THE HOTEL-RECEIPTS TAX ACT, 1980 
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ARRANGEMENT OF SECTIONS 
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SECTIONS 

1.  Short title and extent. 
2.  Definitions. 
3.  Application of the Act. 
4.  Tax authorities. 
5.  Charge of tax. 
6.  Scope of chargeable receipts. 
7.  Computation of chargeable receipts. 
8.  Return of chargeable receipts. 
9.  Self-assessment. 
10.  Assessment. 
11.  Best judgment assessment. 
12.  Re-opening of assessment at the instance of the assessee. 
13.  Receipts escaping assessment. 
14.  Advance payment of hotel receipts tax. 
15.  Penalty for failure to furnish returns, comply with notices, concealment of receipts, etc. 
16.  Penality for false estimate of, or failure to pay, hotel-receipts tax payable in advance. 
17.  Opportunity of being heard. 
18.  Appeals to the Commissioner (Appeals). 
19.  Appeals to Appellate Tribunal. 
20.  Rectification of mistakes. 
21.  Hotel-receipts tax deductible in computing total income under Income-tax Act. 
22.  Revision of order prejudicial to revenue. 
23.  Revision of orders by Commissioner. 
24.  Application of provisions of Income-tax Act. 
25.  Income-tax papers to be available for the purposes of this Act. 
26.  Wilful attempt to evade tax, etc. 
27.  Failure to furnish returns of chargeable receipts. 
28.  Failure to produce accounts and documents. 
29.  False statement in verification, etc. 
30.  Abetment of false return, etc. 
31.  Punishment for second and subsequent offences. 
32.  Certain offences to be non-cognizable. 
33.  Institution of proceedings and composition of offences. 
34.  Power to make rules. 
35.  Power to exempt. 
36.  Power to remove difficulties. 
37.  [Repealed]. 

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THE HOTEL-RECEIPTS TAX ACT, 1980 

ACT NO. 54 OF 1980 

[9th December, 1980.]  

An Act to impose a special tax on gross receipts of certain hotels. 

BE it enacted by Parliament in the Thirty-first Year of the Republic of India as follows:— 

1. Short title and extent.—(1) This Act may be called the Hotel-Receipts Tax Act, 1980. 

(2) It extends to the whole of India.  

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

(1) “assessee” means a person by whom hotel-receipts tax or any other sum of money is payable 

under this Act and includes— 

(a)  every  person in  respect  of  whom  any  proceeding  under  this  Act  has  been  taken  for  the 
assessment of his chargeable receipts or of the amount of refund due to him or of the chargeable 
receipts of any other person in respect of which he is assessable or of the amount of refund due to 
such other person; 

(b) every person who is deemed to be an assessee in default under any provision of this Act; 

(2) “assessment” includes reassessment; 

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

every year; 

(4)  “Board”  means  the  Central  Board  of  Direct  Taxes  constituted  under  the  Central  Boards  of 

Revenue Act, 1963 (54 of 1963); 

(5) “chargeable receipts” means the total amount of all charges referred to in section 6, computed 

in the manner laid down in section 7; 

(6) “hotel” includes a building or part of a building where residential accommodation is, by way 

of business, provided for a monetary consideration; 

(7) “hotel-receipts tax” or “tax” means the tax chargeable under the provisions of this Act; 

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

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

(10)  “room  charges”  means  the  charges  for  a  unit  of  residential  accommodation  in  a  hotel  and 

includes the charges for— 

(a) furniture, air-conditioner, refrigerator, radio, music, telephone, television, and 

(b) such other services as are normally included by a hotel in room rent, 

but  does  not  include  charges  for  food,  drink  and  any  services  other  than  those  referred  to  in  
sub-clauses (a) and (b); 

(11) all other words and expressions used herein but not defined and defined in the Income-tax 

Act shall have the meanings respectively assigned to them in that Act. 

3. Application of the Act.—(1) Subject to the provisions of sub-section (2) and sub-section (3), this 
Act  shall  apply  in  relation  to  every  hotel  wherein  the  room  charges  for  residential  accommodation 
provided to any person at any time during the previous year are seventy-five rupees or more per day per 
individual. 

Explanation.—Where the room charges are payable otherwise than on daily basis or per individual, 
then  the  room  charges  shall  be  computed  as  for  a  day  and  per  individual  based  on  the  period  of 
occupation  of  the  residential  accommodation  for  which  the  charges  are  payable  and  the  number  of 

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individuals ordinarily permitted to occupy such accommodation according to the rules and custom of the 
hotel. 

(2) Where a composite charge is payable in respect of residential accommodation and food, the room 

charges included therein shall be determined in the prescribed manner. 

