Audit judicial coordination required: scrutiny reports must note audit objections and judicials must consult audit on appealed orders.
The Board directs that ITOs sending scrutiny reports on adverse appellate orders must report any audit objection that gave rise to the order, and that the judicial section, when examining AAC/CIT (Appeals)/Tribunal orders, must consult the IAC (Audit) to determine whether the order was passed pursuant to an audit objection and whether it appeared as a draft para or in the printed Audit Report.

Issuance of certificates under Estate Duty Act: require timely completion of assessments and active monitoring to prevent delays.
Requests for certificates under section 57(2) of the Estate Duty Act must be met by prompt completion of any assessments under section 57(1) and immediate issuance of certificates; Controllers and Deputy Controllers must ensure compliance, carry out surprise inspections, and take action against officers who cause undue delay.

Tax withholding exemption for resident individuals permits receipt of interest and dividends without TDS upon furnishing prescribed declaration to the payer.
Section 197A together with rule 29C and prescribed forms allows resident individuals with estimated total income below the exemption limit to receive interest, dividends and similar receipts without tax deduction at source by furnishing a prescribed declaration to the person responsible for paying such income. The declaration must be given to the specific payer or its principal officer (or public debt/treasury officers for government securities), and one declaration per payer per year before the first payment suffices; declarations need only cover receipts payable by that payer.

Selective filing of tax appeals directs deference to factual findings and personal pre appeal record review by senior officers.
Selective filing of tax appeals is departmental policy to control litigation: factual findings by Commissioners (Appeals) should be accepted unless perverse, and appeals must not be authorised merely because revenue is large. Commissioners of Income Tax must personally examine records before authorising appeals and may consult Senior Departmental Representatives prior to authorisation.

Employer liability for pilot compensation clarified: insurance premia paid by employer not taxable as perquisite for pilots.
Liability for compensation to pilots grounded as medically unfit is borne by Indian Airlines under service rules and a wage agreement, and insurance policies were procured to cover that obligation. Premiums are effectively payable by the employer, so reimbursement of such premiums to pilots is not to be treated as a perquisite in individual income tax assessments; Instruction No. 1343 dated 29 7 1980 is modified accordingly. The taxability of compensation on loss of flying licence remains under separate consideration.

Appellate order timeliness required after final hearing; non compliance mandates reporting and may invite disciplinary action.
Appellate orders must be issued within ten days after final hearing and, in fully heard cases, before relinquishing charge on transfer or leave; Commissioners of Income Tax (Appeals) and Appellate Assistant Commissioners must comply and Divisional Inspectors are to report instances of non compliance to the Board for inclusion in monthly progress reviews.

Local appellate hearings directed to be held at respective stations; compliance will affect performance evaluation.
Directive requiring appellate Commissioners to visit places in their charge and hear appeals at the respective stations, and stating that compliance will be considered in their annual performance evaluation.

Export market development allowance covers intermediary service charges paid to facilitate exports, permitting weighted deduction under Section 35B.
The Board clarifies that the difference in rates paid to STC as service charges qualifies as expenditure "wholly and exclusively" for promotion of sales outside India and therefore falls within the scope of Section 35B weighted deduction. The exporter is treated as the actual supplier (with letter of credit and FOB consideration operating for the exporter), export incentives and duty drawback computed on gross bills, and the STC's market, promotional and contract-related services are activities qualifying for the weighted deduction.

Mechanical fixing of hearings prohibited; notices under section 143(2) require prior record study and a list of discussion points.
Prohibits mechanical fixing of hearings and mandates that notices under notice u/s 143(2) be issued only after study of records and after noting points for discussion; hearing notices must include a list of points for the assessee to address. I.A.Cs should check compliance during inspections, the instruction applies to other direct taxes, and officers must bring the procedure to staff attention.

Certification of rehabilitation required annually to claim set-off and carryforward of amalgamating company's losses under the Act.
A certificate from the specified authority confirming adequate steps for rehabilitation is required with the return of income not only for the year of amalgamation but for every assessment year in which the amalgamated company claims set-off or carryforward of the amalgamating company's accumulated losses and unabsorbed depreciation; certificates must be furnished for all years during which the revival scheme is implemented.

