Arithmatical mistakes in computation of total income and taxes, followed by PAC remarks. - Income Tax - 1473/CBDT

INSTRUCTION NO. 1473/CBDT Dated: June 19, 1982 From the cases reported in the Audit reports during the last 4-5 years on which PAC has commented especially in its 38th report it is seen that simple mistakes of arithmetical nature in the computation of total income and taxes are being committed. Though instructions have been issued from time to time laying down the monetary limits upto which the supervisory officers like the headclerk and supervisor have to check the tax computations and those to be checked by the ITO/IAC these instructions are not being followed with the result, a large number of such mistakes are noticed by the receipt audit which are commented upon by the PAC. In the circumstances while reiterating boards confidential circular No.357 dated 15th December 1971 and Boards Instruction No.854 dated 19-7-75 the board have decided that action as indicated in succeeding paras should be strictly taken in all relevant cases. 2. The CsIT shall continue to maintain a ledger card for each ITO regarding the mistakes made by him. Entries will be made in this card when mistakes involving a tax effect of Rs.25,000 or more in respect of Income tax/corporation tax and is Rs.5,000 or more in respect of other direct taxes are reported by either revenue audit or internal audit and accepted by the department. The ledger card will have to be taken into consideration while writing the concerned officers character rolls, but his overall performance during the year should be adjudged without being unduly influenced. 3. In addition to calling for the explanation of the officials responsible for the mistakes in all cases covered by boards instruction No.854 dated 19-7-75 explanation of the defaulting officials may be called for in suitable other cases with lower tax effect where there has been : a) Failure to follow departmental instructions; b) Failure of follow binding instructions or c) Palpable mistakes or mistakes arising out of gross negligence or malafide action. The responsibility for taking disciplinary action in the light of the explanation will be with the appropriate disciplinary authority but DI(Audit) should act as the field arm of the Board and monitor the compliance with the instructions regarding calling for the explanation and punishment awarded. The field officers should be informed that the punitive action would be stronger where the audit objection is found to be correct and acceptable. 4. The decisions contained in para 2 and 3 above would apply both to audit objections raised by Internal Audit parties and audit objections raised by Revenue audit parties.