There is good news for individuals who have not received their income tax refunds for FYs 2017-18, 2018-19 and 2019-20. As per an order by the income tax department, these individuals will now be able to get their due income tax refund by January 31, 2024. These individuals have not received their tax refund for a particular year because their income tax return (ITR) had not been processed on time by the tax department due to the expiry of the time limit of processing of returns.
Do note that, if your ITR calculation matches with that of the income tax department, only then an income tax refund will be issued. Before the income tax refund is credited to your bank account, an intimation notice under section 143(1) will be sent to your registered email ID
As per the order, “It has been brought to the notice of the Central Board of Direct Taxes (‘Board’) that due to certain technical issues or for other reasons not attributable to the asses sees concerned, several returns for assessment years (AYs) 2018-19, 2019-20 and 2020-21, which were otherwise filed validly under section 139 or 142(1) or 119 of the Income tax Act, 1961 (‘Act’) could not be processed under sub-section (I) of section 143 of the Act.” The order was issued by the income tax department on December 1, 2023.
According to the tax department order, it will first process these ITRs, i.e., those who haven’t received tax refunds for FYs 2017-18, 2018-19 and 2019-20.
As per the income tax rules, there is a time limit by which the income tax department must process the ITR filed by individuals. Currently, the income tax department must process the ITR within nine months from the expiry of the financial year in which the ITR was filed. For instance, an ITR filed for FY 2021-22 (AY 2022-23) must be processed by December 31, 2023. This rule was revised with effect from April 1, 2021. Till FY 2020-21 (AY 2021-22), the income tax department had time of one year from the end of the financial year in which ITR was filed.
For FYs 2017-18, 2018-19 and 2019-20 (as mentioned in the order), the income tax department had time till March 2020, March 2021 and March 2022, respectively, to process the ITRs.
The income tax department has said that only those ITRs which were filed under section 139 or 142 (1) or 119 and had a tax refund due would now be processed by January 31, 2023, under section 143 (1). This means that even belated ITRs filed for specified financial years will also be eligible to get the income tax refund.
Rahul Singh, senior manager, advisory and research, Taxmann says, “It must be noted that all ITRs filed till FY 2020-21 (AY 2021-22) must be processed within one year from the end of the financial year in which it was filed. However, nothing could be done if this time limit is exceeded and the ITR is still not processed. Thus, even if the taxpayer raises a grievance on the ITR e-filing portal asking to process the ITR, the Assessing Officer (AO) can’t do this as he has no statutory power to process the return after the lapse of prescribed timeline(s). With this current order dated December 1, 2023, AO got the authority to resolve all those grievances, and ITR can be processed till Jan 31, 2024.”
Also read: How to check if bank account is validated for ITR refund
Who will not get past income tax refunds
The order has clarified that following unprocessed ITRs are not eligible for this relief:
a) ITRs selected in scrutiny,
b) ITRs remain unprocessed for any reason attributable to the assessee,
c) ITRs remain unprocessed, where either demand is shown as payable in the ITRs or is likely to arise after processing it.
“The income tax department has clearly said that those ITRs who either have an additional tax payable or tax demand is likely after processing of the filed ITR or selected for scrutiny assessment or remained unprocessed due to any pending action of the ITR filer would not be processed by January 31, 2024. This also means that if an individual filed his ITR for say AY 2018-19 with a tax refund but later after processing the ITR instead of tax refund, tax demand generates, then that ITR would also not be processed by January 31, 2024. Further, an individual will not receive any intimation notice under section 143(1) of the Income-tax Act,” says Mihir Tanna, associate director, S.K. Patodia and associates, a Mumbai based CA firm.
The income tax department issued a similar order dated October 16, 2023, for processing of old ITR filed for FY 2016-17 (AY 2017-18) and issue of old tax refunds by January 31, 2024. Now the same thing is being extended for ITRs filed for AY(s) 2018-19, 2019-20 and 2020-21.
