Assessments involving assessed income of Rs. 5,000 completed during the financial years 1971-72 to 1973-74. - Income Tax - 1185/CBDT

INSTRUCTION NO. 1185/CBDT Dated : June 8, 1978 Section(s) Referred: 139 ,217 ,220 ,215 ,216 Statute: Income - Tax Act, 1961 The Public Accounts Committee have from time to time have expressed concern at the failure of the Department to levy interest in accordance with the various provisions of the Income-tax Act. A review was conducted about such failure in respect of assessments involving assessed income of Rs. 5,000 and above completed during the financial years 1971-72 to 1973-74. From the results of the review, it is seen that out of 1.61 lakhs assessments so reviewed, in about 12,000 assessments short levy/non levy of interest was detected and the amount of interest short/non-levied was about Rs. 1.45 crores. Commenting on the result the committee has stressed once again the need to devise effective steps to ensure that interest is recovered in all cases of default wherever it is leviable under the provisions of the Act. 2. Instructions have been issued from time to time stressing both the need to levy interest in all appropriate cases and specifying the remedial action to be taken in respect of omission to levy such interest. A reference in this connection is invited to :- i) Board's instruction NO.363(F.NO.404/276/71-ITCC)dated 23-12-71. II) Board's Instruction NO.980(F.NO.400/35/76-ITCC) dated 15-07-76. iii)Board's Instruction NO.805(F.NO.404/301/74-ITCC)dated 27-11-74. iv) Board's Instruction NO.844(F.NO.400/39/75-ITCC)dated 12-06-75. The due observance of these instructions is essentially an administrative matter which should be ensured through appropriate supervision at your and the IACs levels. In view of the continuing concern expressed by the PAC on this subject you are requested to ensure that the recurrence of omissions to levy interest in appropriate cases is totally eliminated. Where interest is reduced/waived under rules 40/117A, the decision should be properly recorded in the file so that the record shows that there has been an exercise of quasi-judicial discretion thus forestalling avoidable criticism.