Section 119 of Income Tax Act

Employees can claim tax exemptions on certain benefits from their employers under specific sections of the Income Tax Act. However, it’s important to note that Section 119 of the Income Tax Act primarily deals with the powers of the Central Board of Direct Taxes (CBDT) to issue orders, instructions, and directions to tax authorities. One key provision under Section 119(2)(b) allows for the condonation of delays in filing income tax returns and related claims, enabling authorities to accept late claims in cases where the delay is due to genuine reasons and subject to certain financial limits. The CBDT permits authorities to accept these applications if submitted within the prescribed time frames. Requests for condonation of delay can be submitted online under the guidelines issued by the CBDT.

In this article, we will explore the provisions of Section 119 and Section 119(2)(b) in more detail, clarifying how they work.

---

Table of Contents

What is Section 119 of the Income Tax Act?

Section 119 Applicable Exemptions

Who can Accept Applications for Exemptions under Section 119?

Time Limit for Refund Claims under Section 119

What is Section 119(2)(b) of the Income Tax Act?

Conditions to Claim Relief under Section 119(2)(b)

Steps for Filing Returns under Section 119(2)(b)

How to File Section 119(2)(b) after Condonation of Delay?

Conclusion

Most Asked Questions

---

What is Section 119 of the Income Tax Act?

The Central Board of Taxation (CBDT) is authorised by Section 119 to give directives to subordinate 

authorities. Furthermore, even after the deadline for filing a claim has passed, CBDT is authorised by section 119(2)(b) to instruct income tax authorities to grant any claim for exemption, deduction, refund, or other relief under the Income Tax Act. Making such a claim within the specified due period was genuinely outside of the taxpayer's control, but such claims will only be accepted by the income tax authority given.

The purpose of Section 119 of the Income Tax Act is to offer tax relief to workers who receive specific benefits from their employers. In addition to an employee's regular income or earnings, businesses may additionally offer non-cash rewards to their staff members as perks or fringe benefits. These benefits may include free or heavily discounted lodging, access to healthcare, reimbursement for travel expenses, etc.

Section 119 Applicable Exemptions

Certain perks that employees get are excluded under Section 119 of the Income Tax Act. The following conditions must be met for the exemptions to be granted: 

• Accommodation: Up to a specific amount, the value of a perquisite that an employer offers a worker at no cost to them is tax-exempt. Depending on which is lower, the value of the perquisite is tax-free up to 15% of the employee's pay or the actual amount of rent the employer pays.

  
  

• Transportation allowances: Up to a specific amount, the value of a perquisite that an employer offers to a worker to help with the commute to and from work is tax-exempt. Up to Rs. 1,800 per month in tax-free value of the perk is provided.

  
  

• Medical Facilities: Up to a certain amount, the value of benefits that an employer offers to an employee, such as paying for medical expenses or the employee's insurance premium—is tax-exempt. The perquisite's value is tax-exempt up to Rs. 15,000 annually.

Who can Accept Applications for Exemptions under Section 119?

According to Section 119, requests for a refund or carryover of losses may be entertained after the deadline. Nonetheless, the CBDT has established a few standards for approving or disapproving these applications in its Circular 9.5.2015. This circular, in fact, lays out the financial thresholds that the various income tax agencies have been permitted to use in handling these applications. The claim's maximum amount and the income tax authority authorised to handle it are specified as follows:

• The Principal Income Tax Commissioners and Commissioners (Pr.CITs/CITs) when the claim's total value does not exceed Rs. 10 lakhs.

  
  

• The heads of the income tax department, also known as the Principal Chief Commissioners of Income Tax (Pr.CCITs/CCITs) In cases when the claim amount exceeds Rs. 10 lacs but falls below Rs. 50 lakhs.

  
  

• Central Board of Revenue in cases where the claim exceeds Rs. 50 lakhs.

Monetary Limit	Authority
Where the amount of the claim is not more than Rs. 10 lacs	The Principal Commissioners of Income Tax/ Commissioners of Income Tax (Pr.CITs/CITs)
Where the amount of claim is more than Rs. 10 lacs but less than Rs. 50 lacs	The Principal Chief Commissioners of Income Tax/ Chief Commissioners of Income Tax (Pr.CCITs/CCITs)
Where the amount of the claim is more than Rs. 50 lacs	Central Board of Taxes

Time Limit for Refund Claims under Section 119

For normal refund claims, the time limit is six years following the assessment year's conclusion. However, it is different if a court order gives rise to a claim for a refund. The six years shall be computed without taking into account the time the court case was pending. Only applications filed within six months of the court's order's expiration date or the end of the relevant fiscal year, whichever comes first, will have this time overlooked.

