DRAWING & DISBURSING OFFICER (DDO)
As per central treasury rules ad payment rules, the head of office authorizes a junior officer to carry out the functions of drawal of money from govt and payments. Such an officer is called Drawing & Disbursing Officer. His main functions are to look after the regulation of receipt of govt money and incurring expenditure. Since DDO are responsible for payment of salaries, therefore sec 192 of IT act 1962 levies the power on him to deduct income tax. Sec 192 says “any person responsible for paying any income chargeable under the head ‘salaries’ shall, at the time of payment, deduct income tax on the amount payable at the average rate of income tax computed on the basis of the rates in force for the FY in which the payment is made, on the estimated income of the assessee under this head for that FY.”’
DUTIES OF DDO
DDO must ensure that proper and adequate tax is deducted from the disbursement to employees of not only additional pay and allowances but also of arrears payable. DDO are required to take into account the revised rates of surcharge while computing TDS. They should recomputed the correct tax liability of every employee and recover full tax liability thereon. Certificates of TDS should be given to each govt servant in whose case tax has been deducted during a FY. Where donations are being made to any trust, institution from salary of employee by employer the DDO may allow the benefit of 100% deduction on such donation. Every DDO is required to file an annual return of tax deduction in form no 24 by the end of may each year in respect of deductions made during the previous FY. Failure to furnish the return may lead to a penalty.
FAILURE OF TDS BY DDO
Section 201(1) states that
where a person, including the principal officer of a company who is required to
deduct any sum in accordance with the provisions of IT act does not deduct, or
does not pay or after so deducting fails to pay the whole or any part of the
tax as required by the rules, he shall be deemed to be an assessee in default
u/s 201 and is liable to payment of appropriate tax so due, penalty u/s 221
which may be as high as the amount of tax in default, prosecution which may
lead to rigorous imprisonment and also fine. According to sec 276B, if a person
fails to pay the credit of the Central govt, the TDS as required by, he shall
be punishable with rigorous imprisonment for a term which shall not be less
than 3 months but which may extend to 7 years and with fine. Interest u/s
201(1A) @1% for every month or part of a month on the due tax for the period of
default. The default runs from the date on which tax was deductible to the date
on which tax deducted is actually paid. Failure to TDS also entails penalty u/s
271C, the amount of penalty shall be equal to the amount which he failed to
deduct.
SET OFF REFUND AGAINST DEMAND
Where
under any of the provisions of the IT act a refund is found to be due to any
person, the Assessing Officer, Dy. Commissioner(appeals), Commissioner(Appeals), Chief Commissioner may set off the amount to be
refunded against any sum remaining payable under the act by the person to whom
the refund is due. In such cases an intimation in writing should be given to
the person concerned regarding the action proposed to be taken. It is necessary
to intimate the assessee about the proposed set off of refund.
PROCESSING OF RETURNS U/S 143(1) TILL SENDING INTIMATIONS
Where a return has been made u/s 139
or in response to a notice u/s 142(1), the Assessing Officer will send an
intimation to the assessee if any tax or interest is found due, after
adjustment of any TDS, advance tax paid, any tax paid on self assessment and
any amount paid otherwise than by way of tax or interest. Such intimation
should specify the sum so payable and it shall be deemed to be a notice of
demand issued u/s 156 and all the provisions of the IT act shall apply
accordingly. If any refund is due on the basis of such return, it shall be
granted to the assessee and intimation to this effect shall be sent to
assessee. Where either no sum is payable by the assessee or no refund is due to
him, the acknowledgment of the return shall be deemed to be an intimation u/s
143(1). No intimation u/s 143(1) shall be sent after expiry of 1 year from the
end of FY in which return of income is made.
PROCEDURE
FOR REGULAR ASSTT
If the Assessing Officer considers
it necessary to ensure that the assessee has not understand his income or has
not computed excessive loss or has not under paid the tax in any manner. It is
his duty to serve upon the assessee a notice u/s 143(2) requiring him to attend
his office or to produce or cause to be produced, any evidence on which he may
rely in support of the return. This notice can be issued irrespective or any
intimation having been sent by the Assessing Officer u/s 143(1) or not. The
Assessing Officer may also order u/s 142(1), the production of such account,
documents and information as he may require and may gather other evidence and
information in exercise of his powers u/s 131 to 133B and section 142(2).
