Condonation of Delay Under Section 119(2)(b): How to Claim an Old Refund After Every Deadline Has Passed (AY 2026-27)

There is a specific tax problem that most guides skip past. You never filed a return for an old year, your employer or bank had already deducted tax, and so the department owes you money. The original deadline is gone, the belated deadline is gone, and when you try the updated return route it refuses to help.

That refusal is deliberate. An updated return under Section 139(8A) can only ever increase your tax - it cannot produce a refund, increase an existing one, or report a loss.

The route that does work is older, slower and far less advertised: condonation of delay under Section 119(2)(b), a formal request to a senior income tax authority to accept a time-barred claim. This guide covers when it applies, who decides, how long you have, what it costs, and whether it is worth doing at all.

The Gap ITR-U Leaves Behind

Four routes exist for a return that is late. They do not overlap.

The belated return is the easy answer, and until 31 December of the assessment year you should simply use it. Our guide on penalties for late ITR filing covers what that costs.

Once 31 December passes, the split matters. If you owe tax, file an updated return - see the ITR-U guide for the additional tax slabs. If the department owes you, ITR-U is legally closed to you, and Section 119(2)(b) is the only remaining door.

What Section 119(2)(b) Actually Says

The section empowers the CBDT to authorise income tax authorities to admit an application or claim for exemption, deduction, refund or any other relief after the statutory period has expired, to avoid genuine hardship.

Three practical points follow from that wording. It is permission to file, not automatic relief - the authority decides whether to admit the claim, not whether the claim is correct. It covers more than refunds, so loss carry-forward and deduction claims fall inside it too. And it is discretionary, which means your stated reason for the delay carries real weight in the outcome.

Who Decides, and the 5-Year Clock

CBDT Circular No. 11/2024 dated 1 October 2024 is the operative instruction, replacing the earlier limits in Circular 07/2023 and reshaping both the approval hierarchy and the deadline.

Monetary limits

The authority who decides depends on how large your claim is for that single assessment year.

Almost every individual refund claim lands in the first row and is handled by the jurisdictional Pr.CIT or CIT.

The deadline

No condonation application is entertained beyond five years from the end of the relevant assessment year.

For AY 2026-27, the assessment year ends 31 March 2027, so the last date to apply is 31 March 2032. The oldest year still open right now is AY 2021-22, and it expires on 31 March 2027 - roughly seven months away.

The circular also sets a service expectation: applications should be disposed of within six months from the end of the month in which they are received, as far as possible.

One carve-out exists: where the refund arises from a court order, the period the proceedings were pending is excluded from the five years.

The Conditions Attached

A condonation carries standing conditions that catch people out later.

The income must not be assessable in someone else's hands, so a claim on income clubbed with a spouse or parent will not survive. The refund must arise from excess TDS, TCS, advance tax or self-assessment tax - those are the recognised sources. The claim can still be verified on merits, because approval only lets you file; the assessing officer may be directed to inquire into whether the refund is genuinely due.

No interest is payable on a belated refund claim. This is the condition with real money attached. Normally a refund carries interest under Section 244A from 1 April of the assessment year, but on a condoned claim that interest is expressly not admissible. On a Rs 60,000 refund sitting for four years, you are forgoing roughly Rs 14,000.

What Counts as "Genuine Hardship"

The statute does not define it, and High Courts have repeatedly held that the phrase should be read liberally rather than used to defeat a valid claim. In practice, applications are rejected for a thin explanation far more often than for a bad reason.

Reasons that are routinely accepted, with evidence:

• Serious illness or hospitalisation of the taxpayer or an immediate family member
• Death in the family, including claims filed by a legal heir
• Being posted or resident abroad for the relevant period
• Genuine ignorance that TDS had been deducted, common with a one-off deduction on a property sale or on interest
• Documented portal or technical failures around the deadline
• Advanced age, or a first-time filer with no prior compliance history

What tends to fail is a bare "I forgot" with nothing attached, an explanation covering only the last few months of a five-year gap, or an application filed after a notice has already gone out for that year.

