Procedure for Response to Arrear Demand By Taxpayer And Verification and Correction of Demand by AOs

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes North-Block,
I TA-11, Division New Delhi the 14. 05. 2015


Subject:      Procedure for Response to Arrear Demand By Taxpayer And Verification and Correction of Demand by AOs – regarding 

The CBDT vide Instruction No,4 of 2014 dated `T” April, 2014, inter-aila, prescribed Standard Operating Procedure for Verification and Correction of Demand available or uploaded by AOs in CPC Demand Portal. Further a
facility has been made available to taxpayers on the E-filing website (www.incometaxindiaefiling.gov.in) toprovide online responses to such demands. The actions required to be
performed by the taxpayer andthe AO
are being consolidated in this circular as
under:

2.                 Action To Be Performed By Taxpayer

i.                 
Login to
e-Filing website with User ID, Password, Date of Birth /Date of Incorporation and Captcha.

ii.                
Go to E-file
menu
and click on
“Response to Outstanding Tax Demand”   

iii.              
Following
details would be displayed.

o    Assessment
Year

o  
Section
Code

o   
Demand
Identification Number (DIN)

o   
Date on
which demand is raised

o  
Outstanding
demand amount

o   
Uploaded
By

o   
Rectification
Rights

o    Response- Submit and View

 iv.    Taxpayer must click on “Submit” link under
Response column for the respective AY in order to submit the response. Taxpayer has to select one of the options

from the radio button.

o    
Demand is correct

o    
Demand is partially correct

o    
Disagree with demand

v, If taxpayer selects “Demand is correct”, then a pop up is
displayed as “If you

confirm  “Demand is correct’ then you cannot ‘Disagree with
the demand’.  Click on “Submit”.
success message is displayed.

o   if any refund is due, the outstanding demand along with interest will be adjusted against the refund due.

o   In any other case taxpayer has to immediately pay the demand.

vi.          
If
taxpayer selects “Demand is partially correct”, then “Amount
which is correct” and
“Amount which is incorrect” has to entered.

vii.        
If
taxpayer selects ‘amount which is incorrect’ then he should mandatorily fill one or more reasons for stating so as listed below:

 

 o  
Demand has been already Paid-

o  
Demand paid and Challan has CIN (Challan
Identification Number)

o Demand paid and Challan has no CIN

o  
Demand has already been reduced by
rectification/ revision

o  
Demand has already been reduced by Appellate
Order but appeal effect has to be given by Department

o  
Appeal has been filed and

o  
Stay petition has been filed with

o  
Stay has been granted by

o  
Installment has been granted by

o  
Rectification/ Revised Return has been filed at
CPC

o  
Rectification has been filed with Assessing Officer

o  
Others

viii.    Based on the
reasons selected, the taxpayer needs to provide additional information as
per  the table given below.

Reason Selected

Additional Details Required

Demand paid and Challan has CIN

BSR Code

Date of payment

Serial Number of Challan

Amount

Remarks (any comments of taxpayer can be included)

Demand paid and Challan has no CIN

Date of Payment

Amount

Remarks (any comments of taxpayer can be included)

Upload copy of Challan

Demand already reduced by rectification/ revision

 

Date of order

Demand after rectification/ revision

Details of AO who has rectified or revised

Upload Rectification/ Giving appeal effect order passed by
AO

Demand already reduced by Appellate Order but appeal
effect to be given

 

Date of order

Appellate order passed by (details of CIT (A) etc)

Stay petition filed with (details of office etc)

Appeal has been filed: Stay has been granted

Date of filing Appeal

Appeal pending with

Stay granted by

Upload copy of Stay Order

Appeal has been filed : installment has been granted

Date of filing Appeal

Appeal pending with (details of CIT (A) etc)

Installment granted by (details of office etc)

Upload copy of stay/ installment order

Rectification/ Revised Return filed at CPC

 

Filing Type

e-Filed Acknowledgment No.

