Centralised Processing, Verification and Communication Schemes

Introduction

The CBDT has centralized its communication and return processing mechanism so that proceedings are closed with speed and efficiency. Accordingly, the CBDT has framed the centralized schemes - for processing of returns, for verification of documents and for issue of notice.

1. Centralised Processing of Returns Scheme, 2011

Section 143(1A) enables the Board to frame a scheme for centralised processing of returns with a view to expeditiously determining the tax payable by, or the refund due to, the assessee. Further, Section 143(1B) empowers the Central Government to issue notification to direct that any of the provisions of the Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in that notification.

The Centralised Processing of Returns Scheme, 2011 has been notified vide Notification No. S.O. 16(E), dated 04-01-2012. The Central Government has notified the provisions relating to processing of returns which shall not apply or shall apply with exceptions, modifications and adaptations in the Notification No. S.O. 17(E), dated 04-01-2012.

1.1 Enabling provision

The Board has framed this scheme for centralised processing of return for the purpose of summary assessment. This scheme has been framed so that returns can be processed and tax payable by or refund due to the assessee can be determined with speed and efficiency.

1.2 Scope of Scheme

This scheme will cover all Income-tax return irrespective of the mode of filing. Thus, returns filed electronically or in paper form will be processed in accordance with this scheme only. To require the Centralized Processing Centre to process an Income-tax return, the assessee shall be required to do certain things which have been discussed below. Further, the activities to be undertaken by the CPC to process the Income-tax return have been discussed below.

1.3 Submission of signed copy of acknowledgement

Where an assessee files his return of income electronically, an acknowledgement of return is generated. Where a return is filed without digital signature or without electronic verification, taxpayer needs to sign the acknowledgement in form ITR-V and send it to the CPC, Bangalore by ordinary or speed post within a period of 120 days from the date of filing of return.

1.3-1. Condonation of delay

Where an acknowledgement of filing of return is not sent to CPC within 120 days, commissioner may condone the delay, in order to avoid genuine hardship, in receipt of form ITR-V.

1.3-2. Rejection of ITR-V

Where ITR-V is sent after expiry of 120 days and it is rejected due to its being unsigned, illegible, mutilated, bad quality or not as per the specification, it shall be deemed that return has never been furnished. In case of rejection, it is necessary for the assessee to furnish a fresh return electronically. Further, where ITR-V submitted by the assessee can't be considered for technical reasons, commissioner is empowered to require the assessee to file fresh ITR-V.

1.4 File revised return

If assessee discovers any omission or error in the return of income, then he has to furnish a revised return. Where original return was furnished electronically, the revised return shall also be furnished electronically. Where original return has not been processed, the Centre will only process the revised return and no action will be taken against original return.

1.5 Rectify the defective return

An Income-tax return may be declared as an invalid return due to the following reasons by the commissioner:

(a)  A return filed using any software not validated and approved by the director general

(b)  A return treated as defective return under Section 139(9) due to incomplete or inconsistent information in the return or for any other reason.

The Centre shall intimate the defects in the Income-tax return to the concerned assessee through e-mail or by placing a suitable communication on the website.

In response to the notice, the assessee shall furnish the rectified return within a period as mentioned in the notice. In case no response is received from the assessee, the commissioner may declare a return as not having been filed at all or he may process the return on the basis of the information available with him.

The commissioner may, with a view to avoid genuine hardship, condone the delay in filing of rectified return.

1.6 Processing of return

1.6-1. Who shall process the return?

The board has set up Centralised Processing Centres (CPC) which it deems necessary by specifying their respective jurisdiction. The Income-tax return shall be processed by the CPC.

1.6-2. Manner of processing

The sum payable to or amount of refund due to the assessee shall be determined after allowing credit for TCS, TDS and tax payment challans reported through authorised banks. After such processing, an intimation will be generated electronically and sent to the assessee through e-mail. Intimation shall specify the sum payable by or refund due to the assessee. Such intimation shall be deemed to be a notice of demand as specified under Section 156.

1.6-3. Transmission to AO

Where a return can't be processed by CPC for any reasons, Commissioner shall transmit such return to jurisdictional AO for processing.

1.7 Rectification of Mistake

Where intimation contains any mistake which is apparent from record, Centre may amend his order or intimation with a view to rectify such mistake either on his own or on receipt of application from the assessee. The assessee can file a rectification application electronically and it shall be processed in the same manner in which a return of income is processed.

Where any error occurred while processing of return due to error in data entry or a software error or otherwise, resulting in computation of excess refund or reduction in demand of tax, such error can be rectified by the centre by passing a rectification order. As a result of which the tax payable, if any, shall be recovered from the assessee.

1.8 Recovery of tax

Where rectification results in enhancing an assessment or reducing the refund or otherwise increase in the liability of the assessee, an intimation for the same shall be sent to assessee electronically and he needs to submit the response through electronic mode only. If assessee does not disagree with the demand, the tax shall be recovered from him.

Amount of Income-tax refund due to the assessee can also be set off against the amount payable by him, if any. Such adjustment shall be made by using the details of the outstanding tax demand lying against the person as uploaded onto the system of the Centre by the Assessing Officer.

1.9 Appellate proceedings

The assessee can file an appeal against the processing of return to the Commissioner (Appeals) having jurisdiction over the jurisdictional Assessing officer. Remand reports, if any, giving effect to appellate order and any other reports to be furnished before the CIT (Appeals) shall be submitted by the Assessing Officer having jurisdiction as regards the person.

1.10 No personal appearance

No assessee shall be required to appear personally or through authorised representative at the centre in connection with any proceedings. Any written or electronic communication from assessee or his authorised representative shall be a sufficient compliance of the query or clarification received from the centre. Further the centre is empowered to call for the clarifications, evidence or document as may be required by him for the purpose of processing of return. All such clarifications, evidences or documents shall be furnished electronically.

