Maintenance of accounts under Section 44AA is mandatory; penalty proceedings must be initiated for noncompliance.
Compliance with the requirement to maintain books of account under Section 44AA is mandatory and failure to do so attracts penalty under section 271A. Assessing Officers are directed to initiate penalty proceedings where non compliance is noticed, and supervisory officers and the Internal Audit wing must verify compliance during inspections and audits.

Inter-head set-off priority requires current-year losses to be adjusted before applying carried-forward losses.
Inter-head set-off under section 71 takes priority: where an assessment year shows income under one head and a loss under another, the contemporaneous loss must be set off against that income before carried forward losses under the income-bearing head are applied. This sequence is subject to Chapter VI exceptions that prohibit inter-head adjustments for certain losses, and departmental return formats have been aligned to reflect this method of computation.

Coordination of relief applications requires enquiry into parallel waiver or relief petitions and disclosure by applicant before disposal.
The Chief Commissioner/Commissioner must enquire whether parallel applications on the same issue-such as waiver of interest or other relief petitions-are pending before any other authority and must require the assessee to state categorically whether the relief sought has been claimed before any other forum; this requirement should be communicated to all officers to enable coordinated disposal of the application.

Power to settle tax cases is not vested in commissioners; settlement lies with Settlement Commission and penalties are waivable.
No power to settle cases is vested in Commissioners under the Income-tax Act; settlement is the remit of the Settlement Commission. Powers under section 273A permit waiver or reduction of penalties and interest only after statutory conditions and Board instructions are satisfied. Assessing officers must decide tax treatment and assessment year on the facts of the file. When evidence of evasion emerges in search or investigation, authorities should gather full material to levy concealment penalties and initiate prosecution under the tax penal provisions.

Prima facie adjustments to net wealth permit obvious allowance or disallowance of exemptions and arithmetical corrections.
Under the Wealth-tax Act the Assessing Officer may make prima facie adjustments to net wealth declared in returns: rectify arithmetical errors; allow exemptions or deductions prima facie admissible though unclaimed; and disallow exemptions or deductions prima facie inadmissible on the basis of the return and accompanying documents. Use the illustrative list addressing exemptions and the foreign property definition as ready reference and apply the same prima facie principles to valuation issues under Schedule III.

Exemption under section 10(23C) conditions clarified: strict verification, time limited notifications, audit evidence and no duplicate exemptions.
Amendments effective 1 April 1990 require applicants for exemption under section 10(23C)(iv) and (v) to submit prescribed Form No.56 with supporting documents, undergo verification of activities, apply income wholly and exclusively to stated objects with permitted investments, and maintain separate accounting for incidental business; investments outside prescribed specifications after 30 March 1990 disqualify entitlement. Notifications are time limited, conditions are cumulative, audited accounts should be examined (preferably three years), and recommendations must contain specific, reasoned findings signed by the Commissioner/Director.

Condonation of delays in claiming refunds requires substantive scrutiny of source income and avoidance of routine approvals.
Exercise of discretion under Section 119(2)(b) must follow prior circular conditions and involve factual scrutiny of source of income, consistency of reporting, maintenance of books, and risk of account manipulation; only genuine hardship cases should be condoned and routine or mechanically approved delay condonations must be avoided.

Residency test for seafarers affects which earnings are taxable in India and guides employers' tax withholding.
Members of the crew of foreign going Indian ships who are non resident are taxable in India only on income received in India or earnings for periods worked in Indian waters; foreign earned income received outside India is not chargeable.

Collection of tax at source now applies to purchase price including excise and issue price, widening TCS base.
Collection of income-tax at source applies to profits and gains from trading in specified goods, with purchase price construed to include any amount paid or payable by the buyer (excluding auction bid amounts) so that excise duty and analogous charges, including the issue price or "Nirgam Mulya", form part of the purchase price. Persons defined as sellers, including governments, local authorities, corporations and co-operative societies, must collect tax at source at prescribed rates based on this inclusive purchase price. The amendments apply from the assessment year 1991-92 and cover collections made during the financial year 1990-91.

Attachment of immovable property: secure title deeds and participate in subsequent auctions to ensure expeditious disposal.
Officers must, where practicable and especially when an assessee seeks stay or instalments, obtain custody of title deeds of attached immovable property to prevent forestalling; and Assessing Officers authorised under Rule 59 should actively participate in subsequent auctions to avoid postponement for want of reserve-price bids and to ensure expeditious disposal.

