Answer

1. F

   Facts

   The department can set off a refund against an outstanding demand after giving you notice. If the old demand is wrong or already paid, you need that demand corrected, usually by rectification of the old year, and then the adjusted amount comes back.

2. P

   Provisions and law

   • Sec 245 (now Sec 438)Set off of refund against a demand, after intimation
   • Sec 154 (now Sec 287)Rectification of mistake apparent from record in an intimation or order
3. A

   Analysis

   Ideally you respond when the Sec 245 intimation arrives and say the demand is paid or wrong. If the set off has already happened, find the old year's demand, show the challan or the reason it is wrong, and file rectification for that year with CPC or the AO. Once the old demand is reduced, the ₹22,000 should be refunded with interest under Sec 244A as applicable. Old demands migrated from legacy systems often need the Jurisdictional AO.

4. C

   Conclusion

   1. 1Check the old year under Pending Actions > Response to Outstanding Demand
   2. 2Upload challan proof or the reason the demand is wrong
   3. 3File rectification for the old year, to CPC or the Jurisdictional AO
   4. 4Follow up on refund reissue after the old demand is cleared

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.