Amended and updated notes on section 240 of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to Refund on appeal, etc.
Chapter XIX (Sections 237 to 245) of the Income Tax Act 1961 deals with the provisions related to refunds. Section 240 of IT Act 1961 provides for Refund on appeal, etc.
Recently, we have discussed in detail section 239 (Form of claim for refund and limitation) of IT Act 1961. Today, we learn the provisions of section 240 of Income-tax Act 1961. The amended provision of section 240 is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 240 of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.
Section-240: Refund on Appeal
Where, as a result of any order passed in appeal or other proceeding under this Act, refund of any amount becomes due to the assessee, the Assessing Officer shall, except as otherwise provided in this Act, refund the amount to the assessee without his having to make any claim in that behalf:
Provided that where, by the order aforesaid,—
- (a) an assessment is set aside or cancelled and an order of fresh assessment is directed to be made, the refund, if any, shall become due only on the making of such fresh assessment;
- (b) the assessment is annulled, the refund shall become due only of the amount, if any, of the tax paid in excess of the tax chargeable on the total income returned by the assessee.