CBDT instruction on Processing of returns with refund claims
F. No. 225/98/2020/ITA-II
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
Dated: 5 July, 2021
Order under section 119 of the Income-tax Act, 1961
Subject: Processing of returns with refund claims under section 143(1) of the Income-tax Act, 1961 beyond the prescribed time limits in non-scrutiny cases-regd.
1. It has been brought to the notice of the Central Board of Direct Taxes (‘Board’) that due to certain technical issues or for other reasons not attributable to the assessees concerned, several returns for various assessment years up to the assessment year 2017-18 which were otherwise filed validly under section 139 or 142 or 119 of the Income-tax Act, 1961] (‘Act’) could not be processed under sub-section (1) of section 143 of the Act. Consequently, intimation regarding processing of such returns could not be sent within the period of one year from the end of the financial year in which such returns were filed as prescribed in the second proviso to sub-section (1) of section 143 of the Act. This has led to a situation where the taxpayer is unable to get his legitimate refund in accordance with provisions of the Act, although the delay is not attributable to him.
2. To resolve the grievances of such taxpayers, Board had earlier issued instructions/orders u/s 119 of the Act from time to time relaxing the prescribed statutory time limit for processing of such validly filed returns with refund claims in non-scrutiny cases. As per the earlier order dated 10th July 2020, time frame was given till 31.10.2020 to process such returns with refund claims.
3. The matter has been re-considered by Board in view of pending taxpayers’ grievances related to issue of refund. To mitigate genuine hardship being faced by the taxpayers on this issue, Board, by virtue of its powers under section 119 of the Act, hereby relaxes the time-frame prescribed in second proviso to sub-section (1) of section 143 and directs that all validly filed returns up to assessment year 2017-18 with refund claims, which could not be processed under sub-section (1) of section 143 of the Act and which have become time-barred, subject to the exceptions mentioned in para below, can be processed now with prior administrative approval of Pr.CCIT/CCIT concerned. The intimation of such processing under sub-section (1) of section 143 of the Act can be sent to the assessee concerned by 30.09.2021. All subsequent effects under the Act including issue of refund shall also follow as per the prescribed procedures. To ensure adequate safeguards, it has been decided that once administrative approval is accorded by the Pr.CCIT/CCIT, the Pr.CIT/CIT concerned would make a reference to the DGIT(Systems) to provide necessary enablement to the Assessing officer on a case to case basis.
4. The relaxation accorded above shall not be applicable to the following returns:
(a) returns selected in scrutiny;
(b) returns remain unprocessed, where either demand is shown as payable in the return or is likely to arise after processing it;
(c) returns remain unprocessed for any reason attributable to the assessee.
5. This may be brought to the notice of all for necessary compliance.
Director to the Government of India
Copy for information to:
1) Chairman (CBDT) and all Members of CBDT
2) All Pr.CCsIT/DsGIT with request for further necessary action in the matter.
3) DGIT(Systems) with request for further necessary action in the matter.
4) ADG(Systems)-4/Web Manager with request for uploading on department website.
5) JCIT, Database Cell for uploading on the website irsofficersonline.
6) Guard file.
Director to the Government of India