Section 4. The Explanation renumbered as Explanation 1 thereof by Act 49 of 1991, s. 90 (w.e.f. 1-4-1963)

4. The Explanation renumbered as Explanation 1 thereof by Act 49 of 1991, s. 90 (w.e.f. 1-4-1963). 5. Ins. by s. 90, ibid , (w.r.e.f. 1-4-1958.) 6. Ins. by Act 41 of 1975, s. 120 (w.e.f. 1-10-1975). (ii) an association of persons or a body of individuals means any member controlling the affairs thereof. 4. Unquoted preference shares. — (1) Subject to the provisions of sub-rule (2), the value of an unquoted preference share in any company shall,— (a) where the preference share is issued before the date on which the gift was made at a rate of dividend of not less than eight per cent. be the paid-up value of such share; and (b) where the preference share is issued before the said date at a rate of dividend of less than eight per cent. be the adjusted paid-up value of such share. (2) Where no dividend has been paid in respect of an unquoted preference share by any company continuously for not less than three accounting years ending on the date on which the gift was made or, in a case where the accounting year of the company does not end on that date, for not less than three continuous accounting years ending on a date immediately before the date on which the gift was made, the paid-up value or, as the case may be, the adjusted paid-up value shall be reduced— (a) in the case of a non-cumulative preference share, as indicated in the Table below : TABLE Number of accounting years ending on the date on which the gift was made or, in a case where the accounting year does not end on that date, the number of accounting years ending on a date immediately preceding the date on which the gift was made, for which no dividend has been paid Rate of reduction (1) (2) |Three Years|10%|| |---|---|---| |Four Years|of<br>the<br>20%|the paid-up value or<br> <br>adjusted<br>paid-up| |Five Years|value, as the case may<br>be;<br>30%|| |Six Years and above|40%|| (b) in the case of a cumulative preference share, by one-half of the rates specified in the aforesaid Table. Explanation. —For the purposes of this rule, "adjusted paid-up value", in relation to a preference share, means an amount which bears to the paid-up value of the preference share the same proportion as the stipulated rate of dividend [being the rate of dividend on the preference share specified in the terms of issue of such share, and in a case where such dividend is required to be increased under the provisions of section 3 of the Preference Shares (Regulation of Dividends) Act, 1960 (63 of 1960), the rate of dividend as so increased] on such share bears to the rate of eight per cent. 2. Subs. by Act 4 of 1988, s. 161, for "Gift-tax Officer" (w.e.f. 1-4-1988). 3. Subs. by s. 161, ibid ., for "Appellate Assistant Commissioner" (w.e.f. 1-4-1988). 4. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 5. Subs. by Act 4 of 1988, s. 161, for "Commissioner" (w.e.f. 1-4-1988). 6. Clause (a) omitted by Act 3 of 1989, s. 86 (w.e.f. 1-4-1989). 7. The words "without reasonable cause" omitted by Act 46 of 1986, s. 40 (w.e.f. 10-9-1986). 8. Clause (i) omitted by Act 3 of 1989, s. 86 (w.e.f. 1-4-1989). 9. Subs. by s. 86, ibid ., for clause (ii) (w.e.f. 1-4-1989). 10. Subs. by s. 86, ibid ., for the proviso (w.e.f. 1-4-1989). 11. Ins. by s. 86, ibid. (w.e.f. 1-4-1989). (2) No order imposing a penalty under sub-section (1) shall be made unless the assessee has been heard or has been given a reasonable opportunity of being heard. 1 [(3) No order imposing a penalty under sub-section (1) shall be made,— (i) by the Income-tax Officer, where the penalty exceeds ten thousand rupees; (ii) by the[2] [Assistant Commissioner or Deputy Commissioner] where the penalty exceeds twenty thousand rupees, except with the prior approval of the[3] [Joint Commissioner.] (4) A[4] [Deputy Commissioner (Appeals)],[5] [a Commissioner (Appeals), a[6] [Chief Commissioner or Commissioner] or the Appellate Tribunal] on making an order under this section imposing a penalty, shall forthwith send a copy of the same to the[7] [Assessing Officer].] 8[(5) No order imposing a penalty under this section shall be passed— (i) in a case where the assessment to which the proceedings for imposition of penalty relate is the subject-matter of an appeal to the Deputy Commissioner (Appeals) or Commissioner (Appeals) under section 22 or an appeal to the Appellate Tribunal under sub-section (2) of section 23, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of the Deputy Commissioner (Appeals) or the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Chief Commissioner or Commissioner, whichever is later; (ii) in a case where the relevant assessment is the subject-matter of revision under sub-section (2) of section 24, after the expiry of six months from the end of the month in which such order of revision is passed; (iii) in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later. Explanation .