Issue of refunds - adjustment with outstanding demand - provision of Section 245 of the Income tax Act, 1961. - Income Tax - 1989/2000

INSTRUCTION NO. 1989/2000 Dated: October 20, 2000 Subject :- Issue of refunds - adjustment with outstanding demand - provision of Section 245 of the Income tax Act, 1961. The Central Board of Direct Taxes have issued Instruction Nos. 1952 dated 14.8.98 and 1969 dated 20.8.99, stating that written intimation must invariably be sent to assessee before adjusting his refund with outstanding demand in compliance to provisions of section 245 of the Income-tax Act, 1961. 2. However, it is noticed that in some cases, the prescribed procedure and the requirement of law are not being complied with. It is once again reiterated that in accordance with the provision of section 245 of the Income tax Act, 1961, a written intimation must be sent to assessee before adjusting his refund with outstanding demand. Any lapse in this regard shall be viewed seriously. This point should be checked up specifically during the inspection work by Chief Commissioners / Directors Generals / Commissioners. 3. This may be brought to the knowledge of all officers in your region for strict compliance. F.No.212/384/2000/ITA.II (Kamlesh C. Varshney) Under Secretary to the Govt. of India