Collection and recovery

Section 220 l When tax payable - assessee in default

1219. Interest chargeable under sub-section (2)- Rebate of 50 per cent to be allowed on full payment of arrear demand

Under a special scheme, the Government will allow a rebate of 50 per cent of the interest chargeable under section 220(2), if the assessee makes full payment of the arrear demand certificate up to 31-3-1986 together with 50 per cent of the interest. The scheme will be in operation during the period from 1-7-1988 to 30-9-1988. Any assessee who is willing to take advantage of the scheme should apply to the Assessing Officer asking for the details of the amount of demand and interest payable under the scheme. The Government has introduced the scheme with a view to arresting the growth of income-tax arrears.

Source : PIB Press Note, dated 13-6-1988.

1220. Levy of interest under sub-section (2) when original assessment is set aside/cancelled

1. Doubts have been raised as to the quantum of interest chargeable under section 220(2) when the original assessment order passed by the Income-tax Officer is—

(a) cancelled by him under section 146;

(b) set aside/cancelled by an appellate/revisional authority and such appellate/revisional order has become final ; or

(c) set aside by one appellate authority but, on further appeal, the order setting aside the assessment is varied by the second appellate authority and the demand gets finally determined.

2. These issues were comprehensively examined in consultation with the Ministry of Law and the Board has been advised :

1. Where an assessment order is cancelled under section 146 or cancelled/set aside by an appellate/revisional authority and the cancellation/setting aside becomes final (i.e., it is not varied as a result of further appeals/revisions), no interest under section 220(2) can be charged pursuant to the original demand notice. The necessary corollary of this position will be that even when the assessment is reframed, interest can be charged only after the expiry of 35 days from the date of service of demand notice pursuant to such fresh assessment order.

2. Where the assessment made originally by the Income-tax Officer is either varied or even set aside by one appellate authority but on further appeal, the original order of the Income-tax Officer is restored either in part or wholly, the interest payable under section 220(2) will be computed with reference to the due date reckoned from the original demand notice and with reference to the tax finally determined. The fact that during an intervening period, there was no tax payable by the assessee under any operative order would make no difference to this position.

3. The foregoing legal position will apply mutatis mutandis to the proceedings under other direct taxes also.

Circular : No. 334 [F. No. 400/3/81-ITCC], dated 3-4-1982.

Judicial analysis

Explained in - In Vikrant Tyres v. First ITO [1993] 202 ITR 454 (Kar.), the above circular was explained with the following observations :

“. . . The circular of the Board may not be binding on the assessee and the interpretation of the provision of law cannot depend upon the meaning given by the Board in all cases. The circular has been issued to facilitate the due administration of the Act by the authorities under the Act. The effect of section 220(2) has been duly clarified by the Board while issuing the circular.” (p. 464)

Explained in - The Kerala High Court in ITO v. A.V. Thomas & Co. [1983] 160 ITR 816 held that this circular is not decisive of the issue explained therein and that interest is not payable under section 220(2) as there has been no non-compliance with the demand made under section 156.

Explained in - The above circular was referred to in Madhav Aluminium Conductors (P.) Ltd. v. ITO [1986] 15 ITD 671 (Mad.), with the following observations :

“As regards the arguments that under CBDT’s Circular No. 334, dated 3-4-1982 levy of interest under section 220(2) was permissible when the original assessment is set aside, we can do no better than citing the decision of the Kerala High Court in CIT v. Malayala Manorama & Co. Ltd. [1983] 143 ITR 29 which expressed the following about the said circular:

“. . . ‘The court will have to put its own construction upon the provisions of the Act regardless of the practice of the department and the directions for the guidance of the officials . . . ’(p. 29)” (pp. 674-675)

referred to in - Citing reference to paragraph 2(ii) of the above circular, it was observed in M. N. Jadhav v. Fourth ITO [1986] 161 ITR 275 (Kar.) that “Without any doubt, this circular correctly expounds the legal position which I have independently reached.” (p. 278).

Explained in - Pitambardas v. Union of India [1998] 99 Taxman 408 (MP)/Mrs. R. Mani Goyal v. CIT [1996] 217 ITR 641 (All.) : The Circular issued by the CBDT in this regard appears to be well-founded.