INTIMATION
U/S 143(1)
This section provides that where a
return has been filed u/s 139, or in response to a notice issued u/s 142(1),
and any tax or interest is found due on the basis of such return, after
adjustment of prepaid taxes or interest, then an intimation has to be sent to
the assessee specifying the sum so payable. This intimation shall be deemed to
be a notice of demand u/s 156. Similarly, if any refund is due on the basis of
such return, it shall be granted to the assessee and an intimation to that
effect will be sent to the assessee. If no intimation is required to be sent
u/s 143(1), the acknowledgement of the return shall be deemed to be an
intimation.
IMP STATISTICAL REPORTS
1.QUARTERLY PROGRESS REPORT-This is a
report which every Assessing Officer is required to submit quarterly in the
prescribed form. It contains complete information regarding all aspects of
Assessing Officer’s work in the preceding quarter. It shows the work pending
with him at the beginning of the preceding quarter, institutions during the
quarter and his disposals during the quarter. It also reflects demand and
collection and budgetary position at the end of each quarter.The form is
divided into 17 parts. Part A shows the deployment of officers on assessment
work of total no of assessee on record and the additions to or subtraction
therefrom. It also indicates the no of assessee who have filed returns
voluntarily and in whose cases notices are issued for filing the return. Part B
reflects workload and disposal of IT assess, arrears. This part contains
analysis of workload, disposal and balance. Part C contains information
regarding wealth tax assessment which includes assessee on record, workload of
assessment, analysis of workload. Part D contains info regarding gift tax
assessment under different stats. Part E,F,G,H,I are meant for recording info
of the type mentioned in part C in regard to workload and disposal of Estate
Duty, Super Profit Tax and Surtax, interest tax, expenditure tax and hotel
receipt tax. Part J reflects work relating to deduction of TDS from various
payments. Part K reflects info of the type mentioned in part J in respect of
TCS. Part L reflects demand and collection of advance tax and penalties imposed
on defaulters. Part M is meant for showing progressive demand of collection,
both arrear and current, after accounting for the variation on account of
different reasons. Part N reflects statistics about progressive demand and
collection of estate duty, hotel receipt tax, super profit tax and surtax. Part
O reflects work load and disposal of penalty proceedings under IT,WT,GT,ET.
Part P is meant for reporting info with regard to miscellaneous work under
different direct tax laws handled by Assessing Officer. Part Q contains summary
of net collection upto the end of the quarter under different enactments. The
QPR is first prepared by the Assessing Officer who submits it to the Jt.
Commissioner or Commissioner of Income Tax. The Jt. Commissioner prepares a
consolidated progress report in respect of his range and submits it to CIT. The
CIT then prepares a consolidated report in respect of his charge and submits it
to Chief Commissioner who will furnish a consolidated QPR.
2. CAP-I = This is a monthly report to be sent by the
Chief Commissioner of IT to director (DOMS), New Delhi. It has to reach DOMS on
or before 10th day of
the month following. This report reflects collection / reduction achieved out
of current and arrear demand of IT (including corporation tax). The position of
demand outstanding with clear indication of un-realisable demand, including
demand not fallen due and demand stayed by various authorities or courts. Net
collectable demad is also reported in this report. On the basis of these
reports, a statement is compiled in DOMS which is used by various authorities,
including the concerned members of board, to monitor the performance of various
charges of C in the field of collection of taxes.
3. CAP-II = This is also a monthly statement which is
compiled by DOMS (income tax) on the basis of reports received from the CC of
IT. This is compiled by CC and DGs(inv) wise. The statement reflects
progressive work load and category wise disposal of IT assessment up to the end
of a particular month. These figures are to be indicated separately for
companies and non companies and scrutiny and non scrutiny. Statistics regarding
search and seizure block assessment, new assessee and audit objections dealt
with have also to be indicated. This statement has been prescribed to obtain
feedback regarding disposal, actual workload and expected workload of each CCs
charge. This serves a very good purpose for monitoring the performance of the
officers in the field of assessing Officer and helps the authorities to augment
the disposal by making suitable distribution / redistribution amongst Assessing
Officer.
4. REVENUE BUDGET
ESTIMATES= Revenue Budget Estimates in the Income Tax Department are
prepared in two parts:0020-Corporation Tax. 0021-Taxes on income other than
corporation tax. (1)the budget estimates serves as a guide to estimation of the
nation’s financial resources for the current year and also the ensuing year. It
is of the utmost importance that the estimates are prepared with due care and
attention. Over budgeting is as bad as under budgeting The
revenue budgets in particular are to be prepared on the basis of the approx
available data and not by way of guess work. (2)the budget heads and sub heads
are printed in the first col of the form ITNS 71. The next col gives the actual
collection and refunds of the preceding year while col 3 gives the estimate
finally adopted for the circle or ward for the current year. Columns 4 & 5
resp record the actual for the current year and the preceding year up to the
date of reporting. These two columns enable keeping a watch over the trends of
revenue in the current year for suitable remedial action. (3)besides the two
parts in the main form ITNS 71, there is summary on the last page. This summary
exhibits the estimates under arrear demand collection, advance tax etc. (4)the
budget estimates are to be sent thrice in a FY-they are referred to as the
4-monthly, 6-monthly, 9-monthly estimates. These estimates are due to be
submitted by the Assessing Officer latest by 5th Sept, 5th Nov,
21st Jan of each FY. The exact dates are fixed by each CIT of
his charge.
