Section 438 — Set off and withholding of refunds in certain cases

(1) Where a refund becomes due or is found to be due to any person
under this Act, the Assessing Officer or Commissioner or Principal Commis-
sioner or Chief Commissioner or Principal Chief Commissioner, as the case may be,
may in lieu of payment of the refund, set off the amount to be refunded or any part
of that amount, against the sum, if any, remaining payable under 4[the Income-tax
Act, 1961 (43 of 1961), or] this Act by such person.
(2) Any action under sub-section (1) shall be taken after giving an intimation in
writing to such person of the action proposed to be taken.
(3) Where,––
( a) a part of the refund is set off under sub-section (1); or
( b) no such amount as referred to in clause (a) is set off,
and refund becomes due to a person, and the Assessing Officer, having regard to
the fact that proceedings for assessment or reassessment are pending in the case
of such person, may, for reasons to be recorded in writing and with the previous
approval of the Principal Commissioner or the Commissioner, withhold the refund
up to sixty days from the date on which such assessment or reassessment is made.