721/CBDT. - Income Tax - 721/CBDT

INSTRUCTION NO. 721/CBDT Dated : July 20, 1974 In Shri R D Saxena's d.o.F.No. 81/67/68-IT(B) dated 11-1-1971 it was stated that in all cases where there are no chances of recovering more than 25% of the total outstanding demand, the demand relating to one or more of the years which would be equal to the amount likely to be recovered, should alone be retained on the register and the balance of the demand should be written off as irrecoverable. In accordance with the above instructions the Board had given approval for partial write off in many cases. 2. A few cases of this type were reviewed by the various Zonal Committees at a later stage and they came to the conclusion that the amount approved for retention by the Board for possible recoveries in future are irrecoverable and should be written off. The Board is receiving references from the Commissioners of Income-tax off and on asking for Board's instructions as to whether they are competent to write off the balance of arrears kept alive for possible future recoveries in such cases, as the overall arrears at one stage amounted to over Rs. 10 lakhs although the demand involved at the time of review by the Zonal Committee was less than Rs. 10 lakhs. 3. The matter has been examined and it has been decided that in all cases where the amount retained for possible future recoveries is less than Rs. 10 lakhs, the Commissioner of Income-tax is competent to write off the arrears under his own powers provided the Zonal Committee/Local Committee is satisfied that the outstanding arrears are irrecoverable and recommends write off. The procedure will mutatis mutandis to cases of Muslim Evacuees where arrears have been transferred to a separate portie of the D C register.