749/CBDT. - Income Tax - 749/CBDT

INSTRUCTION NO. 749/CBDT Dated : September 2, 1974 Section(s) Referred: 2nd Schedule Statute: Income - Tax Act, 1961 In accordance with the orders contained in the Board's Instructions No. 315 (F. No. 16/281/69-ITCC) dated 26th July, 1971, the Tax Recovery Officers and the Inspectors attached to them are empowered to collect cash from individual defaulters while effecting recovery of tax in the circumstances referred to in Rules 22, 47, 60(1) and 73 of the Second Schedule to the I.T. Act, 1961. The said Instruction seeks to impress upon the T.R.Os. and their Inspectors that they should follow the detailed procedure laid down in the Compilation of the Treasury Rules for receipt of Government monies and payment of such monies in the public account. Some of the salient points relating to the procedure for handling Government money and the accounting thereof are listed therein. Subsequently, under their Instruction No. 627 (F. No. 404/259/73-ITCC) dated 17th October, 1973 the Board have authorised the TRO and the Inspectors attached to them to also collect the costs incurred in recovering the arrears from the defaulters in cash under Rule 5 of the Second Schedule. It is stressed therein that the procedure outlined in Instruction No. 315 for handling the cash must be scrupulously followed while collecting cash under Rule 5 as well. 2. Recently, a case has come to the Board's notice in which an Inspector attached to a TRO collected large amounts from defaulter assessee during the period March-August, 1973 but failed to render immediate accounts and tender the collections to the cashier for remission into the Treasury. Eventually, after the lapse of many months when the TRO insisted on the production of the T.R. 5 Receipt Book by the Inspector, embezzlement exceeding Rs. 10,000 extending over a long period was detected. It was further found that one of the numbered receipts was missing in the Receipt Book. When questioned about it, the Inspector pleaded that the Receipt Book was defective and the said receipt was always missing. 3. It is evident that the above defalcation was possible only because the standing instructions on the handling of Government monies were not scrupulously followed. As the possibility of a similar misconduct elsewhere has to be guarded against, all the Commissioners of Income-tax are again requested to ensure that the standing instructions on the subject are strictly obeyed. Wherever this is not being done so far, the T.R.Os. may immediately call for all the Form 5 books issued to the Inspectors and check the receipts shown therein with the entries made in the cash book to satisfy themselves that all the cash collections made hitherto have been fully and promptly accounted for. A certificate of verification should be duly recorded. Henceforth, such verification (with a proper certificate) should be done every month. Surprise checks should also be made. The Annual Vigilance inspection of a T.R.Os. office should cover this aspect. It may be pointed out that under T.R. 85 before a Form T.R. 5 Receipt Book is brought in use, the number of forms contained therein has to be counted and the result recorded in a conspicuous place in the book itself under the signature of the Government Officer in-charge of the book. In case of discovery of any defalcation and loss, instructions contained in Chapter 2 of the compilation of the General Financial Rules should be followed. 4. The receipt of this Instruction may please be acknowledged.