Provisions of Sec 248 of Income Tax Act will not apply in cases where date of tax payment, to credit of Central Government is on or after Apr 01, 2022
Section 248 of the Income-tax Act provides that in a case where, under an agreement or other arrangement, a person who has deducted tax on any income paid to a non-resident, other than interest, u/s 195 of the Act, he may appeal to the Commissioner (Appeals) for a declaration that no tax was deductible on such income if he claims that such tax is to be borne by him since no tax was required to be deducted on such income. Such appeal can be filed after making payment of tax so deducted to the credit of the Government account.
Further, section 249 of the Act lays down that an appeal u/s 248 of the Act should be filed within 30 days of making payment of such tax to the Government account.
The irony is that, to obtain a refund of the tax deducted and paid by a person, where it was not deductible, as per the existing provisions of section 248 of the Act, a taxpayer has no recourse to approach the Assessing Officer with such request. He has to necessarily enter the appellate process by filing an appeal before the Commissioner (Appeals). At the same time, the agreement or arrangement, under which the tax has been deducted and paid, is not brought on the record of the Assessing Officer or examined by him.
Hence, the FM proposes to insert a new section 239A in the Income Tax Act to provide that such a person, who has made the deduction of tax under such an agreement or arrangement and borne the tax liability, when no tax deduction was required, may file an application for refund of such tax deducted before the Assessing Officer. Such person can, if he is not satisfied with the order of the Assessing Officer, go into appeal against such order before the Commissioner (Appeals), u/s 246A of the Act.
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Accordingly, the provisions of section 248 of the Act will not apply in cases where the date of tax payment, to the credit of Central Government is on or after Apr 01, 2022. These amendments will take effect from April 01, 2022.
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