The Taxpayer’s Long Wait For An Order Giving Effect

While winning an appeal on merits should ideally resolve a taxpayer's issues, in practice, it frequently marks the beginning of a second challenging phase. Once the Commissioner (Appeals), the National Faceless Appeal Centre (NFAC), or the Income Tax Appellate Tribunal (ITAT) rules in favour of the taxpayer, the relief is not automatically applied as a reduced demand or a refund. Instead, the Jurisdictional Assessing Officer (JAO) must first calculate and implement these figures through an Order Giving Effect(OGE).

WHAT IS AN ORDER GIVING EFFECT?

An Order Giving Effect (“OGE”) is the order passed by the jurisdictional AO to implement the outcome of an appellate or rectification order – re-computing income, tax, interest and refund in line with the relief granted. the Assessing Officer (AO) is under a statutory obligation to pass the OGE within three months from the end of the month in which the appellate or revisionary order is received. This period may only be extended by the Principal Commissioner for reasons recorded in writing. [Section 153(5) of the Income-tax Act, 1961]. The provision exists precisely because relief on paper is meaningless until it is given effect to in the taxpayer's PAN. For eg: a reduced demand, a corrected interest computation, or a refund with interest under section 244A.

BCAS