Collection of arrear demands. - Income Tax - 1786/CBDT

INSTRUCTION NO. 1786/CBDT Dated: February 25, 1988 The DI(Recovery), Delhi, carried out a sample study in six Commissioners charges at Delhi to find out whether proper and adequate attention is being paid to the collection of arrear demands. This study has revealed that this important aspect of work is being neglected by the assessing officers. The supervisory officers have also been found not to have taken requisite interest in this matter. Some of the reasons for pendency of arrear demands noticed during the course of sample study are ; 1. In many cases, there is no certification of the arrear demand brought forward in the arrear register. 2. Reconciliation of demand has not been done. No reconciliation statements have been found in any of the records maintained in the assessing officers offices. 3. In a number of cases, no action has been taken on rectification petition filed by the assessees. 4. In some cases, stay petitions filed by the assessees have not been attended to by the officers. 5. Even in cases where show case notices have been issued, they have not been followed up for any further action. The files do not indicate whether, on the dates fixed for hearing of the show cause notices, there was any appearances by the assessees or his representative. 6. In quite a few cases, appeal effects have not been given promptly where appeals have resulted in large reduction of demand. In some cases, only part effect has been found to have been given to the appeal orders. 7. In a large number of cases, no effort has been made for collection of the demand even after it has fallen due. 8. Adjustment on account of cash seized during search operations, even where requests have been received, not carried because of lack of communication between different officers. 9. Even in respect of cases which have been found fit for write off, no action has been taken to initiate the requisite action for write off. 10. TROs have not been informed about the modification in the certified demands after rectifications have been carried out and/or after appeal effects have been given. 11. Regular meetings between ITOs and the TROs have not been held to sort out the problems regarding the arrear demands. The most shocking aspect that has emerged from this study relates to apathy of higher functionaries in the matter of collection of outstanding demand. In the charges that have been inspected, it has been found that there has been practically no involvement of the IACs or the Commissioners of Income-tax and almost no action has been taken from their side to ensure that outstanding demand is expeditiously collected. Even stay petition filed before them have not been disposed of for long periods. The Chief Commissioners and Directors General shall bring the above to the notice of all the officers working under them. The eleven items of work enumerated above should invariably be commented upon by the CC/DG/C IT/IAC while conducting inspections.