Attach proof: medical records, a death certificate, passport stamps, an employer posting letter, or timestamped portal error screenshots. A one-paragraph application with no annexures is the single most common reason these get rejected.

Step by Step on the Portal

1. File the condonation request

Log in at incometax.gov.in and go to Services > Condonation Request.

Choose the right request type, because there are two very different ones:

• Allow ITR filing after time-barred - the Section 119(2)(b) route for a return you could not file in time
• Delay in submission of ITR-V - a much simpler request, covered further below

Select the assessment year, enter your reason, and upload supporting documents. Keep the reason factual and chronological: what happened, over which dates, and why it prevented filing.

2. Wait for the order

The request goes to your jurisdictional Commissioner, and you can track it under Services > Condonation Request > View. Expect a few months rather than a few weeks, and expect a possible request for more documents or a hearing.

3. File the return under 119(2)(b)

Once the request is approved, the assessment year opens up in your filing dashboard. When filing, set the return's filing section to "119(2)(b) - after condonation of delay" rather than the usual 139(1) or 139(4). Choosing the wrong section here is the most common technical error, and the return will not map to your approval.

Reconstructing an old year is the tedious part, since you are pulling salary, TDS and interest figures from a Form 26AS and AIS that are several years old. If you still have the Form 16 for that year, 49Tax's AI can extract and reconcile those figures into the correct schedules, which removes most of the manual re-entry.

4. E-verify within 30 days

A condoned return follows the normal verification rule. Verify within 30 days or the return is treated as never filed, and months of waiting are wasted.

What It Costs

Run this arithmetic before you apply.

Late filing fee under Section 234F applies, because the return is furnished after the Section 139(1) due date. It is Rs 5,000, reduced to Rs 1,000 if your total income does not exceed Rs 5 lakh.

Interest under Section 234A is charged on unpaid tax, so in a refund case it is usually nil. Interest under Section 244A is not payable to you, as covered above.

A worked example. Meera had Rs 47,000 of TDS deducted in FY 2022-23 against an actual liability of Rs 12,000, leaving a Rs 35,000 refund. She was on an overseas assignment and never filed. The belated window closed on 31 December 2023 and ITR-U cannot return her money, but her condonation window runs to 31 March 2029.

Clearly worth the paperwork. Flip the refund to Rs 4,000 on an income above Rs 5 lakh, though, and you recover almost nothing after the fee - at small amounts the honest answer is to let it go.

Loss Carry-Forward: The Other Use

Section 80 requires a return to be filed by the Section 139(1) due date to carry forward business losses and capital losses. Miss it and the loss is normally extinguished, even if you later file a belated return. House property loss and unabsorbed depreciation are the exceptions, and those survive a belated return.

For everything else, condonation is the way to preserve the carry-forward. A Rs 4,20,000 short-term capital loss that was never reported is worth about Rs 84,000 in future tax at the 20 per cent Section 111A rate - usually enough to justify the application on its own.

The ITR-V Request Is Not the Same Thing

A large share of condonation requests are for something much smaller: a return filed on time but never verified within 30 days. That is the "Delay in submission of ITR-V" request, and it is a different animal - usually approved quickly, with a far lighter justification and none of the 119(2)(b) machinery. If a missed verification is your only problem, use that option instead.

The Takeaway

Work through each unfiled year in this order. If the belated window is still open, file belated today and stop reading. If it has closed and you owe tax, file an updated return. If it has closed and a refund or carry-forward loss is stranded, check whether five years have passed since the end of that assessment year - and if not, calculate the refund minus the Rs 5,000 fee before you commit.

The five-year clock is the part that catches people, because it runs whether or not you know the route exists, and once it expires the money is genuinely gone. Pull up your Form 26AS for the last five assessment years this week and check whether any of them show TDS against a year you never filed.