Answer

1. F

   Facts

   The same refund set-off section also lets the officer withhold a refund where a scrutiny notice is pending and releasing it may hurt revenue. The refund is then decided after the assessment.

2. P

   Provisions and law

   • Sec 245, Income-tax Act 1961 (now Sec 438, Income-tax Act 2025)Refund can be set off against an earlier demand only after a written intimation to the taxpayer
   • Sec 536, Income-tax Act 2025 (repeal and savings)Proceedings for years before 1 April 2026 continue under the Income-tax Act 1961
3. A

   Analysis

   If your return is selected for scrutiny under Sec 143(2) (now Sec 270(8)), the refund can be held back with reasons recorded and approval. Example: AY 2025-26 refund of ₹80,000 shows as withheld after a scrutiny notice; it is released or adjusted once the order is passed, with interest under Sec 244A (now Sec 437) for the eligible period. Respond fully to the scrutiny so it ends sooner.

4. C

   Conclusion

   1. 1Check e-Proceedings for a scrutiny notice for that year
   2. 2Reply to the scrutiny on time
   3. 3Ask the officer for the reason the refund is withheld, if not stated
   4. 4After the order, check the refund or adjustment shown

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