Power to rescind exemption in relation to certain Union territories already granted under section 294A of the Income-tax Act, 1961

Section 531 — POWER TO RESCIND EXEMPTION IN RELATION TO CERTAIN UNION TERRITORIES ALREADY GRANTED UNDER SECTION 294A OF THE INCOME-TAX ACT, 1961

Section 531 of the Income-tax Act, 2025 corresponds to s. 294A of the Income-tax Act, 1961.

STATUTORY ARCHITECTURE

Section 531 confers a power to rescind; it does not confer any power to grant exemptions. It allows the Central Government, where it considers it necessary or expedient to do so, to rescind, by general or special order, an exemption, reduction in rate or other modification in respect of income-tax or super-tax that was made under s. 294A of the 1961 Act. The exemption, reduction or modification may be one in favour of any assessee or class of assessees, or one in regard to the whole or any part of the income of any assessee or class of assessees.

KEY ELEMENTS

• Authority: the Central Government.
• Condition: the Central Government considers it necessary or expedient to rescind.
• Instrument: a general or special order.
• Subject matter: an exemption, reduction in rate or other modification in respect of income-tax or super-tax.
• Scope: in favour of any assessee or class of assessees, or in regard to the whole or any part of the income of any assessee or class of assessees.
• Source: only exemptions, reductions or modifications made as per s. 294A of the 1961 Act.

CHANGES FROM THE 1961 ACT

The section corresponds to s. 294A of the 1961 Act, but only in part. Section 294A empowered the Central Government to make an exemption, reduction in rate or other modification for the purposes it stated, in relation to the Union territories of Dadra and Nagar Haveli, Goa, Daman and Diu, and Pondicherry (and, for Pondicherry, for implementing the Treaty of Cession concluded between France and India on the 28th day of May, 1956). Its proviso barred the exercise of that power after the 31st day of March, 1967, except for rescinding an exemption, reduction or modification already made. Section 531 carries forward only that surviving power to rescind; it does not reproduce the power to make exemptions, the purposes, or the names of the Union territories; its heading refers only to "certain Union territories".

PRACTITIONER NOTES

• An exemption, reduction in rate or other modification made under s. 294A of the 1961 Act remains open to rescission by the Central Government under s. 531.
• Rescission may be by general or special order.
• The section does not state any purpose that must be served by the rescission beyond the Central Government considering it necessary or expedient.
• The operative text omits a subject: it reads "Where the Central Government considers it necessary or expedient so to do may, by general or special order, rescind", in which "the Central Government" is not repeated before "may"; the Central Government is the only authority named in the section.

CROSS-REFERENCES

• s. 294A of the 1961 Act — the provision under which the exemptions, reductions or modifications that may be rescinded were made.