Rule 40G

Refund Claim Under Section 239A

1. Refund for denying liability to deduct tax

To obtain a refund of the tax deducted and paid by a person, where it was not deductible, as per the provisions of section 248 of the Act, a taxpayer had no recourse to approach the assessing officer with such request. He had to necessarily enter the appellate process by filing an appeal before the Commissioner (Appeals). At the same time, the agreement or arrangement, under which the tax had been deducted and paid, was not brought on the record of the assessing officer or examined by him.

The Finance Act, 2022 has therefore inserted a new section 239A in the Income Tax Act w.e.f. 1-4-2022.