Discontinuance of Advice Notes for tax refund. - Income Tax - Instruction No. 01/2005

INSTRUCTION NO. 1/2005 Dated : March 18, 2005 Discontinuance of Advice Notes issued with Income Tax Refund Order for Refunds up to Rs. 24,999/- regarding. Reference is invited to the following Circular/Instructions issued by DOMS/CBDT from time to time wherein the procedure for issue of Refund Orders was detailed : (i) DOMS Circular No. 39 dated 15.7.1980. (ii) DOMS Circular No. 54 dated 16.12.1987 (iii) DOMS Instruction No. 58 dated 8.2.1988 (iv) CBDT Instruction No. 15/2003 dated 6.11.2003 2. With a view to improve Taxpayers service, the Board has decided to discontinue the system of sending Advice Notes to the bank separately in cases of refunds up to Rs. 24,999/-. Under the new system, no Advice Note would be generated for refund orders up to an amount of Rs. 24,999/-. for refund orders of Rs. 25,000/- and above, one Advice Note would be made, which would be sent to the Main Branch of State Bank of India. One counterfoil of the refund cheque would continue to be retained by the assessing officer for all refunds issued by him regardless of the amount of refund. All refunds of Rs. 25,000/- and above will now be drawn on only the Main Branch of State Bank of India. The order branches in any station will handle refunds only up to Rs. 24,999/-. 3. The above changes in refund procedure will involve the following steps : (a) Issue of fresh refund stationery for different direct taxes with cheques drawn on various branches of State Bank of India with their respective MICR codes. (b) Issue of new type of refunds stationery for different direct taxes : (i) for refunds up to Rs. 24,999/- (one refund cheque for assessee and one counterfoil to be retained by the Assessing Officer). (ii) for refunds of Rs. 25,000/- and above (one refund cheque for assessee, one advice note to be sent to the Main Branch of State Bank of India and one counterfoil to be retained by Assessing Officer). (c) Distribution of the new refund stationary to all assessing officers. Each assessing officer would receive one set of refund stationary for refunds up to Rs. 24,999/- for Corporation Tax and Income Tax and another set of refund stationary for refunds of Rs. 25,000/- and above for Corporation Tax and Income Tax. Similarly, separate refund stationary for Wealth Tax and other direct taxes would also be distributed. (d) Surrender of unused old refund stationary by all assessing Officer to DIT(RSP OR) after the new stationary is introduced. 4. Steps in this regard have already been initiated by the Directorate of System and Directorate of RSP PR and the new refund stationary shall be made available at all filed stations before the date of switchover to the new system. Necessary steps for distribution of new refund stationary, surrender of unused old stationary and informing the assessing officer of the new procedure of issuing refund orders have to be taken by the Chief Commissioner/directors General. 5. The monetary ceiling of Rs. 24,999/- for issuance of refunds without an Advice Note would also apply to Wealth Tax, Gift Tax and all other direct taxes. 6. The instructions issued earlier on the subject may be treated as amended to the extent indicated above. The security measures and other instructions mentioned in the earlier Circulars/Instructions will however continue to be followed scrupulously. 7. The new refund procedure is proposed to be introduce with effect from 1.4.2005. However, the exact date of switchover to the new refund system will be communicated to the Board by a separate order. F.No. 385/25/97-IT(B) Sd/- (Anand Jha) Director (Budget)