FINANCE (NO.2) ACT, 2004

22 of 2004

PREAMBLE An Act to give effect to the financial proposals of the Central Government for the financial  year 2004- BE it enacted by Parliament in the Fifty-fifth Year of the Republic of India as  follows:

CHAPTER 1: PRELIMINARY:

SECTION : Short Title and Commencement:

(1) This Act may be called the Finance (No. 2) Act, 2004.

(2) Save as otherwise provided in this Act, (S.2) to (S.60) shall lie deemed to have come into force on the 1st day of April, 2004.

CHAPTER 2: RATES OF INCOME-TAX:

SECTION 2: Income-tax:

(1) Subject to the provisions of sub-sections (2) and (3), for the assessment year  commencing on the 1st day of April, 2004, income-tax shall be charged at the rates  specified in Part I of the First Schedule and such tax as reduced by the rebate of  income-tax calculated under Chapter VIII-A of the Income-tax Act, (43 of 1961)  (hereinafter referred to as the Income-tax Act) shall be increased by a surcharge for  purposes of the Union calculated in each case in the manner provided therein.

(2) In the cases to which Paragraph A of Part I of the First Schedule applies,  where the assessee has, in the previous year, any net agricultural income exceeding  five thousand rupees, in addition to total income, and the total income exceeds fifty  thousand rupees, then,--  (a) the net agricultural income shall be taken into account, in the manner provided  in clause (b) [that is to say, as if the net agricultural income were comprised in the  total income after the first fifty thousand rupees of the total income but without  being liable to tax), only for the purpose of charging income-tax in respect of the  total income; and (b) the income-tax chargeable shall be calculated as follows-  (i) the total income and the net agricultural income shall be aggregated and the  amount of income-tax shall be determined in respect of the aggregate income at the  rates specified in the said Paragraph A, as if such aggregate income were the total  income; (ii) the net agricultural income shall be increased by a sum of fifty thousand rupees,  and the amount of income-tax shall be determined in respect of the net agricultural  income as so increased at the rates specified in the said Paragraph A, as if the net  agricultural income as so increased were the total income; (iii) the amount of income-tax determined in accordance with sub-clause (i) shall  be reduced by the amount of income-tax determined in accordance with sub-clause (ii)  and the sum so arrived at shall be the income-tax in respect of the total income:  Provided that the amount of income-tax so arrived at, as reduced by the amount  of rebate of income-tax calculated under Chapter VIII-A, shall be increased by a  surcharge for purposes of the Union calculated in each case in the manner provided  in that Paragraph and the sum so arrived at shall be the income-tax in respect of  the total income.

(3) In cases to which the provisions of Chapter XII or Chapter XII-A or (S.115JB) or sub-section (1A) of (S.161) or (S.164) or (S.164A) or (S.167B of the Income Tax Act, 1961) apply, the tax chargeable shall be determined as provided in that Chapter or that  section, and with reference to the rates imposed by sub-section (1) or the rates as  specified in that Chapter or section, as the case may be:   Provided that the amount of income-tax computed in accordance with the provisions  of (S.112)  shall be increased by a surcharge for purposes of the  Union as provided in Paragraph A, B, C, D or E, as the case may be, of Part I of the First  Schedule: Provided further that in respect of any income chargeable to tax under (S.115A), (S.115AB), (S.115AC), (S.115ACA), (S.115AD), (S.115B), (S.115BB), (S.115BBA), (S.115E) and (S.115JB of the Income Tax Act, 1961)  the amount of income-tax  computed under this sub-section shall be increased by a surcharge for purposes of  the Union, calculated,--   (a) in the case of every individual, Hindu undivided family, association of  persons and body of individuals, whether incorporated or not, at the rate of ten per cent of  such income-tax where the total income exceeds eight hundred and fifty  thousand rupees; (b) in the case of every co-operative society, firm, local authority and company,  at the rate of two and one-half per cent of such income-tax; (c) in the case of every artificial juridical person referred to in  sub-clause (vii) of clause (31) of (S.2 of the Income Tax Act, 1961), at the rate of  ten per cent. of such income-tax.

(4) In cases in which tax has to be charged and paid under section 115-O or  sub-section (2) of section 115R of the Income-tax Act, the tax shall be charged and  paid at the rate as specified in those sections and shall be increased by a surcharge  for purposes of the Union, calculated at the rate of two and one-half per cent. of  such tax.

(5) In cases in which tax has to be deducted under (S.193), (S.194), (S.194A), (S.194B), (S.194BB), (S.194D) and (S.195 of the Income Tax Act, 1961) at the rates in force, the deductions shall be made at the rates  specified in Part II of the First Schedule and shall be increased, by a surcharge for  purposes of the Union, calculated in each case, in the manner provided therein.

(6) In cases in which tax has to be deducted under (S.194C), (S.194E), (S.194EE), (S.194F), (S.194G), (S.194H), (S.194-I), (S.194J), (S.194LA), (S.196B), (S.196C) and  (S.196D of the Income-tax Act, 1961) the deductions  shall be made at the rates specified in those sections and shall be increased by a surcharge  for purposes of the Union, calculated,--   (a) in the case of every individual, Hindu undivided family, association of persons and  body of individuals, whether incorporated or not, at the rate of ten per cent. of such tax  where the income or the aggregate of such incomes paid or likely to be paid and subject to  the deduction exceeds eight hundred and fifty thousand rupees; (b) in the case of every co-operative society, firm, local authority and company, at  the rate of two and one-half per cent. of such tax; (c) in the case of every artificial juridical person referred to in sub-clause (vii)  of clause (31) of (S.2 of the Income Tax Act, 1961), at the rate of ten per cent  of such tax.

(7) In cases in which tax has to be collected under the proviso to (S.194B of the Income Tax Act, 1961) the collection shall be made at the rates specified in Part II of  the First Schedule, and shall be increased, by a surcharge for purposes of the Union,  calculated in the manner provided therein.

(8) In cases in which tax has to be collected under (S.206C of the Income Tax Act, 1961),  the collection shall be made at the rates specified in that section and shall be increased  by a surcharge for purposes of the Union, calculated,--   (a) in the case of every individual, Hindu undivided family, association of persons  and body of individuals, whether incorporated or not, at the rate of ten per cent. of  such tax where the amount or the aggregate of such amounts collected, and subject to  the collection, exceeds eight hundred and fifty thousand rupees; (b) in the case of every co-operative society, firm, local authority and company,  at the rate of two and one-half per cent. of such tax; (c) in the case of every artificial juridical person referred to in sub-clause(vii)  of clause (31) of (S.2 of the Income-tax Act, 1961) at the rate of ten per cent. of  such tax.

(9) Subject to the provisions of sub-section (10), in cases in which income-tax  has to be charged under Sub-section (4) of (S.172) or sub-section (2) of (S.174) or (S.174A) or (S.175) or sub-section (2) of (S.176 of the Income-tax Act, 1961  or deducted from, or paid on, income chargeable under the head "Salaries" under (S.192) of the said Act or in which the "advance tax" payable under Chapter XVII-C  of the said Act has to be computed at the rate or rates in force, such income-tax or,  as the case may be, "advance tax" shall be so charged, deducted or computed at the  rate or rates specified in Part III of the First Schedule and such tax as reduced by  the rebate of income-tax calculated under Chapter VIII-A of the said Act shall be  increased by a surcharge for purposes of the Union, calculated in each case in the  manner provided therein:   Provided that in cases to which the provisions of Chapter XII or Chapter XII-A or  (S.115JB)  or sub-section (1A) of (S.161) or (S.164)  or (S.164A) or (S.167B of the Income-tax Act, 1961)  apply, "advance tax" shall  be computed with reference to the rates imposed by this sub-section or the rates as specified in that Chapter or  section, as the case may be: Provided further that the amount of "advance tax" computed in accordance with the  provisions of (S.111A) or (S.112 of the Income-tax Act, 1961) shall be increased by  a surcharge for purposes of the Union as provided in Paragraph A, B, C, D or E, as the  case may be, of Part III of the First Schedule: Provided also that in respect of any income chargeable to tax under (S.115A), (S.115AB), (S.115AC), (S.115ACA), (S.115AD), (S.115B), (S.115BB), (S.115BBA), (S.115E) and (S.115JB of the Income-tax Act, 1961)

  "advance tax" computed under the first proviso shall be increased by a surcharge for  purposes of the Union, calculated,--   (a) in the case of every individual, Hindu undivided family, association of persons  and body of individuals, whether incorporated or not, at the rate of ten per cent. of  "advance tax" where the total income exceeds eight hundred and fifty thousand rupees; (b) in the case of every co-operative society, firm, local authority and company, at  the rate of two and one-half per cent. of such "advance tax"; (c) in the case of every artificial juridical person referred to in sub-clause (vii)  of clause (31) of section 2 of the Income-tax Act, at the rate of ten per cent. of such  "advance tax".

(10) In cases to which, Paragraph A of Part III of the First Schedule applies, where  the assessee has, in the previous year or, if by virtue of any provision of the  Income-tax Act, income-tax is to be charged in respect of the income of a period other  than the previous year, in such other period, any net agricultural income exceeding five  thousand rupees, in addition to total income and the total income exceeds fifty thousand  rupees, then, in charging income-tax under sub-section (2) of (S.174) or (S.174A) or (S.175) or sub-section (2) of (S.176) of the said Act or in computing the  "advance tax" payable under Chapter XVII-C of the said Act, at the rate or rates in force,--   (a) the net agricultural income shall be taken into account, in the manner provided  in clause (b) [that is to say, as if the net agricultural income were comprised in the  total income after the first fifty thousand rupees of the total income but without  being liable to tax], only for the purpose of charging or computing such income-tax or,  as the case may be, "advance tax" in respect of the total income; and (b) such income-tax or, as the case may be, "advance tax" shall be so charged or  computed as follows-   (i) the total income and the net agricultural income shall be aggregated and the  amount of income-tax or "advance tax" shall be determined in respect of the aggregate  income at the rates specified in the said Paragraph A, as if such aggregate income were  the total income; (ii) the net agricultural income shall be increased by a sum of fifty thousand rupees,  and the amount of income-tax or "advance tax" shall be determined in respect of the net  agricultural income as so increased at the rates specified in the said Paragraph A, as if  the net agricultural income were the total income; (iii) the amount of income-tax or "advance tax" determined in accordance with  sub-clause (i) shall be reduced by the amount of income-tax or, as the case may be,  "advance tax" determined in accordance with sub-clause (ii) and the sum so arrived at  shall be the income-tax or, as the case may be, "advance tax" in respect of the  total income:   Provided that the amount of income-tax or "advance tax" so arrived at, as reduced  by the rebate of income-tax calculated under Chapter VIII-A of the said Act, shall be  increased by a surcharge for purposes of the Union calculated in each case, in the  manner provided therein.

(11) The amount of income-tax as specified in sub-sections (4) to, (10) and as  increased by a surcharge for purposes of the Union calculated in the manner provided  therein, shall be further increased by an additional surcharge for purposes of the  Union, to be called the "Education Cess on Income-tax", so as to fulfil the commitment  of the Government to provide and finance universalised quality basic education,  calculated at the rate of two per cent. of such income-tax and surcharge.

(12) For the purposes of this section and the First Schedule,--   (a) "domestic company" means an Indian company or any other company which,  in respect of its income liable to income-tax under the Income-tax Act for the assessment  year commencing on the 1st day of April, 2004, has made the prescribed arrangements for  the declaration and payment within India of the dividends (including dividends on preference  shares) payable out of such income; (b) "insurance commission" means any remuneration or reward, whether by way of commission  or other wise, for soliciting or procuring insurance business (including business relating  to the continuance, renewal or revival of policies of insurance); (c) "net agricultural income", in relation to a person, means the total amount of  agricultural income, from whatever source derived, of that person computed in accordance  with the rules contained in Part IV of the First Schedule; (d) all other words and expressions used in this section and the First Schedule but  not defined in this sub-section and defined in the Income-tax Act shall have the  meanings respectively assigned to them in that Act.

CHAPTER 3: DIRECT TAXES:

SECTION 3: Amendment of Section 2:

In section 2 of the Income-tax Act, in clause (24), after sub-clause (xii), the  following sub-clause shall be inserted with effect from the 1st day of April, 2005, namely- '(xiii) any sum referred to in clause (v) of sub-section (2) of section 56;

SECTION 4: Amendment of Section 7:

In (S.7 of the Income-tax Act, 1961) after clause (ii), the following clause shall be  inserted at the end, namely- "(iii) the contribution made, by the Central Government in the previous year, to  the account of an employee under a pension scheme referred to in section 80CCD.

SECTION 5: Amendment of Section 10:

In  (S.10 of the Income-tax Act, 1961) -- (a) in clause (4), in sub-clause (ii), after the proviso, the following proviso shall be inserted with effect from the 1st day of April, 2006, namely-  "Provided further that nothing contained in this sub-clause shall apply to any income by  way of interest paid or credited on or after the 1st day of April, 2005 to the Non-Resident  (External) Account of such individual;";

(b) in clause (6BB), for the words, figures and letters "an agreement entered after the  31st day of March, 1997 but before the 1st day of April, 1999 and approved by the Central Government in this behalf, the words, figures and letters "an agreement entered into after the 31st day of March, 1997 but before the 1st day of April, 1999, or entered into after  the 31st day of March, 2005 and approved by the Central Government in this behalf shall be substituted with effect from the 1st day of April, 2006;

(c) in clause (15),--  (A) after sub-clause (iiib), the following sub-clause shall be inserted with effect from the 1st day of April, 2005, namely- "(iiic) Interest payable to the European Investment Bank, on a loan granted by it in pursuance  of the framework-agreement for financial cooperation entered into on the 25th day of November, 1993 by the Central Government with that Bank;"; (B) in sub-clause (iv), in item (fa), after the words "by a scheduled bank", the words,  figures and letters "before the 1st day of April, 2005" shall be inserted with effect from the  1st day of April, 2006;

(d) in clause (15A), before the Explanation, the following proviso shall be inserted with  effect from the 1st day of April, 2006, namely-  "Provided that nothing contained in this clause shall apply to any such agreement entered  into on or after the 1st day of April, 2005.";

(e) after clause (18), the following clause shall be inserted with effect from the 1st day of April, 2005, namely-  "(19) family pension received by the widow or children or nominated heirs, as the case may be, of a member of  the armed forces (including paramilitary forces) of the Union, where the death of such member  has occurred in the course of operational duties, in such circumstances and subject to such  conditions, as may be prescribed;";

(f) in clause (23FB), with effect from the 1st day of October, 2004,--  (i) in Explanation 1, for clause (c), the following clause shall be substituted, namely- '(c) "venture capital undertaking" means a venture capital undertaking referred to in the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 199 made under the Securities and Exchange Board of India Act, 1992 and notified as such in the Official Gazette by the Board for the purposes of this clause;'; (ii) Explanation 2shall be omitted;

(g) in clause (23G), before Explanation 1, the following proviso shall be inserted with  effect from the 1st day of April, 2005, namely-  "Provided that the income, by way of dividends, other than dividends referred to in  section 115-O, interest or long-term capital gains of an infrastructure capital company, shall be taken into account in computing the book profit and income-tax payable under section 115JB.";

(h) after clause (36), the following shall be inserted with effect from the 1st day of  April, 2005, namely-  '(37) in the case of an assessee, being an individual or a Hindu undivided family, any income chargeable under the head "Capital gains" arising from the transfer of agricultural land, where--  (i) such land is situate in any area referred to in item (a) or item (b) of  sub-clause (iii) of clause (14) of (S.2); (ii) such land, during the period of two years immediately preceding the date of  transfer, was being used for agricultural purposes by such Hindu undivided family or individual or a parent of his; (iii) such transfer is by way of compulsory acquisition under any law, or a transfer the consideration for which is determined or approved by the Central Government or the Reserve  Bank of India; (iv) such income has arisen from the compensation or consideration for such transfer  received by such assessee on or after the 1st day of April, 2004. Explanation.--For the purposes of this clause, the expression "compensation or consideration"  includes the compensation or consideration enhanced or further enhanced by any court,   tribunal or other authority; (38) any income arising from the transfer of a long-term capital asset, being an equity  share in a company or a unit of an equity oriented fund where--  (a) the transaction of sale of such equity share or unit is entered into on or after the  date on which Chapter VII of the Finance (No. 2) Act, 2004 comes into force; and (b) such transaction is chargeable to securities transaction tax under that Chapter.  Explanation.--for the purposes of this clause, "equity oriented fund" means a fund-

SECTION 6: Amendment of Section 12AA:

In (S.12AA of the Income Tax Act, 1961), after sub-section (2), the following  sub-section  shall be inserted at the end, with effect from the 1st day of October, 2004, namely- "(3) Where a trust or an institution has been granted registration under clause (b) of  sub-section (1) and subsequently the Commissioner is satisfied that the activities of  such trust or institution are not genuine or are not being carried out in accordance  with the objects of the trust or institution, as the case may be, he shall pass an  order in writing cancelling the registration of such trust or institution:  Provided that no order under this sub-section shall be passed unless such trust or  institution has been given a reasonable opportunity of being heard."

