The Central Board of Direct Taxes (CBDT) has established Section 119 of Income Tax Act under which individuals can claim any deduction, exemption, refund and other relief. These claims can be made in the Income Tax Act even if the time limit for making the above-mentioned claims have expired. Through this article, you can understand the fundamentals of Section 119(2)(b) of Income Tax Act. You’ll also understand the procedure to opt for in Section 119 of the Income Tax Act, conditions to be followed, the application filing process, return filing procedure under that section, and famous High court or other judgments.
When is the due date for filing Income tax returns?
There is a prescribed period for filing income tax returns under the Income Tax Act. The due dates for filing of income tax returns are as follows:
For taxpayers not covered by Audit under Income Tax Act
31st July of every year
For Taxpayers covered by Audit under Income Tax Act
30th September of every year
For Taxpayers subject to Transfer Pricing Audit under the Income Tax Act
30th October of every year
Role of Section 119(2)(b) of Income tax act
If the returns are not filed within the time limits mentioned above, the taxpayer loses out on the benefits like refunds, carry forward of losses, etc. However, you can file your Income Tax returns even after you have failed to file your income tax returns on time, you can still avail all these benefits. This is where Section 119(2)(b) of Income tax act comes into play.
- Specific powers have been given to the Central Board of Taxes (CBDT), providing directions to lower-level authorities under Section 119.
- Therefore, accepting of belated returns having any claims of deductions, refunds, income tax exemptions, carry forward of losses, etc., can be done.
- Furthermore, Section 119(2)(b) of Income Tax Act provides CBDT with the power to instruct the various income tax authorities to approve any claim for the deduction, exemption, refund, or other relief under the Income Tax Act, even if the period for making such a claim has passed.
- However, the income tax authorities will only approve such claims if the taxpayer's failure to file a claim by the stipulated deadline was due to circumstances beyond their control.
Application filing process under Section 119(2)(b) of Income tax act
The application under Section 119 can be filed by any assessee manually or online.
- For manual application, it has to be made to the Jurisdictional Officer who is authorised to accept such application.
- If you are applying online on the income tax portal, go to Condonation Request under the Services Tab.
After applying as mentioned above, the income tax department issues a notice asking about relevant information regarding the claim/benefit/deduction/exemption, which can be viewed on the income tax portal www.incometax.gov.in as mentioned below:
- ‘E-file’ tab or
- ‘Pending actions’ section on the dashboard
The income tax officer must determine the merits of the matter and issue an order under section 119(2) after confirming all of the material given by the taxpayer. The order will be available under the 'E-file' tab and email to the taxpayer's registered email address. The taxpayer can file the reply himself or through any Chartered Accountant or Advocate.
You can file a return under Section 119(2)(b) of Income tax act site for the relevant assessment year once you receive the order of acceptance of your claim. The Income Tax Returns (ITR) form number should be the same for that particular assessment year.
Also Read: How To Generate Income Tax Return XML File
Authorities Responsible for Acceptance and Rejection of Section 119(2)(b) Application:
According to Sec 119 of Income tax act, applications for refunds or losses carried forward might be considered after the due date. The CBDT, however, has established some rules for approving or rejecting these petitions in its Circular dated 9/05/2015. In reality, this circular establishes the monetary thresholds below which various income tax authorities are permitted to handle these applications. The table below shows the monetary limit of the claim and the income tax authority that has jurisdiction over it:
Monetary Limit of the claim
Authority responsible for dealing
The amount involved in the claim is less than Rupees 10 Lakhs
The Commissioner of Income Tax (CIT) / The Principal Commissioner of Income Tax
The amount involved in the claim is between Rupees 10 Lakhs to Rupees 50 Lakhs
The Chief Commissioner of Income Tax (CCIT) / The Principal Chief Commissioner Of Income Tax (PCCIT)
The amount involved in the claim is more than Rupees 50 Lakhs
Central Board of Direct Taxes (CBDT)
Time Limit for Acceptance of Section 119(2)(b) Claims by the Various Authorities
The Section 119(2)(b) application for the claim of the refund or carry forward of the loss has to be made by the taxpayers within the next six years from the end of the assessment year. This time limit applies to all the authorities which have been mentioned in the table above.
- Mr Ajay could not claim a refund as he could not file his return due to his poor health conditions. The claim is related to the F.Y. 2018-19 (AY 2019-20).
- The amount was Rs. 2 Lakh.
- Since there was a genuine reason for not being able to file the return, he can apply to the Commissioner of Income Tax/ The Principal Commissioner of Income Tax to allow him to file his Income Tax Return for the Assessment Year.
