Transcript Issues in processing returns in CPC

By CA. M. Lakshmanan,
B. Com., F.C.A., DISA(ICAI).
Chartered Accountant, Madurai.
E-mail: [email protected]
Applicable to
returns filed electronically
and for class of assessees specified in this
behalf
The following assessees have to file
compulsorily e return only:
- Limited Companies
- Compulsory Audit Cases
- from A.Y. 2012-13 Individuals/HUFs having
Total Income above Rs. 10 Lakhs and
assessees who have got foreign assets.
To be filed with digital signature only for
Limited Companies and for others whose
accounts are audited u.s. 44 AB.
If filed without digital signature the
acknowledgement in Form V duly verified is
to be sent to CPC within 120 days by ordinary
or speed post.
If ITR V is rejected because the same is
unsigned, illegible, mutilated, bad quality or
not as per specification it is deemed to have
been not filed and the return is to filed once
again followed by submission of ITR V .
The Commissioner may condone the delay
in a case or class of cases and he can call for
fresh ITR V under special circumstances.
ACKNOWLEDGEMENT OF RECEIPT OF
ITR V
This will be sent by CPC to the email address
provided.
If not received within a reasonable time it
can be downloaded from ‘My Account”
menu.
REVISED RETURN OF INCOME
If original is filed electronically the revised is
to be filed electronically only.
Centre will process only the revised return.
INVALID or DEFECTIVE RETURN
The Commissioner may declare a return
defective due to specific reasons and the
same will be intimated to the assessee
If revised return is not filed within the time
specified the return filed will be rejected
The Commissioner has got powers to
condone the delay.
PROCESSING OF RETURNS
The returns are processed after considering
TDS/TCS and after verification of payment
of taxes, intimations are generated and sent
to assessees by e-mail.
Refunds are sent through refund bankers.
If there is demand the intimations are to be
treated as demand notice u.s. 156.
PROCESSING OF RETURNS
If for any reason the return could not
processed the same will be transferred to the
jurisdictional officer and the same will be
intimated to assessee as communication via
email.
RECTIFICATION OF MISTAKE
Mistake apparent on record
Own motion or application by assessee
To be filed electronically only
Applications are processed after being vetted
by the tax officials in the CPC.
Order u.s 154 is to be treated as demand
notice u.s 156
RECTIFICATION OF MISTAKE
If the error is due to data entry or software
error the excess refund or reduction in
demand will be corrected by CPC it on its
own motion.
If the rectification results in excess demand
or reduction in refund intimation will be
sent and reply by assessee is to be
considered.
ADJUSTMENT AGAINST OUTSTANDING
TAX DEMAND
All outstandings as uploaded by the officer
will be adjusted before issuing refund.
APPELATE PROCEEDINGS
Appeal shall lie with the CIT (Appeals)
having jurisdiction over the assessing officer.
Remand Reports and giving effect to the
appellate orders shall be done by the
Assessing officer.
NO PERSONAL APPEARANCE
Assessee or Authorised Representative shall
not be required to appear at the centre.
Written or electronic communication is
sufficient.
Centre can call for clarification, evidence or
document, which are to be submitted
electronically only.
SERVICE OF NOTICE OR
COMMUNICATION
By Post
Delivering or transmitting electronically
Placing the copy in the registered electronic
account
Any of the modes mentioned in Sec 282(1).
SERVICE OF NOTICE OR
COMMUNICATION
Date of posting in the website/email is the
date of service.
Computer generated notices need not carry
any signature.
TO OPEN THE DOCUMENT PASSWORD
IS REQUIRED
It is combination of PAN and Date of
Birth/incorporation.
This can be stored as a word file in the
computer in the respective assessee’s file for
easy retrieval at every time for opening the
documents received.
The process of request for re-sending of
Intimation u/s 143(1)/154 and refund
is available in ‘Services’ option. The Assessees
who filed their income tax return online can
request online for resending of their intimation
under section 143(1) and section 154 of the
Income tax Act, 1961. Assessee can also place
request for re-issue of income tax Refund..
