Income Tax Department on Tuesday said e-mails sent to assessees to seek clarification on refund should not be construed as harassment.

Central Board of Direct Taxes (CBDT), the apex policy making body for personal income tax and corporate tax, has said that computer-generated emails have been sent to almost 1.72 lakh assessees. These include all classes of taxpayers – from individuals to HUF to firms, big or small companies including start-up. This means no one has been singled out, it said.

These emails are auto-generated under section 245 of the I-T Act in refund cases where there is any outstanding demand payable by the assessee. In case the outstanding demand has already been paid by the taxpayer or it has been stayed by the higher tax authorities, the taxpayers are requested through these mails to provide the status update so that while issuing the refund, these amounts are not held back and their refunds are released forthwith.

Further, the board said that such communication is just a request for seeking an update on response from the assessee for the proposed adjustment of refund with the outstanding demand. "It...cannot be misconstrued as a notice of recovery or be perceived as so-called arm-twisting by the I-T department because the department is duty bound to protect public money by adjusting the outstanding demand before releasing the refund," it clarified.

This statement is in response to various social media posts alleging that the Income Tax Department is pursuing recovery proceedings and using arm-twisting methods by adjusting outstanding demands of the start-ups.

CBDT said that these emails are part of the faceless communication which protects public money by ensuring that refunds are not released without adjusting against outstanding demand, if any. It said it has already come out with a consolidated circular which has laid down modalities involved in assessing start-ups. Similarly, it is said that any other income tax demand of start-ups would also not be pursued unless the demand was confirmed by ITAT (Income Tax Appellate Tribunal). Besides, a start-up cell was constituted to redress grievances of start-ups and address other tax related issues of such concerns.

The board further requested start-ups to respond to its emails at the earliest so that further action can be taken by the I-T Department to release the refunds immediately.

IT Department till date issued nearly 14 lakh refunds involving an amount of over  9,000 crore to various taxpayers including individuals, HUFs, proprietors, firms, corporate, start-ups, MSMEs to help taxpayers in the Covid-19 pandemic situation. Many refunds are pending for the want of response from the taxpayers.