—In computing the period of limitation for the purposes of this section,— (i) the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 38; and (ii) any period during which a proceeding under this section for the levy of penalty is stayed by an order or injunction of any court, shall be excluded. (6) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1989 (3 of 1989) shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in 1. Subs. by Act 3 of 1989, s. 86, for sub-section (3) (w.e.f. 1-4-1989). 2. Subs. by Act 21 of 1998, s. 76, for "Assistant Commissioner" (w.e.f. 1-10-1998). 3. Subs. by s. 76, ibid ., for "Deputy Commissioner" (w.e.f. 1-10-1998). 4. Subs. by Act 4 of 1988, s. 161 for "An Appellate Assistant Commissioner" (w.e.f. 1-4-1988). 5. Subs. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 6. Subs. by Act 4 of 1988, s. 161 for "Commissioner" (w.e.f. 1-4-1988). 7. Subs. by s. 161, ibid ., "Gift-tax Officer" (w.e.f. 1-4-1988). 8. Ins. by Act 3 of 1989, s. 86 (w.e.f. 1-4-1989). this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.] 1[17A. Penalty for failure to answer questions, sign statements, furnish information, allow inspections, etc. — (1) If a person,— (a) being legally bound to state the truth of any matter touching the subject of his assessment, refuses to answer any question put to him by a gift-tax authority in the exercise of his powers under this Act; or (b) refuses to sign any statement made by him in the course of any proceedings under this Act, which a gift-tax authority may legally require him to sign; or (c) to whom a summons is issued under sub-section (1) of section 36, either to attend to give evidence or produce books of account or other documents at a certain place and time, omits to attend or produce the books of account or documents at the place and time, he shall pay, by way of penalty, a sum which shall not be less than five hundred rupees but which may extend to ten thousand rupees for each such default or failure : Provided that no penalty shall be imposable under clause (c) if the person proves that there was reasonable cause for the said failure. (2) If a person fails to furnish in due time any statement or information which such person is bound to furnish to the Assessing Officer under section 37, he shall pay, by way of penalty, a sum which shall not be less than one hundred rupees but which may extend to two hundred rupees for every day during which the failure continues : Provided that no penalty shall be imposable under this sub-section if the person proves that there was reasonable cause for the said failure. (3) Any penalty imposable under sub-section (1) or sub-section (2) shall be imposed— (a) in a case where the contravention, failure or default in respect of which such penalty is imposable occurs in the course of any proceeding before a gift-tax authority not lower in rank than a 2[Joint Director] or a 3[Joint Commissioner], by such gift-tax authority; (b) in any other case, by the[2] [Joint Director] or the[3] [Joint Commissioner]. (4) No order under this section shall be passed by any gift-tax authority referred to in sub-section (3) unless the person on whom penalty is proposed to be imposed has been heard or has been given a reasonable opportunity of being heard in the matter by such authority. Explanation .—In this section, "gift-tax authority" includes a Director General, Director,[2] [Joint Director],[4] [Assistant Director or Deputy Director] or Valuation Officer while exercising the powers vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the matters specified in sub-section (1) of section 36.] 5[18. Rebate on advance payments. — If a person making a taxable gift pays into the treasury within fifteen days of his making the gift any part of the amount of tax due on the gift calculated at rates 1. Subs. by Act 3 of 1989, s. 87, for section 17A (w.e.f. 1-4-1989). 2. Subs. by Act 21 of 1998, s. 76, for "Deputy Director" (w.e.f. 1-10-1998). 3. Subs. by s. 76, ibid ., for "Deputy Commissioner" (w.e.f. 1-10-1998). 4. Subs. by s. 76, ibid ., for "Assistant Director" (w.e.f. 1-10-1998). 5. Subs. by Act 41 of 1975, s. 115, for section 18 (w.e.f. 1-4-1976). specified in the Schedule[1] [or at the rate specified in sub-section (2) of section 3], he shall, at the time of assessment under section 15, be given credit— (i) for the amount so paid; and (ii) for a sum equal to one-ninth of the amount so paid, so however, that such sum shall in no case exceed one-tenth of the tax due on the gift. Explanation .—If a person makes more than one taxable gift in the course of a previous year, the amount of tax due on any one of such gifts shall be the difference between the total amount of tax due on the aggregate value of all the taxable gifts so far made, including the taxable gift in respect of which tax has to be paid, calculated at the rates specified in the Schedule or, as the case may be[2] [at the rate specified in sub-section (2) of section 3], and the total amount of tax on the aggregate value of all the gifts made during that year, excluding the taxable gift in respect of which tax has to be paid, calculated at the rates specified in the Schedule or, as the case may be,[2] [at the rate specified in sub-section (2) of section 3].]