(3) Where— 

(i) a composite charge is payable in respect of residential accommodation, food, drink and other 

services, or any of them, and the case is not covered by the provisions of sub-section (2), or 

(ii)  it  appears  to  the  Income-tax  Officer  that  the  charges  for  residential  accommodation,  food, 
drink or other services are so arranged that the room charges are understated and the other charges are 
overstated, 

the  Income-tax  Officer  shall,  for  the  purposes  of  sub-section  (1),  determine  the  room  charges  on  such 
reasonable basis as he may deem fit. 

4. Tax authorities.—(1) Every Director of Inspection, Commissioner of Income-Tax, Commissioner 
of  Income-tax  (Appeals),  Inspecting  Assistant  Commissioner  of  Income-tax,  Income-tax  Officer  and 
Inspector of Income-tax shall have the like powers and perform the like functions under this Act as he has 
and  performs  under the  Income-tax  Act,  and  for the exercise  of  his  powers and  the  performance  of his 
functions, his jurisdiction under this Act shall be the same as he has under the Income-tax Act. 

(2) All officers and persons employed in the execution of this Act shall observe and follow the orders, 

instructions and directions of the Board: 

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

(a) so as to require any 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  Commissioner  (Appeals)  in  the  exercise  of  his 

appellate functions. 

(3)  Every  Income-tax  Officer  employed  in  the  execution  of  this  Act  shall  observe  and  follow  the 
orders,  instructions  and  directions  issued  for  his  guidance  by  the  Director  of  Inspection  or  by  the 
Commissioner  or  by  the  Inspecting  Assistant  Commissioner  within  whose  jurisdiction  he  performs  his 
functions. 

5. Charge of tax.—(1) Subject to the provisions of this Act, there shall be charged on every person 
carrying  on  the  business  of  a  hotel  in  relation  to  which  this  Act  applies,  for  every  assessment  year 
commencing  on  or  after  the  1st  day  of  April,  1981,  a  tax  in  respect  of  his  chargeable  receipts  of  the 
previous year at the rate of fifteen per cent. of such receipts: 

Provided that where such chargeable receipts include any charges received in foreign exchange, then, 
the  tax  payable  by  the  assessee  shall  be  reduced  by  an  amount  equal  to  five  per  cent.  of  the  charges 
(exclusive of the amounts payable by way of sales tax, entertainment tax, tax on luxuries or tax under this 
Act) so received in foreign exchange. 

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

(a) charges received in Indian currency obtained by conversion of foreign exchange into Indian 
currency shall, in such cases and in such circumstances as may be prescribed, be deemed to have been 
received in foreign exchange; and 

(b) “foreign  exchange”  and  “Indian  currency”  shall have  the  meanings  respectively  assigned  to 

them in clauses (h) and (k) of section 2 of the Foreign Exchange Regulation Act, 1973 (46 of 1973). 

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(2) Where, under an arrangement made between a person carrying on the business of a hotel to which 
this Act applies and any other person having close connection with him, any food, drink or other services 
is  or  are  provided  on  the  premises  of  such  hotel  by  the  second-mentioned  person  and  the  Income-tax 
Officer  is  of  opinion  that  such  arrangement  has  been  made  with  a  view  to  avoiding  or  reducing  the 
liability under this Act by the first-mentioned person, then,— 

(a) the second-mentioned person shall also be deemed to be a person carrying on the business of a 

hotel to which this Act applies; and 

(b) hotel-receipts tax shall be charged on the second-mentioned person in respect of charges for 
food, drink or other services so provided by him as if such charges were the chargeable receipts of the 
business of a hotel deemed to be carried on by him under clause (a), and all the provisions of this Act 
shall apply accordingly. 

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

(i) a close connection shall be deemed to exist between a person carrying on the business of a 
hotel  and  another  person  if,  in  relation  to  the  person  carrying  on  the  business  of  a  hotel,  such 
other  person  is  a  person  referred  to  in  clause  (b)  of  sub-section  (2)  of  section  40A  of  the  
Income-tax Act; 

(ii) any food, drink or other service shall be deemed to have been provided on the premises of 
a hotel if the same is or are provided in the hotel or any place appurtenant thereto and where the 
hotel is situate in a part of building, in any other part of the building. 

6. Scope of chargeable receipts.—(1) Subject to the provisions of this Act, the chargeable receipts of 
any  previous  year  of  an  assessee  shall  be  the  total  amount  of  all  charges,  by  whatever  name  called, 
received  by,  or  accruing  or  arising  to,  the  assessee  in  connection  with  the  provision  of  residential 
accommodation, food, drink and other services or any of them (including such charges from persons not 
provided with such accommodation 1[but excluding such charges from persons within the purview of the 
Vienna  Convention  on  Diplomatic  Relations,  1961  or  the  Vienna  Convention  on  Consular  Relations, 
1963]) in the course of carrying on the business of a hotel to which this Act applies and shall also include 
every amount collected by the assessee by way of tax under this Act, sales tax, entertainment tax and tax 
on luxuries. 

