Processing of income-tax returns must be completed expeditiously; accept returns at face value and process refunds if time barred.

Processing of income-tax returns must be completed expeditiously and in accordance with law; where the statutory time for processing has expired the return is to be accepted at its face value and any refund due is to be processed. The obligation to act applies notwithstanding earlier extensions of the processing period and addresses administrative delay in processing returns. Authorities are directed to take steps to process outstanding returns promptly and to effect refunds when returns are time-barred and otherwise prima facie in order.

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Issues: Whether the Income-tax Department is required to process the petitioners' income-tax returns for the specified assessment years and, where the statutory period for processing has expired, whether the returns must be accepted at face value and any due refund with statutory interest under section 244A of the Income-tax Act, 1961, processed.

Analysis: The petitions establish that the petitioners' returns for the relevant assessment years remain unprocessed despite applications dated 22.10.2021. The time for processing has been extended on several occasions. Where the statutory period for processing a return has expired, the return cannot be left unprocessed; procedural limits on assessment/processing require that an unprocessed return be treated so as to give effect to the taxpayer's claim, subject to applicable law. Section 244A provides for payment of interest on refunds when due. In view of the factual sequence and the elapsed processing time, directions to the tax authority to act expeditiously and to accept returns at face value if processing time has lapsed are warranted.

Conclusion: The petitions are allowed in part by directing the concerned authority to process the petitioners' income-tax returns for the specified assessment years expeditiously and in accordance with law. If the time period for processing has expired, the returns shall be accepted at face value and any refund found due shall be processed along with statutory interest under Section 244A of the Income-tax Act, 1961.

Ratio Decidendi: Where statutory time for processing an income-tax return has expired, the return must be accepted at face value and any resultant refund with statutory interest under Section 244A must be processed.

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