The Gujarat High Court has questioned the Central Board of Direct Taxes (CBDT) over its decision to extend the due date for filing tax audit reports without simultaneously extending the deadline for filing Income Tax Returns (ITRs). The matter came before a bench of Justices Bhargav Karia and Pranav Trivedi, following petitions filed by tax practitioner associations, including the Income Tax Bar Association, which sought a uniform extension of both deadlines. The petitioners contended that the staggered timelines created unnecessary hardship for taxpayers and professionals, especially when statutory provisions require logical consistency between the two.
The Court noted that while the CBDT extended the “specified date” under Section 44AB of the Income Tax Act—from September 30 to October 31—it did not correspondingly extend the ITR filing due date under Section 139(1). The bench observed that this inconsistency could cause practical difficulties since the preparation and submission of audit reports are directly linked to the filing of tax returns. The Court also referred to the structure of Explanation (ii) to Section 44AB, which indicates that the audit report should ordinarily precede the return filing by a month, implying that any change to one should proportionately affect the other.
The petitioners argued that failing to align the two deadlines effectively negates the statutory intent and places an unfair compliance burden on taxpayers. They cited a previous Gujarat High Court ruling from September 2024, which had clarified that extending only the audit report due date without adjusting the ITR filing date undermines the provisions of the Income Tax Act. The Court reiterated that Section 119 of the Act empowers the CBDT to grant relaxation in certain cases but does not authorize it to disturb the clear procedural framework established under Section 44AB.
Taking these points into account, the bench directed the CBDT to file a detailed response explaining its rationale for issuing an extension solely for tax audit reports without extending the corresponding ITR due date for the financial year 2024–25. The Court indicated that such unilateral extensions risk creating administrative confusion and legal ambiguity, as both compliances are interdependent parts of the same tax filing process.
The matter has been scheduled for further hearing, with the High Court emphasizing that clarity and consistency in compliance timelines are essential to uphold fairness and transparency in the taxation system.
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