Bhayander CA Social Group has made a Humble prayer for extension of due date u/s 139(1), section 44AB and for uploading of various audit Reports from 31st December 20 and 31st January 2021 respectively to 31st March 2021 to Smt. Nirmla Sithraman Ji, Hon’ble Union Minister of Finance. Full text of their representation is as follows:-
Bhayander CA Social Group
Dated: 22 December, 2020
Smt. Nirmla Sithraman Ji,
Hon’ble Union Minister of Finance,
Ministry of Finance,
Government of India,
Sub: Humble prayer for extension of due date u/s 139(1), section 44AB and for uploading of various audit Reports from 31st December 20 and 31st January 2021 respectively to 31st March 2021.
1) The unique vast killing virus Covid-19 has infected the entire world and India is no exception to it. The GOL initiated timely measures to prevent its further spread in India, one of which was strict lockdown. This lockdown was imposed from about 22nd March 2020 and was in operation for almost 7 months and thereafter partial lockdown which is still in operation in different forms in different cities.
2) This lockdown had a devastating effect on the lives and means of livelihood for every resident of the nation. The entire infrastructure had been brought down and all the points of supply of goods and services were closed down. A large part of the workforce sifted from one place to their native or other place. Under such circumstances the offices of the chartered accountants were also fully closed and their office staff also left for their place of choice.
3) Under the Income Tax Act 1961, many dues dates fell due from 31st March 2020 till 31st December 2020. The GOI took a very lenient view of the predicament faced by the assesses and by us and was kind enough to extend these due dates from time to time to different dates in the future. The first of such due date to fall due is on 31st December 2020 on which date returns of all non-audit assesses have to be uploaded and the various audit reports like under section 44AB, tax Audit Report, audit report u/s 12A(b) for the trust etc. The consequences for not uploading these audit reports are levy of heavy penalty and, in case of trusts, denial of the total exemption available u/s 11.
4) All assesses, Tax professionals, Accounting professional, Audit professional, Tax payers and all other stockholders, have split and moved to difference places which seem safe for their existence. Such was the tension of the pandemic that the entire nation was divided into many hot spots and their inhabitants were cautioned not to move out of their houses.
5) Under such circumstances it was not at all possible to contact the assesses and ask them for audit of their accounts. Though many had started working from home but WFH itself has its own limitation. Therefore, there is status quo so far as the situation on account of Covid-19 is concerned.
6) Many parliamentarians got infected by this virus and some of the ministers expired due to Covid-19 and therefore the parliament, in its wisdom, called off the Winter Session.
7) However, the Government offices across the country are not functioning with their full capacities. It has been decided for maintaining social distancing. By this move the spread of Covid-19 has been contained in Government Offices but could not be avoided. It is not eradicated completely.
8) The entire judicial system including the Apex Court is functioning as virtual Courts only, thus obviating the personal attendance of the professionals and the judges too.
9) All the Professionals are facing a huge backlog of work to be done which may require a further period of about 4 months to complete. The professionals are an integral part of the entire system; therefore, they too require protection from the pandemic to complete their assignment within the allotted time.
10) Taking Cognizance for the prevailing pandemic The Hon’ble Supreme Court has passed a blanket order on 23.3.2020 extending all the due dates prescribed under various Acts and the same order is still in operation. The Hon’ble Supreme Court has reaffirmed its order as late as on 17th December 2020 by observing as under:
The above order is still operative and by subsequent orders, the scope has been enlarged so that the said order applies in other proceedings also.
11) Now, as late as 21st December 2020 a study in Europe found a new strain of covid-19 in UK which is supposed to be 70% more faster than the existing virus. It has already mutated and spread to south Africa and proceeding towards Asia at a rapid speed.
12) In order to cope with this new virus, the GOI has banned all in bound flights from Britain to India and the Government of Maharashtra has made it mandatory for all persons entering Maharashtra to be in compulsory quarantine for 14 days.
13) Due Date on adopting option for concessional rate of taxation u/s 115BBA etc.
The provision requiring submission of audit report 1 month prior to the date of filing of the ROI has also created many hurdles for the auditors. The ideal law about submission of audit reports would be that these audit reports are submitted within one month after the date of submission of the Return of Income u/s 139(1). In such cases the Revenue would rest assured that whatever information that has been submitted in the Return of Income is True & correct by ensuring that this information is audited by qualified C hartered Accountants and their report is submitted within one month after the date of submission of the Return of Income u/s 139(1).
The present provision is like an auditor is predicting a financial position for a date 1 month in future. The Finance Ministry has not offered any guidelines about the treatment of financial events occurring after the date of submission of audit report.