Cited in - The aforesaid observations were also cited and relied upon in Hindustan Computers Ltd. v. DCIT [1995] 55 ITD 153 (Delhi - Trib.). The Tribunal observed, by following the aforesaid judgment of the Karnataka High Court as well as the judgment of the Kerala High Court in Mohammed Essa Moosa Sait v. GTO [1987] 167 ITR 338, that “the facts contemplated by the circular are squarely present in the instant case and which became manifest by reference to the relevant dates and events set out in the beginning of the order.” (p. 157)

1221. Payment of tax on regular assessment in cases where capital gains have not been invested, for the purposes of availing exemption under sections 54, 54B and 54D, before filing return - Whether time therefor could be extended under the section

See Circular at Sl. No. 856.

1222. Income determined on assessment was substantially higher than returned income - Whether collection of tax in dispute is to be held in abeyance till decision on appeal

1. One of the points that came up for consideration in the 8th meeting of the Informal Consultative Committee was that income-tax assessments were arbitrarily pitched at high figures and that the collection of disputed demands as a result thereof was also not stayed in spite of the specific provision in the matter in section 220(6).

2. The then Deputy Prime Minister had observed as under :

“. . . where the income determined on assessment was substantially higher than the returned income, say, twice the latter amount or more, the collection of the tax in dispute should be held in abeyance till the decision on the appeals, provided there were no lapse on the part of the assessee.”

3. The Board desire that the above observations may be brought to the notice of all the Income-tax Officers working under you and the powers of stay of recovery in such cases up to the stage of first appeal may be exercised by the Inspecting Assistant Commissioner/Commissioner of Income-tax.

Instruction : No. 96 [F. No. 1/6/69-ITCC], dated 21-8-1969.

Judicial analysis

Explained in - In N. Rajan Nair v. ITO [1987] 165 ITR 650 (Ker.), the above circular was explained with the following observations :

“The instructions indicate the departmental thinking on the subject which is also relevant in the context of exercising the discretion under section 220(6).” (p. 654)

Explained in - In Maharana Shri Bhagwat Singhji v. ITAT [1997] 223 ITR 192 (Raj.), the above instruction was cited and applied, with the observation that “the circulars issued by the Central Board of Direct Taxes are binding on the authorities exercising the powers under the taxing statute, and have sufficient force of law”. (p. 200)

Explained in - The above circular was relied on in Mrs. Mani Goyal v. CIT [1996] 217 ITR 641 (All.), with the following observations :

“This circular is also in consonance with the spirit of the provisions contained in sub-section (6) of section 220 of the Income-tax Act.

According to learned counsel for the petitioner, this circular of the Central Board of Direct Taxes becomes applicable to the facts of the present case as mentioned in paragraph 2 of the writ petition. The petitioner had submitted a return of income declaring total income of Rs. 11,710. The Deputy Commissioner of Income-tax, Special Range, Ghaziabad, did not accept the return and enhanced the income by making several additions and determined the tax at Rs. 33,04,450, i.e., more than several times of the return. In such situation, the appellant cannot be treated to be in default and recovery proceedings before the disposal of the appeal will have to be kept in abeyance. The circular of the Board has desired the Recovery Officers to keep such recoveries in abeyance until disposal of the appeal by the appellate authority. This circular of the Central Board of Direct Taxes was also brought to the notice through an affidavit by, the appellant before the Commissioner (Appeals) at Muzaffarnagar, but no reference in the impugned order of rejection of the stay has been made. Moreover, it is opposed to the principles of good conscience and fair play that the disputed amount of tax is sought to be recovered even though the appeal is pending. It adds to the hardship of the appellant in such circumstances, in which he is unable to deposit the amount during recovery proceedings. Therefore, it is highly desirable in the interest of justice that if the assessing authority or the appellate authority are not in a mood to stay recovery proceedings, even contrary to the circular of the Central Board of Direct Taxes, then they must dispose of the appeal without further delay and without taking any coercive action against the petitioner. For the purposes of disposal of this writ petition, it would be sufficient to say that in case the appeal is expeditiously disposed of, the recovery proceedings should not be pursued till disposal of the appeal.” (pp. 643-644)

Explained in - In I.V.R. Constructions Ltd. v. Asstt. CIT [1998] 231 ITR 519 (AP) it was observed that the circular refers to the discussion in the 8th meeting of the informal Consultative Committee with regard to the orders of assessment passed by the authority and not granting of stay under section 220(6) of the Act. It noted the observation of the Deputy Prime Minister and embodied the direction issued by the Board to the effect that powers of stay of recovery in such cases up to the stage of first appeal may be exercised by the Inspecting Assistant Commissioner of Income-tax. There can be no difficulty in understanding the import of the circular.

