After engaging with indirect tax officials across the country, Union Finance Minister Nirmala Sitharaman is expected to hold a similar high-level brainstorming conclave with field formations, including Principal Chief Commissioners of the Income Tax Department, on June 23, sources told CNBC-TV18.
“Aimed at streamlining taxpayer services, expediting litigation disposal, and improving administrative accountability,” sources told CNBC-TV18.
“The meeting will centre on persistent issues such as delayed income tax refunds, pendency of appeals, and grievances that remain unresolved due to system inefficiencies. The FM is expected to review the department’s performance across zones and seek concrete action on several long-standing bottlenecks,” sources added.
Refund Delays and Grievance Redressal Under Scrutiny
A key agenda item will be the delays in processing refunds, particularly those pending under Section 143(1) due to non-processing of returns. The meeting will also address cases stuck in rectification owing to system-related issues.
Simply put, Section 143(1) of the Income Tax Act, 1961 pertains to the initial processing of income tax returns (ITRs) by the Centralized Processing Centre (CPC). It primarily checks the accuracy of the return filed. This is not a scrutiny assessment—rather, it’s an automated verification carried out before any scrutiny begins.
For example, when you file your ITR, the Income Tax Department processes it under Section 143(1) to check for arithmetical errors, compare TDS/TCS or advance tax paid with the amount claimed, cross-verify income, deductions, and exemptions with Form 26AS and the Annual Information Statement (AIS), and compute the final tax payable or refund due.
Once the processing is complete, the taxpayer receives an intimation under Section 143(1), which states whether there is no demand or refund, a demand payable, or a refund due.
Refunds under Section 143(1) may get delayed due to several reasons, including:
Mismatch in TDS/TCS Data: If your employer or bank hasn’t deposited the tax deducted, or has filed incorrect TDS returns (Form 26Q/24Q), your claim may not match the details in Form 26AS or the Annual Information Statement (AIS).
Incorrect Bank Details: If you’ve entered the wrong account number or IFSC code, the refund cannot be credited to your account.
High-volume Filings or Technical Backlogs: Around ITR due dates, the CPC often faces a heavy workload, which can delay processing under Section 143(1) and the issuance of refunds.
Incorrect or Ineligible Deduction Claims: If you claim deductions—such as under Sections 80C or 80D—without valid documentation or exceed the permissible limits, the CPC may put the refund on hold for rectification.
Discrepancies in Reported Income: If the income reported in AIS or Form 26AS is higher than what you’ve declared in your ITR, the CPC may halt processing until the discrepancy is clarified.
PAN-Aadhaar Issues or KYC Non-Compliance: Refunds may not be issued if your PAN isn’t linked to Aadhaar or if KYC norms haven’t been fulfilled.
Section 245 Adjustment Cases: If you have outstanding tax dues, your refund may be adjusted against them under Section 245. However, processing can be delayed while these dues are verified.
During the meeting, “Field formations may be asked to submit detailed data on pending Centralised Processing Centre (CPC) tickets, average time taken for disposal, and unresolved complaints on the e-Nivaran portal, the department’s digital grievance platform.”
Litigation Management and Legacy Appeal Disposal
Sources further shared that the Finance Minister is also expected to assess age-wise pendency of appeals and push for the disposal of long-pending litigation. Senior officials say that zones with high pendency levels may be asked to present a timeline-bound plan to reduce backlog and ease the burden on both taxpayers and the department.
Legacy tax disputes, many of which have remained unresolved for years, are likely to be reviewed closely, with an emphasis on improving disposal rates and curbing fresh litigation.
Vigilance & Disciplinary Matters on the Radar
Another area of concern will be vigilance cases and disciplinary proceedings that have remained pending beyond permissible timelines, which is also on the agenda for discussion, sources said.
“There are zones where such cases have not moved for months. These delays may come under sharp focus,” sources added.
“The FM could also question on non-compliance in such matters and seek updates on why internal accountability processes have stalled in certain regions,” sources added.
Push for Best Practices and Tech-Enabled Governance
At the same time, further on the agenda could be that the Finance Minister would like to boost the morale of officers by appreciating zones that have adopted efficient practices, shown improvements in taxpayer outreach, and leveraged technology to streamline operations, sources said.
“FM might ask other regions to pick up these models as templates for replication,” sources added.
Sources familiar with the matter say the FM could also reiterate the broader vision of a taxpayer-centric, transparent, and tech-enabled Income Tax Department, underlining that reforms must translate into better service delivery on the ground.
This meeting follows a similar engagement earlier this week with CBIC officials, where the Finance Minister flagged the gap between tax leakages detected and actual recoveries. The June 23 meeting is expected to be another significant step in the government’s continued focus on administrative reform and citizen-first governance in the tax apparatus.
