A Lifeline for Taxpayers Facing Incorrect Demands

Taxation can often feel like a labyrinth, with its intricate rules and sometimes perplexing notices. Recently, the Income Tax Department’s latest initiative has come as a beacon of hope for those lost in the complex corridors of tax demands, especially the enigmatic Section 245 notices. This blog delves into the nuances of this new solution – the Demand Facilitation Centre (DFC) – designed to streamline and demystify tax demands that seem misplaced or erroneous.

Understanding Section 245 Notices

Under the purview of Section 245 of the Income-tax Act, 1961, the department is authorized to adjust any outstanding tax dues from previous years against your current year’s tax refunds. This becomes problematic when notices regarding old tax returns surface, catching taxpayers off-guard, often leaving them in a quandary over forgotten or misunderstood transactions.

The Dawn of the Demand Facilitation Centre (DFC)

To counteract this confusion and bring clarity, the Income-tax Department has rolled out the Demand Facilitation Centre. This facility is a testament to the department’s commitment to transparency and taxpayer assistance. The DFC acts as a mediator, elucidating the reasons behind these perplexing notices and advising on the necessary steps to resolve them. It’s a beacon of guidance in the often murky waters of tax compliance.

The Role of DFC in Clarifying Tax Notices

DFC’s mandate is to demystify the Section 245 notices, explaining the discrepancies or errors that triggered them. Here’s a closer look at how the DFC operates:

1.⁠ ⁠Initial Consultation: The DFC reaches out to the taxpayer, shedding light on the demand notice’s specifics, and charts out a pathway to resolution.
2.⁠ ⁠Mediation and Assistance: By examining the records linked to the notice, DFC agents can identify obvious errors, facilitating a quicker resolution process.
3.⁠ ⁠Direct Connection with Assessing Officers: In more complex cases, DFC agents can facilitate a dialogue between the taxpayer and the Assessing Officer, ensuring a comprehensive understanding of the issue at hand.

Eligibility and Approach

The DFC’s assistance is available under certain conditions. Primarily, it targets cases where the discrepancy is evident from the records or when the rectification rights reside with the Centralized Processing Centre (CPC). Taxpayers can reach out to the DFC through a toll-free number or email, ensuring easy access to this pivotal resource.

The Way Forward for Taxpayers

Upon receiving a Section 245 notice, taxpayers are encouraged to engage with the DFC. This not only expedites the resolution process but also provides a deeper understanding of one’s tax obligations. The DFC’s role is pivotal in bridging the gap between complex tax legislation and taxpayer awareness, thereby fostering a more transparent and taxpayer-friendly environment.


The introduction of the Demand Facilitation Centre is a significant stride towards simplifying the tax compliance landscape. It stands as a testament to the department’s evolving approach, focusing on taxpayer convenience and clarity. For those ensnared in the complexities of incorrect tax demands, the DFC emerges as a much-needed ally, navigating them towards a resolution with expertise and ease.

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