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The Finance Act, 1975

( ACT NO. III OF 1975 )

[ 30th June, 1975 ]

Amendment of Act XI of 1922
2. The following amendments shall be made in the Income-tax Act, 1922 (XI of 1922), namely:-
 
 
 
 
(1) throughout the Act,-
 
 
 
 
(a) for the words “Commissioner of Income-tax” and “Commissioners of Income-tax” wherever occurring, the words “Commissioner of Taxes” and “Commissioners of Taxes” shall respectively be substituted;
 
 
 
 
(b) for the words “Assistant Commissioner”, “Assistant Commissioner of Income-tax” and “Assistant Commissioners of Income-tax”, wherever occurring, the words “Joint Commissioner”, “Joint Commissioner of Taxes” and “Joint Commissioners of Taxes” shall respectively be substituted;
 
 
 
 
(c) for the words “an Income-tax Officer”, “Income-tax Officer” and “Income-tax Officers” wherever occurring, the words “a Deputy Commissioner of Taxes”, “Deputy Commissioner of Taxes” and “Deputy Commissioners of Taxes” shall respectively be substituted;
 
 
(d) for the words “Assistant Income-tax Officer” and “Assistant Income-tax Officers” wherever occurring, the words “Extra Assistant Commissioner of Taxes” and “Extra Assistant Commissioners of Taxes” shall respectively be substituted; and
 
 
 
 
(e) for the words “Inspector of Income-tax” and “Inspectors of Income-tax” wherever occurring, the words “Inspector of Taxes” and “Inspectors of Taxes” shall respectively be substituted;
 
 
 
 
(2) in section 2,-
 
 
 
 
(a) for clause (3) the following shall be substituted, namely:-
 
 
 
 
“(3) “Appellate Joint Commissioner” means a person appointed to be an Appellate Joint Commissioner of Taxes under section 5;”;
 
 
 
 
(b) for clause (3A) the following shall be substituted, namely:-
 
 
 
 
“(3A) “Assistant Commissioner of Taxes” means a person appointed to be an Assistant Commissioner of Taxes under section 5;”;
 
 
 
 
(c) after clause (5B) the following new clause (5BB) shall be inserted, namely:-
 
 
 
 
“(5BB) “Deputy Commissioner of Taxes” means a person appointed to be a Deputy Commissioner of Taxes under section 5 and includes a person appointed to be a Special Officer, an Assistant Commissioner of Taxes, an Extra Assistant Commissioner of Taxes and an Examining Officer;”;
 
 
 
 
(d) after clause (6AAA), the following new clause (6AAAA) shall be inserted, namely:-
 
 
 
 
“(6AAAA) “Extra Assistant Commissioner of Taxes” means a person appointed to be an Extra Assistant Commissioner of Taxes under section 5;”;
 
 
 
 
(e) for clause (6D) the following shall be substituted, namely:-
 
 
 
 
“(6D) “Inspecting Joint Commissioner” means a person appointed to be an Inspecting Joint Commissioner of Taxes under section 5;”;
 
 
(f) clause (7) shall be omitted;
 
 
 
 
(3) in section 4, in sub-section (3),-
 
 
 
 
(a) clause (vii) shall be omitted;
 
 
 
 
(b) in clause (xii), in sub-clause (e), for the full-stop at the end a semi-colon shall be substituted; and
 
 
 
 
(c) after sub-clause (e), amended as aforesaid, the following new sub-clause (f) shall be inserted, namely:-
 
 
 
 
“(f) in respect of a building the erection of which is begun and completed at any time between the first day of July, 1975 and the thirtieth day of June, 1980 (both days inclusive) and the building is intended to be, and is actually, used for residential purposes only, for a period of five years from the date of such completion, subject to the following limits, namely:-

(i)     in a case where annual value of such building does not exceed eight thousand and four hundred Taka.

.. The whole of such  value;

(ii)    in a case where annual value of such building exceeds eight thousand and four hundred Taka.

