715/CBDT. - Income Tax - 715/CBDT

INSTRUCTION NO. 715/CBDT Dated : July 10, 1974 Section(s) Referred: 230A Statute: Income - Tax Act, 1961 The Directorate of Inspection (Investigation) conducted a test check of the work done in selected charges in regard to disposal of applications for tax clearance certificates u/s 230A. It has been found that the Board's instructions issued in this respect are not being followed and the information contained in the applications for certificates is not being properly utilised in the assessments of the parties concerned, thereby defeating the very purpose of Section 230A. 2. Under Board's Instruction No. 175 dated 22-5-1970 applications for tax clearance certificate u/s 230A are to be dealt with within a week of their receipt. It was found that in all the charges where the test check was done, with the exception of the Madras charge, there was an undue delay in dealing with these applications. In many instances unnecessary objections were raised. Instances were not wanting in which the applicants were required to pay " the outstanding demand" which had already been paid. 3. In the Board's instruction No. 481, the scope of the words existing liability" occurring in section 230A has been explained. It has been stated in the instruction that existing liability would not only include a tax liability which has been ascertained and is payable under an assessment order, but would also include a tax liability which accrues under the chargeable section, although in the latter case, the tax liability may be quantified later by a regular assessment order, the liability to pay the tax would still be there. It is, therefore, necessary that before a certificate u/ 230A is issued, not only the liability which is ascertained on a regular assessment is discharged by the applicant but he should also make a provision for the liability which exists but has not been yet quantified. It would, therefore, be necessary to consult the ITO's assessment before certificate u/s 230A is issued. 4. In view of what is stated above the Board desire that the attention of the officers working in the charge may be drawn to the Board's instruction No. 175 dated 22-5-70 and instruction No. 481 dated 25-11-1972 and they may be instructed to ensure that :- (i) All the applications for certificates u/s 230A are dealt with within a week of their receipt; (ii) Interest of revenue is safeguarded in regard to all the existing liability. (iii) Intimations are sent to the Income-tax Officers assessing the transferees and all the parties to the transactions.