1.11 Service of Notice

Any notice, order or any other communications which are required to be served on the assessee may be made by any of the following modes:

(a)  By post

(b)  By e-mail

(c)  By uploading a copy on the registered account of assessee on e-filing website

(d)  By any other modes as may be specified under Section 282(1)

Date on which such notice, order or any other communication is posted on the website, e-mail or other electronic medium shall be deemed to be date of service.

Intimations, orders and notices shall be computer generated and there is no need to get it signed physically.

2. Centralised Processing of Statements of TDS Scheme, 2013

2.1 Enabling provisions

Section 200A of the Income-tax Act provides for processing of statements of tax deducted at source and this provision has empowered the Board to make a scheme for centralised processing of statement of TDS

2.2 Objective of the scheme

The objective behind formation of this scheme is to determine the amount of tax payable by or the amount of refund due to the assessee with speed and efficiency. To require the Centre to process the TDS Statement, the deductor shall be required to do certain things which have been discussed below. Further, the activities to be undertaken by the Centre to process the TDS statement have been discussed below.

2.3 File Correction Statement

Where a deductor discovers any mistaken in the TDS Statement, then he can file a correction statement for rectification of such mistake or to add, delete or update the information furnished in the statement delivered.

A TDS correction statement can be filed either at the authorised agency through electronic mode or online through the portal. Such statement shall be furnished under digital signature or verified through a process in accordance with the procedure, formats, and standards specified by the Director General.

2.4 Processing of Statement

The statement for tax deducted at source shall be processed in accordance with the provisions for processing of statements. Where the deductor has furnished a correction statement before date of processing, information contained in such correction statement shall also be considered.

The commissioner may adopt appropriate procedure for processing the statement. However, where it is necessary to process a statement on priority basis as per the administrative requirement, then he may decide the order of priority on such basis.

2.5 Rectification of Mistake

Where intimation contains any mistake which is apparent from record, the concerned Income-tax authority may amend his order or intimation with a view to rectify such mistake either on his own or on receipt of application from the deductor.

2.6 Recovery of tax

Where such rectification results in reducing the refund which has already been made or increasing the liability of the deductor, an intimation for the same shall be sent to deductor electronically and he needs to submit the response in the prescribed form. If assessee doesn't disagree with the demand, the tax shall be recovered from him.

Amount of refund, if any, due to the assessee can also be set off against the amount payable by him. Such adjustment shall be made by sending an intimation of the proposed action to the deductor.

2.7 Appellate proceedings

An appeal against the processing of TDS statement shall be filed to Commissioner (Appeals) having jurisdiction over the jurisdictional Assessing officer.

2.8 No personal appearance

No deductor shall be required to appear either personally or through authorised representative before the authorities at the cell in connection with any proceedings. The cell is empowered to call for clarifications, evidence or document as may be required by him for the purpose of processing of TDS statements or rectification of any order or intimation passed or sent by it. Deductor shall respond to such communications in the format specified by the Director General.

2.9 Service of Notice

Any notice, order, or any other communications which are required to be served on the deductor may be made by any of the following modes:

(a)  By e-mail

(b)  By uploading a copy on the registered account of assessee on e-filing website

(c)  By other modes as specified under section 282

Date on which such communication is posted on e-mail or electronic account of the deductor on the portal shall be deemed to be the date of service.

Intimations, orders and notices shall be computer generated and there is no need to get it signed physically.

3. Centralised Verification Scheme, 2019

3.1 Enabling Provision

Section 133C of the Income-tax Act authorise the Income-tax authorities to call for the information for the purpose of verification. This provision has authorised the Board to form a scheme for centralised issuance of notice and for processing of information or documents and providing the outcome of the processing to the Assessing Officer.

3.2 Applicability

Central Verification scheme

(a)  The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems)

(b)  The Director General of Income-tax (Risk Assessment)

(c)  The Director of Income-tax (Intelligence and Criminal Investigation)

(d)  The Commissioner of Income-tax in charge of the Centralised Processing Centre for processing of returns

(e)  The Commissioner of Income-tax in charge of the Centralised Processing Cell for processing of statements of TDS

(f)  Any other authority, body or person

3.3 Issue and service of notice

For the purpose of verifying the documents or information available with the centre, it may issue a notice to any person requiring him to furnish information or documents for such verification. Such notice shall be issued under the digital signature of the designated authority.

The centre shall serve the notice by delivering a copy by any of the following mode:

(a)  By e-mail

(b)  By uploading a copy on the registered account of assessee on e-filing website

3.4 Time limit for response

The assessee needs to furnish the information or documents on or before the date specified in the notice.

3.5 Mode of submission of response

The assessee needs to submit the response in a machine readable format in accordance with the procedures and processes specified by the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems).

3.6 Processing of Information or documents

The centre shall process the information or documents furnished by the assessee in response to the notice in accordance with the procedures and processes specified by the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems). The outcome of such processing shall also be made available by the centre to the Assessing officer.

3.7 No personal Appearance

No assessee shall be required to appear personally or through authorised representative before the designated authority at the centre in connection with any proceedings. Any written or electronic communication from assessee or his authorised representative shall be a sufficient compliance of the query or clarification received from the centre.

References

Notification No. S.O. 169(E) [NO.3/2013(F.NO.142/39/2012-SO(TPL)], Dated 15-1-2013.

Notification No. S.O. 550 (E) [NO.5/2019 (F.NO.370142/22/2017-TPL)], Dated 30-1-2019.

This article is general information and not tax advice. Provisions change. Confirm your position with a qualified professional before acting.