The Central Board of Direct Taxes (CBDT) has refuted claims on the social media that the Tax Department is using arm-twisting methods by adjusting outstanding demands of the start-ups. Instead it says that email are being sent to all those who are entitled to get tax refund but also have outstanding tax to pay so that refunds are not released without adjusting against outstanding demand, if any.
CBDT said that these emails are part of the faceless communication aimed to protect public money. These emails are auto-generated under Section 245 of the I-T Act in refund cases. In case the outstanding demand has already been paid by the taxpayer or it has been stayed by the higher tax authorities, the taxpayers are requested through these mails to provide the status update so that while issuing the refund, these amounts are not held back and their refunds are released forthwith.
The statement further says that these computer generated emails have been sent to almost 1.72 lakh assessees which include all classes of taxpayers - from individual to HUF to firms, big or small companies including start-ups, and therefore to say that start-ups are being singled out and harassed is total misrepresentation of facts.
CBDT said that such communications are just a request for seeking an update response from the assessee for the proposed adjustment of refund with the outstanding demand. The letter cannot be misconstrued as a notice of recovery or be perceived as so-called arm-twisting by the I-T department, it adds.
In case the outstanding demand has already been paid by the taxpayer or it has been stayed by the higher tax authorities, the taxpayers are requested through these mails to provide the status update.
The CBDT has till date issued nearly 14 lakh refunds involving an amount of over Rs 9,000 crore to various taxpayers including individuals, HUFs, proprietors, firms, corporate, start-ups, MSMEs in order to help taxpayers in the Covid-19 pandemic situation. Many refunds are pending for the want of response from the taxpayers and will be issued at the earliest possible once the information is updated.