- This application by Mr Ajay can be made up to 31st March 2027.
- The authorities should do the acceptance and closure or the rejection of the application within six months from the end of the month in which they received the application.
- Mr Ajay applied on 20th March 2021.
- The said application should be accepted, closed, or rejected by the authorities on 30th September 2021.
- If a refund is provided to a person due to a court's relief, the period during which the court action was ongoing will not be taken into account for calculating the six-year term.
- Only when an application is filed within six months following the court's order or the end of the relevant financial year, whichever comes first, is this time overlooked.
- Suppose the other conditions listed above are met. In that case, a belated application for a supplemental claim of refund (claim of additional amount of refund after completion of assessment for the same year) can be accepted for condonation.
- In the case of returns claiming refund and supplementary claims for refund, the power of the Principal Chief Commissioner of Income Tax, the Chief Commissioner of Income Tax and the Commissioner of Income Tax, and the Principal Commissioner of Income Tax would be subject to some further conditions mentioned separately under the Heading Important points to consider for claiming the benefit of Section 119.
Suppose an applicant has invested in the Government of India's 8% Savings (Taxable) Bonds, 2003. They have opted for the cumulative interest on maturity scheme but accounting interest earned on a mercantile basis. For the intermediary bank, deducting tax at source on the entire amount of interest paid should be done at the time of maturity. It would be without apportioning the accrued interest/Tax Deducted at Source (TDS) over the various financial years involved. Therefore, the time limit of six years for filing a claim has expired.
Return filing procedure under Section 119(2)(b) of Income Tax act
The procedure to file the return under Section 119(2)(b) of Income Tax act is as follows:
When the authorities accept the claim for filing the return, the return can be filed on the income tax website through the following steps:
- Visit the income tax e-filing website, i.e. https://www1.incometaxindiaefiling.gov.in/
- On the website, there will be an option to login into your account on the income tax portal.
- Once you log in to the portal, you will find a tab with the "e-file" option. Once you click on the tab a drop-down option will appear to select Income Tax Returns to file your return.
- For filing the return, the Assessment Year must be selected for which the return needs to be filed.
- Then an option will appear where you will have to choose to file against notice/order.
- You will have to select filing return under Section 139 read with Section 119(2)(b)
- There you will have to upload the XML file.
- Finally, your return can be filed with the verification through the help of Aadhaar OTP/Digital Signature Certificates (DSC) or by sending the printout of acknowledgement to CPC, Bangalore.
Important points to consider for claiming the benefit of Sec 119 of Income Tax act:
Any relief or claim is allowed only if the following conditions are satisfied:
- No income of any person is taxable in the hands of any other person under the Income-tax act.
- No interest will be paid on refund claims.
- The refund claim should be due to self-assessment tax, TDS, advance tax and no other reason.
- The authorities will investigate to check whether the claim is genuine and reasonable and then will allow the claim.
Famous Case Laws of Sec 119 of Income Tax act:
- Jaswant Singh Bambha vs Central Board of Direct Taxes – Punjab and Haryana High Court
- GV Infosolutions Pvt. Ltd. VS DCIT – Delhi High Court
- Commissioner of Income-tax Vs Patel Maheshbhai – Gujarat High Court
- Pala Marketing Co-Operative Society Vs Union of India & Ors – Kerala High Court
- Associated Electro Ceramics Vs Chairman, Central Board of Direct taxes and Another – Karnataka High Court
- Lodhi Property Company Limited vs Secretary (ITAT- Li) Department of Revenue – Delhi High Court
- Labh Singh vs Principal Income Tax Commissioner and Another – Himachal Pradesh High Court
- Parmar Kanu Bhai vs Commissioner of Income-tax – Income Tax Appellate Tribunal
- Shah Ravindra Derogarh Nadiad VS CIT- II Baroda – Income Tax Appellate Tribunal
- M. Rajan vs Principal Commissioner of Income Tax Calicut – Kerala High Court
- Artist Tree Private Limited Vs CBDT – Bombay High Court
Sec 119 of Income Tax act gives the board (CBDT), which is in charge of tax administration, a lot of power. The board has the authority to give orders, instructions, and directions to other Income Tax Authorities for the correct administration of the Act, and where anybody involved in the enforcement of the act must observe and follow them. Although it appears that tax administering authorities must follow these instructions, Appellate Authorities of Income Tax (who are charged with delivering justice rather than administering tax law) are not bound by them. They are instead expected to follow the principle of natural justice.
We hope that this article has provided you with the needed information for your ready reckoner. Download the Khatabook App for regular updates regarding Section 119 of the Income Tax Act.