CBDT Extends Processing Deadline for Electronically Filed Income Tax Returns

Case Name:

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

Key Takeaways:

1. CBDT issued an order under section 119 (of Income Tax Act, 1961), to address delays in processing income tax returns with refund claims for specific assessment years.
2. The order extends the processing timeframe for electronically filed returns for assessment years 2018-19, 2019-20, and 2020-21, subject to certain exceptions.
3. The relaxation does not apply to returns selected for scrutiny, unprocessed returns with payable demand, or likely demand, and returns remaining unprocessed for reasons attributable to the assessee.
4. The order outlines that all subsequent effects under the Act, including the issuance of refunds, will follow prescribed procedures.
5. Taxpayers are encouraged to understand the exceptions and take advantage of the extended processing timeframe.

Synopsis:

The Central Board of Direct Taxes (CBDT), under the Ministry of Finance, issued an order on the 1st of December, 2023, under section 119 (of Income Tax Act, 1961), addressing the processing of electronically filed income tax returns with refund claims. This order extends the deadline beyond prescribed limits for non-scrutiny cases due to technical issues and other non-attributable reasons causing delays in the processing of returns for assessment years 2018-19, 2019-20, and 2020-21.

Let’s break down the key points of the order:

1. Background: The CBDT acknowledges that validly filed returns under sections 139 (of Income Tax Act, 1961), 142(1) (of Income Tax Act, 1961), or 119 of the Income Tax Act, 1961, for the mentioned assessment years, could not be processed within the specified timeframe under section 143(1) (of Income Tax Act, 1961) due to technical issues or reasons not attributable to the taxpayers.

2. Previous Orders: The CBDT had previously issued orders under section 119 (of Income Tax Act, 1961), extending the statutory time limit for processing such returns in non-scrutiny cases. The most recent order, dated 16th October 2023, extended the time frame until 31.01.2024 for processing returns of income filed electronically with refund claims up to AY 2017-18.

3. Current Order: The recent order further relaxes the time-frame prescribed in the second proviso to sub-section (1) of section 143 (of Income Tax Act, 1961), allowing the processing of returns with refund claims for the mentioned assessment years, subject to prior administrative approval of Pr.CCIT/CCIT concerned. The intimation of such processing can be sent to the assessee concerned by 31.01.2024.

4. Subsequent Effects and Safeguards: All subsequent effects under the Act, including the issuance of refunds, will follow prescribed procedures. Adequate safeguards are in place to monitor the progress of disposal of such cases.

5. Exceptions: The relaxation does not apply to returns selected for scrutiny, unprocessed returns with payable demand, or likely demand, and returns remaining unprocessed for reasons attributable to the assessee.

In conclusion, the CBDT’s order provides relief for taxpayers facing delays in receiving refunds due to processing issues. The extension of the processing timeframe offers a solution to genuine hardships faced by taxpayers for specific assessment years. Taxpayers are encouraged to understand the exceptions and take advantage of the extended processing timeframe.