..   Eight thousand and four     hundred Taka:

 

Provided that where an assessee claims exemption in respect of more than one such building the exemption under this sub-clause shall be restricted to such portion of the aggregate annual value of such building as does not exceed eight thousand and four hundred Taka.”;

 

 

   (4) in section 5,-

 

 

(a)   for sub-section (1) the following shall be substituted, namely:-

 

 

“(1) There shall be the following classes of income-tax authorities for the purposes of this Act, namely:-

 

 

(a)   the National Board of Revenue,

 

 

(b)   Directors of Inspection,

(c)   Commissioners of Taxes,

 

 

 

(d)   Joint Commissioners of Taxes who may be either Appellate Joint Commissioners of Taxes or Inspecting Joint Commissioners of Taxes,

 

 

 

(e)   Special Officers,

 

 

 

(f)    Deputy Commissioners of Taxes,

 

 

 

(g)   Assistant Commissioners of Taxes,

 

 

 

(h)   Extra Assistant Commissioners of Taxes,

 

 

 

(i)    Tax Recovery Officers,

 

 

 

(j)    Examining Officers, and

 

 

 

(k)   Inspectors of Taxes.”;

 

 

 

(b)   after sub-section (8), the following new sub-section (9) shall be added, namely:-

 

 

 

“(9) References in any Act, Ordinance, Regulation, Rule, Order, bye-law, deed, document or any other instrument of whatever nature to Commissioners of Income-tax, Assistant Commissioners of Income-tax, Income-tax Officers, Assistant Income-tax Officers and Inspectors of Income-tax shall, with their grammatical variations, except where the context otherwise requires, be construed as references respectively to Commissioners of Taxes, Joint Commissioners of Taxes, Deputy Commissioners of Taxes, Extra Assistant Commissioners of Taxes and Inspectors of Taxes; and any such Act, Ordinance, Regulation, Rule, Order, by-law, deed, document or any other instrument of whatever nature shall have effect accordingly.”;

 

 

(5)   in section 5A, for sub-section (3) the following sub-section shall be substituted, namely:-

 

 

“(3)  A judicial member shall be a person who has exercised the powers of a District Judge or who possesses such qualifications as are normally required for appointment to the post of District Judge; and an accountant member shall be a person who has, for a period of not less than six years, practised professionally as a Chartered Accountant within the meaning of the Bangladesh Chartered Accountants Order, 1973 (P.O. No. 2 of 1973), or who has served as a Joint Commissioner of Taxes for at least three years;

Explanation. For the purposes of this sub-section-

 

(a)   period of practice as Chartered Accountant shall include any period of practice as Chartered Accountant within the meaning of the Chartered Accountants Ordinance, 1961 (Ord. X of 1961), or as registered Accountant enrolled on the register of accountants under the Auditor’s Certificate Rules, 1950; and

 

(b)   period of service as Joint Commissioner of Taxes shall include any period of service as Assistant Commissioner of Income-tax.”;

 

(6)   in section 10, in sub-section (5), in clause (b), in the third proviso, for the word “forty” the word “sixty” shall be substituted;

 

(7)   in section 12,-

 

(a)   in sub-section (3), for the full-stop at the end a colon shall be substituted and thereafter the following proviso shall be added, namely:-

 

“Provided that the second proviso to clause (vii) of sub-section (2) of section 10 shall also be applicable for determination of any profits where the value for which the machinery or plant is sold, transferred or compulsorily acquired exceeds the amount of the written down value of such machinery or plant.”; and

 

(b)   in sub-section (4), for the full-stop at the end a colon shall be substituted and thereafter the following proviso shall be added, namely:-

 

“Provided that the second proviso to clause (vii) of sub-section (2) of section 10 shall also be applicable for determination of any profits where the value for which the building is sold, transferred or compulsorily acquired exceeds the amount of the written down value of such building.”;

 

(8)   in section 12 B,-

 

(a) in sub-section (2), after the first proviso, the following new proviso shall be inserted and shall be deemed to have been so inserted with effect from the first day of July, 1974, namely:-