SECTION 7: Amendment of Section 17:

In (S.17 of the Income Tax Act, 1961), in clause (1), after sub-clause (vii), the  following sub-clause shall be inserted, namely- "(viii) the contribution made by the Central Government in the previous year,  to the account of an employee under a pension scheme referred to in section 80CCD;".

SECTION 8: Amendment of Section 32:

In (S.32 of the Income Tax Act, 1961), in sub-section (1), in clause (iia),  in the first proviso, in clause (B), for the words "twenty-five per cent.",  the words "ten per cent." shall be substituted with effect from the 1st day of  April, 2005.

SECTION 9: Amendment of section 33AC:

In (S.33AC of the Income Tax Act, 1961), in sub-section (1), after the second proviso,  the following proviso shall be inserted with effect from the 1st day of April, 2005, namely- "Provided also that no deduction shall be allowed under this section for any  assessment year commencing on or after the 1st day of April, 2005.".

SECTION 10: Amendment of section 35AC:

In (S.35AC of the Income Tax Act, 1961), for sub-sections (4) and (5), the following  sub-sections shall be substituted with effect from the 1st day of October, 2004, namely- "(4) Where an association or institution is approved by the National Committee under  sub-section (1), and subsequently--  (i) that Committee is satisfied that the project or the scheme is not being carried  on in accordance with all or any of the conditions subject to which approval was  granted; or (ii) such association or institution, to which approval has been granted, has  not furnished to the National Committee, after the end of each financial year,  a report in such form and setting forth such particulars and within such time as  may be prescribed, the National Committee may, at any time, after giving a reasonable  opportunity of showing cause against the proposed withdrawal to the concerned association  or institution, withdraw the approval:  Provided that a copy of the order withdrawing the approval shall be forwarded by  the National Committee to the Assessing Officer having jurisdiction over the concerned  association or institution.

(5) Where any project or scheme has been notified as an eligible project or scheme  under clause (b) of the Explanation, and subsequently--  (i) the National Committee is satisfied that the project or the scheme is not being  carried on in accordance with all or any of the conditions subject to which such project  or scheme was notified; or (ii) a report in respect of such eligible project or scheme has not been furnished  after the end of each financial year, in such form and setting forth such particulars  and within such time as may be prescribed, such notification may be withdrawn in the  same manner in which it was issued:  Provided that a reasonable opportunity of showing cause against the proposed  withdrawal shall be given by the National Committee to the concerned association,  institution, public sector company or local authority, as the case may be: Provided further that a copy of the notification by which the notification of  the eligible project or scheme is withdrawn shall be forwarded to the Assessing  Officer having jurisdiction over the concerned association, institution, public  sector company or local authority, as the case may be, carrying on such eligible  project or scheme.".

SECTION 11: Amendment of section 40:

In (S.40 of the Income-tax Act, 1961) in clause (a), for sub-clause(i) the following shall be  substituted, namely- (i) any interest (not being interest on a loan issued for public subscription before  the 1st day of April, 1938), royalty, fees for technical services or other sum chargeable  under this Act, which is payable,-- (A) outside India; or

(B) in India to a non-resident, not being a company or to a foreign company, on  which tax is deductible at source under Chapter XVII-B and such tax has not been  deducted or, after deduction, has not been paid during the previous year, or in the  subsequent year before the expiry of the time prescribed under sub-section (1) of  section 200:  Provided that where in respect of any such sum, tax has been deducted in any subsequent  year or, has been deducted in the previous year but paid in any subsequent year after  the expiry of the time prescribed under sub-section(1 of section 200, such sum shall be  allowed as a deduction in computing the income of the previous year in which such tax  has been paid.

Explanation-For the purposes of this sub-clause,--  (A) "royalty" shall have the same meaning as in Explanation 2 to clause (vi) of  sub-section (1) of (S.9) ; (B) "fees for technical services" shall have the same meaning as in Explanation 2  to clause (vii) of sub-section (1) of (S.9); (ia) any interest, commission or brokerage, fees for professional services or fees  for technical services payable to a resident, or amounts payable to a contractor or  subcontractor, being resident, for carrying out any work (including supply of labour  for carrying out any work), on which tax is deductible at source under Chapter XVII_B  and such tax has not been deducted or, after deduction, has not been paid during the  previous year, or in the subsequent year before the expiry of the time prescribed under  sub-section(1) of (S.200) ;  Provided that where in respect of any such sum, tax has been deducted in any  subsequent year or, has been deducted in the previous year but paid in any subsequent  year after the expiry of the time prescribed under sub-section (1) of (S.200), such  sum shall be allowed as a deduction in computing the income of the previous year in which  such tax has been paid.

Explanation.--for the purposes of this sub-clause,--  (i) "commission or brokerage" shall have the same meaning as in clause (i) of the  Explanation to (S.194H); (ii) "fees for technical services" shall have the same meaning as in Explanation 2 to  clause (vii) of sub-section (1) of (S.9) ; (iii) "professional services" shall have the same meaning as in clause (a) of the  Explanation to (S.194); (iv) "work" shall have the same meaning as in Explanation III to (S.194C) ; (ib) any sum paid on account of securities transaction tax under Chapter VII of the  Finance (No. 2) Act, 2004;

SECTION 12: Amendment of Section 48:

In (S.48 of the Income-tax Act, 1961) after the fourth proviso and before the Explanation,  the following proviso shall be inserted with effect from the 1st day of April, 2005, namely- "Provided also that no deduction shall be allowed in computing the income chargeable  under the head "Capital gains" in respect of any sum paid on account of securities  transaction tax under Chapter VII of the Finance (No. 2) Act, 2004.".

SECTION 13: Amendment of section 56:

In  (S.56 of the Income Tax Act, 1961), in sub-section (2), after clause (iv), the  following clause shall be inserted at the end, with effect from the 1st day of April, 2005, namely- "(v) where any sum of money exceeding twenty-five thousand rupees is received without  consideration by an individual or a Hindu undivided family from any person on or after  the 1st day of September, 2004, the whole of such sum: -- Provided that this clause shall not apply to any sum of money received

(a) from any relative; or

(b) on the occasion of the marriage of the individual; or

(c) under a will or by way of inheritance; or

(d) in contemplation of death of the payer. Explanation.-- For  the purposes of this clause, "relative" means--  (i) spouse of the individual; (ii) brother or sister of the individual; (iii) brother or sister of the spouse of the individual; (iv) brother or sister of either of the parents of the individual; (v) any lineal ascendant or descendant of the individual; (vi) any lineal ascendant or descendant of the spouse of the individual; (vii) spouse of the person referred to in clauses (ii) to (vi)."

SECTION 14: Amendment of Section 71:

In (S.71 of the Income Tax Act, 1961), after sub-section (2), the following  sub-section shall be inserted with effect from the 1st day of April, 2005, namely- '(2A) Notwithstanding anything contained in sub-section (1) or sub-section (2),  where in respect of any assessment year, the net result of the computation under the  head "Profits and gains of business or profession" is a loss and the assessee has  income assessable under the head "Salaries", the assessee shall not be entitled to  have such loss set off against such income.

SECTION 15: Insertion of new section 80CCD:

After (S.80CCC of the Income Tax Act, 1961), the following section shall be inserted, namely- '80CCD. Deduction in respect of contribution to pension scheme of Central Government. (1) Where an assessee, being an individual employed by the Central Government on  or after the 1st day of January, 2004, has in the previous year paid or deposited any  amount in his account under a pension scheme notified or as may be notified by the  Central Government, he shall, in accordance with, and subject to, the provisions of  this section, be allowed a deduction in the computation of his total income, of the  whole of the amount so paid or deposited as does not exceed ten per cent. of his salary  in the previous year.

(2) Where, in the case of an assessee referred to in sub-section (1), the Central  Government makes any contribution to his account referred to in that sub-section, the  assessee shall be allowed a deduction in the computation of his total income, of the  whole of the amount contributed by the Central Government as does not exceed ten per cent.  of his salary in the previous year.

(3) Where any amount standing to the credit of the assessee in his account referred to  in sub-section (1), in respect of which a deduction has been allowed under that sub-section  or sub-section (2), together with the amount accrued thereon, if any, is received by the  assessee or his nominee, in whole or in part, in any previous year,--  (a) on account of closure or his opting out of the pension scheme referred to in  sub-section (1); or (b) as pension received from the annuity plan purchased or taken on such closure or  opting out, the whole of the amount referred to in clause (a) or clause (b) shall be  deemed to be the income of the assessee or his nominee, as the case may be, in the  previous year in which such amount is received, and shall accordingly be charged to  tax as income of that previous year.

(4) Where any amount paid or deposited by the assessee has been allowed as a deduction  under sub-section (1), no rebate with reference to such amount shall be allowed under  section 88.  Explanation.--For the purposes of this section, "salary" includes clearness allowance,  if the terms of employment so provide, but excludes all other allowances and  perquisites.

SECTION 16: Amendment of section 80DD:

In (S.80DD of the Income Tax Act, 1961), in the Explanation, with effect from the 1st  day of April, 2005,-- (a) in clause (c), after the figures "1995", occurring at the end, the words,  brackets, letters and figures 'and includes "autism", "cerebral palsy" and "multiple  disability" referred to in clauses (a), (c) and (h) of section 2 of the National Trust  for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple  Disabilities Act, 1999(44 of 1999)' shall be inserted;

(b) in clause (e), after the figures "1995", occurring at the end, the words,  brackets, letters and figures 'or such other medical authority as may, by notification,  be specified by the Central Government for certifying "autism", "cerebral palsy",  "multiple disabilities", "person with disability" and "severe disability" referred to  in clauses (a), (c), (h), (j) and (o) of section 2 of the National Trust for Welfare of  Persons with Autism, Cerebral Palsy, Mental Retardation and  Multiple Disabilities Act, 1999(44 of 1999)' shall be inserted;

(c) in clause (Rafter the figures "1995", occurring at the end the words,  brackets, letter and figures "or clause (j)of section 2 of the National Trust for  Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple  Disabilities Act, 1999(44 of 1999)" shall be inserted;

(d) for clause (g), the following clause shall be substituted, namely- '(g) "person with severe disability" means--  (i) a person with eighty per cent. or more of one or more disabilities, as  referred to in sub-section (4) of section 56 of the Persons With Disabilities  (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995(1 of 1996); or (ii) a person with severe disability referred to in clause (o) of section 2 of  the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation  and Multiple Disabilities Act, 1999(44 of 1999);

SECTION 17: Amendment of section 80-IA:

In (S.80-IA of the Income Tax Act, 1961), with effect from the 1st day of April, 2005.-- ;  (a) in sub-section (2), after the words "generates power or commences transmission  or distribution of power", the words "or undertakes substantial renovation and  modernisation of the existing transmission or distribution lines" shall be inserted;

(b) in sub-section (3),--  (A) in the opening portion, for the words, brackets and figures "undertaking referred  to in clause (iv)", the words, brackets and figures "undertaking referred to in clause (ii)  or clause (iv)"shall be substituted; (B) after clause (ii) and before Explanation 1, the following proviso shall be inserted,  namely-  "Provided that nothing contained in this sub-section shall apply in the case of transfer,  either in whole or in part, of machinery or plant previously used by a State Electricity  Board referred to in clause (7) of section 2 of the Electricity Act, 2003(36 of 1999),  whether or not such transfer is in pursuance of the splitting up or reconstruction or  reorganisation of the Board under Part XIII of that Act."

(c) in sub-section (4),--  (A) in clause (ii), for the figures, letters and words "31st day of March, 2004",  the figures, letters and words "31st day of March, 2005" shall be substituted; (B) in clause (iv), after sub-clause (b), the following shall be inserted, namely-  (c) undertakes substantial renovation and modernisation of the existing network of  transmission or distribution lines at any time during the period beginning on the 1st day  of April, 2004 and ending on the 31st day of March, 2006.  Explanation.--For the purposes of this sub-clause, "substantial renovation and  modernisation" means an increase in the plant and machinery in the network of transmission  or distribution lines by at least fifty per cent. of the book value of such plant  and machinery as on the 1st day of April, 2004.

SECTION 18: Amendment of section 80-IB:

In (S.80-IB of the Income Tax Act, 1961), with effect from the 1st day of April, 2005,--  (d) for sub-section (10), the following shall be substituted, namely.-- "(10) The amount of deduction in the case of an undertaking developing and building  housing projects approved before the 31st day of March, 2007 by a local authority shall  be hundred per cent. of the profits derived in the previous year relevant to any  assessment year from such housing project if,-- (a) in sub-section (1), for the brackets, figures, word and letter "(11) and (11A)",  the brackets, figures, letters and word "(11), (11A) and (11B)"shall be substituted;

(b) in sub-section (4), after me third proviso, the following provisos shall be  inserted, namely--  'Provided also that in the case of an industrial undertaking in the State of Jammu  and Kashmir, the provisions of the first proviso shall have effect as if for the figures,  letters and words "31st day of March, 2004", the figures, letters and words "31st day of  March, 2005" had been substituted: Provided also that no deduction under this sub-section shall be allowed to an industrial  undertaking in the State of Jammu and Kashmir which is engaged in the manufacture or  production of any article or thing specified in Part C of the Thirteenth Schedule.

(c) in sub-section (8A), in clause (iii), for the figures, letters and words "1st day of  April, 2004", the figures, letters and words "1st day of April, 2005" shall be  substituted;

(a) such undertaking has commenced or commences development and construction of  the housing project on or after the 1st day of October, 1998 and completes such  construction,--  (i) in a case where a housing project has been approved by the local authority  before the 1st day of April, 2004, on or before the 31st day of March, 2008; (ii) in a case where a housing project has been, or, is approved by the local  authority on or after the 1st day of April, 2004, within four years from the end of  the financial year in which the housing project is approved by the local authority. Explanation.--For the purposes of this clause,--  (i) in a case where the approval in respect of the housing project is obtained more  than once, such housing project shall be deemed to have been approved on the date on  which the building plan of such housing project is first approved by the local  authority; (ii) the date of completion of construction of the housing project shall be  taken to be the date on which the completion certificate in respect of such housing  project is issued by the local authority;

(b) the project is on the size of a plot of land which has a minimum area of one acre:  Provided that nothing in clause (a) or clause (b) shall apply to a housing project  carried out in accordance with a scheme framed by the Central Government or a State  Government for reconstruction or redevelopment of existing buildings in areas declared  to be slum areas under any law for the time being in force and such scheme is notified  by the Board in this behalf;

(c) the residential unit has a maximum built-up area of one thousand square feet  where such residential unit is situated within the city of Delhi or Mumbai or within  twenty-five kilometres from the municipal limits of these cities and one thousand and  five hundred square feet at any other place; and

(d) the built-up area of the shops and other commercial establishments included in  the housing project does not exceed five per cent. of the aggregate built-up area of  the housing project or two thousand square feet, whichever is less.

(e) in sub-section (11A), for the words "an undertaking deriving profit from", the  words "an undertaking deriving profit from the business of processing, preservation and  packaging of fruits or vegetables or from" shall be substituted.

