Accounting procedure relating to the collection of advance tax under the head "ITI-Corporation tax". - Income Tax - 209/CBDT

INSTRUCTION NO. 209/CBDT Dated: August 20, 1970 Section(s) Referred: 210 Statute: Income - Tax Act, 1961 I am directed to refer to Board's letter of even number dated the 27th August, 1969 (Instruction No.101/1969) on the above subject and to say that the accounting procedure relating to the collection/advance tax under/of the head "ITI-Corporation tax" has been reviewed in consultation with the Comptroller Auditor General and as a result the following revised procedure has been prescribed w.e.f.1970-71. 2. Collection of advance tax from companies should not, w.e.f. 1970-71 be credited to a separate minor head "Advance payment of tax" but should be accounted for separately under distinct sub-head "Advance payment of tax" subordinate to the minor head "Income-tax on companies". Instructions for the abolition of the existing minor head "Advance payment of tax" and the opening of a new sub-head under the minor head "Income-tax on companies" are being issued by the Comptroller Auditor General". 3. Until printed challans are available, columns should be provided with the help of the Rubber Stamp in the existing challans showing payments of "Income-tax on companies - Advance payments" before issuing them to the assessees. Challans with the necessary rubber stamp affixed may be supplied to the assessee immediately for making payment. So far as the challans which have already been issued to the assessees are concerned, the Income-tax Officers may ask such assessees to indicate on the challans that the payments are being made under the aforesaid head of account. This is necessary to ensure proper classification of payments of advance tax under "ITI-Corporation Tax". 4. The gross collections of first instalment of advance tax already collected during the year 1970-71 and accounted for under the minor head "Advance payments of tax-Gross Collections" should be transferred to the newly opened sub-head "Advance payment of tax" under the minor head "Income-tax on companies". 5. With effect from the year 1970-71 it will not be necessary to send to the Treasury Officers the adjustment memos prescribed in the Board's letter No.14/20/62-ITB dated the 27th March, 1963 for adjustment of advance tax to final revenue heads of Accounts as and when regular assessments are completed. You may instruct the Income-tax Officers under your charge not to send such memos to the Treasury Officer in future and to request the latter not to make adjustments on the basis of such adjustment memos, for adjustment as have not been acted upon. The adjustment if any made during 1970-71 on the basis of such of the adjustment memos, as have already been acted upon by the Treasury Officers will also have to be got reversed. For this purpose you may collect from the Income-tax Officers in the accounts for 1970-71 under the final revenue head "Income-tax on Companies" by contra debit to the head "Advance payment of tax - deduct amount transferred to final revenue head on completion of regular assessments" and send to the Accountants General consolidated statements showing the amounts so adjusted to final revenue head of revenue in the accounts for 1970-71 in your charge as a whole requesting him to reverse the adjustments. 6. On completion of the assessments the refunds due to the assessees out of advance tax paid by them should in future be accounted for under the sub-head "Other refunds" in the minor head "Income-tax on companies". So far separate Refund vouchers were used for making refunds under the head "Advance payment of tax". Now with the abolition of the head "Advance payment of tax". Now with the abolition of the head "Advance payment of Tax". Now with the abolition of the head "Advance payment of Tax" the refunds of advance payments should be made in the Refund vouchers used for making regular refunds. 7. With the issue of these instructions it will not be necessary to issue adjustments memos to the Treasury on completion of regular assessments either under "ITI-Corporation tax" or under "IV-Taxes on Income". Many of the Commissioners of Income-tax have asked for clarification regarding the nature of entries to be made in the D C Register. On completion of the regular assessments the gross demand should be entered in the D C Register. The advance tax would on verification of payment be reduced from the gross demand as is done in the case of payments u/s.140A and 141 on account of self and provisional assessments. 8. Action may be taken to give effect to these instructions immediately.