In a recent announcement by the Central Board of Direct Taxes (CBDT), taxpayers can expect their pending income tax refunds for the fiscal year 2020-21 (AY 2021-22) to be processed and disbursed by April 30, 2024. The CBDT issued a notification on March 1, 2024, urging individuals awaiting refunds to regularly check their emails for intimation notices from the Income Tax Department.
The circular emphasised that these emails would contain details of the tax refund, if applicable, owed to the taxpayers. Typically, after filing a return request at the Centralised Processing Centre (CPC) within a specified timeframe, the Income Tax Department issues an intimation notice under Section 143(1) of the Income-tax Act, 1961. This notice indicates the successful processing of the filed Income Tax Return (ITR) and is followed by the crediting of any refund amount owed.
However, due to technical issues or reasons beyond the control of the assesses concerned, some taxpayers have faced delays in the processing of their ITRs related to income for FY 2020-21 (AY 2021-22).
The CBDT acknowledged the situation, stating, ‘It has been brought to our notice that due to certain technical issues or for other reasons not attributable to the assesses concerned, several returns for assessment year (AY) 2021-22, which were otherwise filed validly, could not be processed under sub-section (1) of section 143 of the Act. Consequently, intimation regarding processing of such returns could not be sent within the timeframe prescribed under sub-section (1) of section 143 of the Act. This has led to a situation where the taxpayers are unable to get their legitimate refund in accordance with provisions of the Act, although the delay is not attributable to them.’
For returns related to AY 2021-22 (March 31, 2022), the original timeframe for CPC to process returns was one year from the end of the financial year in which the ITR was filed. Consequently, for FY 2020-21, the deadline for the income tax department to process refunds was March 31, 2023. After this timeframe lapsed, the CPC was unable to process ITRs or issue intimation notices under section 143(1).
Additionally, taxpayers are reminded that the deadline for submitting revised ITRs for the financial year 2020-21 is March 31, 2024. The Finance Act of 2022 introduced by the Centre allows individuals who missed filing their return or failed to report any income to submit an updated ITR within 24 months (two years) from the end of the relevant assessment year, subject to certain conditions.
