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October 20, 2020

Tax Consultants Association files Petition for Extension of Tax Audit in High Court

by CA Shivam Jaiswal in Income Tax

Tax Consultants Association files Petition for Extension of Tax Audit in High Court

Rajasthan Tax Consultants Association (RTCA) has filed a petition before the Rajasthan High Court for extension of date of filing of Tax Audit Report.

The economic impact of the 2020 coronavirus pandemic in India has been largely disruptive. The lockdown though necessary has led to a disastrous impact on the economy. The Government of India announced a variety of measures to tackle the situation, from food security and extra funds for healthcare and for the states, to sector related incentives and tax deadline extensions.

With the ongoing COVID -19 pandemic a lot of income tax due dates were extended by The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 read with Notification No. 35 /2020, dated 24-06-2020. In view of the same, the due date of furnishing ITR for FY 2018-19 has been extended till 31st July, 2020 and for FY 2019-20 till 30th November, 2020. However, the due date of filing the Tax Audit Report is 31st October, 2020.

Many issues arose during to the COVID 19 pandemic due to which the said due date was requested to be extended, such as:

  • Lack of employees/working personals in offices of professionals.
  • Entities are not being able to finalize the data for Audit and filing of return.
  • Transport Restrictions.
  • Psychological impact of COVID-19.
  • Although new ITR forms for A.Y. 2020-21 were notified on 29th May, 2020, the utility for filing the ITR-6 and ITR-7 were made available for e-filing on 1st October, 2020 and 30th September, 2020 respectively. Further on 1st October, 2020, various changes were also made in the tax audit report and ITR-6 for A.Y. 2020-21.

In 2018 also RTCA had petitioned and contended that, CBDT pursuant to the powers vested in it under the Income Tax Act, 1961 was continuously making random alterations/modifications in Form No. 3CD and also in the “Utilities” and “Schemas” that are essential for e-filing of Tax Audit Reports and Income Tax Returns which are mandatorily required  to be filed by the Assessee’s in accordance with the provisions of Section 44AB of the Income Tax Act read with Rule 6G of the Income Tax Rules, 1962.

The division bench of the Rajasthan High Court had then directed the CBDT to consider the representation of the petitioner-Association and take a decision on both the aspects i.e. extension of date by another 15 days and extension of due date.

Now it remains to see if the due date of Tax Audit Report is amended after this petition or not as the extension will be very useful for the taxation fraternity and also for the trade and industry.

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