5. EXPENDITURE BUDGET
ESTIMATES =
Expenditure Budget Estimates is an annual financial statement of the estimated
annual revenue expenditure of the central govt prepared and presented by the FM
before both the houses of the parliament before the beginning of every FY.
Article 112 of the constitution of India provides for the presentation of the
budget. Expenditure budget estimates have to be submitted by the various
Assessing Officer, in respect of estimated expenditure under various heads.
They are to be submitted in the form of 5 monthly, 10 monthly and 11 monthly
statements. The information to be furnished in the statement relates to pay of
officers, pay of establishment, allowances. Reasons for variation between the
actual expenditure and the scale of anticipated expenditure have to be
indicated. In preparing these estimates care should be taken to make the
estimates as accurate as possible so that savings or excess are avoided or
reduced to the minimum.
GRANT OF REFUND
If the applicant is resident in
India, the amount of refund arising out of excess payment of tax is ordinarily
given by issuing refund voucher on the RBI or SBI. If the resident’s refund is
small and he finds it convenient to get it by money order, it will be sent
accordingly at govt expenses. Refund should be granted without an application
from assessee, where the assessee had made excess payment of advance tax u/s
210 or self assessment u/s 140A.
Following person are entitled to apply
for refunds:
1. The person
in whose hands the income is assessed or assessable is entitled to apply for
refund. Where one person’s income is included in the total income of another
person and taxed as such in the later’s hand under the provisions of the IT
act, it is the latter who will be entitled to claim refund.
2.The executor, administrator or other legal
representative of a deceased person or the trustee or the receiver in
insolvency or the liquidator of the company or the legal guardian of a minor,
lunatic or idiot will be entitled to claim refund.
3. An agent can apply for refund on
behalf of a non-resident person provided he is duly authorized in proper legal
form.
4. Where the
tax payable by an unregistered firm is recovered from its partners, the tax
should be treated as paid by the firm and consequently an application for
refund should be made by the firm and not by an individual partner.
5. An
ex-partner of a dissolved unregistered firm is entitled for refund on behalf of
the firm, if he obtains a letter of authority from all Ex-partner of the firm.
If the applicant is resident in India, the application for refund should be
made to the Assessing Officer who has jurisdiction over him. If the application
is non-resident, the application should be made to the AO, non resident refund
circle, Mumbai.
Any
application for refund should be made in the prescribed Form No 30 duly filled
in, signed and verified in the prescribed manner. The application should be
accompanied by return of total income in the prescribed form, certificate of
TDS in original from the persons responsible for making deductions, original
dividend warrants issued by the companies. Where the original certificates of
TDS or dividends warrants are lost, their duplicates may be filed. Such
duplicates must be accompanied by an indemnity bond. Full particulars relating
to the loss of original certificates should also be furnished.
A claim for
refund can be made within one year from the end of the AY. For Example-Income
accruing of arising in the FY 2012-13 will be assessable in the AY 2013-14 and
refund in respect of excess deduction on such income can be claimed at any time
before 31.3.15. If it is found that amount of tax has actually been paid in
excess of what was required to be paid, the amount paid in excess is refunded
to the assessee after making necessary entries in the assessment form and
registers maintained in ITO.
ASSESSEE
ENTITLED TO REFUND
An
assessee is entitled to refund :-
1. When the
Tax Collected at Source (TCS) exceeds tax actually chargeable.
2.
Where advance tax paid is more than tax determined on regular assessment or on
determination of income u/s 143(1).
3. Where Tax
Deducted at Source (TDS) from salary, interest on securities and debentures,
dividends or any other payment is higher than tax determined on regular
assessment.
4. Relief
u/s 89, 90,91.
5. Reduction
of tax on account of rectification of mistake u/s 154/155.
6. Relief on
capital gains u/s 54E & 54F.
7. Where tax
paid on self assessment u/s 140A exceeds tax actually chargeable from the
assessee.
