Surprise Extensions under the Income Tax Act

EXTENTION IN DUE DATE OF FILING

Every year, at the beginning, in between and at the flag end of the year, we came across with the extension of the due date of filing of various forms, returns, audit reports, submissions, and compliances under the various acts like The Income Tax Act, The GST Act, The Companies Act, and all the rest acts, laws.

Most of the extensions are granted 3 days, 2 days,1 day before the scheduled date. There are more surprises sometimes, when extensions come before 8 hours, 5 hours, 2 hours on the last date. The greatest surprise is still in store for you, by granting extensions after the days, hours of the scheduled date. In all such cases, the taxpayers, their consultants who are part and parcel of the better compliance are on the oxygen till such announcement. Many a times it is observed, that, their anxiety will not allow them to file the returns, forms which are otherwise possible. The funny part of this is such things happens every year, since the inceptions of the acts, I think. To my mind, their will be no surprise, if a situation emerges and is acted upon as planned, laid down procedures, in timely manner, whether requested or not, expected, or not expected. Somewhere something is missing.

Let us, say if income tax site is out of reach for seven days and not available to the stake holders, the due date should be automatically extended by seven days. If the new site is non operational at least equal to the functions of the old site, and this will take say one month then, the date will be automatically extended by one month and seven days. If all the forms are not available as on the first day of the assessment year, then due date will be decided from the date all the forms are available on the site. There should be established link between an event and the due date, and the same should be automatic whether announced or not announced. In such a case the stakeholders themselves judge the due date and the surprise element will be mostly reduced. This is possible when we consider an extension is not a privilege on request, but a right due to some event. I think if an extension should be given due to an event, then the same should be given maximum possible time so that, the further extension on extension is not required. It is also a good practice that, for some extension the stakeholders will take initiative to explain why the same is required, and in some other cases the authorities himself will grant the same from their own, when they came across that some event is going to happen beforehand, which may not notice by the stakeholders due to non-full use of the systems, as we see in not fully operational Income Tax Site.

We have also to change our mindset, where delay in filing, filing on the last date, filing with penalty is considered as a negative performance or action, these actions have a positive completion for compliance. The authorities also not consider delay, non-filing with penalty as negative compliance, but will be seen as possible reach despite all hurdles, which are came across and the same should be as appreciated as filing in time.

I think, it is also helpful, if an extension should be given or granted in due date, then it should be across the board and not on piecemeal basis. One date for investment under one section, another date for another section, one date for one Form number and another date for another form, this should make the things more confused and complicated as well as difficult to remember and notice. It is also suggested to give all the extension though a complete circular with proper announcement having complete coverage, and no further change by issuing notifications, clarification, and amendments.

I think, we need a separate Taxpayer Charter on extension of Due Dates.

Hope the note will be considered for all future extensions.