1st September 2014
To, Chairman, CBDT
Sub: Extension of date for filing ITR for AY 2014-15 pursuant to deferment of TAR
Hope this letter finds you in good health. This is in furtherance to my letter dated 18th August 2014, as regards notification no. 33/2014 dated July 25, 2014, wherein deferment for filing Tax Audit Report for the AY 2014-15 was sought for. I sincerely appreciate your kind consideration and the extension of due date for filing TAR to November 30, 2014 vide Order no. F.NO.133/24/2014-TPL dated 20th August 2014. However, your order does not take into notice the fact that the due date (30th September 2014) for filing ITR needs to be extended too.
Sir, the newly introduced formats of Forms 3CA, 3CB and 3CD in the midst of the period did not just upset the preparing of TARs, but also equally disturbed the preparation of ITRs. The law (Section 44AB of the Income Tax Act, 1961) mandates filing of TAR, duly signed and verified by a Chartered Accountant, along with ITR by the specified date which now is 30th November 2014 for TAR, however, is unchanged for filing of ITR. For your kind attention, mentioned hereunder are the concerns that have come up due to this abrupt verdict.
1. A Chartered Accountant preparing a TAR needs to vouch the veracity of details provided in the ITR pursuant to which tax liability is computed. In fact, this is the very first occasion when filing of ITR is sought without completion of statutorily required Tax Audit.
2. Filing of an ITR without a duly signed and verified TAR is contrary to the statute (Section 139 read with Section 44AB of the Act), hence stands illegal and unlawful.
3. The details sought to be furnished in the new TAR, inter alia include details qua TDS amounts, deductions under Chapter VI-A, verification of the amount of depreciation claimed by the assessee, verification of expenses claimed by the assessee, etc., which form the very substratum of ITR and the consequent computation of tax liability, thus it appears logical and prudent that ITRs and TARs should be filed simultaneously.
4. The situation will lead to multiplicity of proceedings owing to alterations in the filed ITRs under Section 154 of the Act backed by filing of ITRs without proper verification of records.
5. The current utility mandatorily requires the name of the Auditor, Membership No. of the Auditor, date of the Audit Report, etc. for the ITR to be uploaded. Hence, even in the event where the assessee or the Chartered Accountant intends to proceed for submitting the ITR (without TAR) electronically, the same will not be possible.
Sir, Tax Audit of accounts is an exhaustive process, wherein a Chartered Accountant is required to vouch for and certify the correctness of the details provided in the TAR. Understanding the need for the thoroughness of the audit, the legislators statutorily granted a reasonable time period of 180 days from the end of the relevant FY for completing and furnishing the TAR. It is vital to note that only after such thorough audit computation of actual tax liability of an assessee can take place and ITR can be filed. The entire scheme of the Act (Section 139 read with Section 44AB of the Act) is weaved based on the aforesaid ‘fundamental principle’. Arbitrary alterations of such mandatorily required norms cause a genuine hardship upon the assessees and professionals.
In light of the facts enumerated above, may I please request you to either extend the due date for filing ITR for the AY 2014-15 to 30 November 2014 or make the scheme applicable from the AY 2015-16. You must agree that your thoughtful attention to this pleading would prevent the stakeholders from wastage of funds and labors. The final verdict of yours is eagerly awaited and it is expected that fairness will be rendered supreme place. I thank you for your valuable time and am looking forward to your swift consideration in this subject-matter. For any feedback/ suggestions, I am available at all possible times.
Dr. Sunil Gupta
Director: PNB, GIC, REC, FICCI