gtag('config', 'UA-154374887-1');

Is ITR and Tax Audit Due Date Extended till 31.03.2021

is-itr-and-tax-audit-due-date-extended-till-31-03-2021

A fake news is circulating in social media that the due date of filing of income tax return (ITR) and filing of Tax Audit Report dadte for assessment year (AY) 2020-21 has been extended till 31.03.2021 by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020 after the Bill is introduced in Loksabha on 18.09.2020.


It is true that there is an extension in the due date of filing of ITR and Tax Audit Report for the AY 2020-21. Let us analyze the provision of the Bill to understand the extension of the due date.


Readers are aware that Finance Act, 2020 has amended the provisions of section 44AB to provide for the due date filing of the tax audit report one month prior to the due date of filing of return of income u/s 139(1). As per the amended provision, the tax audit report is required to be furnished by 30th September 2020 for the AY 2020-21. Finance Act, 2020 has extended the due date for filing of the income tax return from 30th September to 31st October. Since the due date for filing of return of income of an assessee who is subject to compulsory tax audit u/s 44AB for the assessment year 2020-21 is 31st October 2020, thus tax audit report shall be required to be furnished by 30-09-2020. The objective of such an amendment is for pre-filling the income tax returns from the tax audit report. Earlier till AY 2019-20, the tax audit report was required to be filed along with the return of income.


Read Also: Changes in Tax Audit Turnover Limit under section 44AB-Budget 2020

 

CBDT defers Clause 30C and Clause 44 of the Tax Audit Report in Form 3CD on GAAR and GST to March 2021

 

How to report EPF and ESI due date extension in Tax Audit Report for AY 2020-21


However, due to the outbreak of COVID-19 pandemic and the subsequent nationwide lockdowns, the government has given certain reliefs to the taxpayers from the compliances under the income tax law. One of the relief is related to the filing of income tax returns for AY 2019-20 and AY 2020-21.


On 31st March 2020, the government has promulgated Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 to provide for certain relaxations related to compliances under the Income Tax law. The Ordinance provided that where the due date for compliances falls between the period from 20-03-2020 to 29-06-2020, the due date for completion of such compliances shall get extended up to 30-06-2020. However, the Ordinance empowers the Central Government to extend the due dates and compliances thereof by issuing Notifications.


Readers are aware that for the AY 2019-20 (FY 2018-19), belated returns u/s 139(4) or revised returns u/s 139(5) could be filed till 31.03.2020 i.e. by the end of the assessment year. Hence, this period was covered by the said Ordinance dated 31.03.2020. Thus the Ordinance extended the date of filing of belated return or revised return for AY 2019-20 could be filed till 30-06-2020.


Section 139(1) and the provisos thereunder require a person to furnish his return of income or loss for the previous year on or before the due date. Explanation 2 to section 139(1) prescribes the ‘due date’ for filing of return of income for a previous year. Different due dates have been prescribed for different class of persons as listed below-


Person/AssesseeDue Date
Company31st October
of the assessment year
A person (other than a company) whose accounts are required to be audited under Income Tax Act or under any other law for the time being in force
(Companies Act, Societies Registration Act, etc.)
A partner of a firm whose accounts are required to be audited under Income Tax Act or under any other law for the time being in force.
(Prior to 01.04.2020, only working partners were covered. From 01.04.2020, all the partners are covered)
Assessee who is required to furnish a report referred to in section 92E30th November
of the assessment year
Other persons
(Individuals/HUF/Firms not subject to tax audit, partner of such firms, AoP, BoI, AJP, etc.)
31st July
of the assessment year

Notes:

 

1. The due date to file return of a partner of  the firm which is not subject to tax audit is 31st July, whereas, the due date to file return of a partner of the firm which is compulsory subject to tax audit is 31st October of the assessment year. The Finance Act, 2020 has removed the distinction between a working and a non-working partner.

 

2. The due date to furnish return by a charitable trust is 31st October if tax audit is applicable. Otherwise, the due date is 31st July.

 

3.The due date to furnish return by a political party is 31st October if tax audit is applicable. Otherwise, the due date is 31st July.


Filing of Belated Return: According to section 139(4), any person who has not furnished a return within the time allowed to him under section 139(1), may furnish the return for any previous year at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.


