45. Act not to apply in certain cases.

No tax shall be levied under this Act in respect of gifts made by

(a) a company in which the public are substantially interested;

(b) any company to an Indian company in a scheme of amalgamation;

(c) any institution or fund the income whereof is exempt from income-tax under section 11 or section 12 of the Income-tax Act.

Explanation 1. For the purposes of clause (b), the term "amalgamation" shall have the meaning assigned to it in clause (1B) of section 2 of the Income-tax Act.

Explanation 3. For the removal of doubts, it is hereby declared that the exemption admissible under clause (e) in relation to gifts made by an institution or fund referred to in that clause shall not be denied merely on either or both of the following grounds, namely:-

(i) that, subsequent to the gift, any part of the income of the institution or fund has become chargeable to tax due to non-compliance with any of the provisions of section 11 or section 12 or section 12A of the Income-tax Act;

(ii) that, under clause (c) of sub-section (1) of section 13 of the Income-tax Act, the exemption under section 11 or section 12 of that Act is denied to the institution or fund in relation to any income arising to it from any investment referred to in clause (h) of sub-section (2) of section 13 of the said Act where the aggregate of the funds invested by it in a concern referred to in the said clause (h) does not exceed five per cent of the capital of that concern.