Income Tax Act, 2025
Section 3: Ins. by Act 10 of 1965, s. 39 (w.e.f. 11965).
3. Ins. by Act 10 of 1965, s. 39 (w.e.f. 11965).
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(ii) at any time before the expiry of the eight years referred to in sub-section (3) of section 33A,
the assesseeutilises the amount credited to the reserve account under clause (ii) of that sub-section—
(a) for distribution by way of dividends or profits; or
(b) for remittance outside India as profits or for the creation of any asset outside India; or
(c) for any other purpose which is not a purpose of the business of the undertaking;
the development allowance originally allowed shall be deemed to have been wrongly allowed, and the
1[Assessing Officer] may, notwithstanding anything contained in this Act, recompute the total income of
the assessee for the relevant previous year and make the necessary amendment; and the provisions
of section 154 shall, so far as may be, apply thereto, the period of four years specified in sub-section (7)
of that section being reckoned from the end of the previous year in which the sale or transfer took place or
the money was so utilised.]
2[Explanation.—For the purposes of this sub-section, where an assessee having any leasehold or other
right of occupancy in any land transfers such right, he shall be deemed to have sold or otherwise
transferred such land.]
3[(5B) Where any deduction in respect of any expenditure on scientific research has been made in any
assessment year under sub-section (2B) of section 35 and the assessee fails to furnish a certificate of
completion of the programme obtained from the prescribed authority within one year of the period
allowed for its completion by such authority, the deduction originally made in excess of the expenditure
actually incurred shall be deemed to have been wrongly made, and the 1[Assessing Officer] may,
notwithstanding anything contained in this Act, recompute the total income of the assessee for therelevant
previous year and make the necessary amendment; and the provisions of section 154 shall, so far as may
be, apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from
the end of the previous year in which the period allowed for the completion of the programme by the
prescribed authority expired.]
4* * * * *
(7) Where as a result of any proceeding under this Act, in the assessment for any year of a company
in whose case an order under section 104 has been made for that year, it is necessary to recompute the
distributable income of that company, the 1[Assessing Officer] may proceed to recompute the
distributable income and determine 5[the tax] payable on the basis of such recomputation and make the
necessary amendment; and the provisions of section 154 shall, so far as may be, apply thereto, the period
of four years specified in sub-section (7) of that section being reckoned 6[from the end of the financial
year in which the final order was passed] in the case of the company in respect of that proceeding.
7* * * * *
8[(7B) Where in the assessment for any year, the capital gain arising from the transfer of a capital
asset is not charged under section 45 by virtue of the provisions of clause (iv) or, as the case may be,
clause (v) of section 47, but is deemed under section 47A to be income chargeable under the head
"Capital gains" of the previous year in which the transfer took place by reason of—
(i) such capital asset being converted by the transferee company into, or being treated by it, as
stock-in-trade of its business; or
(ii) the parent company or its nominees or, as the case may be, the holding company ceasing to
hold the whole of the share capital of the subsidiary company,
at any time before the expiry of the eight years referred to in sub-section
of section 33A,
the assesseeutilises the amount credited to the reserve account under clause
of that sub-section—
for distribution by way of dividends or profits; or
for remittance outside India as profits or for the creation of any asset outside India; or
for any other purpose which is not a purpose of the business of the undertaking;
the development allowance originally allowed shall be deemed to have been wrongly allowed, and the
1[Assessing Officer] may, notwithstanding anything contained in this Act, recompute the total income of
the assessee for the relevant previous year and make the necessary amendment; and the provisions
of section 154 shall, so far as may be, apply thereto, the period of four years specified in sub-section
of that section being reckoned from the end of the previous year in which the sale or transfer took place or
the money was so utilised.]
2[Explanation.—For the purposes of this sub-section, where an assessee having any leasehold or other
right of occupancy in any land transfers such right, he shall be deemed to have sold or otherwise
transferred such land.]
3[
Where any deduction in respect of any expenditure on scientific research has been made in any
assessment year under sub-section
of section 35 and the assessee fails to furnish a certificate of
completion of the programme obtained from the prescribed authority within one year of the period
allowed for its completion by such authority, the deduction originally made in excess of the expenditure
actually incurred shall be deemed to have been wrongly made, and the 1[Assessing Officer] may,
notwithstanding anything contained in this Act, recompute the total income of the assessee for therelevant
previous year and make the necessary amendment; and the provisions of section 154 shall, so far as may
be, apply thereto, the period of four years specified in sub-section
of that section being reckoned from
the end of the previous year in which the period allowed for the completion of the programme by the
prescribed authority expired.]
4* * * * *
Where as a result of any proceeding under this Act, in the assessment for any year of a company
in whose case an order under section 104 has been made for that year, it is necessary to recompute the
distributable income of that company, the 1[Assessing Officer] may proceed to recompute the
distributable income and determine 5[the tax] payable on the basis of such recomputation and make the
necessary amendment; and the provisions of section 154 shall, so far as may be, apply thereto, the period
of four years specified in sub-section
of that section being reckoned 6[from the end of the financial
year in which the final order was passed] in the case of the company in respect of that proceeding.
7* * * * *
8[
Where in the assessment for any year, the capital gain arising from the transfer of a capital
asset is not charged under section 45 by virtue of the provisions of clause
or, as the case may be,
clause
of section 47, but is deemed under section 47A to be income chargeable under the head
"Capital gains" of the previous year in which the transfer took place by reason of—
such capital asset being converted by the transferee company into, or being treated by it, as
stock-in-trade of its business; or
the parent company or its nominees or, as the case may be, the holding company ceasing to
hold the whole of the share capital of the subsidiary company,