CBDT orders processing of late returns, refunds filed upto March 2024

New Delhi: The Central Board of Direct Taxes (CBDT) has ordered the processing of late tax returns and their refunds in cases where taxpayers have filed a request for condoning delays and reported their income by the end of March 2024. 

CBDT said in an order that returns of income filed under section 119 of the Income Tax Act under which delays are condoned, could not be processed within the statutory deadline due to a technical reason and hence refunds were not granted. 

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The tax authority said grievances were filed regarding non-receipt of refund due to non-processing of these returns in some cases.

The tax policy making body said it has now decided to relax the timeframe for processing these returns. Intimation of processing these returns will be sent to the assessees by the end of March 2026. 

Genuine hardship

Experts said that in certain cases, due to genuine hardship, taxpayers are unable to file their income tax return within the specified due dates. As a result, such taxpayers are either unable to claim refund or are denied the opportunity to carry forward the losses incurred, explained Deepesh Chheda, Partner, Dhruva Advisors, a tax and regulatory services firm.

Recognizing this, CBDT in 2015 allowed taxpayers facing genuine hardships to apply for condonation of delay in filing the return and where condonation is granted, the taxpayer could file a tax return and claim refunds or carry forward losses, subject to riders. Such relief is restricted to cases involving genuine hardship and is not available generally to all taxpayers, explained Chheda. 

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However, due to technical issues, several such returns filed pursuant to the condonation were not processed within the statutory timeline, and no intimation was issued. Consequently, refunds were not granted to such taxpayers, prompting representations from affected taxpayers, added Chheda.

Time limit relaxed

“The Board has now relaxed the time limit for processing of valid returns and directed that such returns where the time limit for issuing intimation has expired, shall now be processed. The intimation in respect of such returns shall be issued to the concerned taxpayers on or before 31 March 2026, thereby enabling genuine taxpayers to receive their refunds,” added Chheda.

The move comes after finance minister Nirmala Sitharaman earlier in the week reviewed the performance of the Income Tax department including the pace of refunds and grievance resolution. 

Sitharaman also then directed officials to monitor disposal of grievances on its online platforms, identify recurring issues and strengthen redressal mechanisms accordingly, Mint reported on 23 June. 

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CBDT’s latest circular is a welcome relief for taxpayers whose delayed returns were accepted under condonation provisions but remained unprocessed due to time limitations, said Amit Maheshwari, Tax Partner at AKM Global, a tax and consulting firm. “This move brings much needed closure and certainty, especially for those who were previously left in a state of uncertainty despite filing valid returns,” said Maheshwari.