1223. Circular dated 25-7-1969 granting stay of recovery of tax under sub-section (7) to assessees having income in Pakistan which cannot be brought into India stands withdrawn

1. Reference is invited to the Board’s Circular No. 25 issued under its F. No. 9/20/68-IT(A-II), dated 25-7-1969 [Annex]. Para 2(a) of the said circular relating to sub-section (7) of section 220 reads as under :

“The Income-tax Officers ask the assessees to pay tax on their Indian income at the rate applicable to the total income which includes income arising in Pakistan. Thus, if the Indian income is Rs. 10,000 and the Pakistan income is Rs. 1,00,000, the assessee is required to pay several times more tax than what he would have been required to pay had there been no income at all in Pakistan. The tax demanded by the Income-tax Officer is, thus, disproportionate to the assessee’s ability to pay having regard to his income in India. Under the circumstances, the Board have decided that assessees having income in Pakistan which cannot be brought into India, should be asked to pay tax only on the Indian income by treating it as the total income for the purposes of the Income-tax Act. The balance of the tax should be stayed by the Income-tax Officer under section 220(7).”

2. In the case of A.C. Paul v. TRO [1979] 117 ITR 412, the Madras High Court had occasion to interpret sub-section (7) of section 220 as also to examine the scope and the correctness of the portion of the Board’s Circular extracted in the preceding paragraph. The observations of the High Court thereon are reproduced below :

“We have no hesitation whatever in concluding that the method to be adopted is by finding out the average rate of tax applicable on the total income determined by the assessing authorities [i.e., the tax finally determined after and appeals and references, if any, for the concerned years are disposed of] by dividing the total tax so imposed by the total income. That average rate will have to be applied to the Indian income and the tax that can be collected will be the tax so calculated on the Indian income. There is no case before us that that has not been the method adopted in determining and demanding the tax due on the Indian income. So there can be no complaint that the amount claimed as due from the assessee was not the amount that can be claimed in accordance with the provision in section 220(7). We shall now turn to the second aspect.... We have already extracted the relevant and the emphatic part of that circular and we should repeat the words of that part. It is stated there that the tax on the Indian income must be determined by treating the Indian income as the total income of the assessee and only that amount of tax should be recovered from the assessee. We are constrained to say that this direction by the Central Board of Direct Taxes is a direction diametrically opposed to the statutory provision, a direction which we are unable to support on the basis of any provision under the Act or Rules and we fail to understand how the Board issued such a circular. Even so, we are not called upon to quash that circular and we cannot quash that circular because that circular in no manner can be said to have caused any grievance to the petitioner excepting perhaps the disappointment that what the assessees, if they had income in Pakistan, would have got, he did not get. Such a disappointment we cannot treat as grievance for the purpose of article 226 of the Constitution.”

3. It has been decided by the Board that there is no justification for giving a concession which is not warranted by law. Accordingly, para 2(a) of Circular No. 25 [F. No. 9/20/68-IT(A-II)], dated 25-7-1969 [Annex] is withdrawn with immediate effect and the said circular will stand modified to that extent.

4. The contents of this circular may please be brought to the notice of all concerned. Existing cases where taxes relating to Pakistan income have been stayed under section 220(7) may also be reviewed and necessary action taken in the light of this circular.

Circular : No. 251 [F. No. 403/56/77-ITCC], dated 29-1-1979.

Annex Circular No. 25, dated 25-7-1969 referred to in clarification

1. Instances have come to the notice of the Board where Indian nationals, having income in Pakistan were put to considerable hardship in their assessment proceedings in India. After the 1965 hostilities between India and Pakistan, the assessees having income in Pakistan, are finding it almost impossible to repatriate their Pakistan income to India.

2. The hardships faced by such assessees are generally of the following types :

1. The Income-tax Officers ask the assessees to pay tax on their Indian income at the rate applicable to the total income which includes income arising in Pakistan. Thus, if the Indian income is Rs. 10,000 and the Pakistan income is Rs.1 lakh, the assessee is required to pay several times more tax than what he would have been required to pay had there been no income at all in Pakistan. The tax demanded by the Income-tax Officer is, thus, disproportionate to the assessee’s ability to pay having regard to his income in India.

