Fifth Schedule

Section Fifth Schedule of the Finance Act, 1977 deals with fifth Schedule. THE FIFTH SCHEDULE (See section 39) PART 1 AMENDMENTS IN THE INCOME-TAX ACT 1. The Act was enacted on 06 Aug 1977.

THE FIFTH SCHEDULE

(See section 39)

PART 1

AMENDMENTS IN THE INCOME-TAX ACT

1. Section 2.—After clause (16), insert—

'(16A) "Commissioner (Appeals)" means a person appointed to be a Commissioner of Income-tax (Appeals) under sub-section (1) of section 117;'.

2. Section 1D7A, sub-section (9).-For "Appellate Assistant Commissioner", substitute "Commissioner (Appeals)".

3. Section 116, clause (c) and section 117, sub-section (1).—After "Commissioners of Income-tax", insert " , Commissioners of Income-tax (Appeals)".

4. Sections 119, 154, 177, 189, 267, 271, 271A, 275 and 295.—After "the Appellate Assistant Commissioner"; wherever it occurs, insert "or the Commissioner (Appeals)".

5. After section 121, insert—

Jurisdiction of Commissioners (Appeals)

"121A.

(1) Commissioners (Appeals) shall perform their functions in, respect of such areas or of such persons or classesl of persons or of such incomes or classes of income as the Board may direct.

(2) Where any directions issued under sub-section (1) have assigned to two or more Commissioners (Appeals), the same area or the same persons or classes of persons or the same incomes or classes of income, they shall perform their functions in accordance with any orders which the Board may make for the distribution and allocation of the work to be performed.".

6. Section 125.—

(a) in sub-section (1), in :clause (a), omit "and the Appellate Assistant Commissioner" and "and the Commissioner respectively";

(b) in sub-section (2), for clause (a), substitute—

"(a) where such order is made under clause (a) of the said sub-section (1), references in this Act or in any rule made thereunder to the Income-tax Officer shall be deemed to be references to the Inspecting Assistant Commissioner and any provision of this Act requiring approval or sanction of the Inspecting Assistant Commissioner shall not apply;".

7. Section 125A.—For sub-section (4), substitute—

"(4) Where an order is made under sub-section (1) and the Inspecting Assistant Commissioner exercises the powers or performs the functions of an Income-tax Officer in relation to any area, or persons or classes of persons, or incomes or classes of income, or cases or classes of cases, references in this Act or in any rule made thereunder to the Income-tax Officer shall be construed as references to the Inspecting Assistant Commissioner and any provision of this Act requiring approval or sanction of the Inspecting Assistant Commissioner shall not apply.".

8. Section 126.—

(a) after "empower Commissioners,", insert "Commissioners (Appeals),";

(b) after "section 121,", insert "section 121A,".

9. Section 131, sub-section (1).—For "and Commissioner", substitute ", Commissioner (Appeals) and Commissioner".

10. Sections 133 and 134.—For "or the Inspecting Assistant Commissioner", wherever it occurs, substitute " , the Inspecting Assistant Com missioner or the Commissioner (Appeals)".

11. Section 245.—For "or Commissioner", substitute ", Commissioner (Appeals) or Commissioner".

12. Section 245A, clause (b).—Alter "a Commissioner,", insert "a Commissioner (Appeals),".

13. Chapter XX, in the sub-heading before section 246, after "Appellate Assistant Commissioner", insert "and Commissioner (Appeals)".

