Deduction of tax at source on interest for government securities continues at prior rates; surcharge references removed.
Deduction of tax at source on interest on government securities is to be made at the same basic rates as previously communicated, with the Finance Act, 1986 removing references to surcharge; Accountants General and treasury officers are instructed to issue revised circulars to Treasury and Sub Treasury Officers deleting surcharge references and making necessary year corrections.

Uniform appeals disposal quota established for Appellate Assistant Commissioners, standardising monthly workload and notification requirements.
The Board directed that, from financial year 1986-87, the monthly quota for disposal of appeals by Appellate Assistant Commissioners shall be uniformly fixed at 150 appeals per month, irrespective of metropolitan or other charge, and that this decision be communicated to all Assistant Commissioners in each Charge.

ITO Control Register retention extended to a three-year cycle with a revised computer-oriented format and fourth-year rollovers.
The Instruction mandates that the ITO's Control Register (ITNS-132) be maintained on a three-year cycle rather than annually, with a new register begun every fourth year starting from 1986-87; the form is revised into a simplified, computer-oriented format with new and deleted columns to reflect current law and procedure, and an annexure sets out procedures for completing entries.

Assessability of interest on sticky loans affirmed; banks must recognise credited interest as taxable and expedite pending litigation.
Interest credited to interest suspense accounts by banks and financial institutions is assessable for income-tax purposes; tax commissioners are directed to identify pending cases on this issue in their jurisdictions and move the concerned Courts/Tribunals for their expeditious disposal in light of the controlling judicial precedent upholding assessability.

Levy of estate duty on agricultural land discontinued; state resolutions apply following Estate Duty Amendment provisions.
The levy of estate duty on agricultural lands ceased to apply in specified States following state legislative resolutions adopting the Estate Duty (Amendment) Act, 1984 under the provision referenced in section 5A(2C)(b), with each State's resolution producing cessation effective on the respective dates communicated in the circular.

Interest on delayed tax refunds ensures assessees receive statutory interest and mandates standardised computation for payment.
Statutory interest is payable to assessees where refunds are delayed or where amounts paid under assessment or penalty are later found refundable on appeal; interest runs from the date of excess payment until refund is granted. To address omissions by officers, two prescribed computation sheets are mandated: one for general delayed refunds and one for refunds resulting from assessments or penalties reversed on appeal, and these forms must be used immediately to ensure consistent calculation and payment of interest.

Appeal disposal quota redefines monthly equivalence and weighting for central, company, search and seizure and other appeals.
Monthly disposal quotas for Commissioner (Appeals) are restructured effective financial year 1986-87 into category-specific targets; Central Circle and Search and Seizure disposals count as the equivalent of three ordinary appeals, Company Circle disposals count as the equivalent of one and one-half ordinary appeals, and the overall quota is set at ninety ordinary appeals per month, with no separate weightage for high disputed demand appeals.

Prompt appellate order compliance requires timely implementation, accurate tax recordkeeping, inspections and disciplinary follow up.
Prompt compliance with appellate, revisionary and other orders is mandated, with emphasis on timely service and giving effect to such orders to avoid interest and criticism. Proper entries must be made in the Demand and Collection Register including crediting of pre-paid taxes. A register for receipt and disposal of mistake applications must be maintained and matters disposed within one month. Commissioners and Inspecting Assistant Commissioners must conduct surprise inspections, seek explanations for undue delays, and take deterrent action; the Inspection Division will monitor compliance and report failures for disciplinary proceedings.

Compulsory deposit acceptance allowed after statutory cutoff; penalty liability assessed by income tax officers and amnesty applies.
Banks are authorised to accept compulsory deposit payments even after March 31, 1985, while liability for penalty under section 10 is to be decided by the Income tax Officer. Where income is declared under the Board's amnesty circulars for assessment year 1985 86 or earlier (and as extended for later disclosures), banks should accept deposits relating to such disclosed income; the Board directs wide publicity of the Department of Economic Affairs' clarification so deposit offices and taxpayers understand deposits may be accepted and penalty questions will be determined by tax authorities.

Power of revision under tax law restricted where acquisition orders approved by Commissioner are not revisable.
The Board directs that the Power of Revision under the Income-tax Act cannot be exercised by a Commissioner to revise acquisition orders issued by the Competent Authority where those orders were made under the acquisition provision and were passed with the approval of the Commissioner; strict adherence to this administrative limitation is required.

