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Introduction
The Central India Regional Council
(CIRC) of the Institute of Chartered Accountants of India (ICAI) has formally
requested the Union Finance Ministry to extend the deadline for filing Tax
Audit Reports for FY 2024-25 (Assessment Year 2025-26) from 30 September
2025 to 31 December 2025. The appeal comes amid repeated technical
glitches in the Income Tax e-filing portal, delayed release of Income Tax
Return forms, and a congestion of multiple statutory compliance deadlines
placing pressure on taxpayers and accounting professionals. If granted, the
extension would provide more breathing space and help ensure accuracy in audit
and tax reporting.
Background
/ Context
Tax audits are governed in India
primarily by Section 44AB of the Income-tax Act, 1961, which requires
specified taxpayers (such as those with turnover above a threshold, certain
professionals, etc.) to get their accounts audited and submit a Tax Audit
Report (e.g., Form 3CA/3CB/3CD) to the income tax authorities.
Key timelines under the current
regime include:
- Filing of Tax Audit Report: 30 September
following the end of the financial year in most cases.
- Filling of Income Tax Return (ITR) where audit
is applicable: usually due by 31 October for those under audit.
- Other related compliances: GST returns, MCA (Ministry
of Corporate Affairs) filings, statutory financial statements, etc., often
cluster between July and October.
Why this request matters:
- Accuracy in audits is critical; rushing leads to
errors, misstatements, and potential tax litigation.
- The e-filing portal has often been under strain—portal
crashes, validation errors, mismatches in data (e.g. AIS / Form 26AS) are
frequent.
- Entities like Chartered Accountants, CA firms, and
businesses have many overlapping regulatory deadlines, which stretch
resources and risk non-compliance penalties.
Historically, deadline extensions
have been given occasionally by the Central Board of Direct Taxes (CBDT) in
response to such difficulties. However, large shifts (e.g. a full three-month
extension) are rare without strong, widespread consensus and justification.
Detailed
Explanation of the News
What
ICAI CIRC Has Proposed
- The Central India Regional Council (CIRC) of
ICAI has sent a formal request to the Finance & Corporate Affairs
Minister, proposing that the due date for filing Tax Audit Reports for
FY 2024-25 be extended to 31 December 2025 instead of the
current deadline of 30 September 2025.
- The request cites that although an earlier partial
extension was granted for filing ITRs by individuals (to 15 September
2025), audits remain under tight schedules.
Key
Challenges Cited
- Staggered release of ITR forms / audit forms: Delays in issuing essential forms (such as audit /
financial statement forms or ITR formats) hamper preparatory work.
- Technical issues with the Income Tax e-filing portal: These include system glitches, down-times, session
timeouts, validation errors, mismatches in AIS / Form 26AS, and other data
discrepancies.
- Overlapping compliance deadlines: July to October is crowded with GST returns, MCA
annual returns, financial statement filings, non-corporate entity
reporting changes introduced by ICAI, festival periods, and other sectoral
requirements.
Legal
& Regulatory Basis
- Section 44AB, Income-tax Act: Governs who must conduct a tax audit and defines
deadlines.
- Relevant Rules / Notifications: ITR forms, audit utility forms, and annual returns
under Companies Act / MCA regulations.
Request
formalization
- The request is made via official communication by ICAI
CIRC – signed by its Chairman (Ankur Kumar Gupta) and Secretary (Jayendra
Kumar Tiwary).
- It is being submitted to the Ministry of Finance &
Corporate Affairs.
Impact
Analysis
Who
Stands to Benefit
- Businesses / Companies: Especially those with complex operations, multiple
business verticals, or operating across states; more time allows better
reconciliation, avoidance of penalties or audit errors.
- Chartered Accountants and Audit Firms: Reduced pressure, more realistic work schedules,
quality control possible; avoiding bottlenecks and audit lapses.
- Small and Medium Enterprises (SMEs): They often have lean staff; overlapping statutory
deadlines hit them harder. Extension gives breathing room.
- Taxpayers:
Especially those needing audited returns: better time to ensure accuracy,
collect required information, and liaise with auditors.
Who
Might Lose or Face Disadvantages
- Government / Revenue Department: Delayed submission of audit reports could delay
revenue assessments and potential detection of tax evasions.
- Compliance Punctuality: Extending deadlines sets precedent—could generate
expectations of future leniency.