(2) For the removal of doubts, it is hereby declared that where any such charges have been included in 
the  chargeable  receipts  of  any  previous  year  as  charges  accruing  or  arising  to  the  assessee  during  that 
previous year, such charges shall not be included in the chargeable receipts of any subsequent previous 
year in which they are received by the assessee. 

7.  Computation  of  chargeable  receipts.—(1)  Subject  to  the  provisions  of  sub-section  (2),  the 

following deductions shall be allowed in computing the chargeable receipts of any previous year— 

(i) the amount of charges accruing or arising in an earlier previous year which is established to 

have become a bad debt during the previous year: 

Provided that such charges have been taken into account in computing the chargeable receipts of 
the assessee of any earlier previous year and the amount has been written off as irrecoverable in the 
accounts of the assessee for  the  previous  year  during which it is established to have  become  a  bad 
debt; 

(ii) any amount payable by way of sales tax, entertainment tax or tax on luxuries in respect of any 

charges included in the chargeable receipts of the previous year; 

(iii) the amount of tax chargeable under this Act. 

Explanation.—For  the  removal  of  doubts,  it  is  hereby  declared  that  in  computing  the  chargeable 
receipts of a previous year, no deduction, other than the deductions specified in this sub-section, shall be 
allowed from the total amount of charges received by, or accruing or arising to, the assessee. 

1. Ins. by Act 14 of 1982, s. 41 (w.e.f. 1-4-1982). 

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(2) In computing the chargeable receipts of a previous year, the amount of charges which is received 
by or which accrues or arises to the assessee before the expiry of one month from the end of the month in 
which this Act comes into force 1[or after the 27th day of February, 1982] shall not be taken into account. 

8. Return of chargeable receipts.—(1) Every person, who, during the previous year, carried on the 
business  of  a  hotel  in  relation  to  which  this  Act  applies  or  is  assessable  in  respect  of  the  chargeable 
receipts  of  any  other  person  under  this  Act,  shall  furnish  a  return  of  his  chargeable  receipts  or  the 
chargeable receipts of such other person of the previous year in the prescribed form and verified in the 
prescribed manner and setting forth such other particulars as may be prescribed, before the expiry of four 
months from the end of the previous year in respect of the business of the hotel or where there is more 
than one previous year in respect of such business, from the end of the previous year which expired last 
before the commencement of the assessment year, or before the 30th day of June of the assessment year, 
whichever is later: 

Provided that, on an application made in this behalf, the Income- tax Officer may, in his discretion, 

extend the date for furnishing the return. 

(2) In the case of any person who, in the Income-tax Officer’s opinion is assessable under this Act, 
whether  in  respect  of  his  own  chargeable  receipts  or  in  respect  of  the  chargeable  receipts  of  any  other 
person, the Income-tax Officer may, before the end of the relevant assessment year, issue a notice to him 
and serve the same upon him, requiring him to furnish within thirty days from the date of service of the 
notice a return of his chargeable receipts or the chargeable receipts of such other person of the previous 
year in the prescribed form and verified in the prescribed manner and setting forth such other particulars 
as may be prescribed: 

Provided  that  on  an  application  made  in  this  behalf,  the  Income-tax  Officer  may,  in  his  discretion, 

extend the date for furnishing the return. 

(3)  Any  assessee  who  has  not  furnished  a  return  within  the  time  allowed  under  sub-section  (1)  or  
sub-section  (2),  or  having  furnished  a  return  under  sub-section  (1)  or  sub-section  (2),  discovers  any 
omission or wrong statement therein, may furnish a return or a revised return, as the case may be, at any 
time before the assessment is made. 

9. Self-assessment.—(1) Where any hotel-receipts tax is payable on the basis of any return required 
to be furnished under section 8 or section 13 after taking into account the amount of hotel-receipts tax, if 
any,  already  paid  under  any  provision  of  this  Act,  the  assessee  shall  be  liable  to  pay  such  tax  before 
furnishing the return and the return shall be accompanied by proof of payment of such tax. 

(2)  After  an  assessment  under  section  10  or  section  11  has  been  made,  any  amount  paid  under  

sub-section (1) shall be deemed to have been paid towards such assessment. 

(3)  If  any  assessee  fails  to  pay  the  hotel-receipts  tax  or  any  part  thereof  in  accordance  with  the 
provisions of sub-section (1), the Income-tax Officer may direct that a sum equal to two per cent. of such 
tax or part thereof, as the case may be, shall be recovered from him by way of penalty for every month 
during which the default continues: 

Provided that before levying any such penalty, the assessee shall be given a reasonable opportunity of 

being heard. 

