Arithmetical accuracy of computation of total income - Income Tax - 598/CBDT

INSTRUCTION NO. 598/CBDT Dated : August 25, 1973 Reference is invited to the Board's Instruction No.355F.240/3/-A PAC, dated 13.12.71. Instances of serious arithmetical mistakes in computation of total income continue to come to the Boards notice vide Paras 26(1) to (iii) C AGs Report 1971-72 Arithmetical accuracy in computation of total income is completely responsibility of the Income tax Officer in all cases. 2. In regard to arithmetical accuracy of tax calculations, the I.T.O. is personally responsible for checking this in important cases vide Board's Instructions No.F.36/40/67-It(Audit), dated 13.12.1968 and No 233 F.9/37/68-IT(Audit) dated 23.10.1970 read with para 219(xvii) of chapter XII of Office Manual volume II, Section II The important Income tax cases are of income over Rs. 1 lakhs and refunds over Rs.10,000 Tax calculation in the case of companies with assessed or returned total income of Rs. 10 lakhs and above were also to checked by the Chief Auditor vide item(v)of Annexure III to Boards circular No.5/4/69-IT(Audit) dated 26.5.69 and this audit work is now to be performed by ITO (Internal Audit), vide last para of Boards Instruction No. 483 F.246/76/72-A PAC, dated 13.12.1972 As regards other cases reference is invited to Boards Instruction No.465 F.328/105/72WT dated 11.10.72, directing that that Assistant Controllers of Estate Duty, Wealth-tax Officers and Gift/tax Officer should personally check tax calculations in cases where demands raised exceeded Rs.25,000 or refunds exceeded Rs.10,000. 3. With regard to arithmetical accuracy of computation of total income, besides following the directions in the Board's above-noted Instruction N.355 dated 13.12.71 the I.T.O. should record a very concise reconciliation memo as an office note below the assessment order (the note being on office copy of the order and for office use only), reconciling the returned and assessed income. This will help eliminate arithmetical errors of addition, subtraction and omission generally and particularly in cases where the assessed income is less than the returned income. This procedure may be followed for all assessments made u/s 143(3) or section 144. For summary assessments completed u/s 143(1) the ITOs should carefully check the arithmetical accuracy of returned income before accepting it, and in cases of modification they should comply with the Board's Instruction No.535F.246/82/72-A PAC, dated 29.3.73 recommending an assessment proforma the ITO should carefully check the arithmetical accuracy of the figures in the proforma before signing it. The directions in the preceding para about total income computation apply mutatis mutandis to assessment orders relating to other taxes. Steps are being taken to amplify the relevant para in the Office Manual to cover check of arithmetical accuracy of computation of total income in the manner detailed above.