Income-tax Act,1961
Act No : 43
Section :
Income-tax on undistributed income of certain companies-
1[104. Income-tax on undistributed income of certain companies.- Omitted by the Finance Act, 1987, w.e.f. 1-4-1988.] ----------------------------------------------------------------------- 1 Prior to the omission, section 104, as amended by the Finance Act, 1964, w.e.f. 1-4-1964; Finance Act, 1965, w.e.f. 1-4-1965; Finance Act, 1966, w.e.f. 1-4-1966; Finance (No. 2) Act, 1967, w.e.f. 1-4-1968: Finance Act, 1973, w.e.f. 1-4-1974; Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976 and Finance (No. 2) Act, 1977, w.e.f. 1-4-1978, read as under: "104. Income-tax undistributed income of certain companies.-(1) Subject to the provisions of this section and of sections 105, 106, 107 and 107A, where the Income-tax Officer is satisfied that in respect of any previous year the profits and gains distributed as dividends by any company within the twelve months immediately following the expiry of that previous year are less than the statutory percentage of the distributable income of the company of that previous year, the Income-tax Officer shall make an order in writing that the company shall, apart from the sum determined as payable by it on the basis of the assessment tinder section 143 or section 144, be liable to pay income-tax at the rate of- (a) fifty per cent, in the case of an investment company, (b) thirty-seven per cent, in the case of a trading company, and (c) twenty-five per cent, in the case of any other company, on the distributable income as reduced by the amount of dividends actually distributed, if any, within the said period of twelve months. (2) The Income-tax Officer shall not make an order under sub-section (1) if he is satisfied- (i) that, having regard to the losses incurred by the company in earlier years or to the smallness of the profits made in the previous year, the payment of a dividend or a larger- dividend than that declared within the period of twelve months referred to in sub-section (1) would be unreasonable; or (ii) that the payment of a dividend or a larger dividend than that declared within the period of twelve months referred to in sub-section (1) would not have resulted in a benefit to the revenue; or (iii) that at least seventy-five per cent of the share capital of the company is throughout the previous year beneficially held by an institution or fund established in India for a charitable purpose the income from dividend whereof is exempt under section 11. (3) If the Central Government is of opinion that it is necessary or expedient in the public interest so to do, it may, by notification in the Official Gazette and subject to such conditions as may be specified therein, exempt any class of companies to which the provisions of this section apply from the operation of this section. (4) Without prejudice to the provisions of section 108, nothing contained in this section shall apply to- (a) an Indian company whose business consists mainly in the construction of ships or in the manufacture or processing of goods or in mining or in the generation or distribution of electricity or any other form of power; (b) a company which is neither an Indian company nor a company which -> -> ----------------------------------------------------------------------- 1.454
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