Interest characterization in hire purchase: instalments are not interest, so withholding under section 194A does not apply.
Payment of periodic instalments under a hire purchase contract does not constitute interest within sec.2(28A) because those amounts are composite payments of hire and part of the purchase price, not payments for money borrowed; accordingly, the withholding provisions of section 194A do not apply to such transactions.

No objection certificate requirement for remittances: tax officers instructed to issue certificates promptly to avoid hardship.
A No Objection Certificate from the Income Tax Officer is required by the Reserve Bank before permitting remittances abroad for royalties, technical service fees, and similar receipts; the Board established and amended a standardised NOC form and now directs Income Tax Officers to issue the certificate promptly to avoid hardship and delays to foreign collaborators awaiting RBI clearance.

Existing liability requires a crystallised tax demand arising from assessment or equivalent statutory tax mechanisms.
The Board construes Existing Liability under Sec.230A as a demand created and due and outstanding, arising from an order of assessment or other statutory demand-creating mechanisms; advance tax and TDS demands are included even if no separate assessment order is passed, and the Board has withdrawn its earlier conflicting instruction.

Tax clearance requirement for partition of HUF before registration when property exceeds prescribed threshold
Instruments evidencing partition of immovable property between co parceners fall within Section 17(1)(b) of the Registration Act as documents creating, declaring, assigning, limiting or extinguishing rights; where the property value exceeds the statutory threshold the provisions of section 230A of the Income tax Act apply and the vendor must submit the tax clearance certificate to the registering officer before registration.

Service of special notice to retiring auditors should be sent by registered AD post to ensure effective proof of service.
The circular identifies that section 225(2) presents operational difficulties because copies of the special notice to retiring auditors are often not effectively served and lack proof of service; it accordingly advises that such copies be sent by registered AD post to create reliable evidence of service when appointing auditors other than the retiring auditors.

Penalty determination by law on date of default: delayed filing treated as single default, not continuous.
Penalty is governed by the law in force on the date the wrongful act or default occurs: concealment penalties are judged by the law on the date the return with concealment is filed; delayed filing constitutes a single default on the last date allowed, with monthly multipliers used only to compute quantum. The rule applies to income-tax, wealth-tax and gift-tax penalties; prior contrary clarification is withdrawn and related appeals/references may be withdrawn.

Revenue expenditure treatment for civil defence measures allows allowable deductions when reasonably incurred even outside emergencies.
Expenditure by business concerns on civil defence measures specified in the Board's earlier circular is to be treated as revenue expenditure; such expenditure incurred even when there is no emergency will be allowable to the extent found reasonable and in the manner indicated in the prior circular.

Exchange of information under DTAs enables tax authorities to request foreign transactional data to verify cross-border deductions.
Assessing officers should use exchange of information provisions in Double Taxation Agreements to obtain cross-border data necessary to verify international transactions, ensure requests fall within the scope of the relevant Article for Exchange of Information, and forward requests through departmental channels to the Board, which will request information from the competent authority of the treaty partner.

Consultation requirement before ex parte assessments mandates ITO discuss substantial proposed additions with IAC to curb high pitched assessments.
Before finalising any ex parte assessment under section 144 that proposes a substantial addition determining total income, the Income-tax Officer must consult the Income-tax Assistant Commissioner; the Board confirmed that the existing instruction requiring ITO-IAC discussion for such significant proposed additions remains operative and no further instructions are being issued.

Depreciation for motor vans clarified: treat as lorries and buses and allow the corresponding depreciation rate under Income tax Rules.
Clarifies that motor vans are to be treated as akin to motor lorries and motor buses and that depreciation on motor vans may be allowed at the same rate as motor lorries and motor buses, namely 30 per cent., as per item IIID(9) of Appendix I to the Income-tax Rules, 1962.

Compulsory audit under section 142(2A) urged; Board directs officers to increase referrals for deeper investigation.
Directs intensified use of the statutory power to refer assessments for compulsory audit under section 142(2A), noting prior guidelines and panel-formation criteria exist but referrals were few; officers must increase referrals for cases requiring deeper investigation and issue necessary instructions across charges to implement this directive.

