Insertion of new section 239A.
66. After section 239 of the Income-tax Act, the following section shall be inserted, namely:––
Refund for denying liability to deduct tax in certain cases.
“239A.(1) Where under an agreement or other arrangement, in writing, the tax deductible on any income, other than interest, under section 195 is to be borne by the person by whom the income is payable, and such person having paid such tax to the credit of the Central Government claims that no tax was required to be deducted on such income, may, within a period of thirty days from the date of payment of such tax, file an application before the Assessing Officer for refund of such tax in such form and such manner as may be prescribed.
(2) The Assessing Officer shall, by an order in writing, allow or reject the application:
Provided that no application under sub-section (1) shall be rejected unless an opportunity of being heard has been given to the applicant.
(3) The Assessing Officer may, before passing an order under sub-section (2), make such inquiry as he considers necessary.
(4) The order under sub-section (2) shall be passed within six months from the end of the month in which application under sub-section (1) is received.”.
Notes on Clauses:
Clause 66 seeks to insert a new section 239A in the Income-tax Act relating to refund for denying liability to deduct tax in certain cases.
The proposed new section provides that where under an agreement or other arrangement, in writing, the tax deductible on any income, other than interest, under section 195 is to be borne by the person by whom the income is payable, and such person having paid such tax to the credit of the Central Government claims that no tax was required to be deducted on such income, he may file an application before the Assessing Officer for refund of such tax deducted and such application shall be filed by such person only after within a period of thirty days from the date of payment of such tax, in such form and manner as may be provided by rules.
Further, it is proposed that the Assessing Officer shall dispose of the abovementioned application for refund within a period of six months from the end of the month in which such application has been received, after making any such enquiry as he may consider necessary. The Assessing Officer may allow or reject such application by an order in writing, however, no such application shall be rejected unless an opportunity of being heard is given to the applicant.
This amendment will take effect from lst April, 2022.
