.png)
Introduction
A coalition of tax professionals, charitable
trusts, and industry bodies has petitioned the Central Board of Direct Taxes
(CBDT) to extend the deadlines
for filing tax audit reports under
Section 44AB and renewing Section
12A/12AB registration. The plea, made in September 2025, cites
delays in form availability, portal glitches, and procedural burden as key
obstacles. If granted, the extension could provide relief to thousands of
businesses and nonprofits scrambling to meet simultaneous compliance
obligations.
Background & Context
What is a tax audit under Section 44AB?
Under the Income Tax Act, Section 44AB mandates
that certain businesses and professionals submit a tax audit by a specified due
date:
·
Entities whose turnover exceeds prescribed
thresholds must get their accounts audited by a Chartered Accountant and
the audit report submitted to the Income Tax Department.
·
For FY 2024-25 / AY 2025-26, the due date for
the audit report is 30
September 2025.
·
The related ITR (income tax return) for audited
entities must follow—typically by 31
October 2025, unless further extension is granted.
·
Non-compliance can attract penalties under Section 271B (0.5% of
turnover or gross receipts, with a cap) unless a reasonable cause is shown.
The audit requirement ensures that accounts,
deductions, and income declarations are verified by an independent professional
to reduce tax evasion risk and improve reliability.
What is Section 12A / 12AB registration and
renewal?
Charitable trusts, religious institutions, and
NGOs often seek tax exemption by registering under Section 12A / 12AB
(sometimes colloquially “12A”). Key facts:
·
From 1
April 2021, new registrations under 12A/12AB are granted for five years, and require renewal every 5 years.
·
Organizations whose registration expires on or
before 31 March 2026 must apply for renewal (via Form 10AB) by 30 September 2025.
·
The Finance Act, 2025 has introduced a rule: if
a trust’s total income (before exemptions) did not exceed ₹5 crore in each of
the two preceding years, the renewed registration may be granted for 10 years instead of 5.
·
Failure to renew in time can lead to loss of
exemption benefits or being subject to tax on “accreted income” under Section 115TD in extreme
cases.
Why is this news significant?
This dual request—extending both tax audit
deadlines and 12A renewal dates—reflects mounting pressure from practitioners
and nonprofits who argue the current timelines are unrealistic under existing
constraints. Missing these deadlines could have serious financial and legal
consequences. The CBDT’s decision will therefore affect compliance burden,
litigation risk, and administrative capacity across sectors.
Detailed Explanation of the Request
Who is making the request?
Several bodies have formally requested relief:
·
BCAS
(Bombay Chartered Accountants’ Society) in a representation to
CBDT seeks that the current deadline of 30
September 2025 be extended to 31 December 2025 for 12A
renewals.
·
The ICAI’s
Central India Regional Council (CIRC) has reportedly suggested
a December 2025 deadline for tax audit filing, citing complexities in
compliance.
·
The All
India Federation of Tax Practitioners (AIFTP) has also moved
the Delhi High Court to direct CBDT to extend both ITR and audit deadlines.
What are the objections / grounds cited?
The petitioners highlight multiple challenges:
·
Delay
in finalizing audit & ITR utility forms — repeated
revisions slow down planning.
·
Technical
glitches in the income tax filing portal, AIS mismatches, and
system overload.
·
Simultaneous
deadlines — 12A renewal, audit reporting, and ITR filing
overlap, squeezing time.
·
High
volume of applications from trusts needing renewal, making
timely processing difficult.
·
Exposure
to punitive tax implications (e.g. under Section 115TD) for
trusts that miss renewal due to procedural delays.
What exactly is being asked?
The relief sought includes:
1.
Extension
of tax audit report due date (Section 44AB) beyond 30 September
2025, ideally to 31 December 2025
or another reasonable window.
2.
Extension
of 12A/12AB renewal deadline from 30 September 2025 to 31 December 2025 for
organizations whose registration expires by March 2026.
3.
A one-time
condonation window for organizations that fail to renew on
time.
4.
Review of procedural
hurdles and portal delays that hamper timely compliance.
The intention is to give both taxpayers,
auditors, and nonprofit organizations breathing space—without forcing
noncompliance.
Impact Analysis
Benefits & Risks for Different
Stakeholders
Businesses / Taxpayers subject to audit
Potential
benefits:
·
More time to reconcile books, prepare reports,
and avoid hasty errors.
·
Less likelihood of penalties under Section 271B
due to missed deadlines (especially if “reasonable cause” is argued).
·
Relief from overlapping compliance stress (audit
+ ITR + other statutory tasks).
Potential
drawbacks / considerations:
·
The extension is not guaranteed; taxpayers may
still face uncertainty.
·
Delay in finalizing tax positions may affect
financial forecasting or stakeholder reporting.
·
Some may misuse the extension to procrastinate.
