New Delhi : The PHD Chambers of Commerce has welcomed the recent decision of Central Board of Direct Taxes to extend the date of filing Income Tax returns for the Assessment Year 2021-22 but sounded a note of caution that such extension will result in late completion of work for FY 2020-21 and delayed start to compliance work for Fy 2021-22.
The Central Board of Direct Taxes (CBDT) on Tuesday extended the deadline of income tax return (ITR) filing for Assessment Year 2021-22 till March 15, 2022, for specific taxpayers who are eligible for audit.
A Finance Ministry statement had said “On consideration of difficulties reported by the taxpayers and other stakeholders due to COVID and in electronic filing of various reports of audit under the provisions of the Income-tax Act, 1961 (the Act), the Central Board of Direct Taxes (CBDT) has decided to further extend the due dates for filing of Income Tax Returns and various reports of audit for the Assessment Year 2021-22.”
The Government statement had further said that the due date of furnishing of Report of Audit under any provision of the Act for the Previous Year 2020-21, which was 31st October 2021, in the case of assessees referred in clause (aa) of Explanation 2 to sub-section (1) of section 139 of the Act, is extended to 15th February 2022.
Furthermore, the due date of furnishing of Report from an Accountant by persons entering into international transaction or specified domestic transaction under section 92E of the Act for the Previous Year 2020-21, which was 31st October 2021, as extended to 30th November 2021 and 31st January 2022 by various Circulars, is further extended to February 15, 2022.
After the spread of the Covid virus in the 1st of week of January 2022, all the offices have witnessed 10-20% attendance. In such a scenario, it was not possible to complete tax audits by January 15 and do other compliance subsequently. The extension of the due dates comes as a breather to corporates and Tax consultants, said Mukul Bagla, Chair, Direct Tax Committee, PHDCCI, in a statement here.
However, such extension will result in late completion of work for FY 2020-21 and delayed start to compliance work for Fy 2021-22. Also as the pressure is released, the work will get piled up at the time of the revised due date, Bagla said in a release.
Besides, other statutory compliances and assessment proceedings under income tax act needed to get completed by 31st March, 2022 and all deadlines will lie together resulting in work pressures in the month of March, 2022, he added.
Also in most cases as the tax liabilities have not been worked out for year 2020-21, hence the taxes will have to be paid with interest u/s 234B and 234A of the Income Tax liability resulting in huge aggregate interest liability of 24%, Bagla opined.
