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

Kapoor Textiles filed a return and received an intimation under section 270(1) granting a refund of Rs 40,000, which was paid. Later, on regular assessment under section 270(10), the refund due is determined to be Rs 25,000. What is the consequence under section 270(15)?

Rs 15,000 is deemed to be tax payable. When the refund granted on intimation exceeds the refund due on regular assessment, only the excess is treated as tax payable. Here Rs 40,000 was refunded and Rs 25,000 is due, so the excess is Rs 15,000.

  1. ARs 15,000 is deemed to be tax payable by the assesseeCorrect
  2. BRs 40,000 is deemed to be tax payable by the assessee
  3. CNothing is payable since the refund was already granted
  4. DRs 25,000 is deemed to be tax payable by the assessee

Explanation

Under section 270(15)(b), where the amount refunded under the intimation exceeds the amount refundable on regular assessment, the excess is deemed to be tax payable by the assessee. The excess is Rs 40,000 minus Rs 25,000, which is Rs 15,000. Option B wrongly treats the whole refund as payable, which applies only if no refund is due on regular assessment.

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