Income Tax Department under its reminder campaign, sent email to around 1.74 Lakhs Taxpayers on 14/04/2020 with the Subject line regarding “Claim of Refund in your Income Tax Return for AY <Assessment Year> – <PAN> “. The said email states that “Your Income Tax Return has been selected under risk management process wherein your confirmation is required on the claim of refund. You are requested to submit your response in the e-Filing Portal post login by selecting either of the given two options.” Every Taxpayer who has received such email from Income Tax Department is now looking for reason of selection of Income Tax Return by Risk Management Process and how to resolve the matter. In case your Income Tax Refund is also pending & you have not checked your email yet or the latest email ID is not updated in the E-filing Portal, you should also check the same at the earliest from E-filing Portal.
Confused about the questions relating to Risk Management Process??
Many questions come to the mind of Taxpayers like:- What is the Risk Management Process of Income Tax Department? Why my Income Tax Refund not received till date? Why Income Tax Refund has been put on hold? What can be probable reason of selection of my ITR under such Risk Management Process? What documents Income Tax Department will verify? Which option I need to select out of given two options in the email? Ministry of finance has already asked to department to expeditiously release the refunds upto 5 Lakhs. Why Tax Department is sending such emails even when entire country is under Lockdown due to outbreak of Corona Virus? You may be also facing any of such question/s and looking of definite answer/s. Let us understand what the matter all about is!!
Press Release about clearance of Pending Refunds upto Rs.5 Lakhs
On 8th of April, 2020 Ministry of Finance with a view to provide certain relief to Taxpayers of the country, issued the Press Release “In the context of the COVID-19 situation and with a view to provide immediate relief to the business entities and individuals, it has been decided to issue all the pending income-tax refunds up to Rs. 5 lakh immediately. This would benefit around 14 lakh taxpayers”
Email from IT Department about Submission of Response relating to IT Refund
However, on 14th of April, 2020 few taxpayers received following email from Income Tax Department with the Subject line regarding “Claim of Refund in your Income Tax Return for AY <Assessment Year> – <PAN> “
“ Dear Taxpayer, It is seen that a claim of refund has been made in the Income Tax Return xxxxxxxxxxxxxxxxx (e-filing acknowledgement number) @ for 20YY (A.Y.) filed by you on DD-MMM-YYYY.(Date of Filing of ITR). Your Income Tax Return has been selected under risk management process wherein your confirmation is required on the claim of refund. You are requested to submit your response in the e-Filing Portal post login by selecting either of the following options:
1. The claim of refund is correct to the best of my knowledge and belief.
2. Return of Income is being revised wherein, correct claim of refund shall be made.
To submit the above mentioned response, please login to e-Filing portal, Go to Worklist->For Your Action-> Response for Refund Confirmation. Please verify the claims made in your Return of Income filed and submit your response accordingly.
In case of any incorrect claims, please revise your Income Tax Return (ITR). Please submit your response within 30 days of receipt of this e-mail. “
Clarification from CBDT regarding email for pending Income Tax Refunds
Thereafter, Immediately CBDT by Press Release on 15/04/2020, clarified the matter of such emails to Taxpayers as follows:-
“In pursuance to the Government’s decision vide Press Note on 8th April 2020 to issue pending Income Tax Refunds up to Rs 5 lakh in order to help taxpayers in a COVID-19 pandemic situations, the Central Board of Direct taxes (CBDT) today said that it has already issued over 10.2 lakh refunds totaling to around Rs. 4,250 crore as on 14 April 2020. These refunds are over and above the 2.50 crore refunds already issued in FY 19-20 till 31 March 2020 totaling Rs 1.84 lakh crore.
The CBDT further said that about 1.75 lakh more refunds are in the process of issuance in this week. These refunds would get credited directly to the taxpayer bank account in 5-7 business days from issuance. However, in around 1.74 lakh cases, email responses are awaited from taxpayers regarding reconciliation with their outstanding tax demand for which a reminder email has been sent asking them to respond within 7 days so that the refund can be processed accordingly.
It may be noted that these reminder emails from I-T department are in fact for the benefit of taxpayers as it seeks them to confirm their outstanding demand, their bank accounts and reconciliation of defect/mismatch prior to issue of refund.
The CBDT appealed that it is in the interest of taxpayers to provide a response to such emails at the earliest so that refunds could be processed and issued at the earliest. CBDT has requested taxpayers to check their email and login to their e-filing account to respond to the I-T Department immediately.
The CBDT also said that it has noted in a few media, including social media, some questions are being raised with regards to CBDT’s computerised email to the taxpayers to respond within 7 days for enabling the department to process refund. In this regards, it is clarified that these are the necessary routine process related communications to the taxpayers to seek response on defective ITRs, prima facie adjustments and where confirmation is sought about certain claims made by them. In all such cases, a quick response from the taxpayer would enable the I-T Department to process their refunds expeditiously. “
Why Income Tax Refund is not received?
After reading the above email & Press release/s, you must have understood the reason for hold on your Income Tax Refund by Risk Management System Process (based on certain risk parameters in the system) may be as under-
1. Any Income Tax Demand is outstanding against you for any earlier assessment year/s & you have not submitted the response. In case of non-response/wrong response, refund will be adjusted u/s.245 to that extent
2. You have submitted Bank Account details for Refund, which is common in one or more ITR/s filed by another Tax Payer/s. e.g. You are joint account holder in the bank along with your son & wife. All of you 3 persons have submitted same bank account for getting refund. However the fact is not known to Income Tax Department’s system. Tax department want to make sure that the correct bank account details have submitted for refund or someone wrongly (intentionally or unintentionally) fed another bank account details.
3. You have not submitted response to prima facie adjustments u/s.143(1)(a)
4. You have not submitted response to Defective Income Tax Return notice u/s. 139(9)
5. You have claimed Tax Rebates/Deductions/Exemption over & above Form 16. For example, you have claimed deduction (80C/80D/80G/80E/etc) over and above amounts reflected in Form 16 for LIC/Tuition Fees/Medical Policy/House Loan interest/House loan principal repayment/House rent allowance exemption/Donation. In case that the same thing is being done every year in the ITR, you may be high risk assessee. Department will ascertain the genuineness of claim with supporting documents.
6. You may also verify the 26AS and Compliance Portal/Insights Reports for various Tools/Reports available and cross verify with details filed in ITR for any incorrect information furnished. Further you may take assistance of E-Filing Helpdesk Team of Income Tax Department by calling at their Toll Free Number /writing email to them/using e-nirvan/e-grievance option available at e-filing portal.
7. In case you have not received any such notice/communication from department, but still the refund has not been received, then you may also check that incorrect IFSC Code/Bank Account Number/Closed bank account details may have been given at the time of filling of ITR. You can now submit Refund Reissue Request at E-filing Portal.
Thus, you need not to worry about the communication received from Income Tax Department & file your response according to the facts of the case. In case some mistake has been done at the time of filing of return, you can opt to file the revised Income Tax Return. In case you think that all the figures & facts are already correct in the return filed, then you may file the response accordingly. In later stage if any notice is issued by department & you could not justify the same with proper documents, you may be liable for heavy penalty and Interest.
Please refer all the relevant section, rules, notifications and amendments as applicable. The Author is not responsible for any losses incurred. Content is merely for sharing knowledge & Educational Purpose only.
Author can be reached at [email protected] for any queries, issues & recommendations relating to article.