Refund on appeal, etc.
[Section-435 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 435(1) of Income Tax Act 2025
435(1) Where, as a result of any order passed in appeal or other proceeding under this Act, refund of any amount becomes due to the assessee, the Assessing Officer shall, except as otherwise provided in this Act, refund the amount to the assessee without his having to make any claim in that behalf.
Section 435(2) of Income Tax Act 2025
435(2) Where, by the order as referred to in sub-section (1),—
- 435(2)(a) an assessment is set aside or cancelled and an order of fresh assessment is directed to be made, the refund, if any, shall become due only on the making of such fresh assessment;
- 435(2)(b) the assessment is annulled, the refund shall become due only of the amount, if any, of the tax paid in excess of the tax chargeable on the total income returned by the assessee.
FAQs on Section 435 of Income Tax Act 2025
When does a refund become due to an assessee as per Section 435(1)?
A refund becomes due when any order is passed in appeal or other proceedings under the Act resulting in a refund. The Assessing Officer must refund the amount without the assessee needing to make a separate claim, unless otherwise provided in the Act.
Does the assessee need to file a claim to receive a refund under Section 435(1)?
No, the assessee is not required to make a separate claim. The refund must be issued by the Assessing Officer automatically as per the order passed.
What happens if the assessment is set aside or cancelled and a fresh assessment is directed?
In such a case, as per Section 435(2)(a), the refund, if any, becomes due only upon completion of the fresh assessment.
What if the assessment is annulled?
Under Section 435(2)(b), if an assessment is annulled, the refund becomes due only for the amount of tax paid in excess of the tax chargeable on the total income returned by the assessee.
Is refund under Section 435 linked to the total income returned by the assessee?
Yes, in the case of annulment of assessment under Section 435(2)(b), the refund is limited to the tax paid in excess of the tax chargeable on the returned income.
Can the refund be withheld by the Assessing Officer under this section?
Section 435(1) requires the refund to be made unless otherwise provided in the Act. If there are specific provisions allowing withholding, they would apply separately.
Does Section 435 apply only to appellate orders?
No, Section 435 applies to any order passed in appeal or other proceedings under the Act.
What is the relevance of “without his having to make any claim” in Section 435(1)?
It emphasizes that the refund process is automatic upon such an order; no action is required from the assessee to initiate it.
Are reassessments treated differently for refunds under this section?
Yes, if a fresh assessment is directed after setting aside or cancellation (Section 435(2)(a)), refund arises only after the new assessment is made.
Is the refund immediate in all cases of appellate success?
Not always. It depends on the nature of the appellate or other order. Immediate refund occurs unless the case falls under Section 435(2)(a) or 435(2)(b).
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