Circular No. 7/2025

Relaxation of time limit for processing of valid returns of income filed electronically pursuant to order u/s 119(2)(b) of the Income-tax Act,1961 passed by Competent Authority

What this is

Circular No. 7/2025 was issued by the Central Board of Direct Taxes on 25 June 2025. Its subject is Relaxation of time limit for processing of valid returns of income filed electronically pursuant to order u/s 119(2)(b) of the Income-tax Act,1961 passed by Competent Authority.

What it does

Reopens the window for processing returns that were filed electronically after a competent authority condoned the delay under section 119(2)(b), but which the system could not process within the time allowed by the second proviso to section 143(1). The Board relaxes that time limit for valid returns e-filed on or before 31 March 2024 and directs that intimations under section 143(1) in these cases be sent by 31 March 2026. Consequential effects follow, including refund with interest as applicable. DGIT (Systems), Bengaluru is to lay down the processing procedure.

Why it was issued

Returns filed pursuant to condonation orders could not be processed in time for technical reasons, and grievances were filed about refunds not being received because the returns sat unprocessed.

Who it reaches

Assessees whose delayed returns were admitted on a section 119(2)(b) condonation order
Assessees waiting on refunds locked behind an unprocessed condoned return
CPC and DGIT (Systems), Bengaluru, who must run the processing
Officers who passed condonation orders under Circular No. 9/2015, Circular No. 7/2023 and Circular No. 11/2024

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.119	s.239
s.143	s.270

The instrument, as the Board published it

The department publishes this one only as a PDF, so the words below were read out of that PDF by machine. That reading can carry its own mistakes — a misread number, a broken line. Check the signed document before you rely on a figure in it.

F. No.225/30/2025/IT A-II Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes Circular No. 07/2025 North Block, the 25th June, 2025 Order u/s 119 of the Income-tax Act,1961 Subject: Relaxation of time limit for processing of valid returns of income filed electronically pursuant to order u/s 119(2)(b) of the Income-tax Act,1961 passed by Competent Authority-reg. 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. 2. 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 ufs 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. 3. 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. 4. 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 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. 5. 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. 6. This may be brought to the notice of all for necessary compliance. (Dr. Indu Bala) Deputy Secretary to the Government of India Copy for information to: i. Chairman (CBDT) and all Members of CBDT ii. All Pr.CCsIT/DsGIT iii. DGIT(Systems), Delhi & DGIT (Systems), Bengaluru with request for further necessary action in the matter iv. Joint Secretaries/Commissioners, CBDT v. Pr.DGIT, Directorate of Admin & Taxpayers Services vi. ADG(Systems)-4 with request for uploading on department's official website vii. JDIT, Database Cell for uploading on IRS Officers website viii. Guard file (Dr. Indu Bala) Deputy Secretary to the Government of India

What to watch

Only returns e-filed on or before 31 March 2024 pursuant to a condonation order are covered.
The relaxation does not apply where an assessment under section 143(3), 144, 144B, 153A or 153C, a reassessment under section 147 or 148, or a recomputation or revision has already been completed for that assessment year after the return was filed.
Where PAN and Aadhaar are not linked, no refund will issue, following Circular No. 3/2023 dated 28 March 2023.
The 31 March 2026 outer date is the department's own deadline to send the intimation, so a pending case should be chased before it.

Where you meet it

You meet it when a refund claimed in a condoned return never arrives and there is no intimation under section 143(1) on the portal. It is the authority for asking CPC to process a return whose ordinary processing date has lapsed.

An example

Ours, not the Board’s: a worked case built from the rule the instrument sets, to show how it falls out.

A trust obtains a condonation order and e-files its return for assessment year 2019-20 in February 2024, claiming a refund. The nine-month processing window under the second proviso to section 143(1) lapses and no intimation issues. Under this circular the return is to be processed and the intimation sent by 31 March 2026, with refund and interest to follow, provided no assessment or reassessment for that year was completed after the return was filed.

What it names

It mentions. Circular No. 03/2023, Circular No. 07/2023, Circular No. 07/2025, Circular No. 09/2015, Circular No. 11/2024

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Circular No. 6/2026 — Condonation of delay in filing Form No. 10AB electronically for approval under clause(ii) of the first proviso to sectio 2 July 2026
Circular No. 2/2026 — Order under section 119 of the Income-tax Act, 1961 for extension of timeline for issuance of tax deducted at source (TD 25 March 2026
Circular No.15/2025 — Extension of timelines for filing of various reports of audit and income tax returns ITRS for the assessment year 2025 2 29 October 2025
Circular No. 10/2025 — Relaxation of time limit for processing of returns of income filed electronically which were incorrectly invalidated by 28 July 2025
Circular No. 6/2025 — Extension of due date for furnishing return of income for the Assessment Year 2025-26 27 May 2025
Circular No. 5/2025 — Circular No. f)"" /2025 28 March 2025

← Circular No. 8/2025 · Circular No. 6/2025 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.