CBDT Releases Dos and DON'Ts Manual

THE CBDT has released a manual of Dos and DON'Ts for the officers and staff of the Income Tax Department. The Manual has a disclaimer that it is only for Departmental use and cannot be quoted in any proceedings as an authentic reference resource.

Some of the Dos and DON'Ts for the Administration of Direct Tax Laws are:

DOs

1. Do ensure that refunds are prepared correctly and sent to the proper addressee.

2. Do check twice to fill MICR details and correct address of the payee in case of e-refund.

3. Do check at regular intervals that refunds issued by your office are not shown by the AST as unpaid/unrealized.

4. Do write file name and number each side of note sheet and do cross blank space if left between last line and signatures.

5. Do ensure note sheet gives correct account of the proceedings and mention date with each signature.

6. Do remember that tampering of order-sheets, backdating or any other manipulation will attract criminal and disciplinary proceedings.

7. Do proper verification of a return of income & its annexure.

8. Do probe all the points on the basis of which case was selected for scrutiny before finalizing its assessment.

9. Do avoid large number of hearings and unnecessary adjournments.

10. Do ensure that necessary statutory approval of superior has been taken before issuing notice, imposing any penalty or authorizing Survey action.

11. Do strictly comply with the circulars, notifications and instructions issued by the CBDT.

12. Do refer cases to the TPO for determination of arm's length price if value of international transaction with associate enterprises exceeds the monetary limit prescribed by the CBDT.

13. Do comply with the statutory directions given by superior authorities as provided in the statute.

14. Do call explanation on abnormal increase in certain expenditure claimed.

15. Do satisfy that all conditions are fully met before allowing any deduction, exemption or rebate under the Act.

16. Do refer cases for initiation of penalty to superior authority if same is to be imposed by him as per the provisions of the Act.

17. Do issue all statutory notices well within prescribed time limits.

18. Do examine fresh unsecured loans/ cash credits/share capital/advances received with proper verification of the ingredients like identity & creditworthiness of the creditor and genuineness of the transaction.

19. Surveys should be conducted in accordance with law and as per existing instructions.

20. Do submit Preliminary Survey Report within 48 hours to the office of CCIT/CIT.

21. Do monitor the return of income filed subsequent to the survey for payment of taxes on income disclosed during the Survey proceedings.

22. Supervisory authority must monitor survey assessments for proper utilization of the evidences gathered during the course of Survey.

23. Do record detailed statement of the informant clearly bringing out specific information furnished by him.

24. After the investigation is complete do record a clear finding in the informant folder/proposals for interim rewards about the extent of undisclosed income unearthed which can be attributed to the specific information furnished by the informant as any vagueness on this count gives rise to plethora of disputes and complaints.

25. Do monitor payments of taxes due on additional income admitted during the search and do take all measures necessary to protect the interest of revenue.

26. Do remember to conclude the search proceedings within prescribed time limit wherever prohibition order or restraint is pending.

27. Authorised officer must ensure that Panchnama is error free as any mistake in this regard may prove fatal if validity of the search proceedings at the premise is challenged later.

28. Do identify core documents and get action plan of post search investigation approved from DIT (lnv.) as soon as the search is concluded.

29. Do follow all the procedures as per Search & Seizure Manual published by the CBDT.

30. Do submit Appraisal report within time limit prescribed.

31. Handing over of seized material from Investigation wing to Central charges or from one AO to each successive AO must be properly recorded.

32. Do get all the cases centralised with one AO at the earliest.

33. Do start search assessment proceedings at earliest so as to reach at logical conclusion with timely verification/ investigation.

34. Do monitor the timely completion of search assessments and ensure that all evidences/leads gathered during the search are properly investigated to logical conclusion.

DON'Ts

1. Don't delay the issuance of refunds, as it is a major cause of grievance.

2. Don't delay issuance of instructions to Refund- Banker wherever refund is to be issued under Refund Banker Scheme.

3. Don't seek personal attendance until it is absolutely necessary. Don't select cases for scrutiny in violation of CBDT guidelines.

4. Don't issue cyclostyled questionnaires on a large number of issues without examining the content and relevance thereof.

5. Don't fix further hearings when no new details are to be brought on record. Don't have unreasonable gap between the last date of hearing and the date of order.

6. Don't fix hearings in a large number of cases on the same day and at the same time.

7. Don't complete the assessment in haste when in-depth inquiry is required.

8. Don't issue Summons/ notices without proper jurisdiction and application of mind.

9. Don't disregard the decisions of the Supreme Court and Jurisdictional High Court.

10. Don't take a different stand on the issue, on which the department has taken a particular stand before the appellate authorities.

11. Don't fail to initiate penalty proceedings in case wherever default attracts the penal provisions.

12. Don't let the cases barred by Limitation under the Act and don't pursue assessment or penalty proceedings in a time barred case.

13. Don't forget to recheck b/f loss or unabsorbed depreciation available after assessment/appeal effects, as against the claim made by the assessee before allowing the set off.

14. Don't allow set off of loss of the activity whose income is exempt, against the income of taxable activity.

15. Don't conduct Survey u/s 133A of the Act without proper approval and jurisdiction.

16. Don't accede to the retraction from a voluntary disclosure without examining the terms and the maintainability of the deed of retraction.

17. Don't complete the survey assessments without examining/investigating the information/leads, collected during the survey.

18. Don't forget to record reasons for impounding the books of accounts/ documents during the course of survey and don't forget to seek permission of CCIT/DGIT for retaining impounded books of accounts/ documents beyond 10 days.

19. Don't accept casual, vague or sketchy information from the Informants and don't forget to get the informant form, information, statement and undertaking signed by the informant.

20. Don't delay processing of reward proposal for informants.

21. Don't accept disclosures of additional income during the search proceedings, which is not backed up by the assets or seized materials or documents.

22. Don't keep cash/jwellery/bullion seized in personal custody and cash be deposited in PD Account and jwellery/bullion be either transferred to the bank locker or handed over to the custodian of the strong room at the earliest.

23. Don't forget to draw running Panchnama of all the incidents/events which cannot be incorporated in the printed format.

24. Don't forget to discuss from time to time the progress made in the post search investigations with the DIT (lnv.) to facilitate approval of Appraisal report within time limit.

25. Don't fail to pass on information to officers of other charges about evidence/leads of tax evasion by the persons falling in their jurisdiction and also don't fail to pass on information regarding the violation of the provisions of other Acts, to respective agencies.

26. Don't hold submission of Appraisal report beyond prescribed time limit without getting extension of time from the Competent Authority.

27. Don't forget that any tampering of seized materials revealed at a later stage would involve all officers who have handled the seized materials without proper recording.

28. Don't delay passing of orders of centralization for transferring the cases to Central Charges.

29. Don't delay transfer of records to central charge as soon as order for centralization is passed.

30. Don't forget to enforce verification as outlined in the appraisal report.