Unrealistic over-assessments made by assessing officers under various direct tax Acts. - Income Tax - 574/CBDT

INSTRUCTION NO. 574/CBDT Dated : July 27, 1973 Section(s) Referred: 143(3) ,144 Statute: Income - Tax Act, 1961 Reference is invited to the Board's Instruction No.376 F.277/2/70-IT(J) dated the 1st February, 1972 and the earlier instructions cited therein. 2. Instances continue to come to the notice of the Board about unrealistic over-assessments made by assessing officers under various direct tax Acts. This causes unnecessary hardship to the assessees and tarnishes the image of the Department; there is avoidable litigation and recovery problems arise in respect of the consequential insupportable and exaggerated tax demands. 3. The Board would like therefore to impress once again upon the Commissioners that they should advise the assessing officers in their charge to eschew unjustified over-assessments. The assessments have to be made in a reasonable and fair manner after considering all the relevant circumstances of the case. Even where an assessment has to be made ex-parte, the information available should be reasonably weighed and a proper estimate made in the exercise of best judgment in the circumstances. There should be no tendency to frame assessments even in such cases mechanically on past basis, if there is evidence to the contrary e.g., the business of the concern has become defunct or is in clearly adverse circumstance. 4.If unjustified over-assessments are avoided, this will inter alia curtail the feature of exaggerated demands which unnecessarily inflate our arrears figures. 5. These instruction may be brought to the notice of all officers in the charge and very careful watch kept over their compliance. The erring officials should be properly advised and where necessary pulled up.