Guide to follow when income tax refund is adjusted with past unpaid claims

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Guide to follow when income tax refund is adjusted with past unpaid claims

The article explains the procedure for filing an appeal to the Commissioner of Income Tax (appeals), the orders subject to appeal by the assessee to the Commissioner of Income Tax (appeals), the costs of filing an appeal before the CIT (appeals) and the documents to be submitted for appeal. before the Commissioner of Income Tax (appeals).

Section 245 of the Income Tax Act empowers the Income Tax Department to adjust any refund amount due to the assessed with any previous unpaid tax. However, this power can only be exercised after issuing a u/s 245 notice to the assessee offering an opportunity to be heard within 30 days of the issuance of the notice and then the pending refund may or not be adjusted with a pending request if applicable.

The procedure for filing an appeal with the Commissioner of Income Tax (Calls)

After filing form no. 35 on the tax portal,

1. The Commissioner of Income Tax (Appeals) will notify the taxpayer and the assessment officer whose order is preferred of the date and place for the hearing of the appeal by sending a notice to both parties .

2. On the date of the hearing, the taxpayer or the liquidating agent may appear personally or through an authorized representative.

3. The Commissioner of Income Tax (Appeals) will hear the appeal or may adjourn the appeal from time to time as he sees fit.

4. Before making the order, the Commissioner of Income Tax (Appeal) may either direct the assessment officer to make such necessary inquiries as he deems appropriate and report the outcome directly to him.

5. During the appeal, the taxpayer also has the right to raise additional grounds of appeal that are correlated to it. However, additional grounds will only be accepted by the Commissioner of Income Tax (Appeals) if satisfied that the omission of such grounds was not deliberate or unreasonable. the omission of these grounds was neither intentional nor unreasonable.

Orders subject to appeal by assessee to Commissioner of Income Tax (appeals)

Section 246A lists the orders which may be appealed to the Commissioner of Income Tax (Appeals). Some of them are given below:

1. Opinion issued against the taxpayer in a case where he is not satisfied with the opinion issued under the Income Tax Act.

2. Notice issued under Section 143(1)(1B) when adjustments have been made to the tax return.

3. Notice issued under Section 200A(1) when adjustments have been made to the filed return.

4. Notice issued under section 143(3), except in the case of a judgment rendered by the Dispute Resolution Committee.

5. A Notice of Assessment or Reassessment given under Section 153A or under Section 158BC in the event of a search/seizure.

6. Rectification order made under section 154 or under section 155.

Fees for filing an appeal before the CIT (Calls)

The cost of filing an appeal with the CIT (appeal) depends on the total income determined by the assessment agent. The fees to be paid are as follows

Total income determined by AO Call charges
Assessed total income of ₹1 Lakh or less ₹250
Estimated total income above ₹1 Lakh but not above ₹2 Lakh ₹500
Appeals involving total assessed income above ₹2 Lakhs ₹1000
Appeals on any other matter ₹250

Documents to be submitted for appeal before Income Tax Commissioner (Appeals)

Form No. 35 (including statement of facts and grounds of appeal) – in duplicate.

A certified copy of the order against which the appeal is to be filed.

Notice of formal notice in original.

Copy of fee challans and challan details (i.e. BSR code, date of fee payment, serial number and fee amount) must be provided if filing the appeal form electronically.

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Author Sushant Gangurde is a legal analyst @Taxblock India who aims to educate people on various tax laws and financial planning.

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