SUBJECT: CONDONATION OF DELAY IN FILING REFUND CLAIM AND
CLAIM OF CARRY FORWARD OF LOSSES UNDER SECTION 119(2)(B) OF THE INCOME-TAX ACT.
In supersession of all earlier
Instructions/Circulars/Guidelines issued by the Central Board of Direct Taxes
(the Board) from time to time to deal with the applications for condonation of
delay in filing returns claiming refund and returns claiming carry forward of
loss and set-off thereof under section 119(2)(b) of the Income-tax Act (the
Act), the present Circular is being issued containing comprehensive guidelines
on the conditions for condonation and the procedure to be followed for deciding
The Principal Commissioners of Income-tax/Commissioners of
Income-tax (Pr.CsIT/CsIT) shall be vested with the powers of
acceptance/rejection of such application/claims if the amount of such claims is
not more than ₹ 10 lakhs for any one
assessment year. The Principal Chief Commissioners of Income-tax/Chief
Commissioners of Income-tax (Pr.CCsIT/CCsIT) shall be vested with the powers of
acceptance/rejection of such application/claims if the amount of such claims
exceeds ₹ 10 lakhs but is not
more than ₹ 50 lakhs for any one
assessment year. The applications/claims for amount exceeding ₹ 50 lakhs shall be considered by the
No condonation application for claim of refund/loss shall be
entertained beyond six years from the end of the assessment year for which such
application/claim is made. This limit of six years shall be applicable to all
authorities having powers to condone the delay as per the above prescribed
monetary limits, including the Board. 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.
In a case where refund claim has arisen consequent to Court
order, the period for which any such proceedings were pending before any Court
of Law shall be ignored while calculating the said period of six years,
provided such condonation application is filed within six months from the end
of the month in which the Court order was issued or the end of financial year
whichever is later.
The powers of acceptance/rejection of the application within
the monetary limits delegated to the Pr.CCsIT/CCsIT/Pr.CsIT/CsIT in case of
such claims will be subject to following conditions:
i). At the time of considering the case under Section
119(2)(b), it shall be ensured that the income/loss declared and /or refund
claimed is correct and genuine and also that the case is of genuine hardship on
ii). The Pr.CCIT/CCIT/Pr.CIT/CJT dealing with the case shall
be empowered to direct the jurisdictional assessing officer to make necessary
inquiries or scrutinize the case in accordance with the provisions of the Act
to ascertain the correctness of the claim.
A belated application for supplementary claim of refund
(claim of additional amount of refund after completion of assessment for the
same year) can be admitted for condonation provided other conditions as
referred above are fulfilled. The powers of acceptance/rejection within the
monetary limits delegated to the Pr.CCsIT/CCsIT/Pr.CsIT/CsIT in case of returns
claiming refund and supplementary claim of refund would be subject to the
following further conditions:
i). The income of the assessee is not assessable in the hands
of any other person under any of the provisions of the Act.
ii). No interest will be admissible on belated claim of
iii). 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.
In the case of an applicant who has made investment in 8%
Savings (Taxable) Bonds, 2003 issued by Government of India opting for scheme
of cumulative interest on maturity but has accounted interest earned on
mercantile basis and the intermediary bank at the time of maturity has deducted
tax at source on the entire amount of interest paid without apportioning the
accrued Interest/TDS, over various financial years involved, the time limit of
six years for making such refund claims will not be applicable.
This circular will cover all such applications/claims for
condonation of delay under section 119(2)(b) which are pending as on the date
of issue of the Circular.
The Board reserves the power to examine any grievance arising
out of an order passed or not passed by the authorities mentioned in para 2
above and issue suitable directions to them for proper implementation of this
Circular. However, no review of or appeal against the orders of such
authorities would be entertained by the Board.