One of the major problems of taxpayers is that they have to communicate with the Centralised Processing Centre based in Bengaluru only through letters sent by ordinary post

A large number of taxpayers across the country face various difficulties in rectifying the intimation issued by the Centralised Processing Centre (CPC) under section 143 (1)(a) of the Income-Tax Act, 1961. In order to find a solution to this and to take up the matter with the appropriate authorities, the Bombay Chartered Accountants' Society (BCAS) has asked its members to send a brief summary of the difficulties faced.

The intimation issued under section 143(1) of the I-T Act authorises the assessing officer (AO) to issue refunds and raise a demand of tax along with interest due strictly on the basis of the returns furnished by the assessee. Any mistake in computing the tax by the taxpayer falls within the scope of the Act. However, it does not cover issues like whether the income covered is chargeable to tax or not, the applicable rate of tax, the income shown as royalty, or business profit, or under any other head within the meaning of the double taxation avoidance agreement between India and other countries.

The problem is compounded in case the intimation is issued by the CPC, as there is no other way to communicate with the AO, except through letters, to a post bag number in Bengaluru. And the taxpayer has no way of knowing whether his letter has reached the appropriate authorities.

The BCAS said in a statement, "It seems that the problem becomes more acute due to lack of clarity about the methodology of getting such mistakes rectified, and on account of the fact that the applications for rectification made by the assessees remain pending without proper action."

According to the chartered accountants' society, among the major mistakes observed in the intimation are not giving credit for tax deduction at source (TDS), adjustment of wrong demand for earlier years based on erroneous records against the legitimate refund due to the assessee in subsequent years, and wrong adjustment while computing gross total income.

BCAS said its taxation committee is actively considering taking up this matter with the appropriate authorities, and in this respect it has requested all members to submit a summary of difficulties, without disclosing the identity of the assessees.

Members of the BCA can also send information about the actual number of pending applications, without citing particulars of individual cases, and the amount involved, in a format available on the society's website before 31 May 2011.