On a conjoint reading of section 139(1) and section 139(4), the date of furnishing timely and belated return is as follows-


Person/AssesseeDue Date
u/s 139(1)
Belated
Return
Company31 st October
of the assessment year
31 st March
of the assessment year
A person (other than a company) whose accounts are required to be audited under Income Tax Act or under any other law for the time being in force
(Companies Act, Societies Registration Act, etc.)
A partner of a firm whose accounts are required to be audited under Income Tax Act or under any other law for the time being in force.
(Prior to 01.04.2020, only working partners were covered. From 01.04.2020, all the partners are covered)
Assessee who is required to furnish a report referred to in section 92E30 th November
of the assessment year
Other persons
(Individuals/HUF not subject to tax audit, AoP, BoI, AJP, etc.)
31 st July
of the assessment year

Filing of Revised Return: According to section 139(5), if any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.


Thus the extension of due dates for the AY 2019-20 as per the Ordinance of 2020 are given below-


Return filing sectionCompliance Dates prescribed in the Income Tax ActExtended date of compliances as per Ordinance of 2020
Section 139(1)-Original returnFrom July 2019 to Sep 2019Since the compliance dates were prior to 20-03-2020 hence was outside the purview of the Ordinance of 2020.
Section 139(4)-Belated ReturnWithin 31-03-2020Covered by the provisions of the Ordinance and date was extended till 30-06-2020
Section 139(5) - Revised Return for AY 2019-20Within 31-03-2020Covered by the provisions of the Ordinance and date was extended till 30-06-2020

Since all the due dates for filing of return of income for the AY 2020-21 was starting from July 2020, hence was outside the scope of the Ordinance of 2020.


Also Read: Analysis of New Extended Due Dates for Compliances and Investments under Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020


However, due to prevailing unfavourable COVID-19 pandemic situation even in June 2020, the government has further extended the due date till 30-09-2020 by issuing a Notification No. 35/2020 dated 24.06.2020 and further by a Notification No. 56/2020 dated 29.07.2020. This time the notification has also enlarged the compliance period to cover the compliance dates for the period commencing from 20-03-2020 to 31-12-2020. The compliance date is extended until 31-03-2021. In other words, where the compliance date falls in between 20-03-2020 to 31-12-2020 the same can be completed by 31-03-2021.


Earlier, the Finance Minister Nirmal Sitaraman in a press conference held on 13.05.2020 announced the extension of due dates for filing of return of income for AY 2020-21 for all classes of persons to 30th November, 2020.


Also Read:

CBDT further extends return filing due date and others from June 30

Analysis of new extended due dates as per CBDT Notification under direct taxes

Is there any Extension to TDS Return Due Date For Quarter 1 FY 2020-21

CBDT once again extended the Income Tax Return Filing Due Date for AY 2019-20 (FY 2018-19)


Since this covers the due date for filing of return of income for AY 2020-21, hence this time the Notification No. 35 of 2020 has assumed significance.


It should be noted that unlike the Ordinance of 2020 where a single date of 30-06-2020 was given for all the compliances for the period between 20-03-2020 to 29-06-2020, the Notification No. 35/2020 has prescribed different dates for different compliances. These different dates were provided for different specific compliances by way of the proviso to the main provision which extended the due date for all the compliances from 31-03-2021. The exceptions to the extension of the due date to 31-03-2021 cover the extension of due dates related to the filing of return of income for the AY 2019-20 and AY 2020-21. An exception to the main provision was also provided for furnishing the Tax Audit Report for AY 2020-21.


After the issue of Notification No. 35/2020, the extended due date to file return of income for AY 2020-21 is as given below-


Person/AssesseeNormal Due DateExtended Due Date
Company31st October, 202030th November, 2020
A person (other than a company) whose accounts are required to be audited under Income Tax Act or under any other law for the time being in force
(Companies Act, Societies Registration Act, etc.)
A partner of a firm whose accounts are required to be audited under Income Tax Act or under any other law for the time being in force.
(Prior to 01.04.2020, only working partners were covered. From 01.04.2020, all the partners are covered)
Assessee who is required to furnish a report referred to in section 92E30th November, 2020
Other persons
(Individuals/HUF/Firms not subject to tax audit, partner of such firms, AoP, BoI, AJP, etc.)
31st July, 2020


