Provisional assessments u/s 141A of Income Tax Act, 1961. - Income Tax - 1078/CBDT

INSTRUCTION NO. 1078/CBDT Dated : July 22, 1977 Section(s) Referred: 141A Statute: Income - Tax Act, 1961 Reference is invited to Board's Instruction No. 755* F.No. 236/34/73/-A PAC dated 5-9-1974 on the above subject. In spite of the above instructions, instances have come to the notice of the Board where provisional assessments u/s 141A of the I.T.Act, 1961 are not being made in appropriate cases resulting in payments of avoidable interest u/s/ 214 amounting to several lakhs. 2. The Board desire that the provisional assessments should be made and refund due granted in all cases without fail where the assessees have specifically requested that provisional assessments should be made. Even in cases where no such request has been received, and where the returned income exceeds Rs. 50,000 the returns must be scrutinised with reference to the tax on returned income and pre-assessments taxes paid with a view to decide whether provisional assessments would result in refund. If it is found that provisional assessment would result in refund, and the ITO is of the opinion that the regular assessment is not likely to be made within six months of the date of furnishing the return, a provisional assessment should be made and refund issued promptly. 3. Normally in all cases where Sec. 141A is applicable, refunds should be granted. However where large amounts of refunds of provisional assessments are due and if the Income-tax Officer is of the view that issue of refunds is likely to create difficulties subsequently in the matter of collection of demand that may be raised, the previous approval of the CIT should be obtained u/s 241 of the Income-tax Act with a view to withhold such refunds. 4. The Board have already issued instructions that case where the provisions of Section 141A are attracted should be entered in a separate register which should be kept in the personal custody of the ITO. In order to ensure that all cases wherein provisional assessments are called for are attended to, the columns of this register have been suitably modified. In this register, all applications for provisional refunds and all returns with income exceeding Rs.50,000 should be entered as and when they are received. The ITO should scrutinise the register periodically and if he is of the opinion that regular assessment is not likely to be made within six months of the filing of the return, make a provisional assessment and grant refund unless he is satisfied that the refund should be withheld u/s 241.