At the close of the financial year 2019-20, tax professionals and trade chambers have written to Finance Minister Nirmala Sitharaman seeking more clarity on compliance deadlines and have also sought direct tax relief for assesses impacted by coronavirus.

“It is suggested that powers may be delegated to CBDT to issue instruction to grant appropriate relief to an assessee who has been adversely affected by Covid-19,” they said in a fresh letter to the Finance Minister.

The representation has been sent by IMC Chamber of Commerce and Industry, Bombay Chartered Accountants’ Society, Chartered Accountants Association of Ahmedabad, Chartered Accountants Association of Surat, Karnataka State Chartered Accountants’ Association, Lucknow Chartered Accountants’ Society and Chamber of Tax Consultants.

Amidst the 21-day national lockdown till April 14 to prevent the rapid spread of Covid 19, the Finance Minister had announced extension of various deadlines that fall on March 31.

Compliance issues

“However, there are certain issues in the announcement which need further clarifications, as well as there are other compliance deadlines for taxpayers in the months of March and April which are still not addressed by the Hon’ble FM and which need to be extended by the CBDT so that taxpayers do not have to face hardships on account of non-compliance of the same,” the chambers noted in the letter.

The have suggested that for delay in deposit of TDS till June 30, the taxpayers should not be considered as “assessee-in-default” and prosecution proceedings should not be initiated against such taxpayers.

They have also pointed out that while the Finance Minister has extended the due dates and time limits till June 30, there has been no mention regarding whether recovery proceedings will be initiated or it will be stayed, in respect of collection of outstanding demand due from taxpayers in this period.

“…in cases where no stay of demand has been granted or time-limit of 30 days as provided by Section 156 is expiring in lock-down period, it is suggested that necessary clarification may be issued that the time-limit for payment of demand in such scenarios is extended till June 30, 2020, and the taxpayer will not be treated as an ‘assessee-in-default’ for this period and there will not be any interest/penal/criminal action be taken against the taxpayer,” they have suggested.

Further, they have suggested that the validity of certificates under Section 197 for nil or lower withholding tax should be extended by three months.

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