(f) after sub-section (11A), the following sub-section shall be inserted, namely- "(11B) the amount of deduction in the case of an undertaking deriving profits from the  business of operating and maintaining a hospital in a rural area shall be hundred per cent.  of the profits and gains of such business for a period of five consecutive assessment years,  beginning with the initial assessment year, if--  (i) such hospital is constructed at any time during the period beginning on the 1st day  of October, 2004 and ending on the 31st day of March, 2008; (ii) the hospital has at least one hundred beds for patients; (iii) the construction of the hospital is in accordance with the regulations,  for the time being in force, of the local authority; and (iv) the assessee furnishes alongwith the return of income, the report of audit  in such form and containing such particulars as may be prescribed, and duly signed and  verified by an accountant, as defined in the Explanation below sub-section (2) of  section 288, certifying that the deduction has been correctly claimed. Explanation,--For the purposes of this sub-section, a hospital shall be deemed  to have been constructed on the date on which a completion certificate in respect of  such construction is issued by the concerned local authority,"

(g) in sub-section (14),--  (A) clauses (a) and (aa) shall be re-lettered as clauses (aa) and (ab) respectively,  and before clause (aa) as so re-lettered, the following clause shall be inserted, namely-  (a) "built-up area" means the inner measurements of the residential unit at the  floor level, including the projections and balconies, as increased by the thickness of  the walls but does not include the common areas shared with other residential  units; (B) in clause (c),--  (I) in sub-clause (iv), after the words "undertaking engaged", the words "in  the business of processing, preservation and packaging of fruits or vegetables or"  shall be inserted; (II) after sub-clause (vi), the following sub-clause shall be inserted, namely- "(vii) in the case of an undertaking engaged in operating and maintaining a hospital  in a rural area, means the assessment year relevant to the previous year in which the  undertaking begins to provide medical services;".

SECTION 19: Amendment of section 80U:

In  (S.80U of the Income Tax Act, 1961), for the Explanation, the following Explanation  shall be substituted with effect from the 1st day of April, 2005, namely- "Explanation.--For the purposes of this section,--  (a) "disability" shall have the meaning assigned to it in clause (i) of section 2  of the Persons With Disabilities (Equal Opportunities, Protection of Rights and Full  Participation) Act, 1995(1 of 1996), and includes "autism", "cerebral palsy" and  "multiple disabilities" referred to in clauses (a), (c) and (h) of section 2 of the  National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation  and Multiple Disabilities Act, 1999(44 of 1999);  (b) "medical authority" means the medical authority as referred to in clause (p) of (S.2 of the Person with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995) (1 of 1996), or such other medical authority as may, by notification, be specified by the Central Government for certifying "autism",  "cerebral palsy", "multiple disabilities", "person with disability" and "severe  disability" referred to in clauses (a), (c), (h), (j) and (o) of (S.2 of the National Trust for Welfare of persons with Autism, Cerebral Palsy, Mental Retardation and multiple Disabilities Act, 1999) (44 of 1999);   (c) "person with disability" means a person referred to in clause (t) of (S.2 of the Persons with Disabilities (Equal Opportunities Protection of Rights and Full Participation) Act, 1995) (1 of 1996), or clause (j) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999(44 of 1999);  (d) "person with severe disability" means--  (i) a person with eighty per cent. or more of one or more disabilities, as referred to in  sub-section (4) of (S.56 of the Persons With Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995) (1 of 1996);or (ii) a person with severe disability referred to in clause (o) of (S.2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999) 

 (44 of 1999).

SECTION 20: Amendment of Section 87:

In (S.87 of the Income Tax Act, 1961), with effect from the 1st day of April, 2005,-- (a) in sub-section (1), for the words, figures and letters "sections 88, 88A, 88B and 88C", the words, figures and letters "sections 88, 88A, 88B, 88C, 88D and 88E" shall be substituted;

(b) in sub-section (2), after the words, figures and letter "or section 88C", the words,  figures and letters "or section 88D or section 88E" shall be inserted.

SECTION 21: Amendment of section 88:

In (S.88 of the Income Tax Act, 1961), in sub-section (2), in clause (xv), in  sub-clause (c), after item (6), the following item shall be inserted with effect from the  1st day of April, 2005, namely- "(6A) the assessee's employer where such employer, is an authority or a board or a corporation  or any other body established or constituted under a Central or State Act, or"

SECTION 22: Insertion of new section 88D:

After (S. 88C of the Income Tax Act, 1961), the following section shall be inserted  with effect from the 1st day of April, 2005, namely- 88D. An assessee, being an individual resident in India,-- (a) whose total income does not exceed one hundred thousand rupees, shall be entitled to a deduction from the amount of income-tax (as computed before allowing the deductions under this Chapter) on his total income with which he is chargeable for any assessment year, of an amount equal to hundred per cent. of such income-tax;

(b) whose to total income exceeds one hundred thousand rupees and the income-tax payable on such total income (as computed before allowing the deductions under this Chapter) exceeds the amount by which such total income is in excess of one hundred thousand rupees, shall be entitled to a deduction from the amount of income-tax on his total income, of an amount equal to the amount by which the income-tax payable on such total income is in excess of the amount by which the total income exceeds one hundred thousand rupees."

SECTION 23: Insertion of new section 88E:

After (S.88D of the Income Tax Act, 1961), as so inserted, the following section  shall be inserted with effect from the 1st day of April, 2005, namely-  88E. Rebate in rebate in respect of securities transaction tax. (1) Where the total income of an assessee in a previous year includes any income, chargeable  under the head "Profits and gains of business or profession", arising from taxable securities  transactions, he shall be entitled to a deduction, from the amount of income-tax on such  income arising from such transactions, computed in the amnner provided in sub-section (2), of  an amount equal to the securities transaction tax paid by him in respect of the taxable  securities transactions entered into in the course of his business during that previous year;  Provided that no deduction under this sub-section shall be allowed unless the assessee  furnishes alongwith the return of income, evidence of payment of securities transaction tax in   the prescribed form:  Provided further that the amount of deduction under this sub-section shall not exceed  the amount of income-tax on such income computed in the manner provided in sub-section (2).

(2) For the purpose of sub-section (1), the amount of income-tax on the income arising from the taxable securities transactions, referred to in that sub-section, shall be equal to the amount calculated by applying the average rate of income-tax on such income.  Explanation.--For the purposes of this section, the expressions, "taxable securities transaction" and "securities transaction tax" shall have the same meanings respectively assigned to them under Chapter VII of the Finance (No. 2) Act, 2004.

SECTION 24: Amendment of section 90:

In (S.90 of the Income Tax Act, 1961), in the Explanation, the words and brackets",  where such foreign company has not made the prescribed arrangement for declaration and payment  within India, of the dividends (including dividends on preference shares) payable out of its  income in India" shall be omitted and shall be deemed to have been omitted with effect from  the 1st day of April, 1962.

SECTION 25: Amendment of section 94:

In (S.94 of the Income Tax Act, 1961), with effect from the 1st day of April, 2005,-- (a) in sub-section (7), for clause (b), the following clause shall be substituted, namely- "(b) such person sells or transfers--  (i) such securities within a period of three months after such date; or (ii) such unit within a period of nine months after such date;"

(b) after sub-section (7), the following sub-section shall be inserted, namely- "(8) Where--  (a) any person buys or acquires any units within a period of three months prior to the record date; (b) such person is allotted additional units without any payment on the basis of holding of such units on such date; (c) such person sells or transfers all or any of the units referred to in clause (a) within a period of nine months after such date, while continuing to hold all or any of the additional units referred to in clause (b), then, the loss, if any, arising to him on account of such purchase and sale of all or any of  such units shall be ignored for the purposes of computing his income chargeable to tax and  notwithstanding anything contained in any other provision of this Act, the amount of loss so  ignored shall be deemed to be the cost of purchase or acquisition of such additional units  referred to in clause (b) as are held by him on the date of such sale or transfer.

(c) in the Explanation, for clause (aa), the following clause shall be substituted, namely- (aa) "record date" means such date as may be fixed by--  (i) a company for the purposes of entitlement of the holder of the securities to receive dividend; or (ii) a Mutual Fund or the Administrator of the specified undertaking or the specified company as referred to in the Explanation to clause (35) of section 10, for the purposes of entitlement of the holder of the units to receive income, or additional unit without any consideration, as the case maybe;

SECTION 26: Insertion of new section 111A:

After (S.111 of the Income Tax Act, 1961), the following section shall be inserted, with effect from the 1st day of April, 2005, namely- 111A Tax on short tern capital gains in certain cases. (1) Where the total income of an assessee includes any income chargeable under the head "Capital gains", arising from the transfer of a short-term capital asset, being an equity share in a company or a unit of an equity oriented fund and--  (a) the transaction of sale of such equity share or unit is entered into on or after the date on which Chapter VII of the Finance (No. 2) Act, 2004 comes into force; and (b) such transaction is chargeable to securities transaction tax under that Chapter, the tax payable by the assessee on the total income shall be the aggregate of--  (i) the amount of income-tax calculated on such short-term capital gains at the rate of ten per cent; and (ii) the amount of income-tax payable on the balance amount of the total income as if such balance amount were the total income of the assessee:  Provided that in the case of an individual or a Hindu undivided family, being a resident, where the total income as reduced by such short-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such short-term capital gains shall be reduced by the amount by which the total income as so reduced fall short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such short-term capital gains shall be computed at the rate of ten per cent.

(2) Where the gross total income of an assessee includes any short term capital gains referred to in sub-section (1), the deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains.

(3) Where the total income of an assessee includes any short term capital gains referred to in sub-section (1), the rebate under section 88 shall be allowed from the income-tax on the total income as reduced by such capital gains.  Explanation.-- For the purposes of this section, the expression :equity oriented fund" shall have the meaning assigned to it in the Explanation to clause (38) of section 10.

SECTION 27: Amendment of section 155AD:

In (S.115AD of the Income Tax Act, 1961), in sub-section (1), in clause (ii), the following proviso shall be inserted with effect from the 1st day of April, 2005, namely- "Provided that the amount of income-tax calculated on the income by way of short-term capital gains referred to in section 111A shall be at the rate of ten per cent.;"

SECTION 28: Amendment of section 115JB:

In (S.115JB of the Income Tax Act, 1961), in the Explanation, with effect from the 1st day of April, 2005,-- (a) in clause (f), for the word and figures "section 10", the words, figures, brackets and letter "section 10 [other than the provisions contained in clause (23G) thereof]" shall be substituted;

(b) in clause (ii), for the words and figures "provisions of section 10", the words,  figures, brackets and letter "provisions of (S.10) [other than the provisions  contained in clause (23G) thereof]" shall be substituted.

SECTION 29: Amendment of section 115R:

In (S. 115R of the Income Tax Act, 1961), in sub-section (2),-- (a) for the words "at the rate of twelve and one-half per cent.", the following shall be  substituted with effect from the 9th day of July, 2004, namely- "at the rate of--  (i) twelve and one-half per cent. on income distributed to any person being an individual  or a Hindu undivided family; and (ii) twenty per cent. on income distributed to any other person:";

(b) in the proviso, the words, figures and letters "for a period of one year commencing from the 1st day of April, 2003" shall be omitted.

Section 30: Insertion of new Chapter XII-G:

After Chapter XII-F of the Income-tax Act, the following Chapter shall be inserted with effect from the 1st day of April, 2005, namely- 

SECTION 31: Amendment of Section 119:

In (S.119 of the Income Tax Act, 1961), in sub-section (2), in clause (a), after  the bracket and words "(whether by way of relaxation of any of the provisions of sections",  the figures and letters "115P, 115S," shall be inserted with effect from the 1st day of October, 2004.

SECTION 32: Amendment of Section 139:

In (S.137 of the Income Tax Act, 1961), in sub-section (9) in the Explanation, in  clause (c), in sub-clause (i), for the words "deducted at source and", the words, figures and  letters "deducted at source before the 1st day of April, 2005 and" shall be substituted with  effect from the 1st day of April, 2005.

SECTION 33: Amendment of Section 139A:

In (S.139A of the Income Tax Act, 1961),-- (a) in sub-section (5A), the first proviso shall be omitted with effect from the 1st day of April, 2005;

(b) in sub-sections (5C) and (5D), for the word "buyer", the words "buyer or licensee or  lessee" shall be substituted with effect from the 1st day of October, 2004.

SECTION 34: Insertion of new section 142A:

After (S.142 of the Income Tax Act, 1961), the following section shall be inserted and shall be deemed to have been inserted with effect from the 15th day of November, 1972,  namely- 

SECTION 35: Amendment of Section 153:

In (S.153 of the Income Tax Act, 1961), in Explanation 1, with effect from the 1st day of October, 2004,-- (a) in clause (v), for the words "that section,", the words "that section, or" shall be substituted;

(b) after clause (v) and before the words "shall be excluded", the following clauses shall be inserted, namely;-- "(vi) the period commencing from the date on which an application is made before the Authority for Advance Rulings under sub-section (1) of section 245Q and ending with the date on which the order rejecting the application is received by the Commissioner under sub-section (3) of section 245R, or (vii) the period commencing from the date on which an application is made before the Authority for Advance Rulings under sub-section (1) of section 245Q and ending with the date on which the advance ruling pronounced by it is received by the Commissioner under sub-section (7) of section 245R,"

SECTION 36: Amendment of Section 153B:

In (S.153B of the Income Tax Act, 1961), in sub-section (1), in the Explanation, with effect from the 1st day of October, 2004,-- (a) in clause (iv), for the words "that section,", the words "that section, or" shall be substituted;

(b) after clause (iv) and before the words "shall be excluded", the following clauses shall be inserted, namely- "(v) the period commencing from the date on which an application is made before the Authority for Advance Rulings under sub-section (1) of section 245Q and ending with the date on which the order rejecting the application is received by the Commissioner under sub-section (3) of section 245R, or (vi) the period commencing from the date on which an application is made before the Authority for Advance Rulings under sub-section (1) of section 245Q and ending with the date on which the advance ruling pronounced by it is received by the Commissioner under sub-section (7) of section 245R,".

SECTION 37: Amendment of Section 194C:

In (S.194C of the Income Tax Act, 1961, in sub-section (3), for clause (i), the following clause shall be substituted with effect from the 1st day of October, 2004, namely- "(i) the amount of any sum credited or paid or likely to be credited or paid to the account of, or to, the contractor or sub-contractor, if such sum does not exceed twenty thousand rupees:  Provided that where the aggregate of the amounts of such sums credited or paid or likely to be credited or paid during the financial year exceeds fifty thousand rupees, the person responsible for paying such sums referred to in sub-section (1) or, as the case may be, sub-section (2) shall be liable to deduct income-tax under this section; or".

SECTION 38: Insertion of new Section 194LA:

After (S.194L of the Income Tax Act, 1961), the following section shall be inserted with effect from the 1st day of October, 2004, namely- '194LA. Payment of compensation on acquisition of certain immovable property: Any person responsible for paying to a resident any sum, being in the nature of compensation or the enhanced compensation or the consideration or the enhanced consideration on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land), shall, at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent. of such sum as income-tax thereon: Provided that no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount of such payments to a resident during the financial year does not exceed one hundred thousand rupees.

Explanation.--For the purposes of this section,--  (i) "agricultural land" means agricultural land in India including land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2; (ii) "immovable property" means any land (other than agricultural land) or any building or part of a building.

SECTION 39: Amendment of Section 197:

In (S.197 of the Income Tax Act, 1961), in sub-section (1), for the figures and letters "194C, 194D, 194G, 194H, 194-I, 194J, 194K", the figures and letters "194C, 194D, 194G, 194H, 194-I,  194J, 194K, 194LA" shall be substituted with effect from the 1st day of October, 2004.

SECTION 40: Amendment of Section 198:

In (S.198 of the Income Tax Act, 1961), for the portion beginning with the words  and figures "the provisions of sections 192" and ending with the word, figures and letter "section 196D", the words "the foregoing provisions of this Chapter" shall be substituted with effect from the 1st day of October, 2004.

SECTION 41: Amendment of Section 199:

In (S.199 of the Income Tax Act, 1961),-- (a) in sub-section (1), for the portion beginning with the words and figures "the provisions of sections 192" and ending with the word, figures and letter "section 196D", the words "the foregoing provisions of this Chapter" shall be substituted with effect from the 1st day of October, 2004;

(b) after sub-section (2), the following sub-section shall be inserted at the end with effect from the 1st day of April, 2005, namely-  "(3) Where any-deduction is made in accordance with the foregoing provisions of this Chapter  on or after the 1st day of April, 2005 and paid to the Central Government, the amount of tax deducted and specified in the statement referred to in section 203AA shall be treated as tax  paid on behalf of the persons referred to in sub-section (1) or, as the case may be,  sub-section (2) and credit shall be given to him for the amount so deducted in the assessment made under this Act for the assessment year for which such income is assessable without the  production of certificate.".

SECTION 42: Amendment of Section 200:

In S.200 of the Income Tax Act, 1961),-- (a) in sub-section (1), for the portion beginning with the words and figures "the provisions of sections 192" and ending with the word, figures and letter "section 196D", the words "the foregoing provisions of this Chapter" shall be substituted with effect from the 1st day of October, 2004;

(b) after sub-section (2), the following sub-section shall be inserted with effect from the 1st day of April, 2005, namely- "(3) Any person deducting any sum on or after the 1st day of April, 2005 in accordance with the foregoing provisions of this Chapter or, as the case may be, any person being an employer referred to in sub-section (1A) of section 192 shall, after paying the tax deducted to the credit of the Central Government within the prescribed time, prepare quarterly statements for the period ending on the 30th June, the 30th September, the 31st December and the 31st March in each financial year and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed."

SECTION 43: Amendment of Section 202:

In (S.202 of the Income Tax Act, 1961), for the portion beginning with the word and figures  "sections 192" and ending with the word, figures and letter "section 196D", the words "the foregoing provisions of this Chapter" shall be substituted with effect from the 1st day of October, 2004.

SECTION 44: Amendment of Section 203:

In (S.203 of the Income Tax Act, 1961),-- (a) in sub-section (1), for the portion beginning with the words and figures "the provisions of sections 192" and ending with the word, figures and letter "section 196D", the words "the foregoing provisions of this Chapter" shall be substituted with effect from the 1st day of October, 2004;

(b) after sub-section (2), the following sub-section shall be inserted at the end with effect from the 1st day of April, 2005, namely- "(3) Where the tax has been deducted or paid in accordance with the foregoing provisions of  this Chapter on or after the 1st day of April, 2005, there shall be no requirement to furnish  a certificate referred to in sub-section (1) or, as the case may be, sub-section (2)."

SECTION 45: Substitution of new Section for Section 203A:

For (S.203A of the Income Tax Act, 1961), the following section shall be substituted with effect from the 1st day of October, 2004, namely- '203A. Tax deduction and collection account number: (1) Every person, deducting tax or collecting tax in accordance with the provisions of this Chapter, who has not been allotted a tax deduction account number or, as the case may be, a tax collection account number, shall, within such time as may be prescribed, apply to the Assessing Officer for the allotment of a "tax deduction and collection account number".

(2) Where a "tax deduction account number" or, as the case may be, a "tax collection account number" or a "tax deduction and collection account number" has been allotted to a person, such person shall quote such number--  (a) in all challans for the payment of any sum in accordance with the provisions of section 200 or sub-section (3) of section 206C; (b) in all certificates furnished under section 203 or sub-section (5) of section 206C; (c) in all the returns, delivered in accordance with the provisions of section 206 or sub-section (5A) or sub-section (5B) of section 206C to any income-tax authority; and (d) in all other documents pertaining to such transactions as may be prescribed in the interests of revenue.

SECTION 46: Insertion of new Section 203AA:

After (S.203A of the Income Tax Act, 1961), the following section shall be inserted with effect from the 1st day of April, 2005, namely- "203AA. Furnishing of statement of tax deducted: The prescribed income-tax authority or the person authorised by such authority referred to in sub-section (3) of section 200, shall, within the prescribed time after the end of each financial year beginning on or after the 1st day of April, 2005 prepare and deliver to every person from whose income the tax has been deducted or in respect of whose income the tax has been paid a statement in the prescribed form specifying the amount of tax deducted or paid and such other particulars as may be prescribed."

SECTION 47: Amendment of Section 204:

In (S.204 of the Income Tax Act, 1961), for the portion beginning with the word and figures "sections 192" and ending with the words and figures "sections 195 to 203", the words "the foregoing provisions of this Chapter" shall be substituted with effect from the 1st day of October, 2004.

SECTION 48: Amendment of Section 205:

In (S.205 of the Income Tax Act, 1961), for the portion beginning with the word and figures "sections 192" and ending with the word, figures and letter "section 196D", the words "the foregoing provisions of this Chapter" shall be substituted with effect from the 1st day of October, 2004.

SECTION 49: Amendment of Section 206:

In (S.206 of the Income Tax Act, 1961) ;-- (a) in sub-section (1), with effect from the 1st day of October, 2004,--  (i) for the words "prescribed income-tax authority", the words "prescribed income-tax authority or such other authority or agency as may be prescribed" shall be substituted; (ii) the following proviso shall be inserted, namely-  "Provided that the Board may, if it considers necessary or expedient so to do, frame a scheme for the purposes of filing such returns with such other authority or agency referred to in this sub-section.";

(b) in sub-section (2), with effect from the 1st day of April, 2005,--  (i) for the words "other than the principal officer in the case of every company", the words "other than the prescribed person in the case of every office of the Government and the principal officer in the case of every company" shall be substituted; (ii) for the proviso, the following proviso shall be substituted, namely-  "Provided that the prescribed person in the case of every office of Government and the principal officer in the case of every company responsible for deducting tax under the foregoing provisions of this Chapter shall, deliver or cause to be delivered, within the prescribed time after the end of each financial year, such returns on computer media under the said scheme."

SECTION 50: Amendment of Section 206C:

In (S.206C of the Income Tax Act, 1961),-- (a) after sub-section (1B), the following sub-section shall be inserted with effect from the 1st day of October, 2004, namely- '(1C) Every person, who grants a lease or a licence or enters into a contract or otherwise  transfers any right or interest either in whole or in part in any parking lot or toll plaza  or mine or quarry, to another person, other than a public sector company (hereafter in this  section referred to as "licensee or lessee") for the use of such parking lot or toll plaza or  mine or quarry for the purpose of business shall, at the time of debiting of the amount  payable by the licensee or lessee to the account of the licensee or lessee or at the time  of receipt of such amount from the licensee or lessee in cash or by the issue of a cheque  or draft or by any other mode, whichever is earlier, collect from the licensee or lessee  of any such licence, contract or lease of the nature specified in column (2) of the Table  below, a sum equal to the percentage, specified in the corresponding entry in column (3)  of the said Table, of such amount as income-tax: 

Section 50 TABLE

(b) in sub-section (2), after the word, brackets and figure "subjection (1)", the words, brackets, figure and letter "or sub-section (1C)" shall be inserted with effect from the 1st day of October, 2004;

(c) in sub-section (3),--  (i) after the word, brackets and figure "sub-section (1)", the words, brackets, figure and letter "or sub-section (1C)" shall be inserted with effect from the 1st day of October, 2004; (ii) the following proviso shall be inserted with effect from the 1st day of April, 2005, namely-  "Provided that the person collecting tax on or after the 1st day of April, 2005 in accordance with the foregoing provisions of this section shall, after paying the tax collected to the credit of the Central Government within the prescribed time, prepare quarterly statements for the period ending on the 30th June, the 30th September, the 31st December and the 31st March in each financial year and deliver or cause to be delivered to the prescribed income-tax authority, or the person authorised by such authority, such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed";

(d) in sub-section (4), the following proviso shall be inserted with effect from the 1st day of April, 2005, namely-  "Provided that where any amount is collected in accordance with the provisions of this section on or after the 1st day of April, 2005 and paid under sub-section (3) to the credit of the Central Government, the amount of tax collected and specified in the statement referred to in the second proviso to sub-section (5) shall be deemed as payment of tax on behalf of the person from whom the amount has been collected and credit shall be given to him for the amount so collected in the assessment made under this Act for the assessment year for which such income is assessable without the production of certificate.";

(e) in sub-section (5),--  (i) for the word "buyer", the words "buyer or licensee or lessee" shall be substituted with effect from the 1st day of October, 2004; (ii) the following provisos shall be inserted with effect from the 1st day of April, 2005, namely-  "Provided that no certificate may be furnished in a case where tax has been collected in accordance with the foregoing provisions of this section on or after the 1st day of April, 2005: Provided further that the prescribed income-tax authority or the person authorised by such authority referred to in sub-section (3) shall, within the prescribed time after the end of each financial year, prepare and deliver to the buyer referred to in sub-section (1) or, as the case may be, to the licensee or lessee referred to in sub-section (1C), a statement in the prescribed form specifying the amount of tax collected and such other particulars as may be prescribed.";

(f) in sub-section (5A), with effect from the 1st day of October, 2004,--  (i) for the words, figures and letters "prepare half-yearly returns for the period ending on the 30th September and 31st March in each financial year", the words "prepare within the prescribed time after the end of each financial year" shall be substituted; (ii) for the words "prescribed income-tax authority", the words "prescribed income-tax authority or such other authority or agency as may be prescribed" shall be substituted; (iii) the following proviso shall be inserted, namely-  "Provided that the Board may, if it considers necessary or expedient so to do, frame a scheme for the purposes of filing such returns with such other authority or agency referred to in this sub-section.";

(g) for sub-sections (5B) and (5C), the following sub-sections shall be substituted with effect from the 1st day of April, 2005, namely- "(5B) Without prejudice to the provisions of sub-section (5A), any person collecting tax, other than in a case where the seller is a company, the Central Government or a State Government, may at his option, deliver or cause to be delivered such return to the prescribed income-tax authority in accordance with such scheme as may be specified by the Board in this behalf, by notification in the Official Gazette, and subject to such conditions as may be specified therein, on or before the prescribed time after the end of each financial year, on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media (hereinafter referred to as the computer media) and in the manner as may be specified in that scheme:  Provided that where the person collecting tax is a company or the Central Government or a State Government, such person shall, in accordance with the provisions of this section, deliver or cause to be delivered, within the prescribed time after the end of each financial year, such returns on computer media under the said scheme. (5C) Notwithstanding anything contained in any other law for the time being in force, a return filed on computer media shall be deemed to be a return for the purposes of sub-section (5A) and the rules made thereunder and shall be admissible in any proceedings made thereunder, without further proof of production of the original, as evidence of any contents of the original or of any facts stated therein. (5D) Where the Assessing Officer considers that the return delivered or caused to be delivered under sub-section (5B) is defective, he may intimate the defect to the person collecting tax and give him an opportunity of rectifying the defect within a period of fifteen days from the date of such intimation or within , such further period which, on an application made in this behalf, the Assessing Officer may, in his discretion, allow; and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, such return shall be treated as an invalid return and the provisions of this Act shall apply as if such person had failed to deliver the return.";

(h) in sub-section (9), with effect from the 1st day of October, 2004,--  (i) for the word "buyer", the words "buyer or licensee or lessee" shall be substituted; (ii) after the word, brackets and figure "sub-section (1)", at both the places where they occur, the words, brackets, figure and letter "or sub-section (1C)" shall be inserted.

SECTION 51: Amendment of Section 206CA:

In (S.206CA of the Income Tax Act, 1961), after sub-section (2), the following proviso shall be inserted with effect from the 1st day of October, 2004, namely- "Provided that the provisions of this section shall not apply on or after the 1st day of October, 2004.".

SECTION 52: Amendment of Section 245RR:

In (S.245RR of the Income Tax Act, 1961), for the words, brackets, figures and  letter "under sub-section (1) of section 245R", the words, brackets, figures and letter "under sub-section (1) of section 245Q" shall be substituted and shall be deemed to have been substituted with effect from the 1st day of October, 1998.

SECTION 53: Amendment of Section 246A:

In (S.246A of the Income Tax Act, 1961), in sub-section (1), in clause (a), in the opening portion, for the words "an order against the assessee", the words, brackets, figures and letters "an order passed by a Joint Commissioner under clause (ii) of sub-section (3) of section 115VP or an order against the assessee" shall be substituted with effect from the 1st day of October, 2004.

SECTION 54: Amendment of Section 253:

In (S.253 of the Income Tax Act, 1961), in sub-section (1), after clause (b), the following  clause shall be inserted with effect from the 1st day of October, 2004, namely- "(ba) an order passed by an Assessing Officer under sub-section (1) of section 115VZC; or".

SECTION 55: Insertion of new Section 271FA:

After (S.271F of the Income Tax Act, 1961), the following section shall be inserted with effect from the 1st day of April, 2005, namely- "271FA. Penalty for failure to furnish annual information return: If a person who is required to furnish an annual information return, as required under sub-section (1) of section 285BA, fails to furnish such return within the time prescribed under that sub-section, the income-tax authority prescribed under the said sub-section may direct that such person shall pay, by way of penalty, a sum of one hundred rupees for even, day during which the failure continues.".

SECTION 56: Amendment of Section 272A:

In (S.272A of the Income Tax Act, 1961), in sub-section (2), after clause (j), the following clause shall be inserted with effect from the 1st day of April. 2005, namely- "(k) to deliver or cause to be delivered a copy of the statement within the time specified in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C,".

SECTION 57: Amendment of Section 272B:

In (S.272B of the Income Tax Act, 1961), in sub-section (2), after the word, brackets, figure and letter "sub-section (5A)", the words, brackets, figure and letter "or sub-section (5C)" shall be inserted with effect from the 1st day of April, 2005.

SECTION 58: Amendment of Section 272BBB:

In (S.272BBB of the Income Tax Act, 1961), in sub-section (1), for the words "fails to comply", the words, figures and letters "fails to comply before the 1st day of October, 2004" shall be substituted with effect from the 1st day of October, 2004.

SECTION 59: Amendment of Section 273B:

In (S.273B of the Income Tax Act, 1961), for the word, figures and letter "section 271F," the words, figures and letters "section 271F, section 271FA," shall be substituted with effect from the 1st day of April, 2005.

SECTION 60: Insertion of new Section 277A:

After (S.277 of the Income Tax Act, 1961), the following section shall be inserted with effect from the 1st day of October, 2004, namely-  "277A. Falsification of books of account or document, etc.: If any person (hereafter in this section referred to as the first person) wilfully and with intent to enable any other person (hereafter in this section referred to as the second person) to evade any tax or interest or penalty chargeable and imposable under this Act, makes or causes to be made any entry or statement which is false and which the first person either knows to be false or does not believe to be true, in any books of account or other document relevant to or useful in any proceedings against the first person or the second person, under this Act, the first person shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine. Explanation.--For the purposes of establishing the charge under this section, it shall not be necessary to prove that the second person has actually evaded any tax, penalty or interest chargeable or imposable under this Act.".

SECTION 61: Amendment of Section 278B:

In (S.278B of the Income Tax Act, 1961), after sub-section (2) and before the Explanation, the following sub-section shall be inserted with effect from the 1st day of October, 2004, namely- "(3) Where an offence under this Act has been committed by a person, being a company, and the punishment for such offence is imprisonment and fine, then, without prejudice to the provisions contained in sub-section (1) or sub-section (2), such company shall be punished with fine and every person, referred to in sub-section (1), or the director, manager, secretary or other officer of the company referred to in sub-section (2), shall be liable to be proceeded against and punished in accordance with the provisions of this Act."

SECTION 62: Amendment of Section 279:

In (S.279 of the Income Tax Act, 1961), in sub-section (1), for the words and figures "section 277 or section 278", the words, figures and letter "section 277, section 277A or section 278" shall be substituted with effect from the 1st day of October, 2004.

SECTION 63: substitution of new Section for Section 285BA:

For (S.285BA of the Income Tax Act, 1961), the following section shall be substituted with effect from the 1st day 51 April, 2005, namely- '285BA. Obligation to furnish annual information return: (1) Any person, being--  (a) an assessee; or (b) the prescribed person in the case of an office of Government; or (c) a local authority or other public body or association; or (d) the Registrar or Sub-Registrar appointed under section 6 of the Registration Act, 1908(16 of 1908); or (e) the registering authority empowered to register motor vehicles under Chapter IV of the Motor Vehicles Act, 1988(59 of 1988); or (f) the Post Master General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898(6 of 1898);or (g) the Collector referred to in clause (c) of section 3 of the Land Acquisition Act, 1894(1 of 1894); or (h) the recognised stock exchange referred to in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956(42 of 1956); or (i) an officer of the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934(2 of 1934);or (j) a depository referred to in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996(22 of 1996), who is responsible for registering, or maintaining books of account or other document containing a record of any specified financial transaction, under any law for the time being in force, shall furnish an annual information return, in respect of such specified financial transaction which is registered or recorded by him during any financial year beginning on or after the 1st day of April, 2004 and information relating to which is relevant and required for the purposes of this Act, to the prescribed income-tax authority or such other authority or agency as may be prescribed.

(2) The annual information return referred to in sub-section (1) shall be furnished within the prescribed time after the end of such financial year, in such form and manner (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any computer readable media) as may be prescribed.

(3) For the purposes of sub-section (1), "specified financial transaction" means any--  (a) transaction of purchase, sale or exchange of goods or property or right or interest in a property; or (b) transaction for rendering any service; or (c) transaction under a works contract; or (d) transaction by way of an investment made or an expenditure incurred; or (e) transaction for taking or accepting any loan or deposit, which may be prescribed:  Provided that the Board may prescribe different values for different transactions in respect of different persons having regard to the nature of such transaction: Provided further that the value or, as the case may be, the aggregate value of such transactions during a financial year so prescribed shall not be less than fifty thousand rupees.

