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Can Income Tax department issue refunds pending scrutiny assessments


Gone are the days when IT refunds used to take years to come. For the returns filed Financial Year ending March 2014, the department is already issuing refund orders. Many of our clients have received refunds this year. But some of the (unfortunate) tax payers have to wait for their refunds.


Selection of cases for Scrutiny – We have already written a couple of articles about the process of selection of cases for scrutiny. Please also note that the assessing officers can’t issue notices as and when they feel like.


Suppose, the department has issued notice u/s 143(2) for scrutiny assessment, the refund order won’t be processed till the assessment is over.


It was in Finance Act 2012, a new provision 143(1D) was inserted stating that ‘the processing of a return shall not be necessary, where a notice has been issued to the assessee under section 143(2)


The words ‘shall not be necessary’ was confusing to many people. So, therefore, the income tax department has come out with Instruction No.01-2015 dated 13th January, 2015 stating that “that the processing of the return cannot be undertaken after notice has been issued under sub-section (2) of section 143 of the Act”


So, those who have to get refund pending scrutiny will have to wait for couple of more months, isn’t it? The instruction also addresses this issue in saying that “It shall, however, be desirable that scrutiny assessments in such cases are completed expeditiously”


Please download the instruction here – INSTRUCTION NO.1/2015 [F.NO.225/319/2014-ITAT.II]DATED 13-1-2015

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About CA Prasad Chartered Accountant

CA Prasad Chartered Accountant
CA Prasad is a practicing Chartered Accountant and partner in Bangalore -based CA Firm. For further information or query, please email it to [email protected]