It is requested that The chartered accountants are not in a position to complete audits under Income Tax Act and meet the specified timelines for furnishing of Tax Audit Report which is falling at the end of September 2019 Therefore extension of at least two months of Due Date for filing TAR, ITR to 30th November 2019 is been requested.
AN OPEN LETTER TO UNION MINISTER OF FINANCE FOR TAR EXTENSION
Smt. Nirmala Sitharaman
Hon. Union Minister of Finance and Corporate Affairs
Government of India
SUBJECT: MEMORANDUM SEEKING EXTENSION OF DUE DATE FOR TAX AUDIT REPORT & INCOME TAX RETURNS
ICAI_CIRC_MEERUT_CA, an online yahoo group is PAN India professional group of Chartered Accountants, having a membership of 25000 and in actively participating for the welfare of Chartered Accountants and always represented before various regulatory authorities to resolve the professional problems faced by chartered accountants and the business community. We have already written to your good selves many a time populating issues and possible solutions.
First of all, we would like to congratulate the revolutionary decisions pronounced by you today at Goa in corporate taxes. You have created a history by your confident announcements and signals of your confidence have already reached to the desired level and surely will be helpful in dealing with the on-going economic scenario and possible resolutions.
In the year 2019, CBDT already extended the date for filing Income Tax Returns for those assessees whose accounts are not required to be audited for a month without levy of any interest till 31st August 2019.
The Tax Audit report is required to be furnished to the Department within the prescribed due date which at present, is 30th September 2019 For non-submission / delayed submission of the above report, a penalty under section 271B of the Act may be levied at the rate of ½ % of turnover etc. (up to the maximum of Rs. 1, 50,000/-). We are presenting before your good selves the difficulties and hardship faced by Chartered Accountants in completing their assignments in time. Such as :
1. Lessen time is available for Tax Audits & other audits to be completed till 30th September 2019. The residual period of 30 days is not sufficient to complete the audits. This is because of a reason of the extension of the date for filing Income Tax Returns by those assessees whose accounts are not required to be audited for a month without levy of any interest till 31st August 2019.
2. An extension is requested in view of enormous delay on part of the department to provide IT forms preparation software, Dynamic amendment of Return Preparation Utility, TDS details and extension for filing ITRs to the non-audited assessee. The due date for filing TDS returns in respect of salary payments was extended up to 30.06.2019 and the due date for issue of form no 16 by tax deductor was extended up to 10.07.2019 and in many cases form no 16 and form no 26AS is not yet updated. As you are aware filing ITRs without matching with 26AS results into defective notice from the CPC.
3. There is a nature’s fury across India severely affecting the normal life of the pupil and business community in particular. As you are aware that due to the heavy rains and flooding positions throughout the country and in particular the Madhya Pradesh, Maharashtra, Gujarat, Himachal and Karnataka. There were severe and destructive rains and floods. The impact of floods in states ultimately results in paralysing business activity across India. This impact should be kept in mind while assessing the situation and allowing the extension of dates.
4. Almost every year demand is raised by Tax Payers / CAs etc. for extension of the above due date. Chartered Accountants always took lead in challenging you for extension of Tax Audit Dates. Many quarters feel that it’s the FICCI/Chamber of Commerce etc. to go take a legal battle with you but the Tax Audit is a matter between auditors and the department. Section 44AB gives the provisions relating to the class of taxpayers who are required to get their accounts audited to ensure that the books of account and other records are properly maintained and such books of accounts reflect the income of the taxpayer and claims for deduction correctly. It is also to check fraudulent practices if any and such provision facilitates authorities to see the ready-made information and ultimately save the considerable time of Assessing Officers in carrying out routine verifications. This is a direct work to be performed by the chartered accountants for the department for executing the audits & uploading the same in digital form directly to your site. Their role cannot be ignored.
5. Rationalise the on-going penalty u/s 271B is the solution to get rid of this year to year legal tussle among the Assessee, Professionals and CBDT, There is a simple solution to overcome the above problem i.e the penalty provisions should be rationalized and the penalty amount should be linked with the number of days of delay, say for example Rs. 200/500/1000/- per day of delay. This provision will directly hit the present penalty provision of a sum equal to one-half per cent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred fifty thousand rupees, whichever is less. Such rationalisation shall scrap the need to do the extension of a due date, therefore; there may not be a loss of revenue in the form of a waiver of interest U/s. 234A, the delayed collection of taxes etc. Rather, there may be the increase in revenue because many taxpayers may opt to avail some more time for proper accounting and auditing, by paying the above slight amount of penalty as per their affordability.
Due to above mentioned reasons, The chartered accountants are not in a position to complete audits under Income Tax Act and meet the specified timelines for furnishing of Tax Audit Report which is falling at the end of September 2019 and further in this hour of severity it would be inhumane and unjust to force assessee until their livelihood returns to normalcy.
Therefore we request an extension of at least two months of Due Date for filing TAR, ITR to 30th November 2019.
CA Amresh Vashisht
Moderator & Owner, ICAI_CIRC_MEERUT_CA
Ex-National Council Member, CA Cell, BJP, New Delhi
CC; The Chairman, Central Board of Direct Taxes