Income-tax Act,1961
Act No : 43
Section :
Power to withhold refund in certain cases 4.
3[241. Power to withhold refund in certain cases4 Where refund of any amount becomes due to the assessee as a result of an order under this Act or under the provisions of sub- section (1) of section 143 after a return has been made under section 139 or in response to a notice under sub-section (1) of section 142 and the Assessing Officer is of the opinion, having regard to the fact that- (i) a notice has been issued, or is likely to be issued, under subsection (2) of section 143 in respect of the said return; or (ii) the order is the subject-matter of an appeal or further proceeding; or (iii)any other proceeding under this Act is pending. that the grant of the refund is likely to adversely affect the revenue, the Assessing Officer may, with the previous approval of the Chief Commissioner or Commissioner, withhold the refund till such time as the Chief Commissioner or Commissioner may determiner. --------------------------------------------------------------------- 1 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 2 Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4- 1989. 3 Substituted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989. Prior to the substitution, section 241, as amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988, read as under: "241. Power to withhold refund in certain cases.--Where an order giving rise to a refund is the subject-matter of an appeal or further proceeding or where any other proceeding under this Act is pending, and the Assessing Officer is of the opinion that the grant of the refund is likely to adversely affect the revenue, the Assessing Officer may, with the previous approval of the Chief Commissioner or Commissioner, withhold the refund till such time as the Chief Commissioner or Commissioner may determine." ---------------------------------------------------------------------- 1.691 is of the opinion that the grant of refund is prejudicial to Revenue, he may refer the matter to the Commissioner seeking his approval to withhold refund. In case refund is withheld the reassessment should be completed without any undue delay so that such refund could be adjusted against the resultant tax demand. [Instruction No. 1157, dated 21st March, 1978]
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