- Potential for Misuse or Slowness: Some entities may delay work, citing the extension as
an excuse, which might affect quality.
Practical
Implications
- Audit Schedules:
CA firms will need to reorganize timelines, reallocate staff.
- Form Revision / Release Timing: If forms continue to be delayed, even a December
deadline may require earlier preparation.
- Portal readiness:
Income Tax Department might need to ensure e-filing systems are robust for
the end-of-year rush, to avoid repeated glitches.
- Penalty / Interest Relief: If extension is granted after the original deadline,
there could be clarifications needed on waiver of penalties for filings
between the old and the new deadline.
Common
Misunderstandings
- The extension request by ICAI CIRC does not
guarantee that the deadline will be changed; it is just a proposal.
- An extension for Tax Audit Report does not
automatically extend the Income Tax Return filing deadline unless
separately notified.
- Not all entities are under the audit requirement; many
individuals, small businesses under thresholds are exempt under Section
44AB.
- Granting an extension does not necessarily mean a
waiver of penalties or interest for late filing unless specified in the
notification.
- The extension does not change the date from
which interest for delayed payments might accrue, unless the law or
notification adjusts that.
Expert
Commentary
From my 20+ years covering finance,
taxation, and accounting, this move by ICAI CIRC reflects a recurring friction
between statutory compliance timelines and operational realities. The chanting
of overlapping deadlines is not new, but technological and procedural delays
have exacerbated the issue in recent years.
As one CA I spoke to observed:
“When you have to wait for forms to
be released in late August, then reconcile data from multiple government sources,
while also managing GST, MCA, and Audit workloads, expecting completion by
end-September strains the system very unfairly.”
The extension, if granted, should
ideally be accompanied by government assurances of timely issuance of forms,
stable e-filing infrastructure, and clear rules about consequences (penalties /
interest) so taxpayers can plan with certainty.
Conclusion
/ Action Steps
ICAI CIRC’s request to extend the
Tax Audit Report deadline to 31 December 2025 underscores the urgency of
easing compliance burden under current procedural constraints. Stakeholders now
await formal action from the Finance Ministry or CBDT.
What to watch / what you can do:
- Monitor notifications from Central Board of Direct
Taxes (CBDT) or Finance Ministry to see if extension is approved.
- Auditors and businesses should begin early preparations
even before extension: gathering data, reviewing reconciliations,
identifying gaps.
- Stay updated on form releases, portal announcements,
and draft guidance (if any).
- If extension is granted, verify whether penalties /
interest provisions are adjusted for the period between old and new
deadlines.
Upcoming trends likely include
greater lobbying for more consistent statutory calendars, improved e-filing
capacity, and perhaps differentiated deadlines for different classes of
assessees to spread out the workload.
FAQs
|
Question |
Answer |
|
1. What exactly is being requested? |
ICAI’s Central India Regional Council is asking the
government to move the tax audit report filing deadline for FY 2024-25 from 30
September 2025 to 31 December 2025. |
|
2. Who is affected by this deadline? |
Taxpayers required to get their accounts audited under Section
44AB — this includes businesses, professionals, and entities exceeding
prescribed turnover or other thresholds. Entities exempt from audit under
Section 44AB are not affected. |
|
3. Has the government agreed yet? |
As of now, no official CBDT or Finance Ministry
notification indicates the date has been changed. This is a request by ICAI
CIRC. Stakeholders are watching for formal notification. |
|
4. If extension is granted, will penalties or interests
for late submission be waived for the delay period? |
There is no guarantee; such waivers would need to be
explicitly stated in the notification if granted. Unless clarified, the old
rules regarding penalties / interest might still apply. |
|
5. What other challenges besides deadline pressure are
being cited? |
Major issues include delayed form/releases, glitches and
downtime in the e-filing portal, data mismatches (e.g. AIS, Form 26AS),
clustered statutory compliances like GST, MCA filings, new ICAI format
changes, and resource constraints at audit firms. |
References
/ Source Links
- TaxGuru:
“ICAI CIRC Seeks Tax Audit Due Date Extension to 31st December 2025”
- The Accountant-Online:
“ICAI requests extension for tax audit report submission deadline”
- Yahoo Finance
and related summaries: ICAI’s request citing challenges of forms &
portal delays
- TaxGuru
coverage of growing demands / reasons for extension