Section 319 — Assessment of persons likely to transfer property to avoid tax. Successor to s.175 of the 1961 Act.
Section 319 is in Chapter XVII — Special Provisions Relating to Certain Persons, which runs from section 302 to section 355.
Sub-section (1) operates irrespective of section 4. Where it appears to the Assessing Officer during any current tax year that a person is likely to charge, sell, transfer, dispose of or otherwise part with any of his assets with a view to avoiding payment of any liability under the Act, the total income of that person for the period beginning on the first day of that current tax year and ending on the date the Assessing Officer commences proceedings under this section is chargeable to tax in the current tax year.
Sub-section (2) borrows the machinery: the provisions of section 317(2) to (6) apply, so far as may be, to proceedings against such a person as they apply in the case of persons leaving India.
Tax is normally charged after the year has ended, which leaves time for a person who intends to put his assets beyond reach to do so before any demand exists. The section brings the charge forward to the current year, up to the date proceedings start, so that a liability is in existence while the assets still are.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Period whose total income is charged in the current tax year | From the first day of the current tax year to the date the Assessing Officer commences proceedings | Where it appears to the Assessing Officer that the person is likely to part with assets with a view to avoiding payment of any liability under the Act | Sub-section (1) |
The test is anticipatory and rests on what appears to the Assessing Officer during the current tax year — the assets need not have been parted with, and the words are "is likely to". The period assessed is a broken one ending on the date proceedings commence, so that date fixes both the timing and the measure of the charge. The procedure comes not from here but from section 317(2) to (6).
In November of a current tax year an Assessing Officer forms the view that an individual is preparing to dispose of his properties so that a likely demand cannot be recovered, and commences proceedings on 20 November. The individual's total income from the first day of that tax year to 20 November is charged in that current tax year.
You meet it as proceedings commenced mid-year, with a notice and an assessment for a broken period ending on the date those proceedings began, rather than after the tax year has closed.
with a view to avoiding payment of any liability under the provisions of this Act
the total income of such person for the period beginning from the first day of that current tax year up to the date when the Assessing Officer commences proceedings under this section shall be chargeable to tax in the current tax year
See the full 1961 to 2025 concordance.