GOVERNMENT OF INDIA
DEPARTMENT OF REVENUE
CENTRAL BOARD OF
DIRECT TAXES
NEW DELHI
INSTRUCTION
NO 01/2015,
Dated: January 13, 2015
Subject: – Clarification regarding applicability of section
143(1D) of the Income-tax Act, 1961 – reg.
Sub-section (1D) of section 143 of the Income-tax Act, 1961
(‘Act’) provides that where a notice has been issued to a taxpayer under
sub-section (2) of section 143 of the Act, it shall not be necessary to process
the return in such a case.
2. Some doubts have been expressed, in view of the words “shall
not be necessary” used
in the said sub-section, as to whether this provision permits processing of
returns having a refund claim, where notice under section 143(2) of the Act has
been issued.
3. The matter has been examined by the Board. Sub-section (1D) of
section 143 of the Act was introduced by the Finance Act, 2012 with effect from
01.07.2012. The purpose of introduction of this sub-section has been stated in
the Explanatory Note to the Finance Act as under:
“Under
the existing provisions, every return of income is to be processed under
sub-section (1) of section 143 and refund, if any, due is to be issued to the
taxpayer. Some returns of income are also selected for scrutiny which may lead
to raising a demand for taxes although refunds may have been issued earlier at
the time of processing.
It
is therefore proposed to amend the provisions of the Income-tax Act to provide
that processing of return will not be necessary in a case where notice under
sub-section (2) of section 143 has already been issued for scrutiny of the
return.’
Thus, in cases where an unprocessed return is selected for
scrutiny, the legislative intent is to prevent the issue of refund after
processing as scrutiny proceedings may result in demand for taxes on finalization
of the assessment subsequently.
4. Considering the unambiguous language of the relevant provision
and the intention of law as discussed above, the Central Board of Direct Taxes,
in exercise of the powers conferred on it under section 119 of the Act hereby
clarifies that the processing of a return cannot be undertaken after notice has
been issued under sub-section (2) of section 143 of the Act. It shall, however,
be desirable that scrutiny assessments in such cases are completed
expeditiously.
5. This may be brought to the notice of all concerned for strict
compliance.
6. Hindi version to follow.
(F.No.225/319/2014-ITA.II)
(Rohit Garg)
Deputy Secretary to
the Government of India
