It has been observed that a large number of assessees are finding outstanding income-tax demands on the portal relating to very old assessment years, in some cases as old as AY 2007–08, i.e. almost 15 years old.
The common features of such demands are as under:
1. The demand has appeared for the first time on the Income-tax portal around 2022, i.e. nearly 15 years after its alleged creation.
2. In many cases, service of the relevant assessment order / demand notice is not available, due to which the assessee was deprived of the opportunity to file an appeal within the prescribed time.
3. Without proper service of notice, the demand itself is not legally tenable.
4. Such old demands have been adjusted against refunds of subsequent assessment years, without following due process.
5. No prior intimation / show-cause notice under section 245 was issued, thereby denying the assessee an opportunity to explain why such demand should not be adjusted against refunds.
6. No notice for recovery under section 226 was issued for collection of the alleged demand.
7. Despite the above serious procedural lapses on the part of the Department, the demand continues to appear on the portal along with interest.
We understand that thousands of assessees across the country are facing hardship due to such old disputed demands, though the factual matrix may vary from case to case.
Legal Position (As Understood)
- Filing of appeal or rectification application under section 154 is could not be possible due to non-service of original orders and limitation issues.
- Income-tax authorities do not have powers to waive such demands, even where there are clear procedural irregularities.
- CBDT cannot grant waiver under section 119 in individual cases.
- The only effective solution appears to be issuance of a general order / instruction by CBDT under section 119, granting relief to assessees where such demands suffer from fundamental lapses on the part of the Department.
Way Forward
In view of the above, all aggrieved assessees and tax professionals are requested to submit applications to CBDT under section 119 highlighting this issue.
(A draft application under section 119 is enclosed as Annexure-1 for reference.)
It is hoped that CBDT will consider issuing a suitable general order, considering the large-scale hardship caused to assessees due to no fault of theirs.
Assessees facing substantial demands may also consider filing writ petitions before their respective High Courts, which may help in expediting resolution of the matter from the CBDT.
WhatsApp Group for Deliberation
A dedicated WhatsApp group titled “Income-tax Old Demands” has been created to deliberate, share experiences, and coordinated efforts on the issue.
Link for Whatsapp group- https://chat.whatsapp.com/LrTHwreocQU1E8WWqRIvsF
Interested assessees and professionals may join the group purely for their own cause.
There is no intention on my part to exert pressure on the Department. The sole objective is to assist genuine assessees who are facing hardship due to procedural lapses not attributable to them.
Format of Draft Application under Section 119 of the Income-tax Act, 1961 seeking relief from old income-tax demand appearing on the portal after several years
To
The Chairman
Central Board of Direct Taxes (CBDT)
Department of Revenue
Ministry of Finance
North Block
New Delhi – 110001
Subject: Application under Section 119 of the Income-tax Act, 1961 seeking relief from old income-tax demand appearing on the portal after several years
Respected Sir/Madam,
I, __________________________ (Name of the assessee), PAN __________________, resident of __________________________, most respectfully submit this application under section 119 of the Income-tax Act, 1961, seeking relief from an old income-tax demand that has appeared on my Income-tax portal after an inordinate delay, causing genuine hardship.
Facts of the Case
1. An outstanding demand relating to Assessment Year __________has been reflected on my Income-tax portal.
2. The said demand has appeared for the first time on the portal in the year __________, although it pertains to a very old assessment year.
3. No assessment order / demand notice was ever served upon meat the relevant time, nor is any proof of service available on the portal.
4. Due to non-service of the assessment order, I was deprived of my statutory right to file an appeal within the prescribed limitation period.
5. In absence of valid service of notice, the existence and enforceability of the demand itself is doubtful.
Procedural Lapses Observed
6. The aforesaid demand has been adjusted against my refund(s) for Assessment Year(s) __________, without issuing any prior intimation or opportunity of being heard.
7. No notice under section 245of the Income-tax Act, 1961 was issued to me before adjustment of the refund.
8. Further, no recovery notice under section 226was ever issued for collection of the said demand.
9. Despite the above serious procedural lapses, the demand continues to reflect on the portal along with interest, even after adjustment of refunds.
Hardship Faced
10. I am left without any effective statutory remedy, as:
- Filing of appeal is time-barred due to non-service of the order; and
- Rectification under section 154 is not feasible in absence of the original order.
11. The continued reflection and recovery of such old demand is causing severe financial and mental hardship, without any fault on my part.
Legal Limitation
12. I understand that lower income-tax authorities do not have the power to waive such demands, even where procedural lapses are evident.
13. Individual relief under section 119 is also not ordinarily granted, and therefore intervention of the Hon’ble CBDT by way of a general or special order is the only effective remedy.
Prayer
In view of the above facts and circumstances, I humbly pray that the Hon’ble CBDT may kindly:
- Grant relief under section 119 of the Income-tax Act, 1961by directing deletion / waiver of the aforesaid demand; or
- Issue appropriate instructions to the concerned authorities to remove such old demands where service of assessment order cannot be established and due process has not been followed.
This application is made in good faith and without any intention to challenge or put pressure on the Department, but solely to seek relief from genuine hardship arising due to procedural lapses beyond my control.
I shall be highly grateful for a sympathetic consideration of my request.
Thanking you,
Yours faithfully,
Signature: ________________________
Name of Assessee: ________________________
PAN: ________________________
Assessment Year(s): ________________________
Address: ________________________
Mobile No.: ________________________
Email ID: ________________________
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Readers may approach me with their comments at my E-mail id – ptcppt@gmail.com
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