16B. Interest for defaults in furnishing return of gifts.

(1) Where a return of gifts for any assessment year under sub-section (1) of section 13 orsection 14, or in response to a notice under clause (i) of sub-section (4) ofsection 15, is furnished after the 30th day of June of such year, or is not furnished, the assessee shall be liable to pay simple interest at the rate of two per cent for every month or part of a month comprised in the period commencing on the 1st day of July of the assessment year, and,

(a) where the return is furnished after the 30th day of June ending on the date of furnishing of the return; or

(b) where no return has been furnished, ending on the date of completion of the assessment under sub-section (5) of section 15,

on the amount of tax payable on the taxable gifts as determined under sub-section (1) of section 15 or on regular assessment.

Explanation1. In this sub-section, "tax payable on the taxable gifts as determined under sub-section (1) of section 15" shall not include the additional gift-tax, if any, payable under section 15.

Explanation2. Where in relation to an assessment year the assessment is made for the first time under section 16, the assessment so made shall be regarded as a regular assessment for the purposes of this section.

Explanation3. In this sub-section, "tax payable on the taxable gifts as determined under sub-section (1) of section 15 or on regular assessment" shall, for the purposes of computing the interest payable under section 14B, be deemed to be tax payable on the taxable gifts as declared in the return.

(2) The interest payable under sub-section (1) shall be reduced by the interest, if any paid under section 14B towards the interest chargeable under this section.

(3) Where the return of gifts for any assessment year, required by a notice under sub-section(1) of section 16 issued after the determination of taxable gifts under sub-section (1) of section 15 or after the completion of an assessment under sub-section (3) or sub-section (5) of section 15 or section 16, is furnished after the expiry of the time allowed under such notice, or is not furnished,the assessee shall be liable to pay simple interest at the rate of two percent for every month or part of a month comprised in the period commencing on the day immediately following the expiry of the time allowed as aforesaid, and,

(a) where the return is furnished after the expiry of the time aforesaid, ending on the date of furnishing the return; or

(b) where no return has been furnished, ending on the date of completion of the reassessment under section 16,

on the amount by which the tax on the taxable gifts determined on the basis of such reassessment exceeds the tax on the taxable gifts as determined under sub-section (1) of section 15 or on the basis of the earlier assessment aforesaid.

Explanation.

(4) Where, as a result of an order under section 22 or section 23 or section 24 or section 26or section 28 or section 34, the amount of tax on which interest was payable under this section has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and,

(i) in a case were the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed from specifying the sum payable,and such notice of demand shall be deemed to be a notice under section 31 and the provisions of this Act shall apply accordingly, and

(ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded.

(5) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.