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Income Tax Relief: Delayed Return Processing for AY 2021-22 Addressed

The Central Board of Direct Taxes (CBDT) has issued an order providing relief to taxpayers who faced delays in processing their income tax returns for the assessment year (AY) 2021-22 (financial year 2022-23). This article explains the situation, the relief offered by the CBDT, and how it impacts taxpayers.

Understanding the Issue:

Many taxpayers who electronically filed their income tax returns for AY 2021-22 with valid refund claims encountered processing delays. These delays occurred due to technical issues or reasons beyond the taxpayers’ control. Consequently, these taxpayers couldn’t receive their legitimate refunds within the prescribed timeframe stipulated by Section 143(1) of the Income-tax Act, 1961. This caused unnecessary hardship and inconvenience.

CBDT’s Order for Relief:

Recognizing the genuine hardship faced by taxpayers, the CBDT exercised its powers under Section 119 of the Income-tax Act. The order relaxes the time limit for processing electronically filed returns for AY 2021-22 with refund claims, even if the deadline for sending intimation under Section 143(1) has passed.

Key Points of the Order:

  • Eligible Returns: The relaxation applies to all electronically filed returns for AY 2021-22 with refund claims that couldn’t be processed within the regular timeframe.
  • Exceptions: The relaxation does not apply to:
    • Returns selected for scrutiny.
    • Returns where tax is payable or likely to be payable after processing.
    • Returns unprocessed due to any reason attributable to the taxpayer.
  • Processing Timeline: The Principal Commissioner of Income Tax (Pr. CCIT)/Commissioner of Income Tax (CCIT) concerned needs to grant prior administrative approval before processing these returns. The intimation of processing must be sent to the taxpayer by April 30th, 2024.
  • Subsequent Actions: Once the return is processed, subsequent actions like issuing refunds will follow the standard procedures outlined in the Income-tax Act.
  • Safeguards: To ensure proper implementation, the Pr. CCIT/CCIT will seek assistance from the Directorate General of Income Tax (Systems) to enable the Assessing Officer to process each eligible case. Additionally, the Pr. CCIT/CCIT will monitor the progress of these cases.

Income Tax Refund

Impact on Taxpayers:

This order benefits taxpayers who faced delays in receiving their income tax refunds for AY 2021-22 due to reasons beyond their control. They can now claim their legitimate refunds, even though the original processing deadline has passed.

How to Claim Your Refund:

  • Eligibility: Check if your return falls under the category eligible for this relaxation, considering the exceptions mentioned in point 4 of the order.
  • Contact Tax Authorities: If your return is eligible, contact your concerned Pr. CCIT/CCIT office for information on the specific procedures and timelines for processing your case.
  • Track Progress: Stay informed about the status of your refund by checking the income tax e-filing portal or by contacting your tax authorities.

Additional Information:

  • The order emphasizes that all other provisions of the Income-tax Act remain applicable.
  • The Hindi version of the order will be issued shortly.

Conclusion:

The CBDT’s order provides a welcome reprieve for taxpayers who faced unforeseen delays in receiving their income tax refunds. By understanding the order and taking the necessary steps, these taxpayers can now claim their rightful refunds.

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F. No. 225/132/2023/ITA41
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

*****

North Block, the 01st March, 2024

Order under section 119 of the Income-tax Act, 1961

Subject: Processing of returns of income validly filed electronically with refund claims under section 143(1) of the Income-tax Act, 1961 beyond the prescribed time limits in non-scrutiny cases-regd.

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 assessment year (AY) 2021-22, 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 timeframe prescribed under sub-section (1) of section 143 of the Act. This has led to a situation where the taxpayers are unable to get their legitimate refund in accordance with provisions of the Act, although the delay is not attributable to them.

2. The matter has been considered by Board. 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 returns of income validly filed electronically for AY 2021-22 with refund claims, for which date of sending intimation under sub-section (1) of section 143 of the Act has lapsed, subject to the exceptions mentioned in para 4 below, can be processed now with prior administrative approval of Pr. CCIT/CCIT concerned. The intimation of such processing under sub-section ( I) of section 143 of the Act can be sent to the assessee concerned by 30.04.2024.

3. 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. The progress of disposal of such cases shall be monitored by the Pr.CIT/CIT concerned.

4. The relaxation accorded above shall not be applicable to the following returns:

a) returns selected in scrutiny;

b) returns remaining unprocessed, where either demand is shown as payable in the return or is likely to arise after processing it;

c) returns remaining unprocessed for any reason attributable to the assessee.

5. This may be brought to the notice of all for necessary compliance.

6. Hindi version to follow.

(Dr. Castro Jayaprakash. T)
Under Secretary to Govt. of India

Copy for information to:

i. Chairman (CBDT) and all Members of CBDT

ii. All Pr. CCsIT/DsGIT

iii.  DGIT(Systems),Delhi & DGIT (Systems),Bengaluru with request for further necessary action in the matter

iv. ADG (TPS)-1 and ADG(TPS)-2

v. ADG(Systems)-4 with request for uploading on department’s official website

vi. JCIT, Database Cell for uploading on IRS Officers website

vii. Guard file.

(Dr. Castro Jayaprakash. T)
Under Secretary to Govt. of India

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