Survey powers under section 133A(5) permit post-event enquiries to quantify expenditure and secure corroborative supplier evidence.
Section 133A(5) authorises enquiries and recording of statements after a function, ceremony or event to quantify expenditure. Investigation Wing officials should discreetly gather intelligence from suppliers and venues to select substantial cases, conduct surveys only after the event, promptly record and compare statements, and corroborate claimed expenditure by obtaining evidence from outside suppliers about amounts, modes of payment and services. The assessee should be confronted with quantified expenditure and questioned on sources of funds. Surveys require prior recorded necessity by the Assistant Director(Inv) and submission of a detailed report up the supervisory chain.

Jurisdiction for tax-exemption applications shifted to Directors of Income-tax (Exemptions) for specified metropolitan-assessed entities.
Where the Income-tax Act requires an application to be made to the Commissioner of Income-tax, including applications for registration of trusts and institutions, such applications by persons claiming exemption under the specified exemption provisions and assessed or assessable by authorities with headquarters at Delhi, Bombay, Madras or Calcutta must be made to the respective Director of Income-tax (Exemptions) at those metropolitan headquarters, who have been assigned all the functions of a Commissioner of Income-tax for that class of cases.

Registration under section 12A(a) to be submitted to Directors of Income-tax (Exemptions) where assessee is metropolitan-assessed.
Applications for registration under section 12A(a) should be made to the Directors of Income-tax (Exemptions) in Bombay, Delhi, Madras and Calcutta where the assessee claims specified exemptions under the Income-tax Act and is assessed or assessable by an income-tax authority headquartered in those metropolitan cities; this modifies the prior Board instruction and directs that the procedural change be communicated to all regional officers.

Surcharge increase raises withholding, collection and advance-tax obligations for domestic companies and accelerates payment deadline for enhanced surcharge.
The Ordinance increases the surcharge for domestic companies applied to tax deducted at source under section 194C, tax collected under section 206C, advance tax under section 115B, deductions under Part II of the First Schedule (including specified interest and winnings), and interest-tax/advance tax under Part III of the First Schedule, thereby increasing withholding, collection and advance-tax obligations; the enhanced surcharge for the September advance-tax instalment must be paid before the specified November deadline and non-compliance attracts default provisions of the Income-tax Act.

Audit report compliance: penalty under section 271B applies only for audit non compliance, not delayed self assessment payment.
Clarifies that penalty under section 271B is leviable only for non-compliance with the audit requirement under section 44AB and not for delay in payment of self-assessment tax; for the first year of the provision, where the audit report prescribed under section 44AB (read with rule 6G) was obtained by the prescribed deadline, penalty under section 271B will not be imposed.

Fees for technical services: oil prospecting and drilling services treated as mining operations, taxed under mining provisions.
Prospecting, extraction or production of mineral oil are mining operations under Explanation 2 to section 9(1)(vii); services such as training and drilling for exploration or exploitation of oil and gas are within a 'mining project' and therefore are not treated as fees for technical services, but are chargeable under the separate income-tax provision applicable to mining and oil-field related payments.

Search authorization empowers deputy directors and deputy commissioners to order searches and related action under the tax search provision.
Delegates authority to Deputy Directors of Income-tax (Investigation) posted under Directors General of Income-tax (Investigation) and to Deputy Commissioners of Income-tax in charge of income-ranges, including special ranges, to authorize action under the search provision of the Income-tax Act, thereby permitting these deputy-level officers to order searches under the statutory search power.

Delegation of approval authority for tax-concession agreements allows regional income-tax chiefs to consider reviews based on fresh facts.
Approval authority for agreements seeking tax concessions under section 80-O was delegated from the Central Board of Direct Taxes to Chief Commissioners/Directors General of Income-tax effective April 1, 1989; pending applications were transferred accordingly. Rejected cases for which review petitions were filed after the delegation may be considered by the regional authority only on the basis of fresh facts, and the Chief Commissioner/Director General has power to dispose of such reviews.

Prima facie disallowance under section 143(1)(a) prevents later allowance by rectification under section 154.
Prima facie disallowance under section 143(1)(a) of claims lacking required documentary proof cannot be subsequently allowed by a rectification under section 154; where law conditions deductions or exemptions on filing evidence with the return, such initial disallowance is not a mere apparent error and cannot be remedied later by section 154 without contravening statutory filing requirements and administrative efficiency.

Treatment of returns filed in response to notice under section 142(1): treated as non scrutiny returns unless officer directs scrutiny.
Returns filed in response to a notice under section 142(1) that are processed solely for prima facie adjustment should be treated as non scrutiny returns equivalent to returns under section 139(1). Assessing officers retain discretion to subject such returns to scrutiny when necessary to ascertain any understatement of income, excessive computation of loss, or underpayment of tax.