CBDT Allows Reprocessing of Rejected ITRs Filed in FY 2023–24, Will Pay Interest on Refund Delays

In a significant relief to taxpayers, the Central Board of Direct Taxes (CBDT) has allowed reprocessing of certain income tax returns (ITRs) filed electronically by March 31, 2024, which were previously rejected due to technical errors. The move will benefit thousands of taxpayers who were denied refunds not due to their own fault, but because of backend mismatches and system-related issues.

This development also ensures that affected taxpayers will be entitled to interest under Section 244A of the Income Tax Act for the delay in refund processing.

Why Were Some ITRs Rejected?

Many taxpayers had filed their ITRs correctly through the e-filing portal. However, due to technical glitches, data mismatches, or internal errors at the Centralized Processing Centre (CPC) in Bengaluru, some returns were mistakenly declared invalid and subsequently rejected.

The processing deadline for such returns had lapsed—for instance, ITRs for Assessment Year 2023–24 were supposed to be processed by December 31, 2024. As a result, these taxpayers were left without their rightful refunds.

What Has CBDT Now Decided?

To address the issue, the CBDT has invoked powers under Section 119 of the Income Tax Act, 1961, allowing a fresh window for processing such mistakenly rejected returns.

• All e-filed ITRs submitted on or before March 31, 2024, that were erroneously rejected by the CPC, will now be reprocessed.

• Taxpayers will be informed of the processing outcome and refund status by March 31, 2026.

Will Taxpayers Get Interest on Delayed Refunds?

Yes. As per Section 244A of the Income Tax Act, if there is a delay in issuing income tax refunds due to no fault of the taxpayer, the individual is eligible to receive interest on the refund amount.

This provision now applies to all impacted taxpayers whose refunds were delayed due to system errors or incorrect rejection of returns.

Important Note:
To receive the refund, it is mandatory to link your PAN with Aadhaar. Returns will not be processed for refund if this linkage is missing.

How to File a Complaint in Case of Delay?

If your return is still not processed or your refund is delayed, you can raise a complaint using these methods:

✅ Via CPGRAMS Portal

• Visit: https://pgportal.gov.in

• Lodge your complaint under the relevant department.

✅ Via e-Nivaran / Income-Tax Grievance Portal

Follow these steps:

Log in to https://incometax.gov.in/eportal

Go to the ‘Grievances’ section

Click on ‘Submit Grievance’

Choose the department (e.g., CPC-ITR, NSDL, SBI, etc.)

Select the appropriate sub-category, such as ‘Refund Not Received’

Fill in the details: PAN, Assessment Year, ITR acknowledgment number, and a description of the issue

Upload supporting documents (if any)

Submit your grievance

What Does This Mean for Taxpayers?

This move by CBDT acknowledges the systemic shortcomings that impacted honest taxpayers. With reprocessing now allowed, thousands of pending refunds can be released, restoring financial relief to affected individuals.

The provision for interest on delays further reinforces the government's commitment to taxpayer rights and transparency.

Final Word

If you filed your ITR before March 31, 2024, and it was rejected without a valid reason, this is your opportunity to get it rectified. Ensure your PAN-Aadhaar is linked, check your grievance status regularly, and file a complaint if necessary.

This initiative not only corrects previous errors but also strengthens public trust in the income tax system, ensuring that honest taxpayers are not penalized for administrative lapses.