Now, Get a notice before IT adjust your tax refund against outstanding demand


If you are in those tax payers who have not got any notice of tax demand then do not worry because now your refund can not be adjusted with outstanding demand without a prior notice. According to the income tax act, a valid notice has to be given to the taxpayer before making any adjustments against the demand. A notice has to be served within the certain time framework under the specified sections of the income tax.

The income tax law:

The income tax law states that a refund due to any person may, in return of the payment can be set off against the outstanding demand. But this has to be done after a certain prescribed procedure which includes a written notice to the taxpayer of the action that has to be proposed.

 Vikas Vasal, National Leader Tax ,Grant Thornton India LLP said “In the instant case, the High Court has put aside the tax refund against the tax demand  and educated the assessment experts to streamline their interior procedure. While charge accumulations are the focal point of the income specialists, it ought to be guaranteed that citizens are given an equitable and reasonable chance to display their viewpoint. Further, the undertaking ought to be to eliminate pointless debate and prosecution particularly on the procedural issues,”

According to the income tax law, actually, it is the obligation of each IT officer to guarantee that alongside the serving of notice, all the procedural prerequisites are consented to. “A proof of service of demand is essential before making any adjustment against any refund due to the citizen against the outstanding demand. Further, with the progression of innovation now it is simple enough for the IT officers to give a proof of service and furthermore conform to different prerequisites of law,” advises Soni.

High court Ruling

Outstanding tax demands were controlled by I-T Officials for A.Y 1995-96, 2003-2004, 2009-10 and 2012-13 for a citizen in a recent case,. The I-T Officer at that point balanced the tax refund because of that taxpayer against the tax demands. In any case, according to the taxpayer, he didn’t get any request relating to such requests. He, consequently, said that the modification done against his tax was invalid.

The case went to the Bombay High Court where it was seen that without first guaranteeing that a legitimate notice of interest was served on the citizen, the I-T officer adjusted the refund. In this way, the court guided the I-T office to give the refund with applicable interest. Additionally, Rs 1.5 lakh will be recovered from the Income tax officer. Further, disciplinary move would likewise be made against the officer according to the guidelines of the HC,” says CA Abhishek Soni, Founder,

The Court said that it is available to mediate on inquiries of law and not to settle the routine issues of organization. In like manner, such sort of mistakes made by the I-T officers would not be considered lightly as form the part of prosecution and at last the court’s legal time is wasted.

Now, this way, without serving a legitimate notice of interest, the I-T authorities can’t adjust refund amount against the outstanding demand. On the off chance that they do as such, at that point an expense would be forced upon them. As indicated by expense specialists, this is a very welcoming move of the High Court where the interest of the fair citizen has been maintained.

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