“Provided further that without prejudice to the provisions of the first proviso if in the opinion of the Deputy Commissioner of Taxes the fair market value of a capital asset transferred by an assessee as on the date of the transfer exceeds the full value of the consideration declared by the assessee in respect of the transfer of such capital asset by an amount of not less than fifteen per cent of the value so declared, the full value of the consideration for such capital asset shall, with the previous approval of the Inspecting Joint Commissioner of Taxes, be taken to be its fair market value on the date of its transfer:”; and

 

(b)   after sub-section (4), the following new sub-section (5) shall be added and shall be deemed to have been so added with effect from the first day of July, 1974, namely:-

 

“(5) Notwithstanding anything contained in sub-section (1) where a capital gain arises from the sale, exchange or transfer of a capital asset being buildings or lands appurtenant thereto the income of which is chargeable under the head “Income from property”, which in the two years immediately preceding the date on which the sale, exchange or transfer took place, was being used by the assessee or a parent of his mainly for the purposes of his own or the parent’s own residence, and the assessee has within a period of one year before or after that date purchased, or has within a period of two years after that date constructed, a house property for the purposes of his own residence, then, instead of the capital gain being charged to tax as income of the previous year in which the sale, exchange or transfer took place, it shall, if the assessee so elects in writing before the assessment is made, be dealt with in accordance with the following provisions of this sub-section, that is to say,-

 

(a)   if the amount of the capital gain is greater than the cost of the new asset,-

 

(i)    the difference between the amount of the capital gain and the cost of the new asset shall be charged under this section as income of the previous year, and

(ii)   for the purpose of computing in respect of the new asset any capital gain arising from its sale, exchange or transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or

 

(b)   if the amount of the capital gain is equal to or less than the cost of the new asset,-

 

(i)    the capital gain shall not be charged under this section, and

 

(ii)   for the purpose of computing in respect of the new asset any capital gain arising from its sale, exchange or transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be reduced by the amount of the capital gain:

 

Provided that where in respect of the purchase or construction of a new capital asset consisting of building for the purpose of assessee’s own residence and the assessee satisfies the Deputy Commissioner of Taxes that despite the exercise of due diligence it has not been possible to make the purchase or construction within the period specified in this sub-section, the Deputy Commissioner of Taxes may, with the prior approval of the Inspecting Joint Commissioner of Taxes, extend the said period to such date as he considers reasonable.”;

 

                (9) in section 14A,-

 

(a)   in sub-section (1), for the figure “1978” the figure “1974” shall be substituted;

 

(b) after sub-section (2), the following new sub-sections (2A) and (2B) shall be inserted, namely:-

 

“(2A) Subject to the provisions of this Act, the income, profits and gains of an industrial undertaking set-up in taxable territories between the first day of July, 1974 and the thirtieth day of June, 1976 (both dates inclusive), shall be exempted from the income-tax and super tax payable under this Act for a period of five years beginning with the month in which the commercial production of the undertaking is commenced:

Provided that in the case of an industrial undertaking set-up in such areas as may be specified in this behalf by the National Board of Revenue, by notification in the official Gazette, this sub-section shall have effect as if for the words “five years” the words “seven years” were substituted.

 

(2B) The exemption under sub-section (2A) shall apply to an industrial undertaking which fulfils the following conditions, namely:-

 

(a)     that it is owned and managed by a company formed and registered under the Companies Act, 1913 (VII of 1913), or a body corporate formed in pursuance of an Act of Parliament, having-

 

(i)    its registered office or head office in the taxable territories; and

 

(ii)   except in the case of a company or other body corporate under the control of Government or of a corporation the administration and management of which is subject to instruction, direction or control of Government, a subscribed and paid-up capital of not less than one lakh Taka and not more than three crores Taka;

 

(b)    that it belongs to the class of industries specified by the National Board of Revenue for this purpose by notification in the official Gazette;

 

(c)     that as respects the industrial undertaking set-up in the areas notified by the National Board of Revenue in this behalf in the official Gazette not less than sixty per cent of the income, profits and gains exempted under this sub-section are reinvested in the industrial undertaking from which such income, profits and gains have been derived or are invested in the purchase of bond issued by the Government:

