In a significant move aimed at providing relief to taxpayers and tax professionals, the Central Board of Direct Taxes (CBDT) has extended the deadline for filing various audit reports for the financial year 2023-24. The original deadline for filing these reports was set for 30th September 2024 but has now been extended to 7th October 2024.
This extension applies to assessees who fall under clause (a) of Explanation 2 to sub-section (1) of section 139 of the Income Tax Act, 1961. The details of this extension were communicated through CBDT Circular No. 10/2024 under the reference 225/205/2024-ITA-II, issued on 29th September 2024.
Key Points of the Circular:
- Extended Deadline: The due date for filing audit reports for certain assessees for the financial year 2023-24 has been moved from 30th September 2024 to 7th October 2024.
- Applicable Assessees: This extension is relevant for taxpayers covered under clause (a) of Explanation 2 to sub-section (1) of section 139(1) of the Income Tax Act, 1961. This includes individuals and entities whose accounts are required to be audited under the Income Tax Act or any other law.
- Reason for Extension: The extension has likely been granted to ease the burden on taxpayers and audit professionals facing challenges in meeting the original deadline. It provides additional time for the completion of various audit-related formalities and submission of necessary reports, which are crucial for accurate and compliant income tax filings.
- Audit Reports Covered: The extended deadline applies to the filing of specific audit reports, including but not limited to:
- Tax Audit Report (Form 3CA/3CB and 3CD) required under Section 44AB of the Income Tax Act.
- Other statutory audit reports mandated for specific assessees under different sections of the Income Tax Act.
- Impact on Tax Filing Deadlines: While the extension specifically relates to audit reports, taxpayers and professionals must note that it may impact the due dates for filing income tax returns, especially for those assessees whose return filings are dependent on the submission of these audit reports.
Understanding Section 139(1) of the Income Tax Act:
Section 139(1) of the Income Tax Act outlines the provisions related to the filing of income tax returns. Clause (a) of Explanation 2 to this section identifies certain categories of taxpayers, including companies, firms, and individuals who are required to get their accounts audited before filing their income tax returns. For these taxpayers, the filing of an audit report is a prerequisite for submitting their income tax returns.
The due date for filing these reports is usually synchronized with the due date for filing income tax returns, which for audited entities typically falls on or around 30th September of the relevant assessment year. However, due to the challenges faced in meeting this deadline, the CBDT has now extended it to 7th October 2024.
Importance of Timely Filing of Audit Reports:
Filing audit reports on time is crucial for various reasons:
- Avoiding Penalties: Failure to file the required audit reports by the due date can lead to penalties under section 271B of the Income Tax Act.
- Compliant Tax Filings: Audit reports ensure that the financial statements and tax returns are compliant with the regulations, helping avoid scrutiny or legal complications from tax authorities.
- Facilitating Tax Return Filings: For taxpayers whose accounts are audited, the audit report is a prerequisite for filing income tax returns. Delay in submitting the audit report can result in late filing of tax returns, leading to penalties or interest for late payment of taxes.
Conclusion:
The CBDT’s decision to extend the deadline for filing audit reports from 30th September 2024 to 7th October 2024 is a welcome relief for many taxpayers and tax professionals. It allows them extra time to prepare and file their audit reports without rushing to meet the initial deadline. Taxpayers falling under this category should take note of the new deadline and ensure timely compliance to avoid any potential penalties.
For detailed information, taxpayers and professionals are advised to refer to the full text of CBDT Circular No. 10/2024 dated 29th September 2024.
Visit www.cagurujiclasses.com for practical courses
