Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Monday, May 18, 2015

Procedure for correction of Income Tax Arrear Demands

What actions are required to be performed by the taxpayer in case the Income Tax Department has uploaded some arrear demands against the assessee on the Income Tax website, or in case the tax payer has received a Notice under section 245 for arrear demands?



1. Log in to the e-filing website with your user ID (PAN), password and DOB.

2. Go to the e-filing menu and click on "Response to outstanding Tax Demand" 

3. The following details would be displayed
-Assessment Year
-Section Code
-Demand Identification Number (DIN)
-Date on which demand is raised
-Outstanding demand amount
-Uploaded By
-Rectification Rights
-Response-Submit and view.

4.  Taxpayer must click on "Submit" link under Response column for the respective AY in order to submit the response. Taxpayer has to select one of the options from the radio buttons.
a) Demand is correct
b) Demand is partially correct
c) Disagree with demand

5. If taxpayer selects "Demand is correct", then a pop up is displayed asking for confirmation of the same. Once confirmed, you cannot "Disagree with the demand". Click on "Submit". A success message is displayed. 

a) If any refund is due, the outstanding demand along with interest will be adjusted against the refund due.
b) In any other case taxpayer has to immediately pay the demand.

6. If taxpayer selects "Demand is partially correct", then " amount which is correct" and "Amount which is incorrect" has to entered.

7. If taxpayer selects "amount which is incorrect", then he should mandatorily fill one or more reasons for stating so as listed below:
a) Demand has been already Paid:
- Demand paid and Challan has CIN (Challan identification Number)
- Demand paid and Challan has no CIN
b) Demand has already been reduced by rectification/revision
c) Demand has already been reduced by Appellate Order but appeal effect has to be given by Department
d) Appeal has been filed and 
- Stay petition has been filed with
- Stay has been granted by
- Installment has been granted by
e) Rectification/ Revised Return has been filed at CPC
f)  Rectification has been filed with Assessing Officer
g) Others

8.  Based on the reason selected, the taxpayer needs to provide additional information as per the table given below:- 

Particulars

Demand paid and Challan has CIN
BSR Code, Date of Payment, Serial Number of Challan, Amount
Demand paid and Challan has no CIN
Date of Payment, Amount,  Upload copy of Challan
Demand already reduced by rectification /Revision
Date of order, Demand after rectification/ revision, Details of AO who has rectified or revised, Upload Rectification/ Giving appeal effect order passed by AO.
Demand already reduced by Appellate Order but appeal effect to be given
Date of Order, Appellate Order passed by, Reference Number of Order  
Appeal has been filed : Stay petition has been filed
Date of filing of appeal, Appeal Pending with CIT Appeals
Appeal has been filed : Stay has been granted
Date of filing of appeal, Appeal Pending with, Stay granted by, Upload copy of Stay Order
Appeal has been filed: Installment has been granted
Date of filing of appeal, Appeal Pending, Installment granted by Uploads copy of stay/installment order
Rectification / revised Return filed at CPC
Filing Type, e-filed Acknowledgement No., , Upload Challan Copy, Upload TDS Certificate, Upload letter requesting rectification copy, Upload indemnity Bond 
Rectification filed with AO
Date of Application , Brief of Rectifiction can be given in Remarks
Other Reasons
Others

9. If taxpayer selects "Disagree with the Demand", then taxpayer must furnish the details of disagreement along with reasons. Details / Reasons are same as provided under "Demand is partially correct."

10. After the taxpayer submits the response the success screen would be displayed along with the Transaction ID.

11. The taxpayers can click on 'view' link under response column to view the response submitted. 

CBDT has given actions on the part of the Department and procedure of handling different scenarios during verification of demand. In the case where "demand is already paid" or "taxes paid but no credit is given", necessary documents are to be given by the assessee.

In case of any discrepancy in TDS or tax paid, the Assessing Officer may ask for an indemnity bond on Rs. 100 stamp paper as follows.


INDEMNITY BOND

This Bond of indemnity is made this .................................( Date of indemnity Bond) in favour of Government of India (Department of Finance) i.e. Income Tax department by Mr./Mrs./Ms ............................( Name of the Indemnifier) Son of /Daughter of /  Wife of .................................... on behalf of self or 

M/s ..................................................
PAN..................................................
Status............................................... 

WHEREAS This is to undertake :
1. That I had filed my Income Tax Return for the Assessment Year..................................
2. That TDS claimed in the return of Rs...................................... belongs to me as per TDS certificates mentioned below

Name of Deductor ,     TAN of deductor,    Date of TDS certificate,     Amount
a. ................................................................................
b. ................................................................................
That Challan(s) paid for Rs................................................belongs to me as given below:
Date of Payment, Bank through which payment made, Amount
a....................................................................................
b...................................................................................

3. That in case it is found that the TDS certificate/ challan does not belong to me then the executor of this bond indemnify the Government of India, if any, in all respect.

The executor of this bond indemnifies the government of India(Ministry of Finance) and keep it indemnified against all costs, damages, charges and expenses, excess amount of refund, interest, reduction in demand and also against all sum/money, whether for damages, costs, charges, expenses or otherwise.

In witness where of this bond is executed today this ....................................(Date)
(..........................)
.......................................

1 comment:

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