MINUTES OF BCAS MEETING HELD AT CENTRAL PROCESSING CENTRE OF INCOME-TAX DEPARTMENT AT BENGALURU
Mr. Sanjai Kumar Verma, CIT
Mr. B.K. Panda, Addl. CIT
Mr. Satish Goyal, Addl. CIT
Mr. R.K. Mishra, Addl. CIT
Dr. G. Manoj Kumar, Addl. CIT
Ms. Amrita Ranjan
Mr. Ravishankar P, Tower Head BPO, India Business Unit, Infosys BPO Limited
Mr. Gautam Nayak, Chairman, Taxation Committee;
Mr. Ameet Patel, Chairman, Infotech & 4i Committee;
Mr. Nitin Shingala, Hon. Joint Secretary
The meeting began with a welcome address by Mr Verma who introduced his entire team to the BCAS representatives. Mr Verma also presented the BCAS representatives with copies of the internal newsletter published by the CPC. Thereafter, Mr R.K. Mishra made a presentation in which several facts about the CPC and the processing of returns were brought out. The presentation was accompanied by a very interactive discussion. Several new facts about the processing procedure and the various issues that tax payers face and various issues that the CPC faces were discussed. The gist of the discussion is as under:
ABOUT THE CPC:
3. The present strength of the IT department in the CPC is 35. In addition to this, about 150 people from Infosys also operate from the CPC. Returns are processed in a batch mode. It can process more than 100,000 returns per day. Almost 40% of the total returns filed in the country are currently being processed by the CPC.
10. CPC has already finished processing of all eligible returns (as mentioned in 6 above) where ITR-Vs have been received by it or where returns are filed using digital signature for A.Y. 2010-11. The status of processing can be seen on the E-filing website. The average return processing time was 93 days for that year.
COMMON MISTAKES THAT ARE NOTICED BY THE CPC:
1. The statistics prepared by the CPC show that the most common reason for rectifications being sought in respect of demands raised are following types of mistakes committed while preparing and/or uploading the e-returns:
a) The private software used by tax payers does not generate accurate XML files. At times, the xml file generated by the software does not pick up details of certain schedules, but only totals of those schedules. Mr Verma informed the BCAS representatives that the CPC had a meeting with a few software developers and had pointed out the deficiencies in the software to the developers.
b) Depreciation as per books of account is not added back by taxpayer while depreciation as per Income-tax Act is claimed as a deduction. This results in double deduction being claimed.
c) Chapter VI-A deductions are not entered properly.
d) Mismatch of tax payments as entered in the Return and as appearing in the Form 26AS due to mistakes in entering BSR code, SL no, Amount or date of deposit. Taxpayer has entered minor head as 400 – regular payment of tax instead of minor head 300-Self assessment tax
e) Wrong amounts of tax payments entered into the Return. It should be noted here that the software matches the exact amount and even if there is a difference of Re 1, the system will reject the amount entered by the tax payer and not give credit.
f) Wrong PAN of tax deductee entered in the system by the tax deductors
g) Wrong TAN of deductor entered in the Return by the deductee
h) Wrong CIN details entered in the Return
2. Apart from the above, in many cases, the following data is fed incorrectly in the Return:
a) Email ID: It should be noted here that the CPC’s software picks up the email ID as entered in the ITR form and not the one registered on the e-filing website since this would be the latest email
b) Bank account details: These must be correctly entered in the Return. The account number, BSR Code and MICR Code are very important. Even if there is a single digit difference, the ECS will not take place successfully. Incorrect bank account or giving bank account that has been closed would result in rejection of RO while presenting.
c) Address of assessee: If the address is wrongly mentioned in the Return, the refund cheque and the Intimation sent to the assessee will be returned unserved.
d) ITR-V not being sent: There are a large number of returns filed electronically for which ITR-V is not received by the CPC (around 7%). If the same is not received within time, the e-return will be treated as void ab initio.
3. For Assessment Year 2009-10, as against 45.20 lakh returns processed, rectification applications were received in 5% (2,24,753) of the cases, whereas for assessment Year 2010- 11, as against 71.20 lakh returns processed, rectification applications were received only in 1.3% (90,698) of the cases.
REQUEST MADE BY CPC TO THE CA FRATERNITY:
a) PAN of the tax payer
b) Date of Birth/Incorporation of the tax payer
c) Communication Number mentioned on the CPC generated document/mail/intimation received by the tax payer
If the above are not readily available, the call will not be successful.
Also, in case the query is not resolved immediately, a ticket number can be requested for, on the basis of which subsequent follow up can be made.
6. When a tax payer receives an Intimation generated by the CPC and a demand is payable, after the demand is paid, there is no need to send the challan to the CPC or to inform the CPC or seek rectification. Since all tax payments are now recorded in OLTAS, the CPC gets automatic intimation about the payment.