Compulsory deposit compliance: field officers must maintain registers and pursue recovery and penalty proceedings promptly.
Audit revealed systemic failures to collect deposits and to maintain proper records under the Compulsory Deposit Act. Commissioners must ensure ITOs scrutinise returns at assessment, enter liable assessees who have not paid or have underpaid in a dedicated register, and commence recovery and penalty proceedings. ITOs should review completed assessments from the retrospective period to determine enforcement action and complete penalty proceedings expeditiously, while Range Inspecting Assistant Commissioners verify register maintenance during inspections.

Reorganisation of inspection directorates assigns supervisory control and budgeting authority to designated Director Generals.
Two newly defined Director General posts divide administrative and technical control of inspection and investigation directorates: each DG becomes the supervisory authority for specified Directorates, assumes budgeting and expenditure control for those Directorates from the designated budget year, creates a small headquarters administrative setup from existing staff, sanctions financial and leave matters within delegated scope, initiates and reviews confidential reports and vigilance files for officers under their charge, and forwards annual performance reports with comments to the Board.

Income-tax deduction from salaries: printing errors in guidance corrected, clarifying computation and amended figures for withholding procedures.
Corrections to Circular No. 342 amend printing and numerical errors in guidance on Income-tax deduction from salaries for 1982-83 under section 192, providing line-by-line replacements of words and revised computation figures and directing updates to printed copies and the Hindi translation to ensure accurate withholding calculations.

Recordkeeping requirement for book procurements: Commissioners must maintain permanent lists and verify publishers' recommendations before purchase.
Commissioners of Income-tax controlling expenditure must maintain a permanent list of books recommended or rejected by the Board so that claims by publishers or authors can be verified; where books have been rejected after examination, circular letters will be issued to Commissioners to record such rejections and prevent procurement malpractice.

Section 35CCA approvals: verify document authenticity before granting deductions; do not rely on photocopies or certificates.
Officers must not allow deductions under Section 35CCA routinely on the basis of photocopies or certified copies; they must verify the genuineness of claims and ensure approvals originate from the proper State Level Committee and authorised signatory before granting benefits.

Estate duty amendments expand cooperative housing exemptions, align residential property valuation with wealth-tax rules, and revise exemption thresholds.
The Amendment Act inserts a new section treating the deceased's interest in buildings allotted or leased by cooperative housing societies and adds an exemption for certain deposits with such societies. It aligns valuation of one residential house with Wealth-tax Act methods and revises the Second Schedule to raise the exemption limit and restructure estate duty rates.

Gift-tax exemption for individual coparcener gifts affirmed, subject to characterisation as individual versus Karta and factual determination required.
Exemption under section 5(1)(viii) of the Gift-tax Act, 1958 is allowable when a coparcener makes a gift as an individual from HUF property, with assessment on the donor as an individual; the exemption is not available if the gift is made by the Karta on behalf of the HUF. Gift-tax Officers must assess facts and circumstances and record whether the husband acted as an individual or as Karta. Circular No. 5-D(G.T.) of 1965 is modified.

Tax deduction at source on government securities: rates continue except where amended schedule provisions govern application.
Tax deduction at source on interest paid on Government securities for the financial year 1982-83 continues at the rates previously prescribed by the Board's circular, except where Sub Paragraph I of Paragraph A of Part III of the First Schedule to the Finance Act has been amended; in those cases, deduction must be made in accordance with the annexed Sub Paragraph I. Treasury Officers and Sub Treasury Officers are to implement and individually notify concerned accounting and audit offices of these instructions.

Section 80-CC deduction denied where company's principal object was manufacture of a schedule-listed item at time of share issue.
Deduction under 80-CC is not available for investors in the public issue of M/s Ambalal Sarabhai Enterprises Pvt. Ltd. on 31 March 1982 because the company's Memorandum of Association included manufacture of synthetic detergent, an item listed in the Eleventh Schedule at that time; the subsequent deletion from the schedule effective after the issue date does not affect eligibility. Income-tax Officers are to be instructed to deny such deductions for that public issue.

Tax recovery authority concentrated in a specialized commissioner to lead certified-demand recovery and supervise TROs.
The instruction designates the Tax Recovery Commissioner (CIT(R)) as the primary authority for recovery of certified demands, exercising powers under Schedule II to the Income-tax Act and the I.T.C.P. Rules, 1962, with administrative control over Tax Recovery Officers and IAC(R), responsibility for allocation of work among TROs, and primary responsibility for recovery proceedings, stays and instalments in respect of certified demands, while territorial commissioners retain overall arrears management and remain responsible for dossiers to D.I.(Recovery) with copies endorsed to CIT(R).