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CA Final · Direct Tax Laws & International Taxation · Assessment of Various Entities

Anand Ltd. was processed under section 270(1) and received a refund of ₹80,000. On regular assessment under section 270(10), the refund due is determined at ₹50,000, and ₹20,000 of tax and interest had earlier been paid under sub-section (1). What follows under section 270(15)?

The excess refund of ₹30,000, being ₹80,000 less ₹50,000, is deemed to be tax payable by the assessee. The ₹20,000 paid earlier under the processing stage is deemed paid towards the regular assessment, as section 270(15) provides.

  1. AThe excess refund of ₹30,000 is deemed to be tax payable by the assessee, and the ₹20,000 paid earlier is deemed paid towards the regular assessmentCorrect
  2. BThe entire ₹80,000 refund must be returned
  3. CThe excess refund of ₹30,000 is ignored until the appeal is decided
  4. DThe ₹20,000 paid earlier is forfeited and cannot be credited

Explanation

Section 270(15)(b) provides that where the amount refunded under sub-section (1) exceeds the refundable amount on regular assessment, the excess is deemed tax payable. Here the excess is 80,000 minus 50,000, which is 30,000. Section 270(15)(a) deems the tax or interest paid under sub-section (1) to be paid towards the regular assessment, so the 20,000 is credited.

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