On 28 July 2025, the Central Board of Direct Taxes (CBDT) issued Circular No. 10/2025, granting relief to taxpayers whose valid electronically filed income tax returns (ITRs) were wrongly marked as invalid by the Centralised Processing Centre (CPC), Bengaluru, due to technical glitches or procedural errors. This move addresses numerous grievances where returns went unprocessed within the statutory deadline and refunds remained withheld.
🧭 Why this Circular matters
Many taxpayers had filed valid ITRs before the cut-off date, but those returns were invalidated by CPC due to system issues—leaving no intimation under Section 143(1), blocking both processing and refund issuance. Originally, such returns became void once the statutory timeframe lapsed (e.g., for AY 2023‑24 the deadline was 31 December 2024). Now, Circular No. 10/2025 allows the CPC to resurrect and process these cases retroactively.
Key Highlights
Eligibility ITRs filed electronically on or before 31 March 2024, which were valid but incorrectly invalidated by CPC
Legal Basis Exercised under Section 119 of the Income‑tax Act, 1961
New Deadline CPC must send intimation under Section 143(1) by 31 March 2026
Refunds & Interest Eligible refunds (plus interest under Section 244A) to be issued, subject to PAN‑Aadhaar linkage
Exceptions & Conditions
Non‑applicable in cases where assessment, reassessment, recomputation, or revision proceedings have already been completed for the relevant assessment year. This includes orders under Sections 143(3), 144, 147/148, 153A/153C etc.
Refunds won’t be issued if PAN‑Aadhaar linkage is not in place, as mandated by Circular No. 03/2023 dated 28 March 2023.
What taxpayers should do
Check your ITR status on the e‑filing portal. If filed on or before 31 March 2024 and still showing invalid or pending status, you may now be covered under the relaxation.
Ensure PAN-Aadhaar linkage immediately—no refunds will be processed without this compliance.
Track portal intimations by CPC. If no intimation is received by 31 March 2026, file a grievance formally via CPC or CP‑GRAMS.
Group your return with condonation orders or technical‑error records—although, in this case, specific condonation under section 119(2)(b) may not be necessary since returns were initially accepted but improperly invalidated.
Background & Precedent
This development follows & expands upon CBDT Circular No. 07/2025 (dated 25 June 2025), which extended the processing window for returns filed under condonation of delay up to 31 March 2026, for returns validly filed by 31 March 2024 under Section 119(2)(b) of the Act.
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In contrast, Circular No. 10/2025 focuses specifically on returns that were incorrectly invalidated—not necessarily delayed filings—and creates a fresh pathway for relief.
Bottom Line
Circular No. 10/2025 is a timely and welcome move to correct procedural injustice caused by systemic or administrative failures. Eligible taxpayers can now expect due processing, intimation, and refunds (with interest), all before the extended cut‑off of 31 March 2026. However, compliance with PAN‑Aadhaar linkage and absence of completed assessment proceedings remain key conditions.
If your ITR still shows invalid or unprocessed status, it’s high time to review your portal, ensure linkage, and, if needed, escalate via official grievance channels.