To make easy business and profession for self-employed people extend ITR filing date from 31.07.2023

[DEV KUMAR KOTHARI]

ITR 2023  due date in case of income from business and or profession must be extended even for non-audit cases. Due date as per Explanation 2  in S.139 (1) of Income tax Act, 1961 needs amendment as a logical,  practical and permanent  solution.

Meanwhile CBDT is requested to take justified and remedial action.

ITR forms and size in PDF format for blank forms for assessment year 2023-24:

ITR form no.	Size of  blank form in PDF format	To be used by:
ITR 1 Sahaj	3	For individuals being a resident (other than not ordinarily resident) having total income up to Rs.50 lakh, having Income from Salaries, one house property, other sources (Interest etc.), and agricultural income up to Rs.5 thousand
ITR 2	34	For Individuals and HUFs not having income from profits and gains of business or profession
ITR 3	58	For individuals and HUFs having income from profits and gains of business or profession
ITR 4 SUGAM	6	For Individuals, HUFs and Firms (other than LLP) being a resident having total income upto Rs.50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE,
ITR 5	54	For persons other than- (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7
ITR 6	80	For Companies other than companies claiming exemption under section 11
ITR 7	33	For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) only.

Last or due date 31.07.2023 – in non-audit cases:

Generally speaking in case there is no audit requirement under any law including Income Tax Act, 1961 the due date to file ITR is 31.07.2023.

In case audit is required under any law, say for a company due date is 31st October, 2023. This is irrespective of size of company and volume of business  and whether audit under Income Tax Act is required or not. In this regard it is relevant to see meaning of ‘due date’ which is as follows as per provisions of S.139 vide Explanation 2 which reads as follows (with highlights added) :

Explanation 2.-In this sub-section, "due date" means,-

(a) where the assessee other than an assessee referred to in clause (aa)  is-

(i) a company ; or

(ii) a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; or

(iii) a  partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force or the spouse of such partner if the provisions of section 5A applies to such spouse],

the 31st day of October of the assessment year;

[(aa)  in the case of an assessee , including the partners of the firm or the spouse of such partner (if the provisions of section 5A applies to such spouse) being such assessee,] who is required to furnish a report referred to in section 92E, the 30th day of November of the assessment year;]

(b) in the case of a person other than a company, referred to in the first proviso to this sub-section, the 31st day of October of the assessment year;

(c) in the case of any other assessee, the 31st day of July of the assessment year.

Therefore, we find that in non-audit cases, generally due date is 31.07.23 irrespeictive of size of ITR blank form and size of information to be filled in.

Non audit cases include high volume cases also:

In case most of receipts and payments ( 95% and above) are not in cash there is higher limit of Rs. 10 crore and tax audit report under IT Act is not required. (For details See S.44AB)

Last date for non-audit ITR have been fixed uniformly in a highly prejudiced manner ignoring ground realities and difficulties of taxpayers.

 These taxpayers may not have audit compulsion but they have dealing with others who have audit compulsions. Besides, compilation of information and data is similar to those of audit cases. Although volume may be less but exercises involved are time consuming.

Most important factor for consideration is that non audit cases are mostly related to unorganized sector because of smaller size. A large organization which is highly organized can make compliances quickly because they have large human, infrastructure and fiscal resources which are lacking in case of small and medium sized organizations who are generally out of audit coverage.

As in past, this year also it seems that various tax payers and  tax consultants , return prepares, assesses and their  Associations are finding it difficult to file ROI by 31.07.2023. Therefore,  will have to approach  CBDT and then High Courts for directions to the Ministers and  CBDT / Board for extension of last date for filing of ITR in case of non-audit assesses.

Relevance of due date affecting claims:

Some claims for deductions, benefits can be made only if some compliance is completed within due date. For example, payments allowable if actually made before due date u/s. 43B for tax , duty , fees etc. In case of business who do not require audit only payments made till 31.07.2023 will be allowed. Whereas in audit cases it can be 31st October, 2023 means 3 extra months are allowed. There  seems  no justification for allowed short period to non audit cases and in some cases  up to 30  November may be allowed.

Effected persons are  self-employed persons like individuals, firms and HUF :

Many self-employed people are carrying business and profession in these styles who are not under compulsion of audit under any other law. As mentioned earlier there can be no tax audit requirement even up to Rs. 10 crore turnover. Provisions of  S.43B, TDS and TCS may be applicable even if tax audit under IT Act is not required.

Therefore, allowing time up to 31  July  instead of 31 October is not justified for this reason also.

These are such reasons which really are good enough to amend provisions od S139 for different last dates for different ITR forms. Therefore, in WP this stand requesting to change due dates in provisions itself is desirable.

As per new reports, there is no likely hood of extension of date.

Experience with short and long ITR at processing stage at CPC

Now ITR are being processed mostly with use of strong artificial intelligence system CPC is having. This is used for comparison of data in various ways as found in ITR and other reports and past ITR , past assessment also.

We find that in many short and simple ITR processing was completed within few minutes (not even half an hour) and refunds were allowed and granted within few  hours and days.

However , all these examples are for various simple ITR forms in which people have filed ROI, just as per AIS, TIS and form 26AS. Fact is that many ITR preparers  have not even bothered to look into actual facts and figures in respective cases. They fear that even if some changes are made, higher income is reported, it is likely to get delayed intimation and chances of scrutiny notices.

Delayed processing of long and even a bit more informative ITR:

Official data are not available , however, it is learned from professional friends that ITR having business income, capital gains, and bit more information and data  are processed very slowly.

 Majority of ITR for earlier few years which were in long ITR forms and have some  substantial information  and data  took long time in processing and refunds.

Therefore, when department itself is taking long time in processing even non-audit simple cases of ITR having business income, capital gains, share holdings etc. then why time allowed to assesses  required to file long ITR forms is just shortest time which is allowed for simplest and shortest of ITR forms that is 31.07.2023.

There is no justification and an extension for business and professionals is required to file ITR even if any type of audit is not required.