CBDT Extends Processing Deadline for Delayed Condonation ITRs to March 2026

Introduction

The Central Board of Direct Taxes (CBDT) has issued Circular No. 07/2025 dated 25 June 2025, addressing long-pending issues related to the processing of Income Tax Returns (ITRs) filed after the due date under condonation of delay provisions.

Through this circular, CBDT has extended the deadline for processing such delayed but condoned returns up to 31 March 2026, offering relief to taxpayers who were unable to receive refunds or intimations despite valid approvals.

What Is Condonation of Delay?

Under Section 119(2)(b) of the Income Tax Act, taxpayers who miss the statutory deadline for filing their ITR are not permanently barred from filing. They may apply for condonation of delay by demonstrating genuine reasons beyond their control, such as:

Serious illness
Technical or system failures
Judicial or administrative orders

Once the Competent Authority approves the request, the taxpayer is permitted to file the return even after the due date, ensuring that legitimate refund claims or tax benefits are not forfeited.

Such approvals are governed by earlier CBDT guidelines, including:

CBDT Circular No. 09/2015
CBDT Circular No. 07/2023
CBDT Circular No. 11/2024

Why Were Condoned Returns Not Processed Earlier?

Despite receiving condonation approvals, many taxpayers remained stuck without refunds or intimation notices. This was due to procedural constraints under Section 143(1):

ITRs must normally be processed within 9 months from the end of the financial year
In condonation cases, the return was often filed after this statutory processing window
As a result, even though returns were accepted, they could not be processed—leaving taxpayers without refunds or closure

CBDT Extends Time Limit for Processing Condoned Returns

To resolve this gap and provide equitable relief, CBDT has now officially extended the processing timeline for eligible ITRs filed under Section 119(2)(b).

Eligible Returns

The extension applies only to ITRs that meet all of the following conditions:

Filed electronically
Filed on or before 31 March 2024
Filed after receiving condonation approval under Section 119(2)(b)

What Happens Now?

All eligible returns will be processed
Intimations under Section 143(1) will be issued
The extended deadline for processing and intimation is 31 March 2026

The Director General of Income Tax (Systems), Bengaluru has been tasked with implementing the required technical and procedural changes to ensure timely processing of all eligible cases.

Exclusions and Limitations

Not all condoned returns qualify for this extension.

Not Eligible If:

The assessment year has already undergone assessment or reassessment under:
- Sections 143(3), 144, 144B
- Sections 147, 148
- Sections 153A or 153C
PAN is not linked with Aadhaar (as per CBDT Circular No. 03/2023, refunds are blocked without linkage)
The condonation application was filed beyond five years from the end of the relevant assessment year
- (Strictly applicable to applications filed on or after 1 October 2024)

Refunds and Interest: Key Points

Refunds Will Be Issued If:

The return reflects a genuine refund claim arising from:

Excess TDS
Excess advance tax
Excess self-assessment tax

No Interest on Refunds

Refunds issued for condoned late returns will not carry interest, as per existing provisions.

How to Check Your Eligibility

Your return is likely eligible if you can answer “Yes” to all of the following:

Was the return filed online?
Was it filed on or before 31 March 2024?
Was condonation approved under Section 119(2)(b)?
Was no assessment or reassessment completed for that year?
Is your PAN linked with Aadhaar?

Documents to Keep Ready

Eligible taxpayers should ensure availability of:

Copy of condonation approval order
ITR acknowledgement
PAN–Aadhaar linkage confirmation
Correct bank details for refund
Valid email ID and mobile number

Important Timelines at a Glance

Last date to file condoned ITR: 31 March 2024 (already passed)
Last date for processing & intimation: 31 March 2026
PAN–Aadhaar linking: Mandatory before refund processing
5-year limit for condonation: Strictly enforced from October 2024

Take Action Now to Claim Your Delayed Refund

If you filed a delayed ITR under condonation and are still awaiting processing or refund, this extension offers a crucial opportunity. Ensure your PAN–Aadhaar linkage, documentation, and bank details are in order.

Auriga Accounting pvt. ltd. can assist you in checking eligibility, updating compliance records, and tracking your refund status—helping you secure rightful refunds without further delays.

About the Author

Ravi

“Ravi simplifies complex legal requirements into clear, actionable insights, helping entrepreneurs stay compliant and build sustainable businesses with confidence.”

February 1, 2026