Income Tax : The framework clarifies that refunds can be claimed only through valid ITR filing and mandatory verification. It emphasizes proced...
Income Tax : The new Act continues the existing tax payment framework without altering compliance obligations. It simplifies presentation while...
Income Tax : Learn why refund claims are being paused under a risk-based system and how timely reconciliation or revision can ensure smooth pro...
Income Tax : Automated risk alerts are delaying income-tax refunds without clear reasons. The law allows withholding only through statutory pro...
Income Tax : Learn why the Income Tax Department is sending risk management SMS alerts and how they differ from scrutiny notices. This guide ex...
Income Tax : India's net direct tax collections fell by 1.34% to ₹562,827 crore by July 10, 2025, despite a 3.17% rise in gross collections, ...
Income Tax : Income Tax Department warns against wrongful refund claims in ITRs. Explains consequences like penalties, scrutiny, prosecution, a...
Income Tax : Out of 3.94 crore valid ITRs for AY 2024-25, refunds were processed for 3.68 crore. Reasons for delays include invalid bank detail...
Income Tax : The Finance Act 2023 integrates sections on refund set off and withholding into section 245 of the Income-tax Act, impacting how r...
Income Tax : Learn about the rise in tax returns filed in India, targeted campaigns encouraging filings, and steps taken by the government for ...
Income Tax : The Kerala High Court held that delay condonation applications under Section 119(2)(b) must comply with the revised five-year limi...
Income Tax : The Court held that adjusting a refund against a disputed demand during the subsistence of a stay order is illegal and arbitrary, ...
Income Tax : High Court held that adjusting the entire refund during operation of a Tribunal stay order contravened the order and required refu...
Income Tax : The Court directed the PCCIT to appoint a senior officer to re-examine a refund claim where both parties lacked decades-old record...
Income Tax : The Court directed tax authorities to release refund under Sections 240 and 244A with interest calculated up to the actual date of...
Income Tax : SOP for investigating high-risk refund cases for AY 2024-25. Clusters of suspicious ITRs identified and disseminated for verificat...
Income Tax : Insight Instruction No. 8 guides Assessing Officers in verifying high-risk refund ITRs for AY 2024-25, detailing steps for verific...
Income Tax : CBDT issues comprehensive guidelines for condonation of delay in filing returns claiming refunds or losses under Section 119(2)(b)...
Income Tax : Explore detailed guidelines & procedures for verifying high-risk refund cases using Insights investigation tool. Learn how to navi...
Income Tax : Discover how jurisdictional assessing officers verify high-risk refund cases with Insight Instruction No. 77. Learn the SOP and st...
In respect of cases where returns have been processed by the CPC, Bengaluru and refunds have been fully or partly adjusted against the past arrears while passing or communicating the order under Section 143( I) of the Act, without following the procedure under Section 245 of the Act, be carried out by 31st August, 2013 positively.
Getting notice from income-tax department becomes common today. Thanks to technological improvements and automated world of software coding. Often these software coding require modifications (rectification) that triggers mismatches and issues in the CPC Processing of income-tax returns. We could see that tax payers are saying that they are not getting the refund as claimed, or their tax payment were not considered by CPC or not tagged in their accounts on account of the system being followed in the tax mechanism.
In this case the assessee’s contention for interest under section 244A was not accepted by the Assessing Officer. The Assessing Officer observed that according to section 244A(2), if the proceedings resulting in refund are delayed for reasons attributable to the assessee, whether wholly or in part, the period of the delay so attributable to him shall be excluded from the period for which interest is payable. The Assessing Officer held that from the records it is seen that the above condition was directly applicable to the assessee’s case. He observed that the assessee-company was not able to produce the original documents and these were procured by the assessee-company much later to assessment proceedings. Accordingly, the Assessing Officer held that no interest under section 244A was to be granted.
In the result, the writ petition succeeds and is allowed. The respondents are directed to refund in all Rs.25 Lakhs seized from the petitioners on 17th of October, 2006 along with interest at the prevalent rate as provided for under section 132 B(4) for the period 16.12.2007 to 31.12.2008 and simple interest under section 244A on the said amount of Rs.25 Lakhs from 1st of January, 2009 to the date of actual payment at the rate of 18 per cent per annum within a period of two months, failing which they shall also be liable to pay the interest on interest amount @ 6 % per annum, as indicated above.
In the instant case, assessee a recognized trust invested its funds as per instructions of Government of India in various financial institutions and those institutions deducted tax at source from interest earned on fixed deposits. In order to claim refund of TDS erroneously deducted by the financial institutions, the assessee filed returns for relevant assessment years. The AO held that since said returns had been filed beyond the prescribed time-limit, they were to be treated as invalid returns and, thus, application for the TDS refunds was to be rejected. The CIT, however, refused to condone the delay in filing the returns on the ground that it was not a case of genuine hardship as envisaged under section 119(2)(b). Contending that the stance taken by the respondent authorities is contrary to law, the petitioner-trust filed this instant writ petition for appropriate relief.
I filed Income Tax return of my client in July 2012 for assessment year 2012-13 which was very well before the due date of 31 July 2012. I filed another return of my client in March 2013, which was approximately 9 months late. But see the irony! The Return filed in month of March got processed and return Filed in the Month of July is still not processed.
As per Hon’ble Delhi High Court’s Order dated 14-3-2013, the Department requires to follow the procedure prescribed u/s 245 before making any adjustment of refund payable by the CFC, Bengaluru. Accordingly, the assessee must be given an opportunity to file response or reply and the reply will be considered and examined by the Assessing Officer before any direction for adjustment is made.
In the present case there was no prior intimation of the proposed action of adjusting the amount of refund due to the assessee towards any other amount due from the assessee. It was an intimation informing the appellant that the amount of refund due for the assessment year 1997-98 stood adjusted against the outstanding demand for the assessment year 1995-96. It would not be same thing as a prior intimation of the proposed action. As the adjustment of the refund amount was made without following the provisions of section 245 and without giving a proper intimation the same was bad in law. The provisions of section 245 being mandatory in nature, any action taken contrary to such provision would be bad in law.
It is not disputed by the assessee that the return of income was filed beyond the time limit prescribed by section 139(1) and even section 139(4). Under sub-section (4) of section 139 the assessee ought to have filed the return on or before 31-3-2000. However, the return was filed only on 10-10-2000. Under general principles, a refund of taxes can be granted only where the return of income is processed under section 143(1) or an assessment is made under section 143(3) after inquiry.
Kind attention is drawn to the above mentioned subject. For the A.Y. 2012-13 e-filed returns cases till 22nd Jan. 2013, where refund is likely to be > = Rs. 10 lakhs are 28,444 in number, which are currently pending for processing at CPC. These ITRs are categorized as under :
