income tax
Published on 24 July 2025
CBDT Eases Income Tax Return Processing Time Limits for Delayed Filers
CBDT Offers Relief for Delayed ITRs: Returns Filed Under Condonation Orders to Be Processed by March 2026
In a major relief for taxpayers caught in procedural limbo, the Central Board of Direct Taxes (CBDT) has relaxed a key timeline that previously prevented the processing of income tax returns (ITRs) filed under condonation of delay. This move is especially significant for those who, despite having received CBDT approval to file late returns, were left without refunds or resolution due to time-barred provisions under the tax law.
Why This Matters
Many taxpayers who missed filing deadlines for genuine reasons—such as medical emergencies, loss of documents, or other hardships—were allowed to file late returns after receiving condonation approvals under Section 119(2)(b) of the Income-tax Act, 1961. However, a technical bottleneck often remained: if the deadline for processing such returns under Section 143(1) had already expired, the Income Tax Department simply wouldn’t process them. This meant no refunds, no credit, and no closure—even for validly filed returns.
What’s Changed Under CBDT Circular No. 11/2024?
1. Covers Delayed ITRs Filed With Approval: The relaxation applies to all income tax returns that were electronically filed after condonation was granted under Section 119(2)(b), on or before March 31, 2024.
2. 143(1) Time Limit No Longer a Barrier: Even if the time for issuing a Section 143(1) intimation has already passed, the return will still be processed. This is a significant departure from earlier practice, where such returns were effectively left unaddressed.
3. Processing Deadline Set for March 31, 2026: The Income Tax Department has until March 31, 2026 to complete the processing of all eligible returns and issue the corresponding intimations.
4. Refunds Allowed—With a Condition: If you’re eligible for a refund, it will be issued, but only if your PAN is linked with Aadhaar. If not, the return may still be processed, but no money will be released.
Who’s Not Covered?
This relief does not apply in cases where the department has already completed any of the following proceedings for that assessment year:
- Scrutiny assessment (Section 143(3))
- Best judgment assessment (Section 144)
- Faceless assessment (Section 144B)
- Search-related assessment or reassessment (Sections 153A/153C)
- Income escaping assessment (Sections 147/148)
How the Relaxation Works – Step-by-Step
| Step | What Happens |
|---|---|
| 1. Condonation Granted | Taxpayer receives CBDT approval under Section 119(2)(b) for late ITR filing |
| 2. Return Filed Electronically | Return submitted through official e-filing portal |
| 3. Earlier Issue | If 143(1) time limit had lapsed, return went unprocessed |
| 4. Now Resolved | CBDT now permits such returns to be processed despite time lapse |
| 5. Processing Window | Returns to be processed by March 31, 2026 |
| 6. Refunds Issued | Refunds (if due) will be released—but only if PAN and Aadhaar are linked |
| 7. Exceptions Apply | No relief if the return year has already been assessed or reassessed |
Why This Matters for Taxpayers
This is more than just a procedural clarification—it’s a lifeline for thousands of taxpayers who were left in the dark despite following due process. Those who had legitimate condonation approvals but were told “nothing can be done” because the system’s window had closed can now expect their returns to be processed and refunds issued.
For salaried individuals, senior citizens, and small business owners who often file returns themselves or with limited assistance, this circular ensures that genuine hardship cases don’t end in deadlock.