Intimation u/s 245 of income tax act

Submit manual representations and proof of part-payment directly to your jurisdictional Assessing Officer alongside a Section 154 application to correct the old demand records of A.Y. 2016-17.

Section 245 is an intimation, not a demand order - you have options here even after so many years.

The good news is that the original mismatch was a tax credit issue, which falls squarely under Section 154 (rectification of mistake apparent from record). If Form 26AS showed the credit correctly and the AO is going off a different figure, that is rectifiable. Here is what to do:

Step 1 - Check the outstanding demand on the e-filing portal under Pending Actions. See if the demand has been confirmed or is still at the intimation stage.

Step 2 - File a Section 154 rectification online for AY 2016-17 citing the Form 26AS credit mismatch. Attach the Form 26AS and the original payment proof.

Step 3 - Simultaneously respond to the Section 245 notice on the portal (Services > Response to Outstanding Demand). You can dispute the demand or request the AO to verify before adjusting your refund.

Step 4 - If the online rectification has time-bar concerns (Section 154 petitions can be filed within 6 years of the assessment, so AY 2016-17 may still be open until AY 2022-23 technically), a manual representation to the AO citing Form 26AS evidence is the fallback.

The compounding interest situation is tricky, but if the underlying demand was wrong, the interest also falls away once it is rectified.

This [Section 245 income tax notice guide](https://taxgarden.in/blog/section-245-income-tax-notice-refund-adjusted-demand-india) explains the full process of responding and getting your refund released.

Yes, you can still seek correction, but the route depends on how the AY 2016-17 demand was created and what the assessment/intimation records show. A four-year delay does not, by itself, establish that no remedy is available. Check the demand and payment ledger, the original processing/assessment order, and the status and contents of your 2018 response. If the payment was made against the demand but is not reflected, submit a correction request with the payment evidence and request that the outstanding demand and consequential interest be recomputed. If the demand itself is incorrect because Form 26AS supports the credit, seek rectification of the relevant order and attach the return, Form 26AS and supporting tax-credit details. Respond to the current section 245 adjustment proposal by disputing the demand and explaining the steps already taken; do not leave it unanswered. The applicable route and time limit depend on the order and the portal status, which are not specified here.

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