Instruction regarding tax calculations and assessment order. - Income Tax - 1475/CBDT

INSTRUCTION NO. 1475/CBDT Dated: June 28, 1982 In the case of Mubarak Shah Nawshbandi Vs. CIT(ITO ITR 216), It has been held by the Jammu Kashmir High court that an assessment order is bad in law if the tax calculations are not mentioned in the assessment order itself. In giving this decision it followed the decision of the Bombay High Court. In the case of M.N.Kotak Vs. CIT the Karnataka high court held that the fact that the ITO had quantified the tax on a separate sheet annexed to the assessment order would not be sufficient and annulled the assessment and directed the advance tax and self assessment tax to be refunded. A similar view was also taken by the ITAT, Nagpur Bench in the case of V.B. Saraf Vs. WTO in WTA No.7 of 1980 dt.29-6-89 where it annulled the wealth tax assessment on the ground that the wealth tax computation was not shown in the assessment order itself. 2. Although the board had issued instructions vide its F.No.28/16/63-ITA.II dated the 27th September 1967 laying down that: a) In the case of companies the details of tax calculations should be indicated in the assessment order itself. b) In the non-company, small income cases the details of tax calculations should be indicated on the reverse side of the demand notice. c) In other non-company cases, a copy of form ITNS 150 A should invariably be sent to the assessees alongwith the demand notices. The need for following said instructions strictly is reemphasised. 3. However it is observed that the above said instructions of the board are not being strictly followed by the Field officers with the result that in view of the above mentioned judgments and other judicial pronouncements in favour of the assessees, the ITAT may at times go to the extent of annulling an assessment order on the ground that tax computations are not mentioned in the assessment order itself. In this view of the matter it is requested that you may bring to the notice of the departmental authorised representatives in your charge that while arguing a case before the ITAT on such an issue they may kindly refer to the decision of the Hon.Supreme court in the case of National Taj Traders wherein it has been held that the principle that a fiscal statue should be construed strictly is applicable only to taxing provisions such as charging provision or a provision imposing penalty and not to those parts of the statute which contained machinery provisions.