Tax Recovery Certificates. - Income Tax - 1729/CBDT

INSTRUCTION NO. 1729/CBDT Dated: September 12, 1986 It has been brought to the notice of the Board that the tax recovery certificates are issued by ITOs without verifying the correctness of arrears of taxes to be reported in the certificate. This causes avoidable harassment to the assessees in whose cases the demands have already been paid. This can be avoided by properly verifying the correctness of the arrears from the assessees concerned. The Board desires that before issuing tax recovery certificates, ITO should ascertain the correctness of the arrear position appearing in D C Register by issuing a letter to the concerned assessee giving the particulars of tax arrears, assessment yearwise and mentioning as to whether this relates to IT, WT, GT, penalty, interest, etc., and asking the assessee to bring to his notice if there is any discrepancy/, for example, any rectification/appeal effect pending or credit not having been given to tax payments already made etc. This will go a long way in improving the public relation of the Department and ensure correct certificates being issued to the TROs. 2. Further it has been found by DOMS in a review of the working of tax recovery machinery that generally the tax recovery certificates are issued in the month of March resulting in a large number of defects in the TRC, e.g., full names and addresses of the assessees are not given; and addresses of partners in cases of firms are not furnished; relevant assessment years, certified amount etc., are not correctly given, names and addresses of legal heirs, wherever necessary, are not furnished etc. etc. In large number of cases these defects occur due to preparing TRCs on the basis of D C Registers without referring to actual case files. To avoid these defects in TRCs, the Board desires that Income-tax Officers should prepare the Tax Recovery Certificates with reference to the actual base files and not on the basis of the D C Registers alone. 3. For better recovery of the certified arrear demand, it is necessary that the senior officers should also involve themselves in the day to day progress in cases where arrears are high. The Board desires that CsIT in non-metropolitan charges (i.e. where there is no CIT(R) posted) should oversee all cases of certified demand between Rs. 1 lakhs, and guide the TROs in speedy collection of the arrear demand. 4. With the amendment of law by Taxation Law (Amendment) Act., 1984 extending time for issue of recovery certificates from one year to 3 years, it may not be possible for TROs to take coercive action for recovery of tax u/s 222 of the Income-tax Act for 3 years unless the certificates are issued early. The Board, therefore, desires that a notification should be issued by the Commissioners immediately u/s 226(5) authorising the ITOs to recover the arrear demands by issue of distraint warrants to the defaulters. 5. This may be brought to the notice of all officers working in your charge for its strict compliance.