Delay in Refund Claim & Carry Forward of Losses

Condonation of Delay in Filing Refund Claim & Carry Forward of Losses

Guidelines for Condonation of delay in filing refund claim and claim of carry forward of losses

In supersession of all earlier Instructions / Circulars / Guidelines issued by CBDT from time to time 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 under section 119(2)(b) of the Income-tax Act (the Act), Income Tax Circular No. 9/2015 Dt. June 9, 2015 has been issued containing comprehensive guidelines on the conditions for condonation and the procedure to be followed for deciding such matters.

Claims of not more than ₹ 10 lakhs for any one assessment year

The Principal Commissioners of Income-tax / Commissioners of Income-tax (Pr.CsIT/CsIT) shall be vested with the powers of acceptance/rejection of such application/claims if the amount of such claims is not more than ₹ 10 lakhs for any one assessment year.

Claims exceeding ₹ 10 lakhs but not more than ₹ 50 lakhs for any one assessment year

The Principal Chief Commissioners of Income-tax/Chief Commissioners of Income-tax (Pr.CCsIT/CCsIT) shall be vested with the powers of acceptance / rejection of such application / claims if the amount of such claims exceeds ₹ 10 lakhs but is not more than ₹ 50 lakhs for any one assessment year.

Claims exceeding ₹ 50 lakhs for any one assessment year

The applications / claims for amount exceeding ₹ 50 lakhs shall be considered by the CBDT.

Time Limit of 6 Years for Refund / Carry Forward Claims

No condonation application for claim of refund/loss shall be entertained beyond six years from the end of the assessment year for which such application/claim is made. This limit of six years shall be applicable to all authorities having powers to condone the delay as per the above prescribed monetary limits, including the CBDT.

Time Limit of 6 months for disposal of Refund / Carry Forward Claims

A condonation application should be disposed of within six months from the end of the month in which the application is received by the competent authority, as far as possible.

No Time Limit for Refund / Carry Forward Claims arising out of Court Orders

In a case where refund claim has arisen consequent to 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 six years, provided such condonation application is filed within six months from the end of the month in which the Court order was issued or the end of financial year whichever is later.

Power to review Refund / Carry Forward Claims

The powers of acceptance / rejection of the application within the monetary limits delegated to the Pr.CCsIT/CCsIT/Pr.CsIT/CsIT in case of such claims will be subject to following conditions:

i. At the time of considering the case under Section 119(2)(b), it shall be ensured that the income/loss declared and /or refund claimed is correct and genuine and also that the case is of genuine hardship on merits.

ii. The Pr.CCIT/CCIT/Pr.CIT/CJT dealing with the case shall be empowered to direct the jurisdictional assessing officer to make necessary inquiries or scrutinize the case in accordance with the provisions of the Act to ascertain the correctness of the claim.

Belated Application for Refund / Carry Forward Claims

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 as 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:

i. The income of the assessee is not assessable in the hands of any other person under any of the provisions of the Act.

ii. No interest will be admissible on belated claim of refunds.

iii. 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.

Cases relating investment in 8% Savings (Taxable) Bonds, 2003

In the case of an applicant who has made investment in 8% Savings (Taxable) Bonds, 2003 issued by Government of India opting for scheme of cumulative interest on maturity but has accounted interest earned on mercantile basis and the intermediary bank at the time of maturity has deducted tax at source on the entire amount of interest paid without apportioning the accrued Interest/TDS, over various financial years involved, the time limit of six years for making such refund claims will not be applicable.

Scope of Income Tax Circular No. 9/2015 dt. June 9, 2015

This circular will cover all such applications/claims for condonation of delay under section 119(2)(b) which are pending as on the date of issue of the Circular.

Powers of CBDT and Review / Appeals of its Orders

CBDT reserves the power to examine any grievance arising out of an order passed or not passed by the authorities mentioned in para 2 above and issue suitable directions to them for proper implementation of this Circular. However, no review of or appeal against the orders of such authorities would be entertained by the CBDT.

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