Section 239 — Form of Claim for Refund and Limitation
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live (substituted form). As substituted by the Finance (No. 2) Act, 2019 with effect from 1 September 2019, every claim for refund under the Chapter must be made by furnishing a return under section 139. The former machinery (Form No. 30 and a separate period of limitation) in old sub-section (2) stands omitted.
FA 2026: No amendment by the Finance Act, 2026.
A. SECTION COMMENTARY
Section 239, as it now stands, provides that every claim for refund under Chapter XIX is to be made by furnishing a return of income in accordance with section 139. The earlier scheme — a separate refund application in Form No. 30 within the limitation period prescribed in old sub-section (2) — has been done away with; sub-section (2) now reads "[***]", marking the omission. The reform integrates the refund claim into the return-filing process: the return is both the vehicle for computing income and the vehicle for claiming the refund.
The practical consequence is that a person seeking a refund must file a return within the time allowed under section 139, including, where applicable, a belated return under section 139(4) or an updated return under section 139(8A). Where the time to file has expired, the route to a refund lies through condonation of delay.
Condonation is governed by section 119(2)(b), under which the CBDT (and the authorities it empowers) may admit a belated claim for refund to avoid genuine hardship. CBDT Circular No. 9/2015 dated 9 June 2015 prescribes the monetary limits and the authorities competent to deal with such applications and the conditions (including that the refund has arisen from excess tax/TDS/advance tax/self-assessment tax and that the claim is correct and genuine). The courts have generally read "genuine hardship" liberally and in a justice-oriented manner, the object being to do substantial justice rather than to defeat a legitimate refund on technical delay.
Because section 239 is now purely procedural and recently recast, there is little direct reported authority on the substituted text; the body of law that matters in practice is that on condonation under section 119(2)(b) and on the timely furnishing of returns under section 139.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025). Note: '***' marks words or a sub-section omitted by amendment, retained only to show the omission.
239. (1) Every claim for refund under this Chapter shall be made by furnishingreturn in accordance with the provisions of section 139.
(2) ***
C. AUTHORITIES
The substituted section 239 (refund claim by way of a section 139 return) is recent and procedural; there is no significant body of reported decision on the recast text itself. In practice the operative jurisprudence is that on condonation of delay under section 119(2)(b) read with CBDT Circular No. 9/2015, where the courts construe "genuine hardship" liberally. The substantive right that the return-claim vindicates remains that in section 237.
1. Condonation of delay in a refund claim — "genuine hardship" construed liberally
Where the return (and thus the refund claim) is delayed, the operative jurisprudence is on condonation under section 119(2)(b) read with CBDT Circular No. 9/2015.
Sitaldas K. Motwani v. DGIT (2010) 323 ITR 223 (Bombay) — condonation under section 119(2)(b)
Court: High Court of Bombay; judgment dated 15 December 2009 (2010) 323 ITR 223.
Held: The expression "genuine hardship" in section 119(2)(b) must be construed liberally, the power having been conferred to enable the authorities to do substantial justice by deciding matters on merits. In deciding an application to condone delay in claiming a refund, the authority is not to examine the refund claim closely on merits or to take a pedantic view; a refund legitimately due should not be defeated merely by delay where the delay is explained and no mala fides or culpable negligence is shown.
Significance: The leading authority on condonation of delay in refund claims (relevant to section 239 read with section 119(2)(b) and CBDT Circular No. 9/2015); widely followed for the liberal, justice-oriented construction of "genuine hardship".
2. Governing substantive principle
On the merits of what is refundable through a section 239 return-claim, Shelly Products supplies the governing principle (excess over tax on returned income).
Held: (i) Provisos (a) and (b) to section 240 are declaratory and clarificatory, and therefore operate retrospectively; the CBDT Circular dated 23 January 1990 is likewise only clarificatory. (ii) The liability to pay income-tax arises by force of the charging provisions read with the Finance Act, not from the making of an assessment; Article 265 is not breached merely because no fresh assessment is framed after an annulment. (iii) Where an assessment is annulled and the Revenue does not (or cannot) make a fresh assessment, the assessee is entitled to a refund only of the amount paid in excess of the tax chargeable on, and paid in respect of, the income returned — i.e. tax paid pursuant to the annulled order over and above the tax on the returned income. (iv) Taxes paid voluntarily and on the assessee's own admission of liability, such as advance tax and self-assessment tax referable to the returned income, are not refundable merely because the assessment is annulled; conversely, if the assessee has wrongly paid excess tax (e.g. by misreading an exemption), it may bring the fact to the AO's notice for refund.
Significance: The cornerstone decision on proviso (b) to section 240. It draws the crucial line between (a) tax wrongly collected under an annulled order, which is refundable, and (b) tax voluntarily paid on returned income, which is not. Applied by the Supreme Court in CIT v. Micro Nova Pharmaceuticals (P) Ltd. to block-period self-assessment tax.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the local Act (base text amended up to the Finance Act, 2025); the publisher's footnote apparatus and amendment-marker brackets have been removed, and three asterisks (***) denote words or a sub-section omitted by amendment and retained only to mark the omission. Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported. Where a section has not been the subject of a direct reported decision, that is stated candidly and the nearest governing authority or circular is given. This digest is for professional reference and is not legal advice.
