Section 436 of the Income-tax Act, 2025 — Correctness of Assessment Not to Be Questioned in Refund Claims

In plain language

What Section 436 actually says

Section 436 of the Income-tax Act, 2025 is a short but powerful provision inside Chapter XX (Refunds). In plain words, it tells you that when you file a refund claim, you cannot use that refund claim to re-open, re-argue or review an assessment that has already become final and conclusive. The only relief a refund proceeding can give you is the refund of tax that was wrongly paid or paid in excess — nothing more.

The exact statutory language is: "In a claim under this Chapter, it shall not be open to the assessee to question the correctness of any assessment, or other matter decided which has become final and conclusive, or ask for a review of the aforesaid assessment or matter; and the assessee shall not be entitled to any relief on such claim except refund of tax wrongly paid or paid in excess."

This section is the direct successor to Section 242 of the Income-tax Act, 1961. The language and effect are almost identical — the 2025 Act simply renumbered and re-organised the refund provisions (old Sections 237–245) into the new Sections 431–438.

Why this section exists — the idea of "finality"

• Assessments must become final. The tax system cannot function if every closed assessment can be dragged open again indefinitely. Section 436 protects the finality of assessment orders.
• Refund is a separate, narrow remedy. A refund proceeding exists only to return money that was genuinely overpaid — it is not a back-door appeal.
• Right channel for grievances. If you disagree with an assessment, the correct route is appeal, revision or rectification within the prescribed time — not a refund claim after the order is final.

Who it applies to

• Every assessee — individuals, HUFs, firms, LLPs, companies, trusts — who files a claim for refund under Chapter XX.
• It bites hardest on taxpayers who let the appeal/revision window lapse and then try to recover tax by disputing the assessment through a refund application.
• It does not affect you if your refund arises simply from excess TDS, excess advance tax, excess self-assessment tax, or a computational error that does not require re-opening a settled assessment.

Key conditions and limits

• The matter must have become "final and conclusive." If an assessment is still under appeal or within the appeal window, Section 436 does not stop you — you challenge it through the normal appellate machinery.
• No review, no re-assessment. You cannot ask the refund authority to sit as an appellate body over the original assessment.
• Only over-payment is refundable. The relief is strictly limited to tax "wrongly paid or paid in excess."

How it interacts with related sections

• Section 431 (Refunds) creates the right to a refund; Section 436 limits how far you can push a refund claim.
• Section 433 sets the form and limitation period for making a refund claim.
• Section 435 (Refund on appeal) is the proper vehicle when a refund flows from an appellate or revisional order — that is the legitimate way relief follows a successful challenge.
• Section 437 (Interest on refunds) governs interest on delayed refunds; Section 438 covers set-off and withholding of refunds against other demands.

Practical implications for a normal taxpayer

• Act within time. If you think an assessment is wrong, file an appeal or rectification promptly. Once it is final, Section 436 shuts the door on questioning it via a refund route.
• Refund claims are for genuine over-payment only. Excess TDS, double payment, or arithmetic mistakes are fine; disputing the correctness of a settled order is not.
• Keep the two remedies distinct. Appeal = challenge the assessment. Refund = recover money already established as excess.