ITBA Guidelines for Withholding or Release of Refunds at Time of Processing ITRs for Scrutiny Cases

Workflow in ITBA for Withholding of Refund under Sec. 241A of the I.T. Act’ 1961 or Release of Refund determined while Processing of Returns of Income for the cases selected for Scrutiny.

This is in reference to the subject mentioned above. For a given PAN and AY, if a refund is determined by CPC-ITR while processing of a return of income, and the return of income is already selected for scrutiny, then the AO is required to provide response for withholding of the refund u/s 241A or release of the same to CPC-ITR. Based on AO’s response, further action is taken by CPC-ITR. The process to be followed in ITBA for withholding of refund u/s 241A or release of refund for the cases selected in scrutiny was mentioned in ITBA ITR Processing Instruction No. 5, dated 14- 12-2018. With introduction of Faceless Assessment Scheme, there has been change in workflow for withholding of refund u/s 241A or release of refund for the cases under scrutiny with NaFAC. In partial modification of ITBA ITR Processing Instruction No. 5 dated 14-12-2018, the workflow in ITBA for “Withholding of Refund under Sec. 241A” or “Release of Refund” determined while processing of returns of income for the cases selected for scrutiny for faceless and non-faceless (central/ international taxation/ JAOs) users is as follows.

2. “Withholding of Refund u/s 241A” or “Release of Refund” where corresponding scrutiny case is with “non-faceless (Central/ International taxation/ JAO)” charge:

2.1 The Step-by-step process in ITBA is as under:

Steps for AO:

• Go to ITBA Home page
• Go to ITR processing module
• Click on Return receipt register
• Search for PAN and AY
• The Processing status of the return will be ‘Pending for refund confirmation by AO’
• Click on View/ Proceed for data entry

Scenario 1: Refund is to be Withheld u/s 241A:-

Steps for AO:

• Enter the OTP (valid for 72 hours)/ Re-generate the OTP (if required)
• Select ‘Yes ‘for field ‘Whether Grant of Refund is adversely affecting the revenue as per sec. 241A and refund to be withheld’
• Enter the “Remarks”
• Click on “Submit for 241A approval”

Steps for Range Head:

• Range Head has to login into the ITBA Portal
• Click on Refund Banker Module
• Click on worklist
• Select the Work Item (PAN and AY) with subject “Refund Withholding u/s 241A”
• Enter the Remarks
• Provide response (click on “Submit for 241A “for approval of PCIT or “Send Back” to AO for clarification)

Steps for PCIT:

• PCIT has to login into the ITBA Portal
• Click on Refund Banker Module
• Click on worklist
• Select the Work Item (PAN and AY with subject “Refund Withholding u/s 241A”
• Enter the Remarks
• Provide response (click on “Refund to be Withheld” for withholding of refund u/s 241A, or “Send Back/Reject” for clarification from Range Head/ AO or Rejection of proposed withholding of refund u/s 241A)

Note:

(i) If it has been decided by the PCIT that the case is not fit for withholding of refund u/s 241A, then the proposal has to be sent back (click on “send back/ reject”) with relevant remarks. After that, AO has to cancel the work item from Refund Banker Module and follow the process of refund release. The Para No. 3(A)(i)(e) of ITBA ITR Processing Instruction No. 5 dated 14-12-2018 may be treated as modified in this regard.

(ii) If the PCIT send back only for seeking clarification, then also he has to use the same button “send back/ reject” with applicable/ appropriate remarks.

(iii) In view of the above, AO has two options – either to cancel whole work-item altogether [scenario (i)], or to give clarification as desired by the PCIT [scenario (ii)].

Scenario 2: Refund is to he released, and the refund amount is less than Rs.100000:

Steps for AO:

• Enter the OTP (valid for 72 hours)/ Re-generate the OTP (if required)
• select ‘No ‘for field ‘Whether Grant of Refund is adversely affecting the revenue as per sec. 241A and refund to be withheld’
• Enter the Remarks
• Click on “Approve Refund” to release the refund, or “Block Refund” (for fraud cases)

Scenario 3: Refund is to be released, and the refund amount is equal to or more than Rs.100000, then Range head approval is required: –

Steps for AO:

• Enter the OTP (valid for 72 hours)/ Re-generate the OTP (if required)
• select ‘No ‘for field ‘Whether Grant of Refund is adversely affecting the revenue as per sec. 241A and refund to be withheld’
• Enter the Remarks
• Click on “Submit for Range approval”

For ITBA Official Guidelines Download PDF Given Below: