The Directorate of Income Tax (Systems) furnished the Instruction No. 06 of 2022 on November 28, 2022, to the Assessing Officers to answer for the intimation under tax section 245 issued by CPC, Bengaluru for a reduction in the time limit for furnishing the response to intimation under income tax section 245 by Assessing Officers.
Delhi High Court furnished because the writ of mandamus provided for the required action via the income tax department.
Laid on Instruction No.1 issued in F.No. DIT(S)- III/CPC/2012-13, on November 27, 2012, it is specified by the income tax department, the utility for the taxpayers along with the assessing officers to furnish the answer via the online mode would be furnished. The time duration is specified separately.
“It is observed that, in certain cases, consequent to the issue of intimation u/s 245, the assessees had responded on the demand portal that the demands are incorrect, in as much as that the demands are stayed by Assessing Officer/ITAT/High Court. It has been reported that incorrect categorization of such demands as “correct and collectable” or not providing feedback by the Assessing Officers on the assessee’s response has resulted in the incorrect adjustment of refunds by CPC against such demands, leading to avoidable grievances and litigations,” the income tax department expressed.
Although the assessing officers would be needed to furnish the answer in 30 days, in various cases no answer has been furnished which results in avoidable delays in the refund issuance, directed to the grievances and litigations, the department expressed. The same delay in furnishing the income tax refunds would render a load of interest u/s 244A.
It is seen that in the meantime of the issuance of instruction no 1 on 27th Nov 2022, the process of answering in the online mode was not being made till now. The same system to permit the taxpayers and the assessing officers to answer via online mode would be made and for a longer duration. Hence the taxpayer and assessing officer would seem to understand the significance of answering. For the above expression, it is required to lessen the time of 30 days each, till now it is permitted for answering and required to be lessened to prevent delays.
As per that the department who have settled the time limit of 30 days made available to the assessing officers to diminish it to 21 days.
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“For the sake of clarity, it is hereby reiterated that i. If the assessee either does not agree or partially agrees to adjustment, the matter shall be referred by CPC immediately to the Assessing Officer, who shall, within 21 days from the date of such reference, shall provide feedback to CPC as to whether the adjustment should be made or not, and in case of partial adjustment to be made then, amount of demand to be adjusted for each A.Y. needs to be specified in demand portal. ii. If no feedback is received from the Assessing Officer within 21 days, CPC shall either release the refund without adjustment or adjust the refund to the extent of demands agreed for adjustment by the assessee. iii. In partial modification of para 3(viii) of the CPC Instruction No 1, it is hereby directed that CPC shall not hold these refunds beyond the period of 21 days from the date of reference to the Assessing Officers and shall release the same to the assessee, without delay. iv. The Assessing Officers shall be held to be solely responsible for the effect of no response/ delays in response,” the department stated.
The assessing officer updated the demand portal post considering the submissions of the taxpayers in answer to the intimation u/s 245 stated above. The assessing officers would update the demand portal with the correct status of collectability or of the demands, as per the correctness of the tax demand. The status of stay, instalment, and others. Would be allotted via different heads/courts will get updated on the portal and then submit the same to CPC for preventing the wrong adjustments.
Post updating the demand portal of every taxpayer the assessing officers would be needed to tap the hyperlink submitted to CPC without which the assessing officer’s action does not complete and the needed information does not go to CPC.
Regular monitoring would be performed by the supervisory officers of the above-mentioned work perform by assessing officers.
