Letter [F.No. 246/94/2012-H&FAC-I], dated 12-9-2012

What this is

Letter [F.No. 246/94/2012-H&FAC-I], dated 12-9-2012 was issued by the Central Board of Direct Taxes on 12 September 2012. Its subject is Delay in receipt of replies from the AG leading to avoidable remedial action.

What it does

Calls for figures on a problem the Chief Commissioners raised at their conference: because the Accountant General's reply on whether the department's answer to an audit objection is accepted often does not come in, remedial action is started anyway, and when the acceptance eventually arrives the action has to be dropped. In some cases assessments reopened on account of a pending audit objection were completed and produced infructuous demands. Each Chief Commissioner is asked to send, immediately, the number of cases where remedial action had to be started for want of a reply and was later dropped, and the cases where the assessment was completed and an infructuous demand resulted, so that the matter can be taken up with the Comptroller and Auditor General and other appropriate authorities.

Why it was issued

Chief Commissioners raised the point at their recent conference, and the Board wanted the data before taking it up with the audit authorities.

Who it reaches

• Assessees reopened only because an audit objection was pending
• Assessees carrying a demand that the department itself would call infructuous
• Chief Commissioners and Commissioners compiling the figures
• Assessing Officers taking remedial action on audit objections

The instrument, as the Board published it

Delay in receipt of replies from the AG leading to avoidable remedial action
letter [F.NO. 246/94/2012-H&FAC-I], dated 12-9-2012
During the recent Chief Commissioners Conference some of the Chief Commissioners mentioned that due to non-receipt of replies from the AG regarding acceptance of replies of the Department on the audit objections or otherwise, remedial action is being taken and subsequently when the communication accepting the position of the Department is received such remedial action is to be dropped and in some cases infructuous demands were created on completion of assessments reopened on account of pendency of audit objections.
2. I am to request you to furnish the details, including number of cases in which remedial action had to be initiated due to non-receipt of reply from AG and subsequently the proceedings had to be dropped on receipt of reply from AG accepting the Department's reply and of cases wherein assessment proceedings were completed in such cases resulting infructuous demand.
3. This Information may be furnished immediately so that the matter could be taken up with CAG/other appropriate authorities.
■■

What to watch

• This is a data call, not an instruction: it neither stops a reopening on a pending audit objection nor directs any demand to be dropped.
• Its value to a taxpayer is as the department's own record that reopening merely to keep an audit objection alive has produced demands it accepts are infructuous.
• No form, format or period is prescribed for the information sought.
• It is an internal communication and confers nothing on an assessee.

Where you meet it

Where a reassessment has been made only to protect an audit objection and the objection is later dropped, leaving a demand outstanding.

← Letter [F.NO. Addl. DIT/INTL. TAXATION/2012-13], dated 19-9-2012  ·  Order No. 9/FT&TR/2012 [F. No. 500/15/2011-FT&TR-1], dated 7-9-2012 →