Income Tax Dept lays down Procedure for processing Refund Claims delayed due to Technical Errors [Read Instructions]

The Central Board of Direct Taxes (CBDT) has laid down the functionality for processing of returns having refund claims which were not processed within the time allowed u/s 143(1) due to some technical or other reasons.

Last month, the CBDT has relaxed the time frame prescribed in the second proviso to subsection (1) of section 143 till 31.3.2019 with a view to mitigating the genuine hardship being faced by the taxpayers.

The pre-conditions to avail the benefit of the instruction are, (i) Valid return for the assessment years is filed under permitted time limit u/s 139 or 142(1). (ii) The assessee has claimed the refund in return of income. (iii) On computation, the resultant outcome is refund. (iv) The returns of income should not have been remained unprocessed due to any reason attributable to the concerned assessee and (v) The returns of income should not be under Scrutiny assessment in view of provisions of sub- section (1D) of section 143 of the Act.

An instruction released by the department prescribed the following procedures;

(a) For the cases up to A.Y. 2006-07: Cases for these years will not be processed in System. The AO can process such time-barred returns manually after obtaining prior approval of concerned Pr.CCIT/CCIT and thereafter upload the intimation u/s 143(1) in ITBA through manual order upload functionality as explained in ITBA Assessment Instruction No 9 dated 07.05.2018. The administrative approval of Pr.CCIT/CCIT may be communicated by PCIT/CIT to the Pr DGIT (Systems) so that necessary enablement in system to upload such intimation may be activated. The refund determined in the processing will be issued through refund banker.

(b) For the cases of A. Yr. 2007-08 to 2015-16: Cases of these years will be required to be processed in AST. The administrative approval of Pr.CCIT/CCIT to process such cases may be communicated by PCIT/CIT to the Pr DGIT (Systems) so that necessary enablement in system to process such returns may be activated. Thereafter concerned assessing officer will be able to process such time-barred returns. The refund arises out of processing will be issued through refund banker.

(c) Cases of A. Yr. 2016-17: For the A.Yr. 2016-17 all the paper returns and e-filed returns pushed to AO by CPC-ITR are required to be processed at ITBA as per process described in ITBA Processing Instruction No 1, 2 and 3. If any such return is not processed, the process given in Para (b) is required to be followed. After which the necessary enablement will be activated in system. The AO are required to enter or modify the data and send return to CPC-ITR for final computation and issuance of refund.

(d) For the e-filed cases up to AY 2016-17 which were not transferred to AO and remained unprocessed at CPC-ITR : Cases in which valid unprocessed returns of income are lying with CPC, Bengaluru and the assessing officer is in receipt of request from the assessee seeking refund, the AO is required to verify that all the pre-conditions as per CBDT instructions are complied and obtain the approval of Pr.CCIT/CCIT to process such time-barred returns. Thereafter, the request from assessee along with approval of Pr.CCIT/CCIT will have to be forwarded.