Under the circumstances, the Board have decided that assessees having income in Pakistan which cannot be brought into India, should be asked to pay tax only on the Indian income by treating it as the total income for the purposes of the Income-tax Act.The balance of the tax should be stayed by the Income-tax Officer under section 220(7).

2. In some cases, it has been found that the tax on the Pakistan income was kept in abeyance for a period of only one year and thereafter the recovery proceedings were started even though the Pakistan income had not yet been brought into India. Thus, the provisions of section 220(7) were not applied properly.

3. It has also been seen in some cases that when the assessees having income in Pakistan expressed their inability to produce the assessment orders passed in their cases by the Pakistan income-tax authorities, the Income-tax Officers made assessments which prima facie appears to be rather harsh and unrealistic. The Board disapprove of the tendency to pitch up the assessments in such cases.

It is, therefore, desired that the assessment of the Pakistan income should be made on the basis of the audited profit and loss account and balance sheets duly certified by the chartered accountants but even when these statements are not available, the estimates should be fair and reasonable.

1224. Whether Assessing Officer can exercise discretion under section 220(6) to treat assessee as not being in default in respect of amounts disputed in first appeal pending before Deputy Commissioner (Appeals)/Commissioner (Appeals)

Clarification 1

1. Under section 220(6) of the I.T. Act, 1961 where an assessee has presented an appeal u/s 246 of the Act before the Deputy Commissioner (Appeals) or the Commissioner (Appeals), the Assessing Officer may, in his discretion, and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired, as long as such appeal remains undisposed of.

2. Having regard to the proper and efficient management of the work of collection of revenue, the Board has considered it necessary and expedient to order that on an application being filed by the assessee in this behalf, the Assessing Officer will exercise his discretion u/s 220(6) of the Act (subject to such conditions as he may think fit to impose) so as to treat the assessee as not being in default in respect of the amount in dispute in the appeal in the following situations :

(i) the demand in dispute has arisen because the Assessing Officer had adopted an interpretation of law in respect of which, there exist conflicting decisions of one or more High Courts or, the High Court of jurisdiction has adopted a contrary interpretation but the Department has not accepted that judgment, or

(ii) the demand in dispute relates to issue that have been decided in favour of the assessee in an earlier order by an appellate authority or Court in assessee’s own case.

3. It is clarified that in the situations mentioned in para 2 above, the assessee will be treated as not in default only in respect of the amount attributable to such disputed points. Further, where it is subsequently found that the assessee has not co-operated in the early disposal of appeal or where a subsequent pronouncement by a higher appellate authority or Court alters the situation referred to in para 2 about, the Assessing Officer will no longer be bound by the instructions and will excercise his disertion independently.

4. In respect of other cases, not covered by para 2 above, the Assessing Officer will take into account all the relevant factors and communicate his decision to the assessee in the form of a speaking order. While exercising discretion under the provision, the financial capacity of the assessee to pay demand will not be relevant.

Circular : No. 530, dated 6-3-1989.

Judicial analysis

Explained in - The above circular was explained in Madhu Silica (P.) Ltd. v. CIT 1996 Tax L.R. 521 (Guj.), as follows :

“8. From the aforesaid provision of the Act and Circular issued by the Board of Direct Taxes, it is apparent that in the case where the assessee has preferred an appeal under section 246, the Assessing Officer has been vested with the discretion to treat the assessee as not being in default in respect of the amount in dispute in appeal as long as the appeal remains undisposed of even though time for payment of demand under the assessment has expired. The power being discretionary, general guidelines laying down the circumstances in which the assessee may be treated not being in default, was issued by the Board in exercise of its power under section 119 of the Act which has been reproduced hereinabove. As per the instructions contained in clause 2 of the circular it is obvious that where the demand in dispute relates to issue that have been decided in favour of the assessee in an earlier order by an appellate authority or court in the assessee’s own case, the assessee is not to be treated being in default in respect of that amount in dispute in appeal. While laying down that guidelines it has been further clarified that in that situation the assessee will be treated as not in default only in respect of the amount attributable to such disputed points, namely, which have been decided in favour of the assessee in earlier order by the appellate authority. We also notice that another Circular No. 589, dated 16-1-1991 had been issued by the Board wherein the Board clarified under clause (2) of its instruction contained in the circular that according to para 2 of the Circular No. 530, the Assessing Officer in two situations referred to in that para 2 was bound to treat the assessee not in default in respect of the amount in dispute in appeal.

