ICAI requests for extension of various Income-tax due dates to CBDT

Direct Taxes Committee of ICAI has Request(s) for extension of various due dates under Income-tax Act, 1961 especially Tax Audit Reports and related returns including Income Tax Return Forms for AY 2020-21 to Chairman, Central Board of Taxes.

Request(s) for extension of various due dates under Income-tax Act, 1961 especially Tax Audit Reports and related returns including Income Tax Return Forms for AY 2020-21 especially:-

(i) Tax Audit Reports and related returns

(ii) Income Tax Return Forms for AY 2020-21

(iii) Section 11(1A) of the Income-tax Act, 1961 due date

(iv) TDS/TCS compliances

(v) Section 54/54F of the Income-tax Act, 1961

(vi) Advance tax payments

ICAI wish to bring to kind notice the issues/concerns being faced by taxpayers/members due to ongoing COVID19 pandemic and the resultant need to further extend the due date of filing ITR Forms and Tax Audit report and other related returns/reports for AY 2020-21.

Introduction/Background summarised by ICAI:-

The Finance Act 2020 amended section 139(1) of the Income-tax Act, 1961 to provide that the due date to file ITR Forms for specified assesses is 31.10.2020 for AY 2020-21. Further, the due date to file Tax Audit Report (TAR) u/s 44AB of the Income-tax Act, 1961 was made one month prior i.e. 30.09.2020 for the AY 2020-21. However, due to ongoing COVID19 pandemic, the said due dates for filing ITR forms and TAR for AY 2020-21 have been proactively extended to 31.01.2021 and 31.12.2020 respectively.

The said representation referred to the prevailing situation in various States and continuing & frequent lockdowns making the tasks of filing returns etc. and availing services of professionals practically impossible. In this regard, we will also refer to our earlier representation(s) i.e. ICAI/DTC/2020-21/Rep – 20 dated 25.09.2020), ICAI/DTC/2020-21/Rep – 14 dated 25th July 2020 and ICAI/DTC/2020- 21/Rep – 11 dated 25.06.2020 which were favourably considered regarding extension of various due dates.

Major issues & concerns highlighted by ICAI:-

In the matter of audits including tax audits, the ICAI has an onerous responsibility to maintain and enhance the quality of reports. The Government is well aware that the Institute has the responsibility of ensuring and enhancing the quality of services provided by its members to clients and other stakeholders. In fact, the prime objective of a tax audit is to assist the assessing officer to determine income from business or profession. It is also necessary to emphasize for your kind appreciation that in the context of audit requirements, the Chartered Accountants are also the stakeholders.

During the month of December, there are many other compliances to be made like payment of Advance tax, filing of relevant GST returns, GST Annual Returns over & above audit & tax returns. Further, especially in the current year, Capital Gains transactions have to be reported in great details which is a very time-consuming activity.

It is pertinent to mention here that if someone in the office/client/client staff were to suffer an account of Covid, then the office has to be closed at least for 3 to 5 days, to make it Covid free by cleaning & disinfecting.

Similarly, if the partner/proprietor were to get affected by Covid then at least for 15 to 21 days, he can’t attend the office nor can he sign any reports.

Under the circumstances, the adherence to the extended due dates may not be possible. Majority of the assessees would be unable to meet the extended time-line(s) w.r.t various compliances under the Income-tax law.

Apart from the major issues arising due to COVID19 pandemic hampering compliances regarding the filing of ITR forms and Tax audit reports, certain concerns like delay in the release of online e-filing utilities & continuous and regular updation in the Schemas of the ITR/TAR Form filing utility and detailed information to be provided in notified ITR forms requires time, needs to be kept in mind for considering the extension of the due date.

It may also be mentioned that section 11(1A) of the Income-tax Act, 1961 was not given any extension of timeline in the Ordinance and Amendment Act passed thereafter. Certain Trust(s) could not make investment/ acquire assets which they should have done before 31.03.2020. Accordingly, an extension of time may be provided in this regard as well.

We hope that ICAI suggestions would be favourably considered. We would be happy to deliberate on the matter albeit virtually if considered necessary by your good office.

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