CA Sudhir Halakhandi
The central Board of Direct taxes has extended the date of obtaining and furnishing the Tax Audit report u/s 44AB to 30/11/2014 through an order issued under section 119 of the Income Tax Act, 1961 on 20/08/2014 but the order is silent about the date of filing of Income tax returns u/s 139(1).
There is an opinion in certain legal sector that extending the date of Tax audit report will automatically extend the date of filing of ITR but the law does not support this contention because there is no date of obtaining and filing of tax audit report in section 44AB. The section 44AB has linked the date of filing of audit report with the “due date” of filing of ITR u/s 139(1) hence the due date of obtaining and furnishing the audit report u/s 44AB is dependent and linked with the “due date” mentioned in section 139(1) but the vice versa is not true.
The date has been extended under section 44AB and since no date extension has been provided under section 139(1) hence still the date of submission of the ITR is 30/09/2014 and hence, has given rise to a very confusing situation. See how one can file the ITR without completion of the Tax audit. Logical sequence in this respect should be first complete the audit and then file the income tax return.
There may be a drafting error in the initial order which was received on 20/08/2014 and this was the first reaction from us when the order was issued presuming that the clarification/rectification/fresh order will follow but since in the last 4 days no clarification is received hence the apprehension in this respect is growing within the professionals and the taxpayer community.
What the central board of direct taxes wants to gain from this type of situation is better known to them only because ITR forms do not accept/permit this type of situation. The income tax returns itself require the date of furnishing of audit report and date of signing of audit report which can only be filed after completion of Tax audit report.
Even the instructions attached with the ITR do not support the situation of filing of ITR before filing of Tax audit report. In this respect please refer the instruction No. 4 – ‘Manner of filing of ITR’ which clearly states the following:-
“From assessment year 2013-14 onwards in case an assessee who is required to furnish a report of audit under sections 10(23C)(iv), 10(23C)(v), 10(23C)(vi), 10(23C)(via), 10A, 10AA, 12A(1)(b), 44AB, 44DA, 50B, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA, 92E, 115JB or 115VW he shall file the report electronically on or before the date of filing the return of income.”
In this point it has been clearly mentioned that Tax audit report should be e-filed on or before the date of filing ITR.
Further as per the columns No. 6, under ‘Audit Information’, of the instructions attached with the ITR the “date of audit report” and “date of furnishing of audit report” has to be reported in the ITR. See how this is possible when return filing date is still 30/09/2011 and date of obtaining and furnishing the audit report is extended to 30/11/2014.
This entire situation is the result of the illogical, unreasonable and untimely “midyear” introduction of the new formats of the Tax audit report and such practice should be stopped for future. This is an absurd, complex and confusing situation and the CBDT should extend the date of filing of return of income because the situation created by extending the date of furnishing the audit report without extending the date of filing of income tax return has created anxiety in the minds of taxpayers and the chartered accountants and making it impossible to file the ITR on or before 30/09/2014.
Further we suggest the ICAI should appoint an expert committee of the Experts to test the legality and validity of this situation and further the legality of the order of the CBDT u/s 119 issued to 20/04/2014 since as per section 119 CBDT can relax the provisions of section 139 amongst the other section but not the provisions under section 44AB.
There may be different opinion which we are getting from some section of the experts in this respect but the confusion and complexity in this respect should be cleared ASAP.
-CA Sudhir Halakhandi, -CA Abhas Halakhandi
Halakhandi And Company, Chartered Accountants
“Halakhandi”, Laxmi Market, Beawar-305901(Raj)
Cell- 9828067256, MAIL –firstname.lastname@example.org