Reduction or waiver of interest under Rule 40 clarified; referral to inspecting officer limited by administrative threshold.
Interest under sections 215 and 217 may be reduced or waived under Rule 40; Income-tax Officers can act under sub-rules (1)-(4) and Inspecting Assistant Commissioners under sub-rule (5). Board amended Office Manual guidance so Income-tax Officers refer waiver proposals under sub-rules (1)-(4) to the Inspecting Assistant Commissioner only when interest exceeds Rs.1,000, and the Inspecting Assistant Commissioner need not refer cases to the Commissioner where he approves a proposal or exercises his discretion.

Unpaid dividend transfer: uncashed dividend warrants must be moved to a special unpaid dividend account.
Where a company posts dividend warrants within the statutory payment period, posting satisfies the initial obligation and need not trigger transfer to the unpaid dividend account; however, amounts represented by warrants that remain uncashed, are returned undelivered, or are otherwise unclaimed must be transferred to the special unpaid dividend account and not retained in the company's general account.

Wilful attempt to evade tax triggers prosecution; authorities instructed to pursue offences arising from false entries, omissions, or engineered circumstances.
Instructions require initiation of prosecution for a wilful attempt to evade tax, penalty or interest where a person possesses or makes false entries in books or documents, wilfully omits relevant entries, or creates circumstances enabling evasion; the provision has broader scope than the verification offence and similar prosecutorial treatment applies to corresponding wealth-tax offences, including failure to comply with audit directions.

Perquisite valuation: prescribed treatment distinguishes movable fittings from residential rent and adds furniture valuation where accommodation is furnished.
The circular clarifies that the specified valuation basis applies only to furniture, fittings and air conditioning and not to residential accommodation. For buildings owned and let by the company, the municipal annual rateable value may be taken as rent simpliciter, and where accommodation is furnished an additional valuation component equal to the prescribed proportion of the cost of furniture, fittings and air conditioning should be added.

Jurisdiction change notice: assessee must be informed immediately; transferring officer bears responsibility under tax instruction.
The Board directs that wherever there is a change in jurisdiction the concerned assessee should be informed immediately. The officer transferring the file is responsible for providing such intimation to the assessee, to prevent delays in transfer of assessment records and ensure taxpayer awareness of the new assessing authority.

Depreciation on hire-purchase plant remains admissible where prescribed conditions are met; development rebate follows same basis.
Depreciation on plant and machinery acquired on hire-purchase is admissible at the usual rates where the Board's prescribed conditions are met, and the same basis applies to development rebate; the Board's circular and letter remain effective and must be followed despite Revenue Audit objections.

Supplementary refund claims barred after final assessment; commissioner cannot use s.264 to entertain them under law.
Supplementary refund claims cannot be entertained by Income tax Officers after an assessment has been completed and become final; the Commissioner likewise may not invoke his revisional or other administrative power to admit such supplementary refund claims post finality.

Disclosure of recognised Provident Fund identities allowed to State small-savings directorates where no assessment-related taxpayer information is disclosed.
Furnishing names and addresses of recognised Provident Funds to State Directorates of Small Savings does not violate section 138 because such disclosure does not make available information regarding an assessee in respect of any assessment; therefore Commissioners should provide that institutional contact information to State Directorates on request to assist Small Savings Schemes.

Valuer compliance with prescribed valuation rules required; failure treated as professional misconduct with risk of removal.
Registered valuers must submit valuation reports in the prescribed form and supply all required information and supporting documents; strict compliance with the valuation rules is required and non compliance will be treated as professional misconduct potentially leading to removal from the register of valuers.

Rectification applications under section 154 require prompt processing to ensure tax/refund adjustments and prevent erroneous recovery actions.
Rectification applications under section 154 requiring adjustment of prepaid taxes or refunds must be attended to promptly to avoid inflated demands and erroneous recovery certificates; such matters should ordinarily be resolved within one month and not remain pending beyond three months, and inspecting authorities must emphasise timely handling and take action for failures.

Unilateral relief: compute foreign tax rate in foreign currency and allow relief at the lower comparative rate.
Unilateral relief for doubly taxed income is determined by computing the foreign tax rate in the foreign currency-tax paid in the foreign country divided by the whole amount of income assessed there-and comparing that rate with the Indian rate, allowing relief at the lower rate; conversion of income and tax into Indian rupees for this purpose is not permissible because exchange rate fluctuations may distort the foreign tax rate.