10.  Assessment.—(1)  For  the  purpose  of  making  an  assessment  under  this  Act,  the  Income-tax 
Officer may serve on any person who has furnished a return under section 8 or upon whom a notice has 
been  served  under  sub-section  (2)  of  section  8  (whether  a  return  has  been  furnished  or  not)  a  notice 
requiring  him  on  a  date  therein  to  be  specified,  to  produce  or  cause  to  be  produced  such  accounts  or 
documents or other evidence as the Income-tax Officer may require for the purposes of this Act and may, 
from time to time, serve further notices requiring the production of such further accounts or documents or 
other evidence as he may require. 

(2) The Income-tax Officer, after considering such accounts, documents or other evidence, if any, as 
he  has  obtained  under  sub-section  (1)  and  after  taking  into  account  any  relevant  material  which  he has 

1. Ins. by Act 14 of 1982, s. 42 (w.e.f. 1-4-1982). 

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gathered, shall, by an order in writing, assess the chargeable receipts and the amount of the hotel-receipts 
tax payable on the basis of such assessment. 

11. Best judgment assessment.—If— 

(a)  any  person  fails  to  make  the  return  required  by  any  notice  given  under  sub-section  (2)  of 

section 8 and has not made a return or a revised return under sub-section (3) of that section, or  

(b) any person having made a return, fails to comply with all the terms of a notice issued under 

sub-section (1) of section 10, or 

(c)  the  Income-tax  Officer  is  not  satisfied  about  the  correctness  or  the  completeness  of  the 

accounts of the assessee, 

the Income-tax Officer, after taking into account all relevant material which he has gathered shall make 
the assessment of the chargeable receipts to the best of his judgment and determine the sum payable by 
the assessee or refundable to the assessee on the basis of such assessment. 

12.  Re-opening  of  assessment  at  the  instance  of  the  assessee.—(1)  Where  an  assessee  assessed 
under  section  11  makes  an  application  to  the  Income-tax  Officer,  within  one  month  from  the  date  of 
service  of  a  notice  of  demand  issued  in  consequence  of  the  assessment,  for  the  cancellation  of  the 
assessment on the ground— 

(i)  that  he  was  prevented  by  sufficient  cause  from  making  the  return  required  under  

sub-section (2) of section 8, or 

(ii) that he did not receive the notice issued under sub-section (1) of section 10, or 

(iii)  that  he  had  not  a  reasonable  opportunity  to  comply,  or  was  prevented  by  sufficient  cause 

from complying, with the terms of the notice referred to in clause (ii), 

the Income-tax Officer shall, if satisfied about the existence of such ground, cancel the assessment and 
proceed to make a fresh assessment in accordance with the provisions of section 10 or section 11. 

(2)  Every  application  made  under  sub-section  (1)  shall  be  disposed  of  within  ninety  days  from  the 

date of receipt thereof by the Income-tax Officer: 

Provided  that  in  computing  the  period  of  ninety  days  aforesaid,  any  delay  in  disposing  of  the 

application which is attributable to the assessee shall be excluded. 

13. Receipts escaping assessment.—If— 

(a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the 
part of the assessee to make a return under section 8 for any assessment year or to disclose fully and 
truly all material facts necessary for his assessment for any assessment year, chargeable receipts for 
that  year  have  escaped  assessment  or  have  been  under-assessed  or  have  been  made  the  subject  of 
excessive relief under this Act, or 

(b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the 
part  of  the  assessee,  the  Income-tax  Officer  has,  in  consequence  of  information  in  his  possession, 
reason to believe that chargeable receipts assessable for any assessment year have escaped assessment 
or have been under-assessed or have been the subject of excessive relief under this Act, 

he may, in cases falling under clause (a), at any time, and in cases falling under clause (b), at any time 
within four years of the end of that assessment year, serve on the assessee a notice containing all or any of 
the requirements which may be included in a notice under section 8 and may proceed to assess or reassess 
the amount chargeable to hotel-receipts tax, and the provisions of this Act shall, so far as may be, apply, 
as if the notice were a notice issued under that section. 

14.  Advance  payment  of  hotel  receipts  tax.—(1)  Hotel-receipts  tax  shall  be  payable  in  advance 
during the financial year in respect of the chargeable receipts of the period which would be the previous 
year for the immediately following assessment year in accordance with the provisions of this section. 

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(2) Hotel-receipts tax shall be payable in advance in two instalments on the following dates during the 

financial year, namely: 

(i) the 15th day of September in respect of the chargeable receipts attributable to the first half of 

the previous year; and 

(ii) the 15th day of March in respect of the chargeable receipts attributable to the second half of 

the previous year: 

Provided that the hotel-receipts tax payable in advance during the financial year commencing on 

the 1st day of April, 1980 shall be payable in one sum on the 15th day of March, 1981. 

