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Almost every year, dispute arises as to the extension of non-audited Income Tax Return filing due date and consequent extension of audited Income Tax Return filing due date also. Many professional consultants’ associations across the nation make representations to the government every year for this matter, although it’s a different matter that it’s a primary duty of business / trade associations to make such representations.

Following table shows the extended dates for some of the previous years.

Assessment
Year
Original
Due Date
Extended
Due Date
Relevant Circular Etc.
AY 2021-22 31/07/2021 31/12/2021 CBDT Cir. No.17/2021
AY 2020-21 31/07/2020 10/01/2021 Press Release 30/12
AY 2019-20 31/07/2019 31/08/2019 225/157/2019/ITA.II
AY 2018-19 31/07/2018 31/08/2018 225/242/2018/ITA.II
AY 2017-18 31/07/2017 05/08/2017 Not Available
AY 2016-17 31/07/2016 05/08/2016 225/195/2016/ITA.II
AY 2015-16 31/07/2015 07/09/2015 225/154/2015/ITA.II

But why such extensions are needed every year? And what is the possible solution to this permanent controversy?

Section 139(1) says that the non-audited case ITRs are to be filed latest by 31st July of relevant assessment year. And assessment year starts form 1st April. So, intention of the parliament while enacting this provision can be said as – the person should get the time of 4 months (From 1st April to 31St July). But the million-dollar question is – “are the all ITR filing utilities and schemas made available on 1st April every year?”

Further, the last date of filing TDS return for quarter 4 of relevant financial year is specified as 31st May following that quarter end. So, effect in Form no. 26AS arrives nearly by 10th of June each year.

Further, from AY 2021-22, AIS and TIS are issued by the income tax department. So, matching the data with these two reports has become one more time-consuming task.  Most of the data in AIS and TIS comes from Statement of Financial Transaction (SFT) filed by various entities. And the last date of filing such SFT is 31st May immediately following the financial year in which the transaction is registered or recorded.

So, practically the person who wants to file the return efficiently can get the Form 26AS, AIS and TIS nearly by 15th June.  And such person remains with only 1.5 months’ time to file the return of income. So, it is very natural that time extension is expected by the common people.

Now, suppose, even the time is extended for such cases, that time is actually taken from the remaining 3 months’ time frame available for filing ITRs of audited cases.

So, the income tax department might be of the opinion as under.

1. Person files his return on its own without taking help of tax professionals. Means common man is so expert in ITR filing matter.

2. Persons are fully aware about all their financial transactions and make their accounting also and the person does not need to tally its data with the data mentioned in Form no. 26AS, AIS and TIS.

Is ITR date extension demand justified Possible solution of this permanent controversy

3. Tax professionals are magicians which can file any number of ITRs within this very short period of 1.5 months. And they can work for 24 hours constantly during this period of 1.5 months.

4. Out of 4 months’ time envisaged by the Act (1st April to 31st July) to file the return, income tax department deserves to have first 2.5 months available for itself and remaining 1.5 months’ time is more than enough for the taxpayers to file the returns of income.

God knows who is correct and who is incorrect in demanding such time extension or in rejecting such time extension in this matter, but following are the possible solutions of this permanent controversy.

1. Introduction of clause in the Income Tax Act itself which provides for issuance of all ITR filing utilities as on 31st March itself and non-compliance of that must result into automatic extension of due date by that latency period.

2. If a person can make calculation of TDS by 30th April (7th April for TCS) and can pay it by that date, why can’t that person file a TDS/TCS return by 7th May? So, the due date of filing TDS/TCS return of the 4th quarter must be reduced to 7th May immediately following that quarter.

3. Last date of filing SFT must also be reduced to 30th April or 7th May immediately following the end of that financial year.

4. Form No. 26AS, AIS and TIS must be updated and made smoothly available on the portal latest by 15th May.

5. To encourage the early filing some incentives can also be given by the government to early birds. For example, 2% instead of 4% education cess for those persons who file the return of income by 30th June.

If government open heartedly wants to implement its Minimum Government Maximum Governance slogan, then above are some of the suggestions to be implemented first in this matter. It must not forget that one of canon out of the four canons of taxations is the canon of convenience.

****

Tejas K. Andharia | B.COM, F.C.A., D.I.S.A.(ICAI), D.I.R.M.(ICAI) | Bhavnagar, Gujarat

Author Bio

He is Chartered Accountant by profession plus Song Writer, Composer, Piano player and Singer. One of his hobbies is to share technological knowledge . He was President of Bhavnagar C. A. Association for two consecutive terms. His Youtube Channel is "CA. Tejas Andharia" (more than 50,000 subscribers) View Full Profile

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6 Comments

  1. Parshva Shah says:

    A Multiple RTGS like system would be advisable for TDS…..bill number, date, pay and deduction reported that’s it.

    No wait for challan, comparison or quarter end….in bonus the exact transaction will also be traceable.

    Same thing can be done with AIS, TIS reporting…just share your books for eligible transactions , no filing of return.

    All problems are at accumulation of transactions to a point of time (like they require to be amended before filing 😉 )

  2. CA Roshan Rana says:

    Govt. Must reduced time period of availability of Utilities to filing, TDS/TCS, SFT other reporting to give sufficient time period to taxpayer, tax professional & consultants avoid due date extension.

  3. RAJA GHOSH says:

    Its really a wonderful analysis with all the facts & figures in place.

    A representation must be made to the respective department of the Government for a permanent solution.

    With so much comparisons to be done within such a short frame of effective time is really difficult.

    Incentive for on time filing is a good idea as section for penalty for late filing is already there.

  4. Murtaza I Bhagat says:

    Well,
    These are the good suggestions which are really appreciable but want from Govt. to shift due date to 31st August of non audited assessee or taking audit assessee first which are approx 25 lakhs and 7-10 crores non audited ITRs need to give 6 months of time to file their returns which brings all the real data and more than 90% return will get to file within due date. reducing time in very important yearly returns like SFT, TDS, TCS will create hindrance and wrong data without analysis and consensus which instigating the correction returns. Ramification the requirement of logical due dates will be the great for all and it will create win win situation for both the assessee and Govt.
    Sir, I also have the opinion that the Govt should also work on their availability of their service on or before 31st of every March and lock the updation till 31st July or applicable due date then no one will demand for any extension.
    early birds idea is to implement like Govt. was giving certificate of appreciation earlier to assessee for their participations in filing returns and paying taxes.
    Overall, Govt has to think from both sides and create a bridge to work together.

  5. Ashish Nanda says:

    The due date for filing TDS return for Q1 is also 31st July wherein there is no scope for extension and clients end up paying penalty.

  6. Kailash Chand Aggarwal says:

    In 20% of the cases, the companies/hospitals do not file Q4 TDS return on time and submit it only in the last week of July. As a result 26AS is not updated. Apart from this, TDS also shows mismatch in income tax returns. There are some who have not filed any quarterly return yet. The taxpayer is helpless.

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