of 1986, s. 34 (w.e.f. 10-9-1986) and Act 29 of 1977, s. 39 and the Fifth Schedule 
(w.e.f. 10-7-1978) which was inserted by Act 41 of 1975, s. 92 (w.e.f. 1-4-1976).  

37 

                                                           
(3) Any penalty imposable under sub-section (1) or sub-section (2) shall be imposed— 

(a) in  a  case  where  the  contravention,  failure  or  default  in  respect  of  which  such  penalty  is 
imposable occurs in the course of any proceeding before a wealth-tax authority not lower in rank than 
a 1[Joint Director] or a  2[Joint Commissioner], by such wealth-tax authority; 

(b) in any other case, by the 1[Joint Director] or the 2[Joint Commissioner]. 

(4)  No  order  under  this  section  shall  be  passed  by  any  wealth-tax  authority  referred  to  in                         

sub-section (3) unless the person on whom the penalty is proposed to be imposed has been heard, or has 
been given a reasonable opportunity of being heard in the matter, by such authority. 

Explanation.—In  this  section,  “wealth-tax  authority”  includes  a  Director  General,  Director,  1[Joint 
Director],  3[Assistant Director or Deputy Director] and a Valuation Officer while exercising the powers 
vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the 
matters specified in sub-section (1) of section 37.] 

4 [18B. Power  to  reduce  or  waive  penalty  in  certain  cases.—(1)  Notwithstanding  anything 
contained  in  this  Act,  the 5[6***  Commissioner]  may,  in  his  discretion,  whether  on  his  own  motion  or 
otherwise,— 

7* 

* 

* 

* 

* 

(ii) reduce or waive the amount of penalty imposed or imposable on a person under clause (iii) of 

sub-section (1) of section 18, 

if he is satisfied that such person,— 

8* 

* 

* 

* 

* 

(b) in the case referred to in clause (ii), has, prior to the detection by the 9[Assessing Officer], of 
the concealment of particulars of assets or of the inaccuracy of particulars furnished in respect of any 
asset or debt in respect of which the penalty is imposable, voluntarily and in good faith made full and 
true disclosure of such particulars, 

and also has co-operated in any inquiry relating to the assessment of his net wealth and has either paid or 
made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order 
passed under this Act in respect of the relevant assessment year. 

Explanation 10***.—For the purposes of this sub-section, a person shall be deemed to have made full 
and  true  disclosure  of  the  particulars  of  his  assets  or  debts  in  any  case  where  the  excess  of  net  wealth 
assessed over the net wealth returned is of such a nature as not to attract the provisions of clause (c) of 
sub-section (1) of section 18. 

11*   

* 

* 

* 

* 

1. Subs. by Act 21 of 1998, s. 66, for “Deputy Director” (w.e.f. 1-10-1998). 
2. Subs. by s. 66, ibid. for “Deputy Commissioner” (w.e.f. 1-10-1998). 
3. Subs. by s. 66, ibid. for “Assistant Director” (w.e.f. 1-10-1998). 
4. Ins. by Act 41 of 1975, s. 92 (w.e.f. 1-10-1975). 
5. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988). 
6. The words “Chief Commissioner or” omitted by Act 38 of 1993, s. 40 (w.e.f. 1-6-1993). 
7. Clause (i) omitted by Act 3 of 1989, s. 70 (w.e.f. 1-4-1989). 
8. Clause (a) omitted by s. 70, ibid. (w.e.f. 1-4-1989). 
9. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
10.  The  figure  “1” omitted  by  Act  32 of  1985,  s.  38 (w.e.f.  24-5-1985).  Earlier  the  Explanation  renumbered  as  Explanation  1 

thereof by Act 67 of 1984, s. 58 (w.e.f. 1-10-1984). 

11. Explanation 2 omitted by s. 38, ibid. (w.e.f. 24-5-1985). Earlier it was inserted by Act 67 of 1984, s. 58 (w.e.f. 1-10-1984). 

38 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
(2)  Notwithstanding  anything  contained  in  sub-section  (1),  if  in  a  case  falling  under  clause  (c)  of            

sub-section (1) of section 18, the net wealth in respect of which the penalty is imposed or imposable for 
the relevant assessment year, or, where such disclosure relates to more than one assessment year, the net 
wealth  for  any  one  of  the  relevant  assessment  years,  exceeds  five  hundred  thousand  rupees,  no  order 
reducing or waiving the penalty under sub-section (1) shall be made by 1[the Commissioner except with 
the previous approval of the Chief Commissioner or Director General, as the case may be]. 

(3) Where an order has been made under sub-section (1) in favour of any person, whether such order 
relates to one or more assessment years, he shall not be entitled to any relief under this section in relation 
to any other assessment year at any time after the making of such order: 

2[Provided that  where  an  order  has  been  made  in  favour  of  any  person  under  sub-section  (1)  on  or 
before the 24th day of July, 1991, such person shall be entitled to further relief only once in relation to 
other  assessment  year  or  years  if  he  makes  an  application  to  the  wealth-tax  authority  referred  to  in           
sub-section (4) at any time before the 1st day of April, 1992.] 

(4) Without prejudice to the powers conferred on him by any other provision of this Act, the 3[4*** 
Commissioner] may, on an application made in this behalf by an assessee, and after recording his reasons 
for so doing, reduce or waive the amount of any penalty payable by the assessee under this Act or stay or 
compound any proceeding for the recovery of any such amount, if he is satisfied that— 

(i)  to  do  otherwise  would  cause  genuine  hardship  to  the  assessee,  having  regard  to  the 

circumstances of the case, and 

(ii) the assessee has co-operated in any inquiry relating to the assessment or any proceeding for 

the recovery of any amount due from him. 

(5)  Every  order  made  under  this  section  shall  be  final  and  shall  not  be  called  into  question  by  any 

court or any other authority.] 

5[(6) The provisions of this section as they stood immediately before their amendment by the Direct 
Tax Laws (Amendment) Act, 1989 (3 of 1989), shall apply to and in relation to any assessment for the 
assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, and references 
in this section to the other provisions of this Act shall be construed as references to those provisions as for 
the time being in force and applicable to the relevant assessment year.] 

6[18BA. Power  of  Commissioner  to  grant  immunity  from  penalty.—(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. 

1.  Subs.  by  Act  38  of  1993,  s.  40,  for  “the  Chief  Commissioner  or  Commissioner,  except  with  the  previous  approval  of  the 

Board” (w.e.f. 1-6-1993). 

2. Ins. by Act 49 of 1991, s. 76 (w.e.f. 27-9-1991). 
3. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988). 
4. The words “Chief Commissioner or” omitted by Act 38 of 1993, s. 40 (w.e.f. 1-6-1993). 
5. Ins. by Act 3 of 1989, s. 70 (w.e.f. 1-4-1989). 
6. Ins. by Act 18 of 2008, s. 63 (w.e.f. 1-4-2008). 

39 

                                                           
(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.] 

1[CHAPTER IVA 

SPECIAL PROVISION FOR AVOIDING REPETITIVE APPEALS 

18C. Procedure when assessee claims identical question of law is pending before High Court or 
Supreme Court.—(1) Notwithstanding anything contained in this Act, where an assessee claims that any 
question  of  law  arising  in  his  case  for  an  assessment  year  which  is  pending  before  the  2[Assessing 
Officer]  or  any  appellate  authority  (such  case  being  hereafter  in  this  section  referred  to  as  the  relevant 
case) is identical with a question of law arising in his case for another assessment year which is pending 
before the High Court or the Supreme Court on a reference under section 27 3[or in appeal under section 
27A  before  the  High  Court]  or  in  appeal  before  the  Supreme  Court  under  section  29  (such  case  being 
hereafter in this section referred to as the other case), he may furnish to the 2[Assessing 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 2[Assessing Officer] or the appellate authority, as the case may be, 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 4[in appeal before the High 
Court under section 27A or the Supreme Court under section 29]. 

(2)  Where  a  declaration  under  sub-section  (1)  is  furnished  to  any  appellate  authority,  the  appellate 
authority shall call for a report from the 2[Assessing Officer] on the correctness of the claim made by the 
assessee  and,  where  the 2[Assessing  Officer]  makes  a  request  to  the  appellate  authority  to  give  him  an 
opportunity of being heard in the matter, the appellate authority shall allow him such opportunity. 

(3)  The 2[Assessing  Officer]  or  the  appellate  authority,  as  the  case  may  be,  may,  by  order  in 

writing,— 

(i) admit  the  claim  of  the  assessee  if  he  or  it  is  satisfied that  the  question  of  law  arising  in  the 

relevant case is identical with the question of law in the other case; or 

(ii) reject the claim if he or it is not so satisfied. 

(4) Where a claim is admitted under sub-section (3),— 

(a)  the 2[Assessing  Officer]  or,  as  the  case  may  be,  the  appellate  authority  may  make  an  order 
disposing of the relevant case without awaiting the final decision on the question of law in the other 
case; and 

1. Ins. by Act 67 of 1984, s. 59 (w.e.f. 1-10-1984). 
2. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
3. Ins. by Act 20 of 2002, s. 111 (w.e.f. 1-6-2002). 
4. Subs. by s. 111, ibid., for “for a reference before the High Court or the Supreme Court under section 27 or in appeal before the 

Supreme Court under section 29” (w.e.f.1-6-2002). 

40 

                                                           
(b) the assessee shall not be entitled to raise, in relation to the relevant case, such question of law 
in appeal before any appellate authority or 1[in appeal before the High Court under section 27A or the 
Supreme Court under section 29]. 

(5) When the decision on the question of law in the other case becomes final, it shall be applied to the 
relevant  case  and  the  2 [Assessing  Officer]  or  the  appellate  authority,  as  the  case  may  be,  shall,  if 
necessary, amend the order referred to in clause (a) of sub-section (4) conformably to such decision. 

(6) An order under sub-section (3) shall be final and shall not be called in question in any proceeding 

by way of appeal, reference or revision under this Act. 

Explanation.—In this section,— 

(a)  “appellate  authority”  means  the 3[Deputy  Commissioner  (Appeals)],  or  the  Commissioner 

(Appeals) or the Appellate Tribunal ; 

(b) “case”, in relation to an assessee, means any proceeding under this Act for the assessment of 

the net wealth of the assessee or for the imposition of any penalty on him.] 

CHAPTER IVB 

CHARGE OF ADDITIONAL WEALTH-TAX IN CERTAIN CASES 

18D. [Additional wealth-tax].—Omitted by the Direct Tax Laws (Amendment) Act, 1989 (3 of 1989), 
s. 95 (w.e.f. 1-4-1989. Earlier it was inserted by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), 
s. 143 (w.e.f. 1-4-1989). 

CHAPTER V 

LIABILITY TO ASSESSMENT IN SPECIAL CASES 

19. Tax  of  deceased  person  payable  by  legal  representative.—(1)  Where  a  person  dies,  his 
executor, administrator or other legal representative shall be liable to pay out of the estate of the deceased 
person,  to  the  extent  to  which  the  estate  is  capable  of  meeting  the  charge,  the  wealth-tax  assessed  as 
payable by such person, or any sum, which would have been payable by him under this Act if he had not 
died. 

(2) Where a person dies without having furnished a return under the provisions of section 14 or after 
having  furnished  a  return  which  the  2[Assessing  Officer]  has  reason  to  believe  to  be  incorrect  or 
incomplete,  the 2[Assessing  Officer]  may  make  an  assessment  of  the  net  wealth  of  such  person  and 
determine the wealth-tax payable by the person on the basis of such assessment, and for this purpose may, 
by the issue of the appropriate notice which would have had to be served upon the deceased person if he 
had survived, require from the executor, administrator or other legal representative of the deceased person 
any  accounts,  documents  or  other  evidence  which  might  under  the  provisions  of  section  16  have  been 
required from the deceased person. 

(3) The provisions of sections 14, 15 and 17 shall apply to an executor, administrator or other legal 

representative as they apply to any person referred to in those sections. 

4[19A. Assessment in the case of executors.—(1) Subject as hereinafter provided, the net wealth of 

the estate of a deceased person shall be chargeable to tax in the hands of the executor or executors. 

(2) The executor or executors shall for the purposes of this Act be treated as an individual. 

1. Subs. by Act 20 of 2002, s. 111, for “for a reference before the High Court or the Supreme Court under section 27 or in appeal 

before the Supreme Court under section 29” (w.e.f.1-6-2002). 

2. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
3. Subs. by s. 127, ibid. for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 
4. Ins. by Act 46 of 1964, s. 19 (w.e.f. 1-4-1965). 

41 

                                                           
(3) The status of the executor or executors shall for the purposes of this Act as regards residence and 

citizenship be the same as that of the deceased on the valuation date immediately preceding his death. 

(4) The assessment of an executor under this section shall be made separately from any assessment 
that  may  be  made  on  him  in  respect  of  his  own  net wealth  or on  the  net  wealth  of  the  deceased  under 
section 19. 

(5)  Separate  assessments  shall  be  made  under  this  section  in  respect  of  the  net  wealth  as  on  each 
valuation  date  as  is  included  in  the  period  from  the  date  of  the  death  of  the  deceased  to  the  date  of 
complete distribution to the beneficiaries of the estate according to their several interests. 

(6)  In  computing  the  net  wealth  on  any  valuation  date  under  this  section,  any  assets  of  the  estate 
distributed to, or applied to the benefit of, any specific legatee of the estate prior to that valuation date 
shall be excluded, but the assets so excluded shall, to the extent such assets are held by the legatee on any 
valuation date, be included in the net wealth of such specific legatee on that valuation date. 

Explanation.—In this section, “executor” includes an administrator or other person administering the 

estate of a deceased person.] 

20. Assessment after partition of a Hindu undivided family.—(1) Where, at the time of making an 
assessment, it is brought to the notice of the 1[Assessing Officer] that a partition has taken place among 
the members of a Hindu undivided family, and the 1[Assessing Officer], after inquiry, is satisfied that the 
joint family property has been partitioned as a whole among the various members or group of members in 
definite portions, he shall record an order to that effect and shall make assessment on the net wealth of the 
undivided family as such for the assessment year or years, including the year relevant to the previous year 
in which the partition has taken place, if the partition has taken place on the last day of the previous year 
and each member or group of members shall be liable jointly and severally for the tax assessed on the net 
wealth of the joint family as such. 

(2) Where the 1[Assessing Officer] is not so satisfied, he may, by order, declare that such family shall 
be deemed for the purposes of this Act to continue to be a Hindu undivided family liable to be assessed as 
such. 

2[20A. Assessment after partial partition of a Hindu undivided family.—Where a partial partition 
has taken place after the 31st day of December, 1978, among the members of a Hindu undivided family 
hitherto assessed as undivided,— 

(a)  such  family  shall  continue  to  be  liable  to  be  assessed  under  this  Act  as  if  no  such  partial 

partition had taken place; 

(b) each member or group of members of such family immediately before such partial partition 
and  the  family  shall  be  jointly  and  severally  liable  for  any  tax,  penalty,  interest,  fine  or  other  sum 
payable  under  this  Act  by  the  family  in  respect  of  any  period,  whether  before  or  after  such  partial 
partition; 

(c) the  several  liability  of  any  member  or  group  of  members  aforesaid  shall  be  computed 

according to the portion of the joint family property allotted to him or it at such partial partition, 

and the provisions of this Act shall apply accordingly. 

Explanation.—For the purposes of this section, “partial partition” shall have the meaning assigned to 

it in clause (b) of the Explanation to section 171 of the Income-tax Act.] 

1. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
2. Ins. by Act 44 of 1980, s. 39 (w.e.f. 1-4-1980). 

42 

                                                           
21. Assessment  when  assets  are  held  by  courts  of  wards,  administrators-general,                           

etc.—(1) 1[Subject to the provisions of sub-section (1A), in the case of assets chargeable to tax under this 
Act], which are held by a court of wards or an administrator-general or an official trustee or any receiver 
or manager or any other person, by whatever name called, appointed under any order of a court to manage 
property  on  behalf  of  another,  or  any  trustee  appointed  under  a  trust  declared  by  a  duly  executed 
instrument in writing, whether testamentary or otherwise (including a trustee under a valid deed of wakf), 
the  wealth-tax  shall  be  levied  upon  and  recoverable  from  the  court  of  wards,  administrator-general, 
official trustee, receiver, manager or trustee, as the case may be, in the like manner and to the same extent 
as it would be leviable upon and recoverable from the person 2[on whose behalf or for whose benefit] the 
assets are held, and the provisions of this Act shall apply accordingly. 

3[Explanation.—A trust which is not declared by a duly executed instrument in writing (including a 
valid deed of wakf) shall be deemed, for the purposes of this sub-section, to be a trust declared by a duly 
executed instrument in writing if a statement in writing, signed by the trustee or trustees, setting out the 
purpose or purposes of the trust, particulars as to the trustee or trustees, the beneficiary or beneficiaries 
and the trust property, is forwarded to the 4[Assessing Officer],— 

(i) where  the trust  has  been  declared  before the 1st  day  of June,  1981,  within  a  period  of three 

months from that day; and 

(ii) in any other case, within three months from the date of declaration of the trust.] 

5[(1A)  Where  the  value  or  aggregate  value  of  the  interest  or  interests  of  the  person  or  persons  on 
whose behalf or for whose benefit such assets are held falls short of the value of any such assets, then, in 
addition to the wealth-tax leviable and recoverable under sub-section (1), the wealth-tax shall be levied 
upon and recovered from the court of wards, administrator-general, official trustee, receiver, manager or 
other person or trustee aforesaid in respect of the value of such assets, to the extent it exceeds the value or 
aggregate value of such interest or interests, as if such excess value were the net wealth of an individual 
who is a citizen of India and resident in India for the purposes of this Act, and— 

(i) at the rates specified in Part I of Schedule I; or 

(ii) at the rate of three per cent., 

whichever course would be more beneficial to the revenue.] 

(2) Nothing contained in sub-section (1) shall prevent either the direct assessment of the person  2[on 
whose behalf or for whose benefit] the assets above referred to are held, or the recovery from such person 
of the tax payable in respect of such assets. 

(3) Where the guardian or trustee of any person being a minor, lunatic or idiot 6*** holds any assets 
7[on  behalf or  for  the  benefit  of  such  beneficiary],  the  tax  under  this  Act  shall  be  levied  upon  and 
recoverable from such guardian or trustee, as the case may be, in the like manner and to the same extent 
as it would be leviable upon and recoverable from any such beneficiary if of full age, of sound mind and 
in direct ownership of such assets. 

1. Subs. by Act 44 of 1980, s. 40, for “In the case of assets chargeable to tax under this Act” (w.e.f. 1-4-1980). 
2. Subs. by Act 46 of 1964, s. 20, for “on whose behalf” (w.e.f. 1-4-1965). 
3. Ins. by Act 16 of 1981, s. 26 (w.e.f. 1-4-1981). 
4. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
5. Ins. by Act 44 of 1980, s. 40 (w.e.f. 1-4-1980). 
6. The brackets and words “(all of which persons are hereinafter in this sub-section included in the term “beneficiary”) omitted 

by Act 46 of 1964, s. 20 (w.e.f. 1-4-1965). 

7. Subs. by s. 20, ibid., for “on behalf of such beneficiary” (w.e.f. 1-4-1965). 

43 

                                                           
1[(4) 2[Notwithstanding  anything  contained  in the  foregoing  provisions  of  this  section],  where  the 
shares of the persons on whose behalf or for whose benefit any such assets are held are indeterminate or 
unknown,  the  wealth-tax  shall  be  levied  upon  and  recovered  from  the  court  of  wards,  administrator-
general,  official  trustee,  receiver,  manager,  or  other person  aforesaid 3[,  as  the  case  may  be,  in  the  like 
manner and to the same extent as it would be leviable upon and recoverable from an individual who is a 
citizen of India and resident in India] for the purposes of this Act, and— 

(a) at the rates specified in Part I of 4[Schedule I] 5***; or 

(b) at the rate of 6[three per cent.], 

whichever course would be more beneficial to the revenue: 

Provided that in a case where— 

(i) such assets are held 7[under a trust declared by any person by will and such trust is the only 

trust so declared by him]; or 

8[(ia) none of the beneficiaries has net wealth exceeding the amount not chargeable to wealth-tax 
in the case of an individual who is a citizen of India and resident in India for the purposes of this Act 
or is a beneficiary under any other trust; or] 

(ii)  such  assets  are  held  under  a  trust  created  before  the  1st  day  of  March,  1970,  by  a  non-
testamentary  instrument  and  the  9 [Assessing  Officer]  is  satisfied,  having  regard  to  all  the 
circumstances  existing  at  the  relevant  time,  that  the  trust  was  created bona  fide exclusively  for  the 
benefit of the relatives of the settlor or where the settlor is a Hindu undivided family, exclusively for 
the benefit of the members of such family, in circumstances where such relatives or members were 
mainly dependent on the settlor for their support and maintenance; or 

(iii)  such  assets  are  held  by  the  trustees  on  behalf  of  a  provident  fund,  superannuation  fund, 
gratuity fund, pension fund or any other fund created bona fide by a person carrying on a business or 
profession exclusively for the benefit of persons employed in such business or profession, 

wealth-tax shall be charged at the rates specified in Part I of 4[Schedule I] 5***.] 

8[Explanation 1.—For the purposes of this sub-section, the shares of the persons on whose behalf or 
for  whose  benefit any  such  assets  are  held  shall  be deemed  to be indeterminate  or  unknown  unless the 
shares of the persons on whose behalf or for whose benefit such assets are held on the relevant valuation 
date are expressly stated in the order of the court or instrument of trust or deed of wakf, as the case may 
be, and are ascertainable as such on the date of such order, instrument or deed.] 

1.  Subs.  by  Act  19  of  1970,  s.  26,  for  sub-section  (4)  (w.e.f.  1-4-1971).  Earlier  it  was  amended  by  Act  46  of  1964,                                      

s. 20 (w.e.f. 1-4-1965). 

2. Subs. by Act 16 of 1981, s. 26, for “Notwithstanding anything contained in this section” (w.e.f. 1-4-1981). 
3. Subs. by Act 44 of 1980, s. 40, for “as if the persons on whose behalf or for whose benefit assets are held were an individual 

who is a citizen of India and resident in India” (w.e.f. 1-4-1980). 
4. Subs. by Act 66 of 1976, s. 27, for “the Schedule” (w.e.f. 1-4-1977). 
5. The words “in the case of an individual” omitted by Act 32 of 1971, s. 34 (w.e.f. 1-4-1972). 
6. Subs. by Act 44 of 1980, s. 40, for “one and one-half per cent.” (w.e.f. 1-4-1980). 
7. Subs. by s. 40, ibid., for “under a trust declared by him” (w.e.f. 1-4-1980). 
8. Ins. by Act s. 40, ibid. (w.e.f. 1-4-1980). 
9. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 

44 

                                                           
1 [ 2 [Explanation 2].—Notwithstanding  anything  contained  in  section  5,  in  computing  the  net 
wealth 3[for the purposes of this sub-section or sub-section (4A) in any case, not being a case referred to 
in the proviso to this sub-section], any assets referred to in clauses (xv), (xvi), (xxii), (xxiii), (xxiv), (xxv), 
(xxvi), (xxvii), (xxviii) and (xxix) of sub-section (1) of that section shall not be excluded.] 

4[(4A) Notwithstanding anything contained in this section, where the assets chargeable to tax under 
this Act are held by a trustee under an oral trust, the wealth-tax shall be levied upon and recovered from 
such trustee in the like manner and to the same extent as it would be leviable upon and recoverable from 
an individual who is a citizen of India and resident in India for the purposes of this Act, and— 

(a) at the rates specified in Part I of Schedule I; or 

(b) at the rate of three per cent., 

whichever course would be more beneficial to the revenue. 

Explanation.—For the purposes of this sub-section, “oral trust” means a trust which is not declared 
by a duly executed instrument in writing (including a valid deed of wakf) and which is not deemed under 
the Explanation to sub-section (1) to be a trust declared by a duly executed instrument in writing.] 

5[(5) Any person who pays any sum by virtue of the provisions of this section in respect of the net 
wealth  of  any  beneficiary,  shall  be  entitled  to  recover  the  sum  so  paid  from  such  beneficiary,  and  may 
retain out of any assets that he may hold on behalf or for the benefit of such beneficiary, an amount equal 
to the sum so paid. 

Explanation.—In this section, the term “beneficiary” means any person including a minor, lunatic or 

idiot on whose behalf or for whose benefit assets are held by any other person.] 

6[(6)  Nothing  contained  in  this  section  shall  apply  to  and  in  relation  to  any  assessment  for  the 

assessment year commencing on the 1st day of April, 1993 or any subsequent assessment year.] 

7[21A.  Assessment  in  cases  of  diversion  of  property,  or  of  income  from  property,  held  under 
trust for public charitable or religious purposes.—8[Notwithstanding anything contained in clause (i) 
of section 5, where any property is held] under trust for any public purpose of a charitable or religious 
nature in India and— 

9[(i)  any part of such property or any income of such trust [whether derived from such property or 
from voluntary contributions referred to in sub-clause (iia) of clause (24) of section 2 of the Income-tax 
Act] is used or applied, directly or indirectly, for the benefit of 10[any person referred to in sub-section (3) 
of section 13 of the Income-tax Act], or 

1. Ins. by Act 32 of 1971, s. 34 (w.e.f. 1-4-1972). 
2. Explanation renumbered as Explanation 2 thereof by Act 44 of 1980, s. 40 (w.e.f. 1-4-1980).  
3. Subs. by Act 16 of 1981, s. 26, for “for the purposes of this sub-section in any case, not being a case referred to in the proviso” 

(w.e.f. 1-4-1981). 

4. Ins. by s. 26, ibid. (w.e.f. 1-4-1981). 
5. Ins. by Act 46 of 1964, s. 20 (w.e.f. 1-4-1965). 
6. Ins. by Act 18 of 1992, s. 94 (w.e.f. 1-4-1993). 
7. Ins. by Act 16 of 1972, s. 46 (w.e.f. 1-4-1973).  
8. Subs. by Act 33 of 1996, s. 58, for “Where any property is held” (w.r.e.f. 1-4-1993). Earlier the quoted words were substituted 
by  Act  18  of  1992,  s.  95,  for  “Notwithstanding  anything  contained  in  clause  (i)  of  sub-section  (1)  of  section  5,  where  any 
property is held” (w.e.f. 1-4-1993). 

9. Subs. by Act 21 of 1984, s. 34, for certain words (w.e.f. 1-4-1985). 
10.  Restored  by  Act  3  of  1989, s.  95  (w.e.f.  1-4-1989).  Earlier  the  words  “any  interested person”  was  substituted  by  Act  4  of 

1988, s. 144, for the given expression (w.e.f. 1-4-1989). 

45 

                                                           
(ii)   any  part  of  the  income  of  the  trust  [whether  derived  from  such  property  or  from  voluntary 
contributions referred to  in  sub-clause  (iia)  of  clause  (24)  of  section  2  of  the  Income-tax  Act],  being a 
trust created on or after the 1st day of April, 1962, enures, directly or indirectly, for the benefit of 1[any 
person referred to in sub-section (3) of section 13 of the said Act, or] 

2[(iii)  any  funds  of  the  trust  are  invested  or  deposited,  or  any  shares  in  a  company  are  held  by  the 
trust, in contravention of the  provision  of clause  (d) of  sub-section  (1)  of  section  13  of  the  Income-tax 
Act,] 

wealth-tax  shall  be  leviable  upon,  and  recoverable  from,  the  trustee  or  manager  (by  whatever  name 
called) in the like manner and to the same extent as if the property were held by an individual who is a 
citizen of India and resident in India for the purposes of this Act 3***:] 

Provided that in the case of a trust created before the 1st day of April, 1962, the provisions of clause 
(i) shall not apply to any use or application, whether directly or indirectly, of any part of such property or 
any income of such trust for the benefit of 4[any person referred to in sub-section (3) of section 13 of the 
Income-tax Act], if such use or application is by way of compliance with a mandatory term of the trust: 

5* 

* 

* 

* 

* 

6[7[Provided further that],— 

8[(a)  in  the  case  of  any  association  referred  to  in  clause  (21)  of  section  10  of  the  Income-tax 

Act,— 

(i) the provisions of clause (i) and clause (ii) shall not apply; and 

(ii) the other provisions of this section shall apply with the modifications that,— 

(1) for  the  words,  brackets,  letter  and  figures  “in  contravention  of  the  provisions  of  
clause  (d)  of sub-section (1)  of section  13  of the  Income-tax  Act”,  the  words, brackets  and 
figures  “in  contravention  of  the  provisions  contained  in  the  proviso  to  clause  (21)  of           
section 10 of the Income-tax Act” had been substituted; and 

(2) for  the  words  “at  the  maximum  marginal  rate”,  the  words  and  figures  “at  the  rates 

specified in 9[sub-section (2) of section 3]” had been substituted;] 

(b) in  the  case  of  any  institution,  fund  or  trust  referred  to  in  clause  (22)  or  clause  (22A)  or            

clause (23B) or clause (23C) of section 10 of the Income-tax Act, the provisions of 10[clauses (i) to 
(iii)] shall not apply.] 

1. Restored by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989). Earlier the words “any interested person,” was substituted by Act 4 of 1988, 

s. 144, for the given expression (w.e.f. 1-4-1989). 

2. Restored by s. 95, ibid. (w.e.f. 1-4-1989). Earlier clause (iii) was omitted by Act 4 of 1988, s. 144 (w.e.f. 1-4-1989). 
3. The words “but without excluding the value of any asset under sub-section (1) of section 5, and at the maximum marginal rate” 

omitted by Act 18 of 1992, s. 95 (w.e.f. 1-4-1993). 

4. Restored by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989). Earlier the words “any interested person” was substituted by Act 4 of 1988, 

s. 144, for the given expression (w.e.f. 1-4-1989). 

5. The second proviso omitted by Act 18 of 1992, s. 95 (w.e.f. 1-4-1993). Earlier the second proviso was amended by Act 3 of 

1989, s. 95 (w.e.f. 1-4-1989) and Act 4 of 1988, s. 144 (w.e.f. 1-4-1989). 

6. Ins. by Act 21 of 1984, s. 34 (w.e.f. 1-4-1985). 
7. Subs. by Act 18 of 1992, s. 95, for “Provided also that” (w.e.f. 1-4-1993). 
8.  Restored  by  Act  3  of  1989,  s.  95  (w.e.f.  1-4-1989).  Earlier  clause  (a)  was  substituted  by  Act  4  of  1988,  s.  144                              

(w.e.f. 1-4-1989). 

9. Subs. by Act 18 of 1992, s. 95, for “Part I of Schedule I in the case of an individual” (w.e.f. 1-4-1993). 
10. Restored by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989). Earlier “clauses (i) and (ii)” was substituted by Act 4 of 1988, s. 144, for 

the given expression (w.e.f. 1-4-1989). 

46 

 
 
 
 
 
 
 
 
                                                           
Explanation.—For the purposes of this section,— 

1[(a) any part of the property or income of a trust shall be deemed to have been used or applied 
for  the  benefit  of  any  person  referred  to  in  sub-section  (3)  of  section  13  of  the  Income-tax  Act  in 
every case in which it can be so deemed to have been used or applied within the meaning of clause (c) 
of  sub-section  (1)  of  that  section  at  any  time  during  the  period  of  twelve  months  ending  with  the 
relevant valuation date; 

2* 

* 

* 

* 

*] 

(b) “trust” includes any other legal obligation.] 

