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INSTRUCTION NO. 13/2006, DATED 22-12-2006

1. The procedure for dealing with the applications for condonation of delay in filing returns and claiming refund is presently governed by the Board’s earlier Orders/Circulars issued under section 119(2)(b) of the Income-tax Act, 1961, namely, F. No. 225/208/93-ITA-II, dated 12-10-1993, read with Board’s Circular No. 670, dated 26-10-1993 issued from F. No. 225/208/93-ITA-II, Circular No. 8/2001, dated 16-5-2001 issued from F. No. 212/35/99-ITA-II and also Instruction No. 12/2003, dated 30-10-2003 issued from F. No. 212/338/2002-ITA-II.

2. In modification to earlier Instructions/Circulars, this Instruction vests the Chief Commissioners of Income-tax (CCsIT) with powers for acceptance/rejection of applications/claims under section 119(2)(b) for condonation of delay in filing return involving refund claims above Rs. 10,00,000 and up to Rs. 50,00,000. It also vests the Commissioners of Income-tax (CsIT) with powers of acceptance/rejection of applications/claims under section 119(2)(b) for condonation of delay in filing return involving refund claims up to Rs. 10,00,000.

3. The applications/claims under section 119(2)(b) for condonation of delay involving refund claims exceeding Rs. 50,00,000 would continue to be processed by Central Board of Direct Taxes, both for acceptance and rejection.

4. No fresh application for claim of refund will be entertained beyond six years from the end of the assessment year for which the application/claim is made.

5. The powers of acceptance/rejection within the monetary limits delegated to the CCsIT/CsIT would be subject to the following conditions:—

         (a )  The refund has arisen as a result of excess tax deducted/collected at source and payments of advance tax under the provisions of Chapters XVII-B, XVII-BB and XVII-C respectively and the amount of refund does not exceed Rs. 50,00,000 in respect of CCsIT and  Rs. 10,00,000 in respect of CsIT for any one assessment year;

         (b )  The income of the assessee is not assessable in the hands of any other person under any of the provisions of the Act; and

          (c )  No interest will be admissible on the belated refund claims.

6. At the time of considering the case under the provisions of section 119(2)(b), it should be ensured that the income declared and refund claimed are correct and genuine and also that the case is of genuine hardship on merits.

7. The CCsIT/CsIT are empowered to direct the Assessing Officer to make necessary enquiries or scrutinize the case in accordance with provisions of the Income-tax Act to ascertain the correctness of the claim.

8. This instruction will also cover those applications/claims for condonation of delay under section 119(2)(b) which are pending as on the date of issue of this instruction.