CBDT restricted Manual Refund of Income tax by AO

AST Instruc­tion No. 136

Sub: Restric­tion on Issuance of Man­u­al Refunds by Assess­ing Offi­cers: Reg.

Kind­ly refer to the above subject.

2. The func­tion­al­i­ties for pass­ing orders u/s 143(1) (a)/ 143(3)/154/ appeal effects/ penal­ty exist on the sys­tem and, pro­gres­sive­ly, AOs are most­ly issu­ing orders on the sys­tem from AY 2011-12 onwards. The CBDT has repeat­ed­ly instruct­ed that in all cas­es orders must be passed on the sys­tem. This has also been stressed in the Cen­tral Action Plan for each year. Fur­ther, all charges includ­ing LTUs and Cen­tral Charges are now cov­ered by Refund Banker scheme. How­ev­er, instances con­tin­ue to come to the notice of the CBDT where the Assess­ing Offi­cers have issued man­u­al refunds even in cas­es which have been processed on AST.

3. In cer­tain excep­tion­al time-bar­ring cas­es the CBDT has allowed pro­cess­ing of Returns of Income in Online TMS. The AST Instruc­tion No. 135 dat­ed 20th March 2015 pro­vides for pro­cess­ing of fol­low­ing cat­e­gories of returns for AY.2013–14 in Online TMS.

  • Cat­e­go­ry 1
Sr No. Cat­e­go­ry of cases
 I PAN under migration
II PAN is delet­ed in de-dupli­ca­tion process.
III PAN is under de-dupli­ca­tion restoration.
  • Category2:
S. No. Cat­e­go­ry  of cases
 I Invalid PAN men­tioned in the return
II PAN is not available
III Name in PAN data­base does not match with name in Return of Income
IV Return with one PAN issued to two dif­fer­ent enti­ties OR some­one fil­ing a return quot­ing the PAN of orig­i­nal hold­er and this wrong return is processed first in AST/CPC/TMS, there­fore the Sys­tem will not allow pro­cess­ing of Return of orig­i­nalPAN hold­er.
V Any oth­er con­tin­gency in AST not allow­ing the pro­cess­ing of such return even with valid PAN.

4. As per the afore­men­tioned instruc­tion, refunds can be issued via refund vouch­er print­ing facil­i­ty for Online TMS Cat­e­go­ry 1 cas­es only. Sub­se­quent to the issue of refunds, the infor­ma­tion regard­ing pro­cess­ing and refund issued, if any, needs to be inte­grat­ed with AST. How­ev­er, for the Online TMS Cat­e­go­ry 2 cas­es, refund via refund vouch­er print­ing facil­i­ty or inte­gra­tion with AST is not pos­si­ble, as the cor­rect­PAN details are not available.

5. Only in cas­es where the ini­tial under­ly­ing order is passed out­side the sys­tem, the sub­se­quent orders can­not be passed in the AST sys­tem and there­fore in such cas­es refund can­not be issued through Refund Banker. As dis­cussed in para 2 above, from AY 2011-12 onwards, most orders u/s 143(1) and sub­se­quent orders are already on AST system.

6. It is there­fore decid­ed by the CBDT that hence­forth no man­u­al refund should be issued in a case which has been processed on AST. In cas­es referred to in paras 4 & 5 or in excep­tion­al cas­es, man­u­al refunds may be issued with the fol­low­ing safeguards:

i. It is manda­to­ry for AO to take Approval by Range head for refunds upto Rs. 1 lakh and approval by CIT for refund above Rs. 1 lakh and record rea­sons as to why man­u­al refund was necessary.

ii. Manda­to­ry quot­ing of PAN, AY and Bank account num­ber on the Cheque.

iii. No man­u­al refund will be per­mit­ted if a pri­or man­u­al refund for same PAN, AY and amount has already been encashed.

7. For con­trol pur­pos­es, a sep­a­rate ITO functionality/screen is being rolled out vide this instruc­tion to cap­ture impor­tant details for man­u­al refunds (oth­er than using print refund vouch­er func­tion­al­i­ty where details are already cap­tured in the system)issued by the Assess­ing Officer(s). The Assess­ing Officer(s)are advised to manda­to­ri­ly fill these details before issuance of any man­u­al refund from the date of issue of this instruc­tion. Range Heads are advised to ensure that the Assess­ing Offi­cers duly fill all the details for such man­u­al refunds as pro­vid­ed in the func­tion­al­i­ty before issuance of any such man­u­al refund. The path of this func­tion­al­i­ty is as under:

ITD–>AST–>Others–>Manual Refund Details”

For mon­i­tor­ing by super­vi­so­ry offi­cers, the data of refunds issued man­u­al­ly and entered by the AOs in this new screen will be matched with the data of such refunds encashed as per OLTAS data­base reg­u­lar­ly to iden­ti­fy cas­es that have not been entered by AOs through MIS fea­ture that will be launched shortly.

This process would con­tin­ue till a sep­a­rate func­tion­al­i­ty is devel­oped in ITBA.

8. The CIT(COs) are request­ed to ensure that all the Assess­ing Offi­cers are enabled under Refund Banker Scheme as per new Juris­dic­tion Order issued after restruc­tur­ing w.e.f. 15.11.2014. It also needs to be ensured that the old juris­dic­tions are dis-con­tin­ued immediately.

9. For any clarifications/difficulties user is advised to lodge tick­et with Helpdesk for Any queries on this issue can also be addressed to Shri Ashish Abrol, AddI.DIT(S)- 3(1) (09013850443), ashishabrol@incometax.gov.in

10. This issues with the approval of Chair­per­son, CBDT.

Yours faith­ful­ly,

(Ramesh Krish­na­murthi)

Addl. DGIT(S)-3,New Delhi

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