Let us consider some examples of this contradiction
(a) Reporting in Form 3CB/3CD
Since the assessee has to file his return of income by 31st January 2021 he may not have finally closed his accounts as at 31st December 2020. Under such circumstances no auditor would like to audit such accounts which have not been closed and give the required opinion in Form 3CA/3CB like: –
“In our opinion and to the best of our information and according to examination of books of account including other relevant documents and explanations given to us, the particulars given in the said Form No. 3 CD are true and correct subject to the following observations/qualifications, if any:”
Is it possible to do so if the accounts were still open and not closed as on 31st December 2020?
(b) Clause (8a) seeks answer on the question if the assessee has opted for taxation under section 115BA/ 115BAA/ 115BAB?
Under Section 115BA/115BAA/115BAB the option can be exercised by the assessee in the prescribed manner on or before the due date specified under section 139(1). That means an assessee willing to exercise the option can do so up to 31st January 2021, then how can an auditor answer the question in clause 8a latest by 31st December 2020, when the said option becomes time barred only on 31st January 2021.
(c) Clause 18 seeks answer on the WDV of the assets if the assessee has adopted option of lower rate of taxation u/s 115BAA like:
|(ca)||Adjustment made to the written down value u/s115BAA||Rs…..|
|(cb)||Adjusted written down value||Rs…..|
|(d)||Written down value at the end of the year||Rs…..|
The figures would vary depending upon whether the option u/s 115BAA has been exercised or not and for which the last date is again 31st January 2021.
The value of Adjustment to be made to the written down value u/s 115BAA as stated in clause (ca) is equal to the amount of unabsorbed additional depreciation as at 1st April 2019 which is required to be carried forward to the AY 2020-21. The other figures in the remaining clauses would depend upon the amount of adjustment in clause (ca).
(d) Clause 20 (b) : Details of contributions received from employees for various funds as referred to in section 36(1)(va):
Under this clause compliance with respect to the Due date of Payment is required to be ensured. Whether this due date is the date as per the Provident Fund Act or as per the date u/s 43B i.e. the contribution of the employees will be allowed as expenses if paid up to the due date as per section 43B. There are contradictory judgements of various State High Courts as under. Allowed means allowed u/s 43B even if paid by the due date u/s 139(1) and Disallowed means not allowed if not paid by 15th day of the month next to the month of receipt.
|1||Gujarat High Court||Not Allowed|
|2||Karnataka High Court||Allowed|
|3||Calcutta High Court||Allowed|
|4||Bombay High Court||Allowed|
|5||Madras High court||Allowed & Disallowed both|
|6||Delhi High Court||Allowed|
|7||Rajasthan High Court||Allowed|
|8||Kerala high Court||Not Allowed|
|9||Punjab & Har High Court||Allowed|
|10||Madhya Pradesh High Court||No Clarity|
|11||Patna High Court||Allowed|
|12||Allahabad High Court||Allowed|
|13||Gauhati High Court||Allowed|
The Hon’ble Supreme Court has so far not answered the above question of law on merit of any case.
So, whether the deduction will be allowed or disallowed can be answered only after knowing the High Court in whose jurisdiction the assessee has the place of business. Moreover, the following orders were passed subject to the final order of the Supreme Court on these questions.
So, while submitting form 3CD by 31st December 20 the Tax Auditor will not be able to give correct answer because the assessee has got time up to 31st January 2021 to make payment of the same and claimed it as deduction u/s 43B.
(e) Clause 21(b)(i)(B) : Details of payment on which tax has been deducted but has not been paid on or before the due date specified in sub-section (1) of section 139.
The tax auditor just can’t straight way answer this question and disallow 30% of the expenditure when the time for payment of TDS is still available up to 31st January 2021.
(f) Clause 26(B): Payment under Section 43B
Under section 43B certain payments are allowed on cash basis if they are made before the date of filing of the ROI u/s 139(1). Therefore, a tax auditor just can’t answer this question particularly when the time for payment of the above sums is still available up to 31st December.
(g) Clause 32(a): Details of brought forward loss or depreciation allowance, in the following manner, to the extent available: (Also refer clause 4 above)
|Sl. No.||Assess-ment year||Nature of loss/ Allowance||Amount as returned||All losses/ allowa-nces not allowed under section 115BAA||Amount as adjusted by withdrawal of additional depreciation on account of opting for taxation under section 115BAA||Amounts as assessed||Remarks|
The answer to the question in column (5) & (6) will depend upon whether the assessee has exercised the option of being assessed under the concessional rate of taxation as provided in section 115BAA. However, the last date for exercising this option is 31st January 2021. If the assessee does not exercise the option then the amount to be reported in column (5) & (6) will be NIL and if exercised then the amount will have to be calculated in the manner as given in section 115BAA. Therefore, it will be very difficult for the tax auditor to provide the accurate answer one month in advance of a date in future.