3[21AA. Assessment when assets are held by  certain associations of persons.—(1) Where assets 
chargeable  to  tax  under  this  Act  are  held  by  an  association  of  persons,  other  than  a  company  or  co-
operative society 4[or society registered under the Societies Registration Act, 1860 (21 of 1860) or under 
any law corresponding to that Act in force in any part of India], and the individual shares of the members 
of the said association in the income or assets or both of the said association on the date of its formation 
or at any time thereafter are indeterminate or unknown, the wealth-tax shall be levied upon and recovered 
from  such  association  in  the  like  manner  and  to  the  same  extent  as  it  would  be  leviable  upon  and 
recoverable from an individual who is a citizen of India and resident in India for the 5[purposes of this 
Act 6***]. 

(2)  Where  any  business  or  profession  carried  on  by  an  association  of  persons  referred  to  in  sub-
section  (1)  has  been  discontinued  or  where  such  association  of  persons  is  dissolved,  the 7[Assessing 
Officer]  shall  make  an  assessment  of  the  net  wealth  of  the  association  of  persons  as  if  no  such 
discontinuance or dissolution had taken place and all the provisions of this Act, including the provisions 
relating to the levy of penalty or any other sum chargeable under any provisions of this Act, so far as may 
be, shall apply to such assessment. 

(3) Without prejudice to the generality of the provisions of sub-section (2), if the 7[Assessing Officer] 
or  the  8 [Deputy  Commissioner  (Appeals)]  or  the  Commissioner  (Appeals)  in  the  course  of  any 
proceedings under this Act in respect of any such association of persons as is referred to in sub-section (1) 
is satisfied that the association of persons was guilty of any of the acts specified in section 18 or section 
18A, he may impose or direct the imposition of a penalty in accordance with the provisions of the said 
sections. 

(4)  Every  person  who  was  at  the  time  of  such  discontinuance  or  dissolution  a  member  of  the 
association of persons, and the legal representative of any such person who is deceased, shall be jointly 
and severally liable for the amount of tax, penalty or other sum payable, and all the provisions of this Act, 
so far as may be, shall apply to any such assessment or imposition of penalty or other sum. 

(5)  Where  such  discontinuance  or  dissolution  takes  place  after  any  proceedings  in  respect  of  an 
assessment year have commenced, the proceedings may be continued against the persons referred to in 
sub-section  (4)  from  the  stage  at  which  the  proceedings  stood  at  the  time  of  such  discontinuance  or 
dissolution, and all the provisions of this Act shall, so far as may be, apply accordingly. 

1. Restored by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989). Earlier clause (a) and (ab) was substituted by Act 4 of 1988, s. 144, for 

clause (a) and (aa) (w.e.f. 1-4-1989). 

2.  Clause  (aa)  omitted  by  Act  18  of  1992,  s.  95  (w.e.f.  1-4-1993).  Earlier  it  was  inserted  by  Act  21  of  1984,  s.  34                            

(w.e.f. 1-4-1985). 

3. Ins. by Act 16 of 1981, s. 27 (w.e.f. 1-4-1981). 
4. Ins. by Act 13 of 1989, s. 29 (w.e.f. 1-4-1989). 
5. Subs. by Act 4 of 1988, s. 145, for certain words (w.e.f. 1-4-1989). 
6. The words “, and at the maximum marginal rate” omitted by Act 18 of 1992, s. 96 (w.e.f. 1-4-1993). 
7. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
8. Subs. by s. 127, ibid., for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 

47 

 
 
 
 
 
 
 
                                                           
1* 

* 

* 

* 

*] 

22. Assessment  of  persons  residing  outside  India.—(1) Where the person liable to tax under this 
Act resides outside India, the tax may be levied upon and recovered from his agent, and the agent shall be 
deemed to be, for all the purposes of this Act, the assessee in respect of such tax. 

(2) Any person employed by or on behalf of a person referred to in sub-section (1) or through whom 
such person is in the receipt of any income, profits or gains, or who is in possession or has custody of any 
asset  of  such  person  and  upon  whom  the 2[Assessing  Officer]  has  caused  a  notice  to  be  served  of  his 
intention of treating him as the agent of such person shall, for the purposes of sub-section (1), be deemed 
to be the agent of such person. 

3* 

* 

* 

* 

* 

4[(3) No person shall be deemed to be the agent of any person residing outside India unless he has had 

an opportunity of being heard by the 2[Assessing Officer] as to his being treated as such. 

(4) Any agent, who, as such, pays any sum under this Act, shall be entitled to recover the sum so paid 
from the person on whose behalf it is paid or to retain out of any moneys that may be in his possession or 
may come to him in his capacity as such agent, an amount equal to the sum so paid. 

(5) Any agent, or any person who apprehends that he may be assessed as an agent, may retain out of 
any money payable by him to the person residing outside India on whose behalf he is liable to pay tax 
(hereinafter in this section referred to as the principal), a sum equal to his estimated liability under this 
section, and in the event of any disagreement between the principal and such agent or person, as to the 
amount  to  be  so  retained,  such  agent  or  person  may  secure  from  the 2[Assessing  Officer]  a  certificate 
stating  the  amount  to  be  so  retained  pending  final  settlement  of  the  liability,  and  the  certificate  so 
obtained shall be his warrant for retaining that amount. 

(6) The amount recoverable from such agent or person at the time of final settlement shall not exceed 
the amount specified in such certificate, except to the extent to which such agent or person may at such 
time have in his hands additional assets of the principal. 

(7) Notwithstanding anything contained in this section, any arrears of tax due from a person residing 
outside India may be recovered also in accordance with the provisions of this Act from any assets of such 
person which are or may at any time come within India.] 

5[CHAPTER VA 

SETTLEMENT OF CASES 

6[22A. Definitions.—In this Chapter, unless the context otherwise requires,— 

(a) “Bench” means a Bench of the Settlement Commission; 

7[(b) “case” means any proceeding for assessment under this Act, of any person in respect of any 
assessment year or assessment years which may be pending before an Assessing Officer on the date 
on which an application under sub-section (1) of section 22C is made: 

1. The Explanation omitted by Act 18 of 1992, s. 96 (w.e.f. 1-4-1993). 
2. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
3. The proviso omitted by Act 46 of 1964, s. 21 (w.e.f. 1-4-1965). 
4. Ins. by s. 21, ibid. (w.e.f. 1-4-1965). 
5. Ins. by Act 41 of 1975, s. 93 (w.e.f. 1-4-1976). 
6. Subs. by Act 11 of 1987, s. 77, for section 22A (w.e.f. 1-6-1987). 
7. Subs. by Act 22 of 2007, s. 84, for clause (b) (w.e.f. 1-6-2007). 

48 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
1* 

* 

* 

* 

* 

Explanation.—For the purposes of this clause— 

(i) a proceeding for assessment or reassessment referred to in 2[section 17 shall, in case where 
a  notice  under  the  said  section]  is  issued  but  not  on  the  basis  of  search  under  section  37A  or 
requisition under section 37B, be deemed to have commenced from the date on which a notice 
under section 17 is issued; 

3[(ii) a proceeding for making fresh assessment in pursuance of an order under section 23A or 
section 24 or section 25, setting aside or cancelling an assessment shall be deemed to have been 
commenced  from  the  date  on  which  such  order,  setting  aside  or  cancelling  an  assessment  was 
passed.] 

4 [(iii)  a  proceeding  for  assessment  or  reassessment  for  any  of  the  assessment  years,  in 
consequence of a search initiated under section 37A or requisition made under section 37B, shall 
be  deemed  to  have  commenced  on  the  date  of  issue  of  notice  initiating  such  proceedings  and 
concluded on the date on which the assessment is made;] 

(iv)  a  proceeding  for  assessment  for  an  assessment  year,  other  than  the  proceeding  of 
assessment or reassessment referred to in 5[clause (i) or clause (ii)  clause (iii)], shall be deemed 
to have commenced from the 1st day of the assessment year and concluded on the date on which 
the assessment is made;] 

(c) “Chairman” means the Chairman of the Settlement Commission; 

(d) “Member” means a Member of the Settlement Commission, and includes the Chairman and a 

Vice-Chairman; 

(e)  “Settlement  Commission”  means  the  Income-tax  Settlement  Commission  constituted  under 

section 245B of the Income-tax Act; 

(f)  “Vice-Chairman”  means  a  Vice-Chairman  of  the  Settlement  Commission 6[and  includes  a 

Member who is senior amongst the Members of a Bench]; 

(g) “wealth-tax authority” means an income-tax authority specified in section 116 of the Income-

tax Act who is treated as a wealth-tax authority under section 8.] 

22B. Wealth-tax  Settlement  Commission.—(1)  The  Central  Government  shall  constitute  a 
Commission to be called the Wealth-tax Settlement Commission 7*** for the settlement of cases under 
this Chapter. 

(2) The Settlement Commission shall consist of a Chairman 8[and as many Vice-Chairmen and other 
members as the Central Government thinks fit] and shall function within the Department of the Central 
Government dealing with direct taxes. 

1.  The  proviso  omitted  by  Act  25  of  2014,  s.  77  (w.e.f.  1-10-2014).  Earlier  it  was  amended  by  Act  14  of  2010,  s.  53                          

(w.e.f. 1-6-2010). 

2. Subs. by s. 77, ibid., for “clause (i) of the proviso shall, in case where a notice under section 17” (w.e.f. 1-10-2014). 
3. Subs. by s. 77, ibid., for clause (ii) (w.e.f. 1-10-2014). 
4. Subs. by Act 14 of 2010, s. 53, for clasue (iii) (w.e.f. 1-6-2010).  
5.  Subs.  by  Act  25  of  2014,  s.  77,  for  “clause  (i)  or  clause  (ii)  of  the  proviso  or  clause  (iii)  of  the  Explanation”                               

(w.e.f. 1-10-2014). Ealier it was amended by Act 14 of 2010, s. 53 (w.e.f. 1-6-2010).         

6. Ins. by Act 22 of 2007, s. 84 (w.e.f. 1-6-2007).  
7. The brackets and words “(hereafter in this Chapter referred to as “the Settlement Commission”)” omitted by Act 11 of 1987, s. 

78 (w.e.f. 1-6-1987). 

8. Subs. by Act 46 of 1986, s. 35, for “and two other members” (w.e.f. 10-9-1986). 

49 

 
 
 
 
 
 
 
                                                           
1* 

* 

* 

* 

* 

(3)  The  Chairman 2[,  Vice-Chairman]  and  other  members  of  the  Settlement  Commission  shall  be 
appointed by the Central Government from amongst persons of integrity and outstanding ability, having 
special knowledge of, and experience in, problems relating to direct taxes and business accounts: 

Provided that, where a member of the Board is appointed as the Chairman 2[, Vice-Chairman] or as a 

member of the Settlement Commission, he shall cease to be a member of the Board. 

3* 

* 

* 

* 

* 

4[22BA. Jurisdiction and powers of Settlement Commission.—(1) Subject to the other provisions 
of this Chapter, the jurisdiction, powers and authority of the Settlement Commission may be exercised by 
Benches thereof. 

(2) Subject to the other provisions of this section, a Bench shall be presided over by the Chairman or 

a Vice-Chairman and shall consist of two other Members. 

(3) The Bench for which the Chairman is the Presiding Officer shall be the principal Bench and the 

other Benches shall be known as additional Benches. 

(4) Notwithstanding anything contained in sub-sections (1) and (2), the Chairman may authorise the 

Vice-Chairman  or  other  Member  appointed  to  one  Bench  to  discharge  also  the  functions  of  the            
Vice-Chairman or, as the case may be, other Member of another Bench. 

(5) Notwithstanding anything contained in the foregoing provisions of this section, and subject to any 
rules that may be made in this behalf, when one of the persons constituting a Bench (whether such person 
be  the  Presiding  Officer  or  other  Member  of  the  Bench)  is  unable  to  discharge  his  functions  owing  to 
absence, illness or any other cause or in the event of the occurrence of any vacancy either in the office of 
the  Presiding  Officer  or  in  the  office  of  one  or  the  other  Members  of  the  Bench,  the  remaining  two 
persons may function as the Bench and if the Presiding Officer of the Bench is not one of the remaining 
two persons, the senior among the remaining persons shall act as the Presiding Officer of the Bench: 

Provided that if at any stage of the hearing of any case or matter, it appears to the Presiding Officer 
that  the  case  or  matter  is  of  such  a  nature  that  it  ought  to  be  heard  by  a  Bench  consisting  of  three 
Members, the case or matter may be referred by the Presiding Officer of such Bench to the Chairman for 
transfer to such Bench as the Chairman may deem fit. 

5[(5A) Notwithstanding anything contained in the foregoing provisions of this section, the Chairman 
may,  for  the  disposal  of  any  particular  case,  constitute  a  Special  Bench  consisting  of  more  than  three 
Members.] 

(6) Subject to the other provisions of this Chapter, the places at which the principal Bench and the 
additional Benches shall ordinarily sit, shall be such as the Central Government may, by notification in 
the Official Gazette, specify 5[and the Special Bench shall sit at a place to be fixed by the Chairman]. 

1. Sub-section (2A) omitted by Act 46 of 1986, s. 35 (w.e.f. 10-9-1986). Earlier sub-section (2A) was inserted by Act 14 of 1982, 

s. 36 (w.e.f. 1-4-1982). 

2. Ins. by s. 35, ibid. (w.e.f. 10-9-1986). 
3. The second proviso omitted by s. 35, ibid. (w.e.f. 10-9-1986). 
4. Ins. by Act 11 of 1987, s. 79 (w.e.f. 1-6-1987). 
5. Ins. by Act 49 of 1991, s. 77 (w.e.f. 1-10-1991). 

50 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
22BB. Vice-Chairman  to  act  as  Chairman  or  to  discharge  his  functions 

in  certain 
circumstances.—(1)  In  the  event  of  the  occurrence  of  any  vacancy  in  the  office  of  the  Chairman  by 
reason of his death, resignation or otherwise, the Vice- Chairman or, as the case may be, such one of the 
Vice-Chairmen as the Central Government may, by notification in the Official Gazette, authorise in this 
behalf, shall act as the Chairman until the date on which a new Chairman, appointed in accordance with 
the provisions of this Chapter to fill such vacancy, enters upon his office. 

(2) When the  Chairman  is  unable  to  discharge  his  functions  owing  to  absence, illness  or any  other 
cause,  the  Vice-Chairman  or,  as  the  case  may  be,  such  one  of  the  Vice-Chairmen  as  the  Central 
Government  may,  by  notification  in  the  Official  Gazette,  authorise  in  this  behalf,  shall  discharge  the 
functions of the Chairman until the date on which the Chairman resumes his duties. 

22BC. Power of Chairman to transfer cases from one Bench to another.—On the application of 
the  assessee  or  the 1[Chief Commissioner  or  Commissioner]  and  after  notice to them,  and  after  hearing 
such of them as  may desire to be heard, or on his own  motion without such notice, the Chairman may 
transfer any case pending before one Bench, for disposal, to another Bench. 

22BD. Decision to be by majority.—If the Members of a Bench differ in opinion on any point, the 
point shall be decided according to the opinion of the majority, if there is a majority, but if the Members 
are equally divided, they shall state the point or points on which they differ, and make a reference to the 
Chairman who shall either hear the point or points himself or refer the case for hearing on such point or 
points by one or more of the other Members of the Settlement Commission and such point or points shall 
be decided according to the opinion of the majority of the Members of the Settlement Commission who 
have heard the case, including those who first heard it.] 

22C. Application for settlement of cases.—2[(1) 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 wealth which has not been disclosed before the 3[Assessing Officer], the manner 
in which such wealth has been derived, the additional amount of wealth-tax payable on such wealth 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 hereinafter provided : 

4[Provided that  no  such  application  shall  be  made  unless  such  wealth-tax  and  the  interest  thereon, 
which would have been paid under the provisions of this Act had the wealth declared in the application 
been  declared  in  the return  of  wealth  before the  Assessing  Officer  on  the  date  of  application,  has  been 
paid on or before the date of making the application and the proof of such payment is attached with the 
application.] 

(1A)  For  the  purposes  of  sub-section  (1)  of  this  section 5***  the  additional  amount  of  wealth-tax 
payable  in  respect  of  the  wealth  disclosed  in  an  application  made  under  sub-section  (1)  of  this  section 
shall be the amount calculated in accordance with the provisions of sub-sections (1B) to (1D). 

6[7[(1B) Where the wealth disclosed in the application relates to only one previous year,— 

(i) if  the  applicant  has  not  furnished  a  return  in  respect  of  the  net  wealth  of  that  year,  then,                  

wealth-tax shall be calculated on the wealth disclosed in the application as if such wealth were the net 
wealth; 

1. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988). 
2. Subs. by Act 67 of 1984, s. 60, for sub-section (1) (w.e.f. 1-10-1984). 
3. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
4.  Subs.  by  Act  22  of  2007,  s.  85,  for  the  proviso  (w.e.f.  1-6-2007).  Earlier  it  was  inserted  by  Act  11  of  1987,  s.  80                        

(w.e.f. 1-6-1987). 

5. The words, brackets, figures and letters “and sub-sections (2A) to (2D) of section 22D” omitted by s. 85, ibid. (w.e.f. 1-6-

2007). 

6. Subs. by Act 11 of 1987, s. 80, for sub-sections (1B) and (1C) (w.e.f. 1-6-1987). 
7. Subs. by Act 22 of 2007, s. 85, for sub-section (1B) (w.e.f. 1-6-2007). 

51 

                                                           
(ii) if the applicant has furnished a return in respect of the net wealth of that year, wealth-tax shall 
be calculated on the aggregate of the net wealth returned and the wealth disclosed in the application 
as if such aggregate were the net wealth.] 

(1C) The additional amount of wealth-tax payable in respect of the wealth disclosed in the application 

relating to the previous year referred to in sub-section (1B) shall be,— 

(a) in a case referred to in clause (i) of that sub-section, the amount of wealth-tax calculated under 

that clause; 

(b)  in  a  case  referred  to  in  clause  (ii)  of  that  sub-section,  the  amount  of  wealth-tax  calculated 
under  that  clause  as  reduced  by  the  amount  of  wealth-tax  calculated  on  the  net  wealth returned for 
that year; 

1* 

* 

* 

* 

*] 

(1D)  Where  the  wealth  disclosed  in  the  application  relates  to  more  than  one  assessment  year,  the 
additional amount of wealth-tax payable in respect of the wealth 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  under           
sub-section (1) shall be the additional amount of wealth-tax payable in respect of the wealth disclosed in 
the application. 

(1E)  Where  any  books  of  account  or  other  documents  belonging  to  an  assessee  are  seized  under 
section  37A,  the  assessee  shall  not  be  entitled  to  make  an  application  under  sub-section  (1)  before  the 
expiry of one hundred and twenty days from the date of the seizure.] 

(2)  Every  application  made  under  sub-section  (1)  shall  be  accompanied  by  such  fees  as  may  be 

prescribed. 

(3) An application made under sub-section (1) shall not be allowed to be withdrawn by the applicant. 

2[(4)  An  assessee  shall,  on the  date  on  which  he  makes  an  application  under  sub-section  (1)  to  the 
Settlement  Commission,  also  intimate  the  Assessing  Officer  in  the  prescribed  manner  of  having  made 
such application to the said Commission.] 

22D. Procedure  on  receipt  of  an  application  under  section  22C.— 3 [(1) On  receipt  of  an 
application  under  section  22C,  the  Settlement  Commission  shall,  within  seven  days  from  the  date  of 
receipt of the application, issue a notice to the applicant requiring him to explain as to why the application 
made by him be allowed to be proceeded with, and on hearing the applicant, the Settlement Commission 
shall, within a period of fourteen days from the date of the application, by an order in writing, reject the 
application or allow the application to be proceeded with: 

Provided that  where  no  order  has  been  passed  within  the  aforesaid  period  by  the  Settlement 

Commission, the application shall be deemed to have been allowed to be proceeded with.] 

4* 

* 

* 

* 

* 

1. Clause (c) omitted by Act 22 of 2007, s. 85 (w.e.f. 1-6-2007). 
2. Ins. by s. 85, ibid. (w.e.f.1-6-2007). 
3. Subs. by s. 86, ibid., for sub-section (1) (w.e.f. 1-6-2007). Earlier it was amended by Act 49 of 1991, s. 78 (w.e.f. 27-9-1991) 

and Act 20 of 2002, s. 112 (w.e.f. 1-6-2002). 

4.  Sub-section  (1A)  omitted  by  Act  49  of  1991,  s.  78  (w.e.f.  27-9-1991).  Earlier  it  was  inserted  by  Act  21  of  1979,  s.  24                     

(w.e.f. 1-4-1979). 

52 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
(2)  A  copy  of  every  order  under  sub-section  (1)  shall  be  sent  to  the  applicant  and  to  the 

Commissioner. 

1[(2A)  Where  an  application  was  made  under  section  22C  before  the  1st  day  of  June,  2007  but  an 
order  under  the  provisions  of  sub-section  (1)  of  this  section,  as  they  stood  immediately  before  their 
amendment by the Finance Act, 2007 (22 of 2007), has not been made before the 1st day of June, 2007, 
such application shall be deemed to have been allowed to be proceeded with if the additional wealth-tax 
on the wealth disclosed in such application and the interest thereon is paid on or before the 31st day of 
July, 2007. 

Explanation.—In respect of the applications referred to in this sub-section, the 31st day of July, 2007 
shall be deemed to be the date of the order of rejection or allowing the application to be proceeded with 
under sub-section (1). 

(2B) The Settlement Commission shall,— 

(i) in  respect  of  an  application  which  is  allowed  to  be  proceeded  with  under  sub-section  (1), 

within thirty days from the date on which the application was made; or 

(ii)  in  respect  of  an  application  referred  to  in  sub-section  (2A)  which  is  deemed  to  have  been 

allowed to be proceeded with under that sub-section, on or before the 7th day of August, 2007, 

call for a report from the Commissioner, and the Commissioner shall furnish the report within a period of 
thirty days of the receipt of communication from the Settlement Commission. 

(2C) Where a report of the Commissioner called for under sub-section (2B) has been furnished within 
the  period  specified therein,  the Settlement  Commission  may,  on  the  basis  of the  material contained in 
such report and within a period of fifteen days of the receipt of the report, by an order in writing, declare 
the  application  in  question  as  invalid,  and  shall  send  the  copy  of  such  order  to  the  applicant  and  the 
Commissioner: 

Provided that an application shall not be declared invalid unless an opportunity has been given to the 

applicant of being heard: 

Provided  further that  where  the  Commissioner  has  not  furnished  the  report  within  the  aforesaid 
period,  the  Settlement  Commission  shall  proceed  further  in  the  matter  without  the  report  of  the 
Commissioner. 

(2D) Where an application was made under sub-section (1) of section 22C before the 1st day of June, 
2007  and  an  order  under  the  provisions  of  sub-section  (1)  of  this  section,  as  they  stood  immediately 
before  their  amendment  by  the  Finance  Act,  2007  (22  of  2007),  allowing  the  application  to  have  been 
proceeded with, has been passed before the 1st day of June, 2007, but an order under the provisions of 
sub-section  (4),  as  they  stood  immediately  before  their  amendment  by  the  Finance  Act,  2007,  was  not 
passed  before  the  1st  day  of  June,  2007,  such  application  shall  not  be  allowed  to  be  further  proceeded 
with unless the additional wealth-tax on the wealth disclosed in such application and the interest thereon, 
is,  notwithstanding  any  extension  of  time  already  granted  by  the  Settlement  Commission,  paid  on  or 
before the 31st day of July, 2007.] 

2[(3) The Settlement Commission, in respect of— 

(i) an application which has not been declared invalid under sub-section (2C); or 

1. Subs. by Act 22 of 2007, s. 86, for sub-sections (2A), (2B), (2C) and (2D) (w.e.f. 1-6-2007). 
2. Subs. by s. 86, ibid., for sub-sections (3) (4) and (4A) (w.e.f. 1-6-2007). Earlier sub-section (4A) was inserted by    Act 20 of 

2002, s. 112 (w.e.f. 1-6-2002). 

53 

                                                           
(ii) an application referred to in sub-section (2D) which has been allowed to be further proceeded 

with under that sub-section, 

may call for the records from the Commissioner and after examination of such records, if the Settlement 
Commission is of the opinion that any further enquiry or investigation in the matter is necessary, it may 
direct the Commissioner to make or cause to be made such further enquiry or investigation and furnish a 
report  on  the  matters  covered  by  the  application  and  any  other  matter  relating  to  the  case,  and  the 
Commissioner  shall  furnish  the  report  within  a  period  of  ninety  days  of  the  receipt  of  communication 
from the Settlement Commission: 

Provided that  where  the  Commissioner  does  not  furnish  his  report  within  the  aforesaid  period,  the 

Settlement Commission may proceed to pass an order under sub-section (4) without such report. 

(4) After examination of the records and the report of the Commissioner, if any, received under— 

(i) sub-section (2B) or sub-section (3), or 

(ii) the provisions of sub-section (1), as they stood immediately before their amendment by the 

Finance Act, 2007 (22 of 2007), 

and after giving an opportunity to the applicant and to the Commissioner to be heard, either in person or 
through a representative duly authorised in this behalf, and after examining such further evidence as may 
be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions 
of this Act, pass such order, as it thinks fit, on the matters covered by the application and any other matter 
relating to the case not covered by the application, but referred to in the report of the Commissioner. 

(4A) The Settlement Commission shall pass an order under sub-section (4),— 

(i) in respect of an application referred to in sub-section (2A) or sub-section (2D), on or before the 

31st day of March, 2008; 

(ii) in respect of an application made on or after the 1st day of June, 2007 1[but before the 1st day 

of June, 2010], within twelve months from the end of the month in which the application was made; 

2[(iii)  in  respect  of  an  application  made  on  or  after  the  1st  day  of  June,  2010,  within  eighteen 

months from the end of the month in which the application was made.]] 

3[(5) Subject to the provisions of section 22BA, the materials brought on record before the Settlement 
Commission shall be considered by the Members of the concerned Bench before passing any order under 
sub-section (4) and, in relation to the passing of such order, the provisions of section 22BD shall apply.] 

(6) Every order passed under sub-section (4) shall provide for the terms of settlement including any 
demand by way of 4[tax, penalty or interest], the manner in which any sum due under the settlement shall 
be paid and all other matters to make the settlement effective and shall also provide that the settlement 
shall be void if it is subsequently found by the Settlement Commission that it has been obtained by fraud 
or misrepresentation of facts. 

1. Ins. by Act 14 of 2010, s. 54 (w.e.f. 1-4-2010). 
2. Ins. by s. 54, ibid. (w.e.f. 1-6-2010). 
3. Ins. by Act 11 of 1987, s. 81 (w.e.f. 1-6-1987). Earlier it was amended by Act 14 of 1982, s. 37 (w.e.f. 1-4-1982) which was 

later omitted by Act 46 of 1986, s. 36 (w.e.f. 10-9-1986). 

4.  Subs.  by  s.  81,  ibid.,  for  “tax  or  penalty”  (w.e.f.  1-6-1987).  Earlier  the  quoted  words  were  substituted  for  “tax,  penalty  or 

interest” by Act 67 of 1984, s. 62 (w.e.f. 1-10-1984). 

54 

                                                           
1[(6A)  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,  then,  whether  or  not  the 
Settlement Commission has extended the time for payment of such tax or has allowed payment thereof by 
instalments, the assessee shall be liable to pay simple interest at 2[one and one-fourth per cent. for every 
month or part of a month] on the amount remaining unpaid from the date of expiry of the period of thirty-
five days aforesaid.] 

3[(6B) The Settlement Commission may, at any time within a period of six months from the date of 
the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it 
under sub-section (4): 

Provided that an amendment which has the effect of modifying the liability of the applicant shall not 
be made under this sub-section unless the Settlement Commission has given notice to the applicant and 
the  Commissioner  of  its  intention  to  do  so  and  has  allowed  the  applicant  and  the  Commissioner  an 
opportunity of being heard.] 

(7) Where a settlement becomes void as provided in sub-section (6), the proceedings with respect to 
the matters covered by the settlement shall be deemed to have been revived from the stage at which the 
application was allowed to be proceeded with by the Settlement Commission and the wealth-tax authority 
concerned  may,  notwithstanding  anything  contained  in  any  other  provision  of  this  Act,  complete  such 
proceedings at any time before the expiry of two years from the end of the financial year in which the 
settlement became void. 

1[(8)  For  the  removal  of  doubts,  it  is  hereby  declared  that  nothing  contained  in  section  17A  shall 
apply to any order passed under sub-section (4) or to any order of assessment or reassessment required to 
be made by the 4[Assessing Officer] in pursuance of any directions contained in such order passed by the 
Settlement Commission.] 

5 [22DD. Power  of  Settlement  Commission  to  order  provisional  attachment  to  protect   
revenue.—(1) Where, during the pendency of any proceeding before it, the Settlement Commission is of 
the opinion that for the purpose of protecting the interests of the revenue it is necessary so to do, it may, 
by  order,  attach  provisionally  any  property  belonging  to  the  applicant  in  the  manner  provided  in  the 
Second Schedule to the Income-tax Act as made applicable to this Act by section 32: 

Provided that where a provisional attachment made under section 34C is pending immediately before 
an application is made under section 22C, an order under this sub-section shall continue such provisional 
attachment up to the period up to which an order made under section 34C would have continued if such 
application had not been made: 

Provided further that where the Settlement Commission passes an order under this sub-section after 
the expiry of the period referred to in the preceding proviso, the provisions of sub-section (2) shall apply 
to such order as if the said order had originally been passed by the Settlement Commission. 

(2)  Every  provisional  attachment  made  by  the  Settlement  Commission  under  sub-section  (1)  shall 
cease to have effect after the expiry of a period of six months from the date of the order made under sub-
section (1): 

Provided that  the  Settlement  Commission  may,  for  reasons  to  be  recorded  in  writing,  extend  the 

aforesaid period by such further period or periods as it thinks fit 6***.] 

1. Ins. by Act 67 of 1984, s. 62 (w.e.f. 1-10-1984). 
2. Subs. by Act 22 of 2007, s. 86, for “fifteen per cent. per annum” (w.e.f. 1-4-2008). 
3. Ins. by Act 8 of 2011, s. 35 (w.e.f. 1-6-2011). 
4. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
5. Ins. by Act 26 of 1988, s. 56 (w.e.f. 1-4-1988). 
6. The words “, so, however, that the total period of extension shall not in any case exceed two years” omitted by Act 22 of 2007, 

s. 87 (w.e.f. 1-6-2007). 

55 

                                                           
22E. Power  of  Settlement  Commission  to  reopen  completed  proceedings.—If  the  Settlement 
Commission is of the opinion (the reasons for such opinion to be recorded by it in writing) that, for the 
proper  disposal  of  the  case  pending  before  it,  it  is  necessary  or  expedient  to  reopen  any  proceeding 
connected with the case, but which has been completed under this Act by any wealth-tax authority before 
the application under section 22C was made, it may, with the concurrence of the applicant, reopen such 
proceeding and pass such order thereon as it thinks fit as if the case in relation to which the application 
for settlement had been made by the applicant under that section covered such proceeding also: 

1[Provided that no proceeding shall be reopened by the Settlement Commission under this section if 
the  period  between  the  end  of  the  assessment  year  to  which  such  a  proceeding  relates  and  the  date  of 
application for settlement under section 22C exceeds nine years:] 

2[Provided  further that  no  proceeding  shall  be  reopened  by  the  Settlement  Commission  under  this 

section in a case where an application under section 22C is made on or after the 1st day of June, 2007.] 