14. Section 246.—

(a) renumber the section as sub-section (1) of the section and in the sub-section as so numbered,

(i) in the opening portion, for "Any assessee aggrieved by any of the following orders", substitute "Subject to the provisions of sub-section (2), any assessee aggrieved by any of the following orders";

(ii) omit clause (a) and the Explanation;

(b) after the sub-section as so numbered, insert—

'(2) Notwithstanding anything contained in sub-section (1), any assessee aggrieved by any of the following orders (whether made before or after the appointed day) may appeal to the Commissioner (Appeals) against such order—

(a) an order against the assessee, being a company, under section 104;

(b) an order specified in clauses (c) to (o) (both inclusive) of sub-section (1) where such order is made by the Inspecting Assistant Commissioner in exercise of the powers or functions conferred on or assigned to him under section 125 or section 125A;

(c) an order made by the Inspecting Assistant Commissioner imposing a fine under sub-section (2) of section 131;

(d) an order against the assessee, being a foreign company, where the assessee denies its liability to be assessed under this Act or any order of assessment under sub-section (3) of section 143 or section 144, and the assessee objects to the amount of income assessed or to the amount of tax determined or to the amount of loss computed or to the status under which it is assessed;

(e) an order against the assessee, being a domestic company, where the assessee denies its liability to be assessed under this Act or any order of assessment under sub-section (3) of section 143 or section 144, and the assessee objects to the amount of income assessed or to the amount of tax determined or to the amount of loss computed or to the status under which it is assessed, and the amount of income so assessed or the amount of loss so computed exceeds five lakh rupees;

(f) an order of assessment under sub-section (3) of section 143 or section 144 made on the basis of directions issued by the Inspecting Assistant Commissioner under sec tion 144B;

(g) an order imposing a penalty under clause (c) of sub-section (1) of section 271 where such penalty has been imposed with the previous approval of the Inspecting Assis tant Commissioner under the proviso to clause (iii) of sub section (1) of that section;

(h) an order made by an Inspecting Assistant Commissioner imposing a penalty under section 272A;

(i) an order made by an Income-tax Officer under the provisions of this Act 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.

(3) Every appeal against an order specified in sub-section (2) 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 reheard.

Explanation.—For the purposes of this section,—

(a) "appointed day" means the date appointed under section 39 of the Finance (No.

2) Act, 1977;

(b) "domestic company" and "foreign company" shall have the same meanings as in section 80B;

(c) "status" means the category under which the assessee is assessed as "individual", "hindu undivided family" and so on.'.

15. Sections 247, 248, 249, 250, 251 and 287-After "Appellate Assistant Commissioner", wherever it occurs, insert "or, as the case may be, the Commissioner (Appeals)".

16. Section 253—

(a) in clause (b) of sub-section (1), omit "or section 272A" and in that sub-section and sub-section (2), for "an Appellate Assistant Commissioner", substitute "an Appellate Assistant Commissioner or, as the case may be, a Commissioner (Appeals)";

(b) in sub-section (4), for "the Appellate Assistant Commissioner", at both the places where it occurs, substitute "the Appellate Assistant Commissioner or, as the case may be, the Commissioner (Appeals)".

17. Section 264, sub-section (4),—

(a) in clause (a), after "Appellate Assistant Commissioner", insert "or to the Commissioner (Appeals)" and after "in the case of an appeal", insert "to the Commissioner (Appeals) or";

(b) in clause (c), after "subject of an appeal", insert "to the Commissioner (Appeals) or".

18. Section 272A.—

(a) in sub-section (1), after "Inspecting Assistant Commissioner or", at both the places where it occurs, insert "a Commissioner (Appeals) or";

(b) in sub-section (3), after "the Commissioner", at both the places where it occurs, insert "or the Commissioner (Appeals)".

19. Section 274, sub-section (3).—After "An Appellate Assistant Com missioner", insert "or a Commissioner (Appeals)".

PART II

AMENDMENTS IN THE WEALTH-TAX ACT, 1957

1. Section 2.—After clause (g), insert—

'(gg) "Commissioner (Appeals)" means a person empowered to exercise the functions of a Commissioner of Wealth-tax (Appeals) under section 9A;'.

2. Section 8AA.—For sub-section (4), substitute—

"(4) Where an order is made under sub-section (1) and the Inspecting Assistant Commissioner exercises the powers or performs the functions of a Wealth-tax Officer in respect of any case or person or proceeding, references in this Act or in any rule made thereunder to the Wealth-tax Officer shall be construed as references to the Inspecting Assistant Commissioner and any provision of this Act requireing approval or sanction of the Inspecting Assistant Commissioner shall not apply.".

