Law: Gift Tax Act, 1958

Section: 15(5),6(1),6(3)

Law: Gift Tax Rules, 1963

Section: 9(3B)

Gift Tax Act, 1963 (XIV of 1963)---Sections 2, 3, 6(3), read with sub-rule 3-B of Rule 9 of the Gift Tax Rules 1963---Applicability of Notification Charge of gift tax---Assessment year-Determination of value of land gifted-Appellant gifted his agricultural land on 28-4-1971-Assessing officer determined the value of gifted land-Appeal filed before Appellate Tribunal-Notification No. S.R.O. 292(I)/71, dated 29-7-1971 --- Whether applicable in completing the assessment--Held yes-Whether notification had retrospective eject-Held yes--Whether orders of the Gift Tax Authorities and also of the High Court sustainable--Held no. Feeling aggrieved by the orders dated 26-6-1975 the appellant filed an appeal before the Appellate Tribunal which was disposed of by an order dated 21-2-1977. Before the learned Members of the Appellate Tribunal the appellant's counsel urged that sub-rule (3-B) of Rule 9 of the Gift Tax Rules by Notification No. 292(I)/71, could be invoked and, at any rate, the principles laid down therein should be applicable in completing the assessment against the appellant. The learned Members of the appellate Tribunal however, did not accept this plea and by order dated 21-6-1977 dismissed the appeal. The Scheme of the Gift Tax appears to be that in respect of all gifts made during the "previous year", tax must be calculated on these gifts at the rate specified in the Schedule which is in force on the first day of the assessment year following the pervious year. In other words, the tax is to be paid for the "assessment year" and not for the "accounting year". In this case, the gift having been made on 28-4-1971 the accounting year thereof was from 1-7-1970 to 30-6-1971 whereas the assessment year was from 1-7-1971 to 30-6-1972. Thus, the tax to be calculated on the gift made on 28-4-1971 was liable to be calculated at the rate specified in the Schedule which was in force as from the 1st day of the assessment year following the previous year namely in force on l-7-1971. Accordingly, the question whether Notification No. S.R.O. 292(I)/71, dated 29th July, 1971 could be given retrospective effect does not really arise in this case. The question simply was…

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