22F. Powers  and  procedure  of  Settlement  Commission.—(1) In addition to the powers conferred 
on  the  Settlement  Commission  under  this  Chapter,  it  shall  have  all  the  powers  which  are  vested  in  a 
wealth-tax authority under this Act. 

(2)  Where  an  application  made  under  section  22C  has  been  allowed  to  be  proceeded  with  under 
section 22D, the Settlement Commission shall, until an order is passed under sub-section (4) of section 
22D, have, subject to the provisions of sub-section (3) of that section, exclusive jurisdiction to exercise 
the powers and perform the functions of a wealth-tax authority under this Act in relation to the case: 

3[Provided that where an application has been made under section 22C on or after the 1st day of June, 
2007,  the  Settlement  Commission  shall  have  such  exclusive  jurisdiction  from  the  date  on  which  the 
application was made: 

Provided further that where— 

(i) an application made on or after the 1st day of June, 2007, is rejected under sub-section (1) of 

section 22D; or 

(ii) an application is not allowed to be proceeded with under sub-section (2A) of section 22D, or, 

as the case may be, is declared invalid under sub-section (2C) of that section; or 

(iii) an application is not allowed to be further proceeded with under sub-section (2D) of section 

22D, 

the Settlement Commission, in respect of such application shall have such exclusive jurisdiction up to the 
date on which the application is rejected, or, not allowed to be proceeded with, or, declared invalid, or, 
not allowed to be further proceeded with, as the case may be.] 

(3) Notwithstanding anything contained in sub-section (2) and in the absence of any express direction 
to the contrary by the Settlement Commission, nothing contained in this section shall affect the operation 
of any other provisions of this Act requiring the applicant to pay tax on the basis of self-assessment in 
relation to the matters before the Settlement Commission. 

(4) For the removal of doubt, it is hereby declared that, in the absence of any express direction by the 
Settlement Commission to the contrary, nothing in this Chapter shall affect the operation of the provisions 
of this Act in so far as they relate to any matters other than those before the Settlement Commission. 

4[5*  

* 

* 

* 

* 

1. Subs. by Act 11 of 1987, s. 82, for the proviso (w.e.f. 1-6-1987). 
2. Ins. by Act 22 of 2007, s. 88 (w.e.f. 1-6-2007). 
3. Ins. by s. 89, ibid. (w.e.f. 1-6-2007). 
4. Subs. by Act 46 of 1986, s. 37, for sub-section (5) (w.e.f. 10-9-1986). 
5. Sub-sections (5) and (6) omitted by Act 11 of 1987, s. 83 (w.e.f. 1-6-1987). 

56 

 
 
 
 
 
 
 
                                                           
(7)  The  Settlement  Commission  shall,  subject  to  the  provisions  of  this  Chapter,  have  power  to 
regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise 
of  its  powers  or  of  the  discharge  of  its  functions, including  the  places  at  which  the  Benches  shall  hold 
their sittings.] 

22G. Inspection,  etc.,  of  reports.—No person shall be entitled to inspect, or obtain copies of, any 
reports made by any wealth-tax authority to the Settlement Commission; but the Settlement Commission 
may, in its discretion, furnish copies thereof to any such person on an application made to it in this behalf 
and on payment of the prescribed fee: 

Provided that, for the purpose of enabling any person whose case is under consideration to rebut any 
evidence brought on the record against him in any such report, the Settlement Commission shall,  on an 
application made in this behalf and on payment of the prescribed fee by such person, furnish him with a 
certified copy of any such report or part thereof relevant for the purpose. 

22H. Powers  of  Settlement  Commission  to  grant  immunity  from  prosecution.—(1)  The 
Settlement  Commission  may,  if  it  is  satisfied  that  any  person  who  made  the  application  for  settlement 
under section 22C has co-operated with the Settlement Commission in the proceedings before it and has 
made a full and true disclosure of his net wealth and the manner in which such wealth has been acquired, 
grant to such person, subject to such conditions as it may think fit to impose, immunity from prosecution 
for any offence under this Act or under the Indian Penal Code (45 of 1860) or under any other Central Act 
for the time being in force 1[and also (either wholly or in part) from the imposition of any penalty] under 
this Act, with respect to the case covered by the settlement: 

2[Provided that no such immunity shall be granted by the Settlement Commission in cases where the 
proceedings for the prosecution for any such offence have been instituted before the date of receipt of the 
application under section 22C:] 

3[Provided further that the Settlement Commission shall not grant immunity from prosecution for any 
offence  under  the  Indian  Penal  Code  (45  of  1860)  or  under  any  Central  Act  other  than  this  Act  and 
Income-tax Act, 1961 (43 of 1961) to a person who makes an application under section 22C on or after 
the 1st day of June, 2007.] 

2[(1A) An immunity granted to a person under sub-section (1) shall stand withdrawn if such person 
fails  to  pay  any  sum  specified  in  the  order  of  settlement  passed  under  sub-section  (4)  of  section  22D 
within the time specified in such order or within such further time as may be allowed by the Settlement 
Commission, or fails to comply with any other 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.] 

(2)  An  immunity  granted to  a  person  under  sub-section  (1)  may,  at  any  time,  be  withdrawn  by  the 
Settlement  Commission,  if  it  is  satisfied  that  such  person  4***  had,  in  the  course  of  the  settlement 
proceedings,  concealed  any  particular  material  to  the  settlement  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 settlement and shall also 
become  liable  to  the  imposition  of  any  penalty  under  this  Act  to  which  such  person  would  have  been 
liable, had no such immunity been granted. 

1. Subs. by Act 67 of 1984, s. 63, for “and also from the imposition of any penalty” (w.e.f. 1-10-1984). 

2. Ins. by Act 11 of 1987, s. 84 (w.e.f. 1-6-1987). 

3. Ins. by Act 22 of 2007, s. 90 (w.e.f. 1-6-2007). 

4. The words “has not complied with the conditions subject to which the immunity was granted or that such person” omitted by 

Act 11 of 1987, s. 84 (w.e.f. 1-6-1987).  

57 

                                                           
1[22HA. Abatement of proceedings before Settlement Commission.—(1) Where,— 

(i) an application made under section 22C on or after the 1st day of June, 2007 has been rejected 

under sub-section (1) of section 22D; or 

(ii) an application made under section 22C has not been allowed to be proceeded with under sub-

section (2A) or further proceeded with under sub-section (2D) of section 22D; or 

(iii) an application made under section 22C has been declared as invalid under sub-section (2C) 

of section 22D; or 

(iv) in respect of any other application made under section 22C, an order under sub-section (4) of 
section 22D has not been passed within the time or period specified under sub-section (4A) of section 
22D, 

the proceedings before the Settlement Commission shall abate on the specified date. 

Explanation.—For the purposes of this sub-section, “specified date” means— 

(a) in  respect  of  an  application  referred  to  in  clause  (i),  the  date  on  which  the  application  was 

rejected; 

(b) in respect of an application referred to in clause (ii), the 31st day of July, 2007; 

(c) in respect of an application referred to in clause (iii), the last day of the month in which the 

application was declared invalid; 

(d) in  respect  of  an  application  referred  to  in  clause  (iv),  the  date  on  which  the  time  or  period 

specified in sub-section (4A) of section 22D expires. 

(2) Where a proceeding before the Settlement Commission abates, the Assessing Officer, or, as the 
case  may  be,  any  other  wealth-tax  authority  before  whom  the  proceeding  at  the  time  of  making  the 
application was pending, shall dispose of the case in accordance with the provisions of this Act as if no 
application under section 22C had been made. 

(3) For the purposes of sub-section (2), the Assessing Officer, or, as the case may be, other wealth-tax 
authority, shall be entitled to use all the material and other information produced by the assessee before 
the  Settlement  Commission  or  the  results  of  the  inquiry  held  or  evidence  recorded  by  the  Settlement 
Commission  in  the  course  of  the  proceedings  before  it,  as  if  such  material,  information,  inquiry  and 
evidence  had  been  produced  before  the  Assessing  Officer  or  other  wealth-tax  authority  or  held  or 
recorded by him in the course of the proceedings before him. 

(4) For the purposes of the time-limit under sections 17A, 32 and 35 and for the purposes of payment 
of interest under section 34A, in case referred to in sub-section (2), the period commencing on and from 
the date  of an application to  the  Settlement  Commission  under  section  22C  and ending  with  “specified 
date” referred to in sub-section (1) shall be excluded. 

22HAA. Credit  for  tax  paid  in  case  of  abatement  of  proceedings.—Where an  application  made 
under section 22C on or after the 1st day of June, 2007, is rejected under sub-section (1) of section 22D, 
or any other application made under section 22C is not allowed to  be proceeded with under sub-section 
(2A) of section 22D or is declared invalid under sub-section (2C) of section 22D or has not been allowed 
to be further proceeded with under sub-section (2D) of section 22D or an order under sub-section (4) of 
section  22D  has  not  been  passed  within  the  time  or  period  specified  under  sub-section  (4A)  of  section 
22D,  the  Assessing  Officer  shall  allow  the  credit  for  the  tax  and  interest  paid  on  or  before  the  date  of 
making the application or during the pendency of the case before the Settlement Commission.] 

1. Ins. by Act 22 of 2007, s. 91 (w.e.f. 1-6-2007). Earlier section 22HA was inserted by Act 11 of 1987, s. 85 (w.e.f. 1-6-1987) 
and amended by Act 4 of 1988, s. 127 (w.e.f. 1-4-1988) which was later omitted by Act 20 of 2002, s. 113 (w.e.f. 1-6-2002).  

58 

                                                           
22-I. Order of settlement to be conclusive.—Every order of settlement passed under sub-section (4) 
of section 22D shall be conclusive as to the matters stated therein and no matter covered by such order 
shall, save as otherwise provided in this Chapter, be reopened in any proceeding under this Act or under 
any other law for the time being in force. 

22J. Recovery  of  sums  due  under  order  of  settlement.—Any  sum  specified  in  an  order  of 
settlement passed under sub-section (4) of section 22D may, subject to such conditions, if any, as may be 
specified  therein,  be  recovered,  and  any  penalty  for  default  in  making  payment  of  such  sum  may  be 
imposed and recovered in accordance with the provisions of section 32 by the 1[Assessing Officer] having 
jurisdiction over the person who made the application for settlement under section 22C. 

2[22K. Bar on subsequent application for settlement.—(1) Where,— 

(i) an order of settlement passed under sub-section (4) of section 22D provides for the imposition 
of a penalty on the person who made the application under section 22C for settlement, on the ground 
of concealment of particulars of his net wealth; or 

(ii) after the passing of an order of settlement under the said sub-section (4) in relation to a case, 

such person is convicted of any offence under Chapter VIII in relation to that case; or 

(iii) the  case  of  any  such  person  was  sent  back  to  the  Assessing  Officer  by  the  Settlement 

Commission on or before the 1st day of June, 2002, 

then, he shall not be entitled to apply for settlement under section 22C in relation to any other matter. 

(2) Where a person has made an application under section 22C on or after the 1st day of June, 2007 
and if such application has been allowed to be proceeded with under sub-section (1) of section 22D, such 
person shall not be subsequently entitled to make an application under section 22C.] 

22L. Proceedings  before  the  Settlement  Commission  to  be  judicial  proceedings.—Any 
proceeding  under  this  Chapter  before  the  Settlement  Commission  shall  be  deemed  to  be  a  judicial 
proceeding within the meaning of sections 193 and 228, and for the purposes of section 196, of the Indian 
Penal Code (45 of 1860). 

22M. [Certain persons who have filed appeals to the Appellate Tribunal entitled to make applications 
to the Settlement Commission.]—Omitted by the Finance Act, 1987, s. 87 (w.e.f. 1-6-1987). Earlier it was 
inserted  by  Act  41  of  1975,  s.  93  (w.e.f.  1-4-1976)  which  was  later  amended  by  Act  67  of  1984,  s.  64 
(w.e.f. 1-10-1984). 

CHAPTER VI 

APPEALS, REVISIONS AND REFERENCES 

23. Appeal 

to 

the 

3 [Deputy  Commissioner 

(Appeals)] 

from  orders  of 1[Assessing                 

Officer.]—(1) 4[Subject to the provisions of sub-section (1A), any person],— 

(a) objecting to the amount of 5[net wealth] determined under this Act ; or 

(b) objecting to the amount of wealth-tax determined as payable by him under this Act ; or 

1. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
2.  Subs.  by  Act  22  of  2007,  s.  92,  for  section  22K  (w.e.f.  1-6-2007).  Earlier  it  was  amended  by  Act  11  of  1987,  s.  86                       

(w.e.f. 1-6-1987). 

3. Subs. by Act 4 of 1988, s. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 
4. Subs. by Act 29 of 1977, s. 39 and the Fifth Schedule, for “Any person” (w.e.f. 10-7-1978). 
5. Subs. by Act 46 of 1964, s. 22, for “his net wealth” (w.e.f. 1-4-1965). 

59 

                                                           
(c) denying his liability to be assessed under this Act ; or 

1[(d) objecting to any penalty imposed by the Assessing Officer under section 18 2***; or] 

(e) objecting to any order of the 3[Assessing Officer] under sub-section (2) of section 20; or 

(f) objecting  to  any  penalty  imposed  by  the 3[Assessing  Officer]  under  the  provisions  of    

4[section 221] of the Income-tax Act as applied under section 32 for the purposes of wealth-tax; 5[or] 

5[(g) objecting to any order made by the 3[Assessing Officer] under section 22 treating him as the 

agent of a person residing outside India; or 

(h) objecting  to  any  order  of  the 3[Assessing  Officer]  under  section  35  having  the  effect  of 
enhancing the assessment or reducing a refund or refusing to allow the claim made by the assessee 
under the said section; or 

6[(ha) objecting  to  any  order  of  the  Valuation  Officer  under  section  35  having  the  effect  of 
enhancing the valuation of any asset or refusing to allow the claim made by the  assessee under the 
said section; or] 

7* 

* 

* 

* 

*] 

may  appeal  to  the 8[Deputy  Commissioner  (Appeals)] 9[before  the  1st  day  of  June,  2000,]  against  the 
assessment or order, as the case may be, in the prescribed form and verified in the prescribed manner. 

10[(1A) Notwithstanding anything contained in sub-section (1), any person,— 

(a) objecting to the amount of net wealth determined under this Act or objecting to the amount of 
wealth-tax determined as payable by him under this Act or denying his liability to be assessed under 
this Act, where the net wealth determined on assessment made under section 16 exceeds fifteen lakh 
rupees; or 

11[12[(b) objecting to any penalty imposed under sub-section (1) of section 18 with the previous 

approval of the Deputy Commissioner as specified in sub-section (3) of that section; or] 

(c) objecting to any assessment or order referred to in clauses (a) to (h) (both inclusive) of sub-
section (1), where such assessment or order has been made by the Deputy Commissioner in exercise 
of the powers or functions conferred on or assigned to him under section 8 or section 11; or 

(d) objecting to any penalty imposed by the Deputy Director or the Deputy Commissioner under 

section 18A; or] 

1.  Subs.  by  Act  4  of  1988,  s.  146,  for  clause  (d)  (w.e.f.  1-4-1989).  Earlier  it  was  amended  by  Act  46  of  1964,  s.  22                       

(w.e.f. 1-4-1964). 

2. The words “as it stood immediately before the 1st day of April, 1989 or under section. 18 as amended by the Direct Tax Laws 

(Amendment) Act, 1987 (4 of 1988)” omitted by Act 3 of 1989, s. 71 (w.e.f. 1-4-1989). 

3. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
4. Subs. by Act 46 of 1964, s. 22, for “sub-section (1) of section 46” (w.e.f. 1-4-1965).  
5. Ins. by s. 22, ibid. (w.e.f. 1-4-1965). 
6. Ins. by Act 45 of 1972, s. 11 (w.e.f. 1-1-1973). 
7.  Clause  (i)  omitted  by  Act  4  of  1988,  s.  146  (w.e.f.  1-4-1989).  Earlier  it  was  amended  by  Act  45  of  1972,  s.  11                                 

(w.e.f. 1-1-1973). 

8. Subs. by s. 127, ibid., for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 
9. Ins. by Act 10 of 2000, s. 72 (w.e.f. 1-6-2000). 
10. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 
11. Subs. by Act 4 of 1988, s. 146, for clauses (b), (c) and (d) (w.e.f. 1-4-1989). 
12. Subs. by Act 3 of 1989, s. 71, for clause (b) (w.e.f. 1-4-1989). 

60 

 
 
 
 
 
 
 
                                                           
(e) objecting to an order made by an 1[Assessing Officer] in the case of such persons or classes of 
persons  as  the  Board  may,  having  regard  to  the  nature  of  the  cases,  the  complexities  involved  and 
other relevant considerations, direct, 

may appeal to the Commissioner (Appeals) 2[before the 1st day of June, 2000,] against the assessment or 
order, as the case may be, in the prescribed form and verified in the prescribed manner. 

2[(1AA) Notwithstanding anything contained in sub-section (1), every appeal filed, on or after the 1st 
day of October, 1998, but before the 1st day of June, 2000, before the Deputy Commissioner (Appeals) 
and  any  matter  arising  out  of  or  connected  with  such  appeal  and  which  is  so  pending  shall  stand 
transferred  to  the  Commissioner  (Appeals)  and  the  Commissioner  (Appeals)  may  proceed  with  such 
appeal or matter from the stage at which it was on that day.] 

3[(1B)  Notwithstanding  anything  contained in  sub-section (1),  the  Board  or  the Director  General  or 
Chief Commissioner or Commissioner, if so authorised by the Board, may, by order in writing, transfer 
any appeal which is pending before a Deputy Commissioner (Appeals) and any matter arising out of or 
connected with such appeal and which is so pending, to the Commissioner (Appeals) if the Board or, as 
the  case  may  be,  the  Director  General,  Chief  Commissioner  or  Commissioner  (at  the  request  of  the 
appellant or otherwise) is satisfied that it is necessary or expedient so to do having regard to the nature of 
the  case,  the  complexities  involved  and  other  relevant  considerations  and  the  Commissioner  (Appeals) 
may proceed with such appeal or matter from the stage at which it was before it was so transferred: 

Provided that the appellant may demand that before proceeding further with the appeal or matter, the 

previous proceeding or any part thereof be re-opened or that he be reheard.]] 

(2) An appeal shall be presented within thirty days of the receipt of the notice of demand relating to 
the  assessment  or  penalty  objected  to,  or  the  date  on  which  any  order  objected  to,  is  communicated  to 
him,  but the 4[Deputy  Commissioner  (Appeals)] 5[or,  as  the  case  may  be,  the  Commissioner  (Appeals)] 
may admit an appeal after the expiration of the period aforesaid if he is satisfied that the appellant had 
sufficient cause for not presenting the appeal within that period. 

6[(2A) Where a return has been filed by an assessee, no appeal under this section shall be admitted 

unless at the time of filing of the appeal he has paid the tax due on the net wealth returned by him. 

7* 

* 

* 

* 

*] 

(3)  The 4[Deputy  Commissioner  (Appeals)] 5[or,  as  the  case  may  be,  the  Commissioner  (Appeals)] 

shall fix a day and place for the hearing of the appeal and may, from time to time, adjourn the hearing. 

8[(3A) If the valuation of any asset is objected to in an appeal under clause (a) of sub-section (1) 5[or 
of sub-section (1A)], the 4[Deputy Commissioner (Appeals)] 5[or, as the case may be, the Commissioner 
(Appeals)] shall,— 

(a) in a case where such valuation has been made by a Valuation Officer under section 16A, give 

such Valuation Officer an opportunity of being heard; 

1. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
2. Ins. by Act 10 of 2000, s. 72 (w.e.f. 1-6-2000). 
3.  Subs.  by  Act  4  of  1988,  s.  146,  for  sub-sections  (1B)  and  (1C)  (w.e.f.  1-4-1989).  Earlier  sub-section  (1B)  was  inserted  by            

Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978) and sub-section (1C) was inserted by Act 21 of 1979, s. 25 
(w.e.f. 1-6-1979). 

4.  Subs. by s. 127, ibid., for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 
5. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 
6. Ins. by Act 41 of 1975, s. 94 (w.e.f. 1-10-1975). 
7. The proviso omitted by Act 4 of 1988, s. 146 (w.e.f. 1-4-1989). 
8. Ins. by Act 45 of 1972, s. 11 (w.e.f. 1-1-1973). 

61 

 
 
 
 
 
 
 
 
                                                           
(b) in any other case, on a request being made in this behalf by the 1[Assessing Officer], give an 
opportunity  of  being  heard  to  any  Valuation  Officer  nominated  for  the  purpose  by  the 1[Assessing 
Officer].] 

(4)  The 2[Deputy  Commissioner  (Appeals)] 3[or,  as  the  case  may  be,  the  Commissioner  (Appeals)] 

may— 

(a) at the hearing of an appeal, allow an appellant to go into any ground of appeal not specified in 

the grounds of appeal; 

(b) before  disposing  of  an  appeal,  make  such  further  inquiry  as  he  thinks  fit  or  cause  further 

inquiry to be made by the 4[1[Assessing Officer] or, as the case may be, the Valuation Officer]. 

(5)  In  disposing  of  an  appeal,  the 2[Deputy  Commissioner  (Appeals)] 3[or,  as  the  case  may  be,  the 
Commissioner (Appeals)] may pass such order as he thinks fit which may include an order enhancing the 
assessment or penalty: 

Provided that no order enhancing the assessment or penalty shall be made unless the person affected 

thereby has been given a reasonable opportunity of showing cause against such enhancement. 

5[(5A) In disposing of an appeal, the 2[Deputy Commissioner (Appeals)] 3[or, as the case may be, the 
Commissioner (Appeals)] may consider and decide any matter arising out of the proceedings in which the 
order appealed against was passed, notwithstanding that such matter was not raised before the 2[Deputy 
Commissioner (Appeals)] 3[or, as the case may be, the Commissioner (Appeals)] by the appellant. 

(5B) The order of the 2[Deputy Commissioner (Appeals)] 3[or, as the case may be, the Commissioner 
(Appeals)]  disposing  of  the  appeal  shall  be  in  writing  and  shall  state  the  points  for  determination,  the 
decision thereon and the reasons for the decision.] 

(6) A copy of every order passed by the 2[Deputy Commissioner (Appeals)] 3[or, as the case may be, 
the  Commissioner  (Appeals)]  under  this  section  shall  be  forwarded  to  the  appellant  and  the 6[Chief 
Commissioner or Commissioner]. 

7[23A. Appealable orders before Commissioner (Appeals).—(1) Any person— 

(a) objecting to the amount of net wealth determined under this Act; or 

(b) objecting to the amount of wealth-tax determined as payable by him under this Act; or 

(c) denying his liability to be assessed under this Act; or 

(d) objecting to any penalty imposed by the Assessing Officer under section 18 or section 18A; or 

(e) objecting to any order of the Assessing Officer under sub-section (2) of section 20; or 

(f) objecting to any penalty imposed by the Assessing Officer under the provisions of section 221 

of the Income-tax Act as applied under section 32 for the purposes of wealth-tax; or 

1. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
2. Subs. by s. 127, ibid., for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 
3. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 
4. Subs. by Act 45 of 1972, s. 11, for “Wealth-tax Officer” (w.e.f. 1-1-1973). 
5. Ins. by Act 46 of 1964, s. 22 (w.e.f. 1-4-1965). 
6. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988). 
7. Ins. by Act 21 of 1998, s. 69 (w.e.f. 1-10-1998). Earlier section 23A was inserted by Act 4 of 1988, s. 147 (w.e.f. 1-4-1989) 

which was later omitted by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989). 

62 

                                                           
(g) objecting  to  any  order  made  by  the  Assessing  Officer  under  section  22  treating  him  as  the 

agent of a person residing outside India; or 

(h) objecting  to  any  order  of  the  Assessing  Officer  under  section  35  having  the  effect  of 
enhancing the assessment or reducing a refund or refusing to allow the claim made by the assessee 
under the said section; or 

(i) objecting to any order of the Valuation Officer under section 35 having the effect of enhancing 
the valuation of any asset or refusing to allow the claim made by the assessee under the said section; 
or 

(j) objecting  to  any  penalty  imposed  by  the  Deputy  Director  or  Deputy  Commissioner  under 

section 18A, 

may  appeal  to  the  Commissioner (Appeals) against the  assessment  or  order,  as  the  case  may  be, in the 
prescribed form and verified in the prescribed manner and on payment of a fee of two hundred and fifty 
rupees. 

Explanation.—For the purposes of this sub-section, where on or before the 1st day of October, 1998, 
the post of Deputy Commissioner has been redesignated as Joint Commissioner and the post of Deputy 
Director  has  been  redesignated  as  Joint  Director,  the  references  in  this  sub-section  for  “Deputy 
Commissioner” and “Deputy Director” shall be substituted by “Joint Commissioner” and “Joint Director” 
respectively. 

(2) Notwithstanding anything contained in sub-section (1) of section 23, every appeal under this Act 
which is pending immediately before the appointed day, before the Deputy Commissioner (Appeals) and 
any matter arising out of or connected with such appeal and which is so pending shall stand transferred on 
that day to the Commissioner (Appeals) and the Commissioner (Appeals) may proceed with such appeals 
or matter from the stage on which it was on that day: 

Provided that the appellant may demand that before proceeding further with the appeal or matter, the 

previous proceedings or any part thereof be re-opened or that he be re-heard. 

Explanation.—For the purposes of this sub-section, “appointed day” means the day appointed under 

section 246A of the Income-tax Act. 

(3) An appeal shall be presented within thirty days of the receipt of the notice of demand relating to 
the assessment or penalty objected to or the day on which any order objected to is communicated to him, 
but the Commissioner (Appeals) may admit an appeal after the expiration of the period aforesaid, if he is 
satisfied that the appellant had sufficient cause for not presenting the appeal within that period. 

(4) Where a return has been filed by an assessee, no appeal under this section shall be admitted unless 

at the time of filing of the appeal, he has paid the tax due on the net wealth returned by him. 

(5) The Commissioner (Appeals) shall fix a day and place for the hearing of the appeal and may, from 

time to time, adjourn the hearing. 

(6) If the valuation of any asset is objected to in an appeal under clause (a) or clause (i) of sub-section 

(1), the Commissioner (Appeals) shall,— 

(a) in case where such valuation has been made by a Valuation Officer under section 16A, give 

such Valuation Officer an opportunity of being heard; 

(b)  in  any  other  case  on  request  being  made  in  this  behalf  by  the  Assessing  Officer,  give  an 
opportunity  of  being  heard  to  any  Valuation  Officer  nominated  for  the  purpose  by  the  Assessing 
Officer. 

63 

(7) The Commissioner (Appeals) may,— 

(a) at the hearing of an appeal, allow an appellant to go into any ground of appeal not specified in 

the grounds of appeal; 

(b)  before  disposing  of  any  appeal,  make  such  further  enquiry  as  he  thinks  fit  or  cause  further 

enquiry to be made by the Assessing Officer or, as the case may be, by the Valuation Officer. 

(8) In disposing of an appeal, the Commissioner (Appeals) may pass such order as he thinks fit which 

may include an order enhancing the assessment or penalty: 

Provided that no order enhancing the assessment or penalty shall be made unless the person affected 

thereby has been given a reasonable opportunity of showing cause against such enhancement. 

1[(8A) In every appeal, the Commissioner (Appeals), where it is possible, may hear and decide such 
appeal within a period of one year from the end of the financial year in which such appeal is filed under 
sub-section (1).] 

(9)  In  disposing  of  an  appeal,  the  Commissioner  (Appeals)  may  consider  and  decide  any  matter 
arising out of the proceedings in which the order appealed against was passed, notwithstanding that such 
matter was not placed before the Commissioner (Appeals) by the appellant. 

2[(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.] 

(10) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall 

state the points for determining the decision thereon and reasons for the decision. 

(11)  A  copy  of  every  order  passed  by  the  Commissioner  (Appeals)  under  this  section  shall  be 

forwarded to the appellant and the Chief Commissioner or Commissioner.] 

24. Appeal to the Appellate Tribunal from orders of the 3[Deputy Commissioner (Appeals)].—
4 [(1)  An  assessee  objecting  to  an  order  passed  by  the 3[Deputy  Commissioner  (Appeals)],  5 [or  the 
Commissioner  (Appeals)]  under  section  18  or  section  18A  or  section  23  6 [,  section  23A]  or                     
sub-section (2) of section 37 7*** may appeal to the Appellate Tribunal within sixty days of the date on 
which the order is communicated to him.] 

(2)  The  Commissioner  may,  if  he  is  not  satisfied  as  to  the  correctness  of  any  order  passed                  

by 8[a  Commissioner  (Appeals)  under  sub-section  (10)  of  section  23A],  direct  the 9[Assessing  Officer]      
to appeal to the Appellate Tribunal against such order, and such appeal may be made at any time before 
the expiry of sixty days of the date on which the order is communicated to the Commissioner. 

1. Ins. by Act 27 of 1999, s. 93 (w.e.f. 1-6-1999). 
2. Ins. by Act 18 of 2008, s. 64 (w.e.f. 1-4-2008). 
3. Subs. by Act 4 of 1988, s. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 
4.  Subs.  by  Act  41  of  1975,  s.  95,  for  sub-section  (1)  (w.e.f.  1-4-1976).  Earlier  it  was  substituted  by  Act  46  of  1964,                             

s. 23 (w.e.f. 1-4-1965). 

5. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 
6. Ins. by Act 21 of 1998, s. 70 (w.e.f. 1-10-998).  
7. The words, figures and letter “, or to an order passed by the Inspecting Assistant Commissioner under section 18A” omitted by 

Act 29 of 1977,  s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 

8.  Subs.  by  Act  21  of  1998,  s.  70,  for  “a  Deputy  Commissioner  (Appeals)  or  a  Commissioner  (Appeals)  under  section  23”             
(w.e.f.  1-10-1998).  Earlier  it  was  amended  by  Act  29  of  1977,  s. 39  and  the  Fifth Schedule  (w.e.f.  10-7-1978)  and  later by             
Act 4 of 1988, s. 127 (w.e.f. 1-4-1988). 

9. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 

64 

                                                           
1[(2A) The 2[Assessing Officer] or the assessee, as the case may be, on receipt of notice that an appeal 
against the order of 3[*** the Commissioner (Appeals)] has been preferred under sub-section (1) or sub-
section (2) by the other party, may, notwithstanding that he may not have appealed against such order or 
any  part  thereof,  within thirty  days  of  the  receipt  of  the  notice, file  a  memorandum  of  cross-objections 
verified in the prescribed manner, against any part of the order of 3[*** the Commissioner (Appeals)] and 
such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within 
the time specified in sub-section (1) or sub-section (2).] 

4[(3) The  Appellate Tribunal  may  admit  an  appeal or  permit  the  filing  of  a  memorandum  of  cross-
objections after the expiry of the relevant period referred to in sub-section (1) or sub-section (2) or sub-
section (2A), if it is satisfied that there was sufficient cause for not presenting it within that period.] 