9. It is not in dispute that the aforesaid circular being in the nature of laying down general guidelines for proper administration of the Act for those who are employed in the execution of the Act are bound to observe such instruction particularly ones which are beneficial to the assessee.” (p. 523)

Explained in - Gujarat State Fertilizers & Chemicals Ltd. v. Dy. CIT [1997] 226 ITR 270/98 Taxman 100 (Guj.) it was observed as follows :

“As per Circular No. 530, dated March 6, 1989, on an application being filed by the assessee the Assessing Officer will exercise his discretion under section 220(6) subject to such conditions as he may think fit to impose, so as to treat the assessee as not being in default in respect of the amount in the appeal in the situations indicated in paragraph 2 of the circular. Accordingly, where the demand in dispute relates to issues that have been decided in favour of the assessee in an earlier order by an appellate authority or a court in the assessee’s own case, the assessee is to be treated as not being in default in respect of the amounts attributed to such disputed amounts.”

Clarification 2

1. Reference is invited to Board’s Circular No. 530 [F. No. 404/82/88-ITCC], dated March 6, 1989 regarding the above-mentioned subject.

2. According to paragraph 2 of the said Circular, the Assessing Officer is, in the two situations referred to in that paragraph, bound to treat the assessee as not in default in respect of the amount in dispute in appeal. In respect of other cases, the Circular stated in paragraph 4—

“In respect of other cases, not covered by para 2 above, Assessing Officer will take into account all the relevant factors and communicate his decision to the assessee in the form of a speaking order. While exercising discretion under this provision, the financial capacity of the assessee to pay the demand will not be relevant.”

3. Representations have been received by the Board that the exclusion of financial capacity of the assessee to pay the demand, from the factors relevant for exercise of Assessing Officer’s discretion under section 220(6) of the Income-tax Act, is prejudicial to those assessees who are not financially sound.

4. The matter has been reconsidered by the Board. It has been decided to substitute paragraph 4 of Circular No. 530 by the following paragraph :

“In respect of other cases not covered by paragraph 2 above, the Assessing Officer, while considering the situation for treating the assessees to be not in default, would consider all relevant factors having a bearing on the demand raised and communicate his decision to the assessee in the form of a speaking order.”

Circular : No. 589, dated 16-1-1991.

1225. Stay in case of harsh assessment

It seems that the Government has agreed, and has sent instructions to the Commissioners that, in cases of harsh assessments, the Income-tax Officer should, normally, grant stay on application made under section 220(6). That is clear from the proceedings of the Lok Sabha dated 11th December, 1970, when in reply to unstarred question No. 4289, the Minister for Revenue and Expenditure assured :

“(a) and (b), suitable instructions (to the effect that where the income determined on assessment was substantially higher than the returned income, say, twice the latter amount or more, the collection of the tax in dispute should be held in abeyance till the decision of the appeals, provided there were no lapse on the part of the assessee) have been issued by the Central Board of Direct Taxes to all Commissioners of Income-tax in view of the recommendation made by the informal Consultative Committee of the Ministry.” (pp. 420-421)

Extract from : Vikarambhai Punjabhai Palkhiwala v. S.M. Alpbang, Recovery Officer [1990] 182 ITR 413 (Guj.).

1225A. Raising the monetary ceilings for write-off of irrecoverable dues and reconstitution of committees

1. In partial modification of earlier instructions on the subject, the Board have revised the prescribed monetary ceilings for write-off of irrecoverable dues of Direct Taxes by the various income-tax authorities. At the same time, the Board have reviewed and modified the existing structure of the Committees for recommending write-off. The revised procedure in this regard would be as follows :

Regular Procedure

2. A three-tier structure of Committees (as against two at present to consider and recommend write-off has been approved as under :

u Zonal Committee

u Regional Committee and

u Local Committee.

2.1 Accordingly, the monetary ceilings with respect to the powers of various I.T. authorities to write-off irrecoverable dues have been enhanced and the level of authority whose administrative approval would be required for write-off has been re-defined. Further, the respective jurisdiction of the three Committees over write-off proposals has been re-delineated.

