CBDT Extends Time to Process Invalidated ITRs by CPC

Circular No. 10/2025, dated 28-07-2025

The Central Board of Direct Taxes (CBDT) has acknowledged receiving several grievances from taxpayers regarding the erroneous invalidation of electronically filed Income Tax Returns (ITRs) by the Centralized Processing Centre (CPC) in Bengaluru. These invalidations affected returns for multiple assessment years, including AY 2023–24, where the statutory time limit for processing under Section 143(1) lapsed on December 31, 2024. The technical errors, reportedly beyond the control of taxpayers, have left many returns unprocessed despite timely filing.

Recognizing the widespread nature of this issue and the genuine hardship caused to taxpayers, the CBDT has stepped in to provide relief. Through its latest circular, the Board has decided to relax the statutory time limit for processing those returns that were rejected by the CPC due to technical or procedural anomalies. This move is intended to ensure that valid returns are not left unprocessed merely because of system-generated rejections or data mismatches that were not attributable to the assessees.

As per the new directions, all electronically filed income tax returns up to March 31, 2024, that were wrongly treated as invalid by the CPC, shall now be considered for processing. This includes returns filed for earlier assessment years, subject to the condition that the invalidation was purely due to errors not related to taxability or filing defaults. The aim is to rectify these procedural lapses and enable affected taxpayers to receive appropriate refunds or intimation orders as per law.

Furthermore, the intimations under Section 143(1) for these returns—once reprocessed—must be sent to the concerned assessees on or before March 31, 2026. The relaxation provides ample time for the tax department to reassess and process these returns without compromising procedural integrity. Taxpayers are advised to monitor their accounts and stay updated with any communication from the CPC regarding the reprocessing of previously invalidated returns.