(4) An appeal to the Appellate Tribunal shall be in the prescribed form and shall be verified in the 
prescribed  manner  and  shall,  except  in  the  case  of  an  appeal  referred  to  in  sub-section  (2),  be 
accompanied by a fee of 5[one thousand rupees]: 

6[Provided that  in  the  case  of  an  appeal  not  relatable  to  net  wealth  as  computed  by  the  Assessing 

Officer, the appeal shall be accompanied by a fee of five hundred rupees.] 

(5) The Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, 
pass  such  orders  thereon  as  it  thinks  fit,  and  any  such  orders  may  include  an  order  enhancing  the 
assessment or penalty: 

7[Provided that if the valuation of any asset is objected to, the Appellate Tribunal shall,— 

(a) in a case where such valuation has been made by a Valuation Officer under section 16A, also 

give such Valuation Officer an opportunity of being heard; 

(b) in any other case, on a request being made in this behalf by the 2[Assessing Officer], give an 
opportunity  of  being  heard  also  to  any  Valuation  Officer  nominated  for  the  purpose  by  the 
2[Assessing Officer]: 

Provided further that] no order enhancing an assessment or penalty shall be made unless the person 

affected thereby has been given a reasonable opportunity of showing cause against such enhancement. 

6[(5A) In every appeal, the Appellate Tribunal, where it is possible, may hear and decide such appeal 
within  a  period  of  four  years  from  the  end  of  the  financial  year  in  which  such  appeal  is  filed  under          
sub-section (1) 8[or sub-section (2)]. 

(5B) The cost of any appeal to the Appellate Tribunal shall be at the discretion of that Tribunal.] 

9* 

* 

* 

* 

* 

(9) A copy of every order passed by the Appellate Tribunal under this section shall be  forwarded to 

the assessee and the Commissioner. 

1. Ins. by Act 46 of 1964, 23 (w.e.f. 1-4-1965). 
2. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
3. The words and brackets “the Deputy Commissioner (Appeals) or” omitted by Act 21 of 1998, s. 70 (w.e.f. 1-10-1998). Earlier 
it was amended by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978) and by Act 4 of 1988, s. 127 (w.e.f. 1-4-
1988). 

4. Subs. by Act 46 of 1964, s. 23, for sub-section (3) (w.e.f. 1-4-1965). 
5. Subs. by Act 21 of 1998, s. 70, for “two hundred rupees” (w.e.f. 1-10-1998). 
6. Ins. by Act 27 of 1999, s. 94 (w.e.f. 1-6-1999).  
7. Subs. by Act 45 of 1972, s. 12, for “Provided that” (w.e.f. 1-1-1973). 
8. Ins. by Act 10 of 2000, s. 73 (w.e.f. 1-6-2000). 
9. Sub-sections (6), (7), (8), (8A) and (8B) omitted by Act 45 of 1972, s. 12 (w.e.f. 1-1-1973). Earlier these sub-sections were 

substituted by Act 46 of 1964, s. 23 (w.e.f. 1-4-1965). 

65 

 
 
 
 
 
 
 
 
                                                           
(10) Save as provided in section 27 1[or section 27A], any order passed by the Appellate Tribunal on 

appeal shall be final. 

(11)  The  provisions  of 2[sub-sections  (1),  (4)  and  (5)  of  section  255]  of  the  Income-tax  Act  shall 
apply to the Appellate Tribunal in the discharge of its functions under this Act as they apply to it in the 
discharge of its functions under the Income-tax Act. 

25. Powers of Commissioner to revise orders of subordinate authorities.—(1) The Commissioner 
may, either of his own motion or on application made by an assessee in this behalf, call for the record of 
any proceeding under this Act in which an order has been passed by any authority subordinate to him, and 
may make such inquiry, or cause such enquiry to be made, and, subject to the provisions of this Act, pass 
such order thereon, not being an order prejudicial to the assessee, as the Commissioner thinks fit: 

Provided that the Commissioner shall not revise any order under this sub-section in any case— 

(a) where  an  appeal  against  the  order  lies  to  the 3[Deputy  Commissioner  (Appeals)] 4[or  to  the 
Commissioner  (Appeals)]  or  to  the  Appellate  Tribunal,  the  time  within  which  such  appeal  can  be 
made has not expired or in the case of an appeal 4[to the Commissioner (Appeals) or] to the Appellate 
Tribunal the assessee has not waived his right of appeal; 

(b) where the order is the subject of an appeal before the  3[Deputy Commissioner (Appeals)] 4[or 

the Commissioner (Appeals)] or the Appellate Tribunal; 

(c) where the application is made by the assessee for such revision, unless— 

(i) the application is accompanied by a fee of twenty-five rupees; and 

(ii) the application is made within one year from the date of the order sought to be revised or 
within such further period as the Commissioner may think fit to allow on being satisfied that the 
assessee was prevented by sufficient cause from making the application within that period; and 

(d) where the order is sought to be revised by the Commissioner of his own motion, if such order 

is made more than one year previously. 

Explanation.—For the purposes of this sub-section,— 

(a) the 3[Deputy Commissioner (Appeals)] shall be deemed to be an authority subordinate to the 

Commissioner; and 

(b) an  order  by  the  Commissioner  declining  to  interfere  shall  be  deemed  not  to  be  an  order 

prejudicial to the assessee. 

(2) Without prejudice to the provisions contained in sub-section (1), the Commissioner may call for 
and examine the record of any proceeding under this Act, and if he considers that any order passed therein 
by an 5[Assessing Officer] is erroneous in so far as it is prejudicial to the interests of revenue, he may, 
after  giving  the  assessee  an  opportunity  of  being  heard,  and  after  making  or  causing  to  be  made  such 
inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including 
an order enhancing or modifying the assessment or cancelling it and directing a fresh assessment. 

1. Ins. by Act 27 of 1999, s. 94 (w.e.f. 1-6-1999). 
2. Subs. by Act 46 of 1964, s. 23, for “sub-sections (5), (7) and (8) of section 5A” (w.e.f. 1-4-1965). 
3. Subs. by Act 4 of 1988, s. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 
4. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 
5. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 

66 

                                                           
1 [Explanation.—For  the  removal  of  doubts,  it  is  hereby  declared  that,  for  the  purposes  of  this            

sub-section,— 

(a) an  order  passed 2[on  or before  or  after the  1st day  of June,  1988,] by  the  Assessing  Officer 
shall  include  an  order  made  by  the  3 [Joint  Commissioner]  in  exercise  of  the  powers  or  in  the 
performance of the functions of an Assessing Officer conferred on or assigned to him under orders or 
directions issued by the Board or by the Chief Commissioner or Director General or Commissioner 
authorised by the Board in this behalf under section 120 of the Income-tax Act read with section 8 of 
this Act; 

(b) “record”, 4[shall include and shall be deemed always to have included] all records relating to 

any proceeding under this Act available at the time of examination by the Commissioner; 

(c) where any order referred to in this sub-section and passed by the Assessing Officer had been 
the subject matter of any appeal 2[filed on or before or after the 1st day of June, 1988], the powers of 
the Commissioner under this sub-section shall extend 2[and shall be deemed always to have extended] 
to such matters as had not been considered and decided in such appeal.] 

5[(3) No order shall be made under sub-section (2) after the expiry of two years 6[from the end of the 

financial year in which the order sought to be revised was passed]. 

Explanation.—In  computing  the  period  of  limitation  for  the  purposes  of  sub-section  (3),  the  time 
taken in giving an opportunity to the assessee to be reheard under the proviso to section 39 and any period 
during which any proceeding under this section is stayed by an order or injunction of any court shall be 
excluded. 

7[(3A) On every application made by an assessee for revision under sub-section (1), an order shall be 
passed by the Commissioner within one year from the end of financial year in which such application is 
made by the assessee for revision. 

Explanation.—In  computing  the  period  of  limitation  for  the  purposes  of  this  sub-section,  the  time 
taken  in  giving  an  opportunity  to  the  assessee  to  be  re-heard  under  the  proviso  to  section  39  and  any 
period during which any proceeding under this section is stayed by an order or injunction of any court 
shall be excluded.] 

8[(4) Notwithstanding anything contained in sub-section (3) or sub-section (3A), an order in revision 
under sub-section (1) or sub-section (2) may be passed at any time in consequence of, or to give effect to, 
any  finding  or  direction  contained  in  an  order  of  the  Appellate  Tribunal 9[National  Tax  Tribunal],  the 
High Court or the Supreme Court.]] 

1.  Subs.  by  Act  26  of  1988,  s.  57,  for  the  Explanation  (w.e.f.  1-6-1988).  Earlier  it  was  inserted  by  Act  67  of  1984,  s.  65                    

(w.e.f. 1-10-1984) and later amended by Act 4 of 1988, s. 127 (w.e.f. 1-4-1988). 

2. Ins. by Act 13 of 1989, s. 30 (w.r.e.f. 1-6-1988).  

3. Subs. by Act 21 of 1998, s. 66, for “Deputy Commissioner” (w.e.f. 1-10-1998).  

4. Subs. by Act 13 of 1989, s. 30, for “includes” (w.r.e.f. 1-6-1988). 

5. Ins. by Act 46 of 1964, s. 24 (w.e.f. 1-4-1965). 

6. Subs. by Act 67 of 1984, s. 65, for “from the date of the order sought to be revised” (w.e.f. 1-10-1984). 

7. Ins. by Act 21 of 1998, s. 71 (w.e.f. 1-10-1998). 

8. Subs. by s. 71, ibid., for sub-section (4) (w.e.f. 1-10-1998). 

9.  Ins.  by  Act  49  of  2005,  s.  30  and  the  Schedule.  This  Act  has  been  struck  down  by  the  Supreme  Court’s  Order  dated  25th 

September, 2014 in the Madras Bar Association Vs. Union of India. 

67 

                                                           
26. Appeal to the Appellate Tribunal from orders of enhancement by 1[Chief Commissioner or 
Commissioner].—(1)  Any  assessee  objecting  to  2 [an  order  passed  by  the 1[Chief  Commissioner  or 
Commissioner] under section 18 3[or section 18A] or sub-section (2) of section 25] 4[or an order passed 
by the Director General or Director under section 18A] may appeal to the Appellate Tribunal within sixty 
days of the date on which the order is communicated to him. 

(2)  An  Appeal  to  the  Appellate  Tribunal  under  sub-section  (1)  shall  be  in  the  prescribed  form  and 

shall be verified in the prescribed manner and shall be accompanied by a fee of 5[two hundred rupees]. 

(3) The provisions of 6[sub-sections (3), (5), (9) and (10)] of section 24 shall apply in relation to any 

appeal under this section as they apply in relation to any appeal under that section. 

27. Reference  to  High  Court.—7[(1) The  assessee  or  the 1[Chief  Commissioner  or  Commissioner] 
may, within sixty days of the date upon which he is served with notice of an order 8[passed before the 1st 
day  of  June,  1999]  under  section  24  or  section  26 9[or  clause  (e)  of  sub-section  (1)  of  section  35],  by 
application in the prescribed form, accompanied, where the application is made by the assessee, by a fee 
of 5[two hundred rupees], require the Appellate Tribunal to refer to the High Court any question of law 
arising  out  of  such  order  and,  subject  to  the  other  provisions  contained  in  this  section,  the  Appellate 
Tribunal shall, within one hundred and twenty days of the receipt of such application, draw up a statement 
of the case and refer it to the High Court. 

(2) The Appellate Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause 
from  presenting  the  application  within  the  period  specified  in  sub-section  (1),  allow  it  to  be  presented 
within a further period not exceeding thirty days.] 

(3) If, on an application made under sub-section (1), the Appellate Tribunal— 

(a) refuses to state a case on the ground that no question of law arises, or 

(b) rejects it on the ground that it is time barred; 

the applicant may, within 10[ninety days] from the date on which he is served with a notice of refusal or 
rejection, as the case may be, apply to the High Court, and the High Court may, if it is not satisfied with 
the correctness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state the case 
to the High Court, and on receipt of such requisition, the Appellate Tribunal shall state the case: 

Provided that, if in any case where the Appellate Tribunal has been required by an assessee to state a 
case, the Appellate Tribunal refuses to do so on the ground that no question of law arises, the assessee 
may, within thirty days from the date on which he receives notice of refusal to state the case, withdraw his 
application, and if he does so, the fee paid by him under sub-section (1) shall be refunded to him. 

11[(3A) If, on an application made under this section, the Appellate Tribunal is of the opinion that, on 
account of a conflict in the decisions of the High Courts in respect of any particular question of law, it is 
expedient that a reference should be made direct to the Supreme Court, the Appellate Tribunal may draw 
up a statement of the case and refer it through its President direct to the Supreme Court.] 

1. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988). 
2. Subs. by Act 46 of 1964, s. 25, for “an order of enhancement made by the Commissioner under section 25” (w.e.f. 1-4-1965). 
3. Ins. by Act 41 of 1975, s. 96 (w.e.f. 1-4-1976). 
4. Ins. by Act 3 of 1989, s. 72 (w.e.f. 1-4-1989). 
5. Subs. by Act 16 of 1981, s. 29, for “one hundred and twenty-five rupees” (w.e.f. 1-6-1981). 
6. Subs. by Act 45 of 1972, s. 13, for “sub-sections (3) and (5) to (10) inclusive” (w.e.f. 1-1-1973). 
7. Subs. by Act 46 of 1964, s. 26, for sub-sections (1) and (2) (w.e.f. 1-4-1965). 
8. Ins. by Act 27 of 1999, s. 95 (w.e.f. 1-6-1999).  
9. Ins. by Act 49 of 1991, s. 79 (w.e.f. 27-9-1991). 
10. Subs. by Act 46 of 1964, s. 26, for “three months” (w.e.f. 1-4-1965). 
11. Ins. by s. 26, ibid. (w.e.f. 1-4-1965). 

68 

                                                           
1[(3B) The High Court may admit an application after the expiry of the period of ninety days referred 
to  in sub-section  (3),  if  it  is  satisfied  that there  was sufficient cause  for  not  filing  the  same  within that 
period.] 

(4)  The  statement  to  the  High  Court  2 [or  the  Supreme  Court]  shall  set  forth  the  facts,  the 

determination of the Appellate Tribunal and the question of law which arises out of the case. 

(5) If the High Court 2[or the Supreme Court], is not satisfied that the case as stated is sufficient to 
enable it to determine the question of law raised thereby, it may require the Appellate Tribunal to make 
such modifications therein as it may direct. 

(6) The High Court 2[or the Supreme Court], upon hearing any such case, shall decide the question of 
law raised therein, and in doing so, may, if it thinks fit, alter the form of the question of law and shall 
deliver judgment thereon containing the ground on which such decision is founded and shall send a copy 
of the judgment under the seal of the Court and the signature of the Registrar to the Appellate Tribunal 
and the Appellate Tribunal shall pass such orders as are necessary to dispose of the case conformably to 
such judgment. 

3[(7) The cost of any reference to the High Court or the Supreme Court which shall not include the fee 

for making the reference, shall be in the discretion of the Court.] 

4[27A. Appeal to High Court.—(1) The assessee or the Chief Commissioner or Commissioner may, 
within one hundred and twenty days of the day upon which he is served with notice of an order under 
section  24  or  section  26  or  clause  (e)  of  sub-section  (1)  of  section  35,  file  on  or  after  the  1st  day  of 
October, 1998, 5[but before the date of establishment of the National Tax Tribunal] an appeal before the 
High Court. 

6[(1A) The High Court may admit an appeal after the expiry of the period of one hundred and twenty 
days referred to in sub-section (1), if it is satisfied that there was sufficient cause for not filing the same 
within that period.] 

(2)  An  appeal  shall  lie  to  the  High  Court 5[before  the  date  of  establishment  of  the  National  Tax 
Tribunal]  from  every  order  passed  in  appeal  by  the  Appellate  Tribunal,  under  sub-section  (1)  of            
section 24 only if the High Court is satisfied that the case involves a substantial question of law. 

(3) In an appeal under this section, the Memorandum of Appeal shall precisely state the substantial 

question of law involved in the appeal 7***. 

(4) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall 

formulate that question. 

(5) The appeal shall be heard only on the question so formulated and the respondent shall, at the time 

of hearing of the appeal, be allowed to argue that the case does not involve such question: 

Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the 
Court  to  hear,  for  reasons  to  be  recorded,  the  appeal  on  any  other  substantial  question  of  law  not 
formulated by it, if it is satisfied that the case involves such question. 

1. Ins. by Act 14 of 2010, s. 55 (w.r.e.f. 1-6-1981). 
2. Ins. by Act 46 of 1964, s. 26 (w.e.f. 1-4-1965). 
3. Subs. by s. 26, ibid., for sub-sections (7), (8) and (9) (w.e.f. 1-4-1965). 
4. Ins. by Act 21 of 1998, s. 72 (w.e.f. 1-10-1998). 
5.  Ins.  by  Act  49  of  2005,  s.  30  and  the  Schedule.  This  Act  has  been  struck  down  by  the  Supreme  Court’s  Order  dated  25th 

September, 2014 in the Madras Bar Association Vs. Union of India. 

6. Ins. by Act 14 of 2010, s. 56 (w.r.e.f. 1-10-1998). 
7. The words “, and, where the appeal is made by the assessee, shall be accompanied by a fee of five thousand rupees” omitted by 

Act 27 of 1999, s. 96 (w.e.f. 1-6-1999).  

69 

                                                           
(6) The High Court shall decide the question of law so formulated and deliver such judgment thereon 

containing the grounds on which such decision is founded and may award such cost as it deems fit. 

(7) The Assessing Officer shall give effect to the order of the High Court on the basis of a certified 

copy of judgment delivered under sub-section (6).] 

1[(8)  The  provisions  of  the  Code  of  Civil  Procedure,  1908  (5  of  1908)  relating  to  appeals  to  High 

Court shall, so far as may be, apply in the case of appeals under this section.] 

28. Hearing by High Court.—When a case has been stated to the High Court 2[under section 27 or 
an appeal filed before the High Court under section 27A], it shall be heard by a Bench of not less than 
two Judges of the High Court and shall be decided in accordance with the opinion of such Judges or of 
the majority of such Judges, if any: 

Provided that where there is no such majority, the Judges shall state the point of law upon which they 
differ  and  the  case  shall  then  be  heard  upon  that  point  only  by  one  or  more  of  the  Judges  of  the  High 
Court, and such point shall be decided according to the opinion of the majority of the  Judges who have 
heard the case, including those who first heard it. 

29. Appeal to Supreme Court.—(1) An appeal shall lie to the Supreme Court from any judgment of 
the High Court delivered 3[before the date of establishment of the National Tax Tribunal] on a case stated 
4[under section 27 or an appeal filed under section 27A] in any case which the High Court certifies as a fit 
case for appeal to the Supreme Court. 

(2) Where the judgment of the High Court is varied or reversed on appeal under this section,  effect 
shall be given to the order of the Supreme Court in the manner provided in sub-section (6) of section 27 
5[or in sub-section (7) of section 27A]. 

(3)  The  High  Court  may,  on  application  made  to  it  for  the  execution  of  any  order  of  the  Supreme 
Court in respect of any costs awarded by it, transmit the order for execution to any court subordinate to 
the High Court. 

6[29A. Tax to be paid notwithstanding reference, etc.—Notwithstanding that a reference has been 
made  to  the  High  Court  or  the  Supreme  Court  or  an  appeal  has  been  preferred  to  the  Supreme 
Court, 3[under  this  Act  before  the  commencement  of  the  National  Tax  Tribunal  Act,  2005]  wealth-tax 
shall be payable in accordance with the assessment made in the case. 

29B. Definition of High Court.—In this Chapter, “High Court” means— 

(i) in relation to any State, the High Court of that State; 

7[(ii) in relation to the Union territory of Delhi, the High Court of Delhi; 

8* 

* 

* 

* 

*] 

9[(iii) in  relation to  the  Union  territories  of  Arunachal  Pradesh  and  Mizoram,  the  Gauhati  High 

Court (the High Court of Assam, Nagaland, Meghalaya, Manipur and Tripura);] 

1. Ins. by Act 27 of 1999, s. 96 (w.e.f. 1-6-1999). 
2. Subs. by Act 21 of 1998, s. 73, for “under section 27” (w.e.f. 1-10-1998). 
3.  Ins.  by  Act  49  of  2005,  s.  30  and  the  Schedule.  This  Act  has  been  struck  down  by  the  Supreme  Court’s  Order  dated  25th 

September, 2014 in the Madras Bar Association Vs. Union of India. 

4. Subs. by Act 21 of 1998, s. 74, for “under section 27” (w.e.f. 1-10-1998). 
5. Ins. by s. 74, ibid. (w.e.f. 1-10-1998). 
6. Ins. by Act 46 of 1964, s. 27 (w.e.f. 1-4-1965). 
7.  Subs.  by  the  Punjab  Reorganisation  and  Delhi  High  Court  (Adaptation  of  Laws  on  Union  Subjects)  Order,  1968,  for                 

clause (ii) (w.e.f. 1-11-1966). 

8.  Clause  (iia)  omitted  by  the  State  of  Himachal  Pradesh  (Adaptation  of  Laws  on  Union  Subjects)  Order,  1973                             

(w.e.f. 25-1-1971). 

9. Subs. by the North-Eastern Areas (Reorganisation) (Arunachal of Laws on Union Subjects) Order, 1974, for clause (iii) (w.e.f. 

21-1-1972). 

70 

 
 
 
 
 
 
 
                                                           
(iv) in  relation  to  the  Union  territory  of  Andaman  and  Nicobar  Islands,  the  High  Court  at 

Calcutta; 

(v) in relation to the Union territory of 1[Lakshadweep], the High Court of Kerala; 

(vi) in relation to the Union territories of Dadra and Nagar Haveli and Goa, Daman and Diu, the 

High Court at Bombay; 

(vii) in relation to the Union territory of Pondicherry, the High Court at Madras; 

2[(viii) in relation to the Union territory of Chandigarh, the High Court of Punjab and Haryana.]] 

CHAPTER VII 

PAYMENT AND RECOVERY OF WEALTH-TAX 

3[30. Notice  of  demand.—When  any  tax,  interest,  penalty,  fine  or  any  other  sum  is  payable  in 
consequence of any order passed under this Act, the 4[Assessing Officer] shall serve upon the assessee a 
notice of demand in the prescribed form specifying the sum so payable. 

31. When tax, etc., payable and when assessee deemed in default.—(1) Any amount specified as 
payable  in  a  notice  of demand  under  section  30  shall  be  paid  within 5[thirty  days] of  the  service  of the 
notice at the place and to the person mentioned in the notice: 

Provided that, where the 4[Assessing Officer] has any reason to believe that it will be detrimental to 
revenue  if  the  full  period  of 5[thirty  days]  aforesaid  is  allowed,  he  may,  with  the  previous  approval  of 
the 6[Joint Commissioner], direct that the sum specified in the notice of demand shall be paid within such 
period being a period less than the period of 5[thirty days] aforesaid, as may be specified by him in the 
notice of demand. 

(2)  If  the amount  specified  in  any  notice  of  demand  under section  30 is  not  paid  within the  period 
limited under sub-section (1), the assessee shall be liable to pay simple interest at 7[8[one per cent.]  for 
every month or part of a month comprised in the period commencing from the day immediately following 
the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid]: 

Provided that,  where  as  a  result  of  an  order  under  section  23, 9[or  section  23A,]  or  section  24,  or 
section  25,  or  section  26,  or  section  27,  or  section  29,  or  section  35 10[or  any  order  of  the  Wealth-tax 
Settlement Commission under sub-section (4) of section 22D], the amount on which interest was payable 
under this section had been reduced, the interest shall be reduced accordingly and the excess interest paid, 
if any, shall be refunded: 

1.  Subs.  by  the  Laccadive,  Minicoy  and  Amindivi  Islands  (Alteration  of  Name)  Adaptation  of  Laws  Order,  1974,  for  “the 

Laccadive, Minicoy and Amindivi Islands” (w.e.f. 1-11-1973). 

2.  Ins.  by  the  Punjab  Reorganisation  and  Delhi  High  Court  (Adaptation  of  Laws  on  Union  Subjects)  Order,  1968                   

(w.e.f. 1-11-1966). 

3. Subs. by Act 46 of 1964, s. 28, for sections 30, 31 and 32 (w.e.f. 1-4-1965). 
4. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
5. Subs. by s. 148, ibid., for “thirty-five days” (w.e.f. 1-4-1989). 
6. Subs. by Act 21 of 1998, s. 66, for “Deputy Commissioner” (w.e.f. 1-10-1998). Earlier the quoted words were substituted by 

Act 4 of 1988, s. 127, for “Inspecting Assistant Commissioner” (w.e.f. 1-4-1988). 

7.  Subs.  by  Act  4  of  1988,  s.  148,  for  “fifteen  per  cent.  per  annum  from  the  day  commencing  after  the  end  of  the  period 
mentioned in sub-section (1)” (w.e.f. 1-4-1989). Earlier “fifteen per cent.” was substituted by Act 67 of 1984, s. 66, for “twelve 
per cent.” (w.e.f. 1-10-1984). 

8. Subs. by Act 54 of 2003, s. 20, for “one and one-fourth per cent.” (w.e.f. 8-9-2003). Earlier the quoted words were substituted 

by Act 14 of 2001, s. 99, for “one and one-half per cent.” (w.e.f. 1-6-2001).  

9. Ins. by Act 10 of 2000, s. 74 (w.e.f. 1-6-2000). 
10. Ins. by Act 4 of 1988, s. 148 (w.e.f. 1-4-1989).  

71 

                                                           
1[Provided  further that  in  respect  of  any  period  commencing  on  or  before  the  31st  day  of  March, 
1989, and ending after that date, such interest shall, in respect of so much of such period as falls after that 
date, be calculated at the rate of 2[one per cent.] for every month or part of a month.] 

3 [(2A)  Notwithstanding  anything  contained  in  sub-section  (2),  the  4 [ 5 [Chief  Commissioner  or 
Commissioner] may] reduce or waive the amount of 6[interest paid or payable by an assessee] under the 
said sub-section if 7[he is satisfied that]— 

8[(i) payment of such amount has caused or would cause genuine hardship to the assessee; 

(ii) default in the payment of the amount on which interest has been paid or was payable under 

the said sub-section was due to circumstances beyond the control of the assessee; and] 

(iii) the assessee has co-operated in any inquiry relating to the assessment or any proceeding for 

the recovery of any amount due from him.] 

(3) Without prejudice to the provisions  contained in sub-section (2), on an application made by the 
assessee before the expiry of the due date under sub-section (1), the 9[Assessing Officer] may extend the 
time  for  payment  or  allow  payment  by  instalments,  subject  to  such  conditions  as  he  may  think  fit  to 
impose in the circumstances of the case. 

(4)  If  the  amount  is  not  paid  within  the  time  limited  under  sub-section  (1)  or  extended  under  sub-
section (3), as the case may be, at the place and to the person mentioned in the said notice, the assessee 
shall be deemed to be in default. 

(5) If in a case where payment by instalments is allowed under sub-section (3), the assessee commits 
default  in  paying  any  one  of  the  instalments  within  the  time  fixed  under  that  sub-section,  the  assessee 
shall be deemed to be in default as to the whole of the amount then outstanding, and the other instalment 
or instalments shall be deemed to have been due on the same date as the instalment actually in default. 

(6) Where an  assessee  has  presented  an  appeal  under  section  23 10[or section  23A],  the 9[Assessing 
Officer]  may,  in  his  discretion,  and  subject  to  such  conditions  as  he  may  think  fit  to  impose  in  the 
circumstances of the case, treat the assessee as not being in default in respect of the amount in dispute in 
the appeal, even though the time for payment has expired, as long as such appeal remains undisposed of. 

(7) Where an assessee has been assessed in respect of assets located in a country outside India, the 
laws of which prohibit or restrict the remittance of money to India, the 9[Assessing Officer] shall not treat 
the assessee as in default in respect of that part of the tax which is attributable to those assets, and shall 
continue to  treat the  assessee  as  not  in  default  in  respect  of  that  part  of the tax until  the  prohibition  or 
restriction of remittance is removed. 

1. Ins. by Act 4 of 1988, s. 148 (w.e.f. 1-4-1989). 

2. Subs. by Act 54 of 2003, s. 20, for “one and one-fourth per cent.” (w.e.f. 8-9-2003). Earlier the quoted words were substituted 

by Act 14 of 2001, s. 99, for “one and one-half per cent.” (w.e.f. 1-6-2001). 

3. Ins. by Act 67 of 1984, s. 66 (w.e.f. 1-10-1984). 

4. Subs. by Act 11 of 1987, s. 88, for “the Board may” (w.e.f. 1-4-1987). 

5. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988).  

6. Subs. by Act 11 of 1987, s. 88, for “interest payable by an assessee” (w.r.e.f. 1-10-1984). 

7. Subs. by s. 88, ibid., for “, on the recommendation made by the Commissioner in this behalf, it is satisfied that” (w.e.f. 1-4-

1987). 

8. Subs. by s. 88, ibid., for clauses (i) and (ii) (w.r.e.f. 1-10-1984). 

9. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 

10. Ins. by Act 10 of 2000, s. 74 (w.e.f. 1-6-2000). 

72 

                                                           
32. Mode of recovery.—The provisions contained in 1[sections 221 to 227,  228A], 229, 231 and 232 
of  the  Income-tax  Act  and  the  Second  and Third  Schedules  to that  Act  and  any  rules  made  thereunder 
shall,  so  far  as  may  be,  apply  as  if  the  said  provisions  were  provisions  of  this  Act  and  referred  to                
wealth-tax and sums imposed by way of penalty, fine and interest under this Act instead of to income-tax 
and  sums  imposed  by  way  of  penalty,  fine  and  interest  under  that  Act  2[and  to  the  corresponding             
wealth-tax authorities instead of to the income-tax authorities specified therein]. 

Explanation I.—Any reference to section 173 and sub-section (2) or sub-section (6) or sub-section (7) 
of section 220 of the Income-tax Act in the said provisions of that Act or the rules made thereunder shall 
be  construed  as  references  to  sub-section  (7)  of  section  22  and  sub-section  (2)  or  sub-section  (6)  or               
sub-section (7) of section 31 of this Act, respectively. 

3[Explanation II.—The Chief Commissioner or Commissioner and the Tax Recovery Officer referred 
to in the Income-tax Act shall be deemed to be the corresponding wealth-tax authorities for the purpose of 
recovery of wealth-tax and sums imposed by way of penalty, fine and interest under this Act.]] 

33. Liability of transferees of properties in certain cases.—(1) Where by reason of the provisions 
contained in section 4, the value of any assets transferred to any of the persons mentioned in that section 
have to be included in the net wealth of an individual, the person in whose name such assets stand shall, 
notwithstanding  anything  contained  in  any  law  to  the  contrary,  be  liable,  on  the  service  of  a  notice  of 
demand by the 4[Assessing Officer] in this behalf, to pay that portion of the tax assessed on the assessee 
as is attributable to the value of the asset standing in his name as aforesaid: 

Provided that where any such asset is held jointly by more than one person, they shall be jointly and 

severally liable to pay the tax as is attributable to the value of the asset so jointly held. 

(2) Where any such person as is referred to in sub-section (1) defaults in making payment of any tax 
demanded from him, he shall be deemed to be an assessee in default in respect of such sum, and all the 
provisions of this Act relating to recovery shall apply accordingly. 

