Surtax assessment priority: require immediate notices and contemporaneous finalisation with income tax assessments to cut pendency.
Commissioners must eliminate delay in Surtax assessments by requiring ITOs in company circles to examine returns promptly for Surtax applicability and issue notices under section 5(2) within one month; re examine applicability when substantial additions arise; complete Surtax proceedings contemporaneously with income tax assessments so Surtax finalisation follows immediately after IT assessment (appeals on additions are not a reason to defer); and examine and issue penalty notices with assessment orders where defaults are found.

Property transfer to defeat tax recovery: officers must consult legal counsel to pursue remedies under transfer law.
Board directs that when immovable property transfers appear intended to defeat or delay tax recovery, officers should consult Department legal counsel to consider remedies under the Transfer of Property Act; similarly, where transfers exceeding the registration threshold are effected without registration and create equitable rights, legal counsel must be consulted immediately to assess applicable equitable remedies.

Dividend distribution timing determines additional tax applicability when distributions occur within the prescribed post year period.
Dividends are relevant for additional income tax only if actually distributed within the said period of twelve months following the end of the previous year to which assessment relates; dividends paid after that twelve month period must be excluded. The Finance Act, 1973 effected this timing amendment, which applies from the assessment year 1974 75 onward, and income tax officers must ensure only distributions within the prescribed post year period are taken into account when proposing orders under the relevant provisions.

Notice issue equals service - filing before service treated as voluntary return, mandating fresh decision on penalty waiver.
The High Court held that the word issue in the Wealth Tax Act provision is to be read as meaning serve, so a return filed before service of a notice is a voluntary return; on that basis the court ordered the assessing authority to decide afresh the assessee's application for reduction or waiver of penalty. The Department sought review but the special leave petition was dismissed, and the Board directed that the point be contested in suitable cases.

Ex parte assessment safeguards: curb over pitched income tax assessments and ensure procedural enquiries and opportunity to rebut.
The Board directs supervisory officers to curb recurring high pitched and ex parte assessments that lack requisite enquiries, supporting evidence, confrontation of the assessee, and opportunity to rebut; to prevent deliberate delay until limitation approaches and prolonged non disposal of applications under section 146; and to periodically review statistics on ex parte assessments, demands raised, and pending section 146 applications to ensure compliance with sections 143(3) and 144 and sound investigative procedure.

Centralisation of directors' income tax cases requires reporting of assigned and unassigned cases to the Board by deadline.
Instruction directing centralisation of income tax assessments of directors and senior executives with the Income tax Officers assessing the companies, permitting rotational centralisation covering at least one third of companies where full transfer is impracticable. Commissioners are required to report the number of such cases assigned to company assessing officers and the number remaining unassigned for the specified financial years, by a Board set deadline to monitor compliance.

Exclusion of companies limited by guarantee from specified audits count influences auditor appointment under Explanation I provisions.
The administrative view in the circular clarifies that companies which have no share capital, typically companies limited by guarantee, are to be excluded from the reckoning of the specified number of companies used for determining auditor appointment under Explanation I to the relevant sub sections.

Use of 'Corporation' in company names: permitted for companies with substantial authorised capital; Registrars may allow in deserving cases.
Guidance permits private companies to use the word Hindustan when business scope and scale justify it, and directs Registrars to apply existing name approval guidelines. It further states that authorised capital at incorporation is the criterion for treating a company as "big sized" for allowing the word Corporation, with an authorised capital benchmark for permitting its use and a separate paid up capital benchmark to be used for reporting purposes.

Refund reporting must be reconciled and certified to prevent misleading statistical increases in tax refund figures.
A directive records that the 1970-71 increase in refund amounts resulted from inconsistent reporting-Commissioners included TDS, excess advance tax and self-assessment refunds alongside pure refund cases-and requires that statistical information submitted to the Board or Directorate be reconciled with previously submitted comparable data, with a certificate endorsing such reconciliation attached.

Deductibility of gratuity provisions: mere book provisions disallowed, but approved fund contributions and payable gratuities remain deductible.
Mere book provisions for estimated service gratuity are not deductible in computing taxable profits; only contributions to an approved gratuity fund that became payable during the previous year and gratuity payments that became payable during the previous year remain deductible. If annual actuarial provisioning is begun, only the current year's provision is allowable; earlier unprovided liabilities are deductible only when paid. Provisions should be determined taking employee-level factors into account and supported by appropriate actuarial valuation and records.

