Income Tax Demand and Notice under Section 245- FAQs

Many times we received the intimation under section 245 stating that the refund which you have claimed in income tax return will be adjusted against the outstanding demand. In such case, most of the assesses got panic and have various doubts as to how they should respond to this intimation. Hence, today I am writing this article covering most important FAQs relating to Section 245 and Outstanding Demand under Income Tax.

FAQs relating to Section 245 and Outstanding Demand are as under:

1. Why am I receiving Notice u/s 245?

Your return has been processed at CPC and the same has resulted in refund. The refund so determined is liable to be adjusted against the outstanding demand. Notice u/s 245 informs you of such demands against which your refund would be adjusted within 30 days from date of the notice u/s 245.

2. How do I view my outstanding tax demand?

• You can view outstanding demand by logging onto https://incometaxindiaefiling.gov.in with your user id and password. Go to ‘e-file’ tab-> Response to outstanding tax demand.
• Alternatively, you can also check the demand after login select “My pending actions” in “Dash Board” or click for “For Your action” in Worklist tab on the menu bar.

3. How do I respond to outstanding demand/ what is the action points needed to be taken up from my end for the outstanding demand? What should I do next after receiving the Notice u/s 245?

♠ Response can be made by logging into https://incometaxindiaefiling.gov.in with your user id and password. Go to ‘e-file’ tab-> Response to outstanding demand.

i. In case the demand shown is correct:-

a) Against the Outstanding Demand- click on ‘Submit response’ and then select->’Agree with Demand’. On receipt of the confirmation, demand will be adjusted against the refund and the balance of refund, if any, will be issued.

ii. In case the demand shown is partially correct

a) Against the Outstanding Demand- click on ‘Submit response’ and then select->’Demand is partially correct’. Enter the amount of Demand that is partially correct

b) For the incorrect demand, please follow the steps mentioned in step 3 below.

iii. In case the demand shown is incorrect

a) Against the Outstanding Demand- click on ‘Submit response’ and then select->’Demand is incorrect’

b) Give detailed reasons and attach relevant documents to show why the demand is incorrect in your view. This will be reviewed by the Department.

4. How to know the detail procedure to file online response?

To know the detail procedure for filing online outstanding demand response-> Please log onto https://incometaxindiaefiling.gov.in->Go to ‘Help Tab’ -> ‘Response to Outstanding tax Demand’

5. How to know my Jurisdictional Assessing Officer details:

To know your Jurisdictional Assessing Officer details -> Please log on to https://incometaxindiaefiling.gov.in and click on “Know Your Jurisdictional AO” under “SERVICES” menu.

6. What are the Consequences for not responding to this communication?

If no action taken by you within 30 days of receipt of the notice u/s 245, the outstanding demand as on that date will be considered for adjustment against your refund.

7. Whom should I approach to rectify the demand amount?

The return has been processed at CPC:

• File online Rectification to CPC by logging into https://incometaxindiaefiling.gov.inwith your user ID and password. Select “Rectification request” under My Account tab and enter the necessary details.

The return has been processed by Assessing Officer:

• Kindly file a rectification application u/s 154 with the Jurisdictional Assessing Officer.

8. How to know my Jurisdictional Assessing Officer details:

• To know your Jurisdictional Assessing Officer details -> Please log on to  https://incometaxindiaefiling.gov.in and click on “Know Your Jurisdictional AO” under “SERVICES” menu.

9. Where can I view the details of tax payment and TDS deducted?

• The tax payment and TDS data available with the Department can be seen in the Form 26AS statement. To check the 26AS statement please login to your e-filing account at https://incometaxindiaefiling.gov.in and go to “My Account -> View form 26AS (Tax Credit)”

10. How can I make payment for the outstanding demand?

• Tax payments can be made through a bank authorized to collect Income Tax payments, after filling in the necessary particulars in the Challan provided for this purpose or Online tax payments can be made through the website www.incometaxindia.gov.in under ‘e- Pay Taxes .
• Please make the payment quoting minor head “400” only, as wrong minor head may delay the process of settlement of the outstanding demands.
• Challan Status: You can ascertain the status of your payment Challan through the website https://tin.tin.nsdl.com/oltas/index.html.These payment will also be reflected in Form 26 AS statement. Please refer question No 3 for further details on Form 26AS.

11. I have made an error while making the payment through challan, how can it be corrected?

• In case you detect any mistake in the Challan after payment of the amounts you may approach the concerned bank branch within 7 days of payment for necessary correction in the challan. If the changes are to be made after 7 days of payment, kindly contact the Assessing officer for the correction.

12. Consequences for non-payment of tax demand?

• Non payment of tax demand attracts penalty and prosecution as per the provisions of the Income tax Act,1961 along with proceedings for recovery listed in Chapter XVII-D of the Income-tax Act, 1961.
• You are also liable to pay simple interest at the rate of one per cent for every month or part of a month for the period of default in accordance with section 220(2) of Income Tax Act, 1961.

13. How can I request for a copy of the order passed by CPC?

• In case you require the intimation order to be resent to you, please log on to https://incometaxindiaefiling.gov.in with your User ID and Password. Go to My Account tab  Request for intimation u/s 143(1)/ 154.
• The request can also be placed through CPC call center (Ph.No: 18004252229).

14. What are the common reason for tax demand raised and probable resolution for the same?

Listed below are some of the commonly noticed scenarios, which may result in demand while processing the return at CPC and suggested action! resolution for such scenarios. If the outstanding demand in your case is on account of any of the reasons below, you are requested to initiate the suggested action at the earliest.

S.No	Scenario	Resolution
1	Information in the Income Tax Return (ITR) or appropriate schedules are not filled up correctly and completely resulting in difference in computation of Total income/ Exemption/ Deduction/ Tax/ interest etc by CPC.	1. Please refer to the intimation sent to your email address. In case of variation in the figures of total income! Exemption/ Deduction/ tax/ interest etc, the relevant schedules which caused the error! difference are annexed to the intimation. On examination of these schedules, the tax payer may apply for rectification online by resubmitting the correct information! schedules. 2. Tax payer can apply for rectification u!s 154 of the Income Tax Act, through the procedure given below: a. Please log on to https://incometaxindiaefiling.gov.in with your user ID and password. b. Select “Rectification request” under My Account tab and enter the necessary details. c. Select appropriate Rectification Type based on information: (i) If change is required only with respect tax details – > Select “Tax payer is correcting data for tax mismatch only”. (ii) If change is required with respect to any other data -> Select-“Taxpayer is correcting the data in rectification”. (iii) If no changes required from assesse -> Select “No further data correction required. Reprocess the case”.
2	If tax credit as claimed by the assessee has not been allowed while processing.	Please refer the tax mismatch communication sent along with the intimation order to your email ID. Tax mismatch communication will contain the details of mismatch and possible resolution.

15. Other important points to be considered.

• The outstanding demand status can be viewed on the efiling by logging onto

https://incometaxindiaefiling.gov.in with your user id and password. Go to ‘e-file’ tab->Response to outstanding demand. If after a period of 30 days of your payment the tax demand is not updated at the aforementioned website, please feel free to contact the CPC Customer Care at 18004252229.

• If any of the demands is already paid, but the same continues to be shown as outstanding, please contact CPC Customer Care  18004252229 (Toll Free) or 080-22546500.

Disclaimer: The contents of this article are for information purposes only and does not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

(Republished with Amendments by Team Taxguru)