Missed the ITR Window? Filing a Return After Condonation of Delay Under Section 119(2)(b)

You e-filed nothing for the year, the 31 December belated-return window has slammed shut, and yet Form 26AS shows the tax department is sitting on money that is rightfully yours. Before you write off that refund, know that the Income-tax Act, 1961 keeps one narrow door open: Section 119(2)(b), read with CBDT Circular No. 11/2024 dated 1 October 2024. This is the "what if I missed every deadline" route, and it is more procedural than most taxpayers realise.

The Scenario

Consider a salaried professional whose employer deducted Rs 1,05,000 as TDS across FY 2022-23, against a final liability of only Rs 77,600 — an overpayment of Rs 27,400 waiting to be refunded. The original return under Section 139(1) was due 31 July 2023; the belated return under Section 139(4) could still have been filed up to 31 December 2023. Both dates passed. By January 2024 the e-filing portal simply refuses a normal return for Assessment Year 2023-24.

The instinct is to reach for the updated return (ITR-U) under Section 139(8A), which stays open far longer. That is a dead end for this taxpayer: the fourth proviso to Section 139(8A) expressly bars an updated return where it is a return of loss, where it has the effect of reducing total tax liability, or where it results in a refund or increases a refund. A refund claim cannot travel on ITR-U at all. The only vehicle left is a condonation of delay under Section 119(2)(b).

The same door applies to a business or investor who wants to carry forward a capital loss but missed the Section 139(1) deadline — Section 80 normally forbids carrying forward a loss reported in a late return, and only a condonation order can rescue it.

Statutory Answer

Section 119(2)(b) of the Income-tax Act, 1961 (indiacode.nic.in) empowers the Central Board of Direct Taxes (CBDT) to authorise any income-tax authority to admit an application or claim for a refund or any other relief after the expiry of the statutory period, in order "to avoid genuine hardship". The Board has exercised that power through Circular No. 11/2024 dated 1 October 2024 (incometax.gov.in), which supersedes the earlier Circular No. 9/2015 and resets both the monetary thresholds and the limitation period.

Three conditions travel with every refund application under the 2024 circular. First, the refund must arise from excess deduction or collection of tax (TDS/TCS), advance tax or self-assessment tax — not from a court order. Second, the income of the applicant must not be assessable in the hands of any other person. Third, and importantly for cash-flow planning, no interest is payable under Section 244A on a belated refund admitted through condonation; you recover the principal, not a rupee more.

The competent authority is decided purely by the size of the claim, and the 2024 circular raised these limits materially:

Two clocks matter. The application itself must be filed within five years from the end of the assessment year for which the return is to be furnished — so for AY 2023-24, the outer limit is 31 March 2029. The department, in turn, is directed to dispose of the application within six months from the end of the month in which it is received, as far as possible. That five-year limitation, introduced by the 2024 circular, is a hard boundary: a 2015-era belief that condonation is available "any time" no longer holds.

Worked Resolution

Take our salaried professional and settle the arithmetic first. Under the new-regime slabs for FY 2025-26 (used here to illustrate how a refund crystallises), a gross salary of Rs 14,00,000 less the Rs 75,000 standard deduction leaves taxable income of Rs 13,25,000. The tax builds up slab by slab:

Because taxable income exceeds Rs 12,00,000, the Section 87A rebate — now Rs 60,000 in the new regime for income up to Rs 12,00,000 — does not apply here, so the full Rs 81,900 stands. If the employer had deducted Rs 1,10,000 in TDS, the refund due is Rs 28,100. You can reproduce this build-up for your own figures with the income tax calculator or compare regimes on the old vs new regime calculator.

Now the procedure, which the briefing from the Income Tax Department help portal sets out clearly. You cannot file the return first and seek forgiveness later — the condonation order must come first. The sequence is:

1. Raise the condonation request. Log in at incometax.gov.in, go to Services and then "Condonation Request", choose "Allow ITR filing after time-barred", and submit the reason for the delay for AY 2023-24. Attach evidence of genuine hardship (medical records, an overseas posting, a bereavement) because the officer must be satisfied the case is genuine, not merely late.
2. Wait for the order. The Pr. CIT / CIT (for our Rs 28,100 claim, well under the Rs 1 crore ceiling) passes an order carrying a Document Identification Number (DIN) and an order date, targeted within six months.
3. File through the offline utility only. There is no online-form option for this filing type. Download the ITR JSON utility, and in the Filing Information sheet select the filing type "After Condonation of delay u/s 119(2)(b)", then enter the DIN and the date of the condonation order. Upload the JSON and e-verify.

Miss the e-verification and the return is treated as never filed, so complete it inside the standard window — a point covered in our note on the 30-day e-verification clock. Once processed, the Rs 28,100 is credited to the pre-validated bank account, without Section 244A interest.

For a loss-carry-forward case the mechanics are identical, except the capital gains calculator helps you quantify the loss you are trying to preserve, and the return must still be filed within the condonation order's terms so that Section 80 no longer blocks the set-off in future years.

FAQ

How long do I have to file a condonation application under Section 119(2)(b)?

Five years from the end of the relevant assessment year, per Circular No. 11/2024 dated 1 October 2024. For AY 2023-24 the deadline is 31 March 2029. The older, more generous position under Circular No. 9/2015 no longer applies to applications made on or after 1 October 2024.

Can I just use ITR-U instead of going through condonation?

No, not for a refund. The fourth proviso to Section 139(8A) bars an updated return that produces a refund, increases a refund, or reports a loss. ITR-U is designed for taxpayers who owe more tax, not those owed money, so a refund of the kind in our Rs 28,100 example must go through Section 119(2)(b).

Who decides my application, and does the amount matter?

The claim size decides the authority: up to Rs 1 crore it is the Pr. CIT / CIT, above Rs 1 crore up to Rs 3 crore the CCIT, and above Rs 3 crore the Pr. CCIT. These thresholds were raised by the 2024 circular, and the officer is meant to dispose of the case within six months of the month of receipt.

Will I earn interest on the delayed refund?

No. Circular No. 11/2024 confirms that a refund admitted after condonation carries no interest under Section 244A. In our example you recover the Rs 28,100 principal but nothing for the delay, which is a direct cost of missing the original 31 July and 31 December deadlines.

What counts as "genuine hardship"?

The circular does not publish a closed list, but the officer must be satisfied the delay was for a real reason — hospitalisation, working abroad, a family bereavement or a comparable circumstance — supported by documents. A bare statement that you "forgot" is routinely rejected, so build the evidence file before you apply. The assessment year you are applying for must be stated precisely.

Can I carry forward a business or capital loss this way?

Yes. Condonation under Section 119(2)(b) covers both refund claims and claims to carry forward losses, subject to the same monetary limits and the five-year window. Once the order is granted, Section 80 no longer blocks the set-off of that loss against future income.

Why must I use the offline utility and enter a DIN?

Because the portal has no online form for the "After Condonation of delay u/s 119(2)(b)" filing type. The Income Tax Department requires the return to be prepared in the JSON utility, with the condonation order's DIN and date keyed into Filing Information so the system can link your return to the approving order. Check your tax refund status afterwards under Services on incometax.gov.in.