/ Direct Tax

Timeline reduce to 21 day for filling response of 245 notice

intimation Under section 245

Directorate of Income Tax (Systems) issue instruction to AO on time bound reply to response against intimation U/S 245

  • Central Board of Direct Taxes has issued Instruction No. 06 of 2022 to the AO for response to notice / intimation U/s 245 issued by Centralised Processing Centre Bangalore for decreased in timeline for filling response to notice or intimation under section 245 by the AO.
  • This is in the light of the directions of the High Court of Delhi, issued on their own motion due to writ of mandamus issued for necessary action by the Tax Dept.
  • In Few matters, consequent to the issue of notice or intimation under section 245, the Income tax assessees had responded on the demand portal that the demands are incorrect, in as much as that the demands are stayed by AO or High Court. or Income Tax Appellate Tribunal
  • It has been reported that incorrect categorization of such demand as “correct and collectible” or not providing feedback by the AO on the Income tax assessee’s response has resulted in incorrect adjustment of Income tax refunds by Centralised Processing Centre Bangalore against such Income tax demands, leading to avoidable litigations & grievances.

response-to-outstanding-demand intimation Under section 245

  • If the Income tax assessee either does not agree or partially agrees for adjustment, the matter shall be referred by Centralised Processing Centre Bangalore immediately to the Assessing Officer, who shall, within Twenty One days from the date of such reference, shall provide feedback to Centralised Processing Centre Bangalore as to whether the adjustment should be made or not, and in case of partial adjustment to be made then, amount of Income tax demand to be adjusted for each Assessment Year. Requires to be prescribed in income tax demand online portal.
  • In case no feedback is received from the AO within Twenty-One days, Centralised Processing Centre Bangalore shall either release the refund without adjustment or adjust the Income tax refund to the extent of demands agreed for adjustment by the Income tax assessee.
  • The Directorate of Income Tax (Systems) issue the instruction that Centralised Processing Centre Bangalore shall not hold these Income tax refunds after the period of Twenty-One days from the date of reference to the Assessing Officers & shall release the same to the income tax assessee, without delay.
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