Circular No. 265

What this is

Circular No. 265 was issued by the Central Board of Direct Taxes on 11 April 1980. Its subject is Recording date of tender of cheque and date of its realisa­tion on challans for payment of direct taxes is to be done by branch of authorised public sector bank where it is tendered for payment.

This is a clarification. The Board is stating how it reads a provision. That reading binds the department; it does not bind a court, and where the section says otherwise the section wins.

What it does

Relieves receiving banks of duplicate recording on direct tax challans. Circular No. 261 dated 8-8-1979 had recorded the Reserve Bank's request that authorised public sector banks brand the challan with an inward receipt stamp showing the date of tender of the cheque or draft and the date of its realisation, and had noted the new colour-band challans with separate columns for those dates. The Board now says the object is simply to have evidence of the two dates on the counterfoils, so where the bank's inward receipt stamp already carries them, the corresponding columns of the challan need not be filled and their completion should not be insisted upon.

Why it was issued

A question had been raised whether the challan columns still had to be filled in when the same dates already appeared in the bank's inward receipt stamp.

Who it reaches

• Branches of authorised public sector banks receiving direct tax payments
• Taxpayers paying tax by cheque or draft
• Income-tax Officers testing the date of payment on a challan

The instrument, as the Board published it

Recording date of tender of cheque and date of its realisa­tion on challans for payment of direct taxes is to be done by branch of authorised public sector bank where it is tendered for payment

1. In Board’s Circular No. 261 dated 8-8-1979 [Clarification 1] it was stated that the Reserve Bank of India has requested the authorised public sector banks to "brand" the challan with the "inward receipt stamp" which should, inter alia, contain the date of tender of the cheque/draft and the date of its realisation. It was also stated therein that the Board was progressively intro­ducing new-colour-band challans which would contain separate columns for recording the dates of tender of the cheque/draft and of its realisation.
2. A question has been raised as to whether the filling up of the dates of tender of the cheque/draft and its realisation in the revised colour-band-challan would be necessary if in the "inward receipt stamp" fixed by the receiving bank branch this informa­tion is filled in.
3. The objective here obviously is to record evidence on the counterfoils of challan about the dates of tender of the cheque/draft and its realisation. If this evidence is recorded in the "inward receipt stamp" of the bank, there would obviously be no objection if such dates in the challan forms are not filled. In such cases, the filling up of the relevant columns of the challan should not be insisted upon.
Circular : No. 265 [F. No. 385/61/79-IT(B)], dated 11-4-1980.

What to watch

• The concession applies only where the inward receipt stamp actually carries both dates; if either is missing the challan column must be completed.
• The date of tender and the date of realisation are different dates, and it is the evidence of both that the circular is concerned with.
• Physical challans and bank branding have since given way to electronic payment and challan identification numbers.

Where you meet it

On a dispute over whether tax was paid in time, where the date of tender of the cheque decides interest under the Act.

← Circular No. 266  ·  Circular No. 264 →