The Union finance ministry has rejected a demand raised by tax practitioners to extend the last date of the filing of income tax returns.

However, assessees who skip the due date may have to pay a late fee, tax experts feel.

Last month, the government had extended the income tax return filing deadline. For individual taxpayers who are required to get their accounts audited and companies the due date for filing returns was pushed to February 15, 2021. For all other individual taxpayers, the due date was extended to January 10, 2021.

“CBDT passes order u/s 119 of Income-tax Act, 1961 in F No. 370153/39/2020-TPL dated January 11, 2021, disposing of the representations for extension of due date for filing of Audit Report u/s 44AB, in compliance with the order of hon’ble Gujarat High Court dated January 8, 2021,” the income tax department said in a tweet.

This was in response to the Gujarat High Court order dated January 8, 2021 in the case of The All India Gujarat Federation of Tax Consultants versus Union of India, which had directed the finance ministry to look into the issue of extension of due dates for filing of audit reports under Section 44AB of the Income Tax Act.

The finance ministry identified three reasons for not extending the dates. First, the due dates of filing return and tax audit has already been extended on three occasions. Second, citing examples of the US, the UK, Australia, South Africa, the Netherlands, Ireland, Singapore, Canada and Brazil, the government said that the extension in India has been more generous.

Finally, the government also gave the return filing statistics of the current year indicating that returns filed in this financial year already exceeds the numbers expected on the last date of filing of returns.

“It should also be appreciated that filing of tax returns/audit reports are essential part of the obligations of the assessee and cannot be delayed indefinitely. Many functions of the Income Tax department start only after filing of the returns by the assessee,” said a statement from the finance ministry.

“Sufficient time has already been given to taxpayers to file their tax returns and a large number of taxpayers have already filed their returns of income,” the statement said.

Late fee

Section 234F of the Income Tax Act provides for levy of late fee in case of an assessee whose gross income is above Rs 2,50,000 and is mandatorily required to file the tax return and he has not filed his return within due date or filed a delayed return. Late fee of Rs 10,000 will apply in case total income exceeds Rs 5 lakh and Rs 1,000 in case total income is within Rs 5 lakh.

Narayan Jain, chairman, Income Tax Co-ordination Committee of All India Federation of Tax Practitioners, urged the finance minister to waive the late fee in case ITR for assessment year 2020-21 is filed by March 31, 2021 so that the undue burden is mitigated.

According to an estimate by a professional body, possible short filing or delayed filing returns are likely to be 3 crore and the department may collect late fee of Rs 30,000 crore under section 234F of Income Tax Act.