- Income tax authorities established a three-level approval hierarchy based on the specific refund amount claimed.
- Taxpayers must demonstrate genuine hardship such as illness or financial distress to condone filing delays.
- The framework permits applications for up to five years from the end of the assessment year.
The Central Board of Direct Taxes has established a three-level approval system for taxpayers seeking delayed income tax refunds under Section 119(2)(b) of the Income-tax Act, 1961.
Circular No. 11/2024, issued October 1, 2024, governs applications involving late returns that claim refunds or seek to carry forward losses. It replaced earlier instructions, including Circular 9/2015.
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The framework covers taxpayers who missed the statutory filing deadline under Section 139. They must show that the delay resulted from “genuine hardship,” including serious illness, financial distress, or an administrative error beyond their control.
The system now routes claims according to the refund amount. Smaller cases can be decided by regional commissioners rather than the central Board in New Delhi.
The circular describes its purpose directly:
“With a view to deal with the applications for condonation of delay in filing returns claiming refund and returns claiming carry forward of loss. the present Circular is being issued. containing comprehensive guidelines on the conditions for condonation and the procedures to be followed.”
The procedure applies as of August 2026 to delayed refund claims and to late returns involving loss carry-forwards. A taxpayer must connect the hardship to the missed filing deadline.
Refund authority now depends on the amount claimed
The approval level depends on the amount of the refund claim. The applicable structure is:
| Approving authority | Refund claim amount |
|---|---|
| Principal Commissioner (Pr. CIT) / Commissioner (CIT) | Up to ₹1 crore |
| Chief Commissioner (CCIT) | Between ₹1 crore and ₹3 crore |
| Principal Chief Commissioner (Pr. CCIT) | Exceeding ₹3 crore |
The 2024/2025 guidance shifted more authority to regional Principal Commissioners for claims below ₹1 crore. Taxpayers with those claims generally do not need to approach the central Board in New Delhi. The change was intended to speed decisions at the regional level.
Larger claims move upward through the hierarchy. A claim between ₹1 crore and ₹3 crore goes to the Chief Commissioner, while a claim exceeding ₹3 crore goes to the Principal Chief Commissioner.
The monetary limit does not remove the hardship requirement. Serious illness, financial distress, and administrative mistakes outside the taxpayer’s control remain examples of circumstances that may support condonation.
The five-year window can face judicial scrutiny
The circular sets a five-year period for filing a condonation application, counted from the end of the relevant Assessment Year, or AY. The Income-tax Act itself does not prescribe a strict limit for these applications.
The document also sets a service target. Authorities should dispose of an application, as far as possible, within six months from the end of the month in which they receive it.
“This limit of five years shall be applicable to all authorities having powers to condone the delay. A condonation application should be disposed of, as far as possible, within six months from the end of the month in which the application is received.”
A July 2026 decision by the Andhra Pradesh High Court addressed the limits of that administrative window. The court emphasized that authorities cannot mechanically reject a claim solely because it falls outside a circular-prescribed period when the taxpayer proves genuine hardship.
The five-year period remains the operating framework for tax authorities. A court may still examine whether officials considered the facts rather than applying the period automatically.
The relief can restore tax paid through TDS or advance tax
The provision helps taxpayers who missed return deadlines and would otherwise lose access to excess tax already collected. That money may have been paid through tax deducted at source, or TDS, and advance tax.
Expatriates and NRIs can face missed deadlines while moving between countries and changing their residency status. The procedure gives them a route to seek delayed refunds tied to those filings.
Senior citizens and people with long-term illnesses may also rely on the process to reclaim money needed for their livelihood. Their cases still require evidence of genuine hardship and a connection between that hardship and the late filing.
Refunds approved after condonation generally do not include interest. The process can restore the refund itself, but it does not ordinarily add compensation for the period of delay.
The monetary thresholds also affect where these taxpayers file their requests. A smaller claim may remain with a regional commissioner, while a larger claim moves to a higher authority.
The 2026 “Nudge” Campaign has added pressure to older claims
In 2026, the department’s AI-driven “Nudge” Campaign flagged minor discrepancies in millions of returns. The initiative contributed to delayed processing and a rise in requests involving older refunds that remained stuck.
The campaign examines discrepancies in filed returns. A condonation request addresses whether officials may accept a late return or refund claim after the filing deadline.
Taxpayers seeking relief must set out the reason for the delay, explain the hardship, and link the circumstances to the missed return. The refund amount then determines which level of commissioner has approval authority.
The tax department publishes the Circular No. 11/2024 full text and an E-Filing Portal user manual for condonation requests. Its main website is incometaxindia.gov.in.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or CPA about your specific situation.
