Section 119(2)(b) Condonation of Delay: Who Has the Power to Grant Relief for Refunds and Section 80P Claims?

 

Many taxpayers believe that once a due date under the Income-tax Act is missed, the door is permanently shut. This belief is incorrect. Indian tax law consciously recognises that genuine hardship can arise, and therefore empowers the Central Board of Direct Taxes to relax procedural timelines in deserving cases. This power flows from Section 119(2)(b) of the Income-tax Act, 1961, which has today become one of the most important relief provisions for taxpayers seeking delayed refunds or belated deductions such as those under Section 80P.

Section 119(2)(b) authorizes the Board to issue instructions allowing income-tax authorities to admit applications or claims for exemption, deduction, refund or other relief even after the expiry of statutory time limits, provided that the delay occurred due to genuine hardship. In simple terms, it is the legal bridge between rigid timelines and real-world difficulties.

Over the years, the CBDT has issued multiple circulars under this provision, clearly defining who can condone the delay, up to what monetary limit, and under what conditions. Today, two sets of circulars are especially relevant—one dealing with delayed refund claims and another specifically addressing belated Section 80P deduction claims by cooperative societies.

Condonation of Delay for Refund Claims under Section 119(2)(b)

For delayed refund claims, the governing instructions are presently contained in CBDT Circular No. 11/2024, which has replaced and updated earlier instructions such as Circular No. 09/2015. This circular lays down a structured, monetary-limit-based authority framework for condonation applications.

Under the current framework, taxpayers must approach different authorities depending upon the amount of refund involved for a particular assessment year. Where the refund claim does not exceed ₹1 crore, the application for condonation is to be filed before the Jurisdictional Principal Commissioner of Income Tax or Commissioner of Income Tax. Where the refund exceeds ₹1 crore but does not exceed ₹3 crore, the authority competent to grant condonation is the Chief Commissioner of Income Tax. For refund claims exceeding ₹3 crore, the power vests with the Principal Chief Commissioner of Income Tax.

This delegation is not cosmetic. Filing a condonation application before the wrong authority often results in rejection or long procedural delays. Therefore, identifying the correct authority is the first and most critical step.

The circular also clarifies that condonation is not automatic. The taxpayer must demonstrate genuine hardship, explain the reasons for delay, and establish that the claim is otherwise legally admissible. Importantly, these applications are not to be decided mechanically. Authorities are expected to pass reasoned orders after examining facts, documents and circumstances.

Another important clarification is that once delay is condoned, the return or claim is to be processed on merits in accordance with law. Condonation does not guarantee refund; it only revives the claim for examination.

Condonation of Delay for Section 80P Deduction Claims

Section 80P grants deduction to eligible cooperative societies. However, after amendments and stricter filing requirements, many societies lost the deduction merely because their returns were filed late. Recognizing this hardship, CBDT issued Circular No. 13/2023 specifically invoking Section 119(2)(b) to allow condonation of delay for returns claiming deduction under Section 80P for specified assessment years. This relief was further extended by Circular No. 14/2024.

These circulars allow cooperative societies that were otherwise eligible for deduction under Section 80P but could not file their returns within the prescribed time to approach the jurisdictional Principal Commissioner or Commissioner of Income Tax for condonation of delay. Unlike refund circulars, the focus here is not the quantum of refund but the eligibility of deduction and the existence of genuine hardship.

The authority is required to verify whether the society satisfies the conditions of Section 80P, whether the delay was beyond its control, and whether the claim is bona fide. Once condoned, the return is processed and deduction allowed as per law.

Where Should the Taxpayer Apply? A Practical Authority Map

For delayed refund claims up to ₹1 crore: Application to Jurisdictional Pr. CIT / CIT.
For delayed refund claims between ₹1 crore and ₹3 crore: Application to CCIT.
For delayed refund claims exceeding ₹3 crore: Application to Pr. CCIT.
For belated Section 80P claims: Application to Jurisdictional Pr. CIT / CIT as specified in the circular.

Applications must be filed manually or electronically as per the prevailing administrative instructions, accompanied by a detailed explanation of delay and supporting documents.

Key Judicial and Practical Principles

Courts have repeatedly held that Section 119(2)(b) is a beneficial provision and should be interpreted liberally to mitigate genuine hardship. At the same time, it cannot be used to bypass substantive law or revive inadmissible claims. Authorities must balance taxpayer hardship with revenue protection.

Another practical aspect is timing. Although no absolute limitation period is prescribed, inordinate and unexplained delays weaken the case. Applications should be filed as soon as the mistake or omission is discovered.

Draft Application for Condonation of Delay under Section 119(2)(b)

To
The Principal Commissioner of Income Tax
[Address]

Subject: Application for condonation of delay under Section 119(2)(b) of the Income-tax Act, 1961 for Assessment Year _______

Respected Sir/Madam,

I/We respectfully submit this application seeking condonation of delay under Section 119(2)(b) of the Income-tax Act, 1961 in respect of the return of income / refund claim / deduction claim under Section 80P for Assessment Year _______.

The return of income could not be filed within the prescribed time due to reasons beyond the control of the assessee. The delay occurred on account of _______ (briefly explain reasons such as illness, incorrect professional advice, technical issues, lack of awareness due to change in law, audit delay, etc.). The delay was neither deliberate nor with any intention to evade tax.

The claim made in the return is legally admissible and supported by relevant records. Non-condonation of delay would result in genuine hardship, as the assessee would be deprived of a lawful refund / deduction solely on procedural grounds.

In view of the above facts and in exercise of powers conferred under Section 119(2)(b) read with the relevant CBDT circulars, it is humbly requested that the delay in filing the return / claim may kindly be condoned and the return be directed to be processed on merits.

I/We shall be grateful for your kind consideration.

Thanking you,

Yours faithfully,
Name of Assessee
PAN
Assessment Year
Address
Date

Conclusion

Section 119(2)(b) is not a loophole; it is a legislative safety valve. When used correctly, it restores fairness to the tax system by ensuring that genuine claims are not sacrificed at the altar of rigid deadlines. However, success under this provision depends on approaching the correct authority, filing a well-reasoned application, and demonstrating bona fide hardship. Understanding who has the power to condone delay is not a technicality—it is the key that unlocks the relief.