Return filing sectionCompliance Dates prescribed in the Income Tax ActExtended date of compliances as per NN 35/2020
AY 2019-20 (FY 2018-19)
Section 139(1)-Original returnFrom July 2019 to Sep 2019Since the compliance dates were prior to 20-03-2020 hence was outside the purview of the Ordinance of 2020.
Section 139(4)-Belated ReturnWithin 31-03-2020Covered by the provisions of the Ordinance and date was extended till 30-09-2020
Section 139(5) - Revised Return for AY 2019-20Within 31-03-2020Covered by the provisions of the Ordinance and date was extended till 30-09-2020
AY 2020-21 (FY 2019-20)
Section 139(1)-Original returnFrom July 2020 to Sep 2020Since the compliance dates were prior to 20-03-2020 hence was outside the purview of the Ordinance of 2020.
Section 139(4)-Belated ReturnWithin 31-03-2021Outside the scope of NN 35/2020 since falls beyond 31-12-2020, hence no extension
Section 139(5) - Revised Return for AY 2019-20Within 31-03-2021Outside the scope of NN 35/2020 since falls beyond 31-12-2020, hence no extension

On 18.09.2020, Finance Minister Nirmala Sitharaman introduced the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020 in the Lok Sabha.


This Bill has incorporated the provisions of the Ordinance of 2020 which was promulgated on 31-03-2020 and also the extensions provided by the Notification No. 35/2020 and Notification No. 56/2020 dated 24.06.2020 and 29.07.2020 respectively.


Section 3 of the above bill reads as under:


(1) Where, any time limit has been specified in, or prescribed or notified under, the specified Act which falls during the period from the 20th day of March, 2020 to the 31st day of December, 2020, or such other date after the 31st day of December, 2020, as the Central Government may, by notification, specify in this behalf, for the completion or compliance of such action as-


(a) completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval, or such other action, by whatever name called, by any authority, commission or tribunal, by whatever name called, under the provisions of the specified Act; or


(b) filing of any appeal, reply or application or furnishing of any report, document, return or statement or such other record, by whatever name called, under the provisions of the specified Act; or


(c) in case where the specified Act is the Income-tax Act, 1961,—


(i) making of investment, deposit, payment, acquisition, purchase, construction or such other action, by whatever name called, for the purposes of claiming any deduction, exemption or allowance under the provisions contained in—


(I) sections 54 to 54GB, or under any provisions of Chapter VI-A under the heading “B.-Deductions in respect of certain payments” thereof; or


(II) such other provisions of that Act, subject to fulfillment of such conditions, as the Central Government may, by notification, specify; or


(ii) beginning of manufacture or production of articles or things or providing any services referred to in section 10AA of that Act, in a case where the letter of approval, required to be issued in accordance with the provisions of the Special Economic Zones Act, 2005, has been issued on or before the 31st day of March, 2020,


and where completion or compliance of such action has not been made within such time, then, the time limit for completion or compliance of such action shall, notwithstanding anything contained in the specified Act, stand extended to the 31st day of March, 2021, or such other date after the 31st day of March, 2021, as the Central Government may, by notification, specify in this behalf;



….


Clause (b) of sub-section (1) of section 3 mentions about furnishing return of income or report which invariably covers tax audit report.


Those who are spreading fake news on extension of ITR and tax audit report date read only this provision but forget to read the third proviso to this sub-section (1).


The third proviso to section 3(1) of the Bill reads as under-


Provided also that where the specified Act is the Income-tax Act, 1961 and the compliance relates to—


(i) furnishing of return under section 139 thereof, for the assessment year commencing on the—


(a) 1st day of April, 2019, the provision of this sub-section shall have the effect as if for the figures, letters and words “31st day of March, 2021”, the figures, letters and words “30th day of September, 2020” had been substituted;


(b) 1st day of April, 2020, the provision of this sub-section shall have the effect as if for the figures, letters and words “31st day of March, 2021”, the figures, letters and words “30th day of November, 2020” had been substituted;


…..


…..

(vii) furnishing of report of audit under any provision thereof for the assessment year commencing on the 1st day of April, 2020, the provision of this sub-section shall have the effect as if for the figures, letters and words “31st day of March, 2021”, the figures, letters and words “31st day of October, 2020” had been substituted:


….


The language of the provision is similar to the language of the Notification No. 35/2020 issued on 24.06.2020.


Section 3(1) has at the first instance extended the due date to 31-03-2021 for all the compliances which were required to be completed from the period 20-03-2020 to 31-12-2020.


