From,
[Your Name]
[Your Address]
[City, State, PIN Code]
[Email ID]
[Contact Number]
Date: [DD/MM/YYYY]
To,
The Assessing Officer
[Income Tax Circle/Ward]
[Office Address]
Subject: Reply to Notice Under Section 245 – Objection to Tax Demand Set-Off Against Refund
PAN No: [Your PAN]
Dear Sir/Madam,
My client [Client’s Name] has received your Notice under Section 245 of the Income Tax Act, 1961, dated [DD/MM/YYYY], proposing to set off certain outstanding tax demands against the income tax refund for Assessment Year [Mention Year].
After thoroughly reviewing the income tax records, my client wishes to raise the following objections to the proposed tax adjustment under Section 245:
- Appeal Relief Not Given Effect
- My client obtained relief in appeal before the Commissioner of Income Tax (CIT Appeals) for Assessment Year [Mention Year].
- However, the appeal effect has not yet been granted, which, upon rectification, would result in no outstanding tax liability.
- A copy of the appellate order is enclosed for reference, and I request you to recompute the tax demand accordingly.
- Incorrect Set-Off of Partnership Firm’s Tax Demand
- The tax demand related to a partnership firm for Assessment Year [Mention Year] has been proposed to be adjusted against my client’s refund solely on the basis that my client is a partner.
- However, as per the Income Tax Act, such an adjustment is not legally permissible under Section 245.
- My client formally objects to this improper tax demand adjustment.
- Foreign Income Tax Demand Kept in Abeyance Under Section 220(7)
- The outstanding tax liability for Assessment Year [Mention Year] pertains to income earned outside India.
- As per foreign exchange regulations, remittance has been restricted, and accordingly, the tax has been kept in abeyance under Section 220(7).
- Therefore, this outstanding demand should not be adjusted against my client’s refund.
Request for Full Refund Without Set-Off
- Considering the above facts, the proposed tax demand adjustment under Section 245 is not valid.
- I request you to issue my client’s full income tax refund without any set-off.
I appreciate your immediate attention to this matter and look forward to a prompt resolution.
For expert tax consultation, visit www.companymitra.com.
Thank you.
Yours faithfully,
[Your Name]
[Your Designation] (if applicable)