804. Clarification on the use of challan forms with only three counterfoils for payment of advance tax and self-assessment tax
Circular No. 697 was issued by the Central Board of Direct Taxes on 16 December 1994. Its subject is 804. Clarification on the use of challan forms with only three counterfoils for payment of advance tax and self-assessment tax.
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.
Resolves the practical problem created by the new three-counterfoil challan for advance tax and self-assessment tax. Where the old four-counterfoil challan is used the existing distribution continues, one foil each to the Zonal Accounts Officer, the Income-tax Officer, the taxpayer's record and the taxpayer's return. Where the new challan is used, the three foils go to the Assessing Officer, the Zonal Accounts Officer and the taxpayer for his record, and the taxpayer may annex to his return a self-attested photocopy of foil No. 3. The Board accepts that photocopy as adequate compliance with Explanation (c)(i) to section 139(9).
Banks were retaining two counterfoils and giving the taxpayer only one, leaving him with nothing to attach to the return as proof of payment.
804. Clarification on the use of challan forms with only three counterfoils for payment of advance tax and self-assessment tax
1. Board had recently prescribed the form of challans with three counterfoils for payment of advance tax and self-assessment tax. Some problems have been reported in the implementation of the above decision. It has been reported that banks receiving payment of tax are retaining two counterfoils and returning only one foil to the taxpayer. As the taxpayer is expected to enclose proof of payment of advance tax and self-assessment tax along with the return of income, it has been pointed out that the absence of an extra foil for this purpose leads to difficulties.
2. The question has been examined in the Board. Currently, both types of challan, viz., having four counterfoils (the "old" challan) and three counterfoils (the "new" challan) are in use. Where the old challans are used, the existing distribution pattern will continue to be followed by the banks, viz.,—
1. copy to the ZAO
2. copy to the ITO
3. copy to the taxpayer for his record
4. copy to the taxpayer to be annexed to the return.
Where the new challan forms are used, the three foils will be distributed by the banks as under :
1st counterfoil to the Assessing Officer (i.e., CTU)
2nd counterfoil to the ZAO
3rd counterfoil to the taxpayer for his record.
In such cases, the taxpayer may enclose with his return of income a photocopy (attested by him) of his copy of the foil No. 3, which will be adequate compliance with Explanation (c)(i ) to section 139(9) of the Income-tax Act.
Circular : No. 697, dated 16-12-1994
On a defective return notice under section 139(9) alleging that proof of tax payment was not enclosed.
Source: the Income Tax Department’s own published text — its page for this instrument.