On 1st October 2024, the Central Board of Direct Taxes (CBDT) under the Department of Revenue (DoR), Ministry of Finance (MoF) has released new guidelines for handling delays in submitting Income Tax Returns (ITR) that include claims for refunds on carrying forward losses under Section 119 (2) (b) of the Income-Tax (IT) Act, 1961.
- These new guidelines supersede any previous guidelines or instructions that were in place. This rule applies to applications submitted after October 1, 2024.
- These new guidelines aim to streamline the process of handling delayed tax refund claims and loss carry forward applications.
Key Features:
Introducing a 3-tier System for Processing Applications based on claim Amounts:
i.As per the new rules, the Principal Commissioners of Income-Tax/ Commissioners of Income-Tax(Pr. CsIT/CsIT) have been vested with the powers to accept or reject such applications/claims, if the amount of such claims is up to Rs 1 crore for any one assessment year.
ii.The Chief Commissioners of Income-Tax (CCsIT) have been vested with the powers to accept or reject such applications/claims, if the amount of such claims is between Rs 1 crore and Rs 3 crore for any one assessment year.
iii.The Principal Chief Commissioners of Income-Tax (Pr. CCsIT) have been vested with the powers to accept or reject such applications/claims, if the amount of such claims is more than Rs 3Â crore for any one assessment year.
iv.Also, the new guidelines has empowered the Commissioner of Income-Tax, Central Processing Centre (CPC), Bengaluru (Karnataka) to reject or accept petitions under Section 119(2) (b) of the IT Act, 1961 seeking condonation of delay in verifying the return of income by sending the ITR-V to Bengaluru (Karnataka)-based Centralised Processing (CPC).
Examination of Applications:
i.The concerned authorities while considering the applications, are required to ensure that the assessee was prevented due to reasonable cause from filing the ITR within the due date and that the case is of genuine hardship on merits.
ii.The concerned authorities are empowered to direct the jurisdictional Assessing Officer (AO) to make necessary inquiries as per the provisions of the Act.
Time Limit:
i.As per the new guidelines, the time limit for filing such applications within 5 years from the end of assessment year will apply to applications filed on or after 1st October, 2024.
ii.The concerned authorities are expected to process these applications within a time period of 6 months of receipt.
Special Cases:
i.If the refund claims have arisen from the court order, then, the 5-year limit excludes the period the case was pending in court.
ii.In such cases, taxpayers are required to file applications within 6 months of the court order date or the end of Financial Year (FY), whichever is later.
Conditions w.r.t. power to accept or reject belated application for supplementary claim of refund applications based on Monetary Limit:
i.It is mandatory to ensure that the income of the assessee is not accessible in the hands of any other person under any provisions of the Act.
ii.No interest will be admissible on a belated claim of refunds.
iii.The refund has arisen due to the excess tax deducted/ collected at source and/ or excess advance tax payment and/or excess payment of self-assessment tax as per the provisions of the Act.
About Central Board of Direct Taxes (CBDT):
Chairman – Ravi Agrawal
Headquarter – New Delhi, Delhi
Established – 1963
