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 31.10.2020 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 has directed 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:

• returns selected in scrutiny;
• returns remain unprocessed, where either demand is shown as payable in the return or is likely to arise after processing it;
• 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.

  Report