Publication requirement for written-off tax demands: names, particulars and reasons must be publicly disclosed and monitored.
Central Government, exercising powers under Section 287 of the Income-tax Act, 1961, directs Commissioners of Income-tax to publish names, addresses, status, assessment years, amounts written off and brief reasons for income-tax demands above the prescribed threshold written off for 1969-70 and subsequent years, in the Gazette and specified newspapers; Commissioners must publish within prescribed deadlines and forward copies to the Director of Inspection (R.S.&P.) who monitors compliance and transmits a copy to the Board.

Capital gain application: reinvestment in new trust asset treated as applied to charitable purposes; compliance periods extended.
Capital gains realized by a charitable or religious trust on sale of a corpus capital asset are to be regarded as applied to charitable purposes where the trust transfers the asset solely to acquire another capital asset and utilises the capital gains in acquiring the new asset. Trustees seeking to accumulate income beyond prescribed limits must give notice and invest accumulated sums in specified securities; the permitted period to invest and to furnish accounts is extended to four months from the end of the relevant previous year or until the assessment-year filing deadline, whichever is later.

Spread of income: concealed income may be allocated to earlier years but requires board approval beyond prescribed temporal limits.
Concealed income appearing in accounts is ordinarily taxed in the year of appearance but may be spread over to earlier years when evidence indicates earlier earning; ordinary spreads are confined to a short multi year period, longer spreads require sufficient material showing earlier earning, and any spread beyond the longer prescribed temporal limit must have prior board approval to prevent assessable income from escaping assessment.

Forfeiture of exemption: trusts holding shares in concerns of author/connected persons risk loss of tax exemption depending on holding extent.
The expression funds of the trust includes all trust property, including shares; section 13(2)(h) applies where such funds are invested in a concern in which the author or connected persons have a substantial interest either when invested during the relevant previous year or where pre existing investments continue to remain invested during that year. If the trust continues to hold such investments after the prescribed cut off, exemption is forfeited; complete forfeiture follows when the holding exceeds the statutory capital threshold, while only income from the investment is disqualified where the holding does not exceed that threshold.

Timely filing of references: ensure submissions meet prescribed advance periods to avoid provisional filings and wasted effort.
Delay by Commissioners in submitting proposals for references and leave petitions has resulted in reports arriving with inadequate time margins or without indicated limitation periods, causing provisional filings, additional correspondence, and wasted effort. The Board reiterates the prior circular's timelines and directs Commissioners to process and forward reference and appeal reports promptly and strictly within the prescribed advance periods, and to furnish assurances of compliance.

Tax treatment of gratuity fund income: income received by trustees on behalf of approved gratuity funds is taxable, not exempt.
Income received by trustees on behalf of a recognised provident fund or an approved superannuation fund is exempt under the income-tax law, whereas income received by trustees on behalf of an approved gratuity fund is not exempt and must be treated as taxable; the Board issued this instruction to inform Income Tax Officers and correct erroneous prior treatment.

Capital gains tax on sale of repatriates' capital goods enables recovery action under Section 45.
Sale of goods brought into the country by repatriates as their capital is subject to capital gains tax; the Board directs that tax demands arising from such capital gains be assessed and appropriate recovery action may be taken, and that these instructions be communicated to all responsible officers.

Rectification of wealth-tax assessments: require simultaneous rectification with income-tax when share income is revised to ensure compliance.
Assessing officers must use the register for rectification of provisional share income to ensure that whenever returned share income is provisionally included in assessed income, the Income-tax assessment and the wealth-tax assessment are rectified simultaneously; all actions must be recorded in the order sheet and actively followed up, with supervisory attention to any lapses.

Shareholder deduction under section 80K limited to the company's actual section 80J deduction; remedial recovery permitted.
Shareholder entitlement to a deduction under section 80K is contingent on the company having actually obtained the deduction under section 80J and is limited to the extent of the deduction obtained; shareholders are not entitled when the company fails to obtain the company deduction due to inadequate profits. The Board withdraws Instruction No.227 and directs remedial reassessment or revision to withdraw improperly granted shareholder deductions from assessment year 1968 69 onwards.

Certificate under section 74(3) now requires written full property value before issuance to prevent undervaluation.
Certificates under section 74(3) of the Estate Duty Act (form ED-53) must be issued only after the issuing officer obtains a written submission of the full value of any mortgage, lease or sale of the immovable property; the amended ED-53 will include a column for the full value immediately after the property description, and cyclostyled copies may be used until printed forms are available.

