Income Tax Instruction No: 01/ 2005  dt.18-Mar-05- Discontinuance of Advice
Notes issued with Income Tax Refund Orders for Refunds up to Rs. 24.999/-



To

All Chief Commissioners of Income Tax & Directors General of Income Tax.

Reference Is invited to the following Circulars/ Instructions issued by
DOMS/CBDT from time to time wherein the procedure for issue of Refund
Orders was detailed: -

(1) DOMS Circular No. 3 dated 15.7.1980.

(ii) DOMS Circular No. 54 dated 16.12.1987

(iii) DOMS Instruction No. 58 dated 8.2.1988

(iv) CBDT Instruction No. 15/2003 dated 6.11.2003

2. With a view to improve Taxpayers service, the Board has decided to
discontinue the system of sending Advice Notes to the bank separately in
cases of refunds up to Rs. 24,999/-. Under the new system, no Advice Note
would be generated for refund orders up to an amount of Rs.24.999/-. For
refund orders of Rs. 25.000/- and above, one Advice Note would be made,
which would be sent to the Main Branch of State Bank of India. One
counterfoil of the refund cheque would continue to be retained by the
assessing officer for all refunds Issued by him regardless of the amount of
refund. All refunds of Rs. 25.000/- and above will now be drawn on only the
Main Branch of State Bank of India. The other branches in any station will
handle refunds only up to Rs.24,999/-.

3. The above changes in refund procedure will involve the following steps:-

(a) Issue of fresh refund stationery for different direct taxes with
cheques drawn on various branches of State Bank of Indiawith their
respective MICR codes.

(b) Issue of new types of refunds stationery for different direct taxes:

(i) for refunds up to Rs. 24.999/- (one refund cheque for assessee and one
counterfoil to be retained by the Assessing Officer).

(ii) for refunds of Rs. 25,000/- and above (one refund cheque for assessee,
one advice note to be sent to the Main Branch of State Bank of India and
one counterfoil to be retained by Assessing Officer.

(c) Distribution of the new refund stationary to all assessing officers.
Each assessing officer would receive one set of refund stationary for
refunds up to Rs.24,999/- for Corporation Tax and Income Tax and another
set of refund stationery for refunds of Rs.25,000/- and above for
Corporation Tax and Income Tax. Similarly, separate refund stationery for
Wealth Tax and other direct taxes would also be distributed.

(d) Surrender of unused old refund stationery by all assessing officers to
DIT(RSP&PR) after the new stationery is introduced.

4. Steps in this regard have already been Initiated by the Directorate of
System and Directorate of RSP&PR and the new refund stationery shall be
made available at all Held stations before the date of switchover to the
new system. Necessary steps for distribution of new refund stationery,
surrender of unused old stationery and Informing the assessing officer of
the new procedure of issuing refund orders have to be taken by the Chief
Commissioners/Directors General.

5. The monetary celling of Rs.24,999/- for issuance of refunds without an
Advice Note would also apply to Wealth Tax, Gift Tax and all other direct
taxes.

6. The Instructions Issued earlier on the subject may be treated as amended
to the extent indicated above. The security measures and other instructions
mentioned In the earlier Circulars/ Instructions will however continue to
be followed scrupulously.

7. The new refund procedure Is proposed to be introduced with effect from
1.4.2005. However, the exact date of switchover to the new refund system
will be communicated to the Board by a separate order.

Sd/-

Anand Jha

Director (Budget)