Unable to sort e-filing muddle, taxman loads burden at 11th hour

Unable to solve software glitches in its e-filing system, the Central Board of Direct Taxes has asked assessees to manually file tax audit reports by September 30. The new requirement of manual filing of tax audit reports came through a CBDT notification on September 26.

This means chartered accountants, who do a bulk of the preparation and filing of such reports on behalf of clients, have only five days to comply, failing which tax officials are empowered to levy penalties, which can run into lakhs of rupees in many cases.

The scope of e-filing was expanded this year (assessment year 2013-14) with the law mandating that all tax audit reports be filed electronically.

Corporates unaffected

Indian tax authorities get about 2 million tax audit reports every financial year, a bulk of which are usually filed just before the deadline. Of this, about 5 lakhrelate to corporates, and the remaining relating to individuals, partnership firms.

The latest problem is going to mostly affect the small and medium assessees. Large corporates will not be affected as they are required to file returns by November 30. Strangely, the CBDT on the same day (September 26) extended the last date for electronic filing by a month from September 30 to October 31, even while mandating manual filing by September 30.

Much trouble

Income tax assessees were facing difficulties on uploading due to the frequent changes in the e-filing utility.

In September alone, the utility was changed on three occasions .

The CA fraternity is anguished as most of the tax audit work in the country is done by them — whether it is for corporates, individuals other non-corporate categories.

This is because tax audit reports, from the current assessment year onwards, were required to be filed only electronically and there was no procedure for manual filing for assessment year 2013-14.

“We are requesting CBDT not to stipulate manual filing of tax audit reports.

The electronic filing of the tax audit reports will be done by the extended time of October 31”, Subodh Kumar Agarwal, President of the Institute of Chartered Accountants of India (ICAI) told Business Line.

Manual filing is not required by either income tax law or the income tax rules — so, why insist on it through a notification, he asked.

ICAI has therefore approached CBDT seeking withdrawal of the latest directive .

With civil disturbances in Andhra Pradesh and natural calamities in Gujarat and Uttarakhand, as well as massive power blackouts in many other regions hampering work, it is difficult to ensure manual filing of the tax audit reports in a span of four days, it has been submitted.


(This article was published on September 28, 2013)
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