670/CBDT. - Income Tax - 670/CBDT

INSTRUCTION NO. 670/CBDT Dated : March 23, 1974 Section(s) Referred: 18(1) Statute: Wealth Tax Act, 1957 The revenue Audit have raised a large number of objections on non-initiation of penal action for belated filing of returns under Wealth-tax and Gift-tax Acts. The Board desire to impress upon the Assessing Officers the need for properly recording their reasons in cases where they do not consider necessary to initiate penal action for ostensible under the provisions the direct taxes enactments. 2. Attention is invited to Instructions No. 68 dated 4-7-1969; No. 354 dated 11-12-1971 and No. 394 dated 17-3-1972 in which the Board have already directed that where the Wealth-tax Officer and Gift-tax Officer decides not to levy penalty for late submission of Wealth-tax or Gift-tax returns a note should be recorded giving detailed reasons for not invoking the provisions of section 18(1) (a) of the Wealth-tax Act or 17(1) (a) of the Gift-tax Act. It is hereby further clarified that in cases where penal action is not initiated u/s 18(1) (a) of the Wealth-tax Act or u/s 17(1) (a) of the Gift-tax Act even though the returns have been filed beyond time limit laid down under the Act, the Wealth-tax Officer or Gift-tax Officer should properly record the reasons in the order sheet or append a note to the Assessment Order placed in the Assessment Record, giving reasons therefor. The above instructions will also apply to cases of Non-initiation of penal action or non-levy of penalty u/s 60(1) (a) of the Estate Duty Act for belated delivery of Estate Duty account. 3. In cases where any assessment attracts the provisions of Explanation 1 to section 18(1) of the Wealth-tax Act or provisions of Section 17(1)(c) of Gift-tax Act and where penal action u/s 18(1) (c) of Wealth-tax Act or section 17(1) (c) of the Gift-tax is not initiated, similar action as detailed above should be taken by the Wealth-tax Officer or Gift-tax Officer. These instructions would also apply to cases, where the provisions of section 18(1) (b) of the Wealth-tax Act, 1957, section 17(1) (b) of Gift-tax Act, 1958 and section 60(1) (c) of Estate Duty Act, 1953 are attracted. 4. The above instructions may be brought to the notice of all the Wealth-tax, Gift-tax Officer, and Assistant Controllers of Estate Duty working in each charge. Stringent action should be taken against the officers in cases of any lapses in this regard. 5. Instruction in respect of penal action under the provisions of the Income-tax Act, 1961 and Companies (profit) Surtax Act, 1964, will issue separately.