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In order to facilitate compliance by assessees, the Income Tax Department has instructed its officers to take immediate action on outstanding demand and refund approval.
This is part of an interim plan for Fiscal Year 2023-24, circulated among officials last week. The document, as seen by businessline, has set the deadline for demand verification. Accordingly, checking of all demand PAN-wise and year-wise from systems, AST/TMS (software for return processing) or manual demand, wherever remaining and removal of all duplicate entries need to be completed by June 30. The same timeline will be for verification and certification in CPC Financial Accounting System (FAS) where notice has been issued till March 31, 2023.
In case of response to ‘Outstanding Demand’, the document says Jurisdictional Assessing Officer (JAO) needs to take immediate action, ‘’latest by April 30.” Similarly, in case of refund-related actions, the plan says if scrutiny assessments have been completed and necessary orders have been issued in case of all pending refunds under section 241A of the Income Tax Act, then there should be immediate action for giving approval and here too the timeline is April 30.
Section 241A prescribes withholding of refund when Assessing Officer is of the opinion that if in a case notice has been issued and the grant of the refund likely to adversely affect the revenue.
Within a span of four months, these are the second set of big moves to facilitate refund in case of adjustment. Earlier, in December, the Income Tax Department cut the time allowed for the assessing officer (AO) to respond to 21 days from 30 days. Also, the AO will be held responsible for any delay.
An instruction issued by the Department reiterated that if the assessees (taxpayer) either does not agree or partially agrees for adjustment, the matter shall be referred by CPC (Centralised Processing Centre) immediately to the AO, 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. “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,” the instruction issued by Directorate of Income Tax (System) said.
TDS Timeline
The plan sets a one-month timeline for disposal of all pending application as on April 1 for NIL/lower deduction of TDS (Tax Deducted at Source) or TCS (Tax Collected at Source). June 30 will be the deadline for completing verification of Form No.27C/15G/15H received during FY23.
Form 27C is for exemption from TCS while Form 15G (for individual less than the age of 60 years) and Form 15H (for senior citizen) are self-declaration forms that an individual submits to the bank requesting not to deduct TDS on interest income as their income is below the basic exemption limit.
Appeal
The plan has given deadline of June 30 for disposal of 30 per cent or minimum of 100 appeals filed before April 1, 2019, excluding Vivad se Viswas (VSV) appeals. In case of VSV appeals, these need to dispose within 15 days of receipt of the Form 5 (order for full and final settlement).
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