Remarks (any comments of taxpayer can be included)

Upload Challan Copy

Upload TDS Certificate

Upload Letter requesting rectification copy

Upload Indemnity Bond

Rectification filed with AO

 

Date of application

Remarks (any comments of taxpayer can be included)

Other Reasons

Others (any comments of taxpayer can be included)

 

ix.   If taxpayer
selects “Disagree with the Demand”, then taxpayer must furnish the details of
disagreement along with reasons. Details / Reasons are same as provided under
“Demand is partially correct.”

 

x.     After the
taxpayer submits the response the success screen would be displayed along with
the transaction ID.

 

xi.     The taxpayers
can click on “View link under Response column to view the response submitted.
The following details are displayed:

 

o  
Serial Number

o  
Transaction ID

o  
Date of Response

o  
Response Type

(Note 1: Where the taxpayer has not registered on the Income
Tax department’s e-filing website – www.incometaxindiaefiling.gov.in,
he may do so to get details of outstanding demand and also to submit any
response.

 

Note 2: Whenever the taxpayer finds it difficult to access
the Income Tax Department website, he or she may make necessary application to
the Assessing officer along with above referred details as applicable in this
case.

 

Note 3: In case of individual tax payers if CIN is not
available or payment is made prior to the period of introduction of CIN, the
taxpayer may submit the documents as referred in para 4.1 or 4.2)

 

3. Action on the Part of Department

The Assessing officer or CPC Bangalore after verification
should reduce/remove/confirm the demand in appropriate cases as per procedure
outlined in para 4 below and in accordance with earlier instructions issued by
CBDT. However, following cases are verified on priority:

a) 

b)          
 

c)         

d)          
 

Taxpayer has furnished information in response to
notice u/s 245 of the Act; or

Taxpayer has requested for reduction/removal of demand;
or

 

Information regarding demand/removal is avilabe in department record  Records;
or

Details are already available in the system, such as
additional TDS credits  reported by Deductor in case of earlier TDS
mismatch.

 

4.                    Handling Different Scenarios
during verification and confirmation of

Demand:

The Assessing Officer (AO) should handle different
scenarios during verification and confirmation of demand in following manner:

4 . 1                                    Demand or tax has been paid:

(a)    If the taxpayer’s reply or Departmental
records show that demand or tax has

already been paid and challan (challan identification
number (CIN)) is available on the system:

i.           
The AO should reduce the demand by postingthe challan or
passing rectification order u/s 154 on the system.

ii.         
If
the demand is prior to 01/04/2010, the demand has to reduced directly on the
the CPC-FAS system.

(b) If CIN is
not available or payment is made prior to the period of introduction of

CIN, the reduction can be made only in case of
individuals
and HUFs
provided outstanding demand does riot exceed Rs.1, 00,000 for that AY. The AO should follow the steps as under:

i.                    
The
reduction can be made after obtaining of payment in form of taxpayer counterfoil or bank certifi
Department in
respect of payment or adjustment of re senior citizen and taxpayer is not able to obtain bank
c of tax is different
from the current place of taxpayer, the from the bank directly.

document showing evidence of cate or any
communication from und.
In case where taxpayer is a certificate as the place of payment

AO should obtain the certificate

 

ii.                  
In
case the outstanding demand is more than   
of the
quantum of demand being reduced under should obtain an indemnity bond (in the format given in
Annexure A) from the taxpayer

.25000/- for that AY irrespective
paragraph
4.1.(b).i. above, the

 

iii.                 
Additionally,
in case the demand being reduced under paragraph 4.1. exceeds Rs.50,000/- for that AY for the
assessee, besides obtaining the bond, approval of Range Head should be taken on file
before removing/ reducing the demand,

(b).i. above
indemnity.

 

iv.                
if the payment relates to mismatch of advance tax or
self assessment tax, order WS 154 of the Act needs to be passed.

4.2
Demand due to TDS Mismatch:

(a)         If the taxpayer’s reply or Departmental
records show that the demand is on

account of TDS
mismatch and TDS credits are available in the system, the AO should follow steps as under:

i.      The AO should reduce the demand by passing
rectification order u/s 15 4 on the

system after taking into account the TDS
credits available on the system.

 ii.           If the
demand is prior to 01/04/2010, the demand has to be reduced directly on the CPC-FAS system alter rectification u/s 154.