7. At the time of data entry into the ITR form, as far as TDS entries are concerned, there was no need to fill in individual items appearing in a particular TDS certificate. The CPC was only concerned with the total amount reported by a deductor against a particular TAN and whether it is TDS on salaries or Other than Salaries. If that amount and the TAN tallies with the total amount of TDS reported by the concerned deductee in his return against the same TAN, then the CPC would grant credit for the said TDS. It was not necessary to mention individual amounts contained in every certificate. Similarly, it follows logically that a person can add up the total TDS as per the 4 quarterly certificates from the same Deductor, and show the total TDS for the year against that Deductor.
ADJUSTMENT OF OLD DEMANDS AGAINST REFUNDS PROCESSED BY CPC:
It was pointed out by the BCAS representatives that in a large number of cases, the CPC had adjusted refunds for A.Y. 2008-09, 2009-10 or 2010-11 against the demands for earlier years and that in most cases, the said demands were either non existent or were incorrect or the assessee was not even aware of their existence.
This issue had been pointed out to CPC by other tax payers as well. The CIT explained the process involved in this regard. The CPC had created a special portal where the field officers were requested to upload all pending demands of all tax payers. The field officers were educated by the CPC through instructions on the use of the portal and on the importance of verifying the demands properly before uploading (a summary of which would be provided to BCAS for circulation amongst members to facilitate follow up with jurisdictional officers). Despite this, it may be possible that many disputed demands have been uploaded onto the portal. CPC has conducted training for field officers and would meet with the CCITs, to clarify these issues and once again request them to instruct the field officers to carry out immediate rectifications in respect of disputed demands and upload only the correct information onto the portal. Mr Verma clarified that the CPC, being a back office, cannot go into the details of the demands and had no jurisdiction to carry out rectifications of old orders (which has not been processed by the CPC). This responsibility lay with the jurisdictional field officers.
The BCAS representatives suggested to the CPC to explore the possibility of giving an auto generated email alert to a tax payer as soon as an arrear was uploaded against his name by a field officer. This would give an opportunity to the tax payer to approach his jurisdictional Assessing Officer to carry out rectifications, if any, and revise the demand figure on the portal. The CPC should give a period of 30 days from the date of the email alert to allow a tax payer to get the rectifications carried out. The adjustment of the refunds should be done only after the said period of 30 days. To enable taxpayers to be aware of tax demands already shown as outstanding against them, it was suggested that the details of such demands could be made available in respect of each taxpayer on the e filing website under “My Account”, which a taxpayer could access after registration and log in, so that a taxpayer could become aware of such incorrect demands already uploaded. Mr Verma noted the suggestions and mentioned that he would look into the feasibility of the suggestions.
Mr. Verma also pointed out that in case of refunds already adjusted against incorrect demands of earlier years, the concerned taxpayers would have to approach the jurisdictional officer seeking cancellation of the demand wrongly uploaded against which the refund had been adjusted, and seek a refund for that particular earlier assessment year. The CPC would not be able to make changes in the adjustments already made since the said adjustments had already been posted into the Govt’s accounts for the respective assessment years.
CHANGES EXPECTED IN THE NEAR FUTURE:
The e-filing program is likely to be expanded further.
OTHER IMPORTANT ISSUES:
a. cases of income accruing to co-owners of a property, where the TDS certificate was generally issued only in one name,
b. cases where PAN of deductee was not mentioned in TDS returns,
c. cases of clubbing of income, where TDS was deducted under one PAN, but income was offered to tax and TDS claimed against another PAN.
He informed that these too had been referred to the CBDT for clarification, and were pending with the CBDT. It has been proposed to the CBDT that all these cases (including mismatch on account of method of accounting) should be processed by the jurisdictional officers.
3. In case of online applications for rectification, these were normally processed within 2 months. These applications were processed after being vetted by the tax officials in the CPC.
4. The BCAS representatives informed Mr Verma that the details of rectification of mistakes in the Intimations that were carried out by the CPC were not appearing on the website in the “My Account” details of a tax payer. If a copy of the rectification order was also made available on the site, it would make the entire sequence of events complete on the site. Mr Verma noted the suggestion and agreed to look into the feasibility of the same.
5. It was also suggested by BCAS that a bulletin board should be made available on the website, to facilitate interaction with the CPC in relation to pending rectifications, etc.
The BCAS team appreciated the efforts put in by the CPC team in setting up the CPC facility in record time and achieving magnificent performance of speedy processing of returns. It also expressed its sincere thanks for the very proactive, warm and friendly approach of Mr. Verma and his team.
The meeting ended with a tour of the entire CPC facilities.