No further extensions to be given to income tax assessees for filing audit reports

There will be no further extension for filing of audit reports related with Assessment Year 2020-21 (Financial Year 2019-20).

The last date for filing various audit reports under the Income Tax Act, including tax audit report and report in respect of international/specified domestic transaction, is January 15. These assessees need to file their return by February 15.

“All the representations for further extension of due date are hereby rejected,” Central Board of Direct Tax (CBDT) said in an order made late in the evening on Monday. CBDT is the apex policy making body for Income Tax.

This order comes in the wake of a judgement by the Gujarat High Court on January 8 on the petition of the All India Gujarat Federation of Tax Consultants. The Court directed the Finance Ministry to look into the issue of extension of due dates for filing the audit report under Section 44 AB of the Income Tax Act, more particularly the representation dated October 12, and to take an appropriate decision in accordance with law.

CBDT in its order argued that the date has been extended for all categories of taxpayers thrice, with the last one announced on December 30. It mentioned that a majority of audit reports as well as income tax returns are filed within the last few days of the dates only. For AY 2019-20, it is seen that 24 per cent of total audit reports were filed in last three days before the due date. Therefore, “lesser filing compliances having been made much before the due date, cannot be said to be an anomalous situation,” the order said.

The order also noted that countries such as the UK and the US have provided no or shorter extensions in due dates. For example, in the US due dates for filing returns by individuals and corporates was April 15, which was extended to October 15. At the same time the UK did not give any extension, while India gave three extensions to all categories of taxpayers. For example, individuals who were supposed to file returns for AY 2020-21 by July 31, 2020, got time till January 10, 2021.

“Any further extension would adversely affect return filing discipline and will also be an injustice to those who have taken the pain to file the return before the due date. It would also postpone the collection of revenue, thereby, hampering the efforts of the Government to provide relief to the poor during these COVID times,” the order mentioned.

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