Update on relaxations in Direct tax, GST & Customs due to Covid-19

Taking cognizance of hardship faced by taxpayers in view of the COVID-19 pandemic, Central Board of Direct Taxes (‘CBDT’) has provided certain relaxations to taxpayers by extending the following due-dates:

♦ Due-date for filing appeal before Commissioner (Appeals) [‘CIT(A)’] or objections before Dispute Resolution Panel (‘DRP’) in time-barring cases has been extended to 31 May 2021.

Under the Income-Tax Act (‘IT Act’), appeal before CIT(A) can be generally filed within 30 days of the date of service of notice of demand to the taxpayer. Similarly, objections before DRP can be generally filed within 30 days of receipt of the draft assessment order by the taxpayer.

The captioned circular provides relief for cases where the due-date of filing the appeal/ objection was falling between 1 April 2021 and 31 May 2021. The due-date in such cases has been extended to 31 May 2021.

While the years for which most of taxpayers have received notice of demand / draft order during this period are AY 2018-19 (Non-transfer pricing cases) and AY 2017-18 (transfer pricing cases), some taxpayers may have received such notices/ draft orders for earlier years as well.

COMMENTS

Apart from the circular discussed above, the issue in respect of extension of due-dates for filing appeals/ petitions has been recently addressed by the Supreme Court (‘SC’) in its order dated 27 April 2021. In the order, SC has extended the due-dates for filing petitions/ applications/ suits/ appeals/ all other proceedings before all judicial or quasi-judicial authorities under the relevant laws (both general and specific laws). According to the order of SC, for calculating due-dates provided in the relevant laws, the period from 15 March 2020 till further date, which will be prescribed by SC, shall be excluded.

With the above order of SC, for income tax purposes, the due-date of filing of appeal / objections before CIT(A), DRP, Tribunal, High Court, and SC has also been extended till further orders of SC.

Example Let us say the Order of CIT(A) was passed on 20 March 2020. In a normal scenario, the appeal before Income Tax Appellate Tribunal (‘ITAT’) is required to be filed within 60 days from the date of communication of the order of CIT(A). With the order of SC, the period for filing appeal shall stand extended. Accordingly, the period of 60 days will be counted from the date which will be provided by SC by its further orders.

♦ Due-date for  filing  revised  return  or  belated  return  for

 AY 2020-21 (FY 2019-20), which was earlier 31 March 2021, has been extended to 31 May 2021.

A taxpayer can file a belated or revised return of income in certain cases. There is a due-date prescribed for filing such belated or revised return. With the aforesaid circular, the due-date for filing the belated or revised return for AY 2020-21 has been extended to 31 May 2021.

Due-date for filing Income-tax return in response to notice under section 148 (i.e. where income has escaped assessment) in time-barring cases has been extended to 31 May 2021.

To  assess  or  reassess  any  income  under  section  147  of  the  IT  Act,  the

Assessing O cer is required to issue a notice to the taxpayer requiring him to furnish its return of income. The return is required to be furnished within the time specified in the notice.With the captioned circular, in case the due-date specified in the notice falls between 1 April 2021 and 31 May 2021, the due-date has been extended to 31 May 2021.

Due-date for payment of tax deducted at source (‘TDS’) and filing of challan-cum-statement for tax deducted under section 194-IA has been extended to 31 May 2021 from 30 April 2021:

Under section 194-IA, a resident is required to deduct tax on consideration paid for transfer of immovable property (other than agriculture land). This deduction is required to be made at the rate of one percent in cases where total consideration is greater than or equal to INR 50 lakh.

TDS under section 194-IA is required to be deposited within a period of 30 days from the end of the month in which the deduction was made along with challan-cum-statement (Form 26QB) .

For deduction made between 1 March 2021 to 31 March 2021, the due-date for making payment was 30 April 2021. This due-date has now been extended to 31 May 2021.

It may be noted that tax needs to be deducted and deposited with the Government under various other sections like section 194C, section 194J, section 195, etc. as per the due-date prescribed in Income-tax Rules 2. No specific relaxation has been provided for depositing such TDS.

♦ Due-date for issuance of notice for initiating the re-assessment in time-barring cases has been extended to 30 June 2021.

Generally, under section 148 of the IT Act, a notice for initiating the re-assessment is to be issued within 4 years or 6 years from the end of relevant assessment year, subject to certain conditions. All the due-dates for issuance of notice which were falling between 20  March  2020  to  31  March  20215   have  been  extended. 

As a result, in general, the due-date for the following assessment years shall stand extended:

♦ Due-date for sending intimation of processing of Equalisation Levy (‘EL’) has been extended to 30 June 2021 (from earlier 30 April 2021).

Taxpayers who are subject to EL provisions are required to furnish a statement with the Government. Subsequently, this statement is

processed by the Assessing O cer and intimation specifying the amount payable or amount refundable to such person(s) is issued within one year from the end of the financial year in which such statement was furnished.

For Instance, the due-date for issuing this intimation for FY 2018-19 (AY 2019-20) was 31 March 2021. The same was earlier extended to 30 April 2021. Now, this due-date has further been extended t0 30  June  2021.

1. Cumulative Adjustment of 5% provisional ITC under Rule 36 (4) [Notification No. 13/2021-CT]

Rule 36(4) shall apply cumulatively for the period April 2021 and May 2021.

GSTR-3B for May 2021 shall be furnished with cumulative adjustment of ITC in accordance with the condition under Rule 36(4).