Under section 143(1) of Income Tax Act, 1961, an intimation for adjustment of refund/demand needs to be send within 9 months from the end of the financial year in which the return is made. Earlier this timeline was 12 months from the end of the financial year in which the return is made.
However, due to some technical issues or other reasons, of course not attributed to taxpayers several Income Tax returns up to the AY 2017-18 were not processed and consequently Intimations of the same were not sent to taxpayers. 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.
As per the earlier order dated 10th July 2020, time frame was given till 31st October 2020 to process such returns with refund claims but considering the pending taxpayers’ grievances related to issue of refund and to mitigate genuine hardship being faced by the taxpayers these time limits are further extended till 30th September 2021 through order u/s 119 of IT Act, 1961.
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.
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.
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The article has been contributed by:
CA Kavita Arora
Sr. Manager-Direct Tax
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