ITR Due Date: While normal taxpayers get no extension, what makes govt extend relief in audit cases?

Despite the fact that the due date of filing Income Tax Return (ITR) was extended for normal taxpayers by five months last year (Assessment Year 2021-22) from July 31, 2021 to December 31, 2021 and that of the taxpayers whose books of accounts were subject to audit was extended by four and half months – from October 31, 2021 to March 15, 2021 – the normal taxpayers didn’t get relief for even a day this year (AY 2022-23), while the due date for those having audit needs has been extended by 7 days till November 7, 2022.

“The extended due date for filing Return of Income under section 139(1) of the Income-tax Act, 1961 (‘IT Act’) for companies and persons (other than companies liable for audit under IT Act or any other act) for Financial Year 2020-21 (Assessment Year 2021-22) was 15 March 2022,” said Dr. Suresh Surana, Founder, RSM India.

“Further, the due date for filing Return of Income for assessee liable to furnish Transfer Pricing Audit Report under section 92E of the IT Act for FY 2020-21 (AY 20221-22) was also extended to 15 March 2022,” he added.

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So, what are the reasons for extending the due date for audit cases this year?

The CBDT in its Circular No. 20/2022 dated 26 October 2022 stated “In consequence to extension of due date for various reports of audit in the case of assessees referred in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Act to 07th October 2022 by Circular No.19/2022 dated 30.09.2022, Central Board of Direct Taxes (CBDT), in exercise of its powers under Section 119 of the Income-tax Act,1961 (Act), extends the due date of furnishing of Return of Income under sub-section (1) of section 139 of the Act for the Assessment Year 2022-23, which is 31st October 2022 in the case of assessees referred in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Act, to 07th November 2022.”

“It is notable that the due date for furnishing the audit report is a date, one month prior to the due date for furnishing the return of income under section 139(1) of the IT Act. Accordingly, it may be construed that in order to maintain uniformity and provide reasonable time gap between the 2 compliance timeline (i.e. filing of tax audit report and filing of tax return) under the IT Act, the CBDT extended the due date for furnishing Return of Income to 7 November 2022,” said Dr. Surana.

According to Aarti Raot, Partner, Deloitte India, however, the reason for the extension may be due to the festivities in October.

“While the government was stringent in not extending the due date for non-audit cases this year, the short extension for audit cases was considered on account of the festive holidays coming in the final week,” said Raot.