Recovery proceedings u/s231. - Income Tax - 1608/CBDT

INSTRUCTION NO. 1608/CBDT Dated: March 15, 1985 Sec.231 of the I.T.Act, 1961 has been amended by the Taxation Laws(Amendment) Act, 1984 with effect from 1-10-84 with a view to extending the period of limitation for commencing recovery proceedings from one year to three years. 2. The Board had an occasion to consider whether the extended time limit will apply to demands created prior to 1-10-84. A view has been expressed that as sec.231 is a procedural section, amended provision would extend the time limit even in cases where demands were created prior to 1-10-84. 3. The Board with a view to avoid controversy and litigation in the matter, have decided that in cases where the demands were created on or before 30-9-84 recovery certificate shall be issued within a period of 1 year from the last day of the financial year in which the demand is made. As regards demands created on or after 1-10-84 the recovery certificates may not be issued by the ITOs and IACs(Assessment) in a routine and indiscriminate manner. All the assessing officers should make utmost efforts to collect the demand within extended time limit before issuing the Recovery Certificates. 4. In view of the above the Commissioners may ensure that the Recovery certificates in respect of all cases where the demands were created prior to 1-10-84 are issued according to the provisions existing in the Act prior to the aforesaid amendment. The Commissioners may also ensure that the extended time limit as per the new provision is utilised adequately for recovery of demands created on or after 1-10-1984.