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Tax Recovery Certificate by the ITOs. - Income Tax - 1149/CBDTExtract INSTRUCTION NO. 1149/CBDT Dated : February 9, 1978 Section(s) Referred: 222 Statute: Income - Tax Act, 1961 While considering the report of the Committee on Income-tax arrears, the Board has noted with concern the existing practice of indiscriminate issue of Tax Recovery Certificate by the ITOs in the last month of the financial year when the statutory period of limitation is about to expire. Due to this bulk issue, the certificates suffer from one or more of the following defects: (i) The particulars of the assets of the defaulter are not reported to the TRO. (ii) The amount certified is incorrect since assessee's claim for credit/rectification is not properly considered. (iii) Certificates are issued even in cases where the assessee is not in default since the demand has been stayed/kept in abeyance or the assessee has been permitted to pay the tax in instalments. 2. It is also noticed that Income-tax Officers do not commence action for recovery of tax arrears under their own powers in a large number of cases with the result that the TROs are burdened with an increasing number of certificates and the demand certified goes on increasing unnecessarily to that extent. 3. The Board would, therefore, like to impress on the commissioners of Income-tax the need to take urgent remedial action on the following lines: (i) The ITOs should be instructed to take up the work of preparing the "aid-sheets" and thereafter issuing recovery certificates in cases where found necessary, from October onwards. The practice of issuing the certificates only in the month of March of each financial year, if prevalent in your charge, should be stopped. (ii) The practice of issuing certificates even in respect of stayed demand should be discontinued. A watch over such cases can be kept through the Registers prescribed in the Board's Instruction No.1139 dated 16.1.78 for demands stayed/kept in abeyance and demands permitted to be paid in instalments. A review of this register every year will enable the ITO to issue the TROs in cases where such issue had been postponed due to the demand being stayed or allowed to be paid in instalments. (consequently, the existing Recovery (Limitation) Register (ITNS19) will be discontinued). The IAC must periodically check this Register to ensure that certificates are issued in time wherever necessary. (iii) While issuing the Recovery Certificate to the TROs, particulars of the assets should be noted in the forms accompanying the TRC, as already prescribed on page 324 of the Recovery Manual. (iv) In all cases where the demand to be certified exceeds Rs.25,000, the ITO should forward the certificates to the TRO through the IAC with a note explaining the action taken already for recovery and indicating the action required to be taken by the TRO. (v)(a) A procedure for organising periodical meetings by CIT/IAC with the ITO/TRO was prescribed in Board's Circular No.175 dated 14.8.75 (F.No.404/171/75-ITCC). The CIT/IAC need not himself participate in these meetings; it will be sufficient if they ensure that such meetings are held between the ITOs and the concerned TROs atleast once a month. The scope of further recovery action to be taken in cases presenting difficulties should also be discussed in these meetings. (b) The TRO's staff should also periodically visit the ITO's office wherever necessary in order to collect the particulars of collection/reduction in cases of certified demand. (vi) As far as possible, the jurisdiction of each TRO should be so organised that it coincides with the jurisdiction of the ITOs working in a particular IAC Range. (vii) The TRO's work should be reviewed every month by the IAC who should also conduct periodical inspections. The Cs.IT. should also review the work of the TROs every month as desired by the Board in Instruction F.No.404/138/77-ITCC, dated 5.10.77 and copies of the Commissioner's review should be endorsed to the Board and the DOMS. 4. The continuing pendency of a large number of certificates which are very old indicates that sufficient attention is not being devoted to the work of writing off of such demands in a systematic manner. The Board has decided that the ITO (Headquarters) attached to each individual commissioner of Income-tax should be specially utilised for assisting the CIT for organising on a regular basis and taking all follow up action for expeditious process of writing off irrecoverable demand. If this, work is attended to properly, a lot of dead wood can be eliminated. 5. The Cs.I.T. are requested to acknowledge receipt of this letter and to forward to the Board a note by 30.4.78 on the action taken by them to give effect to the above decisions.
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