One of my friends has got so stressed when he got the income tax notice or intimation from the income tax department for the first time. I know that we all have faced the same situation once, but there is no need to worry. In this article, I’ll explain to you about the intimation under section 245 and how to deal with such intimation.
Reasons for issuing intimation under section 245 of Income-tax act, 1961
Where the person is having an outstanding demand pending from the income tax department and such person shall also have claimed the refund from them related to some other financial year, then in such cases, he may have received intimation under section 245. As per this section, the assessing officer of the assessee has the power to adjust the demand of the person against the refund claimed. In simple words, if you have not paid your demand and your refund is also pending relating to any other year, then your AO can adjust the demand with the refund pending.
Verifying the outstanding demand
If you want to receive your refund within time, then just filing of return is not sufficient. After filing of return you have to check the status of your return at the income tax website from time to time, till the return has been processed. You should also check the outstanding demand status at this site.
For this, first, log on your account at http://www.incometaxindiaefiling.gov.in/home
Go to the “Response to the outstanding demand”
Here you will be able to access the amount of outstanding demand pending if any.
By clicking on the option, 3 options will appear on which you will have to click one of the option i.e.
Demand is correct
Demand is partially correct
Disagree with the demand
And then enter the submit response option.
Calculate the details of tax demand raised under this section
Where you received the intimation under section 245 which states the adjustment of your refund with the outstanding demand, then it is advisable that you should recalculate the demand amount as per the provisions of the income tax act, 1961. You can take the assistance of a chartered Accountant because in many cases, it is seen that the amount of pending demand raised in the intimation was not calculated correctly. So, always calculate the amount by yourself or with the help of a professional because is better to pay the correct amount instead of a higher amount to the department.
How to respond to the Assessing officer of the intimation under this section
As we have already discussed above that the assessee can respond to its pending demand in 3 ways: whether to accept the demand or partially accept or disagree with the demand. TO choose any of the options, the assessee shall have to follow the steps as defined here:
Go to the option Submit for the relevant Assessment year and where you have to click on any one of the following:
- Demand is Correct or
- Demand is partially correct
- Disagree with the demand
Now, in each of the above cases, a further separate process will have to be followed
Case1: Demand is Correct
Where the assessee click on the option demand is correct, one pop up will be shown which states that you are confirming that the demand is correct and after you cannot disagree with the demand.
Assess will have to click on the submit option
Then a success message will be shown on the screen
Where any refund has been due to the assessee relating to any previous years then the demand may be adjusted with such refund due or otherwise, the assessee will have to immediately make the payment of the demand.
Case2: Demand is partially correct
When the assessee clicks on this option, a screen will be displayed showing the 2 fields regarding the amount to be shown as the correct demand amount and incorrect demand amount.
Once, the assessee has entered the fields, he also has to explain the reason why the department’s calculation of demand is partially correct.
Now, the reason, for departments calculation is partially correct, is any of the following:
Demand has already been paid: Where the demand has already been paid, then assessed has to entered the challan details in which the demand has been paid like BSR Code, Date of payment, the serial number of the challan and challan amount. The assessee may also enter other comments in the Remarks option.
Demand has been reduced by rectification or revision order: Where the demand has been reduced against the order passed in rectification or revision then the assessee will have to enter the date of passing of the order, demand amount, Details of the order, etc.
Demand has been reduced under any appeal although the appeal effect has yet to be given by the department: In this case, the assessee will have to attach the reference number of the order and date of order
Access has been filed a stay petition during any appeal: Assess will have to mention the date of filing of the appeal, on which authority, the appeal was pending, stay petition filing date, etc.
Rectification return under section 154 or the revision return under section 139(5) has been filed by the assessee: In such cases, the assessee shall have to enter the following:
- Specify under which section the assessee has filed the return
- E filing Acknowledgment Number
- Challan copy of the amount paid in this return
- TDS Certificate
Where the rectification has already been filed with the Assessing Officer: Where the assessee has already filed the return then mentioned the date of filing of rectified return and other comments etc.
Case3: Disagree with the demand
When the assessee chooses this option then he has to mention the reason why is he disagree with the calculation of the demand.
Once you mentioned the reason the click on the submit option.
As and when you click on the submit option, a screen will be displayed as success along with one transaction Id
If the assessee wants then he can again view his reply by click on the view option under Response Tab.