Write-off authority updated; tax arrears orders must be endorsed centrally and include brief reasons for write-off.
Delegated financial powers allow designated tax officers to write off irrecoverable tax arrears with reporting to the next higher authority; individual write-off orders above the newly lowered threshold and up to the existing upper limit must be endorsed to the Board, copies to the Auditor General remain required, and past orders within the scaled limit should also be forwarded. All write-off orders passed without Board approval must set out brief reasons and use an amended proforma, while supervisory test checks and the annual remission statement will monitor lower-tier write-offs.

Liability under Sec.194A clarified: accrual timing addressed, prior instruction withdrawn and public circular issued by Board
Liability under Sec.194A concerns the timing of accrual of withholding tax obligations; the Board clarified accrual principles after consultation, issued a public circular stating the operative position, and withdrew its earlier Instruction No.1215 of 8-11-78, replacing it with Instruction No.1370 of 22-12-80 to reflect revised administrative direction on withholding tax accrual and compliance.

Voluntary disclosure compliance may require interest payment to secure immunity where prescribed payment procedure was not followed.
Where full tax was paid on or before the cutoff but not in conformity with section 5(2) - for example, no application to the Commissioner for time or no extension due to inadequate security - a strict view treats such payments as not in accordance with the Act; accordingly sections 14(5A)/15(5A) require that the interest specified therein also be paid before the prescribed deadline for the declarant to qualify for the immunity in sections 14(1) and 15(1).

Limitation under Section 153 prevents completion of assessments; objections do not extend the statutory time limit.
The limitation under section 153(1)(a) applies to completion of assessments or reassessments arising from objections or reopenings and is not extended by filing objections, including late objections made within one month of a demand notice; the bar is on making the assessment order. Failure by the assessing officer to issue the mandatory notice or to complete the assessment before the expiry of the limitation period precludes making an assessment under section 143(3). Assessing officers must track objections and reopenings and maintain the required register to ensure compliance with the limitation timetable.

Use of intelligence units restricted to investigative assistance and prosecution support; routine follow-up must be returned to field officers.
Limits intelligence wing functions to collecting information on tax evasion, assisting Commissioners in search and seizure operations, and processing fraud cases for prosecution. Reiterates that anonymous and pseudonymous petitions are for Commissioners to handle and that intelligence enquiries may be requested only when allegations are specific and concealment is likely to be substantial or where the ITO cannot develop the case. Prohibits use of intelligence units for routine follow-up, mandates recall of such files to field authorities, and requires a compliance report to the directorate.

Change in firm constitution requires scrutiny, not summary, for assessment finalisation under the action plan procedures.
Cases involving a change in the constitution of a firm or change in status are classified as All New cases under revised Annexure B of the Action Plan and therefore must be finalised after scrutiny rather than by summary disposal.

Notice under section 143(2) should not be issued mechanically; use deficiency letters or targeted production notices instead.
Notices under section 143(2) must not be issued mechanically; officers should study files and specify requirements, issue deficiency letters for summary-assessment cases, or, where a hearing is needed, serve notices requiring production of documents or notices stating specific points of clarification. Supervisory officers must inspect for mechanical issuance and take corrective action against officers who habitually issue such notices.

Commutation of pension clarified as fully exempt where a lumpsum paid in lieu of pension qualifies under similar service scheme.
The Board accepts the Division Bench ruling that a lumpsum paid under rule 37A as payment in lieu of pension is fully a commutation and therefore the entire commuted amount qualifies for exemption under section 10(10A)(i) of the Income-tax Act, 1961. Instruction No.1191 is withdrawn and pending appeals, revisions and references on this point may be conceded or withdrawn.

Penalty proceedings must be initiated only in liable cases and completed after proper enquiry and hearing.
Instruction No.1364/CBDT mandates that penalty proceedings be initiated only after an enquiry of the assessee and acceptance of genuine explanations without further inquiry where warranted; proceedings must not be mechanical, trivial penalties should be avoided, assessees must be given a reasonable opportunity to be heard, penalty proceedings ordinarily completed within six months of assessment, and penalty orders must be speaking orders reflecting due consideration. Supervisory monitoring using the penalty register, MPR and six-month control statements is required, and the instruction applies mutatis mutandis to Wealth Tax, Gift Tax and Estate Duty proceedings.

Higher tax rates for specified HUFs required; assessors must obtain member wealth declaration and record it.
Assessing officers must apply higher tax rates correctly to specified HUFs and explicitly record in the assessment order that those higher rates were applied. Officers are required to obtain a written declaration from the assessee whether any HUF member possesses taxable wealth, and this declaration must be reflected in the assessment record to avoid calculation errors.

