705/CBDT. - Income Tax - 705/CBDT

INSTRUCTION NO. 705/CBDT Dated : June 15, 1974 Numerous instances have come to the notice of the Board where taxes were shown as outstanding even where the payments had already been made. The reports received from various Commissioners in such cases indicate that such embarrassing situations arose only because challans in respect of payments made were not available on the records. In some cases even the letters sent by the assessees intimating the dates of such payments remained unattended to. 2. Challans constitute the primary and most valuable evidence of the payments made by an assessee, and it is imperative to ensure that all the challans are placed on files and payments noted in the Demand and Collection Register promptly. Laxity in following the prescribed procedure in this behalf alone is responsible for such missing credits. 3. According to the existing procedure, all the challans which are received from the treasury are to be entered in the Daily Collection Register and then to be passed on to the respective wards/circles for placing them on files after posting them in the Demand and Collection Register. At the end of the month, entries in Daily Collection Register are to be compared with the booking in the Treasury with a view to locating and recording individual items of collection which have remained unrecorded in the Daily Collection Register. Then the Treasury Officer is to give a certificate regarding accuracy of the entries made in the Daily Collection Register. The second stage is that all the entries in the Daily Collection Register are compared with the postings in the Demand and Collection Register. This is normally done by an Inspector who puts his initials against each posting in the Demand and Collection Register. It serves twin purposes of verifying the following:- (i) that no collections have been posted in the Demand and Collection Register without first being entered in the Daily Collection Register. (ii) that such collections as have been entered in the Daily Collection Register are duly posted in the Demand and Collection Register. 4. A lot of confusion has been caused by non-observance of the above procedure. Instead of comparing individual entries in the Daily Collection Register with those in the Treasury Register, totals are tallied and quite often some bulk collection is noted in the Daily Collection Register at the end of the month, as 'miscellaneous collection' to facilitate the tallying of totals in the two registers. Verification in the aforesaid manner results in omission of numerous individual entries of collection from the Daily Collection Register and consequently from Demand and Collection Register. If the prescribed procedure is scrupulously followed, the record of collection maintained by the Department will become upto-date, the scope of individual items of collection remaining unaccounted for will be minimized and the task of giving credits for prepaid taxes after verifying the collection from Daily Collection/Demand and Collection Register will become much easier. 5. Commissioners are, therefore, requested to please ensure that monthly verification of the entries in the Daily Collection Register with those in the Treasury Register and comparison of entries in the Daily Collection Register with the postings in the Demand and Collection Register is regularly done in accordance with the prescribed procedure. 6. Receipt of this circular may kindly be acknowledged to the undersigned.