ADMISSIBILITY OF REFUND CLAIM IN INCOME TAX

[KASTURI SETHI]

Dear Experts,

Please reply to my following queries :-

(1) What is the time limit for filing application for refund claim in Income Tax Act ?

(2) Can refund claim be filed for the financial year 21-22 now ?

(3) Is it mandatory to claim refund of Income Tax paid in excess by way of Income Tax Return ? Is there any other way-out ?

Thanks a lot.

[Charu Tyagi]

Dear sir,

Income tax refund can only be claimed by filing Income tax return,

A return should to be file as per the time limit of filing for assesse i.e., individuals has to file on or before 31st July of relevant AY. And in case of late filing can be filed upto 31st December of relevant AY as per section 139(4).

Return for FY 2021-22 can be filed as per section 139(8A) updated return - An updated return can be submitted at any time within 24 months from the end of relevant AY. Therefore for FY 2021-22 i.e., AY 2022-23 updated return can be submitted on or before 31st March 2025 and an updated return can be submitted by any person whether or not he has furnished his return u/s 139(1)/(4)/(5).

No, there's no other way out .

Also in case refund has not been received of which return has filed an application on e-grievance can be made on the portal.

*The above mentioned statement is just a general recommendation do not consider it as final advisory on the matter

[KASTURI SETHI]

Madam,

Thanks a lot for your reply.

Proviso to Section 139 (8A) (c) makes me ineligible for refund by way of filing updated return for the financial year 21-22. In other words, if refund arises by way of updating return, I cannot update my return already filed. Do you agree ?

Provided that the provision of this sub-section shall not apply, if the updated return,-

(a) is a return of a loss; or

(b) has the effect of decreasing the total tax liability determined on the basis of return furnished under sub-section (1) or sub-section (4) or sub-section (5); or

(c) results in refund or increases the refund due on the basis of return furnished under sub-section (1) or sub-section (4) or sub-section (5),

of such person under this Act for the relevant assessment year:

[GUNASEKARAN K]

New Provision Section 139(8A) for Updating ITR as per Budget 2022 applicable from AY 22-23

Intention behind introducing Sec 139(8A) - In order to provide more time to tax payers, it is proposed to introduce a new provision in section 139(8A) of the Act for filing an Updated Return of income by any person, whether he has filed a return previously for the relevant assessment year, or not. The proposal for updated return over a period longer than that is provided in the existing provisions of Income-tax Act would on the one hand bring use of huge data with the IT Department to a logical conclusion resulting in additional revenue realization and on the other hand, it will facilitate ease of compliance to the taxpayer in a litigation free environment.

Time limit of filing Updated ITR - Any person may furnish an updated return of his income or the income of any other person in respect of which he is assessable under the Act for the P. Y. relevant to such A. Y., within 24 months from the end of the A. Y. with additional tax. Such return shall be furnished in the prescribed form and manner and shall contain prescribed particulars.

Cases where Section 139(8A) will not apply - The new proposed provision of Sec 139(8A) shall not apply, if the updated return,

1. is a return of a loss or

2. has the effect of decreasing the total tax liability determined on the basis of return furnished u/s 139(1), (4) or (5) or

3. results in refund or increases the refund due on the basis of return furnished u/s 139(1), (4) or (5)

Conclusion: Updated return can only be filed if it increases tax liability.

[Charu Tyagi]

Yes @kasturi Sethi sir

I agree that if refund arises due to updated return, an updated return cannot be filed.

This section provides benefits to the assessee who failed to file his return of income, to be file within 24 months from the end of relevant AY.

Also agreed with @gunasekaran sir updated return can be filed if it increases income tax liability. Thus, purpose for mentioning section 139(8A) here is for the case where filing of return of FY 2021-23 has not been made.

[KASTURI SETHI]

Madam Charu Tyagi Ji,

You have mentioned as under :

"Also in case refund has not been received of which return has filed an application on e-grievance can be made on the portal".

While filing ITR-1 for the financial year 21-22, TDS was not shown as bank deducted Income Tax (TDS) despite filing Form 15 H. Form 15 H was filed in the bank on 30.4.21. The bank okayed uploading of Form 15 H after consuming my two hours' time in piecemeal. The date of uploading Form 15 H was switched over to 1.5.21 (may be due technical reasons). I filed Income Tax return in the first week of April, 2022 without waiting for Form 16 or reflection of the same in Form 26 AS. Form 26 AS did not show the amount of TDS as the bank could uploading TDS details in Form 26 AS by 31st May, 2022. So TDS was not shown in the ITR-1 filed in the first week of April, 21. Revised return could not be filed as the department cut short last date of filing revised return by three months of the next financial year.

Thus I lost refund of Rs.14000/- by not showing the same in ITR-1 due to fault on the part of the bank .

My question : Is there any benefit of lodging complaint with e-grievance ?

[KASTURI SETHI]

Sh.Gunasekaran K Ji,

Thanks a lot for your reply. Pl. go through my problem detailed above.

Is there any remedy for claiming refund of Income Tax deducted by bank which was not payable at all ?

Thanks & regards.

[Charu Tyagi]

@kasturi Sethi sir,

In my opinion where you haven't considered TDS amount while filing ur return by mistake or otherwise, it's not possible to get that tds amount as refund.

Moreover application on e-grievance would not provide any benefit in such a case.

[KASTURI SETHI]

Madam Charu Tyagi Ji,

I am highly thankful to you for your all-out efforts for my problem.

[Padmanathan KV]

Kasturi Ji,

Kindly file a condonation of delay petition under section 119(2)(b) of Income Tax Act, 1961 before the relevant authority explaining the circumstances under which return was not filed.

If the Authority is satisfied of the circumstances and cause for non-filing of ITR, u will be permitted to file return and claim refund.

The relevant authority is based on monetary limits fixed by Board from time to time vide Circulars:

Circular No.07/2023 dated May 31, 2023

Also See Circular 9 of 2015:

[Padmanathan KV]

Para 6 of the above circular maybe applicable to your case regarding supplementary claim of refund

[KASTURI SETHI]

Sh.Padmanathan Kollengode Ji,

I am indebted to you for taking so much pains for me. I shall go through it word for word and get back to you.

Warm regards.

AI Summary

Income tax refund: claim allowed only through filing returns; updated returns cannot be used to create or increase refunds. A refund of excess income tax is obtainable only by filing an income tax return that discloses the tax credit; an updated return available within 24 months is permitted only when it increases tax liability. The updated return regime excludes returns of loss, decreases in tax liability, or any updated return that would result in or increase a refund, so it cannot be used to create or augment a refund omitted in the originally filed return. Discretionary condonation of delay and departmental supplementary refund procedures were identified as possible administrative remedies.