Ignorance of law is not an excuse; delay and availability of alternative remedies can bar extraordinary relief.
Ignorance of law is no excuse for failing to take timely steps under revenue laws; delay and laches can justify refusal to exercise extraordinary jurisdiction where an adequate alternative remedy such as appeal was available, and a claim for refund may be barred by limitation.

Discretionary power-requirement for speaking orders ensures reasons accompany waivers or reductions of penalties under wealth tax law.
Section 18(2A) authorises Commissioners to reduce or waive penalties under section 18(1)(i) and 18(1)(iii), but such discretionary powers must be exercised with due care and caution and accompanied by a speaking order setting out reasons; the Board directs that these requirements, as endorsed by the High Court, be followed when passing orders under section 18(2A).

Notice requirement under Gift Tax Act: when donor is deceased, issue notices to legal representatives and donees for recovery proceedings.
When the donor is deceased and recovery from donees is contemplated, notices under the Gift Tax Act must be issued to both the donor's legal representatives and to all donees; this prevents duplicative proceedings and allows donees, in the presence of the legal representatives, to show that the tax is recoverable from the donor's estate. Officers must apply and circulate this procedure.

Penalty under section 271(1)(a): retrospective amendment imposes a monthly percentage penalty with an aggregate cap and mandates review of orders.
The Income-tax Act amendment revises section 271(1)(a) to impose a monthly penalty calculated as a percentage of the assessed tax for each month of default, subject to an aggregate cap, and defines "assessed tax" as tax net of amounts deducted at source or paid in advance. The amendment is retrospective and overrides the prior judicial interpretation limiting the phrase "the amount of tax, if any, payable by him"; authorities are directed to review and, where necessary, rectify orders issued under section 271(1)(a) made in reliance on that interpretation.

Exemption under section 10(7): foreign allowances paid by government to citizens for service abroad are fully tax-exempt.
Section 10(7) provides full income-tax exemption for allowances or perquisites paid or allowed by the Government to an Indian citizen for rendering service outside India where the payment is an allowance or perquisite, is made outside the taxable territories, is by the Government of India to a citizen, and is for rendering service outside those territories; no requirement that the allowance be actually expended in performance of duties is attached.

Characterisation of investment as fixed asset rejected for computing statutory percentage, prompting review and rectification of additional tax cases.
Investments by a managing agency in shares of its managed company are not to be treated as fixed assets for computing the statutory percentage for additional tax; classification depends on the holder's business character, audit objections are accepted, officers must be informed and past cases reviewed for rectification with a report submitted.

Approval under section 80J requires timely application and ministerial sanction; retrospective approvals are not allowed.
Approval under section 80J is a distinct statutory prerequisite distinct from ministerial grading; applicants must file for approval before the first assessment year for which the deduction is claimed, approval (when granted) runs for a five year period unless earlier withdrawn, and approvals are not retrospective. The Ministry of Tourism & Civil Aviation issues the Central Government approval for this purpose.

Compounding of technical offences: Commissioners must confirm instruction compliance and that compounding conditions are satisfied before proposals proceed.
Future proposals to compound prosecution for technical offences must include an express report confirming examination against the earlier Board instruction, a statement whether the prescribed five conditions for compounding are satisfied, and a conclusion that the offences merit compounding, to avoid unnecessary correspondence and delay.

Initial depreciation allowance and backward area profits deduction expand targeted tax relief and refine eligibility and sequencing rules.
The Amending Act provides a 20% initial depreciation allowance for qualifying new ships, aircraft and specified machinery or plant installed in selected industries and small scale undertakings, prescribes exclusions and treatment vis a vis development rebate and written down value, permits an assessee to elect not to claim the allowance, and sets transitional and effective date rules; it also introduces Section 80HH granting a profits deduction to new industrial undertakings and approved hotels in specified backward areas subject to formation, transfer of used plant and employment conditions, audit and approval requirements, and sequencing with other concessions.

Long-term capital gains tax tightened, increasing taxable incidence by changing deductions and company tax treatment.
Amendments increase taxation of long-term capital gains by revising deduction rules for non-corporate taxpayers-separate fixed-base-plus-proportion formulas for gains from buildings/lands and for other assets-and by raising prescribed tax rates for companies while retaining a preferential lower rate for widely-held companies meeting a taxable-income condition; changes apply from the specified assessment year and are implemented through amendments to the relevant Income-tax Act provisions.