Co ordination with other agencies in respect of assessment proceedings - Income Tax - 638/CBDT

INSTRUCTION NO. 638/CBDT Dated : December 12, 1973 A case has come to the notice of the Board where the Enforcement Directorate had seized currency of Rs.1 lakh on the ground that it represented compensatory payments in contravention of the FERA Act, but the assessing ITO inspite of being aware of this fact completed the relevant assessments by accepting certain explanations given by the assessee concerned without checking up with the Enforcement Directorate and without scrutinising the seized materials. When there is a seizure by another sister Department, it is absolutely essential that before completing the assessments relevant to the seizure, the ITO should invariably ascertain from the concerned sister department, the results of their action and also indicate the action proposed to be taken by him so that the decision taken by the ITO would not be prejudicial to the action proposed to be taken under other economic laws. 2. It is hardly necessary to emphasise that the explanations offered by assessees in such cases, in the course of Income-tax proceedings have a direct bearing on the proceedings before the other enforcement agencies like Enforcement Directorate of Revenue Intelligence, CBI, etc, whenever any assessing ITO is aware of the action taken by any of these agencies and if such action has relevance to the Income-tax assessment, it is necessary that before finalising the assessment proceedings he should get in touch with the concerned authorities. 3. This may be brought to the notice of all officers working in each charge.