Delay in giving appeal effect and issue of consequential refund, - Income Tax - F.No. 299/99/20l5-IT (Inv. lIl)/455

F.No. 299/99/2015-IT (Inv. III)/455 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes E-2, ARA Centre, Ground Floor, Jhandewalan Extension, New Delhi. Dated : 16th November, 2017 OFFICE MEMORANDUM Sub : Delay in giving appeal effect and issue of consequential refund, 1. Section 153(5) of IT Act, 1961, has made it mandatory to give appeal effect within 3 (three) months front the end of the month of receipt of appellate order. Such time may be extended by 6 (six) months only with the approval of Pr.CIT/CIT. Even before introduction of the above provision, Instruction No. 1965 dated 23.3.1999 issued by CBDT, required that appeal effects shall be given within 30 (thirty) days. 2. In pursuance of suggestions from the Central Vigilance Commission, a systems study was conducted by the Directorate General of Income Tax (Vigilance) in the matters of delay in giving appeal effect and delay in issue of consequential refund, it is found in the study that in about 45% cases appeal effect was not given within 3 (three) months. Further, in about 75% of cases refund in consequence of appeal effect was not given within 3 (three) months. Under Section 240 of IT Act, 1961, the Assessing Officer is required to grant the refund in consequence of appeal effect without any claim by the assessee and Section 244(1) of the Act provides that simple interest @ 15% per annum has to be paid if such refund in consequence of appeal effect is not granted within 3 (three) months. 3. In view of the above, it is requested that the following actions, inter alia, may be ensured by the concerned authorities in Central Charges so that the provisions of Section 153(5) is followed and liability u/s 244(1) is not incurred: (i) AOs may give appeal effect within 2 (two) months so that refund can be granted within 3 (three) months and interest is not required to be paid u/s 244(1). (ii) Range heads and Pr. CslT (Central) may monitor giving of appeal effect from, inter alia, the date of appeal effect mentioned in appeal scrutiny reports (iii) AOs may send proposal for refund approval and take other related actions like caging within 7 (seven) days of giving appeal effect (iv) Range heads and Pr. CslT (Central) may dispose the proposals at their ends within 7 (seven) days of receipt (v) Range heads and Pr. CsIT (Central) may regularly monitor and escalate pendency of appeal effect and grant refund through ITBA online along with physical monitoring 4. This may be circulated among all concerned and supervisory authorities may personally supervise/monitor compliance by the officers working under their respective jurisdictions. 5. This is issued with the approval of Member (Investigation), CBDT. (Syamal Datta) Director Investigation-III, CBDT Tele Fax : 011-23547587 Email : [email protected]