CBDT Relaxes Time Limit for Processing Conditionally Accepted ITRs Filed Under Section 119(2)(b)

Last updated: 26 June 2025

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The Central Board of Direct Taxes (CBDT) has extended the deadline for processing income tax returns (ITRs) that were filed late but had their delay condoned. This move aims to resolve issues where technical glitches prevented the processing of these returns, thus delaying refunds. The new deadline allows for processing and issuing intimations by March 31, 2026, for eligible returns filed electronically by March 31, 2024.

The Central Board of Direct Taxes (CBDT) has issued Circular No. 07/2025, dated June 25, 2025, extending the time limit for processing income tax returns (ITRs) filed with condonation of delay under Section 119(2)(b) of the Income-tax Act, 1961.

The circular addresses grievances where valid returns filed electronically-after being condoned by the competent authority-could not be processed within the prescribed time under the second proviso to Section 143(1) due to technical issues. As a result, affected taxpayers have been unable to receive their refunds.

CBDT Extends ITR Processing Deadline for Delayed Returns

Key Highlights of the Circular

Extended Processing Deadline: The CBDT has now directed that valid delayed returns filed electronically on or before March 31, 2024, and condoned under Section 119(2)(b), may be processed, and intimations under Section 143(1) can be issued by March 31, 2026.
Applicability: This relaxation applies only to cases where no assessment, reassessment, recomputation, or revision proceedings have been completed for the relevant assessment year after the filing of such returns.
Refund Conditions: Any refund due will follow standard provisions, including applicable interest. However, refunds will not be processed where PAN-Aadhaar linkage is not found, in accordance with CBDT Circular No. 03/2023 dated March 28, 2023.
Implementation Oversight: The Director General of Income-tax (Systems), Bengaluru, will specify procedures to ensure timely processing and issuance of intimations.

The circular cites earlier relevant instructions, including CBDT Circulars No. 09/2015, 07/2023, and 11/2024, as the basis for identifying condoned ITRs.

Implications for Taxpayers

This relaxation is a significant step for taxpayers who had their delayed returns condoned but faced undue hardship due to system-related delays. It ensures they receive their rightful refunds and brings clarity to the processing timelines.

Taxpayers are advised to ensure PAN-Aadhaar linkage and monitor their communication from the IT Department for updates on the processing of such returns.

Official copy of the circular has also been attahced

FAQ :

The CBDT has extended the time limit for processing income tax returns (ITRs) that were filed late but had their delay condoned under Section 119(2)(b).

Eligible delayed returns filed electronically on or before March 31, 2024, can now be processed, and intimations issued by March 31, 2026.

This relaxation applies to valid delayed returns filed electronically by March 31, 2024, and condoned under Section 119(2)(b), provided no assessment or related proceedings have been completed for the relevant year.

Refunds will be processed according to standard provisions, including applicable interest. However, refunds will not be issued if the PAN-Aadhaar linkage is not found.

The Director General of Income-tax (Systems), Bengaluru, will specify procedures to ensure the timely processing and issuance of intimations for these returns.

Attached File : 671907_25007_circular_no_07_2025.pdf

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