718/CBDT. - Income Tax - 718/CBDT

INSTRUCTION NO. 718/CBDT Dated : July 12, 1974 The Comptroller and Auditor General in Para 48(c) of their Report for 1972-73 have observed as under:- "An assessee (Individual) was being assessed in particular Commissioner's Charge upto the year 1947-48. For the assessment years 1948-49 to 1950-51, the assessee submitted his return of income on 6.1.1949, 28.12.1949 and 22.2.1951 respectively. By an order of the Central Board of Revenue (Notification dated 18.8.1952) the Income-tax files of the assessee for these three years were transferred to a different charge. The Income-tax Officer to whom the files were transferred made ex-parte assessments on 16.3.1953, 17.12.1953 and 24.3.1955 respectively in respect of the three assessment years raising a total demand of Rs.44 lakhs approximately. These assessments were declared illegal by the order of the Supreme Court (passed in August, 1962) as change of jurisdiction was regarded as an infringement of the assessee's fundamental rights. Accordingly, assessments for these three years were re-opened by the Income-tax Officer who had finalised the assessments upto 1947-48 on 20.9.1962 and a revised demand of over 59 lakhs was raised. The assessee did not pay the tax and challenged the applicability of the section under which re-assessments were made and ultimately the Supreme Court declared (Judgment dated 10.10.1963) after setting aside the assessments, that the Income-tax Officer should re-do the assessments within the period of limitation. The Supreme Court further directed as follows:- "And this court doth further order that this order be punctually observed and carried into execution by all concerned." In spite of the orders of the Supreme Court, notice for taking up fresh assessments was however, issued on 1.5.1968 i.e. after about 41/2 years from the date of the above orders of the Supreme Court. The assessee on receipt of the notice challenged the proposal of fresh proceedings in the Court of Munsif as being time-barred and these proceedings are still pending. By not taking action quickly in compliance with the Supreme Court order coupled with the dilatory tacties adopted by the assessee, the Department had landed itself into difficulties and it is highly doubtful whether the Department will be in a position to realise the tax of over Rs.50 lakhs due from the assessee." 2. It is also pointed out by the Audit that the Department has not been able to realise the demand of about Rs.3 lakhs since 16.3.1951 relating to assessment year 1957-58 due to an injunction issued by the Sub-Judge at the assessee's instance. 3. The Board would like you to ascertain the number of cases in which such inordinate delay has taken place in making final assessments and collection of demands mainly due to dilatory tactics and abuse of the legal process adopted by the assessees. As regards chronic cases, a note as to the steps taken by the Department to expedite the matter may also be sent. 4. All the officers concerned in your charge may be instructed to be on guard against such dilatory tactics for immediate remedial action to ensure early finalisation of assessments and collection of the demands. 5. A report in the matter may please be sent so as to reach the Board's office by 31st July, 1974 positively.