Tax Update: Income Tax Assessees to get 21 Days to Respond to Refund Adjustment Intimations

An Income Tax Assessee would have 21 days to reply to Central Processing Centre (CPC) notice regarding set-off and refund withholding.

According to the Income Tax Department, this will assist to eliminate refund delays. The time restriction for assessees to answer is the same as the time limit for the assessing officer (AO) to respond, which was reduced from 30 days to 21 days last year. Furthermore, it has already been stated that AO would be held accountable for any delays.

An instruction issued by the Directorate of Income Tax (Systems), dated May 31 said, “Consequent to the deployment of online response mode, which has been in place for a sufficiently long period of time, and also in order to avoid delays in the issue of refund, the assessee is given a time limit of 21 days to respond to intimation u/s 245(1) of the Income Tax Act issued by Centralised Processing Centre.” This is effective immediately.”

In the event of a complaint about the demand, the taxpayer may approach the AO, who must answer within the time frame stated. During the interim time, the CPC will hold the refund; after receiving input from the AO, it will amend in accordance with the requests.