(4) Where the prescribed income-tax authority considers that the annual information return furnished under sub-section (1) is defective, he may intimate the defect to the person who has furnished such return and give him an opportunity of rectifying the defect within a period of one month from the date of such intimation or within such further period which, on an application made in this behalf, the prescribed income-tax authority may, in his discretion, allow; and if the defect is not rectified within the said period of one month or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, such return shall be treated as an invalid return and the provisions of this Act shall apply as if such person had failed to furnish the annual information return.

(5) Where a person who is required to furnish an annual information return under sub-section (1) has hot furnished the same within the prescribed time, the prescribed income-tax authority may serve upon such person a notice requiring him to furnish such return within a period not exceeding sixty days from the date of service of such notice and he shall furnish the annual information return within the time specified in the notice."

SECTION 64: Amendment of Thirteenth Schedule:

In the Thirteenth Schedule to the Income-tax Act, with effect from the 1st day of April, 2005,-- (a) for the brackets, words, figures and letters "[See section 80-IC(2)]", the brackets, words, figures and letters "[See sections 80-IB(4) and 80-IC(2)]" shall be substituted;

(b) after Part B, the following Part shall be inserted, namely-

SECTION 65: Amendment of Section 35HA of Act 27 of 1957 Wealth-tax:

In (S.35HA of the Wealth Tax Act, 1957), after sub-section (2), the following subsection shall be inserted with effect from the 1st day of October, 2004, namely- "(3) Where an offence under this Act has been committed by a person, being a company and such offence is punishable with imprisonment and fine, then, without prejudice to the provisions contained in sub-section (1) or sub-section (2), such company shall be punished with fine and every person, referred to in sub-section (1) or the director, manager, secretary or other officer of the company referred to in sub-section (2), shall be liable to be proceeded against and punished in accordance with the provisions of this Act."

CHAPTER 4: INDIRECT TAXES:

SECTION 66: Amendment of Section 41:

In (S.41 of the Customs Act, 1962) (52 of 1962) (hereinafter referred to as the Customs Act), in sub-section (1), the proviso shall be omitted.

Section 67: Insertion of new Section 128A:

After (S.122 of the Customs Act, 1962), the following section shall be inserted, namely- "122A. Adjudication Procedure: (1) The adjudicating authority shall, in any proceeding under this Chapter or any other provision of this Act, give an opportunity of being heard to a party in a proceeding, if the party so desires.

(2) The adjudicating authority may, if sufficient cause is shown at any stage of proceeding referred to in sub-section (1), grant time, from time to time, to the parties or any of them and adjourn the hearing for reasons to be recorded in writing:  Provided that no such adjournment shall be granted more than three times to a party during the proceeding."

SECTION 68: Amendment of Section 128:

In (S.128 of the Customs Act, 1962), after sub-section (1), the following sub-section shall be inserted, namely- "(1A) The Commissioner (Appeals) may, if sufficient cause is shown at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal."

SECTION 69: Amendment of Section 129A:

In  (S.129A of the Customs Act, 1962), with effect from such date as the Central Government may, by notification in the Official Gazette, appoint, for sub-section (6), the following sub-sections shall be substituted, namely- "(6) An appeal to the Appellate Tribunal shall be in such form and shall be verified in such manner as may be specified by rules made in this behalf and shall, irrespective of the date of demand of duty and interest or of levy of penalty in relation to which the appeal is made, be accompanied by a fee of,--  (a) where the amount of duty and interest demanded and penalty levied by any officer of customs in the case to which the appeal relates is five lakh rupees or less, one thousand rupees; (b) where the amount of duty and interest demanded and penalty levied by any officer of customs in the case to which the appeal relates is more than five lakh rupees but not exceeding fifty lakh rupees, five thousand rupees; (c) where the amount of duty and interest demanded and penalty levied by any officer of customs in the case to which the appeal relates is more than fifty lakh rupees, ten thousand rupees:  Provided that no such fee shall be payable in the case of an appeal referred to in subsection (2) or a memorandum of cross-objections referred to in sub-section (4).

(7) Every application made before the Appellate Tribunal --  (a) in an appeal for grant of stay or for rectification of mistake or for any other purpose; or (b) for restoration of an appeal or an application, shall be accompanied by a fee of five hundred rupees;  Provided that no such fee shall be payable in the case of an application filed by or on  behalf of the Commissioner of Customs under this sub-section".

SECTION 70: Amendment of Section 129B:

In section 129B of the Customs Act, after sub-section (1), the following sub-section shall be inserted, namely- "(1A) The Appellate Tribunal may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during  hearing of the appeal.

SECTION 71: Amendment of Section 137:

In (S.137 of the Customs Act, 1962), after sub-section (2), the following  sub-section shall be inserted, namely- "(3) Any offence under this Chapter may, either before or after the institution of prosecution,  be compounded by the Chief Commissioner of Customs on payment, by the person accused of the  offence to the Central Government, of such compounding amount as may be specified by rules."

SECTION 72: Amendment of Section 142:

In (S.142 of the Customs Act, 1962), in sub-section (1), the following proviso shall be inserted at the end, namely- "Provided that where the person (hereinafter referred to as predecessor), by whom any sum  payable under this Act including the amount required to be paid to the credit of the Central  Government under section 28B is not paid, transfers or otherwise disposes of his business or  trade in whole or in part, or effects any change in the ownership thereof, in consequence of  which he is succeeded in such business or trade by any other person, all goods, materials,  preparations, plants, machineries, vessels, utensils, implements and articles in the custody  or possession of the person so succeeding may also be attached and sold by the proper officer,  after obtaining written approval from the Commissioner of Customs, for the purposes of  recovering the amount so payable by such predecessor at the time of such transfer or otherwise disposal or change."

SECTION 73: Amendment of Section 156:

In (S.156 of the Customs Act, 1962), in sub-section (2), after clause (g), the  following clause shall be inserted, namely- "(h) the amount to be paid for compounding under sub-section (3) of section 137.

SECTION 74: Validation of certain actions taken by Central Excise Officers:

(1) The notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 83/2004-Customs (N.T.), dated the 30th June, 2004, published in the Official Gazette vide No.G.S.R. 393(E), dated the 30th June, 2004 (hereinafter referred to as the said notification) shall, for the purposes of hundred per cent. export-oriented undertakings, be deemed to be, and to have always been, for all purposes, in force retrospectively on and from the 11th day of May, 1982 and accordingly, notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority--  (a) any action taken or anything done by a Central Excise Officer appointed by the said notification as an officer of customs to discharge the duties of an officer of customs in respect of hundred per cent. export-oriented undertakings, on and from the 11th day of May, 1982 to 30th day of June, 2004, shall, for all purposes, be deemed to be, and to have always been, validly taken or done as if the appointment made by the said notification was in force at all material times; (b) no suit or other proceedings shall be instituted, maintained or continued in any court, tribunal or other authority against the Central Government or the Central Excise Officer appointed as an officer of customs by the said notification for any action taken or anything done in good faith during the discharge of his duties as an officer of customs in respect of hundred per cent. export-oriented undertakings during the period on and from the 11th day of May, 1982 to 30th day of June, 2004, as if the appointment made by the said notification was in force at all material times; (c) recovery made of any amount of duty or interest or penalty or fine or other charges by or under the order or direction of the Central Excise Officer appointed as an officer of customs by the said notification during the period on and from the 11th day of May, 1982 to 30th day of June, 2004 shall be deemed to be valid, and to have always been, for alt purposes, as validly and effectively, made as if the appointment made by the said notification was in force at all material times.

(2) For the purposes of sub-section (1), the Central Board of Excise and Customs shall have and shall be deemed to have always had the power to bring into force the said notification with retrospective effect as if the Central Board of Excise and Customs had the power to bring into force the said notification under section 4 of the Customs Act, 1962(52 of 1962), retrospectively, at all material times.

(3) For the purposes of this section, the designations of the officers of customs and the Central Excise Officers as existed before the commencement of the Finance Act, 1995(22 of 1995), shall be deemed to be the corresponding substituted designations as specified in the Tables respectively below section 50 and section 70 of the said Finance Act.  Explanation 1.--For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if the said notification had not come retrospectively into force. Explanation 2.--For the purposes of this section, "hundred per cent. export-oriented undertaking" shall have the meaning assigned to it in clause (ii) of Explanation 2 to the proviso to clause (b) of section 3 of the Central Excise Act, 1944(1 of 1944).

SECTION 75: Amendment of Section 3:

In (S.3 of the Customs Tariff Act, 1975) (51 of 1975) (hereinafter referred to as the Customs Tariff Act), in sub-section (2), in clause (ii), the following amendments shall be deemed to have been made on and from the 9th day of July, 2004, namely- (a) in sub-clause (d), the word "and", occuring at the end, shall be omitted;

(b) after sub-clause (d), the following sub-clause shall be inserted, namely- "(dd) the Education Cess on imported goods referred to in section 94 of the Finance (No. 2) Act, 2004; and".

SECTION 76: Amendment of Section 9A:

In (S. 9A of the Customs Tariff Act, 1975), in sub-section (5), for the words  "relating to non-levy, short-levy, refunds and appeals", the words "relating to, the date for  determination of rate of duty, non-levy, short-levy, refunds, interest, appeals, offences and penalties" shall be substituted.

SECTION 77: Amendment of Section 9C:

In (S.9C of the Customs Tariff Act, 1975), with effect from such date as the Central Government may, by notification in the Official Gazette, appoint, after sub-section (1), the following sub-sections shall be inserted, namely- "(1A) An appeal under sub-section (1) shall be accompanied by a fee of fifteen thousand rupees.

(1B) Every application made before the Appellate Tribunal,--  (a) in an appeal under sub-section (1), for grant of stay or for rectification of mistake or for any other purpose; or (b) for restoration of an appeal or an application, shall be accompanied by a fee of five hundred rupees."

SECTION 78: Amendment of First Schedule:

In the First Schedule to the Customs Tariff Act,-- (i) in Chapter 11, in tariff items 1108 1200, 1108 1400, 1108 19 10 and 1108 19 90, for the entry in column (4) occurring against each of them, the entry "50%" shall be substituted;

(ii) in Chapter 19, in tariff item 1903 00 00, for the entry in column (4), the entry "50%" shall be substituted;

(iii) in Chapter 29, in tariff item 2922 42 20, for the entry in column (2), the entry "--Monosodium glutamate" shall be substituted;

(iv) in Chapter 35, in tariff items 3505 10 10 and 3505 10 90, for the entry in column (4) occurring against each of them, the entry "50%" shall be substituted.

SECTION 79: Amendment of Section 9A:

(S.9A of the Central Excise Act, 1944) (1 of 1944) (hereinafter referred to as the Central Excise Act) shall be re-numbered as sub-section (1) thereof and after sub-section (1) as so renumbered, the following sub-section shall be inserted, namely- "(2) Any offence under this Chapter may, either before or after the institution of prosecution,  be compounded by the Chief Commissioner of Central Excise on payment, by the person accused of  the offence to the Central Government, of such compounding amount as may be prescribed."

SECTION 80: Amendment of Section 11:

In (S.9A of the Central Excise Act, 1944), the following proviso shall be inserted at the end, namely "Provided that where the person (hereinafter referred to as predecessor) from whom the duty or any other sums of any kind, as specified in this section, is recoverable or due, transfers or otherwise disposes of his business or trade in whole or in part, or effects any change in the ownership thereof, in consequence of which he is succeeded in such business or trade by any other person, all excisable goods, materials, preparations, plants, machineries, vessels, utensils, implements and articles in the custody or possession of the person so succeeding may also be attached and sold by such officer empowered by the Central Board of Excise and Customs, after obtaining written approval from the Commissioner of Central Excise, for the purposes of recovering such duty or other sums recoverable or due from such predecessor at the time of such transfer or otherwise disposal or change."

SECTION 81: Insertion of new Section 33A:

After (S.11 of the Central Excise Act, 1944), the following section shall be  inserted, namely- "33A. Adjudication procedure: (1) The Adjudicating authority shall, in any proceeding under this Chapter or any other  provision of this Act, give an opportunity of being heard to a party in a proceeding, if the  party so desires.

(2) The Adjudicating authority may, if sufficient cause is shown, at any stage of  proceeding referred to in sub-section (1), grant time, from time to time, to the parties or  any of them and adjourn the hearing for reasons to be recorded in writing:  Provided that no such adjournment shall be granted more than three times to a party during  the proceeding."

SECTION 82: Amendment of Section 35:

In (S.35A of the Central Excise Act, 1944), after sub-section (1), the following sub-section shall be inserted, namely- "(1A) The Commissioner (Appeals) may, if sufficient cause is shown at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal."

SECTION 83: Amendment of Section 35B:

In (S.35B of the Central Excise Act, 1944), with effect from such date as the Central Government may, by notification in the Official Gazette, appoint, for sub-section (6), the following sub-sections shall be substituted, namely- "(6) An appeal to the Appellate Tribunal shall be in the prescribed form and shall be verified in the prescribed manner and shall, irrespective of the date of demand of duty and interest or of levy of penalty in relation to which the appeal is made, be accompanied by a fee of,-- (a) where the amount of duty and interest demanded and penalty levied by any Central Excise Officer in the case to which the appeal relates is five lakh rupees or less, one thousand rupees;

(b) where the amount of duty and interest demanded and penalty levied by any Central Excise Officer in the case to which the appeal relates is more than five lakh rupees but not exceeding fifty lakh rupees, five thousand rupees;

(c) where the amount of duty and interest demanded and penalty levied by any Central Excise Officer in the case to which the appeal relates is more than fifty lakh rupees, ten thousand rupees:

Provided that no such fee shall be payable in the case of an appeal referred to in subsection (2) or a memorandum of cross-objections referred to in sub-section (4). (7) Every application made before the Appellate Tribunal,--

(a) in an appeal for grant of stay or for rectification of mistake or for any other purpose; or

(b) for restoration of an appeal or an application, shall be accompanied by a fee of five hundred rupees:  Provided that no such fee shall be payable in the case of an application filed by or on behalf of the Commissioner of Central Excise under this sub-section."

SECTION 84: Amendment of Section 35C:

In (S.35C of the Central Excise Act, 1944), after sub-section (1), the following sub-section shall be inserted, namely- "(1A) The Appellate Tribunal may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal."

SECTION 85: Amendment of Section 37:

In (S.37 of the Central Excise Act, 1944), in sub-section (2),-- (a) after clause (ic), the following clause shall be inserted, namely- "(id) provide for the amount to be paid for compounding under sub-section (2) of section 9A;";

(b) after clause (xvia), the following clause shall be inserted, namely- "(xviaa) provide for credit of service tax leviable under Chapter V of the Finance Act, 1994(32 of 1994), paid or payable on taxable services used in, or in relation to, the manufacture of excisable goods;".

SECTION 86: Amendment of third Schedule:

In the Third Schedule to the Central Excise Act, against serial No. 91, in column (3), in the  entry, the words "other than monochrome," shall be omitted.

SECTION 87: Validation of certain actions taken by officers of customs:

(1) The notification of the Government of India in the Ministry of Finance (Department of  Revenue) No. 38/2001-Central Excise (N.T.), dated the 26th June, 2001, published in the  Official Gazette vide No. G.S.R. 467(E), dated the 26th June, 2001, (hereinafter referred to  as the principal notification), as amended by the notification of the Government of India in  the erstwhile Ministry of Finance and Company Affairs (Department of Revenue) No.  32/2002-Central Excise (N.T.), dated the 17th September, 2002, published in the Official Gazette vide No. G.S.R. 655(E), dated the 17th September, 2002 Hereinafter referred to as the first amendment and the notification of the Government of India in the erstwhile Ministry of Finance and Company Affairs (Department of Revenue) No. 1/2003-Central Excise (N.T.), dated the 13th January, 2003, published in the Official Gazette vide No. GS.R. 27(E), dated the 13th January, 2003 (hereinafter referred to as the second amendment) shall, for the purposes of hundred per cent. export-oriented undertakings, be deemed to be, and to have always been, for all purposes, in force retrospectively on and from the 11th day of May, 1982 and accordingly, notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority--  (a) any action taken or anything done by an officer of customs invested with the powers of a Central Excise Officer to discharge the duties of the Central Excise Officer in respect of hundred percent, export-oriented undertakings, on and from the 11th day of May, 1982 to 13th day of January, 2003, by the first amendment and the second amendment to the principal notification, shall, for all purposes, be deemed to be, and to have always been, validly taken or done as if the investment of powers made by the first amendment and the second amendment to the principal notification were in force at all material times; (b) no suit or other proceedings shall be instituted, maintained or continued in any court, tribunal or other authority against the Central Government or an officer of customs invested with powers of the Central Excise Officer, by the first amendment and the second amendment to the principal notification, for any action taken or anything done in good faith during the discharge of his duties as the Central Excise Officer in respect of hundred per cent. export-oriented undertakings during the period on and from the 11th day of May, 1982 to 13th day of January, 2003, as if the investment of powers made by the first amendment and the second amendment to the principal notification were in force at all material times; (c) recovery made of any amount of duty or interest or penalty or fine or other charges by or under the order or direction of an officer of customs invested with powers of the Central Excise Officer by the first amendment and the second amendment to the principal notification during the period on and from the 11th day of May, 1982 to 13th day of January, 2003 shall be deemed to be valid, and to have always been, for all purposes, as validly and effectively made as if the investment of powers made by the first amendment and the second amendment to the principal notification were in force at all material times.

