Guidelines for Decentralization of cases from Central Charges - Income Tax - F. No. 286/68/2004-IT (Inv. II)

F. No. 286/68/2004-IT (Inv. II) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes-North Block, New Delhi Dated: the 26th February, 2009 To, All Chief Commissioners of Income Tax (CCA) All Chief Commissioners of Income Tax (Central) All Director General of Income Tax (inv./Intel) Sub: Guidelines for Decentralization of cases from Central Charges 1. I am directed to refer to Board s letters No.286/68/2004-IT (Inv. II) dated 13th June, 2005 and 4th July, 2007 on Guidelines for decentralization of cases from Central Charges. Certain queries have been raised as to how the Central charges can launch prosecution when cases searched are being transferred after disposal of first appeal in search assessments and after filing second appeal in deserving cases. 2. In supersession of the instructions mentioned above, I am directed to issue the following guidelines for decentralization of search cases from Central charge; 2.1. All cases of a search group may be decentralized after filing of second appeal by the Department. In cases where assessee has filed second appeal, the cases may be decentralized after preparing a paper book dealing with all issues, which are subject matter of appeal before ITAT However in case of any assessee where prosecution is contemplated as per prosecution guidelines dated 24th April, 2008 issued by the Board, only such specific cases of the search group should be retained in Central Charges till filing of prosecution. After the prosecution is launched, such cases should also be decentralized. 2.2. Cases where application has been filed before Settlement Commission u/s 245 C(1) and order u/s 245D(4) have not been passed by the Settlement Commission, or cases where filing of writ before High Court or SLP before Supreme Court against the order of the Settlement Commission is being considered by the Department, or cases in which proceedings before the Settlement Commission have abated u/s 245HA(1), will not be decentralized till completion of search assessment proceedings and filing of appeal as mentioned in para-2.1 above. 2.3. The scam cases investigated by other Government Enforcement Agencies and cases centralized as per specific order of the CBDT should not be decentralized without prior approval of the Board. 3.1. The ACIT in the Central Charge, before transferring the case, should identify the following seized documents / seized materials: (a) The documents and materials referred to in the Assessment order: (b) The documents and other material referred by the assessee with reference to his defence before the A.O. (c) The documents referred to by the assessee before CIT (Appeal) during his submissions and referred to by CIT(A) in his order; (d) The documents and material referred by the CIT (Appeal) in his order. 3.2. The A.O. in the Central Charge should segregate the above seized materials and retain these referred documents/materials as a part of search material and hand it over to the succeeding A.O. along with panchnama and annexures, statements recorded by the Department, bank statements, etc. Thereafter, A.O. taking over the seized material must take timely action for further retention of such seized books/ materials. 3.3. The seized material having bearing on prosecution proceedings should not be released till the completion of such prosecution proceedings including appeals by assessee/Department thereon. After the institution of prosecution proceeding, the same should be handed over by the A.O. of the Central Charge to the Nodal officer/DCIT (Prosecution) who should be responsible for their safe custody and for producing them in Court. However, where the Court in which prosecution is launched is located in a station other than the station in which the Nodal Officer/ DCIT(Prosecution) is located, then such original records should be retained by the Assessing Officer under intimation to the nodal officer. Such seized material must be kept in the personal custody of the Nodal Officer/DCIT(Prosecution)/Assessing Officer and the last date for retention should be mentioned in the charge handover note, so that timely action is taken for continued retention of such seized books/ materials. 3.4. Seized documents/books other than the above referred documents may be returned to the assessee and an undertaking be obtained that these released documents would be produced in subsequent proceedings as and when needed. Only after completing this work, the A.O. should propose the case for transfer. 3.5. In case where the prosecution has been launched, the A.O. of the Central Charge shall also hand over the following information/documents to the Nodal Officer / DCIT (Prosecution) /Assessing Officer: (a) The name and present whereabouts of the A.O. who filed the complaint; (b) The reasons for launching prosecution, the corroborative evidence and the names and addresses of the witnesses mentioned in the prosecution complaint. 4.1. The cases may be decentralized before 1st May of every year by passing the orders of decentralization. However, if the order is passed after 31st May, then the decentralization should be effective from the Second week of April of the next financial year. 4.2. The Budget collection with reference to the files transferred out of the Central Charge should be taken into consideration for revision of the Budget target of the Central Charge. 5. The CCIT / DGIT however would have the discretion to retain any other case/cases for any reason which are to be recorded in writing. However if a case not falling under any of the above categories and where no search action has been taken during last five years is retained in the Central Charge, then the reasons for continued retention of the same should be intimated to Board in the Monthly D.O. letter. It is further clarified that no case should be retained in Central Charge only for the purpose of revenue collection of the Central Charge. 6. I am directed to inform you that steps should be taken to decentralize the eligible cases, as per the procedure mentioned in the guidelines. 7. The above guidelines may be brought to the knowledge of all income tax authorities working in your charge. Yours faithfully, (Aarsi Prasad) Under Secretary to the Govt. of India