Filing an ITR After Condonation of Delay Under Section 119(2)(b): The Step-by-Step Procedure

Every filing season a familiar problem lands on a Chartered Accountant's desk: a genuine refund is stuck because the return was never filed in time. Under Section 139(1) of the Income-tax Act, 1961 the ordinary due date is 31 July, the belated and revised windows under Section 139(4) and 139(5) both close on 31 December of the assessment year, and once those dates pass the e-filing portal simply will not accept an ordinary return. If tax was over-deducted at source and no return exists, the refund is trapped. Section 119(2)(b) is the statutory escape hatch, and this guide walks through the exact step-by-step procedure to file that return once the delay is condoned.

The Scenario

Consider a salaried professional whose employer deducted Rs 1,20,000 of TDS during a financial year, but who never filed the return before the 31 December belated deadline because of hospitalisation. The actual tax liability worked out to far less than the tax deducted, so a substantial refund is due. By the time the paperwork is sorted, both the 31 July original date and the 31 December belated date under Section 139(4) have long gone. The portal blocks a normal filing, and the tax refund will not be released without a valid ITR on record for that assessment year.

This is precisely the "genuine hardship" that Section 119(2)(b) is written for. The provision does not reopen assessments or waive tax; it only lets the Central Board of Direct Taxes (CBDT) authorise an income-tax authority to admit a time-barred claim for refund or carry-forward of loss so the return can be processed on merits. The critical sequencing point, stated in the Income Tax Department's e-filing user manual, is that the condonation request must be approved before the return is filed, not after.

Statutory Answer

Section 119(2)(b) of the Income-tax Act, 1961 empowers the CBDT to authorise any income-tax authority (other than an appellate authority) to admit an application or claim for any exemption, deduction, refund or other relief after the expiry of the period specified in the Act, to avoid genuine hardship in any case or class of cases. The power is delegated administratively: a Principal Commissioner of Income Tax (PCIT) typically decides refund claims within the monetary limits fixed by CBDT circulars, with higher-value claims escalating to the Chief Commissioner or the Board itself.

The taxpayer first files a condonation request on the e-filing portal, selecting the ground (delay in claiming a refund, or delay in carrying forward a loss). Only after the PCIT passes a condonation order, which carries a Document Identification Number (DIN) and an order date, can the return be filed. The Income Tax Department's manual is explicit on the return type: the filing is made under Section 139(9A), described in the utility as "After Condonation of delay u/s 119(2)(b)". A second, non-negotiable technical rule follows: the manual states that an ITR under Section 139(9A) "can be filed using offline utility only, the option of online filing is not available."

That single sentence trips up most first-time filers, who expect the usual online form. Instead, the taxpayer must download the Excel or JSON offline utility for the relevant assessment year, prepare the return inside it, enter the DIN and the date of the condonation order in the Filing Information sheet, generate a JSON file, and upload that file to the portal. The table below maps the fields the utility demands.

Worked Resolution

Take the same salaried filer and run the arithmetic under the FY 2025-26 new-regime slabs so the numbers are current. Assume a gross salary of Rs 14,00,000 with the standard deduction of Rs 75,000 available in the new regime, giving taxable income of Rs 13,25,000. Because taxable income exceeds the Rs 12,00,000 threshold, the Section 87A tax rebate of Rs 60,000 does not apply here, so full slab tax is payable. You can reproduce this in the income tax calculator or compare regimes with the old vs new regime tool.

Against a total liability of Rs 81,900, the employer had already deducted Rs 1,20,000 as TDS, which you can cross-check against Form 26AS and the TDS calculator. The refund therefore works out to Rs 1,20,000 minus Rs 81,900, or Rs 38,100. Without a valid return that Rs 38,100 stays with the exchequer indefinitely; with an approved Section 119(2)(b) order and a return filed under Section 139(9A), the refund becomes claimable and the Centralised Processing Centre processes it like any other return. The same computation logic applies to a capital-loss year, where the goal is to preserve carry-forward under Section 74 rather than a cash refund; the capital gains calculator helps quantify the loss being protected.

Before you start, keep three documents ready: the condonation order with its DIN dated by the PCIT, Form 26AS or the Annual Information Statement showing the Rs 1,20,000 TDS entry, and the correct offline utility for that assessment year. Filers who recently cleared an outstanding tax demand should confirm no demand is pending before the refund can be adjusted, and anyone unsure whether the Rs 60,000 rebate applies to their income should read our explainer on the Section 87A rebate for FY 2025-26.

FAQ

Can I file the return online after condonation is approved?

No. The Income Tax Department's e-filing user manual is categorical that an ITR under Section 139(9A) "can be filed using offline utility only". You must download the offline utility for the relevant assessment year, enter the DIN and condonation-order date, generate the JSON and upload it; the online prepare-and-submit route is disabled for 139(9A) returns.

What happens if I file the return before the condonation order is passed?

The filing will not be valid for this purpose. The manual instructs filers to "ensure that the condonation request is approved before filing ITR". A return filed under Section 139(9A) needs the DIN and date of the PCIT order in the Filing Information sheet, and without an approved order there is no DIN to enter.

Which authority approves a Section 119(2)(b) request?

CBDT delegates the power under Section 119(2)(b) of the Income-tax Act, 1961 to income-tax authorities based on the value of the claim. Refund claims within the prescribed monetary limit are decided by the Principal Commissioner of Income Tax (PCIT), with larger claims escalating to the Chief Commissioner or the Board, per the CBDT circular in force for that year.

Does condonation guarantee my refund will be paid?

No. Section 119(2)(b) only admits the time-barred claim for consideration; it does not certify the refund amount. Once the return is filed under Section 139(9A), it is processed on merits by the Centralised Processing Centre, and in the worked example the Rs 38,100 refund is released only after the return is verified and the TDS in Form 26AS is matched.

Can I use condonation to carry forward a business or capital loss?

Yes. Section 119(2)(b) covers delay in claiming carry-forward of loss as well as refund. The same offline Section 139(9A) route applies, and the goal is to preserve set-off rights under provisions such as Section 74 for capital losses rather than to claim a cash refund; quantify the loss first with the capital gains calculator.

How is the refund taxed or does interest apply?

The refund itself is not income, but the Act provides interest on delayed refunds under Section 244A, computed by the department when the return is processed. In our example the principal refund is Rs 38,100; any Section 244A interest is added by CPC and does not need to be self-computed in the offline utility.

Where can I read the official procedure?

The end-to-end steps, field names and the offline-only rule are documented in the Income Tax Department's e-filing "Raise Service Requests" user manual on incometax.gov.in, and the statutory basis is Section 119(2)(b) of the Income-tax Act, 1961 as hosted on India Code. Always confirm the current monetary limits against the latest CBDT circular before you file.