CA Satish Sarda

Almost each year due to one and other reason tax consultants or tax payers demand extension of due date for filing  Tax Audit Report under section 44AB of The Income Tax Act 1961  and Income Tax Return under section 139 of The Income Tax Act 1961.

Reason for this demand is mainly due to heavy penalty leviable on non compliance i.e. 0.5% or Rs.150000 whichever is less.

I here in below suggest a practical solution to above difficulty being faced by all the stakeholders:

1)    Instead of a steep penalty under section 271B there should be a gradual late fees for example Rs.200 per day starting from 1st October.(subject to maximum of Rs.200000 )

2)    Early filers should be given incentives like:

a)     No scrutiny of I T returns if Tax Audit Return is filed before 30th June and Income shown is higher than previous year.

b)     Certificate of Appreciation can also be given to Returns filed within due date.

c)     Refunds if any should be given priority.

Benefits of above solution:

1)    Above measures will encourage timely compliance

2)    Punctuality will be honored.

3)    Late filers will be penalized as per quantum of delay

4)    Auditors will not be overloaded in last days so Audit quality can be maintained

5)    A relatively equitable distribution of assessments for Department

6)    Department server will not be overloaded on last days

7)    Genuine cases will not be steeply penalized

8)    No rush to Banks for deposit of Tax on last days

I hope my solution which is based on actual experience will benefit all the stakeholders.

(Author is a Practicing Chartered Accountant and can be reached at

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0 responses to “Demand for extension of Tax Audit Due Date: A Practical Permanent Solution”

  1. CA Manoj Sethia says:

    Yes, Satish ji has given a very good solution. The Govt. should consider it. I also request ICAI to forward his views to FM in the Pre-budget Memorandum.

  2. Avi says:

    Dear sir your suggestion is appreciable but what can we do than Return Form is not available at the month of August


    Dear Sir,

    Sept. Last week all the CAs will be busy with attending AGM, moreover this year Auditors attendance is must. Most of the AGM is videographed, even for the PVT LTd., company, how can the CAs get time to sign.

    Practically, other than the big companies, all small companies not updating the accounts on day to day basis.

    We make a law, whenever, the Officals surprisingly visited the place, books of account not maintaiend upto date, there must be a clause for penalty (in KVAT 2013 provision is there)

    But, your approach is valueable one.


    The suggestion is very good. It is on the lines of penalty by ROC. This will encourage assessees to give details to auditors in time. Moreover it is becoing impossible to ask clients for the details when the accounts are submitted in time. In addition to the fees for late filing, penalty proceedings may also be initiated so that the clients will have to explain the reason for the delay in submitting the details to the auditors.

  5. Krishna says:

    Very Good Suggestions, I agree

    • Sunil Jaithwar says:

      welcome suggestions by Mr Sarda, but i doubt if any of his suggestions will be accepted by CBDT. The egoistic bureaucrats have there own style of functioning and they are not going to apply their mind in positive directions. They have the habit of harassing the taxpayers and will continue to do so.

      • kssunder says:

        Six months are given for goods returns under vat.Year end transactions therefore have 30th September to revise Vat returns of the last Month. At least 2.5 to 3 months are needed thereafter to confirm VAT liability and ITC and party confirmations to avoid mismatch. All taken to Consideration 31st December should be due date which will provide time for proper VAT and Income tax audits.

  6. Anubhav says:

    I agree, this is a good option, nice.

  7. ANIL AGARWAL says:


  8. M.S. SHETH says:

    I think this is a very good suggestion.
    Particularly in case of small assesses and private limited companies there are no
    knowledgeable accounts staff also and CAs have to do the work from root level, because after signing the accounts he carries lot of responsibilities.
    thanks and regards.

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