803/CBDT. - Income Tax - 803/CBDT

INSTRUCTION NO. 803/CBDT Dated : November 27, 1974 Section(s) Referred: 230 Statute: Income - Tax Act, 1961 Section 230(1) of the IT Act, 1961, inter alia, provides that no person, who is not domiciled in India, shall leave the territory of India by land, sea or air unless he first obtains from the competent authority a tax clearance certificate (in Form No.33) stating that he has no liabilities outstanding under the IT Act and other allied Acts or that satisfactory arrangements have been made for the payment of all or any of such taxes which are or may become payable by that person. However, if the competent authority is satisfied that such a person intends to return to India, he may, under the proviso to section 230(1), issue an exemption certificate (in Form No.34) either in respect of a single journey or in respect of all journeys to be undertaken by that person within the period specified in the certificate. In such a case, the law does not require that the competent authority should be satisfied on the points mentioned in the first sentence of this paragraph. 2. There is a possibility of loss of revenue in cases where the person, to whom an exemption certificate has been issued, does not return to India and adequate assets are not available for recovery of taxes. In fact, an instance has come to the notice of the Board where the person to whom an exemption certificate was issued under the proviso to section 230(1) of the Act did not return to India leading to difficulties in collection of taxes due from him. 3. while the Board do not wish to interfere with the discretion vested in the officers competent to issue such certificates, they desire that, in the interest of revenue, they should be more careful in this behalf and that in future exemption certificates under the proviso to section 230(1) of the Act may be issued only in absolutely genuine cases. Further, to safeguard revenue, such certificates may be issued only where all outstanding taxes have been paid or there are adequate assets in India which can be proceeded against for recovery of tax demands which are or may become payable by the application in case he does not return to India or, in the alternative, a suitable guarantee is furnished by him. 4. The above safeguard regarding the issue exemption certificates under the proviso to section 230(1) may please be brought to the notice of all the officers working in your charge.