Declaration of higher income prompts liberal consideration of penalty under the Compulsory Deposit Scheme for voluntary disclosures.
When an assessee makes a suo motu declaration of higher income in response to the Board's amnesty circulars within the prescribed or extended amnesty period, the Department will take a liberal and sympathetic view in considering the applicability of section 10 of the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 to penalty liability, and instructions to that effect have been issued to departmental officers.

Penalty under Section 10 CDS (ITP) Act not to be initiated for voluntary amnesty declarations made by the prescribed deadline.
Declarations of higher income made suo moto in response to amnesty circulars before 31 March 1986 for AY 1985-86 or earlier are to be treated as due to reasonable cause and penalty under section 10 of the CDS (ITP) Act 1974 need not be initiated; the Board extended equivalent non-initiation treatment to income disclosed up to 30 September 1986 for disclosures relating to AY 1986-87 or earlier.

Depreciation determination remains tied to acquisition-time tax rates, allowing companies to use those rates for accounting.
The specified period for depreciation, determined at acquisition under section 205(5) read with section 350 with reference to income-tax rates then in force, need not be changed when income-tax depreciation rates later change; companies may provide depreciation under clause (b) of section 205(2) on the basis of the rates in force at the time of acquisition.

Copy of High Court judgment required for appeal proposals to Supreme Court; Ministry of Law will not advise without it.
Proposals for appeal to the Supreme Court against a High Court opinion must be accompanied by a copy of the judgement of the High Court, because the Ministry of Law requires the judgement to review the reasons before advising on contesting or accepting the opinion; proposals lacking the judgement cannot be processed.

Acquisition of immovable property: non-initiation and dropping of acquisition proceedings for low-value transfers.
The Board directed that, effective 1 April 1986, acquisition proceedings under section 269C will not be initiated for immovable properties whose apparent consideration is at or below a specified threshold, and that proceedings begun by notice under section 269D will be dropped if the apparent consideration is below that threshold, as an administrative measure to finalise cases under Chapter XXA in light of proposals in the Finance Bill, 1986.

Appeal disposal timetable requires departmental appellate bodies to clear legacy appeals under mandated quarterly targets and strict compliance.
Instruction imposing an Action Plan requiring departmental appellate authorities to fix appeals in chronological order and meet quarterly disposal targets for legacy appeals: appeals filed before 1 April 1983 to be disposed in two equal phases by the end of the first and second quarters of the financial year, and appeals filed before 1 April 1984 to be disposed in two equal phases by the end of the third quarter and by 31 March 1987; strict compliance required and no old appeals to remain pending after 31 March 1987 without adequate reasons.

Refund voucher controls must ensure preparer/checker signatures, tallying of paid foils, and quarterly verification to prevent fraud.
Instruction requires strict adherence to prescribed refund voucher controls: preparer and checker signatures on office copies, clerk or officer tallying of paid foils with office copies and recording encashment dates, and quarterly verification against Demand and Collection Registers to detect paid foils not returned within six months and initiate investigations for possible fraud.

Taxability of interest credited to suspense accounts revised by CBDT withdrawing prior instruction after legal and statutory developments.
A prior Board instruction exempted interest credited to suspense accounts from tax after three years without recovery; a high court judgment held interest credited to an Interest Suspense Account taxable as income and the Finance Act introduced a deduction for provisions for bad and doubtful debts made by banks. Consequently, the Board has withdrawn the earlier instruction with immediate effect and directed officers to note the withdrawal.

Dealer status in shares requires factual assessment whether holdings are trading assets or investments with account scrutiny.
The Board declined to prescribe universal tests for identifying dealers in shares and directed assessing officers to determine, on the facts, whether a taxpayer's shares are trading assets or investments. Assessing officers must examine all relevant aspects and specially scrutinise the balance sheet and profit and loss account of assessees claiming dealer status in shares, using those financial statements as primary evidence in the classification.

Compulsory deposit release: deferred instalments under the scheme must be released and taxpayers informed promptly.
The circular transmits Ministry of Finance directions that, although the Compulsory Deposit Scheme was discontinued from 1 April 1985, instalments due in 1985-86 which had been deferred for one year are to be released; it directs wide publicity to taxpayers and internal circulation to officers, with a Hindi version to follow.