Clearance certificate consultation requirement: tax officers must obtain TRO reports before issuing certificates to defaulters with TRCs.
Income-tax Officers must obtain reports from the concerned Tax Recovery Officers before issuing clearance certificates under section 230A in cases where Tax Recovery Certificates have been issued, because the existence of a TRC indicates an existing liability and issuing certificates without TRO consultation can allow defaulters to alienate attached property and frustrate recovery.

Record reconstruction following riot-related destruction: liberal verification and assistance for affected tax representatives and taxpayers.
Where chartered accountants, advocates or authorised representatives claim destruction of client records in the riots, officials must verify the loss and, if confirmed, extend facilities to reconstruct assessment records; where individual taxpayers lost books, stock or documents, verification including FIR and insurance claims is required and, after reviewing facts and case history, a liberal and sympathetic approach should be adopted in completing assessments while guarding against abuse.

Netting of partner interest under Section 40(b) limits disallowance to net interest where mutual payments occur.
Where a firm both pays and receives interest from the same partner, the amount disallowable under section 40(b) is limited to the net interest payable by the firm (the excess of interest paid by the firm over interest received). Instruction No.882 dated 25-9-1975 is superseded; the netting rule applies to all pending assessments while completed assessments need not be disturbed.

Constitution of tax benches urged to expedite pendency; officers asked to seek out-of-turn hearings and report.
Instruction directing tax officers to request the Chief Justice to arrange out-of-turn hearings and to constitute tax benches on a continuing basis until the pendency of tax cases is reduced, and to submit a report on the results of those actions to the issuing authority by the prescribed deadline.

Stay order: interim suspension of lower-court judgment on departmental appeal pending final hearing and circulate notice to officers.
A departmental civil appeal against a High Court judgment has resulted in an interim stay granted on the appeal, suspending operation of the impugned judgment pending final disposal; a copy of the stay order is enclosed and officers are to be informed.

Reference applications under section 256(2) require commissioner scrutiny to ensure properly framed questions and avoid infructuous filings.
Filing of reference applications under section 256(2) requires Commissioner scrutiny before signature to verify assessee identification, assessment years, and that questions of law are properly framed and match those authorised; the Commissioner must also reconsider filing where subsequent Supreme Court decisions, legislative amendments, or Board instructions render proposed questions settled, so as to avoid infructuous references.

Definition of Family clarifies withdrawal eligibility for house building advances under amended income tax rules for provident fund subscribers.
Amendments to rules 67A-70 of the Income tax Rules, 1962 redefine the term Family in rule 67A and modify permissions for withdrawals from recognised provident funds for house building advances and other permitted purposes to benefit subscribers; the notification of these amendments was issued under the Income tax (Fifth Amendment) Rules, 1985 and was directed to be exhibited on departmental notice boards for public information.

Estate duty cessation allows refund of LIC deposits for specified life insurance policies after legislative amendment.
Sums deposited by the Life Insurance Corporation representing the matured value of life insurance policies obtained to meet estate duty obligations under a specified income tax related policy category are no longer required for policyholders surviving the effective cessation of estate duty; the tax administration has authorized refund of those amounts by circular.

Information sharing requirement: IACs(Acquisition) must notify assessing officers and update valuations to ensure consistent tax assessment.
IACs (Acquisition) must notify assessing officers at the initiation of acquisition proceedings and keep them apprised of valuation estimates and the final decision; valuation references should request Valuation Officers to check prior valuations with assessing officers; assessing officers must examine the information for direct tax implications and take necessary assessment action to avoid inconsistent treatment and underassessment.

Statement filing under section 269AB: late submissions may be registered and trigger acquisition timelines; prosecution possible for delay.
A prescribed statement must be filed and registered by the Competent Authority; rules set 30 days for filing and 60 days for registration. A registered statement is treated as an instrument of transfer permitting acquisition proceedings, with the limitation period for initiating those proceedings running nine months from the end of the month in which registration occurs. Belated filings may be registered, and the limitation runs from registration; prosecution for non compliance may be initiated for unreasonable delay.

