Section 119 Of Income Tax Act

Timelines for filing returns have been prescribed under the income tax laws in India. Taxpayers do make various claims in their returns of income like a refund, carry forward of losses etc, which, if returns are not filed, cannot be claimed at all by taxpayers by any other mode. So does this mean if one fails to file his return within the due date for certain unavoidable reasons, he loses his otherwise rightful claim to a refund or a carryforward of loss?

No. Not completely.

While a choice, the form ITR-U comes with a significant drawback: taxpayers may incur a hefty penalty of 25% or 50% of additional tax under section 139(8A). This particular drawback, however, has been addressed by the Condonation Request process governed by section 119(2)(b). If the Assessing Officer approves the condonation request, the taxpayer is exempt from paying any interest or penalty.

The income tax laws empower the Central Board of Direct Taxes (CBDT) to authorise Income tax officers to accept such returns claiming an exemption, deduction, refund, or carryforward of losses, as the case may be, even after the expiry of the due dates prescribed. Section 119 of the Income Tax Act deals with the condonation of delay in filing the Income Tax Return stands as a special relief provided by the Income Tax Department under section 119(2)(b).

Let’s understand this section a little more in detail.

Section 119 – In Brief

Section 119 empowers the Central Board of Taxes (CBDT) to issue instructions to lower levels of authority. In addition, section 119(2)(b) empowers CBDT to direct income tax authorities to allow any claim for exemption, deduction, refund and any other relief under the income tax act even after the expiry of the time limit to make such claim. However, such claims will only be allowed by the income tax authority provided, making such a claim within the prescribed due date was genuinely out of the control of the taxpayer.

Who Can Accept And Reject Applications?

Applications for a claim of refund or carry forward of losses can be accepted beyond the due date, according to Section 119. However, certain guidelines for accepting or rejecting these applications have been set out by the CBDT vide its Circular dated 9.5.2015. In fact, this circular specifies the monetary limits based on which different levels of income tax authorities have been authorised to deal with these applications. The table below prescribes the monetary limit of the claim made and the income tax authority empowered to deal with it.

• The authorities should accept and close or reject such cases within 6 months from the end of the month in which they received the application. For eg, Mr Ram files the application for relief on 21st June 2021 the concerned authority shall accept and close or reject the application by 31st Dec 2021. 

The Central Board of Direct Taxes (CBDT) has introduced new regulations regarding the condonation of delays in Income Tax Return (ITR) submissions which are applicable from  October 1, 2024: 

• You must submit your condonation applications within five years from the end of the relevant assessment year.
• If you received a refund based on a court order, the five-year limit does not include the duration your case was pending in court. You have six months from the date of the court order to apply for condonation.

How To File Return Under Section 119(2)(b)?

Once you receive an order of acceptance of your claim, you can file return u/s 119(2)(b) from the income tax e-filing website by the following steps :

• Login to your income tax e-filing portal
• Go to the “e-file” tab and select “Income tax returns” from the drop-down menu
• Select the assessment year and the for which you have to file the return under this section
• Then, choose the filing type “Filing against notice/order”
• Select the filing section as “139 read with section 119(2)(b)”
• Then, upload an XML/JSON and file your return by verifying it. 
  Note: When completing the income tax form, you will have to select section 139(4), i.e., the belated return.

Other Important Points Under Section 119(2)(b)

Any relief or claim will be allowed only when these conditions will also be fulfilled along with those mentioned above :

• The income of one person is not taxable in the hands of any other person under Income Tax Act
• You will not be paid any interest on refund claims
• The refund claim must be due to excess of TDS or self-assessment tax or advance tax and no other reason. The authorities after receiving the application, satisfy themselves with a proper investigation that the claim is genuine and reasonable or not. Only pursuant to this they decide to go ahead and allow your claim.

Condonation Request For Filing ITR Post All Deadlines

Here we have discussed the simple steps of online and offline filing requests for the condonation of an income tax return (ITR) beyond the deadline:

Online Method

Step 1: Go to the e-filing website https://www.incometax.gov.in/iec/foportal/

Step 2: Then, log in by using your ID and password

Step 3: Then, go to the dashboard, click on Service, and go to ‘Condonation Request’

Step 4: When the condonation Request page appears, choose the ‘Allow ITR filing after time-barred option’

Step 5: Create ‘Condonation Request’. Upon reaching the ‘Enter Details & Upload ITR page’, enter the following details.

Step 6: Select the ‘Request Category, Assessment Year, ITR, Claim Value, Filing Type, Reason for Delay & ITR Type’ from the provided choices.

Step 7: Proceed to the ‘Upload ITR’ option and submit the Income Tax Return (in PDF/XLS format) corresponding to the condonation of delay request you are filing.

Step 8: Press on ‘Upload documents to upload the supporting documents

Step 9: After submitting the request, proceed to the e-verify page and choose an appropriate option. Upon completion, you will receive a successful e-verification message along with a Transaction ID.