823/CBDT. - Income Tax - 823/CBDT

INSTRUCTION NO. 823/CBDT Dated : January 7, 1975 Attention is invited to Board's Circular letters F.No.385/68/72-IT(B) dated 31st May, 1974, wherein it was pointed out that the amount credited to "Surcharge (Union)" for the years 1970-71 and 1972-73 was much less than what was expected to be collected according to the rates of Surcharge (Union) applicable in those years. You were requested to take necessary action to ensure that collections for the financial year 1972-73 were properly accounted for under the two separate year 1972-73 were properly accounted for under the two separate heads "Advance payment of Income-tax" and "Surcharge (Union)". 2. For the purpose of certification of the net proceeds of Taxes on Income, etc. under Article 279(1) of the Constitution and for determination of the divisible pool, the Comptroller and Auditor General of India requires the figures of Income-tax and Surcharge (Union) separately, since Surcharge (Union) is not including in the divisible pool. Incorrect booking of collections under the heads Income-tax and Surcharge (Union) affects the distribution of the net proceeds of income-tax between the Center and the States. 3. When a re-classification of the collection for 1972-73 was attempted it was found that owing to the lapse of time and other factors, the challan-wise bifurcation between Income-tax and Surcharge (Union) was not possible. The matter was taken up with the Comptroller Auditor General of India who has agreed that for the financial year 1972-73, only a limited representative sample test check of the challans may be carried out in important centres where most of the assessments are concentrated. Accordingly, the Commissioners of Income-tax, Bombay, Delhi, Gujarat, Kanpur, Madras and West Bengal have been requested to undertake a scrutiny of certain percentage of challans and correctly bifurcate the payments into Income-tax and Surcharge (Union). This procedure would be applicable only to past years' collections. 4. while agreeing to the aforesaid procedure for proper classification of Income-tax and Surcharge for earlier years, the Comptroller Auditor General of India has insisted that in relation to payments of advance tax made on and from 1.1.75 the Department should check the classification in the challans concurrently before they are posted in the Daily Collection Register and the Demand and Collection Register maintained in the IT Offices. The Board has agreed to this proposal. However, since concurrent checking of challans relating to payments made on and from 1.1.75 cannot now be carried out, such concurrent checking should be done in respect of payment made on and from 1.2.75. The following procedure should be adopted for this purpose. 5. where the challan does not show or incorrectly shows the classification into Income-tax and Surcharge in respect of advance tax payment under the head "0.21-Taxes on Income other than Corporation-tax" it should be correctly worked out and indicated on the challan itself, before posting the amount in the Daily Collection Register and Demand Collection Register of the Ward/Circle/District concerned. Each such challan should bear a stamp indicating the following entries:- Total amount indicated on the challan Rs....... Bifurcation into: Income-tax Rs..... Surcharge (Union) Rs...... Entered by (Signature of Clerk concerned). Checked by (Signature of Head Clerk/Supervisor). 6. Since the amounts as per our corrected entries will be at variance with the amounts shown as per Treasury/Bank entries, it is necessary to keep a record of the corrections for the purpose of later reconciliation. A Daily record of these corrected challans should be maintained in a separate register showing the following details:- 7. The Entries made in the register as indicated above, should be totaled at the end of each month. 8. Suitable facilities may also be provided to the Receipt Audit Parties who may be deputed by the Accountants General for the conduct of the test-check of classification. 9. These instructions may please be immediately brought to the notice of all the officers working in the charge.