INSTRUCTION NO. 2/2010, DATED 18-3-2010

SECTION 220 OF THE INCOME – TAX ACT, 1961 – COLLECTION AND RECOVERY OF TAX – WHEN TAX PAYABLE AND WHEN ASSESSEE DEEMED IN DEFAULT – PERIODICITY OF MEETINGS OF COMMITTEES OF WRITE-OFF OF IRRECOVERABLE DEMANDS AND RAISING OF MONETARY CEILING – MODIFICATION IN INSTRUCTION NO. 16/2003, DATED 18-11-2003

INSTRUCTION NO. 2/2010DATED 18-3-2010

Reference is invited to Instruction No. 16/2003, dated 18th November, 2003 (Annexure) in which constitution of various Committees for recommending of write-off of income-tax arrears were suggested. Paras 6 and 7 of the above instruction mandated that the meetings to be held at least once in a month and report regarding the same to be sent to the Reporting Authority every month. In partial modification in Paras 6 and 7 of the above instruction following clauses are inserted:—

Para 6 : The Committees will meet at least once a quarter. The Committees would discuss not only the cases which are ripe for write off/scaling down but also the cases which are being processed for write off and cases which have recommended to the Directorate of Income-tax (Recovery), New Delhi, for further processing. This will ensure a continuous review of the unrealizable demand on the registers of the department.”

Para 7 : The Senior most Chief Commissioner/Commissioner/Addl. Commissioner/JCIT will convene the meeting of the committee and the Chief Commissioner/CIT/Addl.CIT/JCIT concerned will present his case. The Chief Commissioner indicated in Col. 4 of the Annexure will send a brief report of the meetings of the Zonal Committee every quarter to the Directorate of Income-tax (Recovery), Mayur Bhawan, New Delhi and endorse a copy thereof to the Board. The meetings must be held by the 15th of the last month of the quarter and report thereof must reach by the 30th of the month to the Directorate of Income-tax (Recovery). Similarly, the senior most Commissioner will send a brief report of the meetings of the Regional Committee to the Cadre Controlling CCSIT and the Sr. most Addl. CIT/JCIT will send a brief report of the meetings of the Local Committee to the CCIT concerned along the same timelines.”

2. As per Delegation of Financial Power Rules S.O. No. 1469, dated 26th May, 1990, the Chief Commissioner of Income-tax is competent to recommend write off of irrecoverable demand up to Rs. 15 lakh subject to the report to the next higher authority. The Competent Authority has further raised the monetary ceilings in each such case from Rs. 15 lakh to Rs. 25 lakh for Chief Commissioner of Income-tax subject to report to the next higher authority.

3. It is again reiterated that writing off of irrecoverable dues of revenue would not lead to release or waiver by the Government of its claim but would be only a write off in the Department’s books. The Government shall have the right at any time during the next 30 years, counting from the date of claim to recover the amount by a Civil Suit, if it appears to the Government that the defaulter has got some assets or means to pay.

The above instruction may be brought to the notice of all officers under your charge for strict compliance.

ANNEXURE

Reference is invited to Instruction No 14/2003, dated 6-11-2003 whereby the Board have revised the prescribed monetary ceilings for write-off of irrecoverable dues of Direct Taxes by the various income-tax authorities and modified the structure of the committees for recommending write-off. The revised constitution of the committees and the procedures to be followed shall be as under :

2. The composition of the various committees will be as under :

Name of the Committee Constitution of the Committee To be constituted by To be notified by
Zonal Committee Permanent Members consisting of three Chief Commissioners CBDT CBDT
Regional Committee Permanent Members consisting of three Commissioners. The CIT concerned shall be co-opted as Member for presenting his case where he is not a Permanent Member Cadre Controlling CCIT Cadre Controlling CCIT (Copy to be sent to CBDT)
Local Committee Permanent members consisting of three Addl. CIT/JCIT. The Addl. CIT/JCIT concerned shall be co-opted as Member for presenting his case, where he is not a Permanent Member CCIT CCIT (copy to be sent to CBDT)

3. Accordingly, the Zonal Committees have been constituted and are notified herewith as per Annexure enclosed. The regional committees will be constituted and notified by the respective cadre controlling CCsIT under intimation to the Board. Likewise, the Local Committees will be constituted and notified by the CCsIT concerned under intimation to the Board.

4. The constitution of the committees for various charges will be fixed. In the event of a vacancy in any charge, another Chief Commissioner/Commissioner(s)/Addl. CIT/JCIT, as the case may be, available in the same city or the nearest charge, may be requested to work on the committee. These arrangements will, however, be temporary till the vacancy is filled.

5. When a new charge is created or an existing one is merged with another charge, a proposal may be sent to the Board for constitution of a Zonal Committee for that charge or for reconstitution, as the case may be. If the Headquarters of an existing charge is shifted, there should be no need to reconstitute the committee. However, in case of any administrative inconvenience, a proposal for reconstitution may be sent for the consideration of the Board.

6. The committees will meet at least once a month. The committees would discuss not only the cases which are ripe for write-off/scaling down but also the cases which are being processed for write-off and cases which have been recommended to the Director of Income-tax (Recovery), New Delhi, for further processing. This will ensure a continuous review of the unrealisable demand on the Registers of the Department.

7. The senior most Chief Commissioner/Commissioner/Addl. CIT/JCIT will convene the meeting of the Committee and the Chief Commissioner/Commissioner/Addl. CIT/JCIT concerned will present his case. The Chief Commissioner indicated in column 4 of the Annexure will send a brief report of the meetings of the Zonal Committee every month to the Director of Income-tax (Recovery), Mayur Bhawan, New Delhi and endorse a copy thereof to the Board. Similarly, the senior most Commissioner will send a brief report of the meetings of the Regional Committee to the cadre Controlling CCIT and the senior most Addl./JCIT will send a brief report of the meetings to the Local Committee to the CCIT concerned.

8. It may be noted that in respect of cases involving demands exceeding the prescribed limits, which are referred to the Board through Director of Income-tax (Recovery) for according administrative approval to the proposal, the specific comments of the Chief Commissioner concerned should also be sent along with the recommendations of the Zonal Committee.

The Instructions contained herein will come into force immediately.

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