The Central Board of Direct Taxes (CBDT) has issued Circular No. 10/2025, allowing for the reprocessing of electronically filed income tax returns (ITRs) that were erroneously marked invalid by the Centralized Processing Centre (CPC), Bengaluru.
As per the circular, the CBDT has invoked its powers under Section 119 of the Income-tax Act, 1961 to relax the time limit stipulated in section 143(1). This move comes in response to grievances about technical glitches leading to wrongful invalidation of returns for various assessment years, particularly AY 2023-24, where the processing deadline expired on December 31, 2024.
The circular permits the CPC to now process all such electronically filed returns submitted up to March 31, 2024, even if previously marked invalid. Importantly, affected taxpayers will receive the intimation under section 143(1) by March 31, 2026.
The circular also clarifies that refunds, along with interest wherever applicable, will be issued. However, in cases where the taxpayer's PAN is not linked with Aadhaar, refunds will not be processed, in accordance with CBDT Circular No. 03/2023 dated March 28, 2023.
This move aims to reduce taxpayer grievances, streamline return processing and ensure eligible taxpayers receive their rightful refunds without delay.
Official copy of the circular has been attached
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