CA Nilay G. Popat
Recently, on 20.08.2014, CBDT issued an order under Section 119 of the Income Tax Act, 1961, by which it extended the due date for obtaining and furnishing tax audit report u/s 44AB from 30/09/2014 to 30/11/2014 for AY 2014-15. At the outset, we should thank them for extending due date for Section 44AB. However, the said order doesn’t have any reference to Section 139(1), (which provides for due date of filing income tax returns). This has created doubts amongst many of us as to whether due date of return of income has been actually extended or not.
As we all know, Section 44AB of the Income Tax Act, 1961 provides tax audit for every assessee who are covered in either of the four clauses viz. Clause (a), (b), (c) & (d) of Section 44AB. Such assessees are required to get their accounts audited by an accountant before the “SPECIFIED DATE” and furnish BY THAT DATE the report of such audit in prescribed form (viz. Form 3CA or Form 3CB along with Form 3CD).
Explanation (ii) of the said Section 44AB provides that “Specified date”, in relation to the accounts of the assessee of the previous year relevant to an assessment year, means the due date for furnishing the return of income under sub-section (1) of section 139. Thus, it is crystal clear that due date u/s 44AB is directly linked to due date u/s 139(1) as applicable to an assessee.
Further Section 44AB does not provide for any powers to any authority with respect to alteration of the “Specified Date”. Therefore, the “Specified Date” for the purpose of obtaining and furnishing the tax audit report shall be the due date for furnishing the return of income under section 139(1). It also makes it clear that there cannot be an isolated extension of due date u/s 44AB without extension of due date u/s 139(1).
Order U/s. 119 dated 20.08.2014 (as referred above) starts with “In exercise of power conferred by section 119 of the Income-tax Act (‘the Act’), the Central Board of Direct Taxes (CBDT) hereby extends the due date for obtaining and furnishing of the report of audit under section 44AB…” Neither Section 44AB nor Section 119 contains any provision which conferred power to CBDT for providing any relaxations from the provisions of Section 44AB.
Hence, if at all CBDT wants to extend due date of obtaining and furnishing Tax Audit Report u/s 44AB, it can do so only by way extending due date u/s 139(1). Only parliament can amend/alter provisions of Section 44AB and hence, any isolated extension of due date u/s 44AB would ultra vires the Income Tax Act and may not survive in front of judicial review.
We hope that CBDT will squarely avoid this and instead of extension of due date of tax audit reports, it will come up with extension of due date u/s 139(1) at its earliest.
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