(2) For the purposes of sub-section (1), the Central Board of Excise and Customs shall have and shall be deemed to have always had the powers to bring into force the principal notification, the first amendment and the second amendment with retrospective effect as if the Central Board of Excise and Customs had the powers to bring into force the principal notification, the first amendment and the second amendment under clause (b) of section 2 of the Central Excise Act, 1944(1 of 1944), retrospectively, at all material times.

(3) For the purposes of this section, the designations of the officers of customs and the Central Excise Officers as existed before the commencement of the Finance Act, 1995(22 of 1995) shall be deemed to be the corresponding substituted designations as specified in the Tables respectively below section 50 and section 70 of the said Finance Act.  Explanation 1.--For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if the principal notification as amended by the first amendment and the second amendment had not come retrospectively into force. Explanation 2.--For the purposes of this section, "hundred per cent. export-oriented  undertaking" shall have the meaning assigned to it in clause (ii) of Explanation 2 to the  proviso to clause (b) of section 3 of the Central Excise Act, 1944(1 of 1944).

SECTION 88: Amendment of the CENVAT Credit Rules, 2002:

(1) In the CENVAT Credit Rules, 2002 made by the Central Government in exercise of the powers conferred by section 37 of the Central Excise Act, 1944(1 of 1944), in rule 3, in sub-rule (6), in clause (b), the Explanation shall stand amended and shall be deemed to have been amended retrospectively in the manner as specified in the Second Schedule, on and from the corresponding date mentioned in column (3) of that Schedule and, accordingly, notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority, any action taken or anything done or purported to have been taken or done under the said Explanation shall be deemed to be, and to have always been, for all purposes, as validly and effectively, taken or done as if the said Explanation as amended by this sub-section had been in force at all material times.

(2) For the purposes of sub-section (1), the Central Government shall have and shall be deemed to have the power to make rules with retrospective effect as if the Central Government had the power to make rules under section 37 of the Central Excise Act, 1944(1 of 1944), retrospectively, at all material times.

(3) The CENVAT credit shall be allowed of such additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957(58 of 1957) which has been disallowed but which would not have been disallowed if the amendment made by sub-section (1) was in force at all material times.

(4) Recovery shall be made of such CENVAT credit of additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957(58 of 1957) which has been availed but which would not have been availed if the amendment made by sub-section (1) was in force at all material times and the provisions of CENVAT Credit Rules, 2002 relating to the recovery of CENVAT credit, along with interest, shall apply for the recovery made under this sub-section subject to the modification that the relevant date defined in section 11A of the Central Excise Act, 1944(1 of 1944), shall, for the purposes of recovery under this sub-section, be deemed to be the date on which the Finance (No. 2) Bill, 2004 receives the assent of the President.

(5) Notwithstanding anything contained in sub-section (4), the following procedure shall be followed for the recovery of the CENVAT credit of additional duty leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957(58 of 1957) which has been availed but which would not have been availed if the amendment made by sub-section (1) was in force at all material times (hereinafter referred to in this section as the amount of credit), namely-  (i) the Central Excise Officer shall, on or before the 25th day of May, 2005, serve notice on the person from whom the recovery is to be made (hereinafter referred to as the assessee), requiring the assessee to declare the amount of credit utilised by him on different dates for payment of duty of excise (hereinafter referred to as the CENVAT duty) leviable under the First Schedule or the Second Schedule to the Central Excise Tariff Act, 1985(5 of 1986); (ii) the assessee shall furnish the declaration as required under clause (i) on or before the 31st day of May, 2005; (iii) the Central Excise Officer shall, after considering the declaration made by the assessee under clause (ii), determine the amount of credit utilised on different dates for payment of CENVAT duty; (iv) the Central Excise Officer shall separately determine the amount of interest on the amount of credit (hereinafter referred to as the amount of interest) utilised for paying the CENVAT duty, in accordance with the provisions of clause (v); (v) the amount of interest on amount of credit utilised for paying the CENVAT duty shall be at a rate of thirteen per cent. per annum for the period beginning on and from the day when each time the amount of credit was so utilised and ending on the 10th day of September, 2004; (vi) the Central Excise Officer shall, on or before the 15th day of June, 2005, inform the assessee, in writing, the amount of credit and the amount of interest so determined under clauses (iii) and (iv); (vii) the assessee shall pay an amount equal to one-thirty sixth part of each of the amount determined under clauses (iii) and (iv) by the fifth day of every month, commencing from the month, following the month of receipt of information of the amount determined by the Central Excise Officer; (viii) the assessee may make payment on his own towards the amount of credit or, as the case may be, the amount of interest, in excess of the amount required to be paid upto a particular month; (ix) where the assessee pays the total amount of credit and the amount of interest so determined under clauses (iii) and (iv), respectively, the Central Excise Officer shall issue an order confirming the payment of credit and the amount of interest and discharging the assessee from any recovery of the amount of credit; (x) for the purposes of this sub-section, it is hereby clarified that the amount of credit has been fully utilised first towards payment of the CENVAT duty before utilising the CENVAT credit of additional duty leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957(58 of 1957) paid on or after the 1st day of April, 2000 for payment of the CENVAT duty.

(6) Where the assessee fails to furnish the declaration as required under clause (i), or has furnished the declaration but failed to pay the amount by the day as specified in clause (vii), of sub-section (5), the provisions of sub-section (4) shall apply subject to the modification that the notice, requiring the assessee to show cause why he should not pay the amount specified in the notice, shall be served upon him within three months from the date of his such failure.  Explanation 1.--For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if this section had not come into force. Explanation 2.--For the purposes of this section, the expression "CENVAT credit" has the meaning assigned to it in the CENVAT Credit Rules, 2002.

SECTION 89: Amendment of First Schedule to Act 5 of 1986:

Central Excise Tariff In the First Schedule to the Central Excise tariff Apt, 1985,-- (i) in Chapter 50, in sub-heading Nos. 5004.11, 5004.90, 5005.10, 5005.20 and  5005.90, for the entry in column (4) occurring against each of them, the entry "8%"  shall be substituted;

(ii) in Section XV, after NOTE 9, the following NOTE shall be inserted, namely- "10. In relation to the products of this Section, the process of drawing or redrawing  a rod, wire or any other similar article, into wire shall amount to 'manufacture'.";

(iii) in Chapter 90, in sub-heading No. 9001.10, for the entry in column (4), the  entry "8%" shall be substituted;

(iv) in Chapter 95, in sub-heading No. 9504.10, for the entry in column (4), the  entry "8%" shall be substituted.

CHAPTER 5: SERVICE TAX:

SECTION 90: Amendment of Act 32 of 1994:

In the Finance Act, 1994,--  (a) in (S.65),--  (i)after clause (3), the following clauses shall be inserted, namely-  '(3a)"aircraft" has the meaning assigned to it in clause (1) of section 2 of the Aircraft Act, 1934(22 of 1934); (3b)"aircraft operator" means any commercial concern which provides the service of transport of goods by aircraft; (3c)"airport" has the meaning assigned to it in clause (b) of  

(S.2 of the Airports Authority of India Act, 1994) (55 of 1994); (3d)"airports authority" means the Airports Authority of India constituted under (S.3 of the Airports Authority of India Act, 1994) (55 of 1994) and also includes any person having the charge of management of an airport or a civil enclave;'; (ii) for clause (12), the following clause shall be substituted, namely- (12)"banking and other Financial services" means--  (a) the following services provided by a banking company or a financial institution including a non-banking financial company or any other body corporate or commercial concern, namely-  (i)financial leasing services including equipment leasing and hire-purchase; (ii)credit card services; (iii)merchant banking services; (iv)securities and foreign exchange (forex) broking; (v)asset management including portfolio management, all forms of fund management, pension fund management, custodial, depository and trust services, but does not include cash management; (vi)advisory and other auxiliary financial services including investment and portfolio research and advice, advice on  mergers and acquisitions and advice on corporate restructuring and strategy; (vii)provision and transfer of information and data processing; and (viii)other financial services, namely, lending; issue of pay order, demand draft, cheque, letter of credit and bill of exchange; providing bank guarantee, overdraft facility, bill discounting facility, safe deposit locker, safe vaults; operation of bank accounts; (b)foreign exchange broking provided by a foreign exchange broker other than those covered under sub-clause (a);'; (iii)for clause (19), the following clauses shall be substituted, namely;--  '(19)"business auxiliary service" means any service in relation to--  (i)promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii)promotion or marketing of service provided by the client; or (ii)any customer care service provided on behalf of the client; or (iv)procurement of goods or services, which are inputs for the client; or (v)production of goods on behalf of the client; or (vi)provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to(vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation, or development of prospective customer or vendor, public relation services, management or supervision, and includes services as a commission agent, but does not include any information technology service and any activity that amounts to,” manufacture" within the meaning of clause (f) of section 2 of the Central Excise Act, 1944(1 of 1944). Explanation.--For the removal of doubts, it is hereby declared that for the purposes of  this clause, "information technology service" means any service in relation to designing,  developing or maintaining of computer software, or computerised data processing or system  networking, or any other service primarily in relation to operation of computer systems; (19a)"business exhibition" means an exhibition,--  (a) to market; or (b) to promote; or (c) to advertise; or (d) to showcase, any product or service, intended for the growth in business of the producer  or provider of such product or service, as the case may be;'; (iv)after Clause (24), the, following clause shall be inserted, namely-  '(24a)"civil enclave" has the meaning assigned to it in clause (i) of section 2 of the Airports Authority of India Act, 1994(55 of 1994);'; (v)clause (28) shall be omitted; (vi) in clause (29), for the words "in relation to commissioning or installation", the  words "in relation to erection, commissioning or installation" shall be substituted; (vii)after clause (30), the following clause shall be inserted, namely- '(30a)"construction service" means,--  (a)construction of new building or civil structure or a part thereof; or (b)repair, alteration or restoration of, or similar services in relation to, building or civil structure, which is--  (i)used, or to be used, primarily for; or (ii)occupied, or to be occupied, primarily with; or (iii)engaged, or, to be engaged, primarily in, commerce or industry, or work intended for  commerce or industry, but does not include road, airport, railway, transport terminal, bridge, tunnel, long distance pipeline and dam;'; (viii)after clause (39), the following clause shall be inserted, namely-  '(39a) "erection, commissioning or installation" means any service provided by  a commissioning and installation agency in relation to erection, commissioning or installation  of plant, machinery or equipment;'; (ix)after clause (46), the following clause shall be inserted, namely-  '(46a) "forward contract" has the meaning assigned to it in clause (c) of section 2 of  the Forward Contracts (Regulation) Act, 1952(74 of 1952);'; (x) after clause (50), the following clauses shall be inserted, namely-  '(50a) "goods carriage" has the meaning assigned to it in clause (14) of  S.2 of the Motor Vehicles Act, 1988(59 of 1988); (50b) "goods transport agency" means any commercial concern which provides service  in relation to transport of goods by road and issues consignment note, by whatever name called;' ; (xi)after clause (55), the following clauses shall be inserted, namely-  '(55a) "intellectual property right" means any right to intangible property, namely,  trademarks, designs, patents or any other similar intangible property, under any law for the time being in force, but does not include copyright; (55b) "intellectual property service" means,--  (a)transferring, whether permanently or otherwise; or (b)permitting the use or enjoyment of, any intellectual property right;'; (xii) after clause (75), the following clauses shall be inserted, namely-  '(75a) "opinion poll" means any service designed to secure information on public opinion  regarding social, economic, political or other issues; (75b) "opinion poll agency" means any person engaged in providing any service in relation  to opinion poll;'; (xiii)after clause (76), the following clause shall be inserted, namely-  '(76a) "outdoor caterer" means a caterer engaged in providing services in connection with catering at a place other than his own;'; (xiv) after clause (77), the following clauses shall be inserted, namely-  '(77a) "pandalor shamiana" means a place specially prepared or arranged for organizing an official, social pr business function; (77b) "pandalor shamiana contractor" means a person engaged in providing any service,  either directly or indirectly, in connection with the preparation, arrangement, erection or decoration of a pandal or shamiana and includes the supply of furniture, fixtures, lights and lighting fittings, floor coverings and other articles for use therein;'; (xv)after clause (86), the following clauses shall be inserted, namely-  '(86a) "programme" means any audio or visual matter, live or recorded, which is intended to be disseminated by transmission of electromagnetic waves through space or through cables intended to be received by the general public either directly or indirectly through the medium of relay stations; (86b) "programme producer" means a commercial concern which produces a programme on behalf of another person;'; (xvi)after clause (89), the following clauses shall be inserted, namely-  '(89a) "recognized association" has the meaning assigned to it in clause (j) of section 2 of the Forward Contracts (Regulation) Act, 1952(74 of 1952); (89b) "registered association" has the meaning assigned to it in clause (jj) of section 2 of the Forward Contracts (Regulation) Act, 1952(74 of 1952);'; (xvii)for clause (101), the following clause shall be substituted, namely-  '(101) "stock-broker"means a person, who has either made an application for registration or is registered as a stock-broker or sub-broker, as the case may be, in accordance with the rules and regulations made under the Securities and Exchange Board of India Act, 1992(15 of 1992);'; (xviii) clause (103) shall be omitted; (xix) after clause (104), the following clause shall be inserted, namely-  '(104a) "survey and exploration of mineral" means geological, geophysical or other prospecting,  surface or sub-surface surveying or map making service, in relation to location or exploration  of deposits of mineral, oil or gas;'; (xx) in clause (105),--  (a)in sub-clause (a), for the words "to an investor", the words "to any person" shall be substituted; (b)in sub-clause (g), after the words "disciplines of engineering", the words "but not in the discipline of computer hardware engineering or computer software engineering" shall be inserted; (c) for sub-clause (zm),the following sub-clause shall be substituted, namely- "(zm)to a customer, by a banking company or a financial institution including a non-banking  financial company, or any other body corporate or commercial concern, in relation to banking  and other financial services;"; (d)sub-clause (zp) shall be omitted; (e)in sub-clause (zs), for the words "to a customer, by a cable operator", the words "to  any person, by a cable operator, including a multi system operator;" shall be substituted; (f) in sub-clause (zx),for the words "in relation to life insurance business", the words "in  relation to the risk cover in life insurance" shall be substituted; (g) in sub-clause (zzd),for the words "commissioning or installation", the words "erection,  commissioning or installation" shall be substituted; (h) after sub-clause (zzl), the following sub-clauses shall be inserted, namely-  "(zzm)to any person, by airports authority or any person authorised by it, in an airport or  a civil enclave; (zzn)to any person, by an aircraft operator, in relation to transport of goods by aircraft; (zzo)to an exhibitor, by the organiser of a business exhibition, in relation to business  exhibition; (zzp)to a customer, by a goods transport agency, in relation to transport of goods by road in a goods carriage; (zzq)to any person, by a commercial concern, in relation to construction service; (zzr)to any person, by the holder of intellectual property right, in relation to intellectual property service; (zzs)to any person, by an opinion poll agency, in relation to opinion poll; (zzt)to a client, by an outdoor caterer; (zzu)to any person, by a programme producer, in relation to a programme; (zzv) to a customer, by any person, in relation to survey and exploration of mineral; (zzw) to a client, by a pandal or shamiana contractor in relation to a pandal or shamiana in any manner and also includes  the services, if any, rendered as a caterer, (zzx)to a customer, by a travel agent, in relation to the booking of passage for travel; (zzy)to any person, by a member of a recognised association or a registered association, in  relation to a forward contract;"; (xxi) for clause (115), the following clauses shall be substituted, namely- '(115) "tour operator" means any person engaged in the business of planning, scheduling, organising  or arranging tours (which may include arrangements for accommodation, sightseeing or other  similar services) by any mode of transport, and includes any person engaged in the business of  operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act, 1988(59 of 1988)  or the rules made thereunder;  (115a) "travel agent" means any person engaged in providing any service connected with booking of  passage for travel, but does not include air travel agent and rail travel agent;';

