Procedure for writing off of non-live cases. - Income Tax - 1309/CBDT

INSTRUCTION NO. 1309/CBDT Dated: January 23, 1980 Statistics of small income-tax demands outstanding for more than 5 years are called for vide Board's letter of even number dated 20th February 1979 revealed that as on 31-3-78 nearly 5 lakh entries of such demand out of total of about 32 lakh entries were of amounts of Rs.200 or below. They involved tax arrears of only Rs.5.21 crores out of Rs.990 crores. The cost of processing one tax recovery certificate has been estimated to come to about Rs.150. 2. After considering all relevant factors, including the above, Government have decided that every entry of income-tax arrears outstanding for over 5 years on 31.3.79 i.e. raised during the financial year 1973-74 or earlier which is of Rs.200 or below in a non-live case should be written off without making any enquiries. 3. The non-live case means the case of an assessee in which :- (a) Neither any return of income was received nor any assessment proceedings initiated till the end of the month preceding the month of write off in respect of any of the 3 latest assessment years viz. 1977-78, 1978-79 or 1979-80; (b) no attachment of any existing property has already been made in pursuance of any recovery proceedings; (c) no scheme of payment of tax in instalments is in operation in that case; and (d) the present jurisdiction is not vested in a: (i) Central Circle (ii) Company Circle or. (iii) Special Investigation Circle or (iv) It is not a search and seizure case or, (v) It is not a case assigned to IAC (Assessment) 4. The procedure for removing, in a 'non-live' case, an entry of Rs.200 or below from the Demand and Collection Register is indicated below: (a) This is confined to demands raised during the financial year 1973-74 or earlier years. (b) The expression "attachment of any existing property" in para 3(b) above would not include a case where, merely, notice under Rule 2 of the Second Schedule has been issued but would refer to a case where definite action of attachment against any specific property, movable or immovable, has been taken under the provisions of Part II or Part III of the Second Schedule to the Income-tax Act. This should be ordinarily known to I.T.O., otherwise he may check up with the TRO. This expression would, however, include a case where specific action has been taken by the Income-tax Officer against any existing property under the provisions of sub-sections (2),(3),(4) and or (5) of section 226 of the Act. (c) The writing off of small entries as above would be irrespective of the size of the total demand or nature of the demand against a particular assessee viz penalty, interest, fine etc. (d) Against each entry to be written off a note to the following effect may be made in the D CR. "Written off vide Board's Instruction No.1309 dated 22.2.80 IDR No. _________ The abbreviation 'IDR' stands for the 'Irrecoverable Demand Register' as per proforma available in Appendix 'A' (p. 19 of the brochure on 'Write Off' issued by DI(RS P) in 1979). (e) The entries of the demand to be written off would be made in a separate part of the Irrecoverable Demand Register (IDR). This part will be titled " Amounts written off" under Board's Instruction No.1309 dated 22.2.80". (f) Separate entries in the plus and minus memorandum of Demand and Collection Register should not be made. The entries in the IDR would serve the purpose. A consolidated entry in the D CR may be made to facilitate reconciliation. (g) In the annual statement of " Remission or Abandonment of Claims to Revenue" for the financial year 1979-80 the amount so written off should be shown against a separate sub-item (a) below Item IV with the following narration: "IV-(e) Total amount written off under Board's Instruction No.1309 dated 22.2.80". The proforma of the annual statement is on p.20 of the brochure on "Write Off" referred to above. 5. List containing the entries written off under this Instruction should be prepared in duplicate and sent to the concerned Tax Recovery Officer in the following proforma. 6. On receipt of the list from the ITO, the Tax Recovery Officer will take the following action :- (a) Remit the demand from his "Register of Recovery Certificates Received by the TRO". He will make an appropriate entry in the 'Remarks' column of the register to the following effect: " Demand remitted vide entry No. _____________ of the list dated _________sent by the Income-tax Officer Ward _________". (b) He will put the serial number of the TRO's register in co. 4 of both the copies of the list received from the ITO. (c) He will return one copy of the list to the ITO for his record with a covering letter stating that remissions have been entered in his register. The copy of the letter should be endorsed by the Tax Recovery Officer to the IAC exercising jurisdiction over the concerned ITO. (d) The tax recovery certificates should be filed by the TROs and need not be returned to ITOs. 7. Writing off of small entries under this procedure is a one time affair. Board attaches very great importance to this work and desires that all eligible entries should be written off before 31.3.80. The entries written off under this procedure, would, no doubt be included in the telegraphic statement of reduction of tax arrears for the months of February and March 1980 apart from their being included in the annual statement referred to in para 4(g) above.