Income Tax Condonation of Delay — Section 119(2)(b) Application

Section 119(2)(b) of the Income Tax Act, 1961: CBDT empowered to condone delay in filing returns or other applications/claims if satisfied that genuine hardship exists; powers delegated to Principal Commissioners and Commissioners within monetary thresholds. CBDT Circular No. 9/2015 (F.No.312/22/2015-OT): delegation framework — up to Rs. 10 lakh to jurisdictional CIT, Rs. 10-50 lakh to PCIT, above Rs. 50 lakh to CBDT. Section 239(2) of the Income Tax Act, 1961: time limit for claiming refund. Section 72: carry forward and set-off of business losses (requires return under Section 139(1)). Section 74: capital losses set-off and carry forward. Section 80: general provision on carry forward requiring timely filing. Rule 128 and Form 67: foreign tax credit to be claimed by filing Form 67 before or along with the ITR.

Section 119(2)(b) of the Income Tax Act, 1961 empowers the CBDT (and, by delegation, the Principal Commissioner or Commissioner of Income Tax) to admit an application or claim after the expiry of the prescribed time limit, if it is satisfied that the person was prevented by sufficient cause from filing the return, claim, or application within the due date. This provision is the principal statutory route through which taxpayers who have missed critical deadlines — due to illness, natural disaster, lack of awareness, or other genuine hardship — can seek relief and regularise their compliance position.

The most common scenarios in which a Section 119(2)(b) condonation application is filed include: filing a belated income tax return to claim a refund beyond the time limit under Section 139(4) or Section 239(2); carrying forward losses (business loss under Section 72, capital loss under Section 74, or speculation loss under Section 73) which require a timely return under Section 80; making a belated election under Section 10-IEA for the new tax regime (applicable from AY 2024-25 onwards); filing a belated Form 67 for foreign tax credit under Sections 90/91, which must be filed before or along with the ITR; and claiming deductions or exemptions that require timely filings under Sections 10A, 10AA, or 80IA.

The jurisdiction for condoning delay is delegated by CBDT in a monetary threshold framework. Based on CBDT Circular No. 9/2015 (F.No.312/22/2015-OT) and subsequent instructions: claims involving a refund of up to Rs. 10 lakh are within the jurisdiction of the Commissioner of Income Tax; claims between Rs. 10 lakh and Rs. 50 lakh are within the Principal Commissioner's jurisdiction; and claims above Rs. 50 lakh require CBDT's direct approval. For certain categories, the IT portal allows online submission of condonation petitions directly on the income tax e-filing portal (incometax.gov.in).

A well-drafted condonation application must contain: the complete factual background explaining the reason for delay, supporting evidence (medical certificate for illness, news reports for calamity, affidavit, etc.), computation of the refund or loss involved, a statement of the tax position for each relevant year, and a clear prayer for condonation citing Section 119(2)(b). The application must be addressed to the jurisdictional authority and is typically accompanied by an affidavit from the taxpayer. Our service handles the full application lifecycle — analysing the grounds for delay, computing the refund or loss amount, drafting the condonation application with appropriate legal citations, and following up with the jurisdictional CIT or CBDT until disposal.