| Question And Answer | |
|---|---|
| Subject: | Refund Adjusted Against Non-Existent Demand Despite Settlement Under DTVsV |
| Category: | Income-Tax |
| Querist: | Vishnu |
| Answered by: | Law Intern |
| Tags: | Direct Tax Vivad Se Vishvas Scheme. |
| Date: | September 21, 2025 |
I had an old tax demand which I opted to settle under the Direct Tax Vivad se Vishwas (DTVsV) scheme. A final order was issued in my favour confirming full and final settlement of the arrear.
Problem:
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Even after the settlement order, the system has not given effect to it.
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The payments made under DTVsV were wrongly credited against the old arrear instead of being treated as settlement.
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Further interest was wrongly computed on this supposed “balance demand.”
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My recent refunds have been adjusted against this non-existent demand, even though the case was already closed.
Current Situation:
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The portal still shows an outstanding demand.
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Refunds for the last year and this year were both adjusted against it.
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Despite filing a grievance, the issue is marked “resolved,” but no correction has been made in CPC’s records.
My objection/request:
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The demand should be extinguished in CPC’s system as per the DTVsV settlement order.
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Refunds wrongly adjusted should be restored along with applicable interest.
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Has anyone faced a similar issue where CPC did not give effect to a DTVsV/VSV settlement?
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Should I file a rectification request online, approach my Jurisdictional AO directly, or escalate further?
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Is there a process to recover the refunds already adjusted once the demand is nullified?
It is an unfortunate situation. A number of other taxpayers have raised similar grievances. I suggest you file a detailed petition with CPGRAMS. If that doesn’t work, you may consider filing a Writ Petition in the High Court.