(3) Every assessee shall, in each financial year, on or before such of the dates on which an instalment 
of hotel-receipts tax is payable in advance, send to the Income-tax Officer, an estimate of the chargeable 
receipts attributable to the relevant part of the previous year and the hotel-receipts tax payable in advance 
on such chargeable receipts and shall pay such amount of hotel-receipts tax as accords with his estimate 
on or before the relevant date specified in sub-section (2): 

Provided  that  in  respect  of  the  hotel-receipts  tax  payable  in  advance  during  the  financial  year 
commencing on the 1st day of April, 1980, the assessee shall send to the Income-tax Officer an estimate 
of the chargeable receipts attributable to the period which would be the previous year for the assessment 
year  commencing  on  the  1st  day  of  April,  1981  and  the  hotel-receipts  tax  payable  in  advance  on  such 
chargeable  receipts  and  shall  pay  such  amount  of  hotel-receipts  tax  as  accords  with  his  estimate  on  or 
before the 15th day of March, 1981. 

(4)  Every  estimate  under  this  section  shall  be  sent  in  the  prescribed  form  and  verified  in  the 

prescribed manner. 

(5) If any assessee does not pay on or before the specified date any instalment of hotel-receipts tax 

payable in advance, he shall be deemed to be an assessee in default in respect of such instalment. 

15. Penalty for failure to furnish returns, comply with notices, concealment of receipts, etc.—(1) 
If, in the course of any proceedings under this Act, the Income-tax Officer or the Commissioner (Appeals) 
is satisfied that any person— 

(a) has, without reasonable cause, failed to furnish the return of chargeable receipts which he was 
required  to  furnish  under  sub-section  (1)  of  section  8  or  by  notice  given  under  sub-section  (2)  of 
section 8 or section 13 or has, without reasonable cause, failed to furnish it within the time allowed 
and the manner required by sub-section (1) of section 8 or by such notice, as the case may be, or 

(b)  has,  without  reasonable  cause,  failed  to  comply  with  the  notice  under  sub-section  (1)  of 

section 10, or 

(c) has concealed the particulars of his chargeable receipts or furnished inaccurate particulars of 

such receipts, 

he may direct that such person shall pay by way of penalty,— 

(i) in the cases referred to in clause (a), in addition to the hotel-receipts tax payable by him, a sum 
equal to two per cent. of the assessed tax for every month during which the default continued, but not 
exceeding in the aggregate fifty per cent. of the assessed tax. 

Explanation.—In  this  clause,  “assessed  tax”  means  hotel-receipts  tax  chargeable  under  the 

provisions of this Act, as reduced by the sum, if any, paid in advance under section 14; 

(ii) in the cases referred to in clause (b), in addition to the hotel-receipts tax payable by him, a 
sum which shall not be less than ten per cent. but which shall not exceed fifty per cent. of the amount 
of the hotel-receipts tax which would have been avoided if the return made by him had been accepted 
as correct; 

(iii) in the cases referred to in clause (c), in addition to the hotel-receipts tax payable by him, a 
sum which shall not be less than, but which shall not exceed twice, the amount of hotel-receipts tax 
which would have been avoided if the return made by him had been accepted as correct: 

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Provided that in a case falling under clause (c), the Income-tax Officer shall not impose any penalty 

without the previous approval of the Inspecting Assistant Commissioner. 

(2)  On  making  an  order  imposing  a  penalty  under  this  section,  the  Commissioner  (Appeals)  shall 

forthwith send a copy of the same to the Income-tax Officer. 

16. Penality for false estimate of, or failure to pay, hotel-receipts tax payable in advance.—If, in 
the  course  of  any  proceedings  in  connection  with  the  assessment  under  section  10  or  section  11,  the 
Income-tax Officer is satisfied that any assessee— 

(a)  has  furnished  under  section  14,  an  estimate  of  the  hotel-receipts  tax  payable  in  advance  by 

him which he knew or had reason to believe to be untrue, or 

(b) has, without reasonable cause, failed to furnish an estimate of the hotel-receipts tax payable in 

advance by him in accordance with the provisions of section 14,  

he may direct that the assessee shall, in addition to the hotel-receipts tax payable by him, pay by way of 
penalty a sum— 

(i)  which,  in  the case  referred to  in  clause (a),  shall not be less than ten per cent. but shall not 
exceed one and a half times the amount by which the hotel-receipts tax paid in advance during the 
financial year immediately preceding the assessment year, falls short of eighty-five per cent. of the 
hotel-receipts tax chargeable under the provisions of this Act; 

(ii) which, in the case referred to in clause (b), shall not be less than ten per cent. but shall not 
exceed  one  and  a  half  times  of  eighty-five  per  cent.  of  the  hotel-receipts  tax  chargeable  under  the 
provisions of this Act. 