(h) Clause 33 Section-wise details of deductions, if any, admissible under Chapter VIA or Chapter III (Section 10A, Section 10AA):
|Section under which deduction is claimed||Amounts admissible as per the provision of the Income-tax Act, 1961 and fulfils the conditions, if any, specified under the relevant provisions of Income-tax Act, 1961 or Income-tax Rules,1962 or any other guidelines, circular, etc., issued in this behalf|
The answer to these questions will again depend whether the assessee has exercised the option of being assessed under the concessional rate of taxation as provided in section 115BAA. However, the last date for exercising this option is 31st January 2021. If the assessee does not exercise the option then the amount to be reported will be the actual amount eligible for deduction and if exercised then the amount to be reported will be NIL. Therefore, it will again be very difficult for the tax auditor to provide the accurate answer one month in advance of a date in future.
(i) For availing this concessional rate the assessee will be required to forego some deductions which are otherwise allowable to it under various sections like 10AA, 32(1)(iia), 32AD, 33AB, 33ABA,35, 35AD, 35CCC 35CCD. If the assessee adopts the option of lower rate of taxation then no deduction under any provisions of Chapter VIA other than the provisions of section 80JJAA or section 80M.
14) Under the above circumstances it is literally impossible to do the audit of the accounts of the assessee and upload the audit report up to 31st December 2020 and therefore, the GOI is very respectfully and humbly requested that all actions of compliances falling during the period from 15th March 2020 to 30th March 2021 to 31st March 2021 relating to –
a. Furnishing of Returns for AY 2020-21
b. Furnishing of Audit Report u/s 44AB for business, profession and the Trusts.
c. Any other Return or audit report falling due before 31st March 2021
With Warm Regards
For, Bhayander CA Social Group
CA Sandip Jain
CA Lalit Munoyat
Direct Tax Advisor
1. Shri Anurag Thakur, Union Minister of State, Ministry of Finance; and Ministry of Corporate Affairs- e’mail: firstname.lastname@example.org
2. Shri Ajay Bhushan Panday Ji, Revenue Secretary of Finance e’mail: email@example.com
3. Shri Pramod Chandra Mody Ji, Chairman, Central Board of Direct Taxes e’mail: firstname.lastname@example.org
|S. No.||Date||Association||Particulars with link|
|1||9 Dec 2020||Western Maharashtra Tax Practitioners||Extend due dates of Tax Audit & ITR for AY 2020–21|
|2||12 Dec 2020||Gujarat Sales Tax Bar||Extend GSTR-9/9A/9C due date for FY 2019-20 to 30/06/2021|
|3||12 Dec 2020||Chamber of Tax Consultants||Extend due dates for Tax/Transfer Pricing Audit & ITR for AY 2020-21|
|4||12 Dec 2020||Tax Practitioner’s Association, Indore||Extend due dates for filing Tax/TP Audit Report & ITR for AY 2020-21|
|5||14 Dec 2020||AGFTC, ITBC and CAA||Extend due dates of Tax Audit Reports/ITR for A.Y. 2020-21|
|6||15 Dec 2020||BCAS, CAA (Ahmedabad), CAA (Surat), KSCAA & LCAS||Request to Extend Due dates under GST & Income Tax|
|7||15 Dec 2020||Tax Bar Association, Bhilwara||Request to extend Due Date of filing of Tax Audit & ITR|
|8||15 Dec 2020||Direct Taxes Professionals’ Association, Kolkata||Extend due date of ITR & Tax Audit for AY 2020-21|
|9||16 Dec 2020||Lucknow CA Tax Practioners’ Association||Extend Due date for filing Tax Audit Report & ITR|
|10||16 Dec 2020||Jamshedpur Chartered Accountants||Extend Due Date of filing Tax Audit & ITR to 31.03.2021|
|11||13 Dec 2020||Direct Taxes Committee of ICAI||ICAI requests for extension of various Income-tax due dates|
|12||10 Dec 2020||Udaipur Tax Bar Association||Further extend due dates of ITR & Tax Audit Reports for FY 2019-20|
|13||15 Dec 2020||CA Social Affiliation (CASA)||Extend Tax/TP Audit Report & ITR filing due date for AY 2020-21|
|14||19 Dec 2020||Chartered Accountants Association, Jalandhar||Extend Due Dates for Tax Audit and Income Tax Return Filing|
