Withholding of tax refunds may be broadened to block refunds across assessment years, increasing delay and litigation risk.
The Finance Bill, 2023 merges section 241A into section 245, expanding authority to withhold or set-off refunds: refunds for a processed return may be blocked if assessment or reassessment is pending for any other assessment year, thereby widening the scope of administrative withholding beyond the year to which the refund pertains and potentially delaying refunds for taxpayers with concurrent proceedings. (AI Summary)