Coordination between ITOs & TROs for recovery work. - Income Tax - 1578/CBDT

INSTRUCTION NO. 1578/CBDT Dated: September 13, 1984 Several instructions have been issued by the Board from time to time stressing the need for ensuring proper coordination between ITOs and TROs so that recovery work is not held up. However, in spite of these instructions, it is found that Department is still facing criticism in this aspect both from the public and the Parliament. 2. The subject of coordination between different offices of Income-tax Department in various fields was studied by a Committee specially set up for this purpose. Among other aspects of cooperation, the Committee in para 13 of its summary of recommendations has stated as follows:- "13. There should be proper and adequate coordination between the Tax Recovery officer and the assessing officer. Changes in demand should be promptly communicated to the Tax Recovery Officer. Certificates on which no action is required to be taken should be promptly cancelled. There should be regular meetings between Commissioner of Income-tax and Commissioner of Income-tax (Recovery) wherever such Commissioners are functioning and between Inspecting Assistant Commissioners and Inspecting Assistant Commissioners (Recovery). Dossiers of demand of Rs. 1 lakh and above can be discussed in such meetings (Paras 4.30 to 4.32)". 3. The report of the Committee was considered by the Board and accepted, particularly having regard to the fact that only recently in the 217th report of the PAC, 1983-84 the recommendations at Para 5.19 touched upon the lack of coordination between ITOs leading to holding up of revenue collections which has been mentioned in the Board's letter F. No. 398/19/84-IT(B) dated the 2nd July, 1984. Therefore your attention is once again invited to various instructions on the subject which are enumerated in brief below and which instructions are reiterated. 4. In Instruction No. 1149 dated 10-2-1978 {F.No. 385/75/76-IT(B)} the report of the Committee on Income-tax arrears was considered. The following deficiencies were noted:- (a) Bulk issue of certificates at the end of the year instead of spacing out evenly. (b) Certificates being issued without meeting assessees objections regarding alleged payments or rectifications pending and without amendment after etc. (c) Certificates issued in spite of stay of demands and/or grant of instalments. (d) Automatic issue of certificates without any action for recovery taken by the ITO HIMSELF LEAVING it to the TRO to take all steps for collection some of which could have been taken by the ITO himself. The following instruction were issued thereupon:- (a) Aid sheet to be prepared from October onwards so that issue of certificates can be evenly spaced out. (b) To avoid certificates for demands which have been stayed or for which instalments have been granted here the Boards earlier instruction was referred to and it was reiterated that the register specified to be kept for such demands stayed etc., should be kept which should be inspected periodically by the IACs. While on this subject attention is invited to instruction No.1412 dated 17-9-81 which deals with the topic of what should be done when the assessee disputes the correctness of the demand. Drawing attention to clause of 2nd schedule which empowers the TRO for granting further time, it was reiterated therein that in such cases only the anticipated demands should be collected, pending clarification from the ITO on the objection raised by the assessee. It was desired therein that the TRO at the end of the month should send a list of such cases to the IAC, wherein he had requested the ITO to consider the assessee's objections. The IAC in their turn would keep a watch on such cases and ensure that the ITOs send intimation of modified demands to the TRO within a reasonable time. Instruction No.1520 dated 20th April, 1983 was issued from F.No.398/30/83-IT(B) in which in para 2(e) it was specifically mentioned that pending clarification which could be obtained even by deputing Inspector to the ITO a letter may be issued to the assessee to the effect that the demand has been kept in obeyance. It was also reiterated at para 2(f) of the above instruction that as per item 8 of the same Manual till such clarification no coercive step for the disputed demands should be taken pending verification. (c) Particulars of assets to be specified invariably in the form prescribed in page 324 of the Recovery manual. (d) In all cases of demands of Rs.25,000 and above the certificates are to be forwarded through the IAC indicating the action taken by the ITO for recovery and indicating the line of further action for TRO. This instruction is probably never obeyed. Here C.I.T.'s(Recovery)can enforce adherence to this instruction by stating that they will not accept certificates in such cases unless routed through IAC with the particulars as specified. (e) There should be regular meetings between C.I.T, IACs, ITOs AND TROs even as indicated in Boards circular No.175 dated 14-8-1975. Even in this connection attention is invited to recent instruction No.1567 dated 28-6-87 wherein instructions were issued for regular meeting of CsIT(Recovery) with IACs, ITOs and TROs to identify and pursue cases of Rs.10,000 and below lying pending without recovery action for 5 years for the purpose of write off. The staff of TRO should visit the office of ITO periodically to collect helpful data to settle cases. (g) In carrying out jurisdiction for TROs the administrative commissioner should ensure that they cover and are co-terminus with the jurisdiction of ITOs. (h) The work of TRO should be reviewed every month.(F.No.404/138/77-ITCC dated 5-10-77). 5. In instruction No.1520 dated 20th July, 1983 mentioned above the following additional instructions were issued: (a) THE COMMISSIONERS SHOULD INSTITUTE REFRESHER COURSES FOR TROs and STAFF FOR ENSURING BETTER PERFORMANCE with better knowledge, better planning and better maintenance of records. (b) The administrative CIT should ensure adequate sanctioned strength being given to the Recovery wing. (c)Incomplete or wrong particulars or addresses and assets should be avoided in the certificates and any lapse on this part viewed seriously. Now that separate CsIT (Recovery) are there at 5 Metropolitan Charges, it should be easier for them to take action in respect of such careless work come to their notice. 6. While sending the quarterly report for TROs performance giving details of the certificates disposed and the amounts collected etc., kindly add a para giving brief particulars in respect of the following:- (a) Action taken for the various lapses mentioned above. (b) Reviews and inspection done by IACs and CsIT. (c) Meetings held with IACs and ITOs.