Claim income tax refund for the last 6 years or carry forward the loss even if return is not filed  


Query 1]

I want to file return for AY 13-14 and 14-15 in Aug 2016. (Belated return date for FY14-15 is over on 31March 2016). What is exactly step by step procedure pl guide. I have refund in both years in 1st around Rs. 2800 and in 2nd (14-15) Rs. 4800/-. Please reply. []


Individual taxpayers are mandatorily required to file their income tax return in case their gross total income exceeds the amount of the basic exemption limit. Even if income is below the basic exemption limit, one can file the income tax return for claiming refund arising due to TDS or payment of advance taxes. Moreover, filing of income tax return within due date is also mandatory if the taxpayer wants to carry forward any losses suffered during the year. The benefit of carry forward of loss would not be available if taxpayers fails to file the return within due date.

Presently, taxpayer is having a period of 2 years for filing of their income tax return which is reduced to one year from AY 2017-18. As a result, income tax return for the FY 2016-17 would be allowed to be filed on or before 31.03.2018 and not afterwards as against income tax return for the FY 2014-15 & FY 2015-16 both of which are allowed to be filed till 31.03.2017. Return pertaining to any period prior to FY 2014-15 is treated as time barred now and could not be filed in the current year.

Though returns of earlier years is not allowed to be filed as per the normal provision of law, still CBDT has been empowered to issue orders for granting relaxation from these normal requirements. In exercise of these powers, CDBT has issue a taxpayer friendly circular No. 9/2015 (F.No. 312/22/2015-OT) Dated 9-6-2015 prescribing the procedure to condone the delay for claiming the income tax refund or carry forward of losses.

By virtue of the above referred CBDT circular, a tax payer can make a request to condone the delay in filing of IT return within six years from the end of the relevant assessment year in respect of which the return is to be filed. Effectively, taxpayers with refund or loss, who failed to file the return of income, can approach the income tax department for Condonation of delay within a period of 6 years to avail the benefit conferred by the above circular. Even application for supplementary refund can also be done by virtue of above circular.

The time limit of six years would exclude the period for which the proceedings were pending before any Court of Law. In such a case, the Condonation application can be filed within six months from the end of the month in which Court order was issued or the end of financial year, whichever being later. No interest will be payable on belated claim of refund. [Generally, taxpayers are entitled to get interest on the amount of refund due in case it is filed within two years from end of the financial years but no interest is payable if the returns is filed under these instruction.

Whom to approach for getting the refund:

This circular provides for different authorities who can condone the delay based on the amount of refund as under:

Refund Claim Application to
Claim amount is not more than Rs. 10 lakhs for any one assessment year Principal Commissioner of Income Tax/ Commissioners of Income-tax
Claim amount is more than Rs 10 Lacs Chief Commissioner of Income Tax
Claim amount is more than Rs 50 Lacs Central Board of Direct Taxes

The limits specified are same whether application is for income tax refund or for carry forward and set off of losses. It may also be noted the above limits apply to each financial year separately and not for the aggregate of the claim for all the years taken together.

Additional Conditions to be satisfied:

An application can be accepted only if the following additional conditions are satisfied:

  1. The claim is correct and genuine.
  2. Non acceptance on merits would cause genuine hardship to the taxpayer.
  3. The income in respect of which the refund is being claimed should not be includible in the income of any other persons.
  4. The claim for refund should have arisen due to TDS, of payment or advance tax or self assessment tax.

In short, assessing officer are empowered to eventually make scrutiny of the claims & process income tax return before granting any refund or benefit of carry forward the loss.

Procedure for getting the refund:

No specific form or format for making such application is prescribed for the purpose. So, an application can be made on plain paper stating the facts of the case in detail, which will help the authorized commissioner to take the appropriate decision. Though no specific process has been prescribed under these instructions, I would suggest taxpayer to file income tax return along with the application for Condonation of delay. So in case application is accepted, income tax return already attached would automatically be taken up for processing immediately. Every application received has to be disposed of by the authorities within six months from the end of the month in which the application was received

[CBDT has reserved all the power to examine any grievance arising out of an order passed or not passed by the Principal Commissioner of Income Tax/ Commissioners of Income-tax/Chief Commissioners 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.]

Thanks to CBDT. Taxpayers who could not claim income tax refund as they had missed the deadline for filing of the income tax return would be benefitted by above circular.