Is there a departmental instruction I can quote when CPC adjusts my refund without notice?
Yes. Instruction No. 12/2013 dated 9 September 2013 directs that the provisions of s.245 be strictly adhered to before any adjustment of refund is made. It follows the Delhi High Court's directions in Court On Its Own Motion v. UOI, W.P.(C) 2659/2012 dated 14 March 2013, and requires prior intimation, an opportunity to the assessee to respond, examination of that response by the Assessing Officer, and communication of the final adjustment, with the Assessing Officer to respond to CPC within 45 days of the communication.
Decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes) on 2013-09-09, reported as Instruction No. 12/2013 [F. No. 312/55/2013-OT], dated 9 September 2013. It bears on section 245, section 143(1), section 244A of the Income Tax Act 1961, in Refunds, Interest & Condonation and Demand, Recovery & Stay matters.
An assessee arguing that a refund was absorbed without notice is arguing non-compliance with the section, and the department's own instruction is a cleaner lever than a judgment because it binds the officer administratively and fixes an internal timeline he has to answer for. The 45-day figure is the practical one: if CPC has referred the matter and the Assessing Officer has sat on it, that is a departure from the Board's own direction and can be put in a letter without going near a court.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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The Delhi High Court, in W.P.(C) 2659/2012 decided on 14 March 2013, gave directions on the adjustment of refunds against arrears by the Central Processing Centre. The Board issued this instruction to all officers to give effect to those directions.
As issued on 9 September 2013, the instruction directs that the provisions of s.245 be strictly adhered to before any adjustment of refund is made: prior intimation to the assessee, an opportunity to file a response, examination of that response by the Assessing Officer before any direction for adjustment, and communication of the final adjustment to the assessee; and, for refunds processed by CPC, that 'The Assessing Officer, in this regard, should respond to CPC within 45 days from the date of communication of issuance of notice u/s 245 by the CPC to the Assessing Officer.' The 45-day figure is stated here as the timeline the 2013 instruction directs, not as the procedure currently in force.
The instruction is administrative rather than reasoned. It records the High Court's directions and converts them into an internal procedure with an accountability timeline, which is how the Board customarily implements a judgment against systemic practice rather than against an individual assessment.
provisions of section 245 of the IT Act be strictly adhered to before making any adjustment of refund
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Handle my notice → Ask a CA on WhatsAppYes. Instruction No. 12/2013 dated 9 September 2013 directs that the provisions of s.245 be strictly adhered to before any adjustment of refund is made. It follows the Delhi High Court's directions in Court On Its Own Motion v. UOI, W.P.(C) 2659/2012 dated 14 March 2013, and requires prior intimation, an opportunity to the assessee to respond, examination of that response by the Assessing Officer, and communication of the final adjustment, with the Assessing Officer to respond to CPC within 45 days of the communication. This was decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes) and bears on section 245, section 143(1), section 244A of the Income Tax Act 1961. It is reported as Instruction No. 12/2013 [F. No. 312/55/2013-OT], dated 9 September 2013. An assessee arguing that a refund was absorbed without notice is arguing non-compliance with the section, and the department's own instruction is a cleaner lever than a judgment because it binds the officer administratively and fixes an internal timeline he has to answer for. The 45-day figure is the practical one: if CPC has referred the matter and the Assessing Officer has sat on it, that is a departure from the Board's own direction and can be put in a letter without going near a court. If it applies to you, the first step is this: Quote the instruction number, date and file number in the letter to the Assessing Officer — Instruction No. 12/2013 [F. No. 312/55/2013-OT], dated 9 September 2013.
The Delhi High Court, in W.P.(C) 2659/2012 decided on 14 March 2013, gave directions on the adjustment of refunds against arrears by the Central Processing Centre. The Board issued this instruction to all officers to give effect to those directions. The matter was decided on 2013-09-09 by the CBDT Circulars & Instructions (Central Board of Direct Taxes). On those facts the CBDT Circulars & Instructions held as follows. As issued on 9 September 2013, the instruction directs that the provisions of s.245 be strictly adhered to before any adjustment of refund is made: prior intimation to the assessee, an opportunity to file a response, examination of that response by the Assessing Officer before any direction for adjustment, and communication of the final adjustment to the assessee; and, for refunds processed by CPC, that 'The Assessing Officer, in this regard, should respond to CPC within 45 days from the date of communication of issuance of notice u/s 245 by the CPC to the Assessing Officer.' The 45-day figure is stated here as the timeline the 2013 instruction directs, not as the procedure currently in force.