34. [Restrictions  on  registration  of  transfers  of  immovable  property  in  certain  cases.]—Omitted  by 

the Wealth-tax (Amendment) Act, 1964, s. 29 (w.e.f. 1-4-1965).  

5[CHAPTER VIIA 

REFUNDS 

34A. Refunds.—(1) Where, as a result of any order passed in appeal or other proceeding (including a 
rectification  proceeding)  under  this  Act,  refund  of  any  amount  becomes  due  to  the  assessee, 
the 4[Assessing Officer] shall, except as otherwise provided in this Act, refund the amount to the assessee 
without his having to make any claim in that behalf: 

6[Provided that where, by the order aforesaid,— 

 (a)  an  assessment  is  set  aside  or  cancelled  and  an  order  of  fresh  assessment  is  directed  to  be 

made, the refund, if any, shall become due only on the making of such fresh assessment; 

1. Subs. by Act 16 of 1972, s. 48, for “sections 221 to 227” (w.e.f. 1-4-1972). 
2.  Subs.  by  Act  4  of  1988,  s.  149,  for  “and  to  Wealth-tax  Officer  and  Commissioner  of  Wealth-tax  instead  of  to  Income-tax 

Officer and Commissioner of Income-tax” (w.e.f. 1-4-1988). 

3. Subs. by s. 149, ibid., for Explanation II (w.e.f. 1-4-1989). 
4. Subs. by s. 127, ibid., for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
5. Ins. by Act 46 of 1964, s. 30 (w.e.f. 1-4-1965). 
6. The proviso added by Act 4 of 1988, s. 150 (w.e.f. 1-4-1989). 

73 

                                                           
 (b) the assessment is annulled, the refund shall become due only of the amount, if any, of the tax 

paid in excess of the tax chargeable on the 1[net wealth] returned by the assessee.] 

2[(2) Where refund of any amount becomes due to the assessee as a result of an order under this Act 
or under the provisions of sub-section (1) of section 16 after a return has been made under section 14 or 
section 15 or in response to a notice under clause (i) of sub-section (4) of section 16 and the Assessing 
Officer is of the opinion, having regard to the fact that— 

 (i)  a  notice  has  been  issued,  or  is  likely  to  be  issued,  under  sub-section  (2)  of  section  16  in 

respect of the said return; or 

 (ii) the order is the subject-matter of an appeal or further proceeding; or 

(iii) any other proceeding under this Act is pending, 

that the grant of the refund is likely to adversely affect the revenue, the Assessing Officer may, with the 
previous approval of the Chief Commissioner or Commissioner, withhold the refund till such time as the 
Chief Commissioner or Commissioner may determine.] 

(3) Where a refund is due to the assessee in pursuance of an order referred to in sub-section (1) and 
the 3[Assessing  Officer]  does  not  grant  the  refund  within  a  period  of  six  months  from  the  date  of  such 
order, the Central Government shall pay to the assessee simple interest at 4[six per cent.] per annum on 
the  amount  of  refund  due  from  the  date  immediately  following  the  expiry  of  the  period  of  six  months 
aforesaid to the date on which the refund is granted. 

5[(3A) Where the whole or any part of the refund referred to in sub-section (3) is due to the assessee 
as a result of any amount having been paid by him after the 31st day of March, 1975, in pursuance of any 
order of assessment or penalty and such amount or any part thereof having been found in appeal or other 
proceeding  under this  Act to  be  in excess of the amount  which such assessee is  liable  to  pay  as tax or 
penalty,  as  the  case  may  be,  under  this  Act,  the  Central  Government  shall  pay  to  such  assessee  simple 
interest at the rate specified in sub-section (3) on the amount so found to be in excess from the date on 
which such amount was paid to the date on which the refund is granted: 

Provided that, where the amount so found to be in excess was paid in instalments, such interest shall 
be payable on the amount of each such instalment or any part of such instalment, which was in excess, 
from the date on which such instalment was paid to the date on which the refund is granted: 

Provided  further that  no  interest  under  this  sub-section  shall  be  payable  for  a  period  of  one  month 

from the date of the passing of the order in appeal or other proceeding: 

Provided  also that,  where  any  interest  is  payable  to  an  assessee  under  this  sub-section,  no  interest 

under sub-section (3) shall be payable to him in respect of the amount so found to be in excess.] 

(4) Where a refund is withheld under the provisions of sub-section (2), the Central Government shall 
pay interest at the aforesaid rate on the amount of refund ultimately determined to be due as a result of the 
appeal or further proceeding for the period commencing after the expiry of six months from the date of 
the order referred to in that sub-section to the date the refund is granted. 

6[(4A) The provisions of sub-sections (3), (3A) and (4) shall not apply in respect of any assessment for 

the assessment year commencing on the 1st day of April, 1989, or any subsequent assessment year. 

1. Subs. by Act 3 of 1989, s. 73, for “total income” (w.e.f. 1-4-1989). 
2. Subs. by Act 36 of 1989, s. 29, for sub-section (2) (w.r.e.f. 1-4-1989). 
3. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
4. Subs. by Act 54 of 2003, s. 21, for “eight per cent.” (w.e.f. 8-9-2003). 
5. Ins. by Act 41 of 1975, s. 97 (w.e.f. 1-10-1975). 
6. Ins. by Act 4 of 1988, s. 150 (w.e.f. 1-4-1989). 

74 

                                                           
(4B) (a) 1[Where refund of any amount becomes due to the assessee under this Act,] he shall, subject 
to the provisions of this sub-section, be entitled to receive, in addition to the said amount, simple interest 
thereon calculated at the rate of 2[one-half 3*** per cent.] for every month or part of a month comprised in 
the period or periods from the date or, as the case may be, dates of payment of the tax or penalty to the 
date on which the refund is granted. 

Explanation.—For the purposes of this clause, “date of payment of the tax or penalty” means the date 
on and from which the amount of tax or penalty specified in the notice of demand issued under section 30 
is paid in excess of such demand. 

(b)  If  the  proceedings  resulting  in  the  refund  are  delayed  for  reasons  attributable  to  the  assessee, 
whether wholly or in part, period of the delay so attributable to him shall be excluded from the period for 
which interest is payable and where any question arises as to the period to be excluded, it shall be decided 
by the Chief Commissioner or Commissioner whose decision thereon shall be final. 

(c) Where as a result of an order under 4[sub-section (3) or sub-section (5) of section 16 or] section 17 
or section 23 5[or section 23A] or section 24 or section 25 or section 27 or section 29 or section 35 or any 
order  of  the  Wealth-tax  Settlement  Commission  under  sub-section  (4)  of  section  22D,  the  amount  on 
which  interest  was  payable  under  clause  (a)  has  been  increased  or  reduced,  as  the  case  may  be,  the 
interest  shall  be  increased  or  reduced  accordingly  and,  in  a  case  where  the  interest  is  reduced,  the 
Assessing  Officer  shall serve  on  the  assessee a  notice  of demand  in the  prescribed  form  specifying  the 
amount of the excess interest paid and requiring him to pay such amount; and such notice of demand shall 
be deemed to be a notice under section 30 and the provisions of this Act shall apply accordingly. 

(d) The provisions of this sub-section shall apply in respect of assessments for the assessment year 

commencing on the 1st day of April, 1989, and subsequent assessment years.] 

(5)  Where  under  any  of  the  provisions  of  this  Act,  a  refund  is  found  to  be  due  to  any  person,  the 
6 [Assessing  Officer],  7 [Deputy  Commissioner  (Appeals)]  8 [,  Commissioner  (Appeals)]  or  9 [Chief 
Commissioner or Commissioner], as the case may be, may, in lieu of payment of the refund, set off the 
amount to be refunded or any part of that amount, against the sum, if any, remaining payable under this 
Act by the person to whom the refund is due, after giving an intimation in writing to such person of the 
action proposed to be taken under this section.] 

10[CHAPTER VIIB 

REGISTERED VALUERS 

34AA. Appearance  by  registered  valuers.—Notwithstanding  anything  contained  in  this  Act,  any 
assessee who is entitled to or required to attend before any wealth-tax authority or the Appellate Tribunal 
in connection with any matter relating to the valuation of any asset, except where he is required under this 
Act to attend in person, may attend by a registered valuer. 

1. Subs. by Act 3 of 1989, s. 73, for “Where, in pursuance of any order passed under this Act, the refund of any amount becomes 

due to the assessee” (w.e.f. 1-4-1989). 

2. Subs. by Act 54 of 2003, s. 21, for “two-third per cent.” (w.e.f. 8-9-2003). Earlier the quoted words were substituted by Act 20 
of 2002, s. 114, for “three fourth per cent.” (w.e.f. 1-6-2002) which were earlier substituted by Act 14 of 2001, s. 100, for “one 
per cent.” (w.e.f. 1-6-2001).  

3. The words “and a half per cent.” omitted by Act 49 of 1991, s. 80 (w.e.f. 1-10-1991). 
4. Ins. by Act 3 of 1989, s. 73 (w.e.f. 1-4-1989). 
5. Ins. by Act 10 of 2000, s. 75 (w.e.f. 1-6-2000). 
6. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
7. Subs. by s. 127, ibid., for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 
8. Ins. by Act 29 of 1977, s. 39 and the Schedule (w.e.f. 10-7-1978). 
9. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988). 
10. Ins. by Act 45 of 1972, s. 14 (w.e.f. 15-11-1972). 

75 

                                                           
34AB. Registration of valuers.—(1) The 1[Chief Commissioner or Director General] shall maintain 
a  register  to  be  called  the  Register  of  Valuers  in  which  shall  be  entered  the  names  and  addresses  of 
persons registered under sub-section (2) as valuers. 

(2)  Any  person  who  possesses  the  qualifications  prescribed in  this  behalf  may  apply  to  the 1[Chief 
Commissioner  or  Director  General]  in  the  prescribed  form for  being  registered  as  a  valuer  under  this 
section: 

Provided that different qualifications may be prescribed for valuers of different classes of assets. 

(3)  Every  application  under  sub-section  (2)  shall  be  verified  in  the  prescribed  manner,  shall  be 
accompanied  by  such  fees  as  may  be  prescribed  and  shall  contain  a  declaration  to  the  effect  that  the 
applicant will— 

(i) make an impartial and true valuation of any asset which he may be required to value; 

(ii) furnish a report of such valuation in the prescribed form; 

(iii) charge fees at a rate not exceeding the rate or rates prescribed in this behalf; 

(iv) not undertake valuation of any asset in which he has a direct or indirect interest. 

(4) The report of valuation of any asset by a registered valuer shall be in the prescribed form and be 

verified in the prescribed manner. 

34AC. Restrictions on practice as registered valuer.—(1) No person, either alone, or in partnership 
with any other person, shall practise, describe himself or hold himself out as a registered valuer for the 
purposes of this Act or permit himself to be so described or held out unless he is registered as a valuer or, 
as the case may be, unless he and all his partners are so registered under this Chapter. 

(2) No company or other body corporate shall practise, describe itself or hold itself out as registered 

valuers for the purposes of this Act or permit itself to be so described or held out. 

2[34ACC. Furnishing  of  particulars  in  certain  cases.—Where  any  person  who  is  registered  as  a 
valuer under section 34AB or who has made an application for registration as a valuer under that section 
is, at any time thereafter,— 

(a) convicted of any offence and sentenced to a term of imprisonment; or 

(b) in a case where he is a member of any association or institution established in India having as 
its  object  the  control,  supervision,  regulation  or  encouragement  of  the  profession  of  architecture, 
accountancy, or company secretaries or such other profession as the Board may specify in this behalf 
by  notification  in  the  Official  Gazette,  found  guilty  of  misconduct  in  his  professional  capacity,  by 
such association or institution, 

he shall immediately after such conviction or, as the case may be, finding, intimate the particulars thereof 
3[to the Chief Commissioner or Director General].] 

1. Subs. by Act 26 of 1988, s. 58, for “Board” (w.e.f. 1-6-1988). 
2. Ins. by Act 67 of 1984, s. 68 (w.e.f. 1-10-1984). 
3. Subs. by Act 26 of 1988, s. 59, for “to the Board” (w.e.f. 1-6-1988). 

76 

                                                           
34AD. Removal  from  register  of  names  of  valuers  and  restoration.—(1)  The  1 [Chief 
Commissioner  or  Director  General]  may  remove  the  name  of  any  person  from  the  register  of  valuers 
where 2[he is  satisfied],  after  giving  that  person  a reasonable  opportunity  of  being  heard and after  such 
further inquiry, if any, as 3[he thinks fit] to make,— 

(i) that his name has been entered in the register by error or on account of misrepresentation or 

suppression of a material fact; 

(ii) that  he  has  been  convicted  of  any  offence  and  sentenced  to  a  term  of  imprisonment  or  has 
been  guilty  of  misconduct  in  his  professional  capacity  which,  in  the  opinion  of  the 1[Chief 
Commissioner or Director General], renders him unfit to be kept in the register. 

(2) The 1[Chief Commissioner or Director General] may, on application and on sufficient cause being 

shown, restore to the register the name of any person removed therefrom. 

4[(3)  Without  prejudice  to  the  provisions  of  sub-sections  (1)  and  (2),  the  Chief  Commissioner  or 
Director General shall, once in three years review the performance of all the registered valuers and may 
remove the name of any person from the Register of Valuers where he is satisfied, after giving that person 
a reasonable opportunity of being heard and after such further inquiry, if any, as he thinks fit to make, that 
his performance is such that his name should not remain on the Register of Valuers. 

(4) The Chief Commissioner or Director General may himself conduct the inquiry referred to in sub-
section  (1)  or  sub-section  (3)  or  appoint  an  Inquiry  Officer  not  below  the  rank  of  a  Commissioner  to 
conduct such inquiry, and for the purposes of such inquiry, the Chief Commissioner or Director General 
and the Inquiry Officer so appointed shall have the same powers as are vested in a court under the Code 
of Civil Procedure, 1908 (5 of 1908 ), when trying a suit in respect of the following matters, namely:— 

(a) discovery and inspection; 

(b) enforcing  the  attendance  of  any  person  including  any  officer  of  a  banking  company  and 

examining him on oath; 

(c) compelling the production of books of account and other documents; 

(d) issuing commission.]] 

5[34AE. Existing  registered  valuers  to  apply  afresh.—(1)  Notwithstanding  anything  contained in 
this Chapter, every person whose name is included in the Register of Valuers immediately before the 1st 
day  of  June,  1988,  shall,  if  he  intends  to  continue to be  registered  under this  Act,  make  an  application 
under sub-section (2) of section 34AB within a period of three months from that date, for being registered 
afresh as a valuer under this Chapter and the provisions of sub-section (3) of that section and the rules 
made  thereunder  shall  be  applicable  in  respect  of  the  verification  of  the  application,  the  fees  that  shall 
accompany such application and the declaration to be made by the applicant. 

(2) The provisions of this Chapter regarding the registration of a person as a valuer and other matters 

shall, so far as may be, apply to every application made under sub-section (1). 

(3) Every application pending before the Board immediately before the 1st day of June,1988, shall be 

deemed  to  be  an  application  received  by  the  Chief  Commissioner  or  Director  General  under                    
sub-section (1).] 

1. Subs. by Act 26 of 1988, s. 60, for “Board” (w.e.f. 1-6-1988). 
2. Subs. by s. 60, ibid., for “it is satisfied” (w.e.f. 1-6-1988). 
3. Subs. by s. 60, ibid., for “it thinks fit” (w.e.f. 1-6-1988). 
4. Ins. by s. 60, ibid. (w.e.f. 1-6-1988). 
5. Ins. by s. 61, ibid. (w.e.f. 1-6-1988). 

77 

                                                           
CHAPTER VIII 

MISCELLANEOUS 

1 [34B. Transfers  to  defraud  revenue  to  be  void.—(1)  Where,  during  the  pendency  of  any 
proceeding under this Act or after the completion thereof, but before the service of notice under rule 2 of 
the  Second  Schedule  to  the  Income-tax  Act as  made  applicable  to  this  Act by  section  32, any  assessee 
creates a charge on, or parts with (by way of sale, mortgage, gift, exchange or any other mode of transfer 
whatsoever)  the  possession  of,  any  of  his  assets  in  favour  of  any  other  person,  such  charge  or  transfer 
shall  be  void as  against  any  claim  in  respect  of  any  tax  or any  other  sum  payable  by  the assessee  as  a 
result of the completion of the said proceeding or otherwise: 

Provided that such charge or transfer shall not be void, if it is made— 

(i) for adequate consideration and without notice of the pendency of such proceeding or, as the 

case may be, without notice of such tax or other sum payable by the assessee; or 

(ii) with the previous permission of the 2[Assessing Officer]. 

(2) This section applies to cases where the amount of tax or other sum payable or likely to be payable 

exceeds five thousand rupees and the assets charged or transferred exceed ten thousand rupees in value. 

Explanation.—In this section, “assets” means land, building, machinery, plant, shares, securities and 
fixed deposits in banks to the extent to which any of the assets aforesaid does not form part of the stock-
in-trade of the business of the assessee. 

34C. Provisional  attachment  to  protect  revenue  in  certain  cases.—(1)  Where,  during  the 
pendency of any proceeding for the assessment of net wealth or for the assessment or reassessment of net 
wealth which has escaped assessment, the 2[Assessing Officer] is of the opinion that for the purpose of 
protecting the interests of the revenue it is necessary so to do, he may, with the previous approval of the 
3[Chief Commissioner or Commissioner], by order in writing, attach provisionally any property belonging 
to the assessee in the manner provided in the Second Schedule to the Income-tax Act as made applicable 
to this Act by section 32. 

4[Explanation.—For the purposes of this sub-section, the proceedings under sub-section (5) of section 
37A  shall  be  deemed  to  be  proceedings  for  the  assessment  of  any  net  wealth  or  for  the  assessment  or 
reassessment of any net wealth which has escaped assessment.] 

(2)  Every  such  provisional  attachment  shall  cease  to have  effect  after  the  expiry  of  a  period  of  six 

months from the date of the order made under sub-section (1): 

Provided that  the   3[Chief  Commissioner  or  Commissioner]  may,  for  reasons  to  be  recorded  in 
writing, extend the aforesaid period by such further period or periods as he thinks fit, so however, that the 
total period of extension shall not in any case exceed two years: 

4[Provided  further that  where  an  application  for  settlement  under  section  22C  is  made,  the  period 
commencing from the date on which such application is made and ending with the date on which an order 
under sub-section (1) of section 22D is made shall be excluded from the period specified in the preceding 
proviso.]] 

1. Subs. by Act 41 of 1975, s. 98, for section 34B (w.e.f. 1-10-1975). Earlier section 34B was inserted by Act 46 of 1964, s. 31 

(w.e.f. 1-4-1965). 

2. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
3. Subs. by s. 127, ibid., for “Commissioner” (w.e.f. 1-4-1988). 
4. Ins. by Act 26 of 1988, s. 62 (w.e.f. 1-4-1988). 

78 

                                                           
1[35. Rectification  of  mistakes.—(1)  With  a  view  to  rectifying  any  mistake  apparent  from  the 

record— 

(a) the 2[Assessing Officer] may amend any order of assessment or of refund or  any other order 

passed by him; 

3[(aa) a wealth-tax authority may amend any intimation or deemed intimation under sub-section 

(1) of section 16;] 

4[5[(aaa)] the Valuation Officer may amend any order passed by him under section 16A;] 

6[(b) the  7[Joint  Director]  or  8 [Joint  Commissioner]  or  Director  or  Commissioner  or  Deputy 
Commissioner  (Appeals)  or  Commissioner  (Appeals)  may  amend  any  order  passed  by  him  under 
section 18A;] 

9[(c) the  Deputy  Commissioner  (Appeals)  or  Commissioner  (Appeals)  may  amend  any  order 

passed by him under section 23 10[or section 23A]; 

(d) the Commissioner may amend any order passed by him under section 25; 

(e) the Appellate Tribunal may amend any order passed by it under section 24.] 

(2) Where the amount of tax, penalty or interest determined as a result of the first appeal or revision 
against  the  order  referred  to  in  sub-clause  (iii)  of  clause  (m)  of  section  2 11[,  as  it  existed  immediately 
before its amendment by the Finance Act, 1992,] is paid within six months of the date of the order passed 
in such appeal or revision, the 2[Assessing Officer] may, notwithstanding anything to the contrary in this 
Act, rectify the assessment by allowing a deduction to the extent the tax, penalty or interest so paid stood 
disallowed therein as if such rectification were a rectification of a mistake apparent from the record. 

(3) Subject to the other provisions of this section, the authority concerned— 

(a) may make an amendment under sub-section (1) or sub-section (2) of its own motion; 

(b) shall  make  such  amendment  for  rectifying  any  such  mistake  which  has  been  brought  to  its 
notice by the assessee, and where the authority concerned is the 12[Valuation Officer or the 13[Deputy 
Commissioner  (Appeals)]]  14 [or  the  Commissioner  (Appeals)]  or  the  Appellate  Tribunal,  by 
the 2[Assessing Officer] also. 

(4)  An  amendment,  which  has  the  effect  of  enhancing  an  assessment  or  reducing  a  refund  or 
otherwise increasing the liability of the assessee, shall not be made under this section unless the authority 
concerned  has  given  notice  to  the  assessee  of  its  intention  so  to  do  and  has  allowed  the  assessee  a 
reasonable opportunity of being heard. 

1. Subs. by Act 46 of 1964, s. 32, for section 35 (w.e.f. 1-4-1965). 
2. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
3. Subs. by  Act  27  of  1999,  s. 97,  for  clause  (aa)  (w.e.f.  1-6-1999). Earlier  clause  (aa)  was  inserted  by  Act  4  of  1988,  s. 151          

(w.e.f. 1-4-1989). 

4. Ins. by Act 45 of 1972, s. 15 (w.e.f. 1-1-1973). 
5. Clause (aa) renumbered as clause (aaa) therof by Act 4 of 1988, s. 151 (w.e.f. 1-4-1989). 
6. Subs. by Act 4 of 1988, s. 160, for clause (b) (w.e.f. 1-4-1989). 
7. Subs. by Act 21 of 1998, s. 66, for “Deputy Director” (w.e.f. 1-10-1998). 
8. Subs. by s. 66, ibid., for “Deputy Commissioner” (w.e.f. 1-10-1998). 
9. Subs. by Act 4 of 1988, s. 160, for clauses (d) and (e) (w.e.f. 1-4-1989). Earlier clause (c) was omitted by Act 41 of 1975, s. 99 

(w.e.f. 1-4-1976). 

10. Ins. by Act 10 of 2000, s. 76 (w.e.f. 1-6-2000). Earlier it was omitted by Act 3 of 1989, s. 74 (w.e.f. 1-4-1989). 
11. Ins. by Act 18 of 1992, s. 97 (w.e.f. 1-4-1993). 
12. Subs. by Act 45 of 1972, s. 15, for “Appellate Assistant Commissioner” (w.e.f. 1-1-1973). 
13. Subs. by Act 4 of 1988, s. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 
14. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 

79 

                                                           
(5)  Where  an  amendment  is  made  under  this  section,  an  order  shall  be  passed  in  writing  by  the 

wealth-tax authority concerned or the Tribunal, as the case may be. 

(6)  Where  any  such  amendment  has  the  effect  of  enhancing  the  assessment  or  reducing  a  refund 
already made, the 1[Assessing Officer] shall serve on the assessee a notice of demand in the prescribed 
form specifying the sum payable and such notice of demand shall be deemed to be issued under section 
30 and the provisions of this Act shall apply accordingly. 

2[(6A) Where any amendment made by the Valuation Officer under clause (aa) of sub-section (1) has 
the  effect  of  enhancing  the  valuation  of  any  asset,  he  shall  send  a  copy  of  his  order  to  the 1[Assessing 
Officer] who shall thereafter proceed to amend the order of assessment in conformity with the order of the 
Valuation Officer and the provisions of sub-section (6) shall apply accordingly.] 

(7) No amendment under this section shall be made after the expiry of four years— 

(a) in  the  case  of  an  amendment  under  sub-section  (2), 3[from  the  end  of  the  financial  year  in 

which the order was passed in the first appeal or revision] referred to in that sub-section; and 

(b) in any other case, 4[from the end of the financial year in which the order sought to be amended 

was passed]. 

2[(7A)  Notwithstanding  anything  contained  in  sub-section  (7),  where  the  valuation  of  any  asset  has 
been enhanced by the Valuation Officer under this section, the consequential amendment to the order of 
assessment may be made by the  1[Assessing Officer] at any time before the expiry of one year from the 
date of the order of the Valuation Officer under this section.] 

(8)  Where  any  matter  has  been  considered  and  decided  in  a  proceeding  by  way  of  an  appeal  or 
revision  relating  to  an  order  referred  to  in  sub-section  (1),  the  authority  passing  such  order  may, 
notwithstanding anything contained in any other law for the time being in force, amend the order under 
this section in relation to any matter other than the matter which has been so considered and decided.] 

5 [35A. Wilful  attempt  to  evade  tax,  etc.—(1)  If  a  person  wilfully  attempts  in  any  manner 
whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act, he shall, without 
prejudice  to  any  penalty  that  may  be  imposable  on  him  under  any  other  provision  of  this  Act,  be 
punishable,— 

(i) in a case where the amount sought to be evaded exceeds one hundred thousand rupees, with 
rigorous imprisonment for a term which shall not be less than six months but which may extend to 
seven years and with fine; 

(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three 

months but which may extend to three years and with fine. 

(2) If a person wilfully attempts in any manner whatsoever to evade the payment of any tax, penalty 
or interest under this Act, he shall, without prejudice to any penalty that may be imposable on him under 
any other provisions of this Act, be punishable with rigorous imprisonment for a term which shall not be 
less than three months but which may extend to three years and shall, in the discretion of the court, also 
be liable to fine. 

1. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 

2. Ins. by Act 45 of 1972, s. 15 (w.e.f. 1-1-1973). 

3. Subs. by Act 67 of 1984, s. 69, for “from the date of the order passed in the first appeal or revision” (w.e.f. 1-10-1984). 

4. Subs. by s. 69, ibid., for “from the date of the order sought to be amended” (w.e.f. 1-10-1984). 

5. Ins. by Act 41 of 1975, s. 100 (w.e.f. 1-10-1975). 

80 

                                                           
Explanation.—For the purposes of this section, a wilful attempt to evade any tax, penalty or interest 

chargeable or imposable under this Act or the payment thereof shall include a case where any person— 

(a) has in his possession or control any books of account or other documents (being books of 
account or other documents relevant to any proceeding under this Act) containing a false entry or 
statement, or 

(b) makes, or causes to be made, any false entry or statement in such books of account or other 

documents, or 

(c) wilfully omits, or causes to be omitted, any relevant entry or statement in such books of 

account or other documents, or 

(d) causes any other circumstances to exist which will have the effect of enabling such person to 

evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof. 

35B. Failure to furnish returns of net wealth.—If a person wilfully fails to furnish in due time the 
return of his net wealth which he is  required to furnish under sub-section (1) of section 14 or by notice 
given under sub-section (2) of section 14 or under sub-section (1) of section 17, he shall be punishable,— 

(i) in a case where the amount of tax, which would have been evaded if the failure had not been 
discovered, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall 
not be less than six months but which may extend to seven years and with fine; 

(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three 

months but which may extend to three years and with fine: 

Provided that a person shall not be proceeded against under this section for failure to furnish in due 

time the return of net wealth under sub-section (1) of section 14— 

(i) for any assessment year commencing prior to the 1st day of April, 1975; or 

(ii) for any assessment year commencing on or after the 1st day of April, 1975, if— 

(a)  the return is furnished by him before the expiry of the assessment year; or 

(b)  the tax payable by him on his net wealth determined on regular assessment does not 

exceed three thousand rupees. 

35C. Failure to produce accounts, records, etc.—If a person wilfully fails to produce, or cause to 
be  produced,  on  or  before  the  date  specified  in  any  notice  under  sub-section  (4)  of  section  16,  such 
accounts,  records  and  documents  as  are  referred  to  in  the  notice,  he  shall  be  punishable  with  rigorous 
imprisonment for a term which may extend to one year or with fine equal to a sum calculated at a rate 
which shall not be less than four rupees or more than ten rupees for every day during which the default 
continues, or with both. 

35D. False statement in verification, etc., made under certain provisions of the Act.—If a person 
makes a statement in any verification under this Act (other than under section 34AB) or under any rule 
made  thereunder,  or  delivers  an  account  or  statement  which  is  false,  and  which  he  either  knows  or 
believes to be false, or does not believe to be true, he shall be punishable,— 

(i) in a case where the amount of tax which would have been evaded if the statement or account 
had been accepted as true, exceeds one hundred thousand rupees, with rigorous imprisonment for a 
term which shall not be less than six months but which may extend to seven years and with fine; 

(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three 

months but which may extend to three years and with fine. 

81 

35E. False statement in verification mentioned in section 34AB.—If a person makes a statement in 
a  verification  mentioned  in  section  34AB  which  is  false,  and  which  he  either  knows  or  believes  to  be 
false,  or  does  not  believe  to  be  true,  he  shall  be  punishable  with  imprisonment  for  a  term  which  may 
extend to six months or with fine or with both. 

1[35EE. Failure  to  furnish  particulars  under  section  34ACC.—If a person referred to in section 
34ACC fails 2*** to intimate to the Board the particulars of conviction or finding referred to in the said 
section, he shall be punishable with rigorous imprisonment for a term which may extend to two years and 
shall also be liable to fine]: 

3[Provided that no person shall be punishable under this section if he proves that there was reasonable 

cause or excuse for the said failure.] 

4[35EEE. Contravention of order made under second proviso to sub-section (1) or sub-section 
(3A) of section 37A.—If a person contravenes any order referred to in the second proviso to sub-section 
(1)  or  sub-section  (3A)  of  section  37A,  he  shall  be  punishable  with  rigorous  imprisonment  for  a  term 
which may extend to two years and with fine.] 

35F. Abetment of false return, etc.—If a person abets or induces in any manner another person to 
make and deliver an account, statement or declaration relating to any net wealth chargeable to tax which 
is false and which he either knows to be false or does not believe to be true or to commit an offence under 
sub-section (1) of section 35A, he shall be punishable,— 

(i) in a case where the amount of tax, penalty or interest, which would have been evaded, if the 

declaration, account or statement had been accepted as true, or which is wilfully attempted to be 
evaded, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not 
be less than six months but which may extend to seven years and with fine; 

(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three 

months but which may extend to three years and with fine. 

35G. Punishment  for  second  and  subsequent  offences.—If  any  person  convicted  of  an  offence 
under sub-section (1) of section 35A or section 35B or section 35D or section 35F is again convicted of 
an  offence  under  any  of  the  aforesaid  provisions,  he  shall  be  punishable  for  the  second  and  for  every 
subsequent  offence  with  rigorous  imprisonment  for  a  term  which  shall  not  be less  than  six  months  but 
which may extend to seven years and with fine. 

5[35GA. Power of Commissioner to grant immunity from prosecution.—(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: 

1. Ins. by Act 67 of 1984, s. 70 (w.e.f. 1-10-1984). 
2. The words “, without reasonable cause or excuse,” omitted by Act 46 of 1986, s. 38 (w.e.f. 10-9-1986). 
3. Ins. by s. 38, ibid. (w.e.f. 10-9-1986).  
4. Ins. by Act 12 of 1990, s. 56 (w.e.f. 1-4-1990). 
5. Ins. by Act 18 of 2008, s. 65 (w.e.f. 1-4-2008). 