Scenario	Time Limit for Filing Application	Example
Normal Refund Claims	Six years from the end of the assessment year	Mr. A missed filing his refund due to poor health in FY 2023-24 (AY 2024-25). He can claim it by applying before 31st March 2031.
Refund from Court Order	Exclude the period of the court case from the 6-year limit. Apply within 6 months from the court order or by the financial year's end, whichever is later.	Neha's tax dispute was resolved in her favor in June 2024. She must file the refund claim by 31st March 2025 (later than the 6-month deadline of December 2024).
Authority's Decision Timeline	Decision must be made within 6 months from the application date.	Mr. Ram applied on 21st June 2024. The authority must decide by 31st December 2024.

What is Section 119(2)(b) of the Income Tax Act?

The Central Board of Direct Taxes (CBDT) may issue an order to waive any restrictions of the Income Tax Act, 1961, in the best interests of taxpayers, under Section 119(2)(b) of the Act. The purpose of this part is to help taxpayers who might be struggling because of unforeseen or unavoidable situations. In the following circumstances, the CBDT may issue an order under Section 119(2)(b) of the Income Tax Act: 

• Strike or lockout: The CBDT may offer relief if a taxpayer is unable to comply with specific Act provisions because of a strike or lockout. 

  
  

• Natural disasters: The CBDT may waive some Act rules for impacted taxpayers in the event of a natural disaster, such as an earthquake, typhoon, or flood.

  
  

• Technical issues: The CBDT may relax the applicable provisions in the event that taxpayers encounter technical difficulties when filing returns or other documents. x If administrative problems impede taxpayers from adhering to the Act's provisions, the CBDT may issue a relaxation order.

For taxpayers, the easing of the rules under Section 119(2)(b) may have major ramifications. It can offer assistance to people who might be going through real difficulties and are unable to follow certain of the Act's requirements. This may lead to a decrease in the fines or interest assessed for noncompliance or late payments.

Conditions to Claim Relief under Section 119(2)(b)

Any relief or claim will only be granted if the following requirements are met in addition to the ones listed above: 

• The Income Tax Act states that no one else's income is taxable in the hands of another individual. 

  
  

• When you file a refund claim, you won't be charged interest. 

  
  

• Refund claims can only be made for the following reasons: excess TDS, advance tax, or self-assessment tax. Following receipt of the application, the authorities conduct a thorough investigation to determine whether or not the claim is true and reasonable. They only choose to approve your claim as a result of this.

How to File Section 119(2)(b) after Condonation of Delay? Condonation Request For Filing ITR Post All Deadlines

The income tax rules of India have established deadlines for filing returns. Taxpayers do make several claims in their income returns, such as carryover of losses and refunds, which are not available to them in any other way if returns are not filed. However, the section 119(2) Condonation Request process has addressed this specific issue (b). The taxpayer is released from paying any interest or penalties if the Assessing Officer grants the request for a condonation. The following are the easy steps to follow when submitting a request for an income tax return (ITR) to be excused beyond the deadline, both online and offline. We will explain the steps of the online method in detail.

Step 1: Visit https://www.incometax.gov.in/iec/foportal/ to access the e-filing website.

Step 2: Next, enter your ID and password to log in. 

Step 3: Next, navigate to the 'Condonation Request' page by clicking on Service on the dashboard.

Step 4: Select "Allow ITR filing after time-barred" when the page for the condonation request displays.

Step 5: Write a "Request for Pardon." Once you are on the "Enter Details & Upload ITR page," fill out the following information.

Step 6: From the list of options, choose "Request Category, Assessment Year, ITR, Claim Value, Filing Type, Reason for Delay & ITR Type."

Step 7: Select the "Upload ITR" option and attach the Income Tax Return (in PDF or XLS format) that goes with the request you are making for a pardon of delay.

Step 8: Select "Upload documents" to attach the corroborating files.

Step 9: Select the appropriate choice on the e-verify page after submitting the request. You will get a Transaction ID and a successful e-verification notice after everything is finished.

