Over 30000 Income Tax pleas for condoning delayed returns pending

Income tax authorities around the country are holding on over 30,000 returns incurring delays, causing hardship for a number of taxpayers.

Individuals with vehicle insurance awards, as well as those who have filed returns in order to obtain loans, are among those affected by tax officials’ hesitation. Several individuals, such as taxi drivers or other gig economy workers, are frequently unaware of the importance of completing returns on time, despite the fact that the platforms make their payments after deducting tax.

Section 119(2) of the Internal Revenue Code allows for the forgiveness of late payments. The CBDT issued instructions in January 2020 permitting commissioners to admit applications for delays of up to 365 days in returns for the financial year 2017-18 and decide the case on its merits. It authorised applications for delays of up to three years for financial years 2017-18 and future years in July, subject to approval by senior authorities such as chief commissioners or principal chief commissioners.

However, several senior officials are believed to be delaying a decision on the applications by neither accepting nor rejecting them, resulting in a backlog of cases.

Given that it has set alarm bells ringing in other wings of the government, the subject was recently discussed in a meeting with CBDT members and chairman. However, there appears to be no progress in the case so far.

“You must consider each case individually before making a decision. A one-size-fits-all approach will not work,” a senior officer stated.

Another government viewpoint is to expedite dispositions by grouping similar cases together. Many in the government argue that delaying applications, some of which stretch back several financial years, just defeats the purpose of the provision in the law, especially when the CBDT has asked officials to use it to provide relief to a number of taxpayers.

An official added that there have been numerous situations of persons discovering that they need to file their returns because some money has accrued to them and seeking forgiveness for the delay, but their cases have not been considered by the authorities.