Direct Tax Alert

Condonation of delay in filing of refund claim and claim of carry forward of losses under Section 119(2)(b) of the Income Tax Act, 1961

Section 119(2)(b) of the Income Tax Act, 1961(‘the Act’) allows the Central Board of Direct Taxes (“CBDT”) to issue instructions to the income tax authorities for allowing the claim of refund and/or the claim towards carry forward of losses, if the return of income has not been filed by the assessee under section 139(1) and 139(4) on or before the due date, since the assessee is not able to file the return of income due to the certain unforeseen circumstances.

However, in order to indemnify the hardship caused in the genuine cases where there is a delay in filing of the refund claim and/or the claim towards carry forward of losses in the return of income or there is non-filing of ROI, due to certain uncontrollable reasons, CBDT has been empowered to issue directions/instructions under section 119 of the Income Tax Act, 1961 in order to condone such defaults made unintentionally by the assessee.

Earlier, CBDT issued Circular No. 09 of 2015 dated 09-06-2015 to provide comprehensive guidelines on the conditions and procedure to be followed for deciding applications for Condonation of delay in Filing Return of Income claiming refunds and/or carry forward of losses and set-off thereof or non-filing of ROI containing such refund claim and/or claims towards carry forward of losses in the return of income filed under section 139(1) and 139(4).

In supersession of all the earlier instructions/circulars/guidelines, CBDT has issued Circular No. 07 of 2023 dated May 31, 2023, which modifies the monitory limits of the claims as prescribed in Circular No. 09 of 2015 and is applicable in respect of the applications filed on or after 01-06-2023 (refer the table below):

S. No.	Income Tax Authority	Circular No. 09 of 2015	Circular No. 07 of 2023
1	Principal Commissioner of Income-tax/Commissioner of Income–tax	‘Less than or equal to (<) INR 10 Lakhs	‘Less than or equal to (<) INR 50 Lakhs
2	Chief Commissioner of Income–tax	‘Greater than’ > INR 10 Lakhs but < INR 50 lakhs	‘Greater than’ > INR 50 Lakhs but < INR 2 Crores
3	Principal Chief Commissioner of Income–tax	‘Greater than’ > INR 10 Lakhs but < INR 50 lakhs	> INR 2 Cores but < INR 3 Crores
4	CBDT	> INR 50 Lakhs	> INR 3 Crores