The CBDT Vide Instruction No. 4 of 2014 prescribed Standard Operating Procedure (SOP) for Verification 2 and Correction of Demand available or uploaded by AO in CPC Demand Portal. Online facility has been provided to taxpayers to provided online responses to such demands.
Action to be performed by the taxpayer:
- Logon to e-filing website. Go to E-file menu and click on “Response to Outstanding Tax Demand”;
- Click on “Submit” link under Response Column for the respective Assessment Year to submit the response;
- Tax Payer has to select one of the three options from radio button i.e Demand is Correct Or Demand is Partly Correct Or Disagree with the demand;
- If taxpayer selects demand is correct, any refund due will be adjusted against outstanding demand along with the interest. If no refund is due, taxpayer has to pay the outstanding demand;
- If taxpayer selects demand is partially correct, then the amount which is correct and which is not correct has to be entered;
- If taxpayer selects demand is incorrect he should mandatorily give one or more reasons; (See Annexure I).
Wherever the taxpayer finds it difficult to access to Income Tax Department Website, he or she may make necessary application to the Assessing Officer along with the prescribed details.( See Annexure I)
Action by the Assessing Officer: Demand due to mismatch of TDS:
If taxpayer’s reply or departmental records show that the demand is on account of TDS mismatch the AO has to follow the below stated steps:
Ø TDS credits are available in the system: AO should reduce the demand by passing rectification order
U/S 154 on the system after taking into account the TDS credits available on the system.If the
demand is prior to 01/04/2010, the demand has to be reduced directly on CPC-FAS system after
rectification U/S 154.
1Circular No.8/2015 dt. 14/05/2015 2www.i ncometaxefili ng.gov.i n
TDS credits are not available in 26AS:The reduction can be done only in the cases of Individuals and HU F. The amount of reduction should not exceed Rs. 1, 00,000/- for that Assessing Year.Besides
- AO should pass order U/S 154 manually after obtaining the TDS certificate from the assessee;
- In case the outstanding demand is more than Rs. 25,000/- for that AY the AO should obtain an indemnity bond (irrespective of the quantum of demand being reduced);
- In case of reduction of demand exceeds Rs. 50,000/- for that AY by rectification order passed manually above besides the indemnity bond approval of Range Head should be taken before reducing demand.
If taxpayer has already paid the tax demand:
- Challan Identification Number (CIN) is available on the system: The AO should reduce the demand by posting the challan or passing rectification order U/S 154 on the system. If the demand is prior to 01/04/2010 the demand has to be reduced directly on the CPC-FAS system.
- IF CIN is not available or payment is made prior to the period of introduction of CIN: The reduction can be made only in case of Individuals and HUF provided outstanding demand does not exceed Rs. 1,00,000/- for that AY. Besides
- AO should obtain evidence of payment in the form of counter foil or bank certificate. In case where the taxpayer is senior citizen and tax payer is not able to obtain bank certificate (as the place of payment of tax is different from the current place of taxpayer), the AO should obtain the certificate from the bank directly.
- In case the outstanding demand is more than Rs. 25,000/- for that AY the AO should obtain an indemnity bond (irrespective of the quantum of demand being reduced);
- In case of reduction of demand exceeds Rs. 50,000/- for that AY by rectification order passed manually above besides the indemnity bond approval of Range Head should be taken before reducing demand.
If the payment relates to mismatch of advance tax or self-assessment tax order U/S 154 needs to be passed.
Annexure I:
|
Reason Selected |
Additional details required |
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Demand Paid and Challan has CIN |
BSR Code, Date of Payment, Serial Number of Challan, Amount etc.. |
|
Demand Paid and Challan has no CIN |
Date of Payment, Amount, Copy of Challan (Upload copy of challan) |
|
Demand already reduced by rectification or Revision |
Date of order, Demand after rectification, revision, Details of AO who has rectified or revised (Upload the copy of the order) |
|
Demand already reduced by Appellate Order but appeal effect to be given |
Date of Order, Appellate order passed by, Reference Number of Order |
|
Appeal has been filed (Stay Petition has been filed) |
Date of filing of appeal, Details of CIT, Stay Petition filed.. |
|
Appeal has been filed (Stay has been granted) |
Date of filing appeal, Appeal pending with, Stay granted (Upload the copy of stay order) |
|
Appeal has been filed (Instalments granted) |
Date of filing appeal, Details of CIT with whom appeal is pending, Instalment granted by (Upload the copy thereof) |
|
Rectification or Revised return filed at CPC |
E-Acknowledgment No, Challan Copy, TDS Certificate, Letter requesting rectification , Indemnity Bond (Upload these) |
|
Rectification filed with AO |
Date of application, other information etc |
|
Other Reasons |
Any comments of taxpayer. |
After the taxpayer submits the response the success screen would be displayed along with the transaction ID.
The taxpayer can click on “View” link under response column to view the response submitted.
This article is contributed by Partners of SBS and Company LLP - Chartered Accountant Company. You can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.