(b) for (S.66), the following section shall be substituted, namely-  "66. Charge of Service Tax.  There shall be levied a tax (hereinafter referred to as the service tax) at the rate often per  cent. of the value of the taxable services referred to in sub-clauses (a), (b),(c), (d), (e), (f), (g), (h), (i), (j), (k), (l), (m), (n), (o), (p),(q), (r), (s), (t), (u), (v), (w), (x),(y), (z), (za), (zb), (zc), (zd), (ze), (zf), (zg), (zh), (zi), (zj), (zk)(zl), (zm), (zn), (zo), (zp), (zq), (zr), (zs), (zt), (zu), (zv), (zw), (zx), (zy), (zz), (zza), (zzb), (zzc),(zzd), (zze), (zzf),(zzg), (zzh), (zgi), (zzj), (zzk), (zzl), (zzm), (zzn),(zzo), (zzp), (zzq), (zzr), (zzs),(zzt), (zzu), (zzv), (zzw), (zzx)and (zzy) of clause(105) of section 65 and collected in such manner as may be prescribed.";

(c) in (S.67),--  (a) the Explanation shall be numbered as Explanation 1, and in the Explanation 1 as so numbered,--  (i) inclause (vi), the word "and" occurring at the end shall be omitted; (ii)for clause (vii), the fallowing clauses shall be substituted, namely- "(vii) the cost of parts or other material, if any, sold to the customer during the course of  providing erection, commissioning or installation service; and (viii) interest on loans."; (b) after the Explanation 1 as so numbered, the following Explanation shall be inserted,  namely-  "Explanation 2.-- Where the gross amount charged by a service provider is inclusive of  service tax payable, the value of taxable service shall be such amount as with the addition of  tax payable, is equal to the gross amount charged."; (d) (S.71) and (S.72) shall be omitted; (e)for (S.73), the following section shall be substituted, namely-  (1) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Assistant Commissioner of Central Excise or, as the case may be, the Deputy Commissioner of Central Excise may, within one year from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice:  Provided that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of--  (a) fraud; or (b)collusion; or (c) wilful misstatement; or (d)suppression of facts; or (e)contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words "one year", the words "five years" had been substituted. Explanation.--Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of one year or five years, as the case may be. (2) The Assistant Commissioner of Central Excise or, as the case may be, the Deputy Commissioner of Central Excise shall, after considering the representation, if any, made by the person on whom notice is served under subsection (1),determine the amount of service tax due from, or erroneously refunded to, such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. (3) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such  tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously  refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a  Central Excise Officer before service of notice on him under sub-section (1) in respect of such  service tax, and inform the Assistant Commissioner of Central Excise or, as the case may be,  the Deputy Commissioner of Central Excise of such payment in writing, who, on receipt of such  information shall not serve any notice under sub-section (1) in respect of the amount so paid:   Provided that the Assistant Commissioner of Central Excise or, as the case maybe, the Deputy Commissioner of Central Excise may determine the amount of short-payment of service tax or  erroneously refunded service tax, if any, which in his opinion has not been paid by such person and, then, the Assistant Commissioner of Central Excise or, as the case may be, the Deputy  Commissioner of Central Excise shall proceed to recover such amount in the manner specified in this section, and the period of "one year” referred to in sub-section (1) shall be counted from the date of receipt of such information of payment. Explanation.--For the removal of doubts, it is hereby declared that the interest under section 75 shall be payable on the amount paid by the person under this sub-section and also on the amount of short payment of service tax or erroneously refunded service tax, if any, as may be determined by the Assistant Commissioner of Central Excise or, as the case may be, the Deputy Commissioner of Central Excise, but for this sub-section. (4) Nothing contained in sub-section (3) shall apply to a case where any service tax has not been levied or paid or has been short-levied or short-paidor erroneously refunded by reason of--  (a) fraud; or (b) collusion; or (c) wilful misstatement; or (d)suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax. (5) The provisions of sub-section (3) shall not apply toany case where the service tax had become payable or ought to have been paid before the 14th day of May, 2003. (6) For the purposes of this section, "relevant date" means,--  (i) in the case of taxable service in respect of which service tax has not been levied or paid or has been short-levied or short-paid--  (ii) in a case where the service tax is provisionally assessed under this Chapter or the rules made thereunder, the date of adjustment of the service tax after the final assessment thereof; (iii) in a case where any sum, relating to service tax, haserroneously been refunded, the date of such refund.'; (f) in (S.74),--  (i) in sub-section (4), for the words "an assessment orreducing a refund or otherwise increasing the liability of the assessee", the words "the liability of the assessee or reducing a refund" shall be substituted; (ii) in sub-section (6), for the word"assessment", the words "liability of an assessee or increasing the refund" shall be substituted; (iii) in sub-section (7), for the word"assessment", the words "liability of the assessee" shallbe substituted; (g) in (S.75), for the words "at the rate of fifteen per cent, per annum", the  words "at such rate not below ten per cent and not exceeding thirty-six per cent per annum, as  is for the time being fixed by the Central Government, by notification in the Official Gazette," shall be substituted; (h) (S.75A) shall be omitted; (i) in (S.76 , for the words "one hundred rupees", the words "one hundred rupees for every day during which such failure continues" shall be substituted; (j) for (S.77), the following section shall be substituted, namely- "77. Penalty for contravention of any provision for which no penalty is provided.  Whoever contravenes any of the provisions of this Chapter or any rule made thereunder for which no penalty is separately provided in this Chapter, shall be liable to a penalty which may extend to an amount not exceeding one thousand rupees."; (k) in (S.78), for the portion beginning with the words" If the Assistant Commissioner" and ending with the words "value of such taxable service:", the following shall be substituted, namely- "Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of--  (a)fraud; or (b)collusion; or (c) wilful mis statement; or (d)suppression of facts; or (e)contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, the person, liable to pay such service tax or erroneous refund, as determined under sub-section (2) of section 73, shall also be liableto pay a penalty, in addition to such service tax and interest thereon; if any, payable by him, which shall not be less than, but which shall hot exceed twice, the amount of service tax so not levied or paid or short-levied or short-paid or erroneously refunded:"; (l) (S.79)  shall be omitted; (m)in  (S.80), for the words and figures "section 77, section 78 or section 79", the words and figures "section 77 or section 78" shall be substituted; (n) (S.81)  shall be omitted; (o)in (S.85), in sub-section (1), the words and figures "section 71, section 72 or "shall be omitted; (p)in (S.86), with effect from such date as the Central Government may, by notification in the Official Gazette, appoint, for sub-section (6), the following subsections shall be substituted, namely-  "(6)An appeal to the Appellate Tribunal shall be in the prescribed form and shall be verified in the prescribed manner and shall, irrespective of the date of demand of service tax and interest or of levy of penalty in relation to which the appeal is made, be accompanied by a fee of,--  (a) where the amount of service tax and interest demanded and penalty levied by any Central Excise Officer in the case to which the appeal relates is five lakh rupees or less, one thousand rupees; (b)where the amount of service-tax and interest demanded and penalty levied by any Central Excise Officer in the case to which the appeal relates is more than five lakh rupees but not exceeding fifty lakh rupees, five thousand rupees; (c)where the amount of service tax and interest demanded and penalty levied by any Central Excise Officer in the case to which the appeal relates is more than fifty lakh rupees, ten thousand rupees: Provided that no fee shall be payable in the case of an appeal referred to in sub-section (2) or sub-section (2A) or a memorandum of cross-objections referred to in sub-section (4). (6A) Every application made before the Appellate Tribunal,--  (a)in an appeal for grant of stay or for rectification of mistake or for any other purpose; or (b)for restoration of an appeal or an application, shall be accompanied by a fee of five hundred rupees:  (q)in section 94, in sub-section (2), for clause (f), the following clauses shall be substituted, namely-  "(f) provisions for determining export of taxable services; (g)grant of exemption to, or rebate of service tax paid on, taxable services which are exported out of India; (h) rebate of service tax paid or payable on the taxable services consumed or duties paid or deemed to have been paid on goods used for providing taxable services which are exported out of India; (i) any other matter which by this Chapter is to be or maybe prescribed."; (r) in section 95, after sub-section (1A), the following sub-section shall be inserted, namely- "(1B) If any difficulty arises in respect of implementing, or assessing the value of, any taxable service incorporated in this Chapter by the Finance (No. 2) Act, 2004, the Central Government may, by order published in the Official Gazette, not inconsistent with the provisions of this Chapter, remove the difficulty:  Provided that no such order shall be made after the expiry of a period of two years from  the date on which the Finance (No. 2) Bill, 2004 receives the assent of the President."

CHAPTER 6: EDUCATION CESS:

SECTION 91: Education Cess:

(1) Without prejudice to the provisions of sub-section (11) of (S.2), there  shall be levied and collected, in accordance with the provisions of this Chapter as  surcharge for purposes of the Union, a cess to be called the Education Cess, to fulfil  the commitment of the Government to provide and finance universalised quality basic  education.

(2) The Central Government may, after due appropriation made by Parliament by law  in this behalf, utilise, such sums of money of the Education Cess levied under  sub-section (11) of section 2 and this Chapter for the purposes specified in  sub-section (1), as it may consider necessary.

SECTION 92: Definition:

The words and expressions used in this Chapter and defined in the Central Excise Act,  1944(1 of 1944), the Customs Act, 1962(52 of 1962) or Chapter V of the Finance Act, 1994 (32 of 1994), shall have the meanings respectively assigned to them in those Acts or  Chapter, as the case may be.

Section 93: Education Cess on excisable goods:

(1) The Education Cess levied under section 91, in the case of goods specified  in the First Schedule to the Central Excise Tariff Act, 1985(5 of 1986), being goods  manufactured or produced, shall be a duty of excise (in this section referred to as the  Education Cess on excisable goods), at the rate of two per cent., calculated on the  aggregate of all duties of excise (including special duty of excise or any other  duty of excise but 1[excluding Education Cess, and Secondary and Higher Education  Cess levied under (S.136 of the Finance Act, 2007)] on excisable goods) which are  levied and collected by the Central Government in the Ministry of Finance (Department  of Revenue), under the provisions of the Central Excise Act, 1944(1 of 1994) or under  any other law for the time being in force.

(2) The Education Cess on excisable goods shall be in addition to any other duties  of excise chargeable on such goods, under the Central Excise Act, 1944(1 of 1944) or  any other law for the time being in force.

(3) The provisions of the Central Excise Act, 1944 and the rules made thereunder,  including those relating to refunds and exemptions from duties and imposition of  penalty shall, as far as may be, apply in relation to the levy and collection of the  Education Cess on excisable goods as they apply in relation to the levy and collection  of the duties of excise on such goods under the Central Excise Act, 1944 or the rules,  as the case may be.

SECTION 94: Education Cess on imported goods:

(1) The Education Cess levied under section 91, in the case of goods specified  in the First Schedule to the Customs Tariff Act, 1975(51 of 1975), being goods imported  into India, shall be a duty of customs (in this section referred to as the Education  Cess on imported goods), at the rate of two per cent., calculated on the aggregate of  duties of customs which are levied and collected by the Central Government in the  Ministry of Finance (Department of Revenue), under (S.12 of the Customs Act, 1962 (52 of 1962) and any sum chargeable  on such goods under any  other law for the time being in force, as an addition to, and in the same manner as,  a duty of customs, but not including--  (a) the safeguard duty referred to in (S.8B of the Customs Tariff Act, 1975) and (S.8C of the Customs Tariff Act, 1975) (51 of 1975); (b) the countervailing duty referred to in (S.9 of the Customs Tariff Act, 1975) (52 of 1975); (c) the anti-dumping duty referred to in  (Section 9A of the Customs Tariff Act, 1975)  (51 of 1975); and (d) the 1[Education Cess, and Secondary and Higher Education Cess levied under (S.136 of the Finance Act, 2007)] on imported goods.

(2) The Education Cess on imported goods shall be in addition to any other duties  of customs chargeable on such goods, under the Customs Act, 1962(52 of 1962) or any  other law for the time being in force.

(3) The provisions of the Customs Act, 1962 and the rules and regulations made  thereunder, including those relating to refunds and exemptions from duties and  imposition of penalty shall, as far as may be, apply in relation to the levy and  collection of the Education Cess on imported goods as they apply in relation to  the levy and collection of the duties of customs on such goods under the  Customs Act, 1962 or the rules or the regulations, as the case may be.

SECTION 95: Education Cess on taxable services:

(1) The Education Cess levied under section 91, in the case of all services which  are taxable services, shall be a tax (in this section referred to as the Education Cess  on taxable services) at the rate of two per cent, calculated on the tax which is levied  and collected under (S.66 of the Finance Act, 1994) (32 of 1994).

(2) The Education Cess on taxable services shall be in addition to the tax chargeable  on such taxable services, under Chapter V of the Finance Act, 1994(32 of 1994).

(3) The provisions of Chapter V of the Finance Act, 1994(32 of 1994) and the rules  made thereunder, including those relating to refunds and exemptions from tax and  imposition of penalty shall, as far as may be, apply in relation to the levy and  collection of the Education Cess on taxable services, as they apply in relation to  the levy and collection of tax on such taxable services under Chapter V of the  Finance Act, 1994 or the rules, as the case may be.

Chapter 7: Securities Transaction Tax:

SECTION 96: Extent Commencement and application:

(1) This Chapter extends to the whole of India.

(2) It shall come into force on such date as the Central Government may,  by notification in the Official Gazette, appoint.

(3) It shall apply to taxable securities transactions entered into on or  after the commencement of this Chapter.

SECTION 97: Definitions:

Section  In this Chapter, unless the context otherwise requires.-- (1) "Appellate Tribunal" means the Appellate Tribunal constituted under (S.252 of the Income-tax Act, 1961) (43 of 1961);

(2) "Assessing Officer" means the Income-tax Officer or Assistant Commissioner  of Income-tax or Deputy Commissioner of Income-tax or Joint Commissioner of Income-tax  or Additional Commissioner of Income-tax who is authorised by the Board to exercise or  perform all or any of the powers and function's conferred on, or assigned to, an  Assessing Officer under this Chapter;

(3) "Board" means the Central Board of Direct faxes constituted under the Central  Boards of Revenue Act, 1963(54 of 1963);

(4) "derivative" has the meaning assigned to it in clause (aa) of (S.2 of the Securities Contracts (Regulation) Act, 1956) (42 of 1956);

(5) "equity oriented fund" means a fund--  (i) where the investible funds are invested by way of equity shares in domestic  companies to the extent of more than 1 [sixty-five per cent]. of the total proceeds  of such fund; and (ii) which has been set up under a scheme of a Mutual Fund: Provided that the percentage of equity share holding of the fund shall be  computed with reference to the annual average of the monthly averages of the opening  and closing figures;

(6) "Mutual Fund" means a Mutual Fund specified under clause (23D) of (S.10 of the Income-tax Act, 1961) (43 of 1961);

(7) "option in securities" has the meaning assigned to it in clause (d) of (S.2 of the Securities Contracts (Regulation) Act, 1956) (42 of 1956);

(8) "option premium" means the premium payable by the purchaser of an "option in  securities" at the time of such purchase;

(9) "prescribed" means prescribed by rules made by the Board under this Chapter;

(10) "recognised stock exchange" shall have the same meaning as in clause (f) of (S.2 of the Securities Contracts (Regulation) Act, 1956) (42 of 1956);

(11) "securities transaction tax" means tax leviable on the taxable securities  transactions under the provisions of this Chapter;

(12) "strike price" means the price at which the "option in securities" may be  exercised on the expiry date of such option;

(13) "taxable securities transaction" means a transaction of--  (a) purchase or sale of an equity share in a company or a derivative or a unit  of an equity oriented fund, entered into in a recognised stock exchange; or (b) sale of a unit of an equity oriented fund to the Mutual Fund;

(14) words and expressions used but not defined in this Chapter and defined  in the Securities Contracts (Regulation) Act, 1956(42 of 1956), the Income-tax Act,  1961(43 of 1961) or the rules made thereunder, shall apply, so far as may be, in  relation to securities transaction tax.

