The Income-tax Act, 1961, Section 245, gives the income tax department the authority to deduct past-year income tax obligations from the amount of the current year’s refund. Since few people would recall such outdated information, there is an issue when the income-tax department sends a section 245 notice for an extremely old income tax return (ITR). The Income-tax department established the Demand Facilitation Center (DFC) in a few states to assist people in specific circumstances for free in an effort to lessen this problem and expedite the resolution of the outstanding section 245 income tax notice cases.
People who receive a section 245 income tax demand notice will be assisted by the DFC in understanding the reason for the notice. The DFC sent an email to a person who received a section 245 income tax notice saying, “Our executive will call you in the next few days..and will explain to you in detail the reason for the demand(s) and the steps needed to be taken by you to reduce/nullify the demand(s).”
What particular circumstances will the DFC assist with?
If someone receives a section 245 income tax demand notice and contests it, they can contact the income tax Assessing Officer directly or the DFC for free assistance. If a section 245 notice is something you disagree with, you have additional legal options, but they will come at a cost.
Obviously, there is no need to contact the DFC or AO if the person accepts the section 245 income tax demand notice. It is sufficient to simply accept the demand; your refund for the current year will be deducted from the demand from the prior year.