2.2 The revised scheme for write-off under the Regular Procedure is summarised in the following Table :

Committee	Constitution	To be notified by	Order of write-off	Monetary ceilings
			by	for write-off
Local	3 officers of the	CCIT	ITO/TRO	Demand up to
Committee	level of Addl.			Rs. 5,000
	CIT
			DCIT/ACIT	Demand over
				Rs. 5,000 and up
				to Rs. 25,000
			Addl. CIT/JCIT	Demand over
				Rs. 25,000
Sub-zonal or	3 officers of the	Cadre Controlling	CCIT Subject to	Demand over
regional	level of CIT	CCIT (under	report to the next	Rs. 1 lakh and
committee		intimation to Board)	higher authority	up to Rs. 10 lakh
Zonal	3 officers of the	CBDT	CCIT Subject to	Demand over
Committee	level of CCIT		report to the next	Rs. 10 lakh and
			higher authority	up to Rs. 25 lakh
			CCIT with the	Demand over
			approval of Full	Rs. 25 lakh and
			Board	up to Rs. 50 lakh
			CCIT with the	Demand over
			approval of Full	Rs. 25 lakh
			Board and the
			Finance Minister

2.3 All other conditions and requirements under the Regular Procedure would remain unchanged.

Ad hoc Procedure

3. Under this procedure, the overall monetary ceiling has been raised from the present level of Rs. 2,000 to Rs. 5,000. Presently, irrecoverable demand exceeding Rs. 500 requires issue of Irrecoverability Certificate by the Tax Recovery Officer (TRO). Such Certificate will now be required only in cases of irrecoverable demand exceeding Rs. 2,000.

3.1 All other conditions and requirements under the ad hoc procedure would remain unchanged.

Summary Procedure

4. The monetary ceiling under this procedure has been raised from the present level of Rs. 25 to Rs. 1,000.

4.1 All other conditions and requirements under the Summary Procedure would remain unchanged.

5. These instructions shall apply to irrecoverable dues under all Direct Tax enactments. It is reiterated that all procedures and conditions under the existing guidelines pertaining to write-off of irrecoverable demand, other than those mentioned herein, shall remain in force. All proposals to be sent to the Board and the Minister for write-off shall continue to be routed through Directorate of Income-tax (recovery) as per the existing guidelines.

These instructions will come into force immediately, Instructions regarding constitution of the various Committees are being issued separately.

Instruction : No. 14/2003, dated 6-11-2003.

1225B. Reconstitution of Committees for Recommending Write-off of Arrears

1. Reference is invited to Instruction No. 14/2003 dated 6-11-2003 whereby the Board have revised the prescribed monetary ceilings for write-off of irrecoverable dues of Direct Taxes by the various income-tax authorities and modified the structure of the Committees for recommending write-off. The revised constitution of the Committees and the procedures to be followed shall be as under :

2. The composition of the various Committees will be as under :

Name of the	Constitution of the Committee	To be	To be
Committee		constituted by	notified by
Zonal	Permanent Members consisting	CBDT	CBDT
Committee	of three Chief Commissioners
Regional	Permanent Members consisting	Cadre	Cadre
Committee	of three Commissioners. The CIT	Controlling	Controlling
	concerned shall be co-opted as	CCIT	CCIT (Copy to
	Member for presenting his case		be sent to
	where he is not a Permanent		CBDT)
	Member
Local	Permanent Members consisting	CCIT	CCIT (Copy of
Committee	of three Addl. CIT/JCIT. The Addl.		be sent to
	CIT/JCIT concerned shall be co-		CBDT)
	opted as Member for presenting
	his case, where he is not a Permanent Member

3. Accordingly, the Zonal Committees have been constituted and are notified herewith as per Annexure enclosed. The regional committees will be constituted and notified by the respective cadre controlling CCsIT under intimation to the Board. Likewise, the Local Committees will be constituted and notified by the CCsIT concerned under intimation to the Board.

4. The constitution of the committees for various charges will be fixed. In the event of a vacancy in any charge, another Chief Commissioner/Commissioner(s)/Addl. CIT/JCIT, as the case may be, available in the same city or the nearest charge, may be requested to work on the committee. These arrangements will, however, be temporary till the vacancy is filled.

5. When a new charge is created or an existing one is merged with another charge, a proposal may be sent to the Board for constitution of a Zonal Committee for that charge or for reconstitution, as the case may be. If the Headquarters of an existing charge is shifted, there should be no need to reconstitute the committee. However, in case of any administrative inconvenience, a proposal for reconstitution may be sent for the consideration of the Board.

6. The committees will meet at least once a month. The committees would discuss not only the cases which are ripe for write-off/scaling down but also the cases which are being processed for write-off and cases which have been recommended to the Director of Income-tax (Recovery), New Delhi, for further processing. This will ensure a continuous review of the unrealisable demand on the Registers of the Department.

