The Income Tax Return (ITR) filing for the financial year 2024-25 will kick in soon once the tax department makes available online and offline forms and utilities on the e-filing portal of the Income Tax Department. Taxpayers, including salaried individuals, keenly await the tax department to upload the necessary utilities to facilitate ITR filing so that their refund amount, if any, is released at the earliest.
But for this assessment year, if you receive a smaller income tax refund or do not get any refund at all, you should check the status of your previous tax assessments and return filings. Many taxpayers have received e-mails from the tax department regarding pending assessments of returns filed previously. Taxpayers have been informed about possible adjustments to their old dues with the current refund.
According to the information in the emails received by some taxpayers, if an individual’s income tax return is pending for assessment or re-assessment, the refund will not be issued to them until the investigation is completed by the concerned authority.
Also read: Income Tax Department monitoring your financial transactions with AI – check details
On March 11, 2025, the deputy director of Income Tax sent emails to taxpayers saying that since there are pending “assessment/re-assessment proceedings in your case, the refund release/withhold will be based on the response provided by Jurisdictional Assessing Officer (JAO) in accordance with the provisions of section 245(2) of the Income Tax Act, 1961.”
The Income Tax Department says that section 245(2) of the Income Tax Act empowers tax officials to take action in such cases and adjust the outstanding amount of any year with the refund of the current year.
Purpose is to ensure ‘pending tax liabilities are recovered’, say tax experts
According to CA (Dr.) Suresh Surana, these notices are intimations issued by the tax department under Section 245(2) of the Income Tax Act, 1961 (hereinafter referred to as ‘the IT Act’). “The department proposes to adjust a taxpayer’s current year tax refund against any outstanding tax demand of earlier years. The primary intent of this provision is to ensure that pending tax liabilities are recovered before issuing any refunds, thereby preventing revenue leakage.”
These notices typically arise in cases where a taxpayer’s Income Tax Return (ITR) has been selected for assessment or reassessment,
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