ITR declared invalid? CBDT offers relief for those with technical glitches

Taxpayers whose returns were wrongly invalidated by the CPC now have fresh hope as CBDT orders reprocessing of such ITRs; refunds and interest may follow

In a relief to thousands of aggrieved taxpayers, the Central Board of Direct Taxes (CBDT) has extended the deadline for processing income tax returns (ITRs) that were wrongly declared invalid by the Centralised Processing Centre (CPC), Bengaluru.

 

Under the fresh relaxation, electronically filed ITRs up to March 31, 2024, but later marked “invalid” will now be reprocessed and validated under Section 143(1) by March 31, 2026.

 

This applies to returns filed for Assessment Years up to 2023–24, provided the taxpayer had verified them on time. Tax experts say this correction addresses technical glitches and procedural lapses that unfairly blocked refunds or triggered compliance issues for honest filers.

 

Why were some ITRs marked invalid despite being filed properly?

Discrepancies in form selection, verification delays, and system errors are among the top reasons, explains Suresh Surana, chartered accountant.

 

“A salaried person who filed ITR-1 despite having small capital gains found her return marked invalid. Her refund was delayed, and she lost deductions and faced interest under Section 234A,” he shares.

 

Kinjal Bhuta, chartered accountant, advocate and treasurer at the Bombay Chartered Accountants Society, adds that sometimes returns filed on the due date are verified a day later due to portal lags and are then treated as invalid.

 

“There have been cases where even OTP-verified returns were later shown as defective. By the time the assessee realised, the deadline to fix it had passed,” she says.

 

What does this CBDT relaxation mean in practice?

According to Surana, the relief is critical as it now allows the CPC to reprocess affected returns and issue intimations under Section 143-1.

 

“It helps taxpayers get their long-pending refunds, plus interest. But those without PAN-Aadhaar linkage may still face blocks,” he cautions.

 

Tarun Garg, Director, Deloitte India, calls the move a “welcome signal” to taxpayers.

 

“For many senior citizens or small taxpayers, refunds are part of annual budgeting. With this circular, they might finally receive what’s due,” he says.

 

To check eligibility:

-Log in to your income tax e-filing portal

 

-Look for “invalid return” status in your filed ITRs

 

-If eligible, no fresh filing is needed; just wait for CPC updates

   

Fixing the system: An implicit admission?

All three experts believe the circular indicates system-level lapses at the CPC.

 

Bhuta says, “Technical issues are increasingly common. This is a much-needed acknowledgement and should push for better safeguards.”

 

Surana suggests more proactive alerts and redressal options, especially for taxpayers without CAs.

 

Garg adds, “The system is strong but not flawless. This circular shows CBDT is willing to course-correct when automation misfires.”