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CBDT Extends ITR Processing Time Limit for Refunds


cbdt-extends-itr-processing-time-limit-for-refunds

CBDT Extends ITR Processing Time Limit for Refunds: CBDT vide its Order issued under section 119 dated 10th July 2020 has extended the time limit to 31.10.202010 for processing of returns with refund claims under section 143(1) of the Income-tax Act,1961 beyond the prescribed time limits in non-scrutiny cases for all the assessment years up to Assessment Year 2017-18 barring a few exceptional cases.


The Board had earlier issued instructions/orders u/s 119 of the Act from time to time relaxing the prescribed statutory time limit for processing of such validly filed returns with refund claims in non-scrutiny cases. As per the latest order dated 5th August 2019, time frame was given till 31.12.2019 to process such returns with refund claims.


Now, the matter has been reconsidered by the Board in view of pending taxpayers' grievances related to the issue of refund. 


To mitigate genuine hardship being faced by the taxpayers on this issue, Board, by virtue of its powers under section 119 of the Act, relaxed the time-frame prescribed in the second proviso to sub-section (1) of section 143 and directs that all validly filed returns up to the assessment year 2017-18 with refund claims, which could not be processed under sub-section (1) of section 143 of the Act and which have become time-barred, subject to the exceptions mentioned in para below, can be processed now with prior administrative approval.


An intimation of such processing under section 143(1) of the Act can be sent to the assessee concerned by 31.10.2020.


The relaxation in the time limit shall not be applicable to the following cases:


(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. 


This is expected to provide liquidity relief in these stressed times to those assessees whose refunds are stuck at the income tax department but their cases are not under scrutiny. There is no monetary limit of the refund amount prescribed in the order.


This order shall not apply to the returns for AY 2018-19 and onwards.




Read the full text of the Order u/s 119 dated 10.07.2020 on Extension of Time Limit for processing of returns with refunds


F. No.22S/98/2020/ITA-II

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes


North Block, New Delhi the 10th July, 2020 


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


Subject: Processing of returns 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 various assessment years up to the assessment year 2017-18 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 period of one year from the end of the financial year in which such returns were filed as prescribed in the second proviso to sub-section (1) of section 143 of the Act. 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. 


2. To resolve the grievances of such taxpayers, Board had earlier issued instructions/orders u/s 119 of the Act from time to time relaxing the prescribed statutory time limit for processing of such validly filed returns with refund claims in non-scrutiny cases. As per the latest order dated 5th August, 2019, time frame was given till 31.12.2019 to process such returns with refund claims.


3. The matter has been re-considered by Board in view of pending taxpayers' grievances related to issue of refund. 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 validly filed returns up to assessment year 2017-18 with refund claims, which could not be processed under sub-section (1) of section 143 of the Act and which have become time-barred, subject to the exceptions mentioned in para below, can be processed now with prior administrative approval of Pr.CCIT/CCIT concerned and intimation of such processing under subsection (I) of section 143 of the Act can be sent to the assessee concerned by 31.10.2020. 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 Pr.DGIT(Systems) to provide necessary enablement to the Assessing Officer on a case to case basis.


4. 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. 


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


(Rajarajeswari R.)

Under Secretary, (ITA-II), CBDT


Download Copy of Order u/s 119 dated 10.07.2020 on Extension of Time Limit for processing of returns with refunds in pdf format.


Download Copy of Order u/s 119 dated 05.08.2019 on Extension of Time Limit for processing of returns with refunds in pdf format.

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