Provisional assessments in cases of banking companies. - Income Tax - 1522/CBDT

INSTRUCTION NO. 1522/CBDT Dated: July 30, 1983 It has been brought to the notice of the Board that in the case of a number of banking companies, provisional assessments u/s 141A of the Income-tax, 1961 were done and refunds issued. Thereafter, regular assessments were not taken up for a long time despite the fact that there was neither any investigation nor any other complication involved in the completion of the assessments. It has also been seen that, in many such cases, when regular assessment is completed, portion of the refund issued earlier had to be recalled in the form of demand. There is no provision u/s 141A of the Act for charging of interest in respect of refunds which are demanded back on regular assessment. The delay in regular assessment in the case of some banks clearly shows that provisional assessment leads to procrastination. 2. It is, therefore, desired that every possible effort should be made to avoid provisional assessments in cases of banking companies where the regular assessments can be completed within the period of six months. If, however, the Assessing Officer feels that the regular assessment is not likely to be completed within the period of six months, he may complete the provisional assessment with the prior approval of Commissioner of Income-tax. In all other cases where the refund likely to be issued on provisional assessment exceeds Rs. 1,00,000, the Assessing Officer should take the prior approval of the Commissioner of Income-tax, who will ensure that such assessments are taken up expeditiously and sincere efforts are made to complete such assessments on priority basis. However, while completing the provisional assessments for granting refunds, it should be ensured that such assessments are not resorted to indiscriminately. 3. The above instructions may please be brought to the notice of Officers working under you.