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Section 22D – The Wealth-Tax Act, 1957

The Wealth-Tax Act, 1957

 

 

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

 

1[22D. Procedure on receipt of an application under section 22C .— 2[(1) On receipt of an application under section 22C, the Settlement Commission shall, within seven days from the date of receipt of the application, issue a notice to the applicant requiring him to explain as to why the application made by him be allowed to be proceeded with, and on hearing the applicant, the Settlement Commission shall, within a period of fourteen days from the date of the application, by an order in writing, reject the application or allow the application to be proceeded with:

 

Provided that where no order has been passed within the aforesaid period by the Settlement Commission, the application shall be deemed to have been allowed to be proceeded with.]

 

3[***]

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

 

4[(2A) Where an application was made under section 22C before the 1st day of June, 2007 but an order under the provisions of sub-section (1) of this section, as they stood immediately before their amendment by the Finance Act, 2007, has not been made before the 1st day of June, 2007, such application shall be deemed to have been allowed to be proceeded with if the additional wealth-tax on the wealth disclosed in such application and the interest thereon is paid on or before the 31st day of July, 2007.

 

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

 

5[(2B) The Settlement Commission shall,—

(i) in respect of an application which is allowed to be proceeded with under sub-section (1), within thirty days from the date on which the application was made; or

 

(ii) in respect of an application referred to in sub-section (2A) which is deemed to have been allowed to be proceeded with under that sub-section, on or before the 7th day of August, 2007, call for a report from the Commissioner, and the Commissioner shall furnish the report within a period of thirty days of the receipt of communication from the Settlement Commission.]

 

6[(2C) Where a report of the Commissioner called for under sub-section (2B) has been furnished within the period specified therein, the Settlement Commission may, on the basis of the material contained in such report and within a period of fifteen days of the receipt of the report, by an order in writing, declare the application in question as invalid, and shall send the copy of such order to the applicant and the Commissioner:

 

Provided that an application shall not be declared invalid unless an opportunity has been given to the applicant of being heard:

 

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

 

7[(2D) Where an application was made under sub-section (1) of section 22C before the 1st day of June, 2007 and an order under the provisions of sub-section (1) of this section, as they stood immediately before their amendment by the Finance Act, 2007, allowing the application to have been proceeded with, has been passed before the 1st day of June, 2007, but an order under the provisions of sub-section (4), as they stood immediately before their amendment by the Finance Act, 2007, was not passed before the 1st day of June, 2007, such application shall not be allowed to be further proceeded with unless the additional wealth-tax on the wealth disclosed in such application and the interest thereon, is, notwithstanding any extension of time already granted by the Settlement Commission, paid on or before the 31st day of July, 2007.]

 

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

 

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

 

(ii) an application referred to in sub-section (2D) which has been allowed to be further proceeded with under that sub-section, may call for the records from the Commissioner and after examination of such records, if the Settlement Commission is of the opinion that any further enquiry or investigation in the matter is necessary, it may direct the Commissioner to make or cause to be made such further enquiry or investigation and furnish a report on the matters covered by the application and any other matter relating to the case, and the Commissioner shall furnish the report within a period of ninety days of the receipt of communication from the Settlement Commission:

 

Provided that where the Commissioner does not furnish his report within the aforesaid period, the Settlement Commission may proceed to pass an order under sub-section (4) without such report.

 

(4) After examination of the records and the report of the Commissioner, if any, received under—

 

(i) sub-section (2B) or sub-section (3), or

 

(ii) the provisions of sub-section (1), as they stood immediately before their amendment by the Finance Act, 2007, and after giving an opportunity to the applicant and to the Commissioner to be heard, either in person or through a representative duly authorised in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of this Act, pass such order, as it thinks fit, on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner.]

 

9[(4A) The Settlement Commission shall pass an order under sub-
section (4),—

 

(i) in respect of an application referred to in sub-section (2A) or sub-section (2D), on or before the 31st day of March, 2008;

 

(ii) in respect of an application made on or after 1st day of June, 2007, within twelve months from the end of the month in which the application was made.]

 

10[(5) Subject to the provisions of section 22BA, the materials brought on record before the Settlement Commission shall be considered by the members of the concerned Bench before passing any order under sub-section (4) and, in relation to the passing of such order, the provisions of section 22BD shall apply.]

