Income Tax News: The Central Board of Direct Taxes (CBDT) has introduced updated guidelines for taxpayers seeking condonation of delays in filing income tax returns (ITRs) claiming refunds or carrying forward losses. These new instructions, which came into effect on October 1, 2024, replace all previous rules and provide a clear framework for how delayed applications will be processed.
Decision-making Authority Based on Claim Amount
The guidelines specify who can approve or reject condonation claims, depending on the value of the refund or loss:
- Claims up to ₹1 crore: Decided by Principal Commissioners of Income Tax (Pr. CsIT).
- Claims between ₹1 crore and ₹3 crore: Handled by Chief Commissioners (CCsIT).
- Claims exceeding ₹3 crore: Managed by Principal Chief Commissioners (Pr. CCsIT).
Additionally, the Bengaluru Central Processing Centre (CPC) is authorized to handle cases involving delayed verification of ITR-V forms.
Time Limits and Application Deadlines
Taxpayers must submit condonation applications within five years from the end of the relevant assessment year for refunds or losses. The new rules apply to applications filed after October 1, 2024. Tax authorities are expected to process these applications within six months.
Key Criteria for Condonation Approval
To qualify for condonation, taxpayers must demonstrate that the delay was caused by genuine reasons and that they faced hardship in filing on time. In some cases, local tax officers may be directed to investigate the circumstances surrounding the delay.
Special Cases and Court Orders
For refunds resulting from a court order, the five-year application deadline excludes the period when the case was pending in court. Taxpayers in these cases have six months from the court’s decision to apply for condonation.
Supplementary refund claims (additional refunds after the original assessment) are also covered under the new rules.
No Interest on Delayed Refunds
Taxpayers filing late refund claims under the condonation guidelines will not receive any interest on the refunded amount.
These guidelines provide clarity for taxpayers seeking relief in cases of delayed filings while ensuring timely processing by tax authorities.
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