IT Department issuing Refund Failure Notices for “PAN not linked with BANK”

In a significant development, the recent update is that the Income Tax Department started issuing Refund Failure Notices for the reason of “PAN not linked with Bank Account”.

This issue has created dissatisfaction among taxpayers, many of whom claim to have been using the same bank account for years without encountering such issues.

CA Akhil Pacholi highlighted the matter on Twitter, stating that many people have been receiving these failure notices despite having their PAN linked to their bank accounts for several years. Pacholi further stated that grievances filed with the department have been dismissed without resolution, leaving taxpayers in the dark.

He wrote on his official Twitter Account, “Income Tax Department is issuing Refund Failure Notices for the reason “PAN not linked with Bank Account”. People have been receiving the Refund in the same account for years. The grievance is also being closed with the reason raised refund reissue after linking. Seems to be deliberately stopping refunds above 10,000 from issuing.”

The main concern pointed out is that returns greater than Rs.10,000 appear to be the primary focus, with purposeful delays in processing big refunds. Several taxpayers resorted to social media to discuss their personal experiences. Some reported that despite the fact that their PAN and Aadhaar were properly linked, refunds had been blocked without reason.

One common complaint is that the system fails to recognize related accounts, resulting in notices despite compliance. Taxpayers are reminded to check their PAN-Aadhaar linking status, since it has become a requirement for collecting refunds, and unresolved difficulties may result in additional complications.

This issue appears to have broader consequences, as many customers expressed concern about potential interest accumulation on delayed refunds, questioning whether the delays are routine or deliberate.

As the tax season concludes, the number of complaints about processing refunds is projected to rise unless the Income Tax Department addresses the issue with clarity and offers more transparent resolutions.

Taxpayers who are encountering similar issues should check that their PAN-Aadhaar link is active and send concerns through the Income Tax Department’s grievance redressal channels if income tax refunds are still withheld.

For further information on linking your PAN to your bank account or resolving issues of refund, please visit the official Income Tax e-filing website.