CENTRALISED PROCESSING OF
RETURNS SCHEME 2011
 Infosys is the Technology Partner for 5 years
from Feb 2009
 CPC enjoys concurrent jurisdiction of all the
officers in the country
 Strength of Income Tax Staff at CPC is 35
 Strength of Infosys Staff at CPC is 150
Discussion on CPC by CA.M. Lakshmanan,
Madurai
CENTRALISED PROCESSING OF
RETURNS SCHEME 2011
CPC has got powers to
- to process the income tax returns u/s.143(1)
- to call for information u/s.133
- to rectify mistakes in processing of returns u/s.154
- to declare returns of income as defective u/s.139(9)
- to issue notice of demand u/s.156, and
- to set off or adjust refunds against outstanding tax
liability u/s.245.
Discussion on CPC by CA.M. Lakshmanan,
Madurai
CENTRALISED PROCESSING OF
RETURNS SCHEME 2011
CPC can process more than 1,00,000 returns per
day
Presently CPC processes all the e-returns filed in
the country and the Physical Returns filed in
Karnataka & Goa.
CPC is back office and not front office i.e. it carries
out the instructions of CBDT
CPC does not have powers to give effect to Appeal
Orders/audit objections
Discussion on CPC by CA.M. Lakshmanan,
Madurai
CENTRALISED PROCESSING OF
RETURNS SCHEME 2011
COMMON MISTAKES found in e-returns
Non Generation of accurate x.ml file by
private software – differences in schedules
Depreciation as per Books as per I. T not
shown
Chapter VI A Deductions not entered
correctly
Discussion on CPC by CA.M. Lakshmanan,
Madurai
CENTRALISED PROCESSING OF
RETURNS SCHEME 2011
COMMON MISTAKES found in e-returns
Mismatch between TDS claimed and
Form 26AS, Wrong CIN of Challan
Mistakes in BSR Code, Date of Payment,
Challan Serial No., Entering Major
head as 400 instead of minor head 300
for self assessment tax
Discussion on CPC by CA.M. Lakshmanan,
Madurai
CENTRALISED PROCESSING OF
RETURNS SCHEME 2011
COMMON MISTAKES found in e-returns
Wrong amounts entered in tax paid – even
difference of Re. 1/- the Challan will not be
taken into account
Wrong PAN of the Deductee is quoted by
Deductor
Wrong TAN of the Deductor is quoted by
Deductee
Discussion on CPC by CA.M. Lakshmanan,
Madurai
CENTRALISED PROCESSING OF
RETURNS SCHEME 2011
COMMON MISTAKES found in e-returns
Correct e-mail id should be given, to which
only communications will be sent and not
the one registered on the website.
Correct address is to be given
ITR V not sent in time – 7% of the assessees
didn’t send ITR V.
Discussion on CPC by CA.M. Lakshmanan,
Madurai
REQUEST BY CPC TO CA
FRETERNITY
To encourage assessees to file e-
returns
To encourage assessees to get DSCs
To send ITR V within time
To ensure quality & size of paper
Discussion on CPC by CA.M. Lakshmanan,
Madurai
REQUEST BY CPC TO CA
FRETERNITY
While making a call to CPC in
phone no.1800 425 2229 keep ready
of the following:
PAN, Date of Birth/Date of
incorporation and communication
no. of the CPC document received.
Discussion on CPC by CA.M. Lakshmanan,
Madurai
REQUEST BY CPC TO CA
FRETERNITY
 If problem is not solved get the ticket no. for
future reference.
 If demand is paid there is no need to send
copies of Challans; it will be taken care by
OLTAS.
 While making entries for TDS, there is no
need to enter all the certificates of the same
Deductor; it is sufficient to fill the total
amount under one TAN. Four quarterly
certificates can be added together.
Discussion on CPC by CA.M. Lakshmanan,
Madurai
Practical Problems
 Why registered post is not accepted?