17. Opportunity of being heard.—No order imposing penalty under section 15 or section 16 shall 

be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard. 

18.  Appeals  to  the  Commissioner  (Appeals).—(1)  Any  person  objecting  to  the  amount  of  
hotel-receipts  tax  for  which  he  is  assessed  by  the  Income-tax  Officer,  or  denying  his  liablility  to  be 
assessed under this Act, or objecting to an order under section 12 refusing to re-open an assessment made 
under section 11 or objecting to any penalty or fine imposed by the Income-tax Officer, or to the amount 
allowed by the Income-tax Officer by way of any relief under any provision of this Act, or to any refusal 
by the Income-tax Officer to grant relief, or to an order of rectification having the effect of enhancing the 
assessment or reducing the refund, or to an order refusing to allow the claim made by the assessee for a 
rectification under section 20, may appeal to the Commissioner (Appeals). 

(2) Every appeal shall be in the prescribed form and shall be verified in the prescribed manner. 

(3) An appeal shall be presented within thirty days of the following date, that is to say,— 

(a) where the appeal relates to assessment or penalty or fine, the date of service of the notice of 

demand relating to the assessment or penalty or fine, or 

(b) in any other case, the date on which the intimation of the order sought to be appealed against 

is served: 

Provided that the Commissioner (Appeals) may admit an appeal after the expiration of the said period 

if he is satisfied that the appellant had sufficient cause for not presenting it within that period. 

(4) The Commissioner (Appeals) shall hear and determine the appeal and, subject to the provisions of 
this Act, pass such orders as he thinks fit and such orders may include an order enhancing the assessment 
or penalty: 

Provided  that  an  order  enhancing  the  assessment  or  penalty  shall  not  be  made  unless  the  person 

affected thereby has been given a reasonable opportunity of showing cause against such enhancement. 

(5)  The  procedure  to  be  adopted  in  the  hearing  and  determination  of  the  appeals  shall,  with  any 

necessary modification, be in accordance with the procedure applicable in relation to income-tax. 

8 

 
 
19.  Appeals  to  Appellate  Tribunal.—(1)  Any  assessee  aggrieved  by  an  order  passed  by  a 
Commissioner under section 22, or an order passed by a Commissioner (Appeals) under any provision of 
this Act, may appeal to the Appellate Tribunal against such order. 

(2) The Commissioner may, if he objects to any order passed by the Commissioner (Appeals) under 
any provision of this Act, direct the Income-tax Officer to appeal to the Appellate Tribunal against the 
order. 

(3) Every appeal under sub-section (1) or sub-section (2) shall be filed within sixty days of the date 
on  which  the  order  sought  to  be  appealed  against  is  communicated  to  the  assessee  or  to  the 
Commissioner, as the case may be. 

(4) The Income-tax Officer or the assessee, as the case may be, on receipt or a notice that an appeal 
against  the  order  of  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 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 (3). 

(5)  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 (3) or sub-section (4), if it is 
satisfied that there was sufficient cause for not presenting it within that period. 

(6) 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)  or  a 
memorandum of cross-objections referred to in sub-section (4), be accompanied by a fee of 1[two hundred 
rupees]. 

(7)  Subject  to  the  provisions  of  this  Act,  in  hearing  and  making  an  order  on  any  appeal  under  this 
section,  the  Appellate  Tribunal  shall  exercise  the  same  powers  and  follow  the  same  procedure  as  it 
exercises and follows in hearing and making an order on any appeal under the Income-tax Act. 

20. Rectification of mistakes.—(1) With a view to rectifying any mistake apparent from the record, 
the Income-tax Officer, the Commissioner (Appeals), the Commissioner and the Appellate Tribunal may, 
of  his  or  its  own  motion  or  on  an  application  by  the  assessee  in  this  behalf,  or  where  the  authority 
concerned  is  the  Commissioner  (Appeals),  by  the  Income-tax  Officer  also,  amend  any  order  passed  by 
him or it in any proceeding under this Act within four years of the date on which such order was passed. 

(2)  An  amendment  which  has  the  effect  of  enhancing  the  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. 

(3)  Where  an  amendment  is  made  under  this  section,  the  order  shall  be  passed  in  writing  by  the 

authority concerned. 

(4) Subject to the other provisions of this Act, where any such amendment has the effect of reducing 

the assessment, the Income-tax Officer shall make any refund which may be due to such assessee. 

(5)  Where  any  such  amendment  has  the  effect  of  enhancing  the  assessment  or  reducing  the  refund 
already  made,  the  Income-tax  Officer  shall  serve  on  the  assessee  a  notice  of  demand  in  the  prescribed 
form specifying the sum payable. 