Charitable Trusts / NGOs (12A / 12AB
registrants)
Potential
benefits:
·
Breathing room to gather documents, prepare
audited accounts, and file renewal forms.
·
Avoid abrupt disruption of tax-exempt status or
donor confidence loss.
·
Avoid punitive consequences such as tax on
accreted income.
Possible
risks:
·
If the extension is denied, those who missed the
deadline may face loss of exemption or required to reapply from scratch.
·
Administrative backlog could still delay
approvals even after extension.
Auditors / CA Firms / Tax Practitioners
Positive
impacts:
·
Reduced pressure during peak compliance season.
·
More realistic timelines to handle client load
and portal delays.
·
Better scope to incorporate recent changes (e.g.
revised schedules, enhanced disclosures).
Challenges:
·
The extension could compress other deadlines
later.
·
Firms must manage client expectations and avoid
last-minute rushes.
·
Additional burden in handling condonation or
retrospective corrections.
Broader economy / fiscal
·
A smoother compliance window may reduce
litigation and scrutiny burden on tax authorities.
·
However, any extension also compresses audit
capacity in later months, potentially increasing backlog.
·
Delay in finalizations may slow the revenue
collection cycle in borderline cases.
Common Misunderstandings (and pitfalls)
·
“If
deadline is extended, no penalties will ever apply.”
Extensions often come with safeguards; delayed submissions may still invite
scrutiny if deemed unreasonable.
·
“12A
renewal wasn’t mandatory previously.”
Earlier, 12A was often perpetual. Post-2021 reforms make periodic renewals
mandatory.
·
“Any
missing date can be condoned automatically.”
Condemnation is discretionary, not automatic, and typically requires
justification.
·
“Extension
for 12A means extension for 80G too.”
These are separate registrations; extension of one doesn’t automatically apply
to the other.
·
“All
taxpayers can take this extension benefit.”
The extension request is specific to audit/non-audit categories; general
non-audit cases already have separate deadlines.
Expert Commentary
From my two decades of observing Indian tax
reform cycles, this dual extension request marks one of the few times
institutional pressure intersects both the corporate and nonprofit sectors
simultaneously. The convergence is telling: compliance timelines, especially in
the digital era, must be realistic to prevent counterproductive defaults. If
CBDT accommodates this request, it could create a precedent for more
responsive, flexible tax administration in future years.
A former CBDT official, now in private
practice, notes:
“Deadlines are necessary for discipline, but
inflexibility in the face of systemic delays undermines both revenue goals and
taxpayer confidence.”
Conclusion & Action Steps
The push to extend tax audit and 12A renewal
deadlines reflects a genuine compliance crunch. Businesses, professionals, and
nonprofits are squeezed by tight timelines, portal glitches, and evolving form
formats. While CBDT has not yet committed to relief, the strength and
coordination of representations could influence its decision.
What
stakeholders should do now:
1.
Monitor
CBDT announcements—extensions, circulars, or notifications may
arrive late.
2.
Prepare
early, draft audits / accounts in parallel, and assemble
documents for 12A renewal even ahead of formal green light.
3.
Document
any delay causes (portal errors, form delays, etc.) to support
reasonable cause submissions if deadlines are missed.
4.
Engage
with professional bodies and legal counsel to monitor writs or
court orders that could alter the standing deadline.
In coming weeks, the tax community will
closely watch whether CBDT accedes to the request. If extensions are granted,
2025 could become a turning point in how India balances compliance rigor with
administrative practicality.
FAQs
Q1:
Has CBDT already extended any deadlines for FY 2024-25 audit or 12A renewals?
No official extension has been confirmed as of now. Stakeholders are awaiting
CBDT’s response to representations.
Q2:
Why is 30 September 2025 the renewal date for 12A?
Because registrations expiring by 31 March 2026 must apply six months prior for
renewal, making the deadline 30 September 2025.
Q3:
What penalties or risks do trusts face if they miss 12A renewal?
They risk losing their tax-exempt status or incurring tax on accreted income under Section
115TD.
Q4:
Can the deadline for both audit and renewal be extended simultaneously?
Yes—that’s precisely what petitioners are requesting. But each extension is
governed by different statutes and CBDT discretion.
Q5:
Should SMEs or small charitable trusts also worry?
Only if they’re required to undergo audit (meeting thresholds) or their 12A
registrations fall due. Smaller entities not needing audits may follow standard
non-audit timelines.
Sources & References
1.
Income tax audit dates and penalties details — Livemint
2.
Renewal of 12A/12AB registration, forms, timelines —
ClearTax, AccountingNGOs
3.
Representation by BCAS to CBDT for extension — BCAS
petition document
4.
AIFTP’s writ application to extend audit and ITR
deadlines — Livemint
5.
ICAI regional body’s request for extended audit
deadline — Finance news
6.
General NGO 12A/80G renewal guidelines —
IncometaxforNGOs, etc.