Excel for
Chartered Accountants
A facility has been made available to taxpayers on the E-filing website ( www.incometaxindiaefiling.gov.in ) to provide online response to demands uploaded by Assessing Officers in CPC Demand Portal.
Now, Central Board of Direct Taxes has issued circular no 08/2015 dated 14-05-2015, consolidating the action required to be performed by the taxpayer and the AO. The following SOP has been prescribed in para 3 of the circular for actions on the part of the Income Tax Department after the response of the taxpayer to the demand arrear.
3. Action to be performed by taxpayers
The assessing officer or CPC Bangalore after verification should reduce/remove/conform the demand in appropriate cases as per procedure outlined in para 4 below and in accordance with earlier instructions issued by CBDT. However, following cases are to be verified on priority:
(a) Taxpayer has furnished information in respect to notice u/s 245 of the Act; or
(b) Taxpayer has requested for reduction/removal of demand ; or
(c) Information regarding demand reduction/removal is available in Department records; or
(d) Details are already available in the system, such as additional TDS credits reported by Deductor in case of earlier TDS mismatch.
4. Handling Different Scenarios during Verification and Confirmation of Demand:
The Assessing Officer (AO) should handle different scenarios during verification and confirmation of demand in following manner:
4.1 Demand or tax has been paid
(a) If the taxpayer’s reply or Departmental records show that demand or tax has already been paid and challan (challan identification number (CIN)) is available on the system:
(i) The AO should reduce the demand by posting the challan or passing rectification order u/s 154 on the system.
(ii) If the demand is prior to 01/04/2010, the demand has to be reduced directly on the CPC-FAS system after rectification u/s 154.
(b) ) If CIN is not available or payment is made prior to the period of introduction of CIN, the reduction can be made only in case of individuals and HUFs provided outstanding demand does not exceed Rs.1,00,000 for that AY. AO should follow the steps as under:
(i) The reduction can be made after obtaining of the document showing evidence of payment in form of taxpayer counterfoil or bank certificate or any communication from Department in respect of payment or adjustment of refund. In case where taxpayer is a senior citizen and taxpayer is not able to obtain bank certificate as the place of payment of tax is different from the current place of taxpayer, the AO should obtain the certificate from the bank directly.
(ii) In case the outstanding demand is more than Rs.25000/- for that AY respective of the quantum of demand being reduced under paragraph 4.1.(b).i. above, the AO should obtain an indemnity bond (in the format given in Annexure A) from the taxpayer.
(iii) Additionally, in case the demand being reduced under paragraph 4.1.(b).i. above exceeds Rs.50,000/- for that AY for the assessee, besides obtaining the indemnity bond, approval of Range Head should be taken on file before removing/reducing the demand.
(iv) if the payment relates to mismatch of advance tax or self assessment tax, order u/s 154 of the Act needs to be passed.
4.2 Demand due to TDS Mismatch:
(a) If the taxpayer's reply or Departmental records ,show that the demand is on account of TDS mismatch and TDS credits are available in the system, the AO should follow steps as under:
(i) The AO should reduce the demand by passing rectification order u/s 154 on the system after taking into account the TDS credits available on the system.
ii. If the demand is prior to 01/04/2010, the demand has to be net reduced directly on the CPC-FAS system after rectification u/s 154.
(b) If the credits are not available in 26AS: The reduction can be one only in the cases of Individuals and HUFs. Further, the amount of reduction should not exceed Rs. 1,00,000 for that AY and AO should take following steps:
(i) AO should pass order u/s 154 manually after obtaining the TDS certificate from the assessee on the basis of which claim has been made.
(ii) In case, the outstanding demand is more than Rs. 25,000 for that of the quantum of demand being reduced, the AO should obtain an indemnity bond (in the format given in Annexure A)
iii. Additionally, in case the demand being reduced under paragraph 4.2.(b).(i) above, exceeds Rs.50,000/- for that AY for the assessee, besides obtaining the indemnity bond, approval of Range Head should be taken on file before removing/reducing the demand.
4.3 Demand already reduced or action is pending:
(a) If the taxpayer's reply or Departmental records show that demand has already been reduced byway-of an order (rectification order, appeal effect order etc.), the demand has to be reduced directly on the CPC-FAS system.
(b) In case where rectification or giving effect order to reduce demand is pending, the same should be completed and revised demand should be reflected.
(c) It is also clarified that after taking action as per pare 4.1 or 4.2, if any refund becomes due to the taxpayer, the same may also be issued.
Download the Full Circular No. 08/2015 for more details Click Here >>
Download MS Word Format of Indemnity Bond Click Here >>
CBDT Circular-Procedure for Online Income Tax Arrear Demand Response by Taxpayer and Action to be taken by Departmental Assessing Officers |14-05-2015|
