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FAQ- CPC Communication on processing of Income Tax Return and filing of Rectification application.

Article deals with frequently asked question(FAQ) related to CPC Communication, Processing of Income Tax Return by CPC, Filing of Rectification Application, Intimation u/s 143(1), Rectification order U/s. 154, non consideration of TDS, Advance Tax/self-assessment tax, adjustment of refund against old demand etc.

Which return will be processed if Original & Revised return are filed on the same date?

Revised return (since it’s the latest return) will be processed if original return and revised return are filed on the same date.

 

Credit for Tax Payments has not been allowed by CPC at the time of Processing the Income Tax Return. What should I do?

First step is to check whether the details mentioned by you in Schedule TDS, TCS or IT is correct or not. If Yes, select user type as “No further Data Correction is required, Reprocess the case”. If No, upload new XML or amend the latest XML after verifying the order passed by CPC.

In case there is no issue with the Tax Credits in the earlier Income Tax Return but the credit was not allowed in the latest Rectification Order Processed by CPC, then verify the Order passed by CPC and ensure the correctness of the data in the latest XML already processed by the CPC. If the data mentioned by you is correct, then select user type as “No further Data Correction is required, Reprocess the case”. If No, then select user type as “Tax Payer correcting the Data for Tax Credit Mismatch ONLY” and then, enter proper details with respect to Schedule TDS, TCS and IT.

In case if you have entered the Schedules as per the details available in 26AS and OLTAS, however the credit is not provided in the Order Processed by CPC due to Credits not available in CPC and if you have received any Communication from CPC regarding the Transfer of Rights to AST, then you have to Contact Local AO for the same instead of filing Rectification with CPC.

 

For the assessment year 2009-10 I have claimed TDS based on original TDS certificate received from employer. However CPC processed the return without giving credit of TDS as the amount is not appearing in form 26AS.

You can approach concerned Assessing Officer with original TDS certificate (form 16) for rectification. Assessing Officer can pass further rectification based on the verification of TDS certificates.

 

I have claimed refund for the assessment year 2013-14, However on verification I found out that refund has been adjusted against erroneous demand for the assessment year 2004-05 raised by the income tax authority. Now how will I get back my refund amount?

Generally demand arises on account of order passed by income tax authority due to mistake apparent on the income tax return. In many cases demand raised was already paid or reduced / eliminated in the appeal etc. and in many other cases rectification u/s 154 was filed asking income tax authority to correct assessment order and delete the demand by providing documentary proof but was not rectified yet all. Such unrectified arrears of demand which were shown as outstanding in the record of assessing officer was uploaded in the portal of Central Processing Centre (CPC), Bengaluru which resulted in adjustment of refund.

Under the provisions of Income tax, an income tax officer can amend order passed by it within four year from the end of the financial year in which order sought to be amended was passed.

However the Central Board of Direct Tax (CBDT), considering the genuine hardship faced by tax payers, has issued instruction (circular on 4 dated 20 June 2012) to its subordinate income tax authorities to process rectification of order passed by it which were otherwise time barred.

Hence you can approach concerned assessing officer with all supporting documents to rectify the mistake and delete erroneous demand and issue refund. Assessing officer, after due verification and rectification, will issue refund of excess amount if any. If there is a balance amount after the aforesaid correction he will upload corrected arrear demand amount to the portal of CPC.

 

I have received an email stating intimation u/s 245 of income tax act, 1961 which shows outstanding demand of Rs. 46130/- uploaded by jurisdictional assessing officer. However I have not received any intimation/notice of demand raising the above mentioned demand. As a result of this, the manner in which the amount of demand is computed is not known to me. How to handle this?

If the income tax return was filed online, you will have the option of requesting for intimation u/s 143(1) of income tax act.

However in your case, as stated in the intimation received u/s 245, the demand was uploaded by the jurisdictional assessing officer, which means the demand is raised after processing your income tax return by the assessing officer not by CPC. You have to approach concerned assessing officer to ascertain the nature of demand.