 

(6) Every order passed under sub-section (4) shall provide for the terms of settlement including any demand by way of 11[tax, penalty or interest], the manner in which any sum due under the settlement shall be paid and all other matters to make the settlement effective and shall also provide that the settlement shall be void if it is subsequently found by the Settlement Commission that it has been obtained by fraud or misrepresentation of facts.

 

12[(6A) Where any tax payable in pursuance of an order under sub-section (4) is not paid by the assessee within thirty-five days of the receipt of a copy of the order by him, then, whether or not the Settlement Commission has extended the time for payment o
f such tax or has allowed payment thereof by instalments, the assessee shall be liable to pay simple interest at 13[one and one-fourth per cent. for every month or part of a month] on the amount remaining unpaid from the date or expiry of the period of thirty-five days aforesaid.]

 

(7) Where a settlement becomes void as provided in sub-section (6), the proceedings with respect to the matters covered by the settlement shall be deemed to have been revived from the stage at which the application was allowed to be proceeded with by the Settlement Commission and the Wealth-tax authority concerned may, notwithstanding anything contained in any other provision of this Act, complete such proceedings at any time before the expiry of two years from the end of the financial year in which the settlement became void.

 

14[(8), For the removal of doubts, it is hereby declared that nothing contained in section 17A shall apply to any order passed under sub-section (4) or to any order or assessment or reassessment required to be made by the 15[Assessing Officer] in pursuance of any directions contained in such order passed by the Settlement Commission.]

 

——————————————–

1. Chapter VA (Containing sections 22A to 22M) ins. by Act 41 of 1975, sec. 93 (w.e.f. 1-4-1976).

 

2. Subs. by Act 22 of 2007, sec. 86(i), for sub-section (1) (w.e.f. 1-6-2007). Earlier sub-section (1) was amended by Act 21 of 1979, sec. 24(a) (w.e.f. 1-4-1980), by Act 49 of 1991, sec. 78(a) (w.e.f. 27-9-1991) and by Act 20 of 2002, sec. 112(a) (w.e.f. 1-6-2002). Sub-section (1), before substitution, by Act 22 of 2007, stood as under: “(1) On receipt of an application under section 22C, the Settlement Commission shall call for a report from the Commissioner and on the basis of the materials contained in such report and having regard to the nature and circumstances of the case or the complexity of the investigation involved therein, the Settlement Commission shall, where it is possible, by order, reject the application or allow the application to be proceeded with within a period of one year from the end of the month in which such application was made under section 22C: Provided that an application shall not be rejected under this sub-section unless an opportunity has been given to the applicant of being heard.” Provided further that the Commissioner shall furnish the report within a period of one hundred and twenty days of the receipt of communication from the Settlement Commission in case of all applications made under section 22C on or after the date on which the Finance (No.2) Act, 1991, receives the assent of the President and if the Commissioner fails to furnish the report within the said period, the Settlement Commission may make the order without such report.”.

 

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

 

4. Subs. by Finance Act, 2007, sec. 86(ii), for sub-section (2A) (w.e.f. 1-6-2007). Earlier sub-section (2A) was amended by Act 32 of 1985, sec. 39 (w.r.e.f. 1-10-1984) and was inserted by Act 67 of 1984, sec. 62(a) (w.e.f. 1-10-1984). Sub-section (2A), before substitution by Finance Act, 2007, stood as under: “(2A) Subject to the provisions of sub-section (2B), the assessee shall, within thirtyfive days of the receipt of a copy of the order under sub-section (1) allowing the application to be proceeded with, pay the additional amount of wealth-tax payable on the wealth disclosed in the application and shall furnish proof of such payment to the Settlement Commission.”.

 

5. Subs. by Finance Act, 2007, sec. 86(ii), for sub-section (2B) (w.e.f. 1-6-2007). Earlier sub-section (2B) was inserted by Act 67 of 1984, sec. 62(a) (w.e.f. 1-10-1984). Sub-section (2B), before substitution by Finance Act, 2007, stood as under: “(2B) If the Settlement Commission is satisfied, on an application made in this behalf by the assessee, that he is unable for good and sufficient reasons to pay the additional amount of wealth-tax referred to in sub-section (2A) within the time specified in that sub-section, it may extend the time for payment of the amount which remains unpaid or allow payment thereof by instalments if the assessee furnishes adequate security for the payment thereof.”.

