ITR filed, but still not processed by CPC? Here’s how taxpayers can legally claim their income tax refund

Income Tax Refund Update: Like taxpayers, the centralised processing centre (CPC) of the Income Tax Department is bound by a deadline to process income tax return (ITR). If you have filed an ITR for the current assessment year by due date, or file a belated ITR by 31 December, 2025, the CPC has to process it by 31 December, 2026.

If your ITR does not get processed by 31 December 2026, or within the relevant deadline for previous assessment years, the CPC has to forfeit its right to the ITR.

While the ITR filing deadline was extended from 31 July to 16 September this year, the tax processing deadline for the CPC remains the same.

What happens if CPC does not process your ITR within deadline?

According to Balwant Jain, tax and investment expert, if the income tax department’s CPC does not process your ITR, the acknowledgemet you receive after filing ITR will be treated as the final intimation under Section 143 of the Income Tax Act.

“Mandatorily they are required to process it within nine months. The acknowledgement that comes during filing ITR will be treated as the final intimation for processing,” he told Livemint.

Manikandan S, Manager Taxation at ClearTax said that the time limit to finish processing a return is nine months from the end of the financial year in which the return has been filed. For AY2024-25, this deadline is on 31 December, 2025.

“As per the provision of section 143, If the CPC misses the 9 month deadline from the end of the financial year in which the return is filed, the return is deemed accepted as filed, and no adjustments(demands) can be made thereafter by the CPC system,” Manikandan told Livemint.

According to Alay Razvi, Managing Partner at Accord Juris, the delay in such processing in solely attributable to the CPC.

“After expiry of this statutory period, the department loses its power to make prima facie adjustments under Section 143(1). The taxpayer’s refund claim cannot be denied or reduced on account of CPC’s delay, subject only to independent proceedings such as scrutiny assessment or reassessment initiated under the Act,” he said.

However, the CPC wing is “not statutorily bound to explain the reason for the delay in processing of returns.”

Balwant Jain explained that the CPC is also not legally bound to let a taxpayer know if the return has not been processed within the stipulated time.

“If CPC misses the ITR processing deadline, i.e. say incase a refund in an ITR for FY 23-24 is not processed till 31st December 2025, then the CPC loses its right to make any adjustments and the ITR filed reaches finality,” according to Vivek Jalan, partner at Tax Connect Advisory Services LLP.

Rohit Jain, managing partner at Singhania & Co explained that the taxpayer has the right to earn interest in case the ITR processing is delayed.

“There is no law that mandates that the CPC is bound to notify the Asessee in case the processing of return is getting delayed. In case of delay, the Assessee is legally entitled to 6% interest p.a. under Section 244A from the date of payment of tax until the date the refund is actually granted,” he said.

How can taxpayers legally claim their tax refund?

According to Tushar Kumar, advocate at the Supreme Court of India, consistent judicial precedent has proven that not processing ITR is “violative of constitutional guarantee.”

“The taxpayer is entitled to seek redress by lodging an online grievance on the e-filing portal, escalating the matter through CPGRAMS, and, if necessary, approaching the jurisdictional Assessing Officer for administrative intervention, it being well-settled that departmental inefficiency cannot defeat a vested fiscal entitlement; further, while the Act may not mandate an automatic explanation for delay, once a grievance is raised, CPC is bound by principles of natural justice and administrative transparency to disclose the cause of non-processing and cannot shelter behind vague or mechanical responses,” he said in reply to a query by Livemint.

The income tax department is bound to issue a valid refund whether or not the ITR has been processed within the deadline of 31 December, Balwant Jain told Livemint.

According to the tax expert, users can raise a grievance online from the e-filing portal by logging into their account to claim such refund.

ClearTax’s Manikandan agreed. “The taxpayers whose returns have still not been processed can raise a grievance ticket on the Income tax portal to claim their refund(plus interest) or they can approach their Jurisdictional Assessing officer to claim the refund,” he said.

According to Jalan, taxpayers can also claim the refund legally by approaching their Jurisdictional Assessing Officer (AO). “It is to be noted that the said refund claim should be filed along with interest u/s 244A of Income Tax Act.”

“After 2-3 reminders, incase still refund is not processed then the taxpayer can also approach the High Court through a writ petition,” Jalan said.

Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Taxpayers are advised to consult a qualified tax professional or refer to the official website of the Income Tax Department for accurate and up-to-date guidance before filing their returns.