82 

                                                           
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 (45  of  1860)  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.] 

35H. Offences  by  Hindu  undivided  families.—(1)  Where  an  offence  under  this  Act  has  been 
committed by a Hindu undivided family, the karta thereof shall be deemed to be guilty of the offence and 
shall be liable to be proceeded against and punished accordingly: 

Provided that nothing contained in this sub-section shall render the karta liable to any punishment if 
he  proves  that  the  offence  was  committed  without  his  knowledge  or  that  he  had  exercised  all  due 
diligence to prevent the commission of such offence. 

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been 
committed  by  a  Hindu  undivided family  and it  is  proved  that  the offence  has  been  committed  with  the 
consent  or  connivance  of,  or  is  attributable  to  any  neglect  on  the  part  of,  any  member  thereof,  such 
member shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and 
punished accordingly. 

1[35HA. Offences  by  companies.—(1)  Where  an  offence  under  this  Act  has  been  committed  by  a 
company,  every  person  who,  at  the  time  the  offence  was  committed,  was  in  charge  of,  and  was 
responsible to, the company for the conduct of the business of the company as well as the company shall 
be  deemed  to  be  guilty  of  the  offence  and  shall  be  liable  to  be  proceeded  against  and  punished 
accordingly: 

Provided that  nothing  contained  in  this  sub-section  shall  render  any  such  person  liable  to  any 
punishment if he proves that the offence was committed without his knowledge or that he had exercised 
all due diligence to prevent the commission of such offence. 

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been 
committed  by  a  company  and  it  is  proved  that  the  offence  has  been  committed  with  the  consent  or 
connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other 
officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of 
that offence and shall be liable to be proceeded against and punished accordingly. 

2[(3) Where an offence under this Act has been committed by a person, being a company and such 
offence is punishable with imprisonment and fine, then, without prejudice to the provisions contained in 
sub-section (1) or sub-section (2), such company shall be punished with fine and every person, referred to 
in sub-section (1) or the director, manager, secretary or other officer of the company referred to in sub-
section (2), shall be liable to be proceeded against and punished in accordance with the provisions of this 
Act.] 

1. Ins. by Act 18 of 1992, s. 98 (w.e.f. 1-4-1993). 

2. Ins. by Act 23 of 2004, s. 65 (w.e.f. 1-10-2004). 

83 

                                                           
Explanation.—For the purposes of this section,— 

(a) “company” means a body corporate, and includes— 

(i) a firm; and 

(ii) an association of persons or a body of individuals whether incorporated or not; and 

(b)  “director”, in relation to,— 

(i)  a firm, means a partner in a firm; 

(ii)   any association of persons or a body of individuals, means any member controlling the 

affairs thereof.] 

1[35-I. Prosecutions to be with the previous sanction of certain wealth-tax authorities and their 
power to compound offences.—2[(1) A person shall not be proceeded against for an offence under this 
Act except with the previous sanction of the Commissioner or Commissioner (Appeals): 

Provided that  the  Chief  Commissioner  or,  as  the  case  may  be,  Director  General  may  issue  such 
instructions  or  directions  to  the  aforesaid  wealth-tax  authorities  as  he  may  deem  fit  for  institution  of 
proceedings under this sub-section. 

(2) Any such offence may, either before or after the institution of proceedings, be compounded by the 

Chief Commissioner or a Director General.] 

3[Explanation.—For the removal of doubts, it is hereby declared that the power of the Board to issue 
orders, instructions or directions under this Act shall include and shall be deemed always to have included 
the  power  to  issue  instructions  or  directions  (including  instructions  or  directions  to  obtain  the  previous 
approval of the Board) to other  wealth-tax authorities for the proper composition of offences under this 
section.]] 

35J. Certain  offences  to  be  non-cognizable.—Notwithstanding  anything  contained  in the  Code of 
Criminal Procedure, 1973 (2 of 1974), an offence punishable under section 35A or section 35B or section 
35D or section 35F shall be deemed to be non-cognizable within the meaning of that Code. 

35K. Bar  on  prosecution  and  on  inadmissibility  of  evidence  in  certain  circumstances.—(1)  A 
person shall not be proceeded against for an offence under section 35A or section 35D in relation to the 
assessment for 4[an assessment year] in respect of which the penalty imposed or imposable on him under 
clause (iii) of sub-section (1) of section 18 has been reduced or waived by an order under section 18B. 

(2)  Where  any  proceeding  for  prosecution  has  been  taken  against  any  person  under  this  Act,  any 
statement made or account or other document produced by such person before 5[any Wealth-tax authority 
(not  being  an  Inspector  of  Income-tax)]  shall  not  be  inadmissible  as  evidence  for  the  purpose  of  such 
proceedings merely on the ground that such statement was made or such account or other document was 
produced in the belief that the penalty imposable would be reduced or waived under section 18B or that 
the offence in respect of which such proceeding was taken would be compounded. 

35L. Jurisdiction of courts.—No court inferior to that of a Metropolitan Magistrate or a Magistrate 

of the first class shall try any offence under this Act. 

1. Subs. by Act 26 of 1988, s. 63, for section 35-I (w.e.f. 1-4-1989). 
2. Subs. by Act 49 of 1991, s. 81, for sub-sections (1) and (2) (w.e.f. 1-10-1991). 
3. Ins. by s. 81, ibid. (w.e.f. 1-4-1991). 
4. Subs. by Act 12 of 1990, s. 57, for “the assessment year commencing on the 1st day of April, 1988, or any earlier assessment 

year” (w.e.f. 1-4-1989). Earlier the quoted words were substituted by Act 4 of 1988, s. 152 (w.e.f. 1-4-1989). 

5.  Subs.  by  Act  4  of  1988,  s.  152,  for  “any  of  the  Wealth-tax  authorities  specified  in  sections  8,  9,  9A,  10,  10A,  and  11”                 

(w.e.f. 1-4-1989). 

84 

                                                           
35M. Section 360 of the Code of Criminal Procedure, 1973, and the Probation of Offenders Act, 
1958,  not  to  apply.—Nothing contained in section 360 of the Code of Criminal Procedure, 1973 (2 of 
1974), or in the Probation of Offenders Act, 1958 (20 of 1958), shall apply to a person convicted of an 
offence under this Act unless that person is under eighteen years of age. 

35N. Presumption as to books of account, etc., in certain cases.—(1) Where during the course of 
any search made under section 37A, any books of account or other documents, articles or things including 
money have been found in the possession or control of any person and such books of account or other 
documents are tendered, or such articles or things including money are relied upon, by the prosecution in 
evidence  against  such  person  or  against  such  person  and  the  person  referred  to  in  section  35F  for  an 
offence under this Act, the provisions of sub-section (5) of section 37A shall, so far as may be, apply in 
relation to such books of account or other documents, articles or things including money. 

(2) Where— 

(i) any books of account or other documents, taken into custody, from the possession or control of 
any person by any officer or authority under clause (a) or clause (b) of sub-section (1) of section 37B, 
are delivered to the requisitioning officer under sub-section (2) of that section; or 

(ii) any note or inventory of any articles or things including money taken into custody, from the 

possession of any person, by any officer or authority under clause (c) of sub-section (1) of section 
37B, is furnished to the requisitioning officer under sub-section (2) of that section, 

and such books of account or other documents are tendered, or such note or inventory is relied upon, by 
the  prosecution  in  evidence  against  such  person  or  against  such  person  and  the  person  referred  to  in 
section 35F for an offence under this Act, the provisions of sub-section (5) of section 37A shall, so far as 
may be, apply in relation to such books of account or other documents or, as the case may be, the articles 
or things including money, covered by such note or inventory. 

1[35-O. Presumption  as  to  culpable  mental  state.—(1)  In  any  prosecution  for  any  offence  under 
this  Act  which  requires  a  culpable  mental  state  on  the  part  of  the  accused,  the  court  shall  presume  the 
existence of such mental state but it shall be a defence for the accused to prove the fact that he had no 
such mental state with respect to the act charged as an offence in that prosecution. 

Explanation.—In this sub-section, “culpable mental state” includes intention, motive or knowledge of 

a fact, or belief in, or reason to believe, a fact. 

(2) For the purposes of this section, a fact is said to be proved only when the court believes it to exist 
beyond  reasonable  doubt  and  not  merely  when  its  existence  is  established  by  a  preponderance  of 
probability.]] 

2[36. Proof of entries  in  records or  documents.—Entries in the records or other documents in the 
custody of a wealth-tax authority shall be admitted in evidence in any proceedings for the prosecution of 
any person for an offence under this Act, and all such entries may be proved either by the production of 
the records or other documents in the custody of the wealth-tax authority containing such entries or by the 
production of a copy of the entries certified by the wealth-tax authority having custody of the records or 
other documents under its signature and stating that it is a true copy of the original entries and that such 
original entries are contained in the records or other documents in its custody.] 

1. Ins. by Act 46 of 1986, s. 39 (w.e.f. 10-9-1986). 

2. Ins. by Act 3 of 1989, s. 75 (w.e.f. 1-4-1989). Earlier it was omitted by Act 41 of 1975, s. 101 (w.e.f. 1-10-1975). 

85 

                                                           
1[36A. Power to tender immunity from prosecution.—(1) The Central Government may, if it is of 
opinion  (the  reasons  for  such  opinion  being  recorded  in  writing)  that  with  a  view  to  obtaining  the 
evidence  of  any  person  appearing  to  have  been  directly  or  indirectly  concerned  in  or  privy  to  the 
concealment of particulars of net wealth or to the evasion of payment of tax on net wealth, it is necessary 
or expedient so to do, tender to such person immunity from prosecution for any offence under this Act or 
under the Indian Penal Code (45 of 1860) or under any other Central Act for the time being in force and 
also  from  the  imposition  of  any  penalty  under  this  Act  on  condition  of  his  making  a  full  and  true 
disclosure of the whole circumstances relating to the concealment of particulars of net wealth or evasion 
of payment of tax on net wealth. 

(2) A tender of immunity made to, and accepted by, the person concerned shall, to the extent to which 
the  immunity  extends,  render  him  immune  from  prosecution  for  any  offence  in  respect  of  which  the 
tender was made or from the imposition of any penalty under this Act. 

(3)  If  it  appears  to  the  Central  Government  that  any  person  to  whom  immunity  has  been  tendered 
under  this  section  has  not  complied  with  the  condition  on  which  the  tender  was  made  or  is  wilfully 
concealing  anything  or  is  giving  false  evidence,  the  Central  Government  may  record  a  finding  to  that 
effect, and thereupon the immunity shall be deemed to have been withdrawn, and any such person may be 
tried  for  the  offence  in  respect  of  which  the  tender  of  immunity  was  made  or  for  any  other  offence  of 
which he appears to have been guilty in connection with the same matter and shall also become liable to 
the imposition of any penalty under this Act to which he would otherwise have been liable.] 

2 [37. Power  to  take  evidence  on  oath,  etc.—(1)  3 [The  4 [Assessing  Officer],  Valuation 
Officer,]  5 [Deputy  Commissioner  (Appeals)],  6 [Commissioner  (Appeals),]  7 [Chief  Commissioner  or 
Commissioner] and the Appellate Tribunal shall, for the purposes of this Act, have the same powers as 
are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of 
the following matters, namely:— 

(a) discovery and inspection; 

(b)  enforcing  the  attendance  of  any  person,  including  any  officer  of  a  banking  company  and 

examining him on oath; 

(c) compelling the production of books of account and other documents; and 

(d) issuing commissions. 

8[(1A)  If  the  Director  General  or  Director  or 9[Joint  Director]  or 10[Assistant  Director or  Deputy 
Director],  or  the  authorised  officer  referred  to  in  sub-section  (1)  of  section  37A  before  he  takes  action 
under clauses (i) to (vi) of that sub-section, has reason to suspect that any net wealth has been concealed, 
or  is  likely  to  be  concealed,  by  any  person  or  class  of  persons  within  his  jurisdiction,  then,  for  the 
purposes of making any inquiry or investigation relating thereto, it shall be competent for him to exercise 
the powers conferred under sub-section (1) on the wealth-tax authorities referred to in that sub-section, 
notwithstanding that no proceedings with respect to  such person or class of persons are pending before 
him or any other wealth-tax authority.] 

11*   

* 

* 

* 

* 

1. Ins. by Act 46 of 1964, s. 34 (w.e.f. 1-4-1965). 
2. Subs. by s. 35, ibid., for section 37 (w.e.f. 1-4-1965). 
3. Subs. by Act 45 of 1972, s. 17, for “The Wealth-Tax Officer,” (w.e.f. 1-1-1973). 
4. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
5. Subs. by s. 127, ibid., for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 
6. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 
7. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988). 
8. Ins. by Act 26 of 1988, s. 64 (w.e.f. 1-6-1988). 
9. Subs. by Act 21 of 1998, s. 66, for “Deputy Director” (w.e.f. 1-10-1998). 
10. Subs. by s. 66, ibid., for “Assistant Director” (w.e.f. 1-10-1998). 
11. Sub-section (2) omitted by Act 4 of 1988, s. 153 (w.e.f. 1-4-1989). 

86 

 
 
 
 
 
 
 
                                                           
(3)  Subject  to  any  rules  made  in  this  behalf,  any  authority  referred  to  in  sub-section  (1) 1[or  sub-
section (1A)] may impound and retain in its custody for such period as it thinks fit any books of account 
or other documents produced before it in any proceeding under this Act: 

Provided that 2[a 3[Assessing  Officer]  or  a  Valuation  Officer]  1[or  an 4[Assistant  Director or  Deputy 

Director]] shall not— 

(a) impound any books of account or other documents without recording his reasons for so doing, 

or 

(b) retain  in  his  custody  any  such  books  or  documents  for  a  period  exceeding  fifteen  days 
(exclusive  of  holidays)  without  obtaining  the  approval  of  5[the  Chief  Commissioner  or  Director 
General or Commissioner or Director therefor, as the case may be]. 

(4) Any proceeding under this Act before a wealth-tax authority or the Tribunal shall be deemed to be 
a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196 of 
the Indian Penal Code (45 of 1860).] 

6[37A. Power  of  search  and  seizure.—(1) Where the 7[Director General or Director] or the 8[Chief 
Commissioner  or  Commissioner]  or  any  such  9[Joint  Director]  or 10[Joint  Commissioner]  as  may  be 
empowered in this behalf by the Board, in consequence of information in his possession, has reason to 
believe that— 

(a) any person to whom a notice under sub-section (4) of section 16 or a summons under section 
37  was  issued  to  produce,  or  cause  to  be  produced,  any  books  of  account  or  other  documents,  has 
omitted or failed to produce, or cause to be produced, such books of account or other documents as 
required by such notice or summons, or 

(b) any person to whom a notice or summons as aforesaid has been or might be issued will not, or 
would not, produce, or cause to be produced, any books of account or other documents which will be 
useful for, or relevant to, any proceeding under this Act, or 

(c) any  person  is  in  possession  of 11[any  money,  bullion,  jewellery  or  other  valuable  article  or 
thing] disproportionate to his known assets, particulars of which will be useful for, or relevant to, any 
proceeding under this Act, 

then,— 

(A) the  7[Director-General  or  Director]  or  the  8[Chief  Commissioner  or  Commissioner],  as  the 
case  may  be,  may  authorise  any 9[Joint  Director], 10[Joint  Commissioner], 12[Assistant  Director or 
Deputy Director], 13[14[Assistant Commissioner or Deputy Commissioner] or Income-tax Officer], or 

1. Ins. by Act 4 of 1988, s. 153 (w.e.f. 1-4-1989). 
2. Subs. by Act 45 of 1972, s. 17, for “a Wealth-Tax Officer” (w.e.f. 1-1-1973). 
3. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
4. Subs. by Act 21 of 1998, s. 66, for “Assistant Director” (w.e.f. 1-10-1998). 
5. Subs. by Act 26 of 1988, s. 64, for “the Chief Commissioner or Commissioner therefor” (w.e.f. 1-4-1988). Earlier the words 
“Chief Commissioner or Commissioner” were substituted by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988). 
6. Subs. by Act 41 of 1975, s. 102, for section 37A (w.e.f. 1-10-1975). Earlier section 37A was inserted by Act 46 of 1964, s. 36 

(w.e.f. 1-4-1965). 

7. Subs. by Act 4 of 1988, s. 127, for “Director of Inspection” (w.e.f. 1-4-1988). 
8. Subs. by s. 127, ibid., for “Commissioner” (w.e.f. 1-4-1988). 
9. Subs. by Act 21 of 1998, s. 66, for “Deputy Director” (w.e.f. 1-10-1998). Earlier the quoted words were substituted by Act 4 of 

1988, s. 127, for “Deputy Director of Inspection” (w.e.f. 1-4-1988). 

10. Subs. by s. 66, ibid., for “Deputy Commissioner” (w.e.f. 1-10-1998). Earlier the quoted words were substituted by Act 4 of 

1988, s. 127, for “Inspecting Assistant Commissioner” (w.e.f. 1-4-1988). 

11. Subs. by Act 4 of 1988, s. 154, for “any articles or things including money” (w.e.f. 1-4-1988). 
12.  Subs.  by  Act  21  of  1998,  s.  66,  for  “Assistant  Director”  (w.e.f.  1-10-1998).  Earlier  the  quoted  words  were  substituted  by      

Act 4 of 1988, s. 154, for “Assistant Director of Inspection” (w.e.f. 1-4-1988). 
13. Subs. by Act 4 of 1988, s. 154, for “or Wealth-tax Officer” (w.e.f. 1-4-1988). 
14. Subs. by Act 21 of 1998, s. 66, for “Assistant Commissioner” (w.e.f. 1-10-1998). 

87 

                                                           
(B) such 1[Joint  Director]  or 2[Joint  Commissioner]  may  authorise  any 3[4[Assistant  Director  or 

Deputy Director]]  or 5[6[Assistant Commissioner or Deputy Commissioner] or Income-tax Officer], 

(the officer so authorised in all cases being hereafter in this section referred to as the authorised officer) 
to— 

(i) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect 
that such books of account or other documents, 7[money, bullion, jewellery or other valuable article 
or thing] are kept; 

(ii) search  any  person  who  has  got  out  of,  or  is  about  to  get  into,  or  is  in,  the  building,  place, 
vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such person has secreted 
about his person any such books of account or other documents, 7[money, bullion, jewellery or other 
valuable article or thing]; 

(iii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising 

the powers conferred by clause (i) where the keys thereof are not available; 

8[(iv) seize  any  such  books  of  account,  other  documents,  money,  bullion,  jewellery  or  other 

valuable article or thing found as a result of such search;] 

(v) place marks of identification on any such books of account or other documents or make, or 

cause to be made, extracts or copies therefrom; 

(vi) make  a  note  or  an  inventory  of 9[any  money,  bullion,  jewellery  or  other  valuable  article  or 

thing] found which, in his opinion, will be useful for, or relevant to, any proceeding under this Act: 

Provided that  where  any  building,  place,  vessel,  vehicle  or  aircraft  referred  to  in  clause  (i)  is 
within  the  area  of  jurisdiction  of  any 10[Chief  Commissioner  or  Commissioner]  but  such 10[Chief 
Commissioner or Commissioner] has no jurisdiction over the person referred to in clause (a) or clause 
(b) or clause (c) of this sub-section, then, notwithstanding anything contained in 11[section 8], it shall 
be competent for him to exercise the powers under this sub-section in all cases where he has reason to 
believe that any delay in getting the authorisation from the 10[Chief Commissioner or Commissioner] 
having jurisdiction over such person may be prejudicial to the interests of the revenue: 

12[Provided further that where it is not possible or practicable to take physical possession of any 
valuable  article  or  thing  and  remove  it  to  a  safe  place  due  to  its  volume,  weight  or  other  physical 
characteristics or due to its being of a dangerous nature, the authorised officer may serve an order on 
the owner or the person who is in immediate possession or control thereof that he shall not remove, 
part with or otherwise deal with it except with the previous permission of such authorised officer and 
such action of the authorised officer shall be deemed to be seizure of such valuable article or thing 
under clause (iv) of this sub-section.] 

1. Subs. by Act 21 of 1998, s. 66, for “Deputy Director” (w.e.f. 1-10-1998). Earlier the quoted words were substituted by Act 4 of 

1988, s. 127, for “Deputy Director of Inspection” (w.e.f. 1-4-1988). 

2. Subs. by s. 66,  ibid., for “Deputy Commissioner” (w.e.f. 1-10-1998). Earlier the quoted words were substituted by Act 4  of 

1988, s. 127, for “Inspecting Assistant Commissioner” (w.e.f. 1-4-1988). 

3. Subs. by Act 4 of 1988, s. 154, for “Assistant Director of Inspection” (w.e.f. 1-4-1988). 
4. Subs. by Act 21 of 1998, s. 66, for “Assistant Director” (w.e.f. 1-10-1998). 
5. Subs. by Act 4 of 1988, s. 154, for “or Wealth-tax Officer” (w.e.f. 1-4-1988). 
6. Subs. by Act 21 of 1998, s. 66, for “Assistant Commissioner” (w.e.f. 1-10-1998). 
7. Subs. by Act 4 of 1988, s. 154, for “articles or things including money” (w.e.f. 1-4-1989). 
8. Subs. by s. 154, ibid., for clause (iv) (w.e.f. 1-4-1989). 
9. Subs. by s. 154, ibid., for “any articles or things including money” (w.e.f. 1-4-1989). 
10. Subs. by s. 127, ibid., for “Commissioner” (w.e.f. 1-4-1988). 
11. Subs. by s. 154, ibid., for “section 10” (w.e.f. 1-4-1988). 
12. Ins. by s. 154, ibid. (w.e.f. 1-4-1989). 

88 

                                                           
 
(2)  Where  any  1 [Chief  Commissioner  or  Commissioner],  in  consequence  of  information  in  his 
possession,  has  reason  to  suspect  that  any  books  of  account  or  other  documents,  2[money,  bullion, 
jewellery  or  other  valuable  article  or  thing]  in  respect  of  which  an  officer  has  been  authorised  by 
the 3[Director  General  or  Director]  or  any  other 1[Chief  Commissioner  or  Commissioner]  or  any  such 
4[Joint  Director]  or 5[Joint  Commissioner]  as  may  be  empowered  in  this  behalf  by  the  Board  to  take 
action under clauses (i) to (vi) of sub-section (1) are kept in any building, place, vessel, vehicle or aircraft 
not mentioned in the authorisation under sub-section (1), such 1[Chief Commissioner or Commissioner] 
may,  notwithstanding  anything  contained  in 6[section  8],  authorise  the  said  officer  to  take  action  under 
any of the clauses aforesaid in respect of such building, place, vessel, vehicle or aircraft. 

(3) The authorised officer may requisition the services of any police officer or of any officer of the 
Central Government, or of both, to assist him for all or any of the purposes specified in sub-section (1) or 
sub-section (2) and it shall be the duty of every such officer to comply with such requisition. 

7[(3A)  The  authorised  officer  may,  where  it  is  not  practicable  to  seize  any  books  of  account,  other 
documents,  money,  bullion,  jewellery  or  other  valuable  article  or  thing,  for  reasons  other  than  those 
mentioned in the second proviso to sub-section (1), serve an order on the owner or the person who is in 
immediate  possession  or  control  thereof  that  he  shall  not  remove,  part  with  or  otherwise  deal  with  it 
except  with  the  previous  permission  of  such  officer  and  such  officer  may  take  such  steps  as  may  be 
necessary for ensuring compliance with this sub-section. 

Explanation.—For the removal of doubts, it is hereby declared that serving of an order as aforesaid 
under  this  sub-section  shall  not  be  deemed  to  be  seizure  of  such  books  of  account,  other  documents, 
money, bullion, jewellery or other valuable article or thing under clause (iv) of sub-section (1).] 

(4)  The  authorised  officer  may,  during  the  course  of  the  search  or  seizure,  examine  on  oath  any 
person who is found to be in possession or control of any books of account or other documents, articles or 
things including money and any statement made by such person during such examination may thereafter 
be used in evidence in any proceeding under this Act. 

7[Explanation.—For the removal of doubts, it is hereby declared that the examination of any person 
under this sub-section may be not merely in respect of any books of account, other documents or assets 
found as a result of the search, but also in respect of matters relevant for the purposes of any investigation 
connected with any proceedings under this Act.] 

(5) Where any books of account or other documents, articles or things including money are found in 

the possession or control of any person in the course of a search, it may be presumed that— 

(i) such books of account or other documents, articles or things including money belong to such 

person; 

(ii) the contents of such books of account or other documents are true; and 

(iii) the  signature  and  every  other  part  of  such  books  of  account  or  other  documents  which 
purport  to  be  in  the  handwriting  of  any  particular  person  or  which  may  reasonably  be  assumed  to 
have  been  signed  by,  or  to  be  in  the  handwriting  of,  any  particular  person,  are  in  that  person’s 
handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped 
and executed or attested by the person by whom it purports to have been so executed or attested. 

1. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988). 
2. Subs. by s. 154, ibid., for “articles or things including money” (w.e.f. 1-4-1989). 
3. Subs. by s. 127, ibid., for “Director of Inspection” (w.e.f. 1-4-1988). 
4. Subs. by Act 21 of 1998, s. 66, for “Deputy Director” (w.e.f. 1-10-1998). Earlier the quoted words were substituted by Act 4 of 

1988, s. 127, for “Deputy Director of Inspection” (w.e.f. 1-4-1988). 

5. Subs. by s. 66, ibid.,  for “Deputy Commissioner” (w.e.f. 1-10-1998). Earlier the quoted words were substituted by Act 4 of 

1988, s. 127, for “Inspecting Assistant Commissioner” (w.e.f. 1-4-1988). 

6. Subs. by Act 4 of 1988, s. 154, for “section 10” (w.e.f. 1-4-1988). 
7. Ins. by s. 154, ibid. (w.e.f. 1-4-1989). 

89 

                                                           
1[(5A) Where any money, bullion, jewellery or other valuable article or thing (hereafter in this section 
and in sections 37B and 37C referred to as the assets) is seized under sub-section (1) or sub-section (2), 
the  Assessing  Officer,  after  affording  a  reasonable  opportunity  to  the  person  concerned  of  being  heard 
and making such inquiry as may be prescribed, shall, within one hundred and twenty days of the seizure, 
make an order, with the previous approval of the 2[Joint Commissioner],— 

(i) estimating the undisclosed net wealth in a summary manner to the best of his judgment on the 

basis of such materials as are available with him; 

(ii) calculating the amount of tax on the net wealth so estimated in accordance with the provisions 

of this Act; 

(iii) determining  the  amount  of  interest  payable  and  the  amount  of  any  penalty  imposable  in 

accordance with the provisions of this Act, as if the order had been the order of regular assessment; 

(iv) specifying the amount that will be required to satisfy any existing liability under this Act in 
respect of which such person is in default or is deemed to be in default, and retain in his custody such 
assets or part thereof as are in his opinion sufficient to satisfy the aggregate of the amounts referred it 
in  clauses  (ii),  (iii)  and  (iv)  and forthwith release the  remaining  portion, if  any,  of  the  assets  to  the 
person from whose custody they were seized: 

Provided that where a person has paid or made satisfactory arrangements for payment of all the 
amounts referred to in clauses (ii), (iii) and (iv) or any part thereof, the Assessing Officer, may with 
the  previous  approval  of  the  Chief  Commissioner  or  Commissioner  release  the  assets  or  such  part 
thereof as he may deem fit in the circumstances of the case. 

(5B) The assets retained under sub-section (5A) may be dealt with in accordance with the provisions 

of section 37C. 

(5C) If the Assessing Officer is satisfied that the seized assets or any part thereof were held by such 
person for or on behalf of any other person, the Assessing Officer may proceed under sub-section (5A) 
against such other person and all the provisions of this section shall apply accordingly.] 

(6) The books of account or other documents, seized under sub-section (1) or sub-section (2), shall 
not  be  retained  by  the  authorised  officer  for  a  period  exceeding  one  hundred and  eighty  days  from  the 
date  of  the  seizure  unless  the  reasons  for  retaining  the  same  are  recorded  by  him  in  writing  and  the 
approval of the 3[Chief Commissioner or Commissioner] for such retention is obtained: 

Provided that  the 3[Chief  Commissioner  or  Commissioner]  shall  not  authorise  the  retention  of  the 
books of account or other documents for a period exceeding thirty days after all the proceedings under 
this  Act  in  respect  of  the  years  for  which  the  books  of  account  or  other  documents  are  relevant  are 
completed. 

1[(6A) An order under sub-section (3A) shall not be in force for a period exceeding sixty days from 
the date of the order, except where the authorised officer, for reasons to be recorded in writing by him, 
extends  the  period  of  operation  of  the  order  beyond  sixty  days,  after  obtaining  the  approval  of 
the 4[Director or, as the case may be, Commissioner] for such extension: 

Provided that the 4[Director or, as the case may be, Commissioner] shall not approve the extension of 
the period for any period beyond the expiry of thirty days after the completion of the proceedings under 
this  Act  in  respect  of  the  years  for  which  the  books  of  account,  other  documents,  money,  bullion, 
jewellery or other valuable articles or things are relevant.] 

1. Ins. by Act 4 of 1988, s. 154 (w.e.f. 1-4-1989).  
2. Subs. by Act 21 of 1998, s. 66, for “Deputy Commissioner” (w.e.f. 1-10-1998). 
3. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988). 
4. Subs. by Act 49 of 1991, s. 82, for “Chief Commissioner or Commissioner” (w.e.f. 1-10-1991). 

90 

                                                           
(7)  The  person  from  whose  custody  any  books  of  account  or  other  documents  are  seized  under       

sub-section (1) or sub-section (2) may make copies thereof, or take extracts therefrom, in the presence of 
the authorised officer or any other person empowered by him in this behalf at such place and time as the 
authorised officer may appoint in this behalf. 

(8) Where the authorised officer has no jurisdiction over the person referred to in clause (a) or clause 
(b) or clause (c) of sub-section (1), the books of account or other documents seized under that sub-section 
shall  be  handed  over  by the  authorised  officer to the 1[Assessing  Officer] having jurisdiction  over  such 
person  within  a  period  of  fifteen  days  of  such  seizure  and  thereupon  the  powers  exercisable  by  the 
authorised  officer  under  sub-section  (6)  or  sub-section  (7)  shall  be  exercisable  by  such   1[Assessing 
Officer]. 

(9) If a person legally entitled to the books of account or other documents seized under sub-section 
(1)  or  sub-section  (2)  objects  for  any  reason  to  the  approval  given  by  the 2[Chief  Commissioner  or 
Commissioner] under sub-section (6), he may make an application to the Board stating therein the reasons 
for such objection and requesting for the return of the books of account or other documents. 

3[(9A) If any person objects for any reason to an order made under sub-section (5A), he may, within 
thirty days from the date of such order, make an application to the Chief Commissioner or Commissioner 
stating therein the reasons for such objection and requesting for appropriate relief in the matter.] 

4[(10) On receipt of the application under sub-section (9), the Board, or on receipt of the application 
under  sub-section  (9A),  the  Chief  Commissioner  or  Commissioner,  may,  after  giving  the  applicant  an 
opportunity of being heard, pass such orders as it or he thinks fit.] 

(11) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches shall 

apply, so far as may be, to searches under this section. 

