Extension of due date for compliances in exceptional circumstances- a need for consequential extension and power to the A.O. to allow extensions.

[C.A. DEV KUMAR KOTHARI]

Due date:

Under various laws due date or last date or period of limitations are prescribed for doing some thing or compliance of legal requirements. In absence of any specific limitation the provisions of the Limitation Act can be applied.

Present article's context:

In the context of present article we are concerned with due date for filing of returns and tax audit reports etc. under the income tax Act, 1961. Which in to-days context is 30^th September,2008.

Exceptional circumstances:

Some time due to exceptional circumstances it may generally be not possible to comply with the legal requirement in a particular area. The factors can be natural calamities, terror related, mass holidays, mass bandh etc. Considering such difficulties, the concerned authorities may take a policy decision and extend the date for compliance. Some times decision is taken for all over India and some times for certain states or local area, depending on the factors contributing and effecting the public causing difficulty in compliance.

Recent extension:

Extension of last date for filing it returns in Bihar and J&K

The Central Board of Direct Taxes (CBDT) have extended the last date of filing of income tax returns and obtaining tax audit report under section 44AB of the Income Tax Act, 1961, due by 30th September 2008, to 30th November 2008 in the state of Bihar in view of the disruption caused by floods in the state. The relevant part of the circular reads as follows:

The Central Board of Direct Taxes (CBDT) have extended the last date of filing of income tax returns and obtaining tax audit report under section 44AB of the Income Tax Act, 1961, due by 30th September 2008, to 30th November 2008 in the state of Bihar in view of the disruption caused by floods in the state.

CBDT has also extended the last date of filing of income tax returns due by 31st July 2008 to 30th September 2008 in the state of Jammu & Kashmir in view of the dislocation caused due to law and order problem in the state.

Case of Bihar:

The extension is only in respect to returns and tax audit report for which last date is 30ths September 2008. It does not cover returns which were due by 31^st July.

Case of Jammu and Kashmir:

In this case due date for returns which were due by 31^st July,2008 has only been extended to 30ths September, Returns and tax audit report which are due by 30the September, will have to be filed that date and there is no extension. The extension for returns which were due by 31^st  July, 2008 has been announced quite late.

The extension is only for filing in particular state:

The extension is applicable only in respect of returns / tax audit report as the case may be to be filed in particular state. It does not allow consequential extension.

Consequential extension is desirable:

Return is usually filed as per geographical jurisdiction or special jurisdiction of assesses. This is usually determined according to the Registered Office or head Office.  The assessee may have many factories or branches in other states. For filing of return it is necessary that information from all factories and branches should be available and assessee should be in a position to finalize the account, obtain necessary reports and documents from all factories and branches. Therefore, the extension should be applied to assesses who have some business establishment like factories, branches, show rooms, warehouses, agencies etc. in the affected areas. For example, suppose a company has registered office in Kolkata, but has a factory in Bihar, it is desirable that the benefit of extension should be allowed to the company assessee though it is  filing its return of income and tax audit report in Kolkata. This is necessary because the company has to maintain books of account and other records not only at Kolkata but also at its factory in Bihar, working of which as well as communication with which has been affected .    

Need to authorize the A.O. to extend dates:

Earlier there was provision and prescribed form (form no. 6) for making an application for extension of time to file return of income. However, this was discontinued. It is desirable that the A.O. should have some discretion to extend time to file return of income , tax audit report and other reports if the assessee shows reasonable cause for which may delay / have delayed filing of return , tax audit report or other reports etc.

Extension of last date for filing it returns in Bihar and J&K

The Central Board of Direct Taxes (CBDT) have extended the last date of filing of income tax returns and obtaining tax audit report under section 44AB of the Income Tax Act, 1961, due by 30th September 2008, to 30th November 2008 in the state of Bihar in view of the disruption caused by floods in the state.

CBDT has also extended the last date of filing of income tax returns due by 31st July 2008 to 30th September 2008 in the state of Jammu & Kashmir in view of the dislocation caused due to law and order problem in the state.

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BSC/SS/GN-230/08