WITHHOLDING
OF REFUND U/S 241
Refund can
be withheld where a notice has been issued or is likely to be issued u/s 143(2)
in respect of the return of income giving rise to the refund or where the order
passed by the Assessing Officer is the subject matter of an appeal or further
proceedings or where any other proceedings under the act is pending and the
Assessing Officer is of the opinion that the grant of refund is likely to
adversely affect the revenue, he may with the previous approval of the Chief
Commissioner or Commissioner, withhold the fund till such time as the Chief
Commissioner or Commissioner may determine.
PROCEDURE
FOR ISSUE OF REFUND
In the
Income Tax Department, refund arising on account of excess payment of tax is
issued on a specially printed refund voucher. This is issued by the Assessing
Officer to the RBI or SBI to pay to the person named therein the specified
amount. The refund voucher is issued to the assessee and advice note is sent to
the bank directly. The advice is sent only in cases where the amount of refund
exceeds Rs 9999. So far as the refund arising on account of assessment order,
appellate order, rectification order, revision order, order of High Court &
Supreme Court is concerned, the assessee need not file an application
therefor.
The refund
has to be issued by the Assessing Officer along with the prescribed notice of
demand. In cases of direct refunds, the assessee has to make an
application in the prescribed form along with the return of income and proof in
respect of payment/deduction of tax which is refundable.
Precautions need to be taken while
refunding:-
1. All refunds are issued on the special forms which
are on security paper and printed by security press. Each order contains three
certificates.
a) certified that with reference to the assessment records of _______
for the year _____ no _____ a refund of Rs. _____ is due to _______ .
b) certified that the tax concerning which the refund is given has been
credited in the bank.
c) certified that no refund regarding the sum has previously been
granted and this order of refund has been entered in the original file of
assessment under my signature.
These
certificates will be recorded after meeting the following requirements for each
certificate:
1. The 1st certificate requires a reference to the
assessment records to see that the refund is due.
2. The 2nd certificate is given after referring to entries
in Arrear Demand Collection Register (DCR), the certificate u/s 203 and annual
return u/s 206 so as to verify that tax concerning refund had been
deposited.
3. The 3rd certificate involves an examination of the cage
containing the record of each refund in the assessment form or intimation slip
to see that the amount in question has not been refunded previously.
2. Along with the refund order for Rs. 1000 and above, an
advice note is also issued to the bank on which refund order is drawn.
3. The particulars, such as refund order no, date of
issue, name of the payee and amount of refund have to be correctly noted.
4. The refund voucher book is kept in personal custody
of the Assessing Officer.
5. As soon as a refund order is issued, the
appropriate entry should be made by the Assessing Officer in the cage for
‘record of refunds’ in the original assessment form or the intimation slip, as
the case may be.
6.
Certificates for Tax
Deducted at Source (TDS) etc. should be duly cancelled under Assessing
Officer’s sign.
7. As an additional precaution, all vouchers are
required to be crossed and marked as ‘account payee only’.
8. The refund voucher, as well as the advice note must
invariably bear the office seal of the Assessing Officer and the AOs sign.
Instructions have been issued to the banks that voucher should not be
entertained unless they are crossed. Where any voucher is not crossed, the bank
should invariably insist on the identification of the payee and should verify
that the Assessing Officer has in fact sent a separate advice note indicating
that the voucher is not crossed.
9. After refund voucher is prepared care should be taken
to see that the refund vouchers are properly issued.
10. Refund vouchers should be sent by registered post or
delivered personally to the assessee.
11. No advice is to be sent, where the amount of refund
does not exceed Rs. 9999.
12. Two refund voucher books which are just like cheque
books, have been prescribed-one for refunds up to Rs 9999 and the other for
refunds of Rs 10000 and above with separate advice note book for the
latter.
13. Refund vouchers beyond Rs 2500 should be sent by registered
post.
14. Refund up to Rs 2500 are ordinarily to be sent through
notice server unless the assessee expresses his desire to get it by registered
post.
15. When a new refund voucher books is started, an
intimation to this effect is sent to the bank. Similarly, when there is change
of the Assessing Officer, the specimen sign of the successor, duly attested by
the predecessor should be sent to the bank.
16. Another precaution which has been provided through
administrative instructions is that in cases where amount of refunds exceeds
certain limit, the Assessing Officer is required to seek approval of his next
higher authority. The limit is prescribed by the board from time to time.
Besides refunds exceeding certain amounts are required to be checked by the Dy.
Commissioner and in some cases by the Commissioner.