 

Provided that in the case of an industrial undertaking set-up in areas other than the areas so notified, this clause shall have effect as if for the words “sixty per cent” the words “thirty per cent” were substituted;

(d)   that an application for exemption in the prescribed form and verified in the prescribed manner has been made to the National Board of Revenue within four months of the month in which the undertaking goes into commercial production:

Provided that in respect of any undertaking which was set up and the commercial production of which commenced on any day between the first day of July, 1974 and the thirtieth day of June, 1975, the period of four months shall be reckoned from the first day of July, 1975;

(e)   that it is approved by the National Board of Revenue for purposes of this sub-section :

Provided that an industrial undertaking approved under this clause may, not later than six months from the date of approval, apply in writing to the National Board of Revenue for the cancellation of such approval, and the National Board of Revenue may pass such orders thereon as it may deem fit:

Provided further that where any exemption has been allowed under this sub-section and it is subsequently discovered by the Deputy Commissioner of Taxes that any one or more of the condition specified in this sub-section was or were not fulfilled, as the case may be, the exemption originally allowed shall be deemed to have been wrongly allowed and the Deputy Commissioner of Taxes may, notwithstanding anything contained in this Act, recompute the total income of the assessee for the relevant previous year and the provisions of section 34 shall, so far as may be, apply thereto, the period of four years specified under sub-section (2) of that section being reckoned from the end of the assessment year relevant to the previous year in which the infringement was discovered.”;

(10) in section 15, in sub-section (3), after the proviso, the following new proviso shall be added, namely:-

“Provided further that as respects any assessment year beginning on the first day of July, 1976, the provisions of this section shall have effect as if for the words “thirty per cent” the words “twenty-five per cent” were substituted.”;
(11) in section 15E,-

(a)   for the words “three hundred” the words “five hundred”, and for the words “nine hundred” the words “fifteen hundred” shall be substituted; and

(b)   in the second proviso, for the words “three hundred” the words “five hundred”, for the words “six hundred” the words “one thousand” and for the words “nine hundred” the words “fifteen hundred” shall be substituted;

(12) in section 15H, for the full-stop at the end a colon shall be substituted and thereafter the following proviso shall be added, namely:-

“Provided that in the case of an assessee, being married individual, the provision shall have effect as if for the words “two thousand Taka” the words “three thousand Taka” were substituted.”;

(13) in section 17, in sub-section (5), in clause (b),-

(a)   the words, figures, brackets and letter “or any capital gains to which the first proviso to sub-section (1) of section 12B applies” shall be omitted; and

(b)   in sub-clause (ii), for paragraph (2) the following shall be substituted, namely:-

“(2) the amount of the said income as reduced by-

(i)    an amount equal to thirty per cent. of the amount of the said income which has arisen on account of disposal by the assessee of his capital asset or assets after one year but before three years from the date of its or their acquisition; or

(ii)   an amount equal to fifty per cent. of the amount of the said income which has arisen on account of disposal by the assessee of his capital asset or assets after three years but before fifteen years from the date of its or their acquisition; or

(iii)     an amount equal to seventy per cent. of the amount of the said income which has arisen on account of disposal by the assessee of his capital asset or assets after fifteen years from the date of its or their acquisition:
                Provided that in the determination of the year under this paragraph, part of a year less than six months shall be disregarded and part of a year equal to or exceeding six months shall be regarded as one year.”;

(14) in section 18A,-

(a)   in sub-section (1), for the words “twelve thousand Taka” the words “twenty thousand Taka” shall be substituted; and

(b)   in sub-section (3), for the words “twelve thousand Taka” the words “twenty thousand Taka” shall be substituted;

(15) in section 23A, in sub-section (2), in clause (b), in the proviso, for the word “two” the word “four” shall be substituted;

(16) in section 30, in sub-section (1), after the first proviso, the following new proviso shall be inserted, namely:-

“Provided further that the National Board of Revenue may, upon an application made in this behalf, in any case modify or waive the requirement of the first proviso:”;

