Condonation of Delay in Filing Refund Claims and Carry Forward of Losses

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Revised monetary limit for  the condonation of delay in filing refund claim and claim of carry forward of losses 

how to condone delay under income tax act

The CBDT has issued Circular No. 07/2023 dated May 31, 2023 regarding the condonation of delay in filing refund claim and claim of carry forward of losses under Section 119(2)(b) of the Income-tax Act, 1961 (“the IT Act”).  

Circular No. 09 of 2015 (the Circular) dated June 09, 2015 in F. No. 312/22/2015-OT by Central Board of Direct Taxes (the Board) prescribed comprehensive guidelines on the conditions and procedure to be followed for deciding applications for condonation of delay in filing Returns of Income (RsOI) claiming refund and RsOI claiming carry forward of loss and set- off thereof under section 119(2)(b) of the Income-tax Act, 1961

Now, vide Circular No 07/2023, The CBDT has updated the monetary limits for condonation of delay in filing refund claims and carry forward of losses as under: The competent authority will accept or reject refund claim or carry forward loss application based on following monetary limit. 

Competent Authority Monetary Limit
Principal Commissioners of Income-tax/Commissioners of Income-tax (Pr. CSIT/CSIT) Not more than Rs.50 lakhs for any one assessment year
Chief Commissioners of Income-tax (CCSIT) Exceeds Rs.50 lakhs but is not more than Rs.2 crores for any one assessment year
Principal Chief Commissioners of Income-tax (Pr. CCSIT) Exceeds Rs.2 crores but is not more than Rs.3 crores for any one assessment year
Board Exceeds Rs.3 crores

These revised monetary limits are effective from June 1, 2023. The other guidelines in Circular No. 09 of 2015 remain unchanged.

Detailed guidelines and procedure for filing application for condonation of delay in filing refund claim and claim of carry forward of losses as per Circular 9/2015:

📌Who can apply for condonation of delay?
Any person who has filed a return of income or claim for refund or carry forward of loss after the due date can apply for condonation of delay.

📌Who can grant condonation of delay? 
The Principal Commissioner of Income-tax/Commissioner of Income-tax (Pr.CsIT/CsIT) can grant condonation of delay for claims up to Rs.50 lakhs. The Chief Commissioner of Income-tax can grant condonation of delay for claims between Rs.50 lakhs and Rs.2 crores. Principal Chief Commissioner of Income-tax can condone delay for claims between Rs. 2 crores to Rs.3 crore and The Board can grant condonation of delay for claims above Rs.3 crores.

📌What are the conditions for condonation of delay?
The applicant must satisfy the following conditions in order to be granted condonation of delay:
  • The income/loss declared and/or refund claimed must be correct and genuine.
  • The applicant must show that there was a genuine hardship on merits.
  • The competent shall be empowered to direct the jurisdictional assessing officer to make necessary inquiries or scrutinize the case.
    Additional condition for grant of refund or supplementary refund:
  • The income of the assessee is not assessable in the hands of any other person under any of the provisions of the Act.
  • No interest will be admissible on belated claim of refunds.
  • 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.
📌What is the time limit for applying for condonation of delay?
An application for condonation of delay must be filed within six years from the end of the assessment year for which the refund or carry forward of loss is claimed.

📌What is the time limit for disposing application for condonation of delay? 
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.

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