In this article, we are giving a deep explanation about intimations under income tax section 245 for outstanding tax demand.
Through the assistance of E-filing of income tax returns (ITR), it is simpler for the assessee and the tax department to file the taxes. The processing of ITRs, providing intimation under Section 143(1), furnishing the rectification under Section 154, and processing of refunds would be quicker when performed online.
But the same is seen that in various cases the assessee has obtained the intimations under section 245 in which the former outstanding demand for the former years would get managed with respect to the present year’s refund.
There are cases that ask for adjustments related to the assessment years before AY 2012-13 i.e when the e-filing wasn’t compulsory. The question which comes in the mind is if it is sufficient to only furnish an answer on the income tax portal.
Refund Adjustments for Intimations Under Section 245
The income tax authorities have the power under section 245 for managing any former year’s demand with the refund amount due to the assessee. No restriction of time is there to manage the outstanding demands with due refunds.
Hence under the law, the tax demand for AY 2000-01 could be managed with respect to the due refund, AY 2021-22. But the same adjustment could be incurred post to providing the intimation in writing to the assessee and furnishing him with the chance to answer the asked adjustment.
The answer should be furnished via the portal. The income tax portal furnishes the assessee with the choice to either approve or oppose the demand and the suggested adjustment. CPC gives 30 days from the issue date of the initiation (communicated on the registered email address) for furnishing the reply.
When the reply does not get rendered within 30 days then the assessee would be considered to accept the outstanding demand and the refund gets adjusted as per the same. Hence same is essential that the assessee submits his disagreement on the portal within 30 days.
Deep Analysis of Intimations Under Section 245
Now seeing when the demand gets raised. The intimation only delivers the amount of the outstanding demand (tax amount and interest) along with the year to which the demand is related. Information, break up, nature, and backup documents of the tax demand would not be available with the intimation.
In that case, the assessee is not required to ask his jurisdictional assessing officer and urge for the breakup/facts with backup assistance the demand and file a rectification application as per that.
Read Also: Easy Guide to e-Notices with Its 6 Types As Per Income Tax
There might be a situation that comes in which the outstanding demand related to the assessment year to which the demand would have been furnished previously or diminished via an appellate order.
In these cases, the disagreement including the information of the challan or assessment order could be updated online and CPC would get processed and update your information.
The same procedure might cause some problems for the assessee, but in the future, the same process would assist the assessee to prevent any other setbacks.