 

6. Subs. by Finance Act, 2007, sec. 86(ii), for sub-section (2C) (w.e.f. 1-6-2007). Earlier sub-section (2C) was inserted by Act 67 of 1984, sec. 62(a) (w.e.f. 1-10-1984). Sub-section (2C), before substitution by Finance Act, 2007, stood as under: “(2C) Where the additional amount of wealth-tax is not paid within the time specified under sub-section (2A), then whether or not the Settlement Commission has extended the time for payment of the amount which remains unpaid or has allowed payment thereof by instalments under sub-section (2B), the assessee shall be liable to pay simple interest at fifteen per cent per annum on the amount remaining unpaid from the date of expiry of the period of thirty-five days referred to in sub-section (2A).”.

 

7. Subs. by Finance Act, 2007, sec. 86(ii), for sub-section (2D) (w.e.f. 1-6-2007). Earlier sub-section (2D) was inserted by Act 67 of 1984, sec. 62(a) (w.e.f. 1-10-1984), and was amended by Act 4 of 1988, sec. 127 (w.e.f. 1-4-1988). Sub-section (2D), before substitution by Finance Act, 2007, stood as under: “(2D) Where the additional amount of wealth-tax referred to in sub-section (2A) is not paid by the assessee within the time specified under that sub-section or extended under sub-section (2B), as the case may be, the Settlement Commision may direct that the amount of wealth-tax remaining unpaid together with any interest payable thereon under sub-section (2C), be recovered and any penalty for default in making payment of such additional amount of wealth-tax may be imposed and recovered, in accordance with the provisions of Chapter VII, by the Assessing Officer having jurisdiction over the assessee.”.

 

8. Subs. by Finance Act, 2007, sec. 86(iii), for sub-section (3) and (4) (w.e.f. 1-6-2007). Sub-sections (3) and (4), before substitution by Finance Act, 2007, stood as under: “(3) Where an application is allowed to be proceeded with under sub-section (1), the Settlement Commission may call for the relevant records from the Commissioner and after examination of such records, if the Settlement Commission is of the opinion that any further enquiry or investigation in the matter is necessary, it may direct the Commissioner to make or cause to be made such further enquiry or investigation and furnish a report on the matters covered by the application and any other matter relating to the case. (4) After examination of the records and the report of the Commissioner received under sub-section (1) and the report, if any, of the Commissioner received under sub-section (3), and after giving an opportunity to the applicant and to the Commissioner to be heard, either in person or through a representative duly authorised in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of this Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application but referred to in the report of the Commissioner under subsection (1) or sub-section (3).”.

 

9. Subs.
by Finance Act, 2007, sec. 86(iii), for sub-section (4A) (w.e.f. 1-6-2007). Earlier sub-section (4A) was inserted by Act 20 of 2002, sec. 112(b) (w.e.f. 1-6-2002). Sub-section (4A), before substitution by Finance Act, 2007, stood as under: “(4A) In every application, allowed to be proceeded with under sub-section (1), the Settlement Commission shall, where it is possible, pass an order under sub-section (4) within a period of four years from the end of the financial year in which such application was allowed to be proceeded with.”.

 

10. Ins. by Act 11 of 1987, sec. 81(a) (w.e.f. 1-6-1987). Earlier sub-section (5) was amended by Act 14 of 1982, sec. 37 (w.r.e.f. 1-4-1982) and was omitted by Act 46 of 1986, sec. 35 (w.e.f. 10-9-1986).

 

11. Subs. by Act 11 of 1987, sec. 81(b), for “tax or penalty” (w.e.f. 1-6-1987). Earlier the words “tax or penalty” were substituted by Act 67 of 1984, sec. 62(b), for the words “tax, penalty or interest” (w.e.f. 1-10-1984).

 

12. Ins. by Act 67 of 1984, sec. 62(c) (w.e.f. 1-10-1984).

 

13. Subs. by Finance Act, 2007, for “fifteen per cent. per annum” (w.e.f. 1-4-2008).

 

14. Ins. by Act 67 of 1984, sec. 62(d) (w.e.f. 1-10-1984).

 

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

 

 

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The Wealth-Tax Act, 1957

 

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