3. After section 9, insert—

Commissioners of Weallh-tax (Appeals)

"9A. The Board may empower as many persons as it thinks fit to exercise under this Act the functions of a Commissioner of Wealth-tax (Appeals), and on being so empowered the Commissioners (Appeals) shall perform their functions in respect of such areas or such persons or such classes of persons as the Board may direct, and where such directions have assigned to two or more Commissioners (Appeals) the same area or the same persons of the same classes of persons they shall perform their functions in accordance with such orders as the Board may make for the distribution and allocation of the work to be performed.".

4. Section 13, sub-section (1).— For "Appellate Assistant Commissioner of Wealth-tax", substitute "Appellate Assistant Commissioner or the Commissioner (Appeals)".

5. Section 18.—

(a) in sub-section (1),—

(i) in the opening portion, after "Appellate Assistant Commissioner,", insert "Commissioner (Appeals),";

(ii) in Explanation 2(A) and Explanation 3, after "Appellate Assistant Commissioner", insert "or the Commissioner (Appeals)";

(b) in sub-section (4), after "Appellate Assistant Commissioner,", insert "a Commissioner (Appeals),";

(c) in sub-section (5), after "Appellate Assistant Commissioner". at both the places where it occurs, insert "or Commissioner (Appeals)".

6. Section 18A.-After "an Inspecting Assistant Commissioner", wher ever it occurs, insert "or a Commissioner (Appeals)".

7. Section 22A, clause (b).-After "a Commissioner,", insert "a Commissioner (Appeals),".

8. Section 23.—

(a) in sub-section (1), for "Any person", substitute "Subject to the provisions of sub-section (1A), any person";

(b) after sub-section (1), insert—

'(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

(b) objecting to any penalty imposed under clause (c) of sub-section (1) of section 18 where the penalty has been imposed with the previous approval of the Inspecting Assistant Commissioner under sub-section (3) of section 18; or

(c) objecting to any assessment or order referred to in clauses (a) to (h) (both inclusive) or clause (i) of sub-section (1), where such assessment or order has been made by the Inspecting Assistant Commissioner in exercise of the powers or functions conferred on or assigned to him under section 8AA; or

(d) objecting to any penalty imposed by an Inspecting Assistant Commissioner under section 18A; or

(e) objecting to an order made by a Wealth-tax 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) against the assessment or order, as the case may be, in the prescribed form and verified in the prescribed manner.

(1B) Every appeal against any assessment or order referred to in sub-section (1A) which is pending immediately before the appointed day before an Appellate Assistant Commissioner dr a Commissioner and any matter arising out of or connected with such appeal and which is so pending shall stand transferred tin that day to the Commissioner (Appeals) and the Commissioner (Appeals) may proceed with the 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 sub-section, "appointed day" means the date appointed under section 39 of the Finance (No.

2) Act, 1977.';

(c) in sub-sections (2), (2A), (3), (4), (5), (5A), (5B) and (6), after "Appellate Assistant Commissioner", wherever it occurs, insert "or, as. the case may be, the Commissioner (Appeals)";

(d) in sub-section (3A) —

(i) after "sub-section (1)", insert "or of sub-section (1A)";

(ii) after "the Appellate Assistant Commissioner", insert "or, as the case may be, the Commissioner (Appeals)".

9. Section 24.—

(a) in sub-section (1), after "the Appellate Assistant Commissioner", insert "or the Commissioner (Appeals)" and in the same sub-section, omit ", or to an order passed by the Inspecting Assistant Commissioner under section 18A,";

(b) in sub-section (2), after "Appellate Assistant Commissioner", insert "or a Commissioner (Appeals)";

(c) in sub-section (2A), after "Appellate Assistant Commissioner,", at both the places where it occurs, insert "or the Commissioner (Appeals)".