21.  Hotel-receipts  tax  deductible  in  computing  total  income  under  Income-tax  Act.—
Notwithstanding  anything  contained  in  the  Income-tax  Act,  in  computing  the  income  chargeable  to 
income-tax  under  the  head  “Profits  and  gains  of  business  or  profession”  in  the  case  of  an  assessee 
carrying on the business of a hotel to which this Act applies, the hotel-receipts tax payable by the assessee 

1. Subs. by Act 16 of 1981, s. 45, for “one hundred and twenty-five rupees” (w.e.f. 1-6-1981). 

9 

 
                                                           
for  any  assessment  year  shall  be  deductible  from  the  profits  and  gains  of  the  business  of  the  hotel 
assessable for that assessment year. 

22. Revision of order prejudicial to revenue.—(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  the  
Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after 
giving the assessee an opportunity of being heard and after making or causing to be made such enquiry 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 the assessment and directing a fresh assessment. 

(2) No order shall be made under sub-section (1)— 

(a) to revise an order of reassessment made under section 13, or 

(b) after the expiry of two years from the date of the order sought to be revised. 

(3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may 
be passed at any time in the case of an order which has been passed in consequence of, or to give effect 
to,  any  finding  or  direction  contained  in  an  order  of  the  Appellate  Tribunal,  the  High  Court  or  the 
Supreme Court. 

Explanation.—In computing the period of limitation for the purposes of sub-section (2), any period 
during which any proceeding under this section is stayed by an order or injunction of any court shall be 
excluded. 

23. Revision of orders by Commissioner.—(1) The Commissioner may, either of his own motion or 
on an application by the assessee for revision, call for the record of any proceeding under this Act which 
has been taken by an Income-tax Officer subordinate to him and may make such enquiry or cause such 
enquiry to be made and, subject to the provisions of this Act, may pass such order thereon, not being an 
order prejudicial to the assessee, as he thinks fit. 

(2) The Commissioner shall not of his own motion revise any order under this section if the order has 

been made more than one year previously. 

(3) In the case of an application for revision under this section by the assessee, the application shall be 
made within one year from the date on which the order in question was communicated to him or the date 
on which he otherwise came to know of it, whichever is earlier: 

Provided that the Commissioner may, if he is satisfied that the assessee was prevented by sufficient 
cause from making the application within that period, admit an application made after the expiry of that 
period. 

(4) The Commissioner shall not revise any order under this section in the following cases:— 

(a) where an appeal against the order lies to the Commissioner (Appeals) but has not been made 
and the time within which such appeal may be made has not expired, or the assessee has not waived 
his right of appeal; or 

(b) where the order has been made the subject of an appeal to the Commissioner (Appeals). 

(5) Every application by an assessee for revision under this section shall be accompanied by a fee of 

twenty-five rupees. 

Explanation.—An  order  by  the  Commissioner  declining  to  interfere  shall,  for  the  purposes  of  this 

section, be deemed not to be an order prejudicial to the assessee. 

24.  Application  of  provisions  of  Income-tax  Act.—The  provisions  of  the  following  sections  and 
Schedules  of the  Income-tax  Act  and the  Income-tax  (Certificate  Proceedings) Rules, 1962, as in force 
from time to time, shall apply with necessary modifications as if the said provisions and the rules referred 
to hotel-receipts tax instead of to income-tax:— 

2(43B) and (44), 41(4), 118, 125, 125A, 128 to 136 (both inclusive), 138, 140, 144A, 156, 159 to 
163 (both inclusive), 166, 167, 170, 171, 173 to 179 (both inclusive), 187, 188, 189, 219 to 227 (both 
inclusive), 228A, 229, 231, 232, 237 to 242 (both inclusive), 244, 245, 254 to 262 (both inclusive), 

10 

 
265, 266, 268, 269, 278B, 278C, 278D, 281, 281B, 282, 283, 284, 287, 288, 288A, 288B, 289 to 293 
(both inclusive), the Second Schedule and the Third Schedule: 

Provided that references in the said provisions and the rules to the  “assessee” shall be construed as 

references to an assessee as defined in this Act. 

25. Income-tax papers to be available for the purposes of this Act.—(1) Notwithstanding anything 
contained in the Income-tax Act, all information contained in any statement or return made or furnished 
under the provisions of that Act or obtained or collected for the purposes of that Act may be used for the 
purposes of this Act. 

(2) All information contained in any statement or return made on furnished under the provisions of 
this Act or obtained or collected for the purposes of this Act may be used for the purposes of the Income-
tax Act. 

26. 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 provision 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. 

