774/CBDT. - Income Tax - 774/CBDT

Instruction No: 774/CBDT Date of Issue: 26/10/1974 Section(s) Referred: 80K ,197(3) Statute: Income - Tax Act, 1961 Kind attention is invited to Board's Instruction No.555 dated 11th June, 1973 issued from F.No.275/98/73-ITJ by which Income-tax Officers were directed to keep an effective check on the issue of provisional certificate under section 197(3) of the IT Act, 1961, authorising deduction of tax at source at rates lower than that requiring in the case of dividends which are entitled to relief under section 80K of the I.T.Act, 1961. 2. Cases have come to the notice of the Board involving escapement of considerable income due to non-revision of the provisional certificate consequent to the quantification of the relief under section 80J in regular assessment in the case of the company which declared the dividends. The Board desire that a review of all cases where provisional certificate under section 197(3) were issued should be carried out to ascertain whether in such cases any excess relief has been allowed under section 80K of the IT Act, 1961 in the case of the shareholders. This will involve intimation by ITOs. assessing the companies to all Commissioners of Income-tax in order that any excess relief allowed under section 80K, if allowed, is withdrawn by the ITOs assessing the shareholders who will be informed by the Commissioners in respect of officers in their respective charges. This review will be restricted in respect of provisional certificate under section 197(3) issued during the last four financial years. 3. A report may please be sent to the Board by 11th November, 1974 indicating therein: (i) the number of cases in which provisional certificates were issued under section 197(3); (ii) number out of (i) above in which regular assessments have been completed; (iii) number out of (ii) above in which the regularising of the provisional certificate under section 197(3) involves with drawal of relief under section 80K; and (iv) where intimations in the cases at (iii) above have been sent to all Commissioners of Income-tax.