Unilateral relief for double taxation requires computing foreign tax as a percentage in foreign currency and applying the lower rate.
Unilateral relief under Section 91 is to be allowed at the lower of the Indian tax rate or the rate of tax in the foreign country, with the foreign rate computed by expressing both the income assessed abroad and the tax paid there in the foreign currency and calculating tax as a percentage of that income; conversion into Indian rupees for rate computation is not permitted because exchange rate fluctuations can distort the correct foreign-country tax rate.

Conveyance allowance exemption affirmed; no separate certificate or strict verification required for judges' allowance.
Conveyance allowance of Rs.300 per month for High Court Judges is to be regarded as a tax-exempt conveyance allowance; Income-tax Officers are not required to make detailed enquiries to verify that conveyance expenses equal the allowance, and judges need not furnish a separate certificate that the allowance reimburses expenses wholly, necessarily and exclusively incurred in performance of duties. Circular No.196 is modified to this effect.

Withholding publication pending appeals: names of taxpayers withheld from penalty lists until disposal of specified revision or settlement applications.
Where an assessee files a revision petition to the Commissioner, an application to the Commissioner under remedial provisions, or an application to the Settlement Commission for cancellation or waiver of penalties, the assessee's name shall be withheld from publication in the annual penalty lists provided the petition or application is pending at the end of the financial year to which the list relates. Publication duties, deadlines, notice board placement, transmission to the publicity unit, and exclusions for certain financial corporations are prescribed.

Publication of tax defaulters' names with revised thresholds and stricter inclusion criteria for pending proceedings and recoverability.
Revised monetary thresholds and a single-part consolidated publication are mandated for publishing names of tax defaulters under section 287; lists must contain defaulters with tax outstanding for two years or more and be published in the Gazette, specified newspapers and office notice boards. Names are to be included only after disposal of revision petitions, specified remedial applications, or appellate orders given effect to; amounts covered by stay orders, appellate refunds, or advance tax awaiting adjustment are excluded from default calculations. A short post-appellate payment period allows deletion if dues are cleared before press submission.

Income-tax rate and surcharge changes: revised withholding, exemptions, capital gains and appellate structure follow the Act.
The Finance (No. 2) Act, 1977 revises income tax and withholding rate schedules, raises the personal exemption threshold and surcharge for non corporate taxpayers, standardises advance tax limits for non company assessees, and prescribes specific source deduction rates for categories such as royalties, interest, dividends and lottery winnings. It shortens the holding period for short term capital assets, advances the base date for historical valuation for capital gains, inserts exemptions for reinvested long term gains in specified assets, expands investment allowance (including a higher rate for certain technology based production), introduces deductions for approved rural development and small rural undertakings, and creates Commissioner (Appeals) as a new appellate authority across direct tax enactments.

Applications under section 132(11) must be tracked in a prescribed register and disposed within six months to ensure timely processing.
The Board directs Commissioners to maintain the register prescribed by Instruction No.1084 to monitor progress of applications filed under the search-and-seizure provision and to ensure all such applications are disposed of within six months of filing, addressing delays and taxpayer uncertainty.

Commissioners' powers under section 132(11) require expeditious disposal and maintenance of a monthly pendency register.
Commissioners of Income-tax are empowered under section 132(11) to decide applications against orders made under the search and seizure provisions, subject to giving applicants an opportunity of being heard, and must maintain a monthly register recording opening pendency, receipts, disposals and closing pendency with specified ageing bands for reporting purposes.

Wilful attempt to evade tax, penalty or interest triggers prosecution and requires prior administrative approval.
Section 276C(2) of the Income-tax Act makes a wilful attempt to evade payment of any tax, penalty or interest a prosecutable offence. The Explanation defines such attempts to include: possession or control of relevant books or documents containing false entries or statements; making false entries or statements; wilful omission of relevant entries or statements; and causing other circumstances to enable evasion. Prosecutions require prior administrative approval and officials are directed to scrutinise and propose prosecution where recovery has been deliberately thwarted.

Continuation of registration requires ascertainable allocation of partners' losses; otherwise fresh partnership deed and re-registration required.
Continuation of registration when a minor attains majority is allowable only if the original partnership deed enables ascertainment of partners' shares in losses so there is no change in the partners' shares; absent such specification a fresh partnership deed must be executed and a fresh application for registration filed.