The Institute of Chartered Accountants of India (ICAI), the country’s biggest accounting organisation, has written to the Central Board of Direct Taxes (CBDT) requesting that the penalty for late filing of income tax returns be waived.
The letter, submitted to the head of the direct taxation body, requested that the late-submission charge and other penalties imposed on individuals who filed their Report of Audit for the financial year 2020-21 or the assessment year 2021-22 after January 15 be reconsidered, considering the current situation and difficulties.
The ICAI also cited recent technological issues and the unavailability of some forms as factors in its request for a penalty remission in its letter. The technology shift by the Income Tax Department has contributed equally to the difficulty posed by timely filing of the audit reports.
Issues such as the lack of availability of Form 3CEB and difficulty submitting forms such as 10B and 10C are still prevalent or present. Taxpayers are having trouble filling out data for accounts, reconciliation, and confirmations, as well as preparing inputs for the tax audit report, according to an ICAI statement, as reported by Bloomberg Quint.
On January 8, a group of CA associations from Chennai, Mumbai, Ahmedabad, and Lucknow wrote to the CBDT and the Finance Ministry, requesting an extension of the deadline for filing tax audit reports and income tax returns, which would provide relaxation to both auditors and the companies along with helping to reduce the errors committed, while finalizing and filing the ITRs and Audit Reports.
The deadline for filing ITR for AY 2021-22 was December 31, 2021. Those who missed the deadline for filing their taxes might do so until March 31, 2022. A late return, on the other hand, will be subject to late-filing penalties of up to Rs 5,000 under Section 234F of the Income Tax Act.
With the pandemic hitting us, it is not just the daily living and conducting of business that has came to a pause. But the difficulty in conducting the rituals of auditing, finalising and filing of the financial statements everything has become difficult due to the fact that virtual working system cannot be easily implemented in every walk of life and business activities.
When these difficulties are coupled with certain other points of difficulty in integration, which is coupled with the inability of many small and medium businesses to adopt the apt technology which would facilitate the integration and make it possible for the auditors and their team to finalise accounts and timely filing of audit reports and ITRs, the delay caused would be huge. And when the penalty or fines or interests are levied on them for such delay, it only would add up to their cost to be incurred and the financial liability rather than helping them come out by finding a way to cope with the happenings.
It is important that the authorities understand what the normal business people are going through and how difficult it is for them to cope with all these fluctuations. Helping them is important due to which we can only support ICAI for taking such an initiative and making a request to the CBDT.