SECTION 98: Charge of securities transaction tax:

Section   On and from the commencement of this Chapter, there shall be charged a securities  transaction tax in respect of the taxable securities transaction specified  in column (2) of the Table below, at the rate specified in the corresponding  entry in column (3) of the said table, on the value of such transaction and such tax,  shall be payable by the purchaser or the seller, specified in the corresponding  entry in column (4) of the said Table: 

SECTION 99: The value of taxable securities transactions:

(a) in the case of a taxable securities transaction relating to a derivative,  being "option in securities", shall be the aggregate of the strike price and the  option premium of such "option in securities";

(b) in the case of a taxable securities transaction relating to a derivative,  being "futures", shall be the price at which such "futures" is traded; and

(c) in the case of any other taxable securities transaction, shall be the price  at which such securities are purchased or sold:  Provided that the Board may, having regard to the manner in which taxable securities  transactions are settled in a recognised stock exchange or such other factors which  may be relevant for the purposes of determining the price of such securities, specify,  by rules made by it, the method of determining the price of such securities for the  purposes of this clause.

SECTION 100: Collection and recovery of securities transaction tax:

(1) Every recognised stock exchange shall collect the securities transaction tax  from every person, being a purchaser or a seller, as the case may be, who enters into  a taxable securities transaction in that stock exchange, at the rates specified in (S.98).

(2) The prescribed person in the case of every Mutual Fund shall collect the  securities transaction tax from every person who sells a unit to that Mutual Fund,  at the rate specified in S. 98.

(3) The securities transation tax collected during any calendar month in accordance  with the provisions of sub-section (1) or sub-section (2), shall be paid by every  recognised stock exchange or by the prescribed person in the case of every Mutual  Fund, as the case may be, to the credit of the Central Government by the Seventh  day of the month immediately following the said calendar month.

(4) Any recognised stock exchange or the prescribed person in the case of any  Mutual Fund, who fails to collect the tax in accordance with the provisions of  sub-section (1) or subsection (2), shall notwithstanding such failure, be liable  to pay the tax to the credit of the Central Government in accordance with the  provisions of sub-section (3).

SECTION 101: Recognised stock exchange to furnish prescribed return:

(1) Every recognised stock exchange or the prescribed person in the case of  every Mutual Fund (hereafter in this Chapter referred to as assessee) shall, within  the prescribed time after the end of each financial year, prepare and deliver or  cause to be delivered to the Assessing Officer or to any other authority or agency  authorised by the Board in this behalf, a return in such form and verified in such  manner and setting forth such particulars as may be prescribed, in respect of all  taxable securities transactions entered into during such financial year in the stock  exchange or, as the case may be, in respect of all taxable securities transactions,  being sale of units to such Mutual Fund during such financial year.

(2) Where any assessee fails to furnish the return under sub-section (1)  within the prescribed time, the Assessing Officer may issue a notice to such  assessee and serve it upon him, requiring him to furnish the return in the  prescribed form and verified in the prescribed manner setting forth such particulars  within such time as may be prescribed.

(3) Any assessee who has not furnished the return within the time allowed under  subsection (1) or sub-section (2), or having furnished a return under sub-section (1)  or subsection (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.

SECTION 102: Assessment:

(1) For the purposes of making an assessment under this Chapter, the Assessing Officer  may serve on any assessee, who has furnished a return under (S.101) or upon whom a notice  has been served under sub-section (2) of section 101 (whether a return has been furnished or  not), a notice requiring him to produce or cause to be produced on a date to be specified  therein such accounts or documents or other evidence as the Assessing Officer may require  for the purposes of this Chapter 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 Assessing 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 other  relevant material which he has gathered, shall, by an order in writing, assess the value  of taxable securities transactions during the relevant financial year and determine the  amount of securities transaction tax payable or refundable on the basis of such assessment:  Provided that no assessment shall be made under this sub-section after the expiry of  two years from the end of the relevant financial year.

(3) Every assessee, in case any amount is refunded to it on assessment under  subsection (2), shall, within such time as may be prescribed, refund such amount to  the concerned person from whom such amount was collected.

SECTION 103: Rectification of mistake:

(1) With a view to rectifying any mistake apparent from the record, the Assessing  Officer may amend any order passed by him under the provisions of this Chapter within  one year from the end of the financial year in which the order sought to be amended  was passed.

(2) Where any matter has been considered and decided in any proceeding by way of  appeal relating to an order referred to in sub-section (1), the Assessing Officer  passing such order may, notwithstanding anything contained in any law for the time  being in force, amend the order under that sub-section in relation to any matter other  than the matter which has been so considered and decided.

(3) Subject to the other provisions of this section, the Assessing officer may--  (a) make an amendment under sub-section (1) of his own motion; or (b) make such amendment if any mistake is brought to his notice by the assessee.

(4) An amendment, which has the effect of enhancing an assessment or reducing a refund  or otherwise increasing the liability of the assessee, shall not be made under this section  unless the Assessing Officer concerned has given notice to the assessee of his intention so  to do and has allowed the assessee a reasonable opportunity of being heard.

(5) Where an amendment is made under this section, an order shall be passed  in writing by the Assessing Officer.

(6) Subject to the other provisions of this Chapter, where any such amendment has  the effect of reducing the assessment, the Assessing Officer shall make any refund,  which may be due to such assessee.

(7) Where any such amendment has the effect of enhancing the assessment or reducing  the refund already made, the Assessing Officer shall make an order specifying the  sum payable by the assessee and the provisions of this Chapter shall apply  accordingly.

SECTION 104: Interest on delayed payment of securities transaction tax:

Every assessee who fails to credit the securities transaction tax or any part  thereof as required under section 100, to the account of the Central Government  within the period specified in that section, shall pay simple interest at the  rate of one per cent. of such tax for every month or part of a month by which  such crediting of the tax or any part thereof is delayed.

SECTION 105: Penalty for failure to collect or pay securities transaction tax:

Any assessee who-- (a) fails to collect the whole or any part of the securities transaction tax as  required under section 100; or

(b) having collected the securities transaction tax, fails to pay such tax to the  credit of the Central Government in accordance with the provisions of sub-section (3)  of that section, shall be liable to pay,--  (i) in the case referred to in clause (a), in addition to paying the tax in  accordance with the provisions of sub-section (4) of that section, or interest,  if any, in accordance with the provisions of section 104, by way of a penalty, a  sum equal to the amount of securities transaction tax that he failed to collect; and (ii) in the case referred to in clause (b), in addition to paying the tax in accordance  with the provisions of sub-section (3) of that section and interest in accordance with  the provisions of section 104, by way of penalty, a sum of one thousand rupees for  every day during which the failure continues, so, however, that the penalty under  this clause shall not exceed the amount of securities transaction tax that it  failed to pay.

SECTION 106: Penalty for failure to furnish prescribed return:

If an assessee fails to furnish in due time the return which it is required to  furnish under sub-section (1) of section 101 or by notice given under sub-section (2)  of that section, it shall be liable to pay, by way of penalty, a sum of one hundred  rupees for every day during which the failure continues.

SECTION 107: Penalty for failure to comply with notice:

If the Assessing Officer in the course of any proceedings under this Chapter is  satisfied that any person has failed to comply with a notice under sub-section (1)  of section 102, he may direct that such person shall pay, by way of penalty, in  addition to any securities transaction tax and interest, if any, payable by him,  a sum of ten thousand rupees for each such failure.

SECTION 108: Penalty not to be imposed in certain cases:

Notwithstanding anything contained in the provisions of (S.105) or (S.106) or (S.107), no penalty shall be imposable for any failure referred to  in the said provisions if the assessee proves that there was reasonable cause for the  said failure: Provided that no order imposing a penalty under this Chapter shall be made unless  the assessee has been given a reasonable opportunity of being heard.

SECTION 109: Application of certain provision of Act 43 of 1961:

The provisions of the following sections of the Income-tax Act, 1961(43 of 1961),  as in force from time to time, shall apply, so far as may be, in relation to securities  transaction tax as they apply in relation to income-tax- 120, 131, 133A, 156, 178, 226 to 227, 229, 232, 260A, 261, 262, 265 to 269, 278B, 282 and  288 to 293.

SECTION 110: Appeals to Commissioner of Income-tax (Appeals):  

(1) Any assessee aggrieved by any assessment order passed by the Assessing Officer  under (S.102) or any order under (S.103), or denying his liability to be  assessed under this Chapter, or by an order levying penalty under this Chapter, may  appeal to the Commissioner of Income-tax (Appeals) within thirty days from the date of  receipt of the order of the Assessing Officer.

(2) Every appeal under sub-section (1) shall be in the prescribed form and shall be  verified in the prescribed manner and shall be accompanied by a fee of one thousand  rupees.

(3) Where an appeal has been filed under the provisions of sub-section (1), the  provisions of (S.249), (S.250), (S.251 of the Income-tax Act, 1961) (43 of 1961), shall,  as far as may be, apply.

SECTION 111: Appeals to the Appellate Tribunal:

(1) Any assessee aggrieved by an order passed by a Commissioner of Income-tax (Appeals)  under (S.110) may appeal to the Appellate Tribunal against such order.

(2) The Commissioner of Income-tax may, if he objects to any order passed by the  Commissioner of Income-tax (Appeals) under (S.110), direct the Assessing Officer  to appeal to the Appellate Tribunal against such 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 received  by the assessee, or by the Commissioner of Income-tax, as the case may be.

(4) Every appeal under sub-section (1) or sub-section (2) shall be in the  prescribed form and shall be verified in the prescribed manner and in the case of  an appeal filed under sub-section (1) shall be accompanied by a fee of one  thousand rupees.

(5) Where an appeal has been filed before the Appellate Tribunal under  sub-section (1) or sub-section (2), the provisions of (S.252), (S.253), (S.254) and (S.255 of the Income-tax Act, 1961) (43 of 1961) shall,  as far as may be, apply.

SECTION 112: False statement in verification etc.:

(1) If a person make a statement in any verification under this Chapter or 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 with imprisonment for a term which may extend to three years and with fine.

(2) Notwithstanding anything contained in the (Code of Criminal Procedure, 1973 (2 of 1974),  an offence punishable under sub-section (1) shall be deemed to be non-cognizable within  the meaning of that Code.

SECTION 113: Institution of proceedings:

A person shall not be proceeded against for any offence under (S.112)  except with the previous sanction of the Chief Commissioner of Income-tax.

SECTION 114: Power to make rules:

(1) The Central Government may, by notification in the Official Gazette, make  rules for carrying out the provisions of this Chapter

(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 time within which the return shall be delivered or caused to be delivered to  the Assessing Officer or to any other agency and the form and the manner in which such  return shall be furnished under sub-section (1) or sub-section (2) of (S.101) ; (b) the time with which the return shall be furnished on receipt of notice under  sub-section (2) of (S.101); (c) the form in which an appeal under (S.110) or (S.111) may be filed and  he manner in which they may be verified; (d) any other matter which by this Chapter is to be, or may be, prescribed.

(3) Every rule made under this Chapter and every notification issued under this Chapter  shall be laid, as soon as may be after it is made or issued, 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 notification or both Houses agree  that the rule should not be made or the notification should not be issued, the rule or  notification 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 or  notification.

SECTION 115: Power to remove difficulties:

(1) If any difficulty arises in giving effect to the provisions of this Chapter,  the Central Government may, by order published in the Official Gazette, not inconsistent  with the provisions of this Chapter, remove the difficulty:  Provided that no such order shall be made after the expiry of a period of two years  from the date on which the provisions of this Chapter come into force.

(2) Every order made under this section shall be laid, as soon as may be after it is  made, before each House of Parliament.

CHAPTER 8: MISCELLANEOUS:

SECTION 116: Amendment of Act 5 of 1873:

In (S.3 of the Government Savings Banks Act, 1873), for clause (b),  the following clauses shall be substituted, namely- '(b) "Government Savings Bank" means  (i) a Post Office Savings Bank; or (ii) a banking company, or any other company or institution, as the Central  Government may, by notification in the Official Gazette, specify, for the purposes  of this Act;

(bb) "Secretary" means,--   (i) in the case of a Post Office Savings Bank, the Postmaster-General appointed  for the area in which the Post Office Savings Bank is situated, or any officer of  the Government as the Central Government may, by general or special order, specify  in this behalf; and (ii) in the case of a banking company or other company or institution, an officer  of that banking company or other company or institution, as the case may be, or any  officer of the Government or any other person as the Central Government may, by  general or special order, specify in this behalf;'.

SECTION 117: Amendment of Act 2 of 1899:

In the Indian Stamp Act, 1899,--  (i) in (S.2), after clause (25), the following clause shall be inserted, namely- '(26) Stamp.--"Stamp" means any mark, seal or endorsement by any agency or person duly  authorised by the State Government, and includes an adhesive or impressed stamp, for the  purposes of duty chargeable under this Act.';

(ii) in section 9, in sub-section (1), in clause (b), after the words "consolidation  of duties", the words "of policies of insurance and" shall be inserted;

(iii) in Schedule 1, in Article No. 53, in the first column, for the words  "five hundred rupees", the words "five thousand rupees" shall be  substituted.

SECTION 118: Amendment of section 8:

In (S.8 of the Central Sales Tax Act, 1956) (74 of 1956) (hereinafter referred to as  the Central Sales Tax Act),--  (a) for sub-section (6), the following sub-section shall be substituted, namely- "(6) Notwithstanding anything contained in this section, no tax under this Act shall be  payable by any dealer in respect of sale of any goods made by such dealer, in the course  of inter-State trade or commerce to a registered dealer for the purpose of setting up,  operation, maintenance, manufacture, trading, production, processing, assembling,  repairing, reconditioning, re-engineering, packaging or for use as packing material  or packing accessories in a unit located in any special economic zone or for development,  operation and maintenance of special economic zone by the developer of the special  economic zone, if such registered dealer has been authorised to establish such unit  or to develop, operate and maintain such special economic zone by the authority specified  by the Central Government in this behalf.";

(b) in sub-section (8), for the words, brackets and figures "authority referred to in  sub-section (6) a declaration in the prescribed manner on the prescribed form obtained  from the authority referred to in sub-section (5)", the following shall be substituted,  namely- "prescribed authority referred to in sub-section (4) a declaration in the prescribed  manner on the prescribed form obtained from the authority specified by the Central  Government under sub-section (6)".

SECTION 119: Amendment of Chapter VI:

In Chapter VI of the Central Sales Tax Act, as directed to be inserted by  Section 3 of the Central Sales Tax (Amendment) Act, 2001(41 of 2001), and as it stands  amended by the Finance Act, 2003(32 of 2003), with effect from the commencement  of the Central Sales Tax (Amendment) Act, 2001,-- (a) in (S.19), in sub-section (1), for the words, figures and letter  "section 6A or section 9", the words, figures and letter "section 6A read with  section 9" shall be substituted;

(b) in  (S.20), in sub-section (1), for the words, figures and letter  "section 6A or section 9", the words, figures and letter "section 6A read with  section 9" shall be substituted;

(c) in (S.21), in sub-section (3), in the first proviso, for the words  "also to the State Government", the words "also to each State Government" shall  be substituted;

(d) in (S.22), after sub-section (1), the following sub-section shall be  inserted, namely-   "(1A) The Authority may grant stay of the operation of the order of the assessing  authority against which the appeal is filed before it or order the pre-deposit of the  tax before entertaining the appeal and while granting such stay or making such order  for the pre-deposit of the tax, the Authority shall have regard, if the assessee has  already made pre-deposit of the tax under the general sales tax law of the State  concerned, to such pre-deposit.";

(e) in (S.25), for the words "every appeal", the words "any proceeding"  shall be substituted;

(f) in (S.26), for the words "the assessing authorities", the words "each  State Government concerned, the assessing authorities" shall be substituted.

SECTION 120: Amendment of section 4 of Act 39 of 2003:

In (S.4 of the Fiscal Responsibility and Budget Management Act, 2003),  for the figures, letters and word "31st March, 2008", at both the places where they occur,  the figures, letters and word "31st March, 2009" shall be substituted.

SECTION 121: Repeal of section 2 of Act 13 of 2004:

(S.2 of the Finance Act, 2004) is hereby repealed and shall be deemed never  to have been enacted.

SCHEDULE 1: THE FIRST SCHEDULE:

Schedule 

Section 1 TABLE

SCHEDULE 2: THE SECOND SCHEDULE:

Schedule    [See section 88(1)]

Section 2 Table