Income Tax Taxation

The Implications and Restriction Prescribed Under Section 119


The Income Tax Act, 1961, prescribes the time limit in the form of due dates for filing of the return, payment of advance tax, a deposit of TDS, etc. If the taxpayer fails to pay the tax by the due date, he/she is penalized in different ways depending upon the severity of negligence.

For instance, if the taxpayer fails to file his return within the due date of 31st July, he is not allowed to claim a refund of excess tax paid, set off and carry forward of losses, etc.

Section 119 of the Income Tax Act, 1961, provides relief to such stringent and strict provisions of the Act. This section empowers the Central Board of Direct Taxes to authorize the Income Tax Officers to accept such return claiming the deductions, refunds, carry forward of losses, etc. even after the expiry of the due date.

Let’s understand the provisions of this section in detail in the following paragraphs.

Section-119 of Income Tax Act, 1961

Section 119 empowers the CBDT to authorize and instructthe lower level of the Income Tax Authority.  CBDT has also issued various order and notification in exercise of powers conferred upon it under this section.

Section 119(2) (b) also empowers the CBDT authorizing the income tax authorities to allow the late filing of return provided that they are satisfied with the generous reason of taxpayer for not filing the return within the due date. 

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Authority as per the Monetary Limit

CBDT has set out certain guidelines for dealing with an application vide its circular dated 09.05.2015. Monetary limits of claim are specified under this circular based on which the application is accepted or rejected by the different levels of income tax authorities.

Following is the list of the monetary claim and the authority empowered to deal with such application:

  1. In case the claim amount is up to INR 10 Lakhs:Such application can be dealt with by Principal Commissioner of Income Tax or Commissioner of Income Tax.
  • In case the claim amount exceeds INR 10 Lakhs but up to INR 50 Lakhs: Such application can be dealt with by Principal Chief Commissioner of Income Tax or Chief Commissioner of Income Tax.
  • In case the claim amount exceeds INR 50 Lakhs: Such an application can be dealt with by the Central Board of Tax.

Time Limit of an Application

Following are timeline guidelines under Section 119 for the taxpayer who is making an application as well as for the authorities to dispose of the case.

  1. Application: The taxpayer has to apply to the authority depending upon the monetary claim within 6 years from the end of the assessment year.

For Example, Mr. X has failed to file the return for the FY- 17-18 within the due date of 31st July 2018 due to certain medical issues. He can file an application to the Principal Commissioner for claiming the refund of INR 2 Lakhs within 31st March 2025.

  • Closure of an Application: Authority should accept or reject and close the case within 6 months from the end of the month in which an application was received by them.
For example, Mr. X, in the above case, filed an application dated 16th June 2019, shall be accepted or rejected, disposed, or closed within 31st December 2019.

Conditions to be fulfilled under section 119(2)(b)

Relief or the claim will be allowed under this section if the assessee fulfills the following condition:

  • An application is filed by the assessee himself, i.e., an income of one taxpayer cannot be taxed in the hands of others.
  • There will be no interest paid for the refund.
  • Refund claimed in an application shall be arising only out of the following:
  • Excess TDS; or
  • Excess self-assessment of tax; or
  • Advance tax paid.
  • Income tax authority pre-scrutinizes the application and approves the same only if it finds the same to be genuine and reasonable.
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The Order passed under Section 119

CBDT has issued certain orders in exercising the powers conferred upon it under section 119:

  • The CBDT, in accordance with the powers conferred upon it under Section 119, has extended the due date for filing the income tax return for the AY 19-20 from 31st July 2019 (as prescribed under section 139) to 31st August 2019.
  • It has extended the due date for filing the TDS statement in form 24Q for the AY 2019-20 from 31st May 2019 to 30th June 2019.
  • It has also extended the due date of the issue of the TDS certificate in form 16 for the AY 19-20 from 15th June 2019 to 10th July 2019.

Steps to file return u/s 119(2) (b)

Once the authority accepts the application for the claim of refund, the assessee can file an income tax return under this section by the following procedure:

  • Visit the income tax website for e-filing the income tax return.
  • Select the “e-file” tab from the options.
  • After selecting e-file, there will be a drop-down menu from which assessee has to choose “Income Tax Return.”
  • Choose the assessment year for which the return is being filed.
  • Select the filing type and choose “Filing against notice/order.”
  • Choose the filing section of “section 139 read with section 119(2)(b)”.
  • Upload the XML and complete the return filing by verifying it online through Aadhar OTP/ Bank OTP/ EVM generation or offline by sending a physical copy of ITR V to the central processing center, Bangalore.

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