853/CBDT. - Income Tax - 853/CBDT

INSTRUCTION NO. 853/CBDT Dated : July 18, 1975 In a cases pointed out by the Audit, the assessee submitted a revised return in December 1963 reducing the income by taking into account the debit of Rs. 1.43 lakhs representing the cost of bonus shares received from another company purporting to follow the Patna High Court's judgment in the case of M/s. Dalmia Investment Co. Ltd. This judgment was delivered by the High Court on 28-11-1960. The decision was not accepted and the Commissioners of Income-tax was advised to contest the judgment by way of leave petition for appeal to Supreme Court. The decision of the Board in not accepting High Court judgment was also contained in the bulletin for the quarter ending 30-9-1961, which was circulated to all the Officers. The concerned Income-tax Officer neither kept a note to facilitate revision of the relevant assessment nor did he ascertain as to what happened to the further appeal preferred against the High Court's judgment. The High Court judgment was reversed by the Supreme Court in March 1964. By the time the Supreme Court judgment was communicated, the concerned Income-tax Officer had left on deputation and his successor was not aware that the assessment in question was made following the judgment of the High Court. The assessment was not rectified and Audit pointed out this omission. 2. In para 2.58 of their 128 Report (1973-74) the Public Accounts Committee have observed that all this indicated a very unsatisfactory system of working. They have desired that the Board should issue suitable instructions to all the assessing officers with a view to prevent lapses of this kind recurring in future. 3. In this connection attention is invited to Register of Appeals (ITNS-61) dealing with the receipt of appellate orders and their disposal. Attention is further invited to Board's instructions contained in their Circular letters F. NO. 14/23/61-O M dated 14-3-1966 requiring the Income-tax Officers to leave a note giving brief details on all important matters, including matters relating to disputed assessments, while handing over charge on transfer or when proceeding on leave. The Board are of the view that the lapse commented upon by Public Accounts Committee would not have occurred if (i) the register of appeals had been maintained properly by the Income-tax Officer and necessary entries were made in the relevant columns and (ii) the Income-tax Officer had carefully followed the above instructions to the effect that a note giving brief details of disputed assessments should be given while handing over charge in transfer. 4. The Board desire that all the Officers working in your Charge may be advised to maintain and complete these registers. Instruction in regard to leaving note giving brief details in disputed assessment while handing over charge on transfer may also be reiterated to these officers. They may be cautioned that serious view will be taken of any lapse on their part in this respect.