(12) The Board may make rules in relation to searches or seizure under this section; and in particular 
and without prejudice to the generality of the foregoing power, such rules may provide for the procedure 
to be followed by the authorised officer— 

(i) for obtaining ingress into any building, place, vessel, vehicle or aircraft to be searched where 

free ingress thereto is not available; 

(ii) for ensuring the safe custody of any books of account or other documents seized. 

3[Explanation  1.—In  computing  the  period  referred  to  in  sub-section  (5A)  for  the  purposes  of  that 
sub-section, any period during which any proceeding under this section is stayed by an order or injunction 
of any court shall be excluded. 

Explanation 2.—In this section, the word “proceeding” means any proceeding in respect of any year 
under this Act which may be pending on the date on which a search is authorised under this section or 
which  may  have  been  completed  on  or  before  such  date  and  includes  also  proceedings  under  this  Act 
which may be commenced after such date in respect of any year.] 

37B. Power to requisition books of account, etc.—(1) Where the 5[Director General or Director] or 
the 2[Chief Commissioner or Commissioner], in consequence of information in his possession, has reason 
to believe that— 

(a) any person to whom a notice under sub-section (4) of section 16 or a summons under section 
37  was  issued  to  produce,  or  cause  to  be  produced,  any  books  of  account  or  other  documents  has 
omitted or failed to produce, or cause to be produced, such books of account or other documents as 
required  by  such  notice  or  summons  and  the  said  books  of  account  or  other  documents  have  been 
taken into custosdy by any officer or authority under any other law for the time being in force, or 

1. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
2. Subs. by s. 127, ibid., for “Commissioner” (w.e.f. 1-4-1988). 
3. Ins. by s. 154, ibid. (w.e.f. 1-4-1989). 
4. Subs. by s. 154, ibid., for sub-section (10) (w.e.f. 1-4-1989). 
5. Subs. by s. 127, ibid., for “Director of Inspection” (w.e.f. 1-4-1988). 

91 

                                                           
(b) any  books  of  account  or  other  documents  will  be  useful  for,  or  relevant  to,  any  proceeding 
under this Act and any person to whom a notice or summons as aforesaid has been or might be issued 
will not, or would not, produce or cause to be produced such books of account or other documents on 
the return of such books of account or other documents by any officer or authority by whom or which 
such books of account or other documents have been taken into custody under any other law for the 
time being in force, or 

(c) 1[any assets] disproportionate to the known assets of any person, particulars of which will be 
useful for, or relevant to, any proceeding under this Act, have been taken into custody by any officer 
or authority under any other law for the time being in force, from the possession of such person, 

then,  the 2[Director-General  or  Director]  or  the 3[Chief  Commissioner  or  Commissioner]  may  authorise 
any  4 [Joint  Director],  5 [Joint  Commissioner],  6 [Assistant  Director or  Deputy  Director]  7 [,  8 [Assistant 
Commissioner or Deputy Commissioner] or Income-tax Officer] (hereafter in this section referred to as 
the  requisitioning  officer)  to  require  such  officer  or  authority 9[to  deliver  such  books  of  account,  other 
documents, or assets to the requisitioning officer]. 

(2)  On  a  requisition  being  made  under  sub-section  (1),  9[the  officer  or  authority  referred  to  in            

clause (a) or clause (b) or clause (c), as the case may be, of that sub-section shall deliver the books of 
account, other documents, or assets to the requisitioning officer either forthwith or when such officer or 
authority is of the opinion that it is no longer necessary to retain the same in his or its custody.] 

10 [(3)  Where  any  books  of  account,  other  documents,  or  assets  have  been  delivered  to  the 
requisitioning  officer,  the  provisions  of  sub-sections  (5)  to  (12)  (both  inclusive)  of  section  37A  and 
section 37C  shall,  so far  as  may  be,  apply  as  if such  books  of  account,  other  documents,  or  assets  had 
been  seized  under  sub-section  (1)  of  section  37A  by  the  requisitioning  officer  from  the  custody  of  the 
person referred to in clause (a) or clause (b) or clause (c) of sub-section (1) of this section and as if for the 
words  “the  authorised  officer”  occurring  in  sub-sections  (5)  to  (12)  aforesaid,  the  words  “the 
requisitioning officer” were substituted.]] 

11[37C. Application  of  retained  assets.—(1)  The  assets  retained  under  sub-section  (5A)  of  section 

37A may be dealt with in the following manner, namely:— 

(i) the  amount  of  the  existing  liability  referred  to  in  clause  (iv)  of  the  said  sub-section  and  the 
amount of the liability determined on completion of the regular assessment or reassessment for all the 
assessment years for which the net wealth referred to in clause (i) of that sub-section is assessable to 
tax  (including  any  penalty  levied  or  interest  payable,  in  connection  with  such  assessment  or 
reassessment) and in respect of which the assessee is in default or is deemed to be in default may be 
recovered out of such assets; 

(ii) if  the  assets  consist  solely  of  money,  or  partly  of  money  and  partly  of  other  assets,  the 
Assessing Officer may apply such money in the discharge of the liabilities referred to in clause (i) and 
the assessee shall be discharged of such liabilities to the extent of the money so applied; 

1. Subs. by Act 4 of 1988, s. 155, for “any articles or things including money” (w.e.f. 1-4-1989). 
2. Subs. by s. 127, ibid., for “Director of Inspection” (w.e.f. 1-4-1988). 
3. Subs. by s. 127, ibid., for “Commissioner” (w.e.f. 1-4-1988). 
4.  Subs.  by  Act  21  of  1998,  s.  66,  for  “Deputy  Director”  (w.e.f.  1-10-1998).  Earlier  the  quoted  words  were  substituted                        

by Act 4 of 1988, s. 127, for “Deputy Director of Inspection” (w.e.f. 1-4-1988). 

5.  Subs.  by  s.  66,  ibid.,  for  “Deputy  Commissioner”  (w.e.f.  1-10-1998).  Earlier  the  quoted  words  were  substituted  by                    

Act 4 of 1988, s. 127, for “Inspecting Assistant Commissioner” (w.e.f. 1-4-1988). 

6. Subs. by s. 66, ibid., for “Assistant Director” (w.e.f. 1-10-1998). Earlier the quoted words were substituted by Act 4 of 1988,  

s. 154, for “Assistant Director of Inspection” (w.e.f. 1-4-1988). 

7. Subs. by Act 4 of 1988, s. 155, for “or Wealth-tax Officer” (w.e.f. 1-4-1988). 
8. Subs. by Act 21 of 1998, s. 66, for “Assistant Commissioner” (w.e.f. 1-10-1998). 
9. Subs. by Act 4 of 1988, s. 155, for clauses (i) and (ii) (w.e.f. 1-4-1989). 
10. Subs. by s. 155, ibid., for sub-section (3) (w.e.f. 1-4-1989). 
11. Ins. by s. 156, ibid. (w.e.f. 1-4-1989). 

92 

                                                           
(iii) the  assets  other  than  money  may  also  be  applied  for  the  discharge  of  any  such  liability 
referred to in clause (i) as remains undischarged and for this purpose such assets shall be deemed to 
be under distraint as if such distraint was effected by the Assessing Officer under authorisation from 
the Chief Commissioner or Commissioner under sub-section (5) of section 226 of the Income-tax Act 
as made applicable to this Act by section 32, and the Assessing Officer may recover the amount of 
such liabilities by the sale of such assets and such sale shall be effected in the manner laid down in 
the Third Schedule to the Income-tax Act as made applicable to this Act by section 32. 

(2)  Nothing  contained  in  sub-section  (1)  shall  preclude  the  recovery  of  the  amount  of  liabilities 

aforesaid by any other mode laid down in this Act. 

(3) Any assets or proceeds thereof which remain after the liabilities referred to in clause (i) of sub-
section  (1) are  discharged shall  be forthwith  made  over  or  paid  to  the  persons  from  whose  custody  the 
assets were seized. 

(4) (a) The Central Government shall pay simple interest at the rate of fifteen per cent per annum on 
the amount by which the aggregate of the money retained under section 37A and of the proceeds, if any, 
of the assets sold towards the discharge of the existing liability referred to in clause (iv) of sub-section 
(5A)  of  that  section  exceeds  the  aggregate  of  the  amounts required  to  meet  the  liabilities  referred to  in 
clause (i) of sub-section (1) of this section. 

(b) Such interest shall run from the date immediately following the expiry of the period of six months 
from the date of the order under sub-section (5A) of section 37A to the date of the regular assessment or 
reassessment referred to in clause (i) of sub-section (1) or, as the case may be, to the date of the last of 
such assessments or reassessments.] 

38.  Information,  returns  and  statements.— 1[Where,  for  the  purposes  of  this  Act],  it  appears 
necessary  for 2[any  wealth-tax  authority]  to  obtain  any  statement  or  information  from  any  individual, 
company  3 [(including  a  banking  company)],  firm,  Hindu  undivided  family  or  other  person,  2[such         
wealth-tax  authority]  may  serve  a  notice  requiring  such  individual,  company,  firm,  Hindu  undivided 
family  or  other  person,  on  or  before  a  date  to  be  therein  specified,  to  furnish  such  statement  or 
information on the points specified in the notice, and the individual or the principal officer concerned or 
the manager of the Hindu undivided family, as the case may be, shall, notwithstanding anything in any 
law to the contrary, be bound to furnish such statement or information to 2[such wealth-tax authority]: 

Provided that no legal practitioner shall be bound to furnish any statement or information under this 
section based on any professional communications made to him otherwise than as permitted by section 
126 of the Indian Evidence Act, 1872 (1 of 1872). 

4[38A. Powers of Valuation Officer, etc.—(1) For the purposes of this Act, a Valuation Officer or 
any overseer, surveyor or assessor authorised by him in this behalf may, subject to any rules made in this 
behalf and at such reasonable times as may be prescribed,— 

(a) enter any land within the limits of the area assigned to the Valuation Officer, or 

(b) enter any land, building or other place belonging to or occupied by any person in connection 

with whose assessment a reference has been made under section 16A to the Valuation Officer, or 

(c) inspect  any  asset  in  respect  of  which  a  reference  under  section  16A  has  been  made  to  the 

Valuation Officer, 

1.  Subs.  by  Act  4  of  1988,  s.  157,  for  “Where,  for  the  purposes  of  determining  the  wealth-tax  payable  by  any  person”                        

(w.e.f. 1-4-1989). 

2. Subs. by s. 157, ibid., for “the Wealth-tax Officer” (w.e.f. 1-4-1989). 
3. Ins. by s. 157, ibid. (w.e.f. 1-4-1989). 
4. Ins. by Act 45 of 1972, s. 18 (w.e.f. 15-11-1972). 

93 

                                                           
and require any person in charge of, or in occupation or possession of, such land, building or other place 
or asset to afford him the necessary facility to survey or inspect such land, building or other place or asset 
or estimate its value or inspect any books of account, document or record which may be relevant for the 
valuation of such land, building or other place or asset and gather other particulars relating to such land, 
building or other place or asset: 

Provided that  no  Valuation  Officer, overseer,  surveyor  or  assessor shall  enter  any  building  or  place 
referred  to  in  clause  (b),  or  inspect  any  asset  referred  to  in  clause  (c)  (unless  with  the  consent  of  the 
person in charge of, or in occupation or possession of, such building, place or asset) without previously 
giving to such person at least two days’ notice in writing of his intention to do so. 

(2) If a person who, under sub-section (1), is required to afford any facility to the Valuation Officer or 
the overseer, surveyor or assessor, either refuses or evades to afford such facility, the Valuation Officer 
shall  have  all  the  powers  under  sub-sections  (1)  and  (2)  of  section  37  for  enforcing  compliance  of  the 
requirements made.] 

39. Effect  of  transfer  of  authorities  on  pending  proceedings.—Whenever  in  respect  of  any 
proceeding  under  this  Act  any  wealth-tax  authority  ceases  to  exercise  jurisdiction  and  is  succeeded  by 
another who has and exercises such jurisdiction, the authority so succeeding may continue the proceeding 
from the stage at which the proceeding was left by his predecessor: 

1[Provided that  the  assessee  concerned  may  demand  that  before  the  proceeding  is  so  continued  the 
previous  proceeding  or  any  part  thereof  be  reopened  or  that  before  any  order  of  assessment  is  passed 
against him, he be reheard.] 

40. Computation of periods of limitation.—In computing the period of limitation prescribed for an 
appeal under this Act or for an application under section 27, the day on which the order complained of 
was made and the time requisite for obtaining a copy of such order shall be excluded. 

41. Service  of  notice.—(1)  A  notice  or  a  requisition  under  this  Act  may  be  served  on  the  person 
therein  named  either  by  post  or  as  if  it  were  a  summons  issued  by  a  court  under  the  Code  of  Civil 
Procedure, 1908 (5 of 1908). 

(2)  Any  such  notice  or  requisition  may,  in  the  case  of  a  firm  or  a  Hindu  undivided  family,  be 
addressed to any member of the firm or to the manager or any adult male member of the family, 2[and in 
the case of a company or any other association of persons] be addressed to the principal officer thereof. 

3[(3) After a finding of total partition has been recorded by the 4[Assessing Officer] under section 20 
in respect of any Hindu family, notices under this Act in respect of the net wealth of the Hindu family 
shall be served on the person who was the last manager of the Hindu family, or, if such person is dead, 
then on all surviving adults who were members of the Hindu family immediately before the partition.] 

5[(4) Where an association of persons referred to in section 21AA is dissolved, notices under this Act 
in respect of any matter relating to the association may be served on any person who was a member of the 
association immediately before its dissolution.] 

6[42. Notice deemed to be valid in certain circumstances.—Where an assessee has appeared in any 
proceeding or cooperated 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 

1. Added by Act 46 of 1964, s. 37 (w.e.f. 1-4-1965). 
2. Subs. by Act 3 of 1989, s. 76, for “and in the case of any other association of persons” (w.e.f. 1-4-1989). 
3. Ins. by Act 46 of 1964, s. 38 (w.e.f. 1-4-1965). 
4. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1989). 
5. Ins. by Act 16 of 1981, s. 31 (w.e.f. 1-4-1981). 
6. Ins. by Act 18 of 2008, s. 66 (w.e.f. 1-4-2008).  Earlier section 42 was omitted by Act 5 of 1964, s. 50 (w.e.f. 1-4-1964). 

94 

                                                           
(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.] 

1 [42A. Publication  of  information  respecting  assessees.—(1)  If  the  Central  Government  is  of 
opinion that it is necessary or expedient in the public interest to publish the names of any assessees and 
any  other  particulars  relating  to  any  proceedings 2[or  prosecutions]  under  this  Act  in  respect  of  such 
assessees, it may cause to be published such names and particulars in such manner as it thinks fit.] 

3[(2) No publication under this section shall be made in relation to any penalty imposed under this Act 
until the time for presenting an appeal to the 4[Deputy Commissioner (Appeals)] 5[or, as the case may be, 
the  Commissioner  (Appeals)]  has  expired  without  an  appeal  having  been  presented  or  the  appeal,  if 
presented, has been disposed of.] 

6[Explanation.—In the case of  a company, the names  of the directors, secretaries and treasurers, or 
managers  of  the  company,  may  also  be  published  if,  in  the  opinion  of  the  Central  Government,  the 
circumstances of the case justify it.] 

42B. Disclosure of information respecting assessees.—Where a person makes an application to the 
7[Chief  Commissioner  or  Commissioner]  in  the  prescribed  form  for  any  information  relating  to  any 
assessee in respect of any assessment made under this Act, the  7[Chief Commissioner or Commissioner] 
may,  if  he  is  satisfied  that  it  is  in  the  public  interest  so  to  do,  furnish  or  cause  to  be  furnished  the 
information asked for in respect of that assessment only and his decision in this behalf shall be final and 
shall not be called in question in any court of law.] 

2[42C. Return  of  wealth,  etc.,  not  to  be  invalid  on  certain  grounds.—No  return  of  wealth, 
assessment,  notice,  summons  or other  proceeding  furnished  or  made  or  issued or  taken  or  purported  to 
have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be 
invalid  or  shall  be  deemed  to  be  invalid  merely  by  reason  of  any  mistake,  defect  or  omission  in  such 
return of wealth, assessment, notice, summons or other proceeding if such return of wealth, assessment, 
notice,  summons  or  other  proceeding  is  in  substance  and  effect  in  conformity  with  or  according  to  the 
intent and purpose of this Act.] 

8[42D. Presumption  as  to  assets,  books  of  account,  etc.—9[(1)]  Where  any  books  of  account  or 
other documents, articles or things including money are found in the possession or control of any person 
in the course of a search under section 37A, it may, in any proceeding under this Act, be presumed that— 

(i) such books of account or other documents, articles or things including money belong to such 

person; 

(ii) the contents of such books of account or other documents are true; and 

(iii) the  signature  and  every  other  part  of  such  books  of  account  or  other  documents  which 
purport  to  be  in  the  handwriting  of  any  particular  person  or  which  may  reasonably  be  assumed  to 
have  been  signed  by,  or  to  be  in  the  handwriting  of,  any  particular  person,  are  in  that  person’s 
handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped 
and executed or attested by the person by whom it purports to have been so executed or attested.] 

1. Subs. by Act 5 of 1964, s. 50, for sections 42A and 42B (w.e.f. 1-4-1964). Earlier these sections were inserted by Act 28 of 

1960, s. 11 (w.e.f. 1-4-1960). 

2. Ins. by Act 41 of 1975, s. 103 (w.e.f. 1-10-1975). 
3. Subs. by s. 103, ibid., for sub-section (2) (w.e.f. 1-10-1975). 
4. Subs. by Act 4 of 1988, s. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 
5. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 
6. Ins. by Act 3 of 1989, s. 77 (w.e.f. 1-4-1989). 
7. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988). 
8. Ins. by Act 22 of 2007, s. 93 (w.r.e.f. 1-10-1975). 
9. Section 42D renumbered as sub-section (1) thereof by Act 18 of 2008, s. 67 (w.r.e.f. 1-10-1975). 

95 

                                                           
1[(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.] 

43. Bar of jurisdiction.—No suit shall lie in any civil court to set aside or modify 2[any proceeding 
taken  or  order  made]  under  this  Act,  and  no  prosecution,  suit  or  other  legal  proceeding  shall  lie 
against 3[the Government or] any officer of the Government for anything in good faith done or intended 
to be done under this Act. 

4[44. Appearance before wealth-tax authorities by authorised representatives.—(1) Any assessee 
who  is  entitled  to  or  required  to  attend  before  any  wealth-  tax  authority  or  the  Appellate  Tribunal  in 
connection with any proceeding under this Act, except where he is required under this Act to attend in 
person, may attend by a person who would be entitled to represent him before any income-tax authority 
or the Appellate Tribunal under section 288 of the Income-tax Act. 

(2) Notwithstanding anything in sub-section (1)— 

(i) no person who has been convicted of an offence connected with any wealth-tax proceeding or 
on  whom  a  penalty  has  been  imposed  under  this  Act  other  than  a  penalty  imposed  on  him  under 
clause  (i)  or  clause  (ii)  of  sub-section  (1)  of  section  18  shall  be  qualified  to  represent  an  assessee 
under  sub-section  (1)  for  such  time  as  the 5[Chief  Commissioner  or  Commissioner]  may  by  order 
determine; 

(ii)  if  any  person  who  is  not  a  legal  practitioner  or  a  chartered  accountant,  is  found  guilty  of 
misconduct in connection with any wealth-tax proceeding by the prescribed authority, the prescribed 
authority  may  direct  that  he  shall  thenceforth  be  disqualified  to  represent  an  assessee  under  sub-
section (1); 

(iii) no person not qualified to represent an assessee under the Indian Income-tax Act, 1922 (11 of 
1922),  the  Estate  Duty  Act,  1953  (34  of  1953), the  Expenditure-tax  Act,  1957  (29  of  1957),  or the 
Gift-tax Act, 1958 (18 of 1958), shall be entitled to appear on behalf of any assessee under this Act: 

Provided that any order or direction under clause (i) or clause (ii) shall be subject to the following 

conditions, namely:— 

(a) no such order or direction shall be made in respect of any person unless he has been given 

a reasonable opportunity of being heard; 

(b) any person against whom any such order or direction is made may, within one month of 
the making of the order or direction, appeal to the Board to have the order or direction cancelled; 
and 

(c) no  such  order  or  direction  shall  take  effect  until  the  expiration  of  one  month  from  the 

making thereof, or, where an appeal has been preferred, until the disposal of the appeal. 

1. Ins. by Act 18 of 2008, s. 67 (w.r.e.f. 1-10-1975). 
2. Subs. by Act 26 of 1988, s. 65, for “any order made” (w.r.e.f. 1-3-1988). Earlier the quoted words were substituted by Act 11 

of 1987, s. 89, for “any assessment made” (w.r.e.f. 1-3-1987). 

3. Ins. by Act 5 of 1964, s. 50 (w.e.f. 1-4-1964). 
4. Subs. by Act 46 of 1964, s. 39, for section 44 (w.e.f. 1-4-1965). 
5. Subs. by Act 4 of 1988, s. 127, for “Commissioner” (w.e.f. 1-4-1988). 

96 

                                                           
44A. Agreement  for  avoidance  or  relief  of  double  taxation  with  respect  to  wealth-tax.—1[The 

Central Government may enter into an agreement with the Government of any reciprocating country— 

(a) for the avoidance or relief of double taxation with respect to wealth-tax payable under this Act 

and under the corresponding law in force in the reciprocating country, or 

(b) for exchange of information for the prevention of evasion or avoidance of wealth-tax 

chargeable under this Act or under the corresponding law in force in that country or investigation of 
cases of such evasion or avoidance, or 

(c) for recovery of tax under this Act and under the corresponding law in force in that country, 

and  may,  by  notification in  the  Official  Gazette,  make  such  provision  as  may  be  necessary  for 
implementing the agreement.] 

Explanation.—The  expression  “reciprocating  country”  for  the  purposes  of  this  Act  means  2[any 
country outside India or any territory outside India] which the Central Government may, by notification 
in the Official Gazette, declare to be a reciprocating country. 

44B. Countries  with  which  no  agreement  exists.—Where the net wealth of any assessee includes 
any foreign wealth and he proves that, in respect of such foreign wealth, he has paid in any country, with 
which there is no reciprocal arrangement under section 44A for the relief or avoidance of double taxation, 
a tax in respect of wealth, under the law in force in that country, he shall be entitled to the deduction from 
the  Indian  wealth-tax  payable  by  him  of  a  sum  calculated  on  such  doubly  taxed  foreign  wealth  at  the 
Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax 
if both the rates are equal. 

Explanation.—In this section— 

(1) the expression “Indian wealth-tax” means wealth-tax charged in accordance with the 

provisions of this Act; 

(2) the expression “Indian rate of tax” means the rate determined by dividing the amount of 

Indian wealth-tax after deduction of any relief due under the provisions of this Act but before the 
deduction of any relief due under this section by the net wealth; 

(3) the expression “rate of tax of the said country” means any tax in respect of wealth, actually 

paid in the said country, in accordance with the corresponding laws in force in the said country after 
deduction of all relief due but before deduction of any relief due in the said country in respect of 
double taxation, divided by the whole amount of the wealth assessed in the said country; 

(4) the expression “foreign wealth”, in relation to any assessee, means the value of all his assets 

located in any country outside India as reduced by the value of his debts in that country.] 

3[44C. Rounding  off  of  net  wealth.—The  amount  of  net  wealth  computed  in  accordance  with  the 
foregoing provisions of this Act shall be rounded off to the nearest multiple of one hundred rupees and, 
for this purpose, any part of a rupee consisting of paise shall be ignored and thereafter, if  such amount 
contains  a  part  of  one  hundred  rupees,  then,  if  such  part  is  fifty  rupees  or  more,  the  amount  shall  be 
increased to the next higher amount which is a multiple of one hundred and, if such part is less than fifty 
rupees, the amount shall be reduced to the next lower amount which is a multiple of one hundred; and the 
amount so rounded off shall be deemed to be the net wealth of the assessee for the purposes of this Act. 

1. Subs. by Act 16 of 1972, s. 49, for certain words (w.e.f. 1-4-1972). 
2. Subs. by Act 33 of 2009, s. 84, for “any country” (w.e.f. 1-10-2009). 
3. Ins. by Act 42 of 1970, s. 65 (w.e.f. 1-4-1971). 

97 

                                                           
44D. Rounding off of tax, etc.—The amount of wealth-tax, interest, penalty, fine or any other sum 
payable,  and  the  amount  of  refund  due,  under  the  provisions  of  this  Act,  shall  be  rounded  off  to  the 
nearest  rupee  and,  for  this  purpose,  where  such  amount  contains  a  part  of  a  rupee  consisting  of  paise, 
then, if such part is fifty paise or more, it shall be increased to one rupee, and if such part is less than fifty 
paise, it shall be ignored.] 

45. Act not to apply in certain cases.—1[No tax shall be levied under this Act in respect of the net 

wealth of—] 

2* 

* 

* 

* 

* 

(f) any company registered under section 25 of the Companies Act, 1956 (1 of 1956); 

3[(g) any co-operative society;] 

4[(h) any social club;] 

5[(i) any political party. 

Explanation.—For the purposes of clause (i), “political party” shall have the meaning assigned to it in 

the Explanation to section 13A of the Income-tax Act;] 

6[(j) a Mutual Fund specified under clause (23D) of section 10 of the Income-tax Act;] 

7[(k) the Reserve Bank of India incorporated under the Reserve Bank of India Act, 1934 (2 of 

1934).] 

46. Power  to  make  rules.—(1) The Board may, by notification in the Official Gazette, make rules 

for carrying out the purposes of this Act. 

(2) In particular, and without prejudice to the generality of the foregoing power, rules made under this 

section may provide for— 

(a) the manner in which the market value of any asset may be determined; 

(b) the form in which returns under this Act shall be made and the manner in which they shall be 

verified; 

8[(ba) the documents, statements, receipts, certificates, audit reports, reports of registered valuer 
or  any  other  documents  which  may  not  be  furnished  along  with  the  return  but  shall  be  produced 
before the Assessing Officer on demand under section 14A; 

(bb) the class or classes of persons who shall be required to furnish the return in electronic form; 
the  form  and  the  manner  in  which  the  return  in  electronic  form  may  be  furnished;  the  documents, 
statements,  receipts,  certificates,  audit  reports,  reports  of  registered  valuer  or  any  other  documents 
which  may  not  be  furnished  along  with  the  return  in electronic  form  and  the  computer  resource  or 
electronic record to which such return may be transmitted under section 14B;] 

(c) the form in which appeals and applications under this Act may be made, and the manner in 

which they shall be verified; 

1. Subs. by Act 16 of 1972, s. 50, for “The provisions of this Act shall not apply to—” (w.e.f. 1-4-1972). 
2. Clauses (a) to (e) omitted by Act 18 of 1992, s. 99 (w.e.f. 1-4-1993).] 
3. Ins. by Act 16 of 1972, s. 50 (w.r.e.f. 1-4-1957). 
4.  Subs.  by  Act  18  of  1992,  s.  99,  for  clause  (h)  (w.e.f.  1-4-1993).  Earlier  clause  (h)  was  inserted  by  Act  25  of  1975,  s.  28             

(w.r.e.f. 1-4-1957) 

5. Ins. by Act 29 of 1978, s. 3 (w.e.f. 1-4-1979). 
6. Ins. by Act 4 of 1988, s. 158 (w.e.f. 1-4-1988). 
7. Ins. by Act 23 of 2012, s. 118 (w.r.e.f. 1-4-1957). 
8. Ins. by Act 17 of 2013, s. 63 (w.e.f. 1-6-2013). 

98 

 
 
 
 
 
 
 
                                                           
1[(cc) the circumstances in which, the conditions subject to which, and the manner in which, the 
2[Deputy  Commissioner  (Appeals)] 3[or  the  Commissioner  (Appeals)]  may  permit  an  appellant  to 
produce  evidence  which  he  did  not  produce  or  which  he  was  not  allowed  to  produce  before 
the 4[Assessing Officer];] 

(d) the form of any notice of demand under this Act; 

5[(dd) the procedure to be followed in calculating interest payable by assessees or interest payable 
by  the  Government  to  assessees  under  any  provision  of  this  Act,  including  the  rounding  off  of  the 
period for which such interest is to be calculated in cases where such period includes a fraction of a 
month, and specifying the circumstances in which and the extent to which petty amounts of interest 
payable by assessees may be ignored;] 

6[(e) the areas within which Valuation Officers may exercise jurisdiction; 

(ee) the manner in which and the conditions subject to which Valuation Officers, overseers, 

surveyors and assessors may exercise their powers under sub-section (1) of section 38A;] 

(f) any other matter which has to be, or may be, prescribed for the purposes of this Act. 

7[(3) The power to make rules conferred by this section shall include the power to give retrospective 
effect, from a date not earlier than the date of commencement of this Act, to the rules or any of them and, 
unless the contrary is permitted (whether expressly or by necessary implication), no retrospective effect 
shall be given to any rule so as to prejudicially affect the interests of assessees.] 

8[(4) The Central Government shall cause every rule made under this Act 9[and the rules of procedure 
framed by the Settlement Commission under sub-section (7) of section 22F] to be laid as soon as may be 
after  it  is  made  before  each  House  of  Parliament  while  it  is  in  session  for  a  total  period  of  thirty  days 
which may be comprised in one session 10[or in two or more successive sessions], and if before the expiry 
of  the  session 11[immediately  following  the  session  or  the  successive  sessions  aforesaid],  both  Houses 
agree in making any modification in the rule or both Houses agree that the rule should not be made, the 
rule  shall  thereafter  have  effect  only  in  such  modified  form  or  be  of  no  effect,  as  the  case  may  be,  so 
however, that any such modification or annulment shall be without prejudice to the validity of anything 
previously done under that rule.] 

12[46A. Power  to  make  exemption,  etc.,  in  relation  to  certain  Union  territories.—If the Central 
Government  considers  it  necessary  or  expedient  so  to  do  for  avoiding  any  hardship  or  anomaly  or 
removing any difficulty that may arise as a result of the application of this Act to the Union territories of 
Dadra and Nagar Haveli, Goa, Daman and Diu, and Pondicherry, or in the case of the Union territory of 
Pondicherry,  for  implementing  any  provision  of  the  Treaty  of  Cession  concluded  between  France  and 
India  on  the  28th  day  of  May,  1956,  that  Government  may,  by  general  or  special  order,  make  an 
exemption, reduction in rate or other modification in respect of wealth-tax in favour of any class of assets 
or in regard to the whole or any part of the net wealth of any assessee or class of assessees: 

1. Ins. by Act 16 of 1972, s. 51 (w.e.f. 1-4-1972). 
2. Subs. by Act 4 of 1988, s. 127, for “Appellate Assistant Commissioner” (w.e.f. 1-4-1988). 
3. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 
4. Subs. by Act 4 of 1988, s. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988). 
5. Ins. by Act 42 of 1970, s. 65 (w.e.f. 1-4-1971). 
6. Subs. by Act 45 of 1972, s. 19, for clause (e) (w.e.f. 1-4-1988). 
7. Subs. by Act 26 of 1974, s. 17, for sub-section (3) (w.e.f. 18-8-1974). 
8. Subs. by Act 46 of 1964, s. 40, for sub-section (4) (w.e.f. 1-4-1965). 
9. Ins. by Act 32 of 1994, s. 53 (w.e.f. 1-6-1994). 
10. Subs. by Act 41 of 1975, s. 105, for “or in two successive sessions” (w.e.f. 1-4-1976). 
11. Subs. by s. 105, ibid., for “in which it is so laid or the session immediately following” (w.e.f. 1-4-1976). 
12. Ins. by the Taxation Laws (Extension to Union Territories) Regulation, 1963 (3 of 1963) (w.e.f. 1-4-1963). 