DISCHARGE
OF REFUND VOUCHER
In cities of
Kolkata, Chennai, Delhi and Mumbai where MICR refund voucher order are issued
in form of a cheque, there is no necessity of obtaining discharge by the payee
on the reverse of the cheque. However, in cases where refund orders are issued
in the old conventional manner, prevailing system of discharge by payee i.e,
claimant’s sign on the reverse of the refund only will continue.
STEPS TAKEN
TO SPEED UP THE REFUND PROCESS
Delay in issue of refund has been a major grievance
area of taxpayers. On an analysis made by the Income Tax Department (ITD), it
was revealed that out of total grievance received, about 75% relate to delay or
non issuance of refunds. To improve its image, the ITD has taken many
initiatives with a view to issue speedy refunds to the taxpayers. Some of the
initiative taken by the deptt are:
1. The
procedure of issue of refund is reviewed and simplified from time to time to
remove bottlenecks which result in refund.
2. The
particulars of bank account etc of the assessee are captured in the form of
return itself in case the return result is refund.
3. At many
stations, refunds are prepared with the help of computer on running computer
stationery so that no time is lost in preparing refunds. 4. The
returns are being processed on computer to enable the department to issue
refunds timely.
5. To move
one step further, centres are being created for centralized processing of
returns with the help of technology to make the process of issue of refund
faster.
6. From time
to time, the department issues instruction to the filed formations to process
returns on priority with the sole intention to issue refunds promptly.
7. The
Refund Banker Scheme is a major initiative adopted by the department with a
view to ensure prompt issue of refunds. Presently this scheme is operational in
Delhi, Mumbai, Chennai, Bangalore etc. covering all assessee except corporate
and exemption charges. This scheme is very successful in prompt issue of
refunds and the same is intended to be extended in other station also.
REFUND
BANKER SCHEME
The pilot
scheme for sending IT refunds through a bank was inaugurated by the then
Finance Minister Sh. P Chidambaram. This scheme is running in salary charge and
other assessment charges except corporate charges. In this scheme, the IT
refunds due to taxpayer will be sent by State Bank of India (SBI) directly from
their Cash Management Product (CMP) branch in Mumbai. The scheme of refund
banker is based on the concept of refund bankers for IPOs. In this scheme, the
Assessing Officer will process the ITR on his computer. If a refund is due to
the taxpayer, the data will be picked up automatically and transmitted to the
bank. The bank will then send the funds as indicated by the Assessing Officer
either through ECS discipline or by a banker’s cheque on the tax payers address
as indicated on the return of income. An advice will also be sent to all tax
payers regarding the funds deposited in their account by ECS mode. The bank
will dispatch refund cheques within 3 working days of receipt of data.
REFUNDS DUE
TO EXCESS DEDUCTION OF TDS U/S 237
Refunds on
account of excess deduction of tax at source u/s 192 to 195 of the act are
allowed u/s 237 of the IT act. Under this section, if the amount of tax
actually paid by the assessee or on his behalf or treated as paid on his behalf
for any Assessment Year exceeds the amount with which he is properly chargeable
under the act for that year, he is entitled to a refund of the excess amount so
paid on an application being made by him in Form No. 30 and verified in the
prescribed manner. The claim has to be made within 1 year from the end of the
Assessment Year to which the claim relates. For Example - Refund claims for AY
2008-09 must be filed on or before 31st mar 2010.
INTEREST ON
DELAYED PAYMENT OF REFUND
Where the
refund is out of TCS or TDS or out of advance tax paid during the Financial
Year immediately preceeding the Assessment Year, the interest will be
calculated @0.5% for every month or part of month from the 1st day of April of assessment to the date
on which refund is granted.
No interest
is payable if the amount of refund is less than 10% of the tax as determined
u/s 143(1) or on regular assessment and u/s 244A; where the refund is not out
of advance tax or treated as tax paid, interest shall be calculated @ 0.5% for
every month of a part of month comprised in the period or periods from the
dates of payment of the tax or penalty to the date on which refund is
granted.
The amount
on which interest is to be calculated shall be refunded off to the nearest 100
rupees and for this purpose any part of a 100 rupee shall be ignored.
Where any
person makes an application for refund u/s 237 to the Assessing Officer and on
scrutiny of the evidence produced by the claimant, the Assessing Officer finds
that there will be a demand and not a refund, the Assessing Officer should pass
an order refusing the refund. A written order is necessary as an appeal lies
against such refusal of refund.
For
calculation of interest u/s 234A, 234B,
244A any fraction
of a month should be deemed to be full month. The amount on which interest is
to be calculated shall be rounded off to the nearest multiple of 100 rupee.
