High Court refuses to extend Income Tax returns filing date

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The High Court of Gujarat has rejected a plea seeking further extension of the due date for the filing of income tax (I-T) returns by businesses & professionals covered under Section 44AB of the Income Tax Act from Feb 15 to March 31.

“We have concluded that we should not interfere in the matter,” the Court said hearing a special civil application by the All-Gujarat Federation of Tax Consultants. “In the result, bot the writ applications fail & are hereby rejected. At this stage, we may only observe that the CBDT may consider issuing an appropriate circular taking a lenient view as regards the consequences of late filing of the Tax Audit Reports as provided under Section 271B of the Act. We leave it to the better discretion of the CBDT in this regard.”

An assessee needs to be audited under Section 44AB if his/her annual gross turnover/receipts in business exceed Rs 1 crore while it is Rs 50 lakh in case of professionals. In case of failure to get accounts audited, the Income Tax Act section 271B prescribes that the Assessing Officer may direct that such person shall pay, by way of penalty, 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 the profession, in such previous year or years or a sum of one hundred fifty thousand rupees, whichever is less.

Due to the Coronavirus pandemic, the due dates for filing of return/tax audit have already been extended on three occasions. The latest extension is from January 31 to Feb 15 for assesses whose accounts need to be audited under Section 44AB.

“Any further extension would adversely affect the return filing discipline & shall also cause injustice to those who have taken pains to file the return before the due date. It would also postpone the collection of revenue thereby hampering the efforts of the Government to provide relief to the poor during these Covid times,” the CBDT submitted to the Court.

The principal argument of the writ applicants was that delay in releasing the utilities for filing the Tax Audit Reports & Income Tax Returns has reduced time available for tax consultants to file returns for clients & put stress on their manpower.

The CBDT submitted that the changes brought about in the ITR by way of an update do not amount to adding or extending the fields. It is only increasing or making changes in the character of the existing fields to enable certain minuscule taxpayers to report correctly which they might not have been able to otherwise.

The Income-tax department also submitted that the number of returns filed this year has already exceeded by about 6% to 5.95 crore as on January 10, 2021, compared with 5.62 crore as on Aug 31, 2019 (last date of return filing). 

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