Compulsory deposit Scheme (Income-tax Payers) Act, 1974 and the Scheme framed thereunder--Erroneous deposit made--Refund thereof--Procedure regarding. - Income Tax - 180A/1975

Circular No. 180A Dated 24 /10/1975 Subject: Compulsory deposit Scheme (Income-tax Payers) Act, 1974 and the Scheme framed thereunder--Erroneous deposit made--Refund thereof--Procedure regarding. 1. Under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974, persons mentioned in section 3(2) of the said Act are required to make compulsory deposit for the assessment year commencing on the 1st day of April, 1975, and 1st day of April, 1976, provided their current income exceeds Rs.15,000 at the rates specified in the Schedule appended to the Act. 2. Instances have come to the notice of the Board where deposits have been made by persons erroneously either because the person depositing the money is not liable to do so in terms of section 3(2) of the Act, or the person is one whose current income does not exceed the limit of Rs.15,100 during the financial year, or though his current income was above Rs.15,100, by virtue of section 4(2) of the Act, he was not liable to make any deposit. The matter has been examined in consultation with the Department of Economic Affairs and it has been decided that such deposits should be refunded to the depositors by the respective deposit offices. 3. A person who has made a deposit erroneously is required to submit an application in duplicate to the deposit office where the amount stands indicating the details of the deposit, viz., amount and date of deposit, account number allotted by the deposit office and reasons for seeking the refund and evidence in support of the income. The application should be accompanied by the original receipt granted by the deposit office (in Form "B" appended to the Scheme) and the pass book. 4. The deposit officers are required to verify the particulars of the deposit/deposits from its records and also such other evidence which may be submitted along with the application in support of the claim, and, thereafter, after due verification, the refund may be allowed by them together with interest thereon at the prevailing Post Office Savings Bank rate, currently at 5% per annum. Necessary instructions in this regard have been issued by the Department of Economic Affairs to the Reserve Bank of India and in turn by the Reserve Bank of India to all the deposit offices all over the country. 5. While framing assessment, the Income-tax Officers may scrutinise the refund claim made by the depositors to the deposit office with a view to ensure that the refund has been correctly claimed and allowed. In case a wrong claim has been entertained by the deposit office, the Income-tax Officers may initiate appropriate penal action wherever necessary in accordance with the provisions of the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974, and the Scheme framed thereunder. 6. Necessary instructions may please be issued to all Income-tax Officers working in your charge. (Sd.) T.P. Jhunjhunwala, Secretary, Central Board of Direct Taxes.