Clarification regarding tax demand and refund. - Income Tax - 1437/CBDT

INSTRUCTION NO. 1437/CBDT Dated: December 5, 1981 The following 2 questions were raised by the CsIT in the Commissioners conference held in New Delhi in April 1981:- (a)whether proportionate demand relating to confirmed additions can be realised in cases where some grounds of appeal have been adjudicated while the case has been set aside on some other grounds? b) whether refund of taxes paid before completion of assessment can be made if the assessment is set aside? 2. The Board have been advised that the answer to the first question referred to above would depend on the nature of the order passed by the appellate authority. If the appellate authority has set aside the complete order of the assessing authority, as no demand survives, the question of enforcing the demand does not arise. Howsoever, if the appellate order sets aside the order of the ITO only on certain points and upholds on other points the points on which the order has been upheld the demand can be raised. 3. Regarding the 2nd question once an assessment is finalised the excess over what is found due by assessment is refunded to the assessee. The balance is appropriated against the tax liability. This amount is not liable to be refunded even if the ITO's order is set aside. A refund from the aforesaid sum can be granted only in pursuance of an order of the appellate authority and only to the extent ordered by him. 4. The above clarifications may be brought to the notice of all the officers working in your charge.