Tax officials will now have to decide on refund adjustment in 21 days, department gives relief to taxpayers
The officers will give their opinion to the CPC within 21 days on whether the adjustment can be made or not. The Assessing Officer, under section 245 of the Income Tax Act, can adjust the refund against any tax demand outstanding on behalf of the taxpayer.
The Income Tax Department has given relief to the taxpayers in connection with adjusting the refund against the outstanding tax. Tax authorities will now have to decide on such cases within 21 days. Earlier this period was 30 days. This decision will reduce litigation. According to the statement issued by the Income Tax Department, if the taxpayer does not agree to the adjustment or partially agrees, the case will be immediately sent by the Central Processing Unit (CPC) to the Assessing Officer.
The officers will give their opinion to the CPC within 21 days on whether the adjustment can be made or not. The Assessing Officer, under section 245 of the Income Tax Act, can adjust the refund against any tax demand outstanding on behalf of the taxpayer. If the taxpayer disagrees with the tax demand, he can reply to the intimation notice. The Directorate of Income Tax says that although the Assessing Officer has to respond within 30 days, in many cases the response is not given on time. This leads to delays in the issue of refunds, leading to complaints and litigation. Such delay in the issue of a refund is leading to the additional burden of interest.
Refund incorrectly adjusted
In many cases involving the adjustment of refunds, the CPC observed that the wrong classification of demand or non-receipt of response from the Assessing Officer resulted in the incorrect adjustment of refunds. As a result, unnecessary litigation took place. Following the fresh instructions, the difficulties faced by the taxpayers will be resolved expeditiously. The directive also reiterates the obligation of the Assessing Officer to update the exact demand position based on stays granted by various authorities and installments taken.
