The Central Board of Direct Taxes (CBDT), under the Department of Revenue, Ministry of Finance, has recently released updated regulations outlining the process for granting condonation of delays in submitting income tax returns (ITRs) that include claims for refunds or carrying forward losses. These latest directives effectively override any prior guidelines or instructions that were in place.
Here are the top points:
1. The authority to approve or deny claims based on amounts are allocated as follows:
> Claims up to Rs 1 crore will be decided by Principal Commissioners of Income Tax (Pr. CsIT).
> Claims falling between Rs 1 crore and Rs 3 crore are within the jurisdiction of Chief Commissioners (CCsIT).
> Claims exceeding Rs 3 crore will be handled by Principal Chief Commissioners (Pr. CCsIT).
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In addition, Bengaluru’s Central Processing Centre (CPC) has the power to process applications concerning the verification of ITR-V forms that have been delayed beyond the stipulated timeframe.
2. Time limits for submission of condonation applications:
Taxpayers are required to submit condonation applications within five years from the conclusion of the assessment year for refunds or losses claims. This regulation is applicable to applications submitted post October 1, 2024. Authorities must aim to process these applications within six months.
3. Approval Criteria
In order to be approved, the taxpayer must show a legitimate justification for the delay and prove that they experienced difficulties in meeting the deadline for filing. If necessary, the authorities may assign a local tax officer to look into the matter.
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4. Special Cases:
In instances where a refund is issued due to a court order, the five-year limit for refund claims does not include the time the case was under court consideration.
Taxpayers are allowed six months from the date of the court order to request condonation.
Additional refund claims, known as supplementary refund claims, may be reviewed according to these guidelines.
5. Late refund claims
No interest will be paid on late refund claims; taxpayers filing for delayed refunds should take note of this policy.