Case follow-up obligations: ensure active monitoring and clear communication to prevent procedural lapses and missed filings.
The instruction records that inadequate follow-up and a communication gap between departmental officers and standing counsel led to non-filing of paper books and failure to file a supplementary affidavit within extended time. It directs officers to keep active watch on case progress, coordinate with the judicial branch, ensure timely preparation and filing of papers and affidavits, and maintain prompt correspondence to avoid procedural lapses and unanswered departmental applications.

Stay and instalment relief for tax demands: apply existing guidelines when appeals lock disputed demands and collect undisputed portions.
Where a tax demand is locked in the first appeal, officers must follow the Board's guidelines on grant of stay, allowance of payment by instalments, and collection of undisputed portions; the prior instruction sets criteria for suspension of recovery, structuring instalment schedules, and collecting undisputed amounts, and officers are directed to circulate that instruction for strict compliance.

TDS on contractor payments under section 194C applies to munshis in the bidi industry; payments liable to deduction.
The munshi engaged by a bidi manufacturer falls within the concept of contractor for the purposes of the withholding provision because statutory definitions in the industry statute include sub-contractor, agent, munshi and similar intermediaries. The withholding provision extends to oral and implied contracts; by the nature of the services performed there is an implied contract between manufacturer and munshi. Accordingly, payments made to munshis in the bidi industry are subject to deduction under the withholding provision.

Assessment coordination: tax officers must collect detailed artist- and picture-level payment records to verify and correlate assessments.
The Board directs tax officers to obtain and use detailed producer-, artist- and picture-level data for assessments, including total agreed remuneration, amounts actually paid (cheque, annuities or otherwise), payment dates, outstanding balances, dates of contracts, contract monies, picture release dates, names of producers and particulars of annuities, and to correlate receipts and payments between producers' accounts and payees' accounts for verification.

Reopening of assessments: voluntary disclosure alone should not trigger reopening; cooperative new taxpayers will be treated sympathetically.
A new assessee's first-time declaration of substantial income does not alone justify reopening earlier assessments or initiating roving enquiries; established reopening principles require independent grounds beyond voluntary disclosure. Although penal provisions for defaults like late filing and advance tax non-compliance continue to apply, the Department instructs officers to adopt a liberal, sympathetic approach toward taxpayers who come forward voluntarily and cooperate in enquiries, and to encourage early filing of returns without fear.

Revision petition time limit imposed for disposal, with mandated quarterly reporting of any delays and reasons.
Direction requires Commissioners of Income Tax to dispose of revision petitions u/s.264 and similar petitions under other Direct Taxes Acts within one year from the end of the financial year in which the application is received, and mandates quarterly reporting to the Board of any petitions not disposed within that period with individual reasons in the prescribed proforma.

Section 89(1) relief for leave encashment while in service; retirement encashment exempt under section 10 clause.
Relief under section 89(1), read with rule 21A, is admissible for amounts received on encashment of leave salary while an employee remains in service; encashment on retirement is exempt under clause (10AA) of section 10 as inserted by the Finance Act, 1982, effective from April 1978.

Capitalisation of interest: post-commencement interest cannot be capitalised, barring investment allowance and depreciation on such amounts.
Post-commencement interest relating to the period after commencement of production or installation is revenue in character, cannot be capitalised, and therefore no investment allowance or depreciation can be allowed on capitalised amounts consisting of such interest including future interest; assessing authorities are to reject such claims.

Refund processing: vouchers must accompany orders and refunds be disposed promptly, with inspections and disciplinary action enforced.
Refund vouchers must invariably accompany orders giving rise to refunds and IACs/ITOs must maintain the prescribed Register of Receipt of Refund Application to enable prompt disposal; delays and failure to issue refunds must be investigated, interest paid where applicable, and written explanations obtained from responsible officials.

Compulsory Deposit Scheme guidance directed to be exhibited for public guidance; Hindi version to follow.
The circular transmits a Ministry of Finance letter concerning the Compulsory Deposit Scheme (Income tax Payers) Act, 1974, and directs income tax commissioners to exhibit the letter on departmental notice boards for the guidance of taxpayers and the general public, noting that a Hindi version will follow.