In a welcome move that addresses a long-standing concern for thousands of taxpayers, the Central Board of Direct Taxes has issued a fresh directive to process income tax returns that were earlier invalidated due to technical issues. The issue had affected numerous taxpayers across India, particularly those who filed electronically but found their returns marked invalid without any fault on their part.
This decision follows complaints received by the Centralized Processing Centre in Bengaluru. Many returns, some going as far back as Assessment Year 2023 to 2024, had been wrongly declared invalid due to backend system glitches. The original deadline for processing such returns had expired on December 31, 2024. However, the new order under Section 119 of the Income Tax Act overrides that deadline, granting relief to affected individuals.
According to the updated directive, electronically filed ITRs up to March 31, 2024, that were marked invalid due to system errors, will now be processed normally. This is a significant relaxation granted under Section 143(1) of the Act, using the powers provided to CBDT under Section 119. Taxpayers who were earlier in limbo over refunds or tax adjustments can now expect their ITRs to be properly processed.
The new timeline for communication is also clear. Intimations under Section 143(1) for such returns will be issued by March 31, 2026. This ensures that even though the initial processing window had lapsed, taxpayers will still receive due communication and resolution within a new extended timeline.
However, there is an important caveat attached to this relief. The CBDT has made it very clear that refunds will only be issued if the taxpayer’s PAN is linked to their Aadhaar. This requirement has been in effect since March 28, 2023, as stated in Circular No. 03/2023. Taxpayers who have not completed this mandatory linkage will not receive any refund, full or partial, under this new relaxation until compliance is achieved.
The clarification serves as a strong reminder for all taxpayers to ensure their PAN and Aadhaar details are correctly linked in the system. Without this, the benefits of the recent relief measures may not be accessible, no matter how valid or deserving the claim is.
CBDT has directed all internal departments and processing centers to act in accordance with the new order and make sure that no genuine taxpayer is left out due to procedural errors caused by technology.
This relief is expected to resolve multiple pending tax matters and unlock refunds that have been stuck in the system due to issues beyond taxpayer control. In a year where technology continues to reshape tax filing and governance, this corrective step is a reminder that systems must also serve the people they are meant to empower.
For more such tax updates and simplified personal finance news, follow You Finance on Instagram and Facebook. We help you decode money matters every single day.
