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CMA Intermediate · Direct and Indirect Taxation · Self-Assessment and Intimation

After processing, an assessee was granted a refund of Rs 50,000 under section 270(1). A later regular assessment under section 270(10) shows that the refund due is only Rs 20,000. How is the excess treated?

The excess of Rs 30,000 is deemed to be tax payable by the assessee, because section 270(15)(b) treats the amount refunded at processing beyond the refund due on regular assessment as tax payable. The whole refund would be payable only if no refund were due.

  1. AIt is ignored since the refund was already granted
  2. BIt is deemed to be tax payable by the assessee, being Rs 30,000Correct
  3. CThe entire Rs 50,000 is deemed payable by the assessee
  4. DIt is adjusted only against future years' advance tax with no demand

Explanation

Under section 270(15)(b), where the amount refunded at processing exceeds the amount refundable on regular assessment, the excess is deemed to be tax payable by the assessee. The excess is Rs 50,000 minus Rs 20,000, which is Rs 30,000. The whole Rs 50,000 is deemed payable only if no refund is due on regular assessment.

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