(b)    If the credits are not available in 26AS: The
reduction can be done only in the

cases of
Individuals arid
HUFs. Further, the amount of reduction should not exceed Rs.1,00,000
for that AY
and AO should take following
steps:

i.     AO should pass order u/s 154 manually after obtaining the
TDS certificate from
the assesses on the basis of which claim has
been made.

In case, the outstanding demand is more than Rs.25,000 for
that AY, irrespective of the quantum of demand being
reduced, the AO should obtain an indemnity band (in the format given in Annexure
A)

iii.         
Additionally, in case the demand
being reduced under paragraph 4.2.(b).i
above, exceeds Rs.50,000/- for that AY for the assessee, besides obtaining the indemnity bond, approval of Range Head should be taken on
file before removing/reducing the demand.

4.3 Demand already reduced or action is pending:

(a) If the
taxpayer’s reply or Departmental records show that demand has 

already
been reduced by way of an order (rectification order, appeal effect order
etc) the demand has to be reduced directly on the CPC-FAS system.

 

 

(b)     
In case where rectification or
giving effect order to reduce demand is pending,
the same should be completed and revised
demand should be reflected.

(c)     
It is also clarified that after
taking action as per para 4.1 or 4.2, if any refund
becomes due to the taxpayer, the same may
also be I sued.

Enclosure: as above

 

 

 

 

(F.No.225/151/2014/ITA.II) Copy to:

1.   
Chairperson and all Members of CBDT

2.   
Pr.Director General of Income Tax
(Systems)

3.   
All Officers and Technical Sections
of CBDT

4.   
Director of Income tax (Inv.)/IT
& Audit/Vigilance/Inv/RSP&PR/Recovery

5.   
Director of Income tax (O&MS),
New Delhi

6.   
ITCC Division of CBDT(3 copies)

7.   
All
Pr.CCIT/Pr.DGIT/CCIT/DGIT/CIT/DIT

8.   
Data Base Cell-for placing it on
www.irsofficersonline.gov.in

9.   
DIT(S)-4
for placing it on www.incometaxindia.gov.in         

10.  Guard File

(Rohit Garg)

Deputy
Secretary to the Government of India

 

 Annexure A

Format for Indemnity Bond (to be typed on non-judicial Stamp Paper of
Rs. 100):


INDEMNITY
BOND

This Bond of indemnity is made this
                     (Date of Indemnity
Bond)
in

favour of Government of India
(Department of Finance) i.e. Income Tax Department by
Mr./                                                                                                                                                                                                                                                           Mrs./Ms

___________________________ (      Name         of the

Indemnifier)             Son            of            /            Daughter            of/                wife            of

     on behalf of        self or

M/s__

PAN_

Status

 

WHEREAS This is to Undertake:

1.   That I had filed my Income Tax return for
Assessment Year                             

2.   That TDS claimed in the return of Rs.                              Belongs to me as
per

      Name of Deductor , TAN of Deductor, Date
of TDS Certificate, Amount.

 

        a.   —————–

 

       b.——————-

OR

That
Challan(s) paid for Rs.                                               belongs to me as given

below:

Date of Payment, Bank through which payment made, Amount

a.   ————————–

 

b.     ———————-

3.    That in case it is found that the
TDS certificates / Challan does not belong to me then the executor of this bond
indemnify the government of India ( Ministry of Finance) for the loss, claim and excess
amount of refund, if an , in all respect.

The executor of this bond
indemnifies the government of India (Ministry of Finance)
and keep it indemnified against all costs, damages, charges and expenses,
excess

amount of refund, interest, reduction in demand and also
against all sum/ money, whether for damages, costs, charges, expenses or
otherwise.

In witness where of this bond is executed today this                                                  (Date) 

(………………)

;

………………………………………………

Leave a Reply

Your email address will not be published. Required fields are marked *