CBDT Released New Guidelines for Handling Delayed Tax Refund Claims

Current Context: The Central Board of Direct Taxes (CBDT) has issued new guidelines for handling delayed income tax refund claims and loss carry-forward applications.

• Here are the key points:
• Condonation Applications: Taxpayers must file condonation applications within five years from the end of the assessment year for claims of refunds or losses.
• Authority Based on Claim Amount:
• Claims up to ₹1 crore: Handled by Principal Commissioners of Income Tax (Pr. CsIT).
• Claims between ₹1 crore and ₹3 crore: Managed by Chief Commissioners of Income Tax (CCsIT).
• Claims exceeding ₹3 crore: Processed by Principal Chief Commissioners of Income Tax (Pr. CCsIT).
• Processing Time: Authorities aim to process these applications within six months.
• Conditions for Approval: Taxpayers must demonstrate a genuine reason for the delay and show that they faced hardship in filing on time.
• Special Cases: For refunds due to court orders, 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.
• No Interest on Late Refunds: No interest will be paid on the refunded amount for delayed claims.

Question:

1 What is the maximum time limit for filing a condonation application for delayed income tax refund or loss carry-forward claims?

• A) 3 years
• B) 4 years
• C) 5 years
• D) 6 years

Answer: C) Taxpayers must file condonation applications within five years from the end of the assessment year for claims of refunds or losses.