An income tax assessee will get 21 days to respond to notices issued by the Central Processing Centre (CPC) regarding set-off and withholding of refund.
The Income Tax Department says this will help in avoiding delays in the issuance of refunds. The time limit for assessees to respond is at par with the time allowed for the assessing officer (AO) to respond which was lowered last year to 21 days from 30 days. Also, it has already been said that AO will be held responsible for any delay.
An instruction issued by the Directorate of Income Tax (Systems), dated May 31 said, “Consequent to the deployment of online response mode, which is in place for a sufficiently long period of time and also in order to avoid delays in issue of refund, the time limit of 21 days is provided to the assessee to respond to intimation u/s 245(1) of the Income Tax Act issued by Centralised Processing Centre. This will apply with immediate effect.”
Section 245 of the Income Tax Act prescribes the mechanism for the set-off of refunds against tax remaining payable. Accordingly, in case of refunds due, based on the demand uploaded, CPC issues prior intimation to the taxpayer to adjust the refund against the correct and legitimate actionable demand due.
In case of a grievance against the demand, the taxpayer can approach the AO who, in turn, is required to respond within the specified time. In the interim period, the CPC will hold the refund; after feedback from the AO, it will adjust against the demands.
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