F.No.225/303/2014/IT  A.ll
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi, the November, 2014

To
The Chief Commissioner of Income-tax. Amritsar

Madam,

Subject:- Advisory for conducting scrutiny assessment proceedings in the State of Jammu and Kashmir, in the aftermath of Floods- regarding.

It has come to the notice of the Board that due to recent devastation caused by the floods in the State of Jammu & Kashmir, the income-tax assessees of that State are facing difficulties in ensuring compliance either with the  requirements  under ongoing  scrutiny  assessment  proceedings or with respect to notices u/s 143(2) of the Income Tax Act, 1961 ('Act') issued recently.

2 In such cases. where an assessee under scrutiny claims that he is unable to make certain compliances due to destruction of records, documents and books of accounts etc. in the floods, the Assessing Officer may ascertain from the district administration whether the area in  which the business premises of the assessee concerned is located and where the books of accounts, documents etc. are claimed to had been kept  was affected by the recent floods or  not.  If the difficulties conveyed by the assessees are found to be genuine and beyond his control making him unable to produce books of accounts etc., the pending assessments may be completed on the basis of materials available on record. The Assessing Officers are further advised to keep in mind the following points while finalizing assessments  in such cases:-

(i)      In cases of non-production of books of accounts, documents, records  etc. requisitioned u/s 143(2) I 142(1) of the Act, the Assessing  Officer,  even if invoking the provisions of section 144 of the Act, should avoid framing a high pitched assessment containing frivolous additions merely on account of non-production of relevant books of accounts, documents or records;

(ii)    Third  party  verifications,  if necessary,  should  generally  be  made  1n cases where  such third party is located outside the affected areas Taking recourse to special audit u/s 142(2A) and conducting surveys u/s 133A of the Act should only be done in cases with substantial merit and with prior approval of CIT concerned;

(iii) If a particular case has been completed  under scrutiny during earlier years, the records concerned could be perused to understand the trend in business activity. If it is possible to draw any reasonable and convincing inference, the same may be utilized while finalizing the pending scrutiny assessment:

(iv) Post-assessment action on recovery of outstanding demand should be decided by the Assessing Officer on a case to case basis and after taking into consideration the assessee's financial condition in the aftermath of floods;

(v)    The  Income-tax  Authorities  should  expeditiously  lake  all  necessary  steps  with adequate sensitivity to resolve grievances and difficulties faced by the tax payers.

4. The above may be brought to the notice  of  all  concerned  for  compliance.  Affected  tax payers may also be informed suitably through a Press Note to be issued by the CCIT, Amritsar.

Yours faithfully.

(Richa Rastogi)
Under Secretary (ITA.II)

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