Belated refund claims under CBDT circulars must be considered on merits with hardship and genuineness examined

A belated refund claim under a CBDT circular issued under Section 119 of the Income-tax Act required a liberal, merits-based consideration within the monetary limits prescribed by the circular. The Court noted that such belated refund claims would not carry interest and that the competent income tax authority should examine hardship, as well as the correctness and genuineness of the refund claim, in line with the circular's purpose. The impugned order was set aside and the matter was remitted for fresh consideration and appropriate orders.

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Issues: Whether the impugned order rejecting the petitioner's request concerning a belated refund claim under the CBDT circular issued under Section 119 of the Income-tax Act, 1961 was liable to be set aside and the matter remitted for reconsideration.

Analysis: The circular issued under Section 119 of the Income-tax Act, 1961 vested power in the competent income tax authority to consider refund claims within the monetary limits prescribed therein, and also contemplated that belated refund claims would not carry interest. The matter was treated as requiring a liberal approach consistent with the purpose of the circular. In view of the earlier decision referred to by the Court, the authority was expected to consider the claim on its merits, including the question of hardship and the correctness and genuineness of the refund claim.

Conclusion: The impugned order was set aside and the matter was remitted to the respondent for fresh consideration and appropriate orders.

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