Procedure of issue etc. of refund vouchers. - Income Tax - 1687/CBDT

INSTRUCTION NO. 1687/CBDT Dated: May 2, 1986 Instructions were issued vide Directorate of O M Services (Income-tax) Circular No. 39 (F.No. 22/24/76-Ap/DOMS) dated 15.7.1980 regarding preparation of Refund Vouchers/Advice Notes and watching their encashment. The instructions were issued primarily to prevent the issue and encashment of fraudulent Refund Vouchers. 2. On test check conducted by the Receipt Audit in 1983-84, it has been observed in the comptroller Auditor General's Report for the year 1983-84 that the procedures laid down in the aforesaid circular are not being observed in following respects in most of the Income-tax Wards :- (a) Writing of Refund Vouchers : It is laid down that after the Refund Voucher is written by a clerk or a Tax Assistant, it will be checked by a Supervisor or Head Clerk before the same is put up to the Income-tax Officer for final check and signature. The person who writes of the Refund Voucher and the one who checks the same, have to put their signatures (with name in brackets) on the office copies of the Refund Vouchers and Advice Notes. The Receipt Audit has pointed out that out of 412 Income-tax Wards inspected by them, the above procedure was not being followed in 328 Wards. Omissions were also noticed in 24 Wards in Punjab and 53 Wards in Andhra Pradesh. (b) Tallying of Paid Vouchers with office copies: In case of refund upto Rs. 999/- on receipt of the third foil of the Refund Vouchers, the Clerk or the Tax Assistant concerned is required to tally the amount paid with the office copy (first foil) of the Refund Voucher and also write the date of encashment in the space provided in the office copy. In regard to refund of Rs. 1000/- and above, the Income-tax Officer himself, on receipt of the third foil of the Advice note, has to tally the amount paid with the office copy of the Refund Voucher and also write the date of encashment in the space provided in the office copy. The Receipt Audit has noticed that out of 424 Wards test checked, omissions to tally the paid vouchers with the office copies occurred in 360 Wards. Similarly, in Andhra Pradesh and Kerala charges also omissions of this type were noticed in 53 Wards and 18 Wards respectively. (c) Quarterly verification of receipt of paid vouchers : According to the prescribed procedure, a quarterly verification is to be made from the office copies of the Refund Vouchers as well as the relevant entries in the Demand and Collection Register to find out the cases where the paid foils of Refund Vouchers have not been received upto 6 months from the date of issue of Refund Vouchers and necessary investigations made to ensure that there has been no fraudulent payment. The audit has pointed out that in 356 Wards out of 461 test checked by it, such a verification was not made. The Audit has further, pointed out that in 186 Wards, 12,587 paid vouchers issued during 1980-81 to 1982-83 for Rs. 259.97 lakhs were not available on record. 3. According to para 17 of the Directorate of O M Services (Income-tax) Circular No. 39 dated 15.7.1980, the Inspecting Assistant Commissioners are required to check in the course of their periodical inspections that the system of issuing refund and the various checks prescribed in the Circular are being strictly adhered to. The large scale omissions pointed out by Audit in the observance of prescribed procedure/checks regarding issue etc. of refund shows that the Inspecting Assistant Commissioners have not been exercising this important check during their inspection. 4. The Commissioner of Income-tax are, requested to impress upon all the Income-tax Officers to see that the prescribed procedure for issue etc. of Refund Vouchers are strictly observed. They are further requested to impress upon the Range Inspecting Assistant Commissioner also to exercise the necessary check during their inspection that the various checks prescribed are being adhered to strictly.