7. The senior-most Chief Commissioner/Commissioner/Addl. CIT/JCIT will convene the meeting of the Committee and the Chief Commissioner/Commissioner/Addl. CIT/JCIT concerned will present his case. The Chief Commissioner indicated in column 4 of the Annexure will send a brief Report of the meetings of the Zonal Committee every month to the Director of Income-tax (Recovery), Mayur Bhawan, New Delhi and endorse a copy thereof to the Board. Similarly, the senior-most Commissioner will send a brief report of the meetings of the Regional Committee to the cadre Controlling CCIT and the senior-most Addl./JCIT will send a brief Report of the meetings to the Local Committee to the CCIT concerned.

8. It may be noted that in respect of cases involving demands exceeding the prescribed limits, which are referred to the Board through Director of Income-tax (Recovery) for according administrative approval to the proposal, the specific comments of the Chief Commissioner concerned should also be sent along with the recommendations of the Zonal Committee.

The Instructions contained herein will come into force immediately.

Revised composition of Zonal Committees (ZC’s) for write-off irrecoverable demand in various Chief Commissioners of Income-tax charges.

ZC No.	Cases of CCsIT Charge to be covered	Composition of the Committee of the CCsIT		CCIT who sends of the monthly report
1.	2.	3.(a) Permanent Members	3. (b) Co- opted Members	4.
North Zone
1.	Kanpur, Meerut, Dheradun	Kanpur, Meerut, Dheradun	CCIT	Kanpur
			concerned
2.	Lucknow, Allahabad, Bareilly	Lucknow, Allahabad, Bareilly	CCIT	Lucknow
	DGIT (Inv.), Lucknow		concerned
3.	Amritsar, Ludhiana, Chandi-	Amritsar, Chandigarh,	CCIT	Amritsar
	garh, Shimla, Panchkula	Ludhiana	concerned	Ludhiana,
	DG (Inv.)			Chandigarh,
4.	Delhi I to XII CCIT Central	Delhi IV, V, VI	CCIT	Delhi V
	DGIT (Int. Tax)		concerned
5.	Jaipur, Jodhpur, Udaipur,	Jaipur, Jodhpur, Udaipur	CCIT	Jaipur
	DGIT (Inv.), Jaipur		concerned
South Zone
6.	Hyderabad, I, II, III,	Hyderabad, I, II, III	CCIT	Hyderabad I
	Visakhapatnam DG (Inv.),		concerned
	Hyderabad
7.	Cochin, Thiruvananthpuram,	Cochin, Thiruvananthpuram,	CCIT	Cochin
	DGIT (Inv.), Cochin	DGIT (Inv.), Cochin	concerned
8.	Bangalore I, II, III, Hubli,	Bangalore I, II, III	CCIT	Bangalore I
	Panaji, DGIT (Inv.), Bangalore		concerned
9.	Chennai I to IV, Coimbatore,	Chennai II, III, IV	CCIT	Chennai II
	Madurai, Tiruchirapalli,		concerned
	DGIT (Inv.), Chennai
East Zone
10.	Kolkata I to XI, Durgapur,	Kolkata II, III, IV	CCIT	Kolkata II
	Bhubaneswar, DGIT (Exmp),		concerned
	Kolkata, DGIT (Inv.), Kolkata
11.	Patna I, III, Ranchi, Guwahati,	Patna I, III, Ranchi	CCIT	Patna
	Shillong, Jalpaiguri, DGIT		concerned
	(Inv.), Patna
West Zone
12.	Mumbai I to XIII, CCIT	Mumbai II, III, IV	CCIT	Mumbai II
	Central I, II		concerned
13.	Pune I, II, Thane, Nashik,	Pune I, II, Thane	CCIT	Pune I
	DGIT (Inv.), Pune		concerned
14.	Bhopal, Raipur, Indore,	Bhopal, Nagpur,	CCIT	Bhopal
	Nagpur, DGIT (Inv.), Bhopal	DGIT (Inv.), Bhopal	concerned
15.	Ahmedabad I to IV, Surat,	Ahmedabad II, III, IV	CCIT	Ahmedabad
	Baroda, Rajkot, DGIT		concerned
	(Inv.), Ahmedabad

Source : Instruction No. 16/2003, dated 18-11-2003.

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