Conclusion

Employees benefit from Section 119 of the Income Tax Act, which permits them to seek tax exemptions on specific benefits they receive from their employers. The exemptions apply to benefits including lodging, healthcare, and allowances for transportation. Certain requirements must be fulfilled in order to be eligible for these exemptions, and the value of the perquisites cannot exceed the set limits. A key clause that offers assistance to taxpayers in the event of unanticipated or inevitable situations is Section 119(2)(b) of the Income Tax Act. Remembering that the Act must still be followed is crucial, even when the provision may have a big impact on taxpayers.

FAQ

Q1. What is Section 119 of the Income Tax Act?

Certain benefits that employees get from their employers are free from taxes under Section 119 of the Income Tax Act. 

Q2. Are all benefits offered by employers free from taxes under Section 119? 

No, not every benefit that companies offer is free from taxes under Section 119. The only things that qualify for exemptions are specific requirements that fulfil the guidelines and restrictions.

Q3. Do all employers who offer benefits under Section 119 have to file a report? 

Yes, employers must file Form 12BA with the Income Tax Department if they offer benefits under Section 119. 

Q4. What is Section 119(2)(b) of the Income Tax Act?

Certain benefits that employees get from their employers are free from taxes under Section 119 of the Income Tax Act.

Q5. What is the time limit to avail of benefits under Section 119(2)(b)?

The Act makes no reference to a deadline for claiming benefits under Section 119(2)(b). However, after the relevant assessment year ends, the request for relief must be submitted within a reasonable amount of time.

Q6. What is the procedure for seeking relief under Section 119(2)(b)?

A formal application must be submitted by the taxpayer to the Commissioner of Income Tax to request relief under Section 119(2)(b). Along with any other pertinent information, the applicant should include the explanations for the delay in filing the return.

Q7. What is after condonation of delay in income tax?

The Income Tax Act of 1961 stipulates that any income-tax authority may be granted permission by the Central Board of Direct Taxes (CBDT) to consider an application or claim for a deduction, exemption, refund, or other relief under the Act after the Act's statutory time period has passed.

Q8. What is the time for appeal with condonation of delay?

A delay of less than 90 days may be excused under Section 21(5) if there is a good basis for it.

Q9. Can the condonation of delay be granted for all types of income tax returns?

No, the condonation of delay is not applicable to all types of returns. It is generally considered for claims related to refunds, losses carried forward, or specific deductions, as per the discretion of the Income Tax authorities and the guidelines of the CBDT.

Q10. Can I appeal if my application for condonation of delay is rejected?

Yes, if your application for condonation of delay is rejected, you can file an appeal before the higher authorities or tribunals, depending on the circumstances and grounds provided for the delay.

Q11. Can condonation of delay be granted for non-filing of income tax returns on time due to a medical emergency?

Yes, in some cases, if the taxpayer provides a valid reason such as a medical emergency or serious illness, the delay can be condoned under Section 119(2)(b), subject to the approval of the relevant Income Tax authorities.

Q12. Is there any penalty for filing a delayed return with condonation of delay?

While condonation of delay may be granted, filing a return after the due date may still attract late filing penalties and interest under Sections 234A, 234B, and 234C, depending on the tax liability and delay.

Q13. Who has the authority to grant condonation of delay under Section 119(2)(b)?

The power to grant condonation of delay under Section 119(2)(b) is vested with the Central Board of Direct Taxes (CBDT) or the Commissioner of Income Tax (CIT), depending on the quantum of the claim.

Q14. Can an employer apply for condonation of delay on behalf of an employee for missed tax benefits under Section 119?

No, the application for condonation of delay under Section 119(2)(b) must be made by the individual taxpayer. Employers cannot apply on behalf of their employees for missed tax benefits.

Q15. Is the condonation of delay applicable to non-resident taxpayers (NRIs)?

Yes, non-resident taxpayers (NRIs) can also apply for condonation of delay for specific cases like refund claims, subject to approval from the CBDT or concerned tax authorities.

Q16. What documents are needed to file a condonation of delay application?

The taxpayer must submit a formal application to the Commissioner of Income Tax along with supporting documents, such as a copy of the filed ITR (if available), reasons for the delay, relevant medical certificates (if applicable), and any other evidence justifying the delay.

Q17. What happens if my condonation of delay application is approved?

If the condonation of delay application is approved, the taxpayer’s return or claim will be processed as though it had been filed within the original statutory time frame. This may allow them to claim refunds, carry forward losses, or get other tax relief.