Section 245 of the Income Tax Act empowers the Assessing Officer...

Section 245 of the Income Tax Act empowers the Assessing Officer to adjust refund against outstanding tax demand and withhold refund where assessment or reassessment is pending. The Finance Act, 2023 integrated sections 241A and 245. Section 245(2) allows withholding refund if grant adversely affects revenue, with reasons recorded and approval. The amendment proposes retaining the phrase "for reasons recorded in writing" and extending the withholding period to 60 days from assessment date. Consequential amendment in section 244A disallows additional interest during withholding period. The amendment takes effect from October 1, 2024.

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