“…the present circular is being issued to deal with the applications for condonation of delay in filing returns claiming refund and returns claiming carry forward of loss and set off thereof containing comprehensive guidelines on the conditions for condonation and the procedures to the followed for deciding such matters,” said Central Board of Direct Taxes (CBDT) under Ministry of Finance in a circular dated October 1, 2024. ET Wealth has also received a copy of this circular.
What it means that you will no longer have to approach a higher authority even when the concerned tax amount goes up as the existing authorities will now handle the cases with higher limits.
Source: ET Wealth Online
What is the new limit for putting in condonation of delay requests
As per the circular, here are the limits of the amount of tax refund, carry forward of loss and set off:
- Not more than Rs 1 crore: “The Principal Commissioners of Income-tax/Commissioners of Income-tax (Pr. CsIT/CsIT) shall be vested with the powers of acceptance/rejection of such applications/ claims if the amount of such claims is not more than Rs 1 crore for any one assessment year.
- More than Rs 1 crore but less than Rs 3 crore: The Chief Commissioners of Income-tax (CCsIT) shall be vested with the powers of acceptance/rejection of such applications/claims if the amount of such claims exceeds Rs 1 crore but is not more than Rs 3 crore for any one assessment year.
- Exceeds Rs 3 crore: The Principal chief commissioners of Income-tax (Pr. CCsIT) shall be vested with the power of acceptance/rejection of such applications/claims if the amount of such claims exceeds Rs 3 crores for any one assessment year.
“Further, it is also provided that the Commissioner of Income-tax, Central Processing Centre (CPC), Bengaluru shall be vested with the powers for acceptance/rejection of petitions under section 119(2)(b) of the Act seeking condonation of delay in verifying the return of income by sending the ITR-V to centralised processing cell (CPC), Bengaluru within the prescribed time limit.
“As per section 139(4) a taxpayer can file return before three months prior to the end of the relevant assessment year. What happens if she/he fails to make refund claim within this period. Section 119(ii)(b) provides for filing petition for condoning delay in filing refund claim and competent authority if finds the claim bona fide condons delay and passes an order under this section. Quoting the order the taxpayer can e file return claiming refund and CPC portal facilitate uploading return in such cases. In my experience as PCIT Chennai and at Kochi I have entertained many bonafide cases (due to flood, natural calamities etc, motor accident victims) by condoning delay. Happy to note CBDT has enhanced limits for senior officers in entertaining claims of higher amounts. Otherwise taxpayers have to file petition to CBDT,” says Ramakrishnan Srinivasan, former chief commissioner of Income Tax to ET Wealth Online.
No condonation of delay request will be taken beyond this time limit
The new time limits are prospective in nature and hence these will not be applicable on old cases before October 1, 2024.
CBDT said in the circular cited above, “No condonation application for claim of refund/loss shall be entertained beyond five years from the end of the assessment year for which such application/claim is made. The time limit for filing of such application within five years from the end of assessment year will be applicable for applications filed on or after October 1, 2024. This limit of five years shall be applicable to all authorities having powers to condone the delay as per the above prescribed monetary limits. A condonation application should be disposed of, as far as possible, within six months from the end of the month in which the application is received by the competent authority.”
Conditions applicable to condonation of delay requests
As per the circular by CBDT, “in view of the amendment in section 139(9A) of the Act vide Finance Act, 2024, the powers of acceptance/rejection of the application within the monetary limits delegated to the authorities in case of such claims will be subject to the following conditions:
- At the time of considering the case under section 119(2)(b) of the Act, it shall be ensured that the 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.
- The authorities dealing with the case shall be empowered to direct the jurisdictional Assessing Officer (AO) to make the necessary inquiries in accordance with the Provisions of the Act to ensure that the application is dealt on merits in accordance with law.
What is the procedure to follow incase tax refund arose due to a court order in a pending case
According to the circular, “In a case where the refund claim has arised consequent to a Court order, the period for which any such proceedings were pending before any Court of Law shall be ignored while calculating the said period of five years, provided such condonation application is filed within six months from the end of the month in which the Court order was issued or at the end of the financial year whichever is later.
Conditions applicable for belated application for tax refund claim if submitted after completion of assessment of the ITR
A belated application for supplementary claim of refund (claim of additional amount of refund after completion of assessment for the same year) can be admitted for condonation provided other conditions referred above are fulfilled. The powers of acceptance/rejection within the monetary limits delegated to the Pr.CCsIT/CCsIT/Pr.CsIT/CsIT in case of returns claiming refund and supplementary claim of refund would be subject to the following further conditions:
- The income of the assessee is not assessable in the hands of any other person under any of the provisions of the Act.
- No interest will be admissible on belated claim of refunds.
- The refund has arisen as a result of 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.
“The delegation of powers, as per para 2 of this Circular shall also cover 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. 01.10.2024.” Which means that new monetary limit for deciding the jurisdiction will be applicable on new as well as old pending cases.
What was the earlier monetary limit for putting in condonation of delay requests
According to a circular by CBDT dated May 31, 2023, the monetary limits were as follows:
- Not more than Rs 50 lakh: The principal commissioners of Income-tax/Commissioners of Income-tax (Pr. CsIT/CsIT) shall be vested with the powers of acceptance/rejected of such applications/claims if the amount of such claims is not more than Rs 50 lakhs for any one assessment year.
- Exceeds Rs 50 lakh but less than Rs 2 crore: The Chief Commissioners of Income-tax (CCsIT) shall be vested with the powers of acceptance/rejection of such applications/claims if the amount of such claims exceeds Rs 50 lakh but is not more than Rs 2 crore for any one assessment year.
- Exceeds Rs 2 crore but less than Rs 3 crore: The Principal Chief Commissioners of Income-tax (pr. CCsIT) shall be vested with the powers of acceptance/rejection of such applications/claims if the amount of such claims exceeds Rs 2 crores but is not more than Rs 3 crores for any one assessment year.
- More than Rs 3 crore: The applications/claims for amounts exceeding Rs 3 crores shall be considered by the Board.
Note: In the new circular the principal chief commissioner is the top most authority for accepting or rejecting condonation of delay requests. Earlier it was the ‘Board’.
