Companies (Profits) Surtax Act, 1964- Sections 9 to 17

9. Penalties.

9. Penalties.—If the [i][Assessing Officer], in the course of any proceedings under this Act, is satisfied that any person has, without reasonable cause, failed to furnish the return required under Section 5, or to produce or cause to be produced the accounts, documents or other evidence required by the [ii][Assessing Officer] under sub-section (1) of Section 6, or has concealed the particulars of the chargeable profits or has furnished inaccurate particulars of such profits, he may direct that such person shall pay, by way of penalty, in addition to the amount of surtax payable, a sum not exceeding—

(a) where the person has failed to furnish the return required under Section 5, the amount of [iii][surtax chargeable under the provisions of this Act];

(b) in any other case, the amount of surtax which would have been avoided if the return made had been accepted as correct:

Provided that the [iv][Assessing Officer] shall not impose any penalty under this section without the previous authority of the [v][Deputy Commissioner].

9-A. False estimate of, or failure to pay, advance surtax.

[vi][9-A. False estimate of, or failure to pay, advance surtax.—(1) If the [vii][Assessing Officer], in the course of any proceedings in connection with the regular assessment for any assessment year, is satisfied that any assessee—

(a) has furnished under clause (a) of sub-section (5) of Section 7-A a statement of advance surtax payable by him which he knew or had reason to believe to be untrue, or

(b) has without reasonable cause failed to furnish a statement of the advance surtax payable by him in accordance with the provisions of clause (a) of sub-section (5) of Section 7-A,

he may direct that such assessee shall, in addition to the amount of surtax, if any, 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 surtax actually paid during the financial year immediately preceding the assessment year under the provisions of Section 7-A falls short of—

(1) eighty-three and one-third per cent. of the assessed surtax, or

(2) the amount which would have been payable by way of advance surtax if the assessee had furnished a correct and complete statement in accordance with the provisions of clause (a) of sub-section (5) of Section 7-A,

whichever is less;

(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-three and one-third per cent. of the assessed surtax.

(2) If the [viii][Assessing Officer], in the course of any proceedings in connection with the regular assessment for any assessment year, is satisfied that any assessee—

(a) has furnished under clause (b) of sub-section (5) or sub-section (6) or sub-section (7) or sub-section (9) or Section 7-A, an estimate of the advance surtax payable by him which he knew or had reason to believe to be untrue, or

(b) has furnished under sub-section (8) of Section 7-A, an estimate of the advance surtax payable by him which he knew or had reason to believe to be untrue, or

(c) has without reasonable cause failed to furnish an estimate of the advance surtax payable by him in accordance with the provisions of clause (b) of sub-section (5) of Section 7-A, or

(d) has without reasonable cause failed to furnish an estimate of advance surtax payable by him in accordance with the provisions of sub-section (8) of Section 7-A,

he may direct that such assessee shall, in addition to the amount of surtax, if any, 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 surtax actually paid during the financial year immediately preceding the assessment year under the provisions of Section 7-A falls short of—

(1) eighty-three and one-third per cent. of the assessed surtax, or

(2) where a statement under clause (a) of sub-section (5) of Section 7-A was furnished by the assessee, the amount payable under such statement,

whichever is less;

(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 the amount by which the surtax actually paid during the financial year immediately preceding the assessment year under the provisions of Section 7-A falls short of eighty-three and one-third per cent. of the assessed surtax;

(iii) which, in the case referred to in clause (c), shall not be less than ten per cent. but shall not exceed one and a half times of eighty-three and one-third per cent. of the assessed surtax; and

(iv) which, in the case referred to in clause (d), shall not be less than ten per cent. but shall not exceed one and a half times the amount of surtax payable in accordance with a statement under clause (a) or an estimate under clause (b) of sub-section (5) of Section 7-A or an estimate in lieu of a statement under sub-section (6) of that section falls short of eighty-three and one-third per cent. of the assessed surtax.

Explanation.—Where the Commissioner has, in exercise of the powers conferred by the first proviso to sub-section (4) of Section 209-A, or the first proviso to sub-section (3-A) of Section 212, of the Income-tax Act, extended the date for furnishing the estimate referred to in the said sub-section (4) or, as the case may be, the said sub-section (3-A) and the date so extended falls beyond the financial year immediately preceding the assessment year, then, the amount of surtax paid by the assessee on or before the date so extended shall, for the purposes of clause (ii) of sub-section (2) also be regarded as surtax actually paid during that financial year.]