10. Section 25, proviso to sub-section (1).—

(a) in clause (a), after "Appellate Assistant Commissioner", insert "or to the Commissioner (Appeals)" and after "in the cage of an appeal", insert "to the Commissioner (Appeals) or";

(b) in clause (b), after "Appellate Assistant Commissioner", insert "or the Commissioner (Appeals)".

11. Section 34A, sub-section (5).—After "Appellate Assistant Commissioner", insert ", Commissioner (Appeals)".

12. Sections 35 and 46.—After "the Appellate Assistant Commissioner", wherever it occurs, insert "or the Commissioner (Appeals)".

13. Section 35K, sub-section (2),—For "in sections '8, 9", substitute "in sections 8, 9, 9A".

14. Section 37, sub-section (1).—After "Appellate Assistant Commissioner,", insert "Commissioner (Appeals),".

15. Section 42A, sub-section (2).—After "the Appellate Assistant Commissioner", insert "or, as the case may be, the Commissioner (Appeals) ".

PART III

AMENDMENTS IN THE GIFT-TAX ACT, 1958

1. Section 2.—After clause (vi), insert—

(via) "Commissioner (Appeals)" means a person empowered to exercise the powers of a Commissioner of Gift-tax (Appeals) under section 8A;'.

2. Section 7AA.—For sub-section (4), substitute—

" (4) Where an order is made under sub-section (1) and the Inspecting Assistant Commissioner exercises the powers or performs the functions of a Gift-tax Officer in respect of any case or person or proceeding under this Act, references in this Act or in any rule made thereunder to the Gift-tax Officer shall be construed as references to the Inspecting Assistant Commissioner and any provision of this Act requiring approval or sanction of the Inspecting Assistant Commissioner shall not apply.".

3. After section 8, insert—

Commissioners of Gift-tax (Appeals)

"8A. The Board may empower as many persons as it thinks fit to exercise under this Act the functions of a Commissioner of Gift-tax (Appeals), and on being so empowered the Commissioners (Appeals) shall perform their functions in respect of such areas or such persons or such classes of persons as the Board may direct, and where such directions have assigned to two or more Commissioners (Appeals) the same areas or the same persons or the same classes of persons they shall perform their functions in accordance with such orders as the Board may make for the distribution and allocation of the work to be performed.".

4. Section 12, sub-section (1).—For "the Appellate Assistant Commissioner of Gift-tax", substitute "the Commissioner (Appeals) or the Appellate Assistant Commissioner".

5. Section 17 —

(a) in sub-section (1), after "Appellate Assistant Commissioner,", insert "Commissioner (Appeals),";

(b) in sub-section (4), for "Commissioner or the Appellate Tribunal", substitute "a Commissioner (Appeals), a Commissioner or the Appellate Tribunal".

6. Section 17A.—After "an Inspecting Assistant Commissioner", wherever it occurs, insert "or a Commissioner (Appeals)"

7. Section 21, sub-section (2) .—After "Appellate Assistant Commissioner", insert ", the Commissioner (Appeals)".

8. Section 22.—

(a) in sub-section (1), for "Any person", substitute "Subject to the provisions of sub-section (1A), any person";

(b) after sub-section (1), insert—

'(2A) Notwithstanding anything contained in sub-section (1), any person—

(a) objecting to the value of taxable gifts determined under this Act or objecting to the amount of gift-tax determined as payable by him or denying his liability to be assessed under this Act where the value of taxable gifts determined on assessment exceeds two lakh rupees; or

(b) 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 an Inspecting Assistant Commissioner in exercise of the powers or functions Conferred on or assigned to him unddr section 7AA; or

(c) objecting to any penalty imposed under clause (c) of sub-section (1) of section 17 where the penalty has been imposed with the previous approval of the Inspecting Assistant Commissioner under sub-section (3) of section 17; or

(d) objecting to any penalty imposed by an Inspecting Assistant Commissioner under section 17A; or

(e) objecting to any order made by a Gift-tax 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) against the assessment or order, as the case may be, in the prescribed form and verified in the prescribed manner:

Provided that no appeal shall lie under clause (b) of this sub-section against any order referred to in clause (f) of subsection (1) unless the tax has been paid before the appeal is filed.