Section 40A(3) amendment requires assessing officers to apply amended rule 6DD when determining expenditure admissibility.
The Board withdraws its prior instruction and notes that rule 6DD, as amended by the Income Tax (4th amendment) Rules, 1970, governs admissibility of expenditure under section 40A(3). Assessing officers are instructed to complete assessments for the year and determine expenditure admissibility in each case by applying the amended rule 6DD.

Best judgment assessment: record component deductions so remission or cessation can be taxed and allowances withdrawn.
Instruction requires that where total income is estimated under section 144, the assessment order must expressly state amounts taken into account for (i) expenses in the profit and loss account, (ii) depreciation on assets, and (iii) development rebate allowance, so that subsequent remission or cessation can be taxed under section 41(1), balancing charges under section 41(2) can be applied, and development rebate previously allowed can be withdrawn under section 155(5).

Restriction on registration of property transfers: defer issuing tax clearance certificate until pending assessments completed or security provided.
Assessing officers must prevent issuance of a tax clearance certificate where an application appears intended to defeat future tax recovery by alienation of immovable property; they should, unless satisfied sufficient assets remain or investigation difficulties exist, complete all pending assessments within the applicable time-limit and raise any demand before issuing the certificate, and where a demand exists issue the certificate only after payment or satisfactory provision for payment.

Tax recovery functions assignment places Additional Commissioner (Recovery) in charge of recovery, stays and withholding of refunds for all demands.
Additional Commissioners of Income-tax (Recovery) are assigned the functions of Commissioners of Income-tax for tax recovery, including review, stays of demand, withholding of refunds under section 241 and Tax Recovery Commissioner duties. The Addl. CIT(Recovery) must take appropriate action on arrears within their assigned band and ensure compliance with directions of the Director of Inspection for larger arrears. The notification does not confine Addl. CIT(Recovery) to certificated demands: they must handle review, stay, collection and related action on all demands from inception; same applies to Addl. CIT, Jaipur.

Wealth-tax on agricultural holdings: collection paused for holdings within affected jurisdiction; no coercive recovery pending appeal.
The Board advises that the High Court judgment invalidating wealth-tax on agricultural holdings applies to all assessees assessed by wealth-tax officers within that territorial jurisdiction, regardless of where the land is located, and directs that no coercive measures be taken to recover demands where net wealth includes agricultural land situated within the affected jurisdiction pending appeal.

Tax recovery responsibility assigned to Additional Commissioners for review, stay and collection, subject to higher oversight directions.
Allocation of responsibility for recovery of tax arrears assigns Additional Commissioners of Income-tax (Recovery) authority over review, stay, collection and withholding of refunds under section 241 for demands from inception, not confined to certified demands, with the Additional Commissioner responsible for mid-range arrears and required to implement directions of the Director of Inspection and the Board for larger arrears.

Rounding off rule: allocate rounded tax amounts across minor heads so the aggregate equals the rounded total amount.
Section 288B requires rounding off tax-related amounts to the nearest rupee by treating paise of 50 or more as one rupee and ignoring paise under 50. Rounding is applied to the total tax payable or refundable, not separately to each minor head; separate head amounts must be adjusted so their aggregate equals the rounded total. Assessment forms show unrounded heads, while demand registers and notices reflect rounded totals. Tax deduction certificates and subdivided certificates should record the actual tax deducted and need not re-round subdivided figures.

Adjustment of tax refunds across direct tax laws permitted to set off against outstanding non disputed demands promptly.
Assessing officers must entertain requests to adjust refunds payable under one direct tax enactment against demands due under another enactment for demands that have fallen due and are not in dispute, to simplify recovery procedures. Absent an assessee request, the officer should pass a formal order under the applicable tax procedural provisions to set off refunds under any other direct tax enactment against the assessee's outstanding demands.

Tax deduction at source on interest: immediate bank discounting avoids withholding, agency receipts require TDS on interest.
If a usance bill/hundi is immediately discounted by a bank which advances the net amount, the bank acquires the bill and its payment to the supplier is a price, not interest, so no tax is deductible at source by the bank and the buyer need not deduct tax when paying the bank under the exemption for payments to banks. If instead the bank merely receives payment as agent and credits it to the supplier, any interest component is received for the supplier and the buyer must deduct tax at source from that interest even if routed through the bank.

Admissibility of depreciation to be scrutinised by internal audit; assessing officers must provide asset breakups for verification.
The Board directs internal audit parties to scrutinise the admissibility of depreciation and development rebate per Board instructions and the Internal Audit Manual, and requires assessing officers to obtain an asset break up identifying any intangible assets so IAPs can verify whether depreciation has been incorrectly allowed on intangible assets.