10. Opportunity of being heard.

10. Opportunity of being heard.—No order imposing a penalty under Section 9 [ix][or Section 9-A] shall be make unless the assessee has been given a reasonable opportunity of being heard.

11. Appeals to the Commissioner (Appeals).

11. Appeals to the [x][Commissioner (Appeals)].—(1) Any person objecting to the amount of surtax for which he is liable as assessed by the [xi][Assessing Officer] or denying his liability to be assessed under this Act, or objecting to any penalty or fine imposed by the [xii][Assessing Officer], [xiii][or objecting to the interest levied by the [xiv][Assessing Officer] under Section 7-D,] or to the amount allowed by the [xv][Assessing Officer] by way of any relief under any provisions of this Act, or to any refusal by the [xvi][Assessing Officer] to grant relief or to an order of rectification or amendment 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 13 or amendment under Section 14 may appeal to the [xvii][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:

Provide that the [xviii][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 [xix][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.

11-A. Transfer of certain pending appeals.

[xx][11-A. Transfer of certain pending appeals.—Every appeal under this Act which is pending immediately before the appointed day before an Appellate Assistant Commissioner or a Commissioner 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 appeal or matter from the stage at which it was on that day:

Provided that the appellant may demand that before proceeding further with the appeal or matter the previous proceeding or any part thereof be reopened or that he be re-heard.

Explanation.—In this section, “appointed day” means the date appointed under Section 39 of the Finance (No. 2) Act, 1977.]

12. Appeals to Appellate Tribunal.

12. Appeals to Appellate Tribunal.—(1) Any assessee aggrieved by an order passed by a Commissioner under Section 16, or an order passed by [xxi][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 [xxii][Commissioner (Appeals)] under any provision of this Act, direct the [xxiii][Assessing 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 [xxiv][Assessing Officer] or the assessee, as the case may be, on receipt of notice that an appeal against the order of the [xxv][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 [xxvi][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 [xxvii][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.

13. Rectification of mistakes.

13. Rectification of mistakes.—(1) With a view to rectifying any mistake apparent from the record, the Commissioner, the [xxviii][Assessing Officer], the [xxix][Commissioner (Appeals)] and the Appellate Tribunal may, of his, or its, own motion or on an application by the assessee in this behalf, amend any order passed by him or it in any proceeding under this Act [xxx][within four years from the end of the financial year in 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 [xxxi][Assessing 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 [xxxii][Assessing Officer] shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable.

14. Other amendments.

14. Other amendments.—Where as a result of any order made under Section 154 [xxxiii][,155, 250, 254, 260, 262, 263 or 264] of the Income-tax Act, it is necessary to recompute the chargeable profits determined in any assessment under this Act, the [xxxiv][Assessing Officer] may proceed to recompute the chargeable profits, and determine the surtax payable or refundable on the basis of such recomputation and make the necessary amendment and the provisions of Section 13 shall, so far as may be, apply thereto, the period of four years specified in sub-section (1) of that section being reckoned [xxxv][from the end of the financial year in which the order under the aforesaid sections of the Income-tax Act was passed.]

15. Surtax deductible in computing distributable income under Income-tax Act.

15. Surtax deductible in computing distributable income under Income-tax Act.—Notwithstanding anything contained in clause (i) of Section 109 of the Income-tax Act, in computing the distributable income of a company for the purposes of Chapter XI-D of that Act, the surtax payable by the company for any assessment year shall be deductible from the total income of the company assessable for that assessment year.

16. Revision of orders prejudicial to revenue.

16. Revision of orders 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 [xxxvi][Assessing 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 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 the assessment and directing a fresh assessment.

[xxxvii][Explanation.—For the removal of doubts, it is hereby declared that, for the purposes of this sub-section, an order passed by the [xxxviii][Assessing Officer] shall include an order passed by the [xxxix][Deputy Commissioner] in exercise of the powers or in performance of the functions of an [xl][Assessing Officer] conferred on, or assigned to, him under clause (a) of sub-section (1) of Section 125 or under sub-section (1) of Section 125-A of the Income-tax Act as applied by Section 18 of this Act.]

[xli][(2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed.]

(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 or 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.

17. Revision of orders by Commissioner.

17. Revision of orders by Commissioner.—(1) The Commissioner may, either or 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 [xlii][Assessing Officer] [xliii][* * *] subordinate to him and may make such inquiry or cause such inquiry 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—

[xliv][(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 1.—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.

Explanation 2.—[xlv][* * *]

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