Wealth Tax Refund - Time Limit can be extended and interest will be paid
PRIOR to amendment by Finance Act 2013, sub clause (b) of Explanation 1 to clause (ea) of section 2 of the Wealth-tax Act 1957 provided that an urban land shall be chargeable to wealth-tax. This included land situated in any area which is comprised within the jurisdiction of a municipality or a cantonment Board and which has population of not less than ten thousand according to the last preceding census;or land situated in any area within such distance not being more than eight kilometres from the local limits of any municipality or cantonment Board as the Central government may specify in this behalf by notification in the official gazette. Subsequently, by Finance Act 2013 the said sub clause (b) of Explanation 1 to clause (ea) was amended to provide that the term "urban land" would not include land classified as agricultural land in the records of the Government and used for agricultural purposes. Accordingly, such land stands exempt from wealth-tax. This amendment was done with retrospective effect from 1.4.1993.
Various representations have been received in the Central Board of Direct Taxes (CBDT) that assessees had paid wealth-tax on such agricultural land as per the provisions of the Act as they existed prior to Finance Act 2013. In view of the amendment brought by the Finance Act 2013 w.r.e.f. 1.4.1993, the wealth-tax paid in respect of such land is required to be refunded. However, the time-limit for filing revised return or application for rectification for the purpose of claiming refund has expired in several cases.
With a view to avoid genuine hardship, the CBDT has authorised Principal Commissioners/Commissioners of Wealth-tax to admit application for revision under section 25 of the Act from assessees seeking refund arising due to the aforesaid amendment, after the expiry of the period specified under the said section and to deal with it on merits as per law.
In case refund is granted, the assessee shall be entitled to interest on such refund.
The assessee shall make the application for such claim within one year from the date of issue of the order (11.06.2015). After expiry of the said period, no such claim shall be admitted.
CBDT Circular No.11/2015., Dated: June 11, 2015