Tax deduction at source excess payment adjustment: excess amounts must be set off against direct tax liabilities before refund.
Excess payment from TDS is the difference between the actual payment by the deductor and the tax deducted or that deductible, whichever is more. That excess must be adjusted against existing liabilities under the Direct Tax Acts and, after meeting such liabilities, the balance refunded. Branch offices filing TDS returns are separate units; the ITO who receives the branch's statement is responsible for refund. Refund vouchers must be prepared debiting the appropriate major/minor heads, and particulars of adjustment/refund recorded in the quarterly TDS statement or annual return under the ITO's endorsement.

Discretion to defer tax recovery: ITO may treat disputed amounts as not in default subject to conditions and review.
The ITO's discretion under section 220(6) permits treating an assessee as not being in default for disputed amounts while an appeal is pending; this is not a stay of demand and must be recorded in writing. The ITO must assess the legal and factual nature of disputed points, may impose conditions such as security, interim payments and an undertaking to cooperate, and should reserve a right to review the order to ensure compliance. Monitoring, withdrawal for breach, adjustment of refunds, higher approvals in certain cases, notification of significant stayed demands and application to other direct taxes are required procedural measures.

Summary assessment: most tax matters may be completed summarily with specified exceptions; notices convert cases to scrutiny.
The instruction designates most income tax matters as summary assessments except those listed in the revised annexure and cases where statutory accounts are not maintained (the no-account exception); salary and low-income film circle assessments may be summary matters. Issuance of a preliminary notice converts a case to scrutiny and must be preceded by verification that the case is not suitable for summary treatment. Firm assessments are to be coordinated with partner assessments, inspectors' deployment remains limited, and authorised inspectors may use a stamp to indicate delegation.

Gift-tax exemption limited to cash donations; gifts in kind excluded under the linked income-tax donation rule.
Exemption under section 5(1)(v) of the Gift-tax Act is limited to gifts to charitable institutions only insofar as such gifts qualify under the Income-tax provision that permits deductions exclusively for donations that are a sum of money; consequently, gifts in kind do not qualify for the Gift-tax exemption.

Disclosure of transferor address required in objection memos when documents are returned for non tally of signature.
Companies listed on stock exchanges should include the registered address of the transferor in the objection memorandum when returning share transfer documents for non tally of the transferor's signature, as directed by the Government to implement the Standing Committee's decision without formally amending the listing agreement, and stock exchanges are to advise listed companies to comply.

Tax deduction adjustment allowed: employers may offset excess TDS for low income employees against future salary tax with certification.
Employers may adjust tax previously deducted at source from non-Government employees whose estimated salary falls below the raised exemption limit by offsetting the identified surplus against tax payable for other employees in subsequent months. The payer must determine surplus payments, reduce the monthly return figures in Form No.21 (columns 8 and 9), enclose a list of affected employees with amounts, revise earlier returns to the month of adjustment, furnish a certificate of reimbursement with the adjustment-month return, and disclose the refunded excess in individual section 203 certificates.

Reference filing threshold for adverse ITAT orders clarified; fresh references not required unless tax effect exceeds departmental threshold.
The Board directs that the standard deduction under section 16(1) be allowed to pensioners from assessment year 1981-82; in consequence, existing practice on filing references is adjusted. A High Court decision showing divergent views has been referred to the Chief Justice. Departments should contest pending appeals, circulate the judgment to AACs, CIT(Appeals) and senior D.R.s, and dispose of appeals previously kept blocked. Fresh references against adverse Tribunal orders need not be filed except where the tax effect exceeds the Board's specified monetary threshold.

Simultaneous invocation of gift-tax and income-tax valuation permitted when asset transferred for inadequate consideration and conditions met.
Where an asset is transferred for less than adequate consideration the provisions of section 52 of the Income-tax Act and section 4(1) of the Gift-tax Act may be invoked simultaneously, provided the other statutory conditions for each levy are satisfied; this instruction applies generally except where a High Court has given a contrary decision.

Restriction on royalty deductions applies to the entire previous year, not prorated from the June reference.
The restriction on deductions for royalty and fees for technical services under section 44D applies to the entire previous year relevant to the assessment year beginning 1977-78 and thereafter; the June 1 date is relevant only to withholding procedures and merely regularises deductions permitted up to May 31, 1976. Assessing officers must apply the deduction cap for the whole previous year and correct any assessments where the cap was applied pro rata.

Income tax rate and withholding restructuring alters exemptions, deductions and procedural rules across direct tax law.
The Finance Act revises income tax rate and withholding structures, raises personal exemption thresholds, reduces non corporate surcharge, and modifies advance tax and withholding rates for categories of payees; it also introduces substantive amendments to promote savings, investment and research (including additional depreciation and weighted research deductions), extends targeted deductions and exemptions, tightens trust and HUF anti avoidance rules, and reforms summary assessment and defective return procedures.