[READ MORE ATDid you receive communication on Arrear Demand u/s 245 from Income Tax Department?]

 

For the A. Y 2011-12 I have an outstanding demand and for the A.Y 2013-14, I have arrived at a refund. That refund has got adjusted against the demand of A.Y 2011-12. Demand raised for the A.Y.2011 – 12 has been already paid off, what should I do in order to get refund which is wrongly adjusted?

You have to file online rectification for the A.Y 2011-12 to get refund amount.

 

How many times can I file rectification?

Legally, a return can be rectified any number of times before the expiry of four years from the date of passing the order.

 

Why have deductions under Chapter VIA not been allowed while processing the Income Tax return by CPC?

Check whether relevant information is furnished by you in schedule chapter VIA as well as in Part BTI at the time of filing Income Tax Return.

If Yes, select user type as “No further Data Correction is required, Reprocess the case”.

If No, correct mistake after verifying the order passed by CPC and file rectification after selecting user type as “Tax Payer is correcting the data in Rectification” Correct mistake after verifying the order passed by CPC and upload new XML

My E-Filed Income Tax Return has been processed by CPC raising a demand or less refund. Whom should I approach for Rectification?

In case the Income Tax Return for the relevant assessment year is processed by CPC, then assessee can file rectification with CPC.

In case the Rectification Request has already been transferred to Assessing Officer, then assessee has to file rectification application on paper.

In order to know whether rights are with CPC or AO, the Tax Payer should LOGIN and GO TO “My Account” and then GO TO “My Returns / Forms” and Check the Status.

 

While filing my income tax return, I have selected wrong ITR Form; Can I rectify the same with correct ITR Form?

No, for the purpose of rectification, form type cannot be changed.

To change form type, you have to exercise option of “revision of Return”.

 

Interest under Section 234A has been levied in the Order processed by CPC, even though I have filed the return within Due Date, What should I do?

First verify the due date and date of filing of the return is correctly mentioned in the return. If the due date and date of filing of the return original / revised return is incorrect, then select “Tax Payer correcting the Data in Rectification” then correct due date / date of filing and upload new XML and ensure there are no other issues in the Order Processed by CPC.

 

I have not claimed current year losses in the Income Tax Return. Can I file rectification by claiming Current Year Losses?

Fresh / additional claim of loss cannot be accepted in rectification. Hence you have to file a revised return provided the original return is filed within the due date or time limit to file revised return is not exceeded.

 

I have not claimed deductions under Chapter VIA in the Income Tax Return. Can I file rectification by claiming deductions under Chapter VIA?

Fresh / additional claim of deductions under chapter VIA cannot be accepted in rectification, hence you have to file a revised Return provided original return is filed within the due date or time limit to file revised return is not exceeded.

 

Why my E- Filed Income Tax return has been processed by CPC without giving credit for TDS, Advance tax or/and self assessment tax?

The credit for TDS, Advance tax, Self assessment tax are considered to the extent  claimed in the return and available in 26AS as on the date of processing.

However tax payment mismatch arises mainly due to following mistakes:

  1. Date of credit is entered in MM/DD/YYYY or YYYY/MM/DD format where it is required in DD/MM/YYYY format in the return.
  2. The amount paid is rounded off to nearest 10, where the amount should be exact. Many people pay-7,899 to Bank and claim 7,900 or 7,890 which is not allowed. Amount should be correct.
  3. BSR codes are quoted incorrectly.
  4. Date of deposit of cheque is mentioned while date of credit is required.

 

I have filed Online Rectifications 6 months back. Why is it not processed yet?

Generally online rectification will be processed within 3 months. The delay is largely due to non receipt of Response sheet which has to be filed by taxpayer to complete rectification process in case of any change in bank account particulars. Many people are filing rectification in case of refund failure or due to change in bank details.

 

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About CA Prakash Chartered Accountant Bangalore

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