INCOME TAX

INSTRUCTION NO. 1971/1999

 Dated: August 25, 1999

Section(s) Referred: 154 ,147 ,263

Statute: Income - Tax Act, 1961

Subject : Remedial action and proforma report in case of Revenue Audit objections / Draft audit para - regarding

It has come to the notice of Board that in several cases where Revenue Audit or C & AG of India have raised objection (Draft para audit objection) care is not taken in preparing and sending the Proforma Report to the Board. Often, replies to the Draft para are sent after 8-10 months ( in some cases after one and half year). It is also noticed that some times Draft Para reports in Part 'A' and 'B' are not filled in completely and correctly and even dates of receipt of Draft Para and date of sending the report are not indicated. Further, in cases where audit objection is accepted by the Commissioners of Income Tax, remedial action is not completed early, depriving much needed revenue to the exchequer.

It has also come to the notice of Board that very often Assessing Officers tend to initiate and complete remedial action u/s. 154 in cases where there is no case of mistake being apparent from record. Such orders get knocked down in the appellate stage.

It is, therefore, decided by the Board that in the cases of Draft Para audit objection and Revenue audit objection

(a) Remedial action should be completed immediately in those cases, where audit objections have been accepted by Commissioners of Income Tax;

(b) Proforma report in Part 'A' and 'B' should be sent to the Board within 4 weeks of the receipt of the same as per the existing guidelines;

(c) All the columns of the proforma report should be completely and correctly filled in. The date of receipt of Draft Para and date of sending the Draft Para report should invariably be indicated at the appropriate place.

(d) In cases where detailed examination of the audit objection is required, remedial action may be taken under section 147 or 263 of the Income tax Act. Action under section 154 may be only taken in those cases where mistake is apparent from the records.

Above instruction may be brought to the notice of all the assessing officers in your charge.

F. No. 246/19/99- A&PAC-II

VIMALENDU VERMA
Under Secretary (A&PAC-II)