1. Those practicing on tax audti under income tax act would have experienced the thrill, suspense and irony of extension of due date.

2. It was perceived as apathy towards the burning problem of assessees at hands. Later Dr. Hasmukh Adhia has apologised through twitter. One may go through the apology and reactions of people at  his twitter page.

3. Much has been written about this and I intend to avoid repetition thereof.

4. It may be prudent to re-produce para 14 of Judgement of Gujarat High Court on the captioned issue.

14. It may be recalled that in relation to assessment year 2014-15, the respondent Board had extended the time for filing the tax audit reports, but had not extended the time for filing the returns and the petitioners were constrained to approach this court for extension of the due date for filing return of income. In that case, this court has, inter alia, observed thus :

“50. We are also actuated by the fact that the entire situation is arising not on account of any contribution on the part of either the professionals or the assesses leading to such a situation. In the present case, with the advancement of the technology, it is always commendable that the department takes recourse to the technology more and more. With the possible defects having been found in utility software in use in the previous year, the required changes in the clarification or the new format of such utility, if brought to the fore, the same would be desirable. At the same time, the complete black out for nearly a month’s time would not allow accessibility to such utility software to the assessees, which has put them to a great jeopardy.

Why this article-:

5. An attempt has been made to find out a long term solution for this problem being uninfluenced by what happened in last week of September 2015.

6. I am sure that CBDT, ICAI, chamber of commerce, association of tax consultants etc. can come to a consensus for long term solution by taking a pro-active steps.

Some issues that will influence the long term solution-:

7. The most important thing with which all will agree is that, we as human beings are prone to procrastination i.e. delaying the things. It is applicable to all, be it officials at CBDT, CA fraternity, assessees for finishing the audit / financial statements / tax liability / payment of self assessment tax liability.

8. Secondly, India is a very heterogenous country where the situation changes radically from state to state.There are several factors like festivals, paucity of water, electricity, internet, temporary disturbances regarding in law and order situation etc.

9. Being heterogenous, the reactions of people in different states have been different and perhaps have been echoed in the varying decisions of respective high courts.

Objective of this article-:

10. To instigate a thought process in the minds of the reader for formulating a long term solution.

Contents of ROI / TAR

11. Before dealing with the solution for due date, I strongly propose a change in the contents of ROI / TAR.

12. Tax audit report was introduced with the objective to enable to Assessing Officer to complete the assessment in an smooth manner.

13. In furtherance of the above principle, in simple terms, CBDT should think of out-sourcing the work of scrutiny assessment to CA firms and focus more on other areas. CBDT may draft model question / issues / approach that it expects a scrutiny assessment must be done.

Questions / Issues Response of Difference
Assessee Auditor & reasons
Information Required
Change in composition of the assessee
Nature of business
Payments above Rs. 20,000 u/s 40A(3) that be dis-allowed
Statement of Income
Computation of Tax Liability
Recommendation of Auditor
The assessee is advised to
Pay additional demand of Rs.
Claim refund of
Re-instate MAT credit

14. A very relevant article in this area has been authored by CA. Satish Sarda. I propose the solution as follows

15. The corporates contribute more to the exchequor in terms of revenue collection. It is an open secret that, CBDT is more interested in collecting revenue in terms of self assessment taxes.

16. I have applied the materiality criteria and I intend to advance the date.

Category ROI / TAR TP
Listed companies and those having turnover above 100 crores 31-July 30-Nov
Other Assessees having tax audit 31-Aug 30-Nov
One revised return for TP adjustment 30-Nov 30-Nov
Assessees not having tax audit [including salaried class] 30-Sep N.A.

17. The only technical problem is compliance with transfer pricing norms.A suo motto adjustment to income arising out of transfer pricing adjustment to return of income be allowed for such tax benefits.

18. The assessee will file its ROI on or before 31-July and will revise the same on or before 30-Nov.

19. A special category of revision of original return arising out of adjustment due to transfer pricing be created and the due date should be 30-Nov.

20. Additionally, CBDT may consider following;

a) Refund if any, be given on priority

b) Small tax incentive for early filing

c) A late fee should be intrduced on the lines of section 234E whereby the there will be a fee on a daily basis[for which no proceedings are required]

Achievements of CBDT.

21. Before spelling out any expectation, CBDT must be given credit for improvement in Information System. It is not a taunt. I have experienced implementation of ERP in private enterprises. Even those people suffer from problems despite employing all the “professional” people / enterprises specialising in that “core” area.

22. CBDT has come a long way since FY 2005-06, first financial year for which return was required to be filed in electronic format. Over a period the system of TDS, form 26AS, electronic processing u/s 143(1)(a), 139(9).

23. CBDT must be complimented for quickly processing the refunds and issuing them expeditiously.

24. In furtherance of what CBDT has done, it may consider

a) Notifying the forms / utilities precisely on 1-April.

b) No change in the forms / utilities till due date.

Regarding the situation in last month

c) Recently, CBDT published the answers given by it in respect of black money law with name of querists.

d) On the same lines, CBDT may take a stock of situation on a state by state basis and issuing a press release at least one month before due date.

e) CBDT should release a press release spelling out its stand on extension / or otherwise of due date alongwith the reasons thereof on a statewise basis.


25. I know that the solution provided may not be full proof and readers are requested to throw upon me various awkward situations / problems.

26. Once WE ALL are instigated to think, we will definitely find a long term solution which will be fair and SUFFICIENT.

( Author CA. Yogesh S. Limaye can be reached at [email protected])

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June 2021