Taxpayers must file condonation applications within five years from the end of the assessment year for claims of refunds or losses.
The Central Board of Direct Taxes (CBDT) has issued new guidelines for condonation of delay in filing income tax returns (ITRs) claiming refunds or carrying forward losses. These rules supersede all previous instructions.
Here’s what taxpayers need to know:
- Power to accept/reject claims based on amounts
- Claims up to ₹1 crore: Principal Commissioners of Income Tax (Pr. CsIT) can decide these cases.
- Claims between ₹1 crore and ₹3 crore: Chief Commissioners (CCsIT) have the authority.
- Claims exceeding ₹3 crore: Principal Chief Commissioners (Pr. CCsIT) will handle these applications.
- Additionally, Bengaluru’s Central Processing Centre (CPC) is empowered to process applications related to verifying ITR-V forms delayed beyond the set time.
Time limits for filing condonation applications
- Taxpayers must file condonation applications within five years from the end of the assessment year for claims of refunds or losses.
- This rule applies to applications filed after October 1, 2024.
- Authorities must aim to process these applications within six months.
- Key conditions for approval
- The taxpayer must demonstrate a genuine reason for the delay and that they faced hardship in filing on time.
- The authorities may direct a local tax officer to investigate the case.
Special cases
If the refund is due to a court order, the five-year limit excludes the period the case was pending in court.
Taxpayers have six months from the court order date to apply for condonation.
Supplementary refund claims (additional refunds after the original assessment) can be considered under these rules.
No interest on late refund claims
If taxpayers file for a delayed refund, no interest will be paid on the refunded amount.