 - [2011] 16 taxmann.com 323(Bombay)
Crawford Bayley & Co. vs. Union of India
 Disallowances are not known – difference
between returned income & assessed
income.
Discussion on CPC by CA.M. Lakshmanan,
Madurai
Practical Problems
 Loss from House Property is adjusted in
Income from Salary.
 Depreciation is disallowed if Depreciation
Schedule is not filled in.
 Donation u.s. 80 G is not allowed if the details
of order of CIT granting exemption is not
furnished in the return
 Communication is received without
attachment
Discussion on CPC by CA.M. Lakshmanan,
Madurai
Practical Problems
 Refund cheques are received or the same is
credited in the Bank Account without any
intimation/rectification order
 How much TDS is considered and how
much interest is given is not ascertainable.
 Non-existing demands are adjusted while
granting refunds.
Discussion on CPC by CA.M. Lakshmanan,
Madurai
CHANGES EXPECTED IN THE NEAR
FUTURE
 PAN encrypted DSC or plain DSC if all the
directors are foreigners
 Method of Accounting and claim for TDS to
be sorted out by jurisdictional officers
 Co-owners of Property and TDS certificate
is in the name of one owner.
 PAN of the Deductee not mentioned in the
TDS return
 Clubbing of Income – TDS is one PAN and
income offered in another PAN

Discussion on CPC by CA.M. Lakshmanan,
Madurai
SUGGESTIONS
 Registered Post with ack. due is to be
accepted
 Details of disallowances should be given
 In the ‘my account’ menu facility for down
loading intimation/rectification order
should be made available
 Mismatch in TDS between claim and
Form 26AS should be given
Discussion on CPC by CA.M. Lakshmanan,
Madurai
SUGGESTIONS
 Old out standing demands uploaded by
the assessing officer should be made
available so that the assessee can approach
the concerned officer for deleting nonexisting demands before the same are
deducted from refunds.
 Pendency of Appeals/Revisions can also be
uploaded by the concerned officials so that
the assessee can ascertain from the site the
pending proceedings.
Discussion on CPC by CA.M. Lakshmanan,
Madurai
SUGGESTIONS
 Dialogue Box/Bulletin Board should be
provided in the “My Account” menu to
accept word/excel documents wherein
the assessees can upload their
queries/doubts relating to the
intimations, rectification orders,
refunds etc.,
Discussion on CPC by CA.M. Lakshmanan,
Madurai
SUGGESTIONS
 Uploading of payment of taxes demanded
by CPC as well as existing demands relating
to earlier year should be made available.
 Likewise assessees should be given option to
upload pending refunds .
 List of donations eligible for deduction u.s
80 G should be made available in the
Income Tax site and link should be provided
in the CPC.
Discussion on CPC by CA.M. Lakshmanan,
Madurai
SUGGESTIONS
 LIST of mistakes that can be considered as
“MISTAKES apparent on Record” should be
provided so as to reduce the time in making
an application, rejecting the same etc.,
 As of now the following are not considered:
 -- Depreciation
 -- Carry forward loss
Discussion on CPC by CA.M. Lakshmanan,
Madurai
CASE LAWS
 Sending ack. by Post – [2011] 16
Taxmann.com. 323 (Bombay)
HIGH COURT OF BOMBAY
- Crawford Bayley & Co. vs.
Union of India.
Discussion on CPC by CA.M. Lakshmanan,
Madurai
CASE LAWS
 Carry forward loss
- ITAT CHANDIGAR BENCH
Ambala Central Co-op Bank
Ltd., vs. Income Tax Officer
IT APPEAL NO. 332 (CHD.) OF 2012 Discussion on CPC by CA.M. Lakshmanan,
Madurai
CONCLUSION
 This presentation is not full coverage of all the
aspects of CPC
 CPC is in the initial stages and it is to be fine tuned
for which we have to share our experiences within
ourselves and with the Department .
 We have to be very attentive and file rectification
petitions/appeals/stay petitions in time to avoid
further complications.
Discussion on CPC by CA.M. Lakshmanan,
Madurai