Circular No. 503 — Instructions to subordinate authorities - Authorisation regarding condonation of delay in

What this is

Circular No. 503 was issued by the Central Board of Direct Taxes on 6 February 1988. Its subject is Instructions to subordinate authorities - Authorisation regarding condonation of delay in filing refund claim.

This is a condonation. It lets an authority admit something filed late; it does not make the late filing timely, and it usually carries conditions and an outer limit of its own.

What it does

Raises to Rs. 10,000 the belated refund claim an Income-tax Officer may himself admit. Following the Board's order under section 119(2)(b) dated 5 February 1988, Income-tax Officers are authorised to admit belated refund claims under section 237 up to Rs. 10,000, on the conditions in that order: the refund must arise from tax deducted at source under sections 192, 193, 194, 194A, 194B, 194C, 194D and 195 and must not exceed Rs. 10,000; the returned income must not be a loss where the assessee claims carry forward; the claim must not be supplementary, that is an additional refund claimed after the original assessment for the same year is complete; and the income must not be assessable in another person's hands. The authorisation takes effect from 10 February 1988.

Why it was issued

The Board raised the monetary limit to avoid hardship to taxpayers who had missed the time limit for a refund claim.

Who it reaches

Taxpayers with small belated refund claims arising from tax deducted at source
Income-tax Officers exercising the delegated power to admit such claims
Assessees whose returned income is a loss, who fall outside the order
Assessees making a second, supplementary refund claim

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.119	s.239
s.192	s.392, s.402
s.237	s.431

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

Instructions to subordinate authorities - Authorisation regarding condonation of delay in filing refund claim

1. Attention is invited to the Board’s Order under section 119(2)(b) [F. No. 225/201/87-IT(A-II)], dated 5-2-1988 whereby the Board, in exercise of the powers conferred by clause (b) of sub-section (2) of section 119, have raised the monetary limit of cases in which the ITO is authorised to admit belated refund claims under section 237.
2. With a view to avoid hardship to the taxpayers, the Income-tax Officers have now been authorised to admit belated refund claims in respect of amounts up to Rs. 10,000 provided the conditions laid down in the said order are fulfilled. These conditions are as follows :
(i) the refund arising as a result of tax deducted at source in respect of assessment year under the provisions of sections 192, 193, 194, 194A, 194B, 194C, 194D and 195 does not exceed Rs. 10,000;
(ii) the returned income is not a loss where the assessee claims the benefit of carry forward of the loss;
(iii) the refund claimed is not supplementary in nature, i.e., a claim for additional amount of refund after the completion of the original assessment for the same assessment year; and
(iv) the income of assessee is not assessable in the hands of any other person under any provisions of the Act.
3. This order will be effective from 10-2-1988.
Circular : No. 503 [F. No. 203/201/87-IT (A-II)], dated 6-2-1988.

What to watch

The refund must arise out of tax deducted at source under the listed sections; a refund from advance tax or self-assessment tax is not covered by this authorisation.
A supplementary claim after the original assessment is excluded, as is a case where the income belongs in another person's hands.
The loss return condition here was later held untenable by the Board itself, so a claim refused on that ground alone should be tested against the later position.
The monetary limits and the authorities empowered to condone under section 119(2)(b) have been revised repeatedly since 1988, so check the current order before filing.

Where you meet it

In a petition to admit a belated refund claim where salary or contract tax was deducted and no return was filed in time.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Circular No. 6/2026 — Condonation of delay in filing Form No. 10AB electronically for approval under clause(ii) of the first proviso to sectio 2 July 2026
Circular No. 2/2026 — Order under section 119 of the Income-tax Act, 1961 for extension of timeline for issuance of tax deducted at source (TD 25 March 2026
Circular No.15/2025 — Extension of timelines for filing of various reports of audit and income tax returns ITRS for the assessment year 2025 2 29 October 2025
Circular No. 10/2025 — Relaxation of time limit for processing of returns of income filed electronically which were incorrectly invalidated by 28 July 2025
Circular No. 7/2025 — Relaxation of time limit for processing of valid returns of income filed electronically pursuant to order u/s 119(2)(b) 25 June 2025
Circular No. 6/2025 — Extension of due date for furnishing return of income for the Assessment Year 2025-26 27 May 2025

← Circular No. 504 · Circular No. 502 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.