INCOME TAX ACT, 1961

Section 241A

Refund - Exercise undertaken by Revenue under section 241A was not in consonance with section 241A - Withholding of refund -

Revenue had produced relevant file which contained the proforma enlisting the reasons for issuance of notice under section 143(2) to assessee which, she stated, were reasons looked at by AO while putting up his proposal to PCIT for withholding of the refund under section 241A. Exercise undertaken by Revenue under section 241A was not in consonance with section 241A inasmuch, as AO had not given due regard to the facts of the case and he had not applied his mind as to why the refund was likely to adversely affect the revenue. Held: Exercise undertaken by Revenue under section 241A was not in consonance with section 241A inasmuch, as AO had not given due regard to the facts of the case and he had not applied his mind as to why the refund was likely to adversely affect the revenue. There was no reasons recorded in writing by him to justify withholding of the refund due to assessee in terms of section 143(1). Accordingly, entire exercise under section 241A was not correctly undertaken by Revenue. Therefore, Revenue was directed to consider the aspect whether the amount found due to be refunded, or any part thereof, was liable to be withheld under section 241A.

REFERRED :

FAVOUR : Directions issued

A.Y. :

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