Section 119 of Income Tax Act, 1961 (‘the Act’)

Section 119 briefly explained (For tax nerds)

Section 119 accords the following powers to CBDT:

• 119(1): To issue instructions and directions to other income-tax authorities for the proper administration of this Act, given that orders shall not be issued requiring assessment or disposition of a particular case in a specific manner to avoid any bias or prejudice against the taxpayer in question. Such instructions are generally made to all income tax authorities except the Commissioner (Appeals) to avoid the interruption in the discharge of their appellate functions.
• 119(2)(a): To provide relaxation regarding certain provisions in the public interest such as waiver or reduction of interest under 234A, 234B, 234C, 234E, penal consequences etc.
• 119(2)(b): To admit application or claim for condonation of delay as explained at length in the subsequent paragraphs.
• 119(2)(c): To provide relaxation for claiming deduction under Chapter IV/ VI-A, where the taxpayer fails to comply with any prescribed requirements for reasons beyond his control and provided that the taxpayer complies with such requirements before the completion of the assessment by the income tax officer.

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Section 119(2)(b)

CBDT is empowered to deal with the applications for condonation of delay in filing returns containing a refund claim and returns claiming to carry forward loss and set off thereof under section 119(2)(b) read with Circular 9/2015 dated 9 June 2015.

The power to accept/reject the application by the prescribed income-tax officer in case of such claims will be subject to the following conditions:

2.1. Time limit for filing application: 2.2. Time limit for disposing of the application:

A condonation application must be disposed of within six months from the end of the month in which the application was received by the competent authority, as far as possible. It is pertinent to note that this time limit is recommendatory and not mandatory.

2.3. Procedure for filing return under section 119(2)(b): Step 1: File a manual or online application:

File a manual application to the jurisdictional officer authorised to deal with the application. The application may also be filed online on the income tax portal in the ‘Condonation request’ section under the ‘services’ tab.

The officers authorised to accept/ reject the application based on the amount of claim is tabulated as under:

The application shall contain all the material facts. It is generally accepted to divide the application into two parts, namely,

a) the facts of the case along with the circumstances due to which the delay was caused, along with the supporting and
b) the genuine hardship caused to the taxpayer if such a claim is not allowed to him.

Step-2: Response to notice issued by the income tax officer

After submitting an application as above, a notice will be issued by the department seeking relevant information regarding the claim, which can be accessed on the income tax portal www.incometax.gov.in under:
- ‘E-file’ tab or
- ‘Pending actions’ section on the dashboard

The taxpayer can submit a reply to the notice online, either by himself or through his authorised representative (CA or an advocate)

Step-3: Disposal of application by the income tax officer

After verifying all the information provided by the taxpayer, the income tax officer shall decide upon the merits of the case and pass an order under section 119(2)(b). The order will be made available under the ‘E-file’ tab and on an email sent on the registered email-id of the taxpayer.

Step-4: Filing of return under section 119(2)(b):

Once the order of acceptance of your claim is received, you can file a return u/s 119(2)(b) on the income tax portal for the relevant assessment year, and the ITR form number should be the same as was applicable for that particular assessment year

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Conclusion

In case of delay in filing a return, the taxpayer has an option to file a belated return under section 139(4) by the following dates, whichever is earlier:

Section 119 accords the following powers to CBDT:

- on or before the relevant AY ends or
- Before the tax authority completes the assessment

E.g. If the taxpayer fails to furnish the return for FY 2020-20 21(AY 2021 -22) by the deadline, he can file a belated return by 31 Jan 2022 being earlier of 31 Jan 2022 or before the tax authority completes the assessment (say 10 April 2022)

If the taxpayer misses the above deadlines due to genuine difficulties, he may apply for relief under section 119 as discussed above.

3.1. Few instances which the judiciary has upheld to be cases of genuine difficulties are:

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