The instruction is administrative rather than reasoned. It records the High Court's directions and converts them into an internal procedure with an accountability timeline, which is how the Board customarily implements a judgment against systemic practice rather than against an individual assessment. In the words reproduced by the source cited on this page: "provisions of section 245 of the IT Act be strictly adhered to before making any adjustment of refund"
It was decided by the CBDT Circulars & Instructions on 2013-09-09 and is reported as Instruction No. 12/2013 [F. No. 312/55/2013-OT], dated 9 September 2013. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 245, section 143(1), section 244A, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. As issued on 9 September 2013, the instruction directs that the provisions of s.245 be strictly adhered to before any adjustment of refund is made: prior intimation to the assessee, an opportunity to file a response, examination of that response by the Assessing Officer before any direction for adjustment, and communication of the final adjustment to the assessee; and, for refunds processed by CPC, that 'The Assessing Officer, in this regard, should respond to CPC within 45 days from the date of communication of issuance of notice u/s 245 by the CPC to the Assessing Officer.' The 45-day figure is stated here as the timeline the 2013 instruction directs, not as the procedure currently in force. It arises in Refunds, Interest & Condonation and Demand, Recovery & Stay matters, on section 245, section 143(1), section 244A of the Income Tax Act 1961, and was decided by Central Board of Direct Taxes. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Ask for the date on which CPC communicated the matter to the Assessing Officer, and measure the 45 days from it. Pair it with the judgment it implements: the instruction is the Board's acceptance of the two-stage reading of s.245. Check separately whether Instruction No. 02/2023 applies — that one governs withholding of a refund under s.245(2), which is a different power from set-off.
Superseded by amendment. The check that the previous pass could not finish is now complete on the point that mattered. CBDT Instruction No. 01/2023 [F. No. 312/97/2022-OT] dated 13 June 2023 expressly provides that 'the time limit of 45 days granted to the Assessing Officers to respond to CPC by Instruction No. 12/2013 in F.No. 312/55/2013-OT dated 09-09-2013 is reduced to 21 days, with immediate effect' (text quoted on the taxcorner report, fetched; the 45-to-21-day reduction is independently recorded in the BDO alert, also fetched). Nothing found withdraws Instruction No. 12/2013 as a whole, and its substantive safeguards - prior written intimation, opportunity to respond, consideration of the response by the Assessing Officer before any adjustment, and communication of the final adjustment - are still cited as operative. Separately, the BDO alert records that the Finance Act 2023 substituted s.245 itself, and that the withholding of refunds now provided for by the substituted section is governed by Instruction No. 02/2023 dated 10 November 2023, which sets its own thresholds and timelines (20 days for the Faceless Assessment Unit, 30 days for the Jurisdictional AO). That finding was checked against a published source, which is linked on this page, on 2026-08-20. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The instruction was read from a PDF hosted on itgoawbunit.org, an Income Tax employees' association site, and corroborated on itatonline.org. The official incometaxindia.gov.in page for this instruction was not opened — verify the text there before relying on it in a formal reply. The 45-day figure is quoted as it appears in the PDF: 'The Assessing Officer, in this regard, should respond to CPC within 45 days from the date of communication'. Whether the instruction has been superseded in the ten years since was not established. The statement of the holding has been rewritten to date the 45-day direction to the instruction as issued in 2013 rather than to restate it as the position in force. Whether that timeline still governs could not be verified: no page read records a later instruction amending or superseding it, and the itatonline page for this instruction lists a further CBDT directive on s.245 adjustments by CPC dated 10 February 2016 which was not opened. The suggestion that the position was overtaken in June 2023 is not established on any source here. It does not state the time the assessee gets to respond to the intimation, nor what the officer must do if the assessee does not respond. It says nothing about reversing adjustments already made in breach of the procedure, beyond what the judgment it implements directed. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
As issued on 9 September 2013, the instruction directs that the provisions of s.245 be strictly adhered to before any adjustment of refund is made: prior intimation to the assessee, an opportunity to file a response, examination of that response by the Assessing Officer before any direction for adjustment, and communication of the final adjustment to the assessee; and, for refunds processed by CPC, that 'The Assessing Officer, in this regard, should respond to CPC within 45 days from the date of communication of issuance of notice u/s 245 by the CPC to the Assessing Officer.' The 45-day figure is stated here as the timeline the 2013 instruction directs, not as the procedure currently in force.
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