(1B) Every appeal against any assessment or order referred to in sub-section (1A) 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 the 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 sub-section, "appointed day'' means the date appointed under section 39 of the Finance (No.

2) Act, 1977.' ;

(c) in sub-sections (2), (3), (4), (5), (5A), (5B) and (6), after "Appellate Assistant Commissioner", wherever it occurs, insert "or, as the case may be, the Commissioner (Appeals)".

9. Section 23.—

(a) in sub-section (1), after "the Appellate Assistant Commissioner", insert "or the Commissioner (Appeals)" and in the same sub section, omit "or to an order passed by the Inspecting Assistant Com missioner under section 17A";

(b) in sub-section (2), after "Appellate Assistant Commissioner", insert "or a Commissioner (Appeals)";

(c) in sub-section (2A), after "Appellate Assistant Commissioner,", at both the' places where it occurs, insert "or the Commis sioner (Appeals)".

10. Section 24, proviso to sub-section (1).—

(a) in clause (a), after "Appellate Assistant Commissioner", insert "or to the Commissioner (Appeals)" and for "in the case of the Appellate Tribunal", substitute "in the case of an appeal to the Com missioner (Appeals) or to the Appellate Tribunal";

(b) in clause (b), after "subject of an appeal", insert "to the Commissioner' (Appeals) or".

11. Section 33A, sub-section (5).—After "Appellate Assistant Commissioner", insert ", Commissioner (Appeals)".

12. Sections 34 and 46.—After "Appellate Assistant Commissioner", wherever it occurs, insert "or the Commissioner (Appeals)".

13. Section 36, sub-section (1).—After "Appellate Assistant Commissioner,", insert "the Commissioner (Appeals),".

14. Section 41A, sub-section (2).—After "the Appellate Assistant Com missioner", insert "or, as the case may be, the Commissioner (Appeals)".

PART IV

AMENDMENTS IN THE COMPANIES (PROFITS) SURTAX ACT, 1964

1. Throughout the Act [except in sub-section (1) of section 3 and section 17], for "Appellate Assistant Commissioner" (except where it is preceded by "an"), substitute "Commissioner (Appeals)" and for "an Appellate Assistant Commissioner", substitute "a Commissioner (Appeals) ".

2. Section 3, sub-section (1)—For "Additional Commissioner of Income-tax, Appellate Assistant Commissioner of Income-tax", substitute "Commissioner of Income-tax (Appeals), Additional Commissioner of. Income-tax".

3. After section 11, insert,—

Transfer of certain pending appeals

'11A. 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.'.

4. Section 17.—

(a) in sub-section (1), omit "or Appellate Assistant Commissioner";

(b) in sub-section (4), for clauses (a), (b) and (c), substitute—

"(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).";

(c) omit Explanation 2.

PART V

AMENDMENTS IN THE INTEREST-TAX ACT, 1974

1. Throughout the Act [except in sub-section (1) of section 3 and section 20], for "Appellate Assistant Commissioner" (except where it is preceded by "an"), substitute "Commissioner (Appeals)'', and for "an Appellate Assistant Commissioner", substitute "a Commissioner (Appeals)".

2. Section 3, sub-section (1.).—For "Additional Commissioner of Income-tax, Appellate Assistant Commissioner of Income-tax", substitute "Commissioner of Income-tax (Appeals), Additional Commissioner of Income-tax''.

3. After section 15, insert.—

Transfer of certain pending appeals

'15A. 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.'.

4. Section 20,—

(a) in sub-section (1), omit "or Appellate Assistant Commissioner—";

(b) in sub-section (4), for clauses (a), (b) and (c), substitute—

"(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:).";

(c) omit Explanation 2.

[Finance (No.

2) Act, 1977]

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Fifth Schedule, The Finance Act, 1977 (Act 11 of 1977).