CHAPTER XIX — REFUNDS
Section 239 — Form of Claim for Refund and Limitation
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live (substituted form). As substituted by the Finance (No. 2) Act, 2019 with effect from 1 September 2019, every claim for refund under the Chapter must be made by furnishing a return under section 139. The former machinery (Form No. 30 and a separate period of limitation) in old sub-section (2) stands omitted.
FA 2026: No amendment by the Finance Act, 2026.
A. SECTION COMMENTARY
Section 239, as it now stands, provides that every claim for refund under Chapter XIX is to be made by furnishing a return of income in accordance with section 139. The earlier scheme — a separate refund application in Form No. 30 within the limitation period prescribed in old sub-section (2) — has been done away with; sub-section (2) now reads "[***]", marking the omission. The reform integrates the refund claim into the return-filing process: the return is both the vehicle for computing income and the vehicle for claiming the refund.
The practical consequence is that a person seeking a refund must file a return within the time allowed under section 139, including, where applicable, a belated return under section 139(4) or an updated return under section 139(8A). Where the time to file has expired, the route to a refund lies through condonation of delay.
Condonation is governed by section 119(2)(b), under which the CBDT (and the authorities it empowers) may admit a belated claim for refund to avoid genuine hardship. CBDT Circular No. 9/2015 dated 9 June 2015 prescribes the monetary limits and the authorities competent to deal with such applications and the conditions (including that the refund has arisen from excess tax/TDS/advance tax/self-assessment tax and that the claim is correct and genuine). The courts have generally read "genuine hardship" liberally and in a justice-oriented manner, the object being to do substantial justice rather than to defeat a legitimate refund on technical delay.
Because section 239 is now purely procedural and recently recast, there is little direct reported authority on the substituted text; the body of law that matters in practice is that on condonation under section 119(2)(b) and on the timely furnishing of returns under section 139.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025). Note: '***' marks words or a sub-section omitted by amendment, retained only to show the omission.
239. (1) Every claim for refund under this Chapter shall be made by furnishingreturn in accordance with the provisions of section 139.
(2) ***
C. AUTHORITIES
The substituted section 239 (refund claim by way of a section 139 return) is recent and procedural; there is no significant body of reported decision on the recast text itself. In practice the operative jurisprudence is that on condonation of delay under section 119(2)(b) read with CBDT Circular No. 9/2015, where the courts construe "genuine hardship" liberally. The substantive right that the return-claim vindicates remains that in section 237.
1. Condonation of delay in a refund claim — "genuine hardship" construed liberally
Where the return (and thus the refund claim) is delayed, the operative jurisprudence is on condonation under section 119(2)(b) read with CBDT Circular No. 9/2015.
Sitaldas K. Motwani v. DGIT (2010) 323 ITR 223 (Bombay) — condonation under section 119(2)(b)
Court: High Court of Bombay; judgment dated 15 December 2009 (2010) 323 ITR 223.
Held: The expression "genuine hardship" in section 119(2)(b) must be construed liberally, the power having been conferred to enable the authorities to do substantial justice by deciding matters on merits. In deciding an application to condone delay in claiming a refund, the authority is not to examine the refund claim closely on merits or to take a pedantic view; a refund legitimately due should not be defeated merely by delay where the delay is explained and no mala fides or culpable negligence is shown.
Significance: The leading authority on condonation of delay in refund claims (relevant to section 239 read with section 119(2)(b) and CBDT Circular No. 9/2015); widely followed for the liberal, justice-oriented construction of "genuine hardship".
2. Governing substantive principle
On the merits of what is refundable through a section 239 return-claim, Shelly Products supplies the governing principle (excess over tax on returned income).
CIT v. Shelly Products (2003) 261 ITR 367 (SC)
Court: Supreme Court of India; (2003) 261 ITR 367 / 129 Taxman 271.
Held: (i) Provisos (a) and (b) to section 240 are declaratory and clarificatory, and therefore operate retrospectively; the CBDT Circular dated 23 January 1990 is likewise only clarificatory. (ii) The liability to pay income-tax arises by force of the charging provisions read with the Finance Act, not from the making of an assessment; Article 265 is not breached merely because no fresh assessment is framed after an annulment. (iii) Where an assessment is annulled and the Revenue does not (or cannot) make a fresh assessment, the assessee is entitled to a refund only of the amount paid in excess of the tax chargeable on, and paid in respect of, the income returned — i.e. tax paid pursuant to the annulled order over and above the tax on the returned income. (iv) Taxes paid voluntarily and on the assessee's own admission of liability, such as advance tax and self-assessment tax referable to the returned income, are not refundable merely because the assessment is annulled; conversely, if the assessee has wrongly paid excess tax (e.g. by misreading an exemption), it may bring the fact to the AO's notice for refund.
Significance: The cornerstone decision on proviso (b) to section 240. It draws the crucial line between (a) tax wrongly collected under an annulled order, which is refundable, and (b) tax voluntarily paid on returned income, which is not. Applied by the Supreme Court in CIT v. Micro Nova Pharmaceuticals (P) Ltd. to block-period self-assessment tax.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the local Act (base text amended up to the Finance Act, 2025); the publisher's footnote apparatus and amendment-marker brackets have been removed, and three asterisks (***) denote words or a sub-section omitted by amendment and retained only to mark the omission. Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported. Where a section has not been the subject of a direct reported decision, that is stated candidly and the nearest governing authority or circular is given. This digest is for professional reference and is not legal advice.