The CBDT issued Circular No. 07/2025 dated June 25, 2025, has granted relaxation for processing income tax returns (ITRs) filed electronically under section 119(2)(b) of the Income-tax Act, 1961, where delays in filing were condoned by competent authorities as per earlier circulars (No. 09/2015, No. 07/2023, No. 11/2024). Due to technical reasons, some of these returns could not be processed within the prescribed time limit under the second proviso to section 143(1), leading to grievances regarding delayed refunds.
To address this, the Board has extended the processing time for valid returns filed up to 31 March 2024 under such condonation orders. These returns can now be processed, and intimations under section 143(1) must be issued by 31 March 2026. However, this relaxation does not apply where assessment, reassessment, recomputation, or revision proceedings have already been completed for the relevant assessment year.
Post-processing, refunds and applicable interest will be issued. However, refunds will not be processed for cases where PAN-Aadhaar linkage is not completed, as per Circular No. 03/2023 dated 28.03.2023. The Director General of Income-tax (Systems), Bengaluru, will establish procedures to ensure timely processing and compliance.
It has been brought to the notice of the Central Board of Direct Taxes (the Board) that returns of income filed in pursuance of order u/s 119(2)(b) of the Income-tax Act, 1961 (the Act) condoning the delay in filing such returns, could not be processed within the prescribed time limit under second proviso to section 143 (1) of the Act due to technical reasons. Such orders u/s 119(2)(b) of the Act condoning delay in filing of return were passed by Competent Authority as specified in CBDT’s Circular No. 09/2015 vide F. No. 312/22/2015-OT dated 09.06.2015, Circular No. 07/2023 vide F. No. 312/63/2023-OT dated 31.05.2023 and latest Board’s Circular No. 11/2024 dated 01.10.2024. Grievances have been filed regarding non-receipt of refund due to non-processing of these returns in some cases.
The matter has been considered by the Board and it has been decided to relax the time-frame prescribed in second proviso to sub-section (1) of section 143 of the Act in exercise of its powers under section 119 of the Act, and directs that valid returns of income filed electronically on or before 31.03.2024 pursuant to condonation of delay u/s 119(2)(b) of the Act by the competent authority, for which date of sending intimation under sub-section (1) of section 143 of the Act has lapsed, shall be processed now. Accordingly, intimation under sub-section (1) of section 143 of the Act in respect of processing of such ITRs shall be sent to the assessees concerned by 31.03.2026.
The relaxation accorded above shall not be applicable to cases where any proceeding for assessment (u/s 143(3)/144/144B/153A/153C) or reassessment (u/s 147/148) or recomputation or revision of income under the Act has been completed for the relevant assessment year subsequent to filing of such returns of income.
All subsequent effects under the Act, including issue of refund along with interest as applicable, shall also follow in these cases. In those cases where PAN-Aadhaar linkage is not found, refund of any amount of tax or part thereof, due or under the provisions of the Act shall not be made as laid down in Circular No.03/2023 dated 28.03.2023 vide F.No.370142/14/2022-TPL.
The Director General of Income-tax (Systems), Bengaluru shall specify the procedures for processing of such returns filed u/s 119(2)(b) of the Act to ensure that intimation u/s 143(1) of the Act shall be sent to assessees on or before 31.03.2026.
This may be brought to the notice of all for necessary compliance.
The Circular can be accessed at: https://incometaxindia.gov.in/communications/circular/circular-no-07-2025.pdf
