Income Tax Refund Claim Window Reduction means taxpayers now have 5 years instead of 6 years from the end of the relevant assessment year to claim income tax refunds.
As per the circular no. 11/2024 dated October 1, 2024, a new guidelines has been issued for condonation of delay in filing returns under Section 119(2)(b) of the Income-tax Act, 1961.
This circular has replaced previous instructions on condonation of delay for filing returns claiming refunds or carry forward of losses, providing updated guidelines.
Provisions of the Circular
Authority's Decisions to Accept/Reject Applications
The authorities have the powers to decide applications for condonation of delay and that are based on monetary limits:
- Principal Commissioners/Commissioners of Income-tax (Pr. CsIT/CsIT): To handle claims up to Rs 1 crore per assessment year.
- Chief Commissioners of Income-tax (CCsIT): Empowered to handle claims exceeding Rs 1 crore but up to Rs 3 crores per assessment year.
- Principal Chief Commissioners of Income-tax (Pr. CCsIT): Claims exceeding Rs 3 crores per assessment year.
- Commissioner of Income-tax, Central Processing Centre (CPC): Handles cases where there is a delay in verifying the return of income (ITR-V).
Time Limit for Filing Condonation Applications
- Condonation applications must be filed within 5 years from the end of the relevant assessment year. This rule applies to all applications filed on or after October 1, 2024.
- No condonation for refund/loss claims beyond five years from the assessment year's end.
- Condonation applications must be ideally be resolved within 6 months of receipt.
Conditions for Condonation Application
At the time of considering the case under Section 119(2)(b) of the Act, it shall be ensured that assessee was prevented by reasonable cause from filing the return of income within the due date and that the case is of genuine hardship on merits.
Authorities can direct Assessing Officers for necessary inquiries.
Refunds Arising from Court Orders
- If a refund claim has been arises due to a Court order, the time spent in legal proceedings will not count towards the 5-year limit.
- The application must be filed within 6 months of the Court order or the end of the financial year, whichever is later.
Supplementary Claim of Refund
Supplementary refund claims (additional refund requests after an assessment) allowed if:
- Income is not assessable in another person's hands.
- No interest will be paid on the delayed refund.
- The refund arises due to excess TDS, advance tax, or self-assessment tax payments.
Pending Applications or Claims
The delegation of powers applies to all such applications/claims for condonation of delay under section 119(2)(b) of the Act which are pending as on the date of issue of the Circular i.e. October 1, 2024.
Board's Oversight
The CBDT reserves the right to address grievances related to decisions under this circular and issue appropriate directions.
Income Tax Refund Claim Window Reduction concludes that claims made after this period will not be accepted, except in cases where court proceedings delay the process, provided the claim is filed within 6 months of the court order or the financial year-end.
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