In line with the Notification No. 35/2020, different due dates have been prescribed for different compliances by inserting various provisos to the the sub-section (1). The clause (i) to the third proviso has substituted the extended due date of March 31, 2021 to 30-09-2020 for the return filing dates for the AY 2019-20 and to 30-09-2020 for the AY 2020-21. This shall be applicable for all the class of assessees since there is no exception provided for any class of assessee.


Similarly, clause (vii) to the third proviso has substituted the extended due date of March 31, 2021 to 31-10-2020 for furnishing the tax audit report date.


Hence, on reading the Bill as a whole, the following are the extended dates for furnishing return of income and tax audit report for the AY 2019-20 and AY 2020-21-


AY 2019-20

Filing of belated return and revised return (with or without Tax Audit Report)

30-09-2020 

(and not 31-03-2021)

AY 2020-21

Filing of original return for all the assessee

30-11-2020 

(and not 31-03-2021)

Furnishing Tax Audit Report

31-10-2020 

(and not 31-03-2021)


Besides the exception to the due dates of furnishing the return of income and Tax Audit Report, exceptions were also provided for certain other compliances which fall in the period which begins from 20-03-2020 to 31-12-2020. Only those compliances which were mentioned in the provisos to the sub-section (1) have different extended due dates and the extended date of 31-03-2021 will not apply. If any compliance is not covered by any of the proviso, then the main provision shall prevail for which due date gets extended till 31-03-2021. For example, the due date of furnishing Equalisation Levy Statement in Form-1 is June 30, 2020 for the FY 2019-20. It is not covered by any of the proviso to section 3(1). Hence, this gets extended till 31-03-2021.


Update:

CBDT has further Extended the Due Date of Tax Audit Report and filing of ITR for AY 2020-21


Conclusion


Any law is required to be read in whole and not in piecemeal. In this case of fake news, the person did not read the Bill as a whole but only read the main provision and not the exception to the main provision given in the provisos. This has led to the wrong interpretation of the provision.


Further to state that there are various other amendments introduced by the Bill which shall be discussed in detail in future posts.


Further Readings:

Extension of TDS payment Due Date March 2020

The Saga of PAN and Aadhaar Linking in Income Tax

Relief measures announced by Finance Minister on Income Tax and Other Compliances amid COVID-19 outbreak




Get all latest content delivered straight to your inbox
Sociliaze with Us

Post a comment

5 Comments

  1. Is the date for seeking exemption under section 54 (two years to buy a new house) for capital gain earned on sale of property in FY 2018-2019 now got extended from 30 Sep 2020 to 31 Mar 2021?

    On page 2 of this bill, something is mentioned for section 54. But it is confusing to understand.

    ReplyDelete
    Replies
    1. No. Date for claiming exemption for exemption u/s 54 has not been extended and it remains at 30.09.2020. Please read the clause (v) of the third proviso on page-3 of the Bill.
      Hope this clarifies.

      Delete
    2. Hi @Sujit Talukder,

      Thank you for responding.

      However I can't understand why they say exactly the opposite in the 3rd proviso item (v). Opposite of the dates specifically covering sec 54 to 54GB in the main sec 3(1)(c)(I)(1).

      If proviso changes the dates of main section, then why then mention the dates in main section.

      Created a big confusion around it.

      Actually I had sold a property in June 2018, the amount is deposited in capital gain account. Now to save tax, I was going to do registry of a house at Faridabad on 23rd Sep 2020, but I don't really like that house much. There is another house that I like but that will take around 30 days to get registered. So wanted to be 100% sure before making any decision.

      Regards,
      Anuj Kumar

      Delete
    3. A proviso has the power to curtail the operation of the main provision. Hence even if the main provision speaks of 31.03.2021, the proviso curtails it to 30.09.2020 which also synchronizes with the date of filing of return for AY 2019-20. However, in your case, registration is not mandatory to claim the exemption.

      Delete
    4. Hi Sujit Talukder,

      Thank you for the explanation.

      I just hope it is not the typing error in this proviso.

      They have done similar mistakes in past, when extending date from June to 30 sep. That time they written it as "section 54 or 54GB", which they later changed to "Section 54 to 54GB".


      I understand this will only be clarified by the very end of this month.

      Regards,
      Anuj Kumar

      Delete