Instructions for delay serving of demand notice. - Income Tax - 362/CBDT

INSTRUCTION NO. 362/CBDT Dated: December 23, 1971 Section(s) Referred: 220 Statute: Income - Tax Act, 1961 Under Section 220(1) of the I.T.Act, an assessees is normally allowed 35 days time, from the date of the service of the demand notice, to pay his taxes. A sample study conducted by the Directorate of Inspection (R.S. P), New Delhi shows that only in 16.7% of the cases covered under the study demand notices were served within a fortnight of the dates of the orders of assessment. In another 16.7% cases the demand notices were served within a fortnight to one month of the dates of the order of the assessment. In bulk of the cases covered by the study, the demand notices were found not served even after two months of the creation of the demand. In some cases the notices were found served after a lapse of 5 to 6 months. The Board have taken a very serious view of this matter. 2.Vide item No.II of the minutes of the Commissioner's Conference held in August, 1971, which were circulated under Board's letter F.No.385/78/71-IT(B), dated 21st October, 1971 it was emphasised that the ITOs must keep a personal watch on the service of the notices. It was also emphasised that in cases where the net demand exceeded Rs.10,000 there should only be a minimum of time lag in the completion of assessment and issue of the notice of demand, and that such notices are served within two days of issue. If it is not served within 7 days the IAC must review the reasons for pendency and remove the cause for the delay. The Board desire that demand notices in all big cases must be issued and served within 2 days of the date of order or at the most within 7 days. The IAC of Income-tax should exercise control on the work and make random checks to see that there is no laxity in this regard. 3. These instructions may be brought to the notice of all the ITOs/IACs for their information and strict compliance. If in future any abnormal delay in the service of the demand notices comes to the notice of the Board, a serious view will be taken.