Rule 230: Refund of tax borne by the payer under section 434 in Form No. 160
Section 434 covers a payer who, under a written agreement or arrangement, bears the tax deductible on income it pays, pays that tax, and then claims that no tax was deductible. The payer can apply to the Assessing Officer for a refund within thirty days from the date of payment. Rule 230 says the claim is made in Form No. 160, by the claimant or a duly authorised agent, with a copy of the agreement or arrangement.
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Bare law
Rule 230 - Refund claim under section 434
A claim for refund under section 434 shall be made in Form No. 160, by the claimant himself or through a duly authorised agent, and shall be accompanied by a copy of an agreement or other arrangement referred to in section 434.
Rule breakdown
What the rule does
Rule 230 prescribes Form No. 160 for a refund claim under section 434.
The claim may be made by the claimant himself or through a duly authorised agent. It must be accompanied by a copy of the agreement or other arrangement referred to in section 434.
Conditions in section 434
Under section 434(1), the agreement or arrangement must be in writing and must provide that the tax deductible on the income (other than interest in section 393(2) (Table: Sl. No. 17)) is to be borne by the payer. The payer must have paid the tax to the credit of the Central Government and must claim that no tax was required to be deducted.
The application is filed before the Assessing Officer within thirty days from the date of payment of the tax.
What happens next
The Assessing Officer allows or rejects the application by a written order (section 434(2)). He may make inquiries first (section 434(4)). No application is rejected without an opportunity of being heard (section 434(3)).
The order is to be passed within six months from the end of the month in which the application is received (section 434(5)).
Key takeaways
Form No. 160
The section 434 refund claim form.
Thirty days
Section 434(1) requires the application within thirty days from the date of payment of the tax.
Attach the agreement
A copy of the tax-bearing agreement or arrangement must accompany the claim.
Practical checklist
- Count the thirty days from the date the tax was paid.
- Attach a copy of the written agreement or arrangement.
Avoid
- Do not use Form No. 160 for interest referred to in section 393(2) (Table: Sl. No. 17), which section 434(1)(a) excludes.
- Do not file without written evidence that the payer bears the tax.
FAQs
Who can file Form No. 160?
The claimant himself or a duly authorised agent (Rule 230).
What is the time limit?
Section 434(1) requires the application within thirty days from the date of payment of the tax.
Is a hearing given before rejection?
Yes. Section 434(3) bars rejection without an opportunity of being heard.
How long does the Assessing Officer have to decide?
Six months from the end of the month in which the application is received (section 434(5)).
Glossary
- Agreement or other arrangement
- The written terms under which the payer bears the tax deductible on the income (section 434(1)(a)).
- Duly authorised agent
- A person authorised by the claimant to make the claim on his behalf.