The account figures are normally compiled with reference to classification shown on challans - Income Tax - 878/CBDT

INSTRUCTION NO. 878/CBDT Dated : September 22, 1975 It has been brought to the notice of the Board that for quite a number of years, the collections under 020-Corporation-tax as per the Accounts figures maintained in Treasuries/A.G,'s Offices have always been less as compared to the Department. 2. Your are, no doubt, aware that the account figures are normally compiled with reference to classification shown on challans. The collection under 020-Corporation-tax is appropriated exclusively by the Centre and does not form part of the divisible pool which is intended for distribution between the Centre and States. The Accounts figures form the basis for working out the Centre. Any deflation of Accounts figures of collection under 020-Corporation-tax, because of incorrect classification of receipts, works to the detriment of the Centre. Moreover, as a result of misclassification between 020-Corporation-tax 021-Taxes on income other than Corporation-tax there is an unwarranted criticism by the C. A.G. and the P.A.C. about the shortfall in collection under 021-Taxes on Income other than Corporation-tax over Budget estimates. 3. In order to ascertain the reasons for such variations, some of the Commissioners of Income-tax were asked to conduct a representative sample study. The sample study has revealed that out of 307 cases of misclassification, 284 cases (92.18%) related to use of wrong challans for making payment of Corporation-tax. In 161 cases (52.11%) wrong challans were used for Advance-tax, while in 32 cases (10.42%), self assessment tax was paid by Companies on challans meant for payment of tax by non-company assessees. What has been all the more surprising to the Board is that in 91 cases (29.64%) regular assessment tax was paid by companies on wrong challans. These findings go to show that proper care has not been taken in using the right type of challans for collecting the tax from Company assessees. 4. The Board, therefore, desire that utmost care should be taken in all cases to see that correct challans are issued/used, whether they pertain to Advance-tax, self assessment tax or they are meant for payment of tax on regular assessment. Where the right type of challan is not available, a rubber stamp in hold letter should be got prepared showing the correct classification i.e 020-Corporation Tax or 021-Taxes on Income other than Corportation-tax, as the case may be, and affixed on each part of the challan by scoring out the wrong classification already shown thereon. You are requested to please ensure that in no case should wrong challan be sent to an assessee for payment of pre-assessment tax or for collecting the tax on regular assessment.