|15||19 Dec 2020||All India Federation of Tax Practitioners (CZ)||Request for extension of due dates of Tax Audit Reports/ITR|
|16||19 Dec 2020||Vyyapaar Mandal Association, Nagore & AIMTPA||Extended Income Tax & GST Audit/Return/Compliance dates|
|17||17 Dec 2020||Emerging Businesses Chamber Of Commerce||Extend due dates for Income Tax Audit & Returns for AY 2020-21|
|18||Dec 2020||The Uttar Pradesh Tax Bar Association||Representation for Extension of time for Tax Audit & Return|
|19||19 Dec 2020||Tax Bar Association, Guwahati||Extend Tax Audit/ITR due dates for AY 2020-21|
|20||21 Dec 2020||Tax Bar Association, Guwahati||Extend due dates of GSTR-9/ GSTR-9C for FY 2018-19 & 2019-20|
|21||17 Dec 2020||Karnataka State Chartered Accountants Association||Waive Late Fees for Delayed Filing of GST Returns|
|22||15 Dec 2020||Direct Taxes Professionals’ Association||Extend Vivad Se Vishwas Scheme due date to 15.03.2021|
|23||15 Dec 2020||Direct Taxes Professionals’ Association||Extend due date of AGM to 31st March 2021|
|24||15 Dec 2020||Association of Tax payers & Professional, Agra||Extend due of GSTR-9, GSTR-9A & GSTR-9C|
|25||08 Dec 2020||Tax Bar Association (Regd), Allahabad||Extend due date of ITR/Tax Audit/GSTR-9/GSTR-9C|
|26||08 Dec 2020||Tax Consultant & Practitioners Association of Kerala||Extend due of ITR, GSTR 9, 9A & 9C for FY 2018-19 & 2019-20|
|27||21 Dec 2020||Tax Bar Association, Guwahati||Extend CFSS 2020 & LLP Settlement Scheme 2020 to 31.03.2021|
|28||22 Dec 2020||Income Tax Bar Association, Lucknow||Extend Time for filing ITR & Audit Report for A.Y 2020-21|
|28||22 Dec 2020||53 GST and Trade Associations||53 Associations requests Extension for GSTR 9, 9A & 9C|
|29||16 Dec 2020||Chandigarh Chartered Accountants Taxation Association||Extend Income Tax & GST Return & Audit due dates|
|30||22 Dec 2020||Bhayander CA Social Group||Request to extend Due date of Annual GST Return & Audit|
|31||22 Dec 2020||Luminaires Accessories Components Manufacturers Association||Extend due dates for Tax Audit & Income Tax Return filing for AY 2020-21|
|32||22 Dec 2020||All Professionals, Tax Payers and Stakeholders||Open letter for extension of Due dates under Income Tax and GST|
|33||22 Dec 2020||Punjab Accountants Association||Extend due date for filing ITR & Tax Audit Report- AY 2020-21|
|34||22 Dec 2020||Bhayander CA Social Group||Extend Income Tax Audit & ITR Due dates for AY 2020-21|
|35||23 Dec 2020||The Tax Bar Association, Odisha||Extend due dates of Audit Reports, ITRs, GST Returns, VSV Scheme|
|36||21 Dec 2020||Sales Tax Bar Association, Delhi||Extend Tax/TP Audit & ITR Due dates for AY 2020-21|
|37||23 Dec 2020||Direct Taxes Professionals’ Association||Extend Income Tax, Companies & CGST Act compliance due dates|
|38||24 Dec 2020||ICSI||Extend due dates of CFSS, LLPSS, Charge Forms, Meetings|
|39||24 Dec 2020||All Odisha Tax Advocates Association||Extend due date for filing TAR/ITR/GSTR9/9A/9C|
|40||25 Dec 2020||BJP Economic Cell, Rajasthan||Extend Income Tax, GST, LLP, Company Law due dates|
|41||23 Dec 2020||Hyderabad Chartered Accountants’ Society||Extend Due date under GST and Income Tax|
|42||22 Dec 2020||A. P. Tax Bar Association, Vijayawada||Extend date of filing of GSTR 9, GSTR 9C and IT returns|
|43||03 Jan 2021||National Company Law Tribunal Bar Association||Representation for further extension of CFSS 2020|
|44||25 Nov 2020||Merchants Chamber of Uttar Pradesh||Request for extension of Company Fresh Start Scheme 2020|
|45||04 Jan 2021||Adv. Anuj Bhatt||Request to President to take Suo-Moto cognizance of GST Issues|
|46||03 Jan 2021||The Chamber of Tax Consultants||Extend Income-tax due dates with humane approach|
|47||01 Jan 2021||WMTPA||Highly Disappointing GST Audit Due Date Extension|
|48||01 Jan 2021||The A.P. Tax Bar Association, Vijayawada||Extend due date of Form GSTR 9 and 9C for year 2018-19|