Obligation to quote PAN: expedite allotment, certify allotment for live cases, and cease use of GIR numbers.
The instruction directs expeditious allotment and communication of Permanent Account Number (PAN), emphasises the statutory obligation to quote PAN on returns, challans and correspondence, requires commissioners to certify that PANs have been allotted in all live cases on the Department's register as of the reference date, and reiterates that use of GIR numbers must be discontinued in favour of PAN for registers and correspondence.

Scaling down of tax arrears: delegation to tax controllers with higher cases referred after zonal committee scrutiny and reporting.
The Board delegates authority for the scaling down of arrears under Wealth tax, Gift tax, Expenditure tax and Estate Duty to the respective Controllers on the same procedural basis as income tax; aggregate arrears exceeding the prescribed threshold must be referred to the Board after zonal committee scrutiny and recommendation. Existing income tax scaling down instructions apply to these taxes, and Controllers must review cases promptly and submit separate quarterly statistical reports for each tax by the twentieth of the month following the quarter.

Small scale industrial undertaking definition determines eligibility for investment allowance and initial depreciation under tax law.
Clarifies that the monetary ceiling for a small scale industrial undertaking is the aggregate value of all plant and machinery installed as on the last day of the relevant previous year, excluding only tools, jigs, dies and moulds where the statute so provides; departmental or industry norms cannot exclude additional items like generating sets or transformers. The same approach applies to initial depreciation, subject to the distinct statutory definition for that allowance which does not exclude tools, jigs, dies and moulds.

Variation of certified tax demand: TRO collects undisputed portion and awaits assessing officer's modification before further recovery.
The TRO should collect only the undisputed portion of a certified tax demand when the assessee asserts payment, rectification or pending appeal, then write to the assessing officer to reconsider and intimate any modified demand. At month-end the TRO must forward a list of such cases to the supervisory authority for follow-up; the TRO must not take further action on the original certificate until the assessing officer communicates the revised demand.

Prompt issuance of appellate orders: require orders within ten days and disposal before transfer with certificate.
Appellate orders must be passed within ten days of conclusion of the hearing; ante-dating of orders is prohibited. An officer who is transferred or proceeding on leave must pass orders in all cases fully heard by him before handing over charge and must furnish a certificate to that effect with his charge report. These measures reiterate prior Board instructions and implement recommendations to ensure prompt disposal and service of appellate orders.

Corporate capacity limits: companies may not enter partnerships unless constitution expressly authorises it, and registration authorities must verify articles.
A company entering into a partnership is prima facie ultra vires unless its memorandum and articles of association expressly authorise such partnership; corporate participation requires specially drafted articles to address difficulties in applying Partnership Act provisions, and registration authorities must examine company constitutions for appropriate enabling and remedial provisions before registering firms with corporate partners.

Company entering into partnership: permitted only if company constitution expressly authorises it, otherwise prima facie ultra vires.
An incorporated company may enter into a partnership only if its memorandum and articles of association expressly authorise such participation; absent such authorisation the company's entry into a partnership is prima facie ultra vires. Even where authorised, the company must adopt special articles to address anomalies and difficulties in applying many provisions of the Partnership Act to partnerships that include corporate partners, and registration authorities should examine corporate constitutions for such authorising and remedial provisions.

Hotel receipts tax imposes a special levy on hotel gross receipts with rules for computation, returns, assessments and penalties.
A special hotel receipts tax applies to hotels in India meeting the room charge threshold and is levied at a specified rate on chargeable receipts, defined to include receipts from accommodation, food, drink and ancillary services; limited deductions (bad debts on conditions, certain indirect taxes and the hotel receipts tax) are allowed. Rules govern attribution of room charges in composite bills and permit tax officers to determine room charges reasonably where composite charges are indeterminate or contrived. The Act provides for self assessment, advance payments, assessments (including best judgment assessments), appeals, recovery procedures and a graduated penalty and prosecution regime for defaults and wilful evasion.

Deduction of unprovided depreciation required when computing deposit acceptance limits for non-bank companies under Companies rules.
The amount of unprovided depreciation is to be treated as part of accumulated loss and therefore must be deducted from the aggregate of paid up share capital and free reserves, as shown in the latest audited balance sheet, when computing the limits up to which a non banking non financial company may accept deposits.