99 

                                                           
Provided that the power conferred by this section shall not be exercisable after the 31st day of March, 

1967, except for the purposes of rescinding an exemption, reduction or modification already made.] 

1[47. Power to remove difficulties.—(1) If any difficulty arises in giving effect to the provisions of 
this Act as amended by the Direct Tax Laws (Amendment) Act, 1987, the Central Government may, by 
order, do anything not inconsistent with such provisions for the purpose of removing the difficulty: 

Provided that no such order shall be made after the expiration of three years from the 1st day of April, 

1988. 

(2)  Every  order  made  under  sub-section  (1)  shall  be  laid  before  each  House  of  Parliament.] 

1. Ins. by Act 4 of 1988, s. 159 (w.e.f. 1-4-1988). 

100 

                                                           
1[SCHEDULE I] 
2[[See section 3(1)]] 

RATES OF WEALTH-TAX 
3[PART I 

(1) In the case of every individual or Hindu undivided family, not being a Hindu undivided family, to 

which item (2) of this Part applies,— 

(a)  where the net wealth does not exceed Rs. 2,50,000 

  Nil; 

Rate of tax 

(b)  where the net wealth exceeds Rs. 2,50,000 but does 

  ½ per cent. of the amount by which the net wealth 

not exceed Rs. 10,00,000 

exceeds Rs. 2,50,000; 

(c)  where the net wealth exceeds Rs 10,00,000 but does 

  Rs. 3,750 plus 1 per cent. of the amount by which 

not exceed Rs. 20,00,000 

the net wealth exceeds Rs. 10,00,000; 

(d)  where the net wealth exceeds Rs. 20,00,000 

  Rs. 13,750 plus 2 per cent. of the amount by which 

the net wealth exceeds Rs. 20,00,000. 

(2)  In  the  case  of  every  Hindu  undivided  family  which  has  at  least  one  member  whose  net  wealth 

assessable for the assessment year exceeds Rs. 2,50,000,— 

(a)  where the net wealth does not exceed Rs. 1,50,000 

  Nil; 

Rate of tax 

(b)  where the net wealth exceeds Rs. 1,50,000 but does 

  1 per cent. of the amount by which the net wealth 

not exceed Rs. 5,00,000 

exceeds Rs. 1,50,000; 

(c)  where the net wealth exceeds Rs. 5,00,000, but does 

  Rs. 3,500 plus 2 per cent. of the amount by which 

not exceed Rs. 10,00,000 

the net wealth exceeds Rs. 5,00,000; 

(d)  where the net wealth exceeds Rs. 10,00,000 

  Rs. 13,500 plus 3 per cent. of the amount by which 

the net wealth exceeds Rs. 10,00,000.] 

4[Surcharge on wealth-tax 

The amount of wealth-tax computed in accordance with the provisions of this Part shall, in relation to 
the assessment year commencing on the 1st day of April, 1988 be increased by surcharge calculated at the 
rate of ten per cent of such wealth-tax.] 

5* 
6* 
7* 
8* 
9* 

* 

* 

* 

* 

* 

* 

* 

* 

* 

* 

* 

* 

* 

* 

* 

* 

*  

*  

*  

*  

1. The Schedule numbered as Schedule I thereof by Act 66 of 1976, s. 27 (b) (w.e.f. 1-4-1977). 
2. Subs. by Act 18 of 1992, s. 100, for “(See section 3)” (w.e.f. 1-4-1993). 
3. Subs. by Act 32 of 1985, s. 40, for Part I (w.e.f. 1-4-1986). 
4. Added by Act 26 of 1988, s. 66 (w.e.f. 1-4-1988). 
5. Part II omitted by Act 18 of 1992, s. 100 (w.e.f. 1-4-1993). 
6. Rule 1 omitted by Act 18 of 1992, s. 100 (w.e.f. 1-4-1993). 
7. Rule 2 omitted by Act 19 of 1970, s. 26 (w.r.e.f. 1-4-1969). 
8. Rules 3, 4, 5 omitted by Act 18 of 1992, s. 100 (w.e.f. 1-4-1993). 
9. Schedule II omitted by Act 18 of 1992, s. 100 (w.e.f. 1-4-1993). Earlier it was inserted by Act 66 of 1976, s. 27 (w.e.f. 1-4-1977). 

101 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
1[SCHEDULE III 

[See section 7(1)] 

RULES FOR DETERMINING THE VALUE OF ASSETS 

PART A 

GENERAL 

1. Value of assets how to be determined.—The value of any asset, other than cash, for the purposes 

of this Act, shall be determined in the manner laid down in these rules. 

2. Definitions.—In this Schedule, unless the context otherwise requires,— 

(1) “accounting year” in relation to a company means a period in respect of which any profit and 

loss account of the company laid before it in the annual general meeting is made up; 

(2) “debenture” includes debenture stock, bonds and any other securities of a company, whether 

constituting a charge on the assets of the company or not; 

(3) “equity  share”  means  any  share  in  the  share  capital  of  a  company  other  than  a  preference 

share; 

(4) “gold”  means  gold,  including  its  alloy,  whether  virgin,  melted,  remelted,  wrought  or 
unwrought, in any shape or form of a purity of not less than nine carats and includes any gold coin 
(whether legal tender or not), any gold ornament and other article of gold; 

(5) “gold ornament” means any article in a finished form, meant for personal adornment or for the 
adornment of any idol, deity or any other object of religious worship made of, or manufactured from, 
gold,  whether  or  not  set  with  stones  or  gems,  real  or  artificial,  or  with  pearls,  real,  cultured  or 
imitation, or with all or any of them and includes parts, pendants or broken pieces of gold ornaments ; 

(6) “investment company” means a company whose gross total income consists mainly of income 
which  is  chargeable to  income-tax  under  the  heads  “Income  from  house  property”,  “Capital  gains” 
and “Income from other sources”. 

Explanation.—In  this  clause,  the  expression  “gross  total  income”  shall  have  the  meaning 

assigned to it in section 80B of the Income-tax Act; 

(7) “jewellery” includes— 

(a) ornaments  made  of  gold,  silver,  platinum  or  any  other  precious  metal  or  any  alloy 
containing one or more of such precious metals, whether or not containing any precious or semi-
precious stones, and whether or not worked or sewn into any wearing apparel; 

(b) precious  or  semi-precious  stones,  whether  or  not  set  in  any  furniture,  utensils  or  other 

article or worked or sewn into any apparel; 

(8) “preference share” has the meaning assigned to it in section 85 of the Companies Act, 1956 (1 

of 1956); 

 (9) “quoted share” or “quoted debenture”, in relation to an equity share or a preference share or, 
as the case may be, a debenture, means a share or debenture quoted on any recognised stock exchange 
with  regularity  from  time  to  time,  where  the  quotations  of  such  shares  or  debentures  are  based  on 
current transactions made in the ordinary course of business. 

Explanation.—Where  any  question  arises  whether  a  share  or  debenture  is  a  “quoted  share”  or  a 
“quoted  debenture”  within  the  meaning  of  this  clause,  a  certificate  to  that  effect  furnished  by  the 
concerned stock exchange in the prescribed form shall be accepted as conclusive; 

1. Ins. by Act 3 of 1989, s. 78 (w.e.f. 1-4-1989). 

102 

                                                           
(10) “recognised stock exchange” has the meaning assigned to it in clause (f) of section 2 of the 

Securities Contracts (Regulation) Act, 1956 (42 of 1956); 

(11) “unquoted  share”  or  “unquoted  debenture”,  in  relation  to  an  equity  share  or  a  preference 
share or, as the case may be, a debenture, means a share or debenture which is not a quoted share or a 
quoted debenture. 

PART B 

IMMOVABLE PROPERTY 

3. Valuation  of  immovable  property.—Subject to the  provisions of rules  4, 5, 6,  7  and  8,  for  the 
purposes of sub-section (1) of section 7, the value of any immovable property, being a building or land 
appurtenant thereto,  or  part  thereof,  shall  be  the  amount  arrived  at  by  multiplying  the  net  maintainable 
rent by the figure 12.5 : 

Provided that in relation to any such property which is constructed on leasehold land, this rule shall 

have effect as if for the figure 12.5,— 

(a) where the unexpired period of the lease of such land is fifty years or more, the figure 10.0 had 

been substituted ; and 

(b) where the unexpired period of the lease of such land is less than fifty years, the figure 8.0 had 

been substituted: 

Provided further that where such property is acquired or construction of which is completed after 
the 31st day of March, 1974, if the value so arrived at is lower than the cost of acquisition or the cost 
of construction, as increased, in either case, by the cost of any improvement to the property, the cost 
of acquisition or, as the case may be, the cost of construction, as so increased, shall be taken to be the 
value of the property under this rule: 

Provided also that the provisions of the second proviso shall not apply for determining the value 
of one house belonging to the assessee, where such house is acquired or the construction whereof is 
completed after the 31st day of March, 1974, and the house is exclusively used by the assessee for his 
own  residential  purposes  throughout  the  period  of  twelve  months  immediately  preceding  the 
valuation date and the cost of acquisition or, as the case may be, the cost of construction, as increased, 
in either case, by the cost of any improvement to the house, does not exceed,— 

(a) if the house is situate at Bombay, Calcutta, Delhi or Madras, fifty lakh rupees; 

(b) if the house is situate at any other place, twenty-five lakh rupees: 

Provided also that where more than one house belonging to the assessee is exclusively used 
by him for residential purposes, the provisions of the third proviso shall apply only in respect of 
one of such houses which the assessee may, at his option, specify in this behalf. 

4. Net maintainable rent how to be computed.—For the purposes of rule 3, "net maintainable rent" 
in relation to an immovable property referred to in that rule, shall be the amount of gross maintainable 
rent as reduced by— 

(i) the amount of taxes levied by any local authority in respect of the property ; and 

(ii) a sum equal to fifteen per cent of the gross maintainable rent. 

5. Gross maintainable rent how to be computed.—For the purposes of rule 4, “gross maintainable 

rent”, in relation to any immovable property referred to in rule 3, means— 

(i) where the property is let, the amount received or receivable by the owner as annual rent or the 
annual value assessed by the local authority in whose area the property is situated for the purposes of 
levy of property tax or any other tax on the basis of such assessment, whichever is higher; 

103 

(ii) where  the  property  is  not  let,  the  amount  of  annual  rent  assessed  by  the  local  authority  in 
whose  area  the  property  is  situated  for  the  purpose  of  levy  of  property  tax  or  any  other  tax  on  the 
basis of such assessment, or, if there is no such assessment or the property is situated outside the area 
of any local authority the amount which the owner can reasonably be expected to receive as annual 
rent had such property been let. 

Explanation.—In this rule,— 

(1) “annual rent” means,— 

(a) where  the  property  is  let  throughout  the  year  ending  on  the  valuation  date  (hereinafter 
referred to as “previous year”), the actual rent received or receivable by the owner in respect of 
such year; 

(b) where the property is let for only a part of the previous year, the amount which bears the 
same proportion to the amount of actual rent received or receivable by the owner for the period 
for  which  the  property  is  let  as  the  period  of  twelve  months  bears  to  the  number  of  months 
(including part of a month) during which the property is let during the previous year: 

Provided that in the following cases, such actual rent under sub-clauses (a) and (b) shall be 

increased in the manner specified below:— 

(i) where  the  property  is  in  the  occupation  of  a  tenant  and  taxes  levied  by  any  local 
authority in respect of the property are borne wholly or partly by the tenant, by the amount of 
the taxes so borne by the tenant; 

(ii) where  the  property  is  in  the  occupation  of  a  tenant  and  expenditure  on  repairs  in 

respect of the property is borne by the tenant, by one-ninth of the actual rent; 

(iii) where  the  owner  has  accepted  any  amount  as  deposit  (not  being  advance  payment 
towards rent for a period of three months or less), by the amount calculated at the rate of 15 
per  cent  per  annum  on  the  amount  of  deposit  outstanding  from  month  to  month,  for  the 
number  of  months  (excluding  part  of  a  month)  during  which  such  deposit  was  held  by  the 
owner  in  the  previous  year,  and  if  the  owner  is  liable  to  pay  interest  on  such  deposit,  the 
increase  to  be  made  under  this  clause  shall  be  limited  to  the  sum  by  which  the  amount 
calculated as aforesaid exceeds the interest actually paid; 

(iv) where  the  owner  has  received  any  amount  by  way  of  premium  or  otherwise  as 
consideration for leasing of the property or any modification of the terms of the lease, by the 
amount  obtained  by  dividing  the  premium  or  other  amount  by  the  number  of  years  of  the 
period of the lease; 

(v) where the owner derives any benefit or perquisite, whether convertible into money or 
not, as consideration for leasing of the property or any modification of the terms of the lease 
by the value of such benefit or perquisite; 

(2) “rent  received  or  receivable”  shall  include  all  payments  for  the  use  of  the  property,  by 
whatever name called, the value of all benefits or perquisites whether convertible into money or not, 
obtained from a tenant or occupier of the property and any sum paid by a tenant or occupier of the 
property in respect of any obligation which, but for such payment, would have been payable by the 
owner. 

6. Adjustments to value  arrived  at  under  rule  3, for  unbuilt  area  of  plot  of land.  —Where the 
unbuilt  area  of  the  plot  of  land  on  which  the  property  referred  to  in  rule  3  is  constructed  exceeds  the 
specified area, the value  arrived at in accordance with the provisions of rule 3 shall be increased by an 
amount calculated in the following manner, namely:— 

(a) where the difference between the unbuilt area and the specified area exceeds five per cent. but 
does not exceed ten per  cent. of the aggregate area, by an amount equal to twenty per cent of such 
value; 

104 

(b) where the difference between the unbuilt area and the specified area exceeds ten per cent but 
does not exceed fifteen per cent of the aggre-gate area, by an amount equal to thirty per cent of such 
value; 

(c) where the difference between the unbuilt area and the specified area exceeds fifteen per cent 
but does not exceed twenty per cent of the aggregate area, by an amount equal to forty per cent of 
such value. 

Explanation.—For the purposes of this rule and rule 6,— 

(a) “aggregate area”, in relation to the plot of land on which the property is constructed, means 

the aggregate of the area on which the property is constructed and the unbuilt area; 

(b) “specified area”, in relation to the plot of land on which the property is constructed, means— 

(i) where the property is situate at Bombay, Calcutta, Delhi or Madras, sixty per cent of the 

aggregate area; 

(ii) where  the  property  is  situate  at  Agra,  Ahmedabad,  Allahabad,  Amritsar,  Bangalore, 
Bhopal,  Cochin,  Hyderabad,  Indore,  Jabalpur,  Jamshedpur,  Kanpur,  Lucknow,  Ludhiana, 
Madurai,  Nagpur,  Patna,  Pune,  Salem,  Sholapur,  Srinagar,  Surat,  Tiruchirapalli,  Trivandrum, 
Vadodara (Baroda) or Varanasi (Benaras), sixty-five per cent. of the aggregate area; and 

(iii) where the property is situate at any other place, seventy per cent. of the aggregate area: 

Provided that where, under any law for the time being in force, the minimum area of the plot 
of land required to be kept as open space for the enjoyment of the property exceeds the specified 
area, such minimum area shall be deemed to be the specified area; 

(c) “unbuilt area”, in relation to the aggregate area of the plot of land on which the property is 

constructed, means that part of such aggregate area on which no building has been erected. 

7. Adjustment for unearned increase in the value of the land.—Where the property is constructed 
on land obtained on lease from the Government, a local authority or any authority referred to in clause 
(20A) of section 10 of the Income-tax Act, and the Government or any such authority is, under the terms 
of the lease, entitled to claim and recover a specified part of the unearned increase in the value of the land 
at the time of the transfer of the property, the value of such property as determined under rule 3 shall be 
reduced by the amount so liable to be claimed and recovered or by an amount equal to fifty per cent. of 
the value of the property as so determined, whichever is less, as if the property had been transferred on 
the valuation date. 

Explanation.—For  the  purpose  of  this  rule,  "unearned  increase"  means  the  difference  between  the 
value  of  such  land  on  the  valuation  date  as  determined  by  the  Government  or  such  authority  for  the 
purpose of calculating such increase and the amount of the premium paid or payable to the Government 
or such authority for the lease of the land. 

8. Rule 3 not to apply in certain cases.—Nothing contained in rule 3 shall apply,— 

(a) where, having regard to the facts and circumstances of the case, the Assessing Officer, with 
the previous approval of the Deputy Commissioner, is of opinion that it is not practicable to apply the 
provisions of the said rule to such a case; or 

(b) where the difference between the unbuilt area and the specified area exceeds twenty per cent 

of the aggregate area; or 

(c) where the property is constructed on leasehold land and the lease expires within a period not 
exceeding fifteen years from the relevant valuation date and the deed of lease does not give an option 
to the lessee for the renewal of the lease, 

and  in  any  case  referred  to  in  clause  (a)  or  clause  (b)  or  clause  (c),  the  value  of  the  property  shall  be 
determined in the manner laid down in rule 20. 

105 

1* 

* 

* 

PART D 

ASSETS OF BUSINESS 

* 

* 

14. Global  valuation  of  assets  of  business.—(1) Where the  assessee is  carrying  on  a  business for 
which accounts are maintained by him regularly, the net value of the assets of the business as a whole, 
having regard to the balance-sheet of such business on the valuation date after adjustments specified in 
sub-rule (2) shall be taken as the value of such assets for the purposes of this Act. 

(2) For the purposes of sub-rule (1)— 

(a) the value of any asset as disclosed in the balance-sheet shall be taken to be,— 

(i) in the case of an asset on which depreciation is admissible, its written-down value; 

(ii) in the case of an asset on which no depreciation is admissible, its book value; 

(iii) in  the  case  of  closing  stock  its  value  adopted  for  the  purposes of assessment  under  the 

Income-tax Act for the previous year relevant to the corresponding assessment year; 

(b) where the value of any of the assets referred to in clause (a), deter-mined in accordance with 
the provisions of this Schedule as applicable to that particular asset or if there are no such provisions, 
determined in accordance with rule 20, exceeds the value arrived at in accordance with clause (a) by 
more than 20 per cent, then the higher value shall be taken to be the value of that asset; 

(c) the  value  of  an  asset  not  disclosed  in  the  balance-sheet,  shall  be  taken  to  be  the  value 

determined in accordance with the provisions of this Schedule as applicable to that asset; 

(d) the value of the following assets which are disclosed in the balance sheet shall not be taken 

into account, namely:— 

(i) any amount paid as advance tax under the Income-tax Act; 

(ii)  the debt due to the assessee according to the balance-sheet or part thereof which has been 
allowed as a deduction under clause (vii) of sub-section (1) of section 36 of the Income-tax Act, 
for  the  purposes  of  assessment  for  the  previous  year  relevant  to  the  corresponding  assessment 
year under that Act; 

(iii)  the value of any asset in respect of which wealth-tax is not payable under this Act; 

(iv) any amount shown in the balance-sheet including the debit balance in the profit and loss 

account or profit and loss appropriation account which does not represent the value of any asset; 

(v) any asset shown in the balance-sheet not really pertaining to the business; 

(e) the following amounts shown as liabilities in the balance-sheet shall not be taken into account, 

namely:— 

(i) capital employed in the business other than that attributable to borrowed money; 

(ii) reserves by whatever name called; 

(iii) any provision made for meeting any future or contingent liability; 

(iv) any liability shown in the balance-sheet not really pertaining to the business; 

1. Part C omitted by Act 18 of 1992, s. 100 (w.e.f. 1-4-1993). 

106 

 
 
 
 
 
 
 
 
                                                           
(v) any debt owed by the assessee to the extent to which it has been specifically utilised for 

acquiring an asset in respect of which wealth-tax is not payable under this Act: 

Provided that where it is not possible to calculate the amount of debt so utilised, it shall be 
taken  as  the  amount  which  bears  the  same  proportion  to  the  total  of  the  debts  owed  by  the 
assessee as the value of that asset bears to the total value of the assets of the business. 

Explanation.—Provision for any purpose other than taxation shall be treated as a reserve. 

PART E 

INTEREST IN FIRM OR ASSOCIATION OF PERSONS 

15. Valuation of interest in firm or association of persons.—The value of the interest of a person 
in  a  firm  of  which  he  is  a  partner  or  in  an  association  of  persons  of  which  he  is  a  member  shall  be 
determined in the manner provided in rule 16. 

16. Computation of net wealth of the firm or association and its allocation amongst the partners 
or  members.—The net wealth of the firm or association of persons on the valuation date shall first be 
determined as if it were the assessee and, thereafter,— 

(i) that portion of the net wealth of the firm or association as is equal to the amount of its capital 
shall  be  allocated  among  the  partners  or  members  in  the  proportion  in  which  capital  has  been 
contributed by them; 

(ii) the residue of the net wealth of the firm or association shall be allocated amongst the partners 
or  members  in  accordance  with  the  agreement  of  partnership  or  association  for  the  distribution  of 
assets in the event of dissolution of the firm or association or, in the absence of such agreement, in the 
proportion in which the partners or members are entitled to share the profits, 

and the sum total of amounts so allocated to a partner or member under clause (i) and clause (ii) shall be 
treated as the value of the interest of that partner or member in the firm or association: 

Provided that in determining the net wealth of the firm or association for the purposes of this rule, no 

account shall be taken of the exemptions in sub-sections (1) and (1A) of section 5.  

Explanation.—For the purposes of this rule,— 

(a) where the net wealth of the firm or association computed in accordance with this rule includes 
the value of any assets located outside India, the value of the interest of any partner or member in the 
assets located in India shall be determined having regard to the proportion which the value of assets 
located in India diminished by the debts relating to those assets bears to the net wealth of the firm or 
association; 

(b) where the net wealth of the firm or association computed in accordance with this rule includes 
the value of any assets which are exempt from inclusion in the net wealth under sub-sections (1) and 
(1A) of section 5, the value of the interest of a partner or member shall be deemed to include the value 
of his proportionate share in the said assets and, the provisions of sub-sections (1) and (1A) of section 
5 shall apply to him accordingly; 

(c) where the net wealth of the firm or association computed in accordance with this rule includes 
the value of any assets referred to in sub-section (2) of section 5, the value of the interest of a partner 
or member shall be deemed to include the value of his proportionate share in the said assets, and the 
provisions of sub-section (2) of section 5 shall apply to him accordingly. 

107 

PART F 

LIFE INTEREST 

17. Valuation of life interest.—(1) For the purposes of sub-section (1) of section 7, the value of the 
life interest of an assessee shall be arrived at by multiplying the average annual income that accrued to the 
assessee from the life interest by the fraction 

1      minus 1, where ‘P’ represents the annual premium  

                                                                            p + d   

for a whole life insurance without profits on the life of the life tenant for unit sum assured as specified in 
the Appendix to these rules, and ‘d’ is equal to 

i        “i” being the rate of interest. 

                                                                             1+i 

Explanation.—In this rule,— 

(a) “life tenant” means a person for the duration of whose life the life interest is to subsist; 

(b) “average annual income” means the average of the gross income derived by the assessee from 
the life interest during each year of the period ending on the valuation date, reduced by the average of 
the expenses incurred on the collection of such income in each of those years: 

Provided that the amount of the reduction for such expenses shall, in no case, exceed five per cent 

of the average of the annual gross income: 

Provided further that in case the income so derived is for a period exceeding three years, only that 

income derived during the three years ending on the valuation date shall be taken into account; 

(c) the rate of interest shall be 6½ per cent. per annum. 

(2) Notwithstanding anything contained in sub-rule (1),— 

(a) the  Assessing  Officer  may,  if  he  is  of  the  opinion  that  in  the  case  of  the  life  tenant,  a  life 
insurance company would not take the risk of insuring his life at the normal premium rates in force 
but would demand a higher premium, vary the valuation suitably; 

(b) the  value  of  the  life  interest  so  determined  shall,  in  no  case,  exceed  the  value  as  on  the 
valuation  date  as  determined  under  this  Schedule,  of  the  corpus  of  the  trust  from  which  the  life 
interest is derived. 

PART G 

JEWELLERY 

1[18. Valuation of jewellery.—(1) The value of the jewellery shall be estimated to be the price which 
it would fetch if sold in the open market on the valuation date (hereafter in this rule referred to as fair 
market value). 

(2) The return of net wealth furnished by the assessee shall be supported by,— 

(i) a statement in the prescribed form, where the value of the jewellery on the valuation date does 

not exceed rupees five lakhs; 

(ii) a report of a registered valuer in the prescribed form, where the value of the jewellery on the 

valuation date exceeds rupees five lakhs. 

(3)  Notwithstanding  anything  mentioned  in  sub-rule  (2),  the  Assessing  Officer  may,  if  he  is  of 

opinion, that the value of the jewellery declared in the return,— 

(a) is  less  than  its  fair  market  value  by  such  percentage  or  such  amount  as  is  prescribed  under 

sub-clause (i) of clause (b) of sub-section (1) of section 16A; 

1. Subs. by Act 12 of 1990, s. 58, for rule 18 (w.e.f. 1-4-1990). 

108 

 
 
                                                           
(b) is less than its fair market value as referred to in clause (a) of sub-section (1) of section 16A, 

he  may  refer  the  valuation  of  such  jewellery  to  a  Valuation  Officer  under  sub-section  (1)  of  the  said 
section  and  the  value  of  such  jewellery  shall  be  the  fair  market  value  as  estimated  by  the  Valuation 
Officer.] 

19. Adjustment  in  value  of  jewellery  for  subsequent  assessment  years.—The  value  of  any 
jewellery  determined  in  accordance  with 1[sub-rule  (3)  of]  rule  18  for  any  assessment  year  (hereinafter 
referred to as the first assessment year), shall be taken to be the value of such jewellery for the subsequent 
four assessment years, subject to the following adjustments, namely :— 

(a) where the jewellery includes gold or silver or any alloy containing gold or silver, the value of 
such  gold  or  silver  or  such  alloy  as  on  the  valuation  date  relevant  to  the  concerned  subsequent 
assessment year shall be substituted for the value of such gold or silver or alloy on the valuation date 
relevant to the first assessment year; 

(b) where any jewellery or part of jewellery is sold or otherwise disposed of by the assessee, or 
any jewellery or part of jewellery is acquired by him, on or before the valuation date relevant  to the 
concerned subsequent year, the value of the jewellery determined for the first assessment year shall 
be  reduced  or  increased,  as  the  case  may  be,  and  the  value  as  so reduced  or  increased  shall  be the 
value of the jewellery for such subsequent assessment year. 

PART H 

RESIDUARY 

20. Valuation of assets in other cases.—(1) The value of any asset, other than cash, being an asset 
which  is  not  covered  by  rules  3  to  19,  for  the  purposes  of  this  Act,  shall  be  estimated  to  be  the  price 
which, in the opinion of the Assessing Officer, it would fetch if sold in the open market on the valuation 
date. 

(2) Notwithstanding anything contained in sub-rule (1), where the valuation of any asset referred to in 
that sub-rule is referred by the Assessing Officer to the Valuation Officer under section 16A, the value of 
such asset shall be estimated to be the price which, in the opinion of the Valuation Officer, it would fetch 
if sold in the open market on the valuation date. 

(3) Where the value of any asset cannot be estimated under this rule because it is not saleable in the 
open market, the value shall be determined in accordance with such guidelines or principles as may be 
specified by the Board from time to time by general or special order. 

21. Restrictive covenants to be ignored in determining market value.—For the removal of doubts, 
it is hereby declared that the price or other consideration for which any property may be acquired by or 
transferred to any person under the terms of a deed of trust or through or under any restrictive covenant in 
any instrument of transfer shall be ignored for the purposes of determining under any provision of this 
Schedule, the price such property would fetch if sold in the open market on the valuation date. 

1. Subs. by Act 12 of 1990, s. 58, for “clause (b) of” (w.e.f. 1-4-1990). 

109 

 
 
                                                           
APPENDIX 

[See rule 17] 

Table of ( 1             1) 
        P + d 

Age nearer birthday 

Premium for unit sum 
assured 

1 

( 

P + d 

    1) 

  Value of life interest of rupee 1 
per annum at 6½% rate of 
interest 

1 

0. 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

10. 

11. 

12. 

13. 

14. 

15. 

16. 

17. 

3 

10.100 

11.999 

12.517 

12.765 

12.893 

12.951 

12.965 

12.955 

12.930 

12.893 

12.850 

12.803 

12.751 

12.699 

12.644 

12.587 

12.534 

12.473 

2 

0.02906 

0.01590 

0.01295 

0.01162 

0.01095 

0.01065 

0.01058 

0.01063 

0.01076 

0.01095 

0.01117 

0.01142 

0.01169 

0.01197 

0.01226 

0.01257 

0.01286 

0.01319 

110 

 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 

18. 

19. 

20. 

21. 

22. 

23. 

24. 

25. 

26. 

27. 

28. 

29. 

30. 

31. 

32. 

33. 

34. 

35. 

36. 

37. 

38. 

39. 

40. 

41. 

42. 

2 

0.01350 

0.01387 

0.01431 

0.01469 

0.01512 

0.01556 

0.01606 

0.01656 

0.01706 

0.01762 

0.01825 

0.01894 

0.01962 

0.02037 

0.02112 

0.02194 

0.02281 

0.02369 

0.02462 

0.02562 

0.02669 

0.02787 

0.02912 

0.03044 

0.03181 

111 

3 

12.417 

12.351 

12.273 

12.207 

12.132 

12.057 

11.972 

11.888 

11.806 

11.715 

11.614 

11.505 

11.399 

11.285 

11.173 

11.053 

10.927 

10.804 

10.675 

10.541 

10.400 

10.249 

10.093 

9.932 

9.771 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 

43. 

44. 

45. 

46. 

47. 

48. 

49. 

50. 

51. 

52. 

53. 

54. 

55. 

56. 

57. 

58. 

59. 

60. 

61. 

62. 

63. 

64. 

65. 

66. 

67. 

2 

0.03325 

0.03475 

0.03637 

0.03806 

0.03987 

0.04181 

0.04387 

0.04612 

0.04850 

0.05100 

0.05362 

0.05637 

0.05931 

0.06244 

0.06575 

0.06925 

0.07294 

0.07681 

0.08167 

0.08589 

0.09025 

0.09475 

0.09938 

0.10415 

0.10907 

112 

3 

9.607 

9.441 

9.267 

9.092 

8.911 

8.724 

8.533 

8.333 

8.130 

7.926 

7.722 

7.518 

7.310 

7.099 

6.888 

6.676 

6.464 

6.255 

6.008 

5.806 

5.610 

5.419 

5.234 

5.054 

4.879 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 

68. 

69. 

70. 

71. 

72. 

73. 

74. 

75. 

76. 

77. 

78. 

79. 

80. 

3 

4.709 

4.543 

4.380 

4.220 

4.062 

3.907 

3.753 

3.602 

3.453 

3.305 

3.160 

3.016 

2.875] 

2 

0.11414 

0.11938 

0.12483 

0.13054 

0.13652 

0.14278 

0.14936 

0.15627 

0.16356 

0.17125 

0.17937 

0.18796 

0.19706 

113 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
