The Central Board of Direct Taxes (CBDT), by way of Circular No. 10/2025 dated 28 July 2025, has granted relief in cases where Income Tax Returns (ITRs) were electronically filed within time but subsequently treated as invalid by CPC, Bengaluru, on account of technical or procedural defects.
Statutory Authority
The relaxation has been issued under the enabling powers of Section 119 of the Income-tax Act, 1961, which empowers the Board to mitigate genuine hardship in the administration of the Act.
Covered Period and Returns
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The relief applies to all returns of income filed electronically up to 31 March 2024.
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The measure thus extends to Assessment Years up to AY 2023–24.
Processing Extension
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Such returns, earlier treated as invalid, may now be processed under Section 143(1) up to 31 March 2026.
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Refunds, where due, shall be issued along with interest under Section 244A.
Exclusions
The relief will not extend to cases where:
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Assessment has already been completed under Sections 143(3), 144, 147, 153A or 153C;
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PAN is invalid or inoperative (particularly for want of PAN–Aadhaar linkage);
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The return itself suffers from substantive defects rather than mere technical lapses.
Taxpayer Obligations
Although no separate condonation petition is required, taxpayer action is essential. Returns will not be automatically reopened. Taxpayers should:
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Verify the status of their returns on the income-tax portal;
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Raise a grievance with CPC, Bengaluru, citing the Circular;
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Ensure PAN–Aadhaar linkage and pre-validation of bank accounts;
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Maintain contemporaneous records of filing acknowledgments, error communications, and grievance submissions.
Practical Significance
This measure provides a structured opportunity for:
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Release of long-pending refunds with statutory interest;
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Recognition of carried-forward losses in business/professional cases;
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Regularisation of compliance for NRIs and taxpayers affected by e-verification or DSC issues.
Conclusion
Circular 10/2025 is a remedial step recognising the hardship caused by invalidation of timely-filed returns. By extending the processing window up to 31 March 2026 and allowing consequential refunds with interest, the Board has addressed a long-standing grievance of taxpayers. The relief, however, is contingent upon timely taxpayer follow-up with CPC to ensure such returns are duly considered for processing.