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— 

(i)  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 

(ii) makes or causes to be made any false entry or statement in such books of account or other 

documents; or 

(iii)  wilfully  omits  or  causes  to  be  omitted  any  relevant  entry  or  statement  in  such  books  of 

account or other documents; or 

(iv) causes any other circumstance 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. 

27. Failure to furnish returns of chargeable receipts.—If a person wilfully fails to furnish in due 
time the return of chargeable receipts which he is required to furnish under sub-section (1) of section 8 or 
by notice given under sub-section (2) of section 8 or section 13, 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 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 chargeable receipts under sub-section (1) of section 8, if— 

(a) the return is furnished by him before the expiry of the assessment year; or 

11 

 
(b) the tax payable by him on the chargeable receipts determined on assessment as reduced by the 

tax paid in advance under section 14, if any, does not exceed three thousand rupees. 

28. Failure to produce accounts and documents.—If a person wilfully fails to produce, or cause to 
be produced, on or before the date specified in any notice served on him under sub-section (1) of section 
10,  such  accounts  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. 

29.  False  statement  in  verification,  etc.—If  a  person  makes  a  statement  in  any  verification  under 
this Act 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. 

30.  Abetment  of false return,  etc.—If  a  person abets  or  induces  in  any  manner  another  person  to 
make  and  deliver  an  account  or  a  statement  or  declaration  relating  to  any  chargeable  receipts  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 26, 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. 

31. Punishment for second and subsequent offences.—If any person convicted of an offence under 
sub-section (1) of section 26 or section 27 or section 29 or section 30 is again convicted for 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. 

32.  Certain  offences  to  be  non-cognizable.—Notwithstanding  anything  contained  in  the  Code  of 
Criminal Procedure, 1973 (2 of 1974), an offence punishable under section 26 or section 27 or section 29 
or section 30 shall be deemed to be non-cognizable within the meaning of that Code. 

33. Institution of proceedings and composition of offences.—(1) A person shall not be proceeded 
against for any offence under section 26 or section 27 or section 28 or section 29 or section 30 for any 
offence under the Indian Penal Code (45 of 1860) relating to any matter connected with or arising out of 
this Act, except at the instance of the Commissioner. 

(2)  The  Commissioner  may,  either  before  or  after  the  institution  of  proceedings,  compound  any 

offence punishable under section 26 or section 27 or section 28 or section 29 or section 30. 

34. Power to make rules.—(1) The Board may, subject to the control of the Central Government, 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,  such  rules  may 

provide for all or any of the following matters, namely:— 

(a) the manner in which the room charges may be determined under sub-section (2) of section 3 

in cases where composite charges are payable in respect of residential accommodation and food; 

12 

 
(b) the cases and the circumstances in which payments made in Indian currency by conversion of 
foreign exchange into Indian currency shall be deemed to have been made in foreign exchange for the 
purposes of sub-section (1) of section 5; 

(c) the form in which returns under section 8 may be furnished, the manner in which they may be 

verified and the other particulars which a form may contain; 

(d) the form in which an estimate under section 14 may be sent and the manner in which it may 

be verified; 

(e)  the  form  in  which  appeals  under  section  18  or  section  19  may  be  filed  and  the  manner  in 

which they may be verified; 

(f) the form in which a memorandum of cross-objections under sub-section (4) of section 19 may 

be verified; 

(g) the procedure to be followed on applications for rectification of mistakes under section 20; 

(h) the form in which a notice of demand may be served on the assessee under sub-section (5) of 

section 20; 

(i) any other matter which by this Act is to be or may be prescribed. 

(3)  The  power  to  make  rules  conferred  by  this  section  shall  on  the  first  occasion  of  the  exercise 
thereof include the power to give retrospective effect to the rules or any of them from a date not earlier 
than the date of commencement of this Act. 

(4) The Central Government shall cause every rule made under this section 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 or in two or more successive sessions, and if, before the expiry of 
the session 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. 

35.  Power  to  exempt.—Where  the  Central  Government  is  of  the  opinion  that  it  is  necessary  or 
expedient so to do either in the public interest or having regard to the peculiar circumstances of the case, 
it may, by notification in the Official Gazette and subject to such conditions, if any, as may be specified in 
the notification, exempt any hotel or any class of hotels from the levy of hotel-receipts tax. 

36. Power to remove difficulties.—If any difficulty arises in giving effect to the provisions of this 
Act, the Central Government may, by order, not inconsistent with the provisions of this Act, remove the 
difficulty: 

Provided  that  no  such  order  shall  be  made  after  the  expiry  of  a  period  of  two  years  from  the 

commencement of this Act.  

37. [Consequential amendments].—Rep. by the Repealing and Amending Act, 1988 (19 of 1988), s. 2 

and the First Schedule (w.e.f. 31-3-1988). 

13 

 
