If the Income Tax Department’s Centralised Processing Centre (CPC) fails to process an income tax return (ITR) within the legally prescribed time limit,
taxpayers do not lose their refund rights. In fact, the law clearly states that such a delay works in the taxpayer’s favour. For ITRs filed for FY 2025–26 (AY 2026–27), whether on the original due date or the belated deadline of December 31, 2025, the CPC must process the return by December 31, 2026. Missing this deadline has important legal consequences. What Is The Statutory Deadline For CPC To Process ITRs? Under Section 143(1) of the Income-tax Act, the CPC is required to process an ITR and issue an intimation within nine months from the end of the financial year in which the return is filed. Chartered Accountant Dr Suresh Surana explains that if an ITR is filed on July 31 or September 16, 2025, the CPC has time until December 31, 2026 to process it. Extensions in the ITR filing deadline do not alter this statutory processing timeline. What Happens If CPC Fails To Process The ITR On Time? If CPC does not issue an intimation within the nine-month window, it loses its legal authority to make any adjustments to the return under Section 143(1). According to tax experts, once this deadline expires:
- The ITR becomes final as filed
- CPC cannot raise tax demands or reduce refunds
- Any refund shown in the return becomes automatically payable
- Taxpayers are also entitled to interest under Section 244A
Can CPC Make Adjustments After The Deadline?
No. Once the statutory time limit expires, CPC cannot:
- Modify income figures
- Disallow deductions
- Raise additional tax demands
- Delay refunds through processing adjustments
Legal experts confirm that CPC’s powers under Section 143(1) lapse permanently after the deadline.
How Can Taxpayers Claim Their Refund If CPC Delays Processing?
If your refund is stuck due to non-processing, you can legally pursue it through multiple routes:
- File an online grievance on the income tax e-filing portal
- Submit a refund application to the jurisdictional Assessing Officer (AO)
- Approach the High Court through a writ petition in extreme cases
Tax professionals say courts have consistently ruled in favour of taxpayers in such situations.
Does CPC’s Delay Mean No Future Scrutiny?
Not entirely. While CPC cannot make adjustments after the deadline, the Assessing Officer (AO) still retains limited powers.
- A notice under Section 143(2) (scrutiny assessment) can be issued within three months from the end of the financial year in which the return was filed
- Reassessment under Section 148 is possible if income has escaped assessment
- Reopening timelines range from 3 years and 3 months to 5 years and 3 months, depending on the amount involved
However, these proceedings are separate from CPC’s processing under Section 143(1).
What Should Taxpayers Do Proactively?
Experts recommend that if an ITR remains unprocessed beyond the deadline, taxpayers should:
- Raise an online grievance immediately
- Maintain documentation of refund claims
- Follow up with the jurisdictional AO
- Seek legal remedies if delays persist
If CPC misses the ITR processing deadline, the law is firmly on the taxpayer’s side. Refunds must be released as claimed, along with applicable interest — and CPC can no longer make adjustments.
