CBDT Guidelines for Handling Delayed Tax Refund Claims

CBDT Guidelines for Handling Delayed Old pending Tax Refund Claims

• The Central Board of Direct Taxes issued Circular No. 11/2024 on October 1, 2024, providing new guidelines for condoning delays in filing Income Tax Returns (ITRs) that claim refunds or carry forward losses u/s 119(2)(b) of the Income-tax Act, 1961. This circular supersedes earlier instructions and introduces a structured process for handling delay-related claims based on specific monetary thresholds.
• This Central Board of Direct Taxes issued Circular No. 11/2024 on October 1, 2024 is aimed at providing a clearer and more organized process for handling delayed claims, while maintaining a structured approach for different levels of claim amounts. It also highlights the importance of prompt action by tax authorities in processing such applications.

Key Highlights of Central Board of Direct Taxes Circular No. 11/2024:

Condonation Applications:

• Taxpayers must submit condonation applications within five years from the end of the relevant assessment year for refund claims or loss carry-forward applications.

Monetary Limits for Authorities: Authority for Handling Claims:

• Principal Commissioners of Income Tax (Pr. CsIT/CsIT): Empowered to handle delay claims involving amounts up to ₹1 crore.
• Chief Commissioners of Income Tax (CCsIT): Handle claims between ₹1 crore and ₹3 crores.
• Principal Chief Commissioners of Income Tax (Pr. CCsIT): Manage claims exceeding ₹3 crores.
• Condonation of Delay in Verification:
• The Central Processing Centre (CPC) in Bengaluru is now authorized to process applications for condonation of delays in verifying ITRs.

5-Year Deadline for Claims:

• No application will be entertained if it is filed beyond five years from the end of the relevant assessment year. This applies to all applications submitted on or after October 1, 2024. In cases of refunds arising from court orders, the five-year limit does not include the period the case was pending in court.

No Interest on Late Refunds:

• No interest will be paid on refunds for claims that were delayed. Taxpayers have six months from the date of the court order to file for condonation.
• The CBDT reserves the right to review grievances arising from the application of these guidelines, ensuring transparency and efficiency for taxpayers seeking refunds or loss carry-forward approvals due to delayed ITR filing

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