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Madras HC directs CBDT to extend date for filing I-T return to Nov 30
September, 25th 2014

The Madras high court, in its interim order, passed on Wednesday night directed the Central Board of Direct Taxes (CBDT) to consider extension of the time for filing the income-tax return to November 30. It has asked the CBDT to pass such an order of extension in the due date before the end of this month. However, the court points out that: "If eventually the petitioners claim is rejected the consequences of section 234-A will automatically follow." Section 234A of the Income-tax (I-T) Act, 1961, levies a simple interest at 1 per cent for every month or part of the month, from the due date of filing the income-tax return to the date the return is actually filed.

The Madras high court heard the writ petitions filed by All India Federation of Tax Practitioners, G Baskar, an advocate and CNGSN & Associates, a firm of chartered accountants. In August, the CBDT had extended the due date for filing the tax audit report to November 30 (via its order dated August 20). This extension was introduced owing to the substantial changes made in the revised Tax Audit Report Form (Form 3CD). However, the CBDT's order was silent on whether the date for filing the I-T return had also been extended.

As details contained in Form 3CD are the basis for filing the I-T return, many taxpayers faced difficulties. Post the tax audit, there could be a change in the taxable income figure, which meant that these tax payers would have to file a revised return of income and could also be subject to penal proceedings. This prompted many tax professionals and associations to approach the high courts, across India, to file writ petitions.

In its order, the HC states: "The main issue raised in these writ petitions is whether the assesse will be able to file their returns on or before September 30, when the CBDT has extended the due date for obtaining and furnishing the report of audit under section 44AB of the I-T Act for the assessment year 2014-15 (ie: for the financial year ended on March 31, 2014) up to November 30."

The Madras high court also refers to the decision of the Gujarat high court on the same issue, which was decided on September 22 and reported by The Times of India. It adds: "Considering these anomalous situation, the Gujarat high court appears to have passed an interim order, protecting the interest of the taxpayers as well as the revenue, directing the CBDT to extend the due date for filing the return of income subject to the provisions of section 234-A."

Therefore considering the fact that the only consequence of a default in filing a return of income on or before September 30 is to be traced to section 234-A, an interim order is passed to the following effect: "The CBDT is directed to consider the request of the assesses in general and consider the extension of the time for filing the return in tune with the order passed by them in F.No. 133/24/2014-TPL dated August 20. If eventually the petitioners claim is rejected, the consequences of section 234-A would automatically follow. The CBDT is directed to pass orders on or before September 30."

Advocates Anita Sumanth and R Sivaraman represented the petitioners before the Madras high court. A hearing on the same issue is currently ongoing in the Bombay high court, where a writ petition has been filed by The Chamber of Income Tax Consultants.

Non-salaried taxpayers who are covered under tax audit provisions but not transfer pricing provisions are required to file their tax returns and get their accounts audited (for tax purposes) by September 30. This order by the Madras high court and earlier by the Gujarat high court, will provide huge relief to a large section of tax payers - viz: business men whose sales, turnover or gross receipts exceed Rs. One crore and professionals whose gross revenue is more than Rs 25 lakh.

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