Recovery certificates be issued before 31-3-79, Aid Sheets should be sent to the concerned assessees. - Income Tax - 1235/CBDT

INSTRUCTION NO. 1235/CBDT Dated : February 7, 1979 Section(s) Referred: 222 , II Schedule Statute: Income - Tax Act, 1961 Attention is invited to the Board's letter F.No.385/109/78-IT(B) dated 22-12-1978 and reiterating the instructions contained in D.O.letter of late Sri.R.S.Chadha, Member, CBDT in F.No.385/50/76-IT(B) dated 21st August 1976 on the above subject. 2. The test check conducted recently by the Staff Inspection Unit in a few selected TRO's charges have disclosed that substantial proportion of the disposal of recovery certificates by the TROs during the financial year 1977-78 has been achieved through verification of the certificated arrears with assessment records and cancellation of the tax recovery certificates. The high proportion of such disposals clearly indicates that notwithstanding the issue of instructions on 21st August, 1976, the task of removing fictitious demands from the registers of the department by giving prompt credit for pre-paid taxes and prompt effect to the appellate orders and by promptly attending to the pending requests for rectification of assessments or re-opening the ex-parte assessments invoking the provisions of sec.146 has not received adequate attention. You will no doubt, agree that such indiscriminate issue of revenue recovery certificates without proper verification of the payments made by the assessees or their claims for revision of the demands leads to all-round increase in infructous work besides serving as an irritant to the assessee and thus harming the public image of the Department. 3. In the current financial year, the problem is likely to be accentuated by delays in the receipt of challans from the focal point branches of some banks in some of the areas. The result is likely to be that even taxes already paid may not properly be given credit to in some cases resulting in the increase in the number of infructous recovery certificates unless due care is taken to eliminate such certificates well in time. 4. The Board, therefore, desire that in all cases where tax recovery certificates are to be issued before 31-3-79, Aid Sheets should be sent to the concerned assessees if not already done and their objections duly considered. Wherever no real tax arrears will subsist if the assessee's grievances are rectified, follow-up action should be taken to ensure that such arrears are removed from the registers so that no recovery certificate has to be issued in such cases. Where, however, the tax payments claimed by the assessee cannot be verified due to the delay in receipt of challans, the ITOs should, clearly indicate to the TROs while forwarding recovery certificates, the fact that the assessee has claimed to have made the payment but credit for such payment could not be given due to the delay in the receipt of challans. The TRO should be requested not to proceed to take any further recovery action in pursuance of the certified arrear until the ITO confirms the correctness of the said arrear. The ITO should, on his part, verify the correctness of the subsisting arrears in all such cases before 30th April 1979 and take steps to cancel modify or confirm the recovery certificates issued to the TRO since the relevant challans would have by then, been received by all ITOs. The due date for verification and confirmation should be strictly adhered to as, in the absence of immediate follow-up action, the process of verification at a subsequent stage would only become more difficult and time-consuming. 5. You may kindly ensure through the IACs and ITOs that in every case where recovery certificates are to be issued before 31-3-79, the procedure laid down in the preceding paragraph is followed before the issue of the recovery certificate. Issue of a recovery certificate in a routine manner without following the aforesaid procedure should be viewed seriously.