(17) in section 31, for sub-section (4) the following shall be substituted, namely:-

“(4) The Appellate Joint Commissioner may,-

(a)   in the case of an order of assessment-

(i)    reduce, enhance or annul the assessment; or

(ii)   set aside the assessment and direct the Deputy Commissioner of Taxes to make a fresh assessment after making such further inquiry as the Deputy Commissioner of Taxes thinks fit or the Appellate Joint Commissioner may direct, and the Deputy Commissioner of Taxes shall thereupon proceed to make such fresh assessment and determine where necessary the amount of tax payable on the basis of such fresh assessment; or
(b)    in the case of an order cancelling the registration of a firm under sub-section (4) of section 23 or sub-section (4) of section 26A or refusing to register a firm under sub-section (4) of section 23 or section 26A cancel such order and direct the Deputy Commissioner of Taxes to register the firm or set aside such order and direct the Deputy Commissioner of Taxes to make such further inquiry as he thinks fit or as the Appellate Joint Commissioner may direct, and the Deputy Commissioner of Taxes shall thereupon proceed to make such inquiry and shall thereafter make a fresh order registering the firm or refusing to register it or cancelling its registration, as he may think fit; or

(c)    in the cases of an order under sub-section (2) of section 25 or sub-section (1) of section 23A or sub-section (2) of section 26 or section 48, 49, or 49F, cancel or vary such order; or

(d)    in the case of an order under sub-section (1) of section 25A, cancel such order and either direct the Deputy Commissioner of Taxes to make further inquiry and pass a fresh order or to make an assessment in the manner laid down in sub-section (2) of section 25A; or

(e)    in the case of an order under section 28 or sub-section (6) of section 44E or sub-section (5) of section 44F or sub-section (1) of section 46, cancel such order or vary it so as either to enhance or reduce the penalty or set aside such order and direct the Deputy Commissioner of Taxes to make fresh order after making such inquiry as the Deputy Commissioner of Taxes thinks fit or as the Appellate Joint Commissioner may direct, and the Deputy Commissioner of Taxes shall thereupon proceed to make such fresh order and determine the amount of penalty on the basis of such order; or

(f)     in the case of an appeal against a computation of loss under section 24, vary such computation; or

(g)    in the case of an appeal under sub-section (1A) of section 30 decide that the person is or is not liable to make the deduction and in the latter case direct the refund of the sum paid under sub-section (6) of section 18:
Provided that the Appellate Joint Commissioner shall not enhance an assessment or a penalty unless the appellant has had a reasonable opportunity of showing cause against such enhancement:

Provided further that at the hearing of any appeal against an order of a Deputy Commissioner of Taxes, the Deputy Commissioner of Taxes shall have the right to be heard either in person or by a representative.”;

(18) in section 33, in sub-section (1), in the proviso, for the full-stop at the end a colon shall be substituted and thereafter the following new proviso shall be added, namely:-

“Provided further that the National Board of Revenue may, upon an application made in this behalf, in any case modify or waive the requirement of the first proviso.”;

(19) in section 33A, in sub-section (2A), in clause (b) for the full-stop at the end a colon shall be substituted and thereafter the following new proviso shall be added, namely:-

“Provided that the National Board of Revenue may, upon an application made in this behalf, in any case modify or waive the requirement of clauses (a) and (b).”;

(20)   in section 34, in sub-section (2), in the proviso, for clause (iv) the following shall be substituted, namely:-

“(iv) notwithstanding anything contained in this section limiting the time within which any action may be taken or any order, assessment or re-assessment may be made, assessment or re-assessment, as the case may be, to be made on the assessee or any person in consequence of, or to give effect to, any finding or direction in an order under section 31, section 33, section 33A, section 34A, section 66 or section 66A or, in the case of a firm, an assessment to be made on a partner of a firm in consequence of an assessment made on the firm, may be made-

(a)   in the case of any such order made before the 1st day of July, 1975, within four years from that date; and

(b)   in any other case, within four years from the end